When Government Goes Broke

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What happens when governments go broke?

This question makes me think back to 2008 and 2009 post real estate bubble lunacy.  A good friend of mine had a great business model that had nothing to do with real estate.  He was planning on going live in the height of the bubble.  Of course, few knew at the time that we were at the pinnacle of a massive leveraged ticking time bomb.  Everything in my friend’s business model was poised for success.  It seemed like the proverbial “no-brainer.”  In the months that followed his launch the economy started showing cracks and Lehmann brothers default became mainstream news.  I vividly remember what followed.  My friend, a consummate entrepreneur and well-rounded investor, was not overly optimistic with the potential performance of his company, despite all the well-positioned facets of his business.  He fell into a depression and blamed the banksters and financial crisis on his business failure.  He got desperate and started making decisions that were beyond his typical moral compass- shorting suppliers, lying to customers, even trying to liquidate his kid’s college fund.

Fast-forward 5 years and here we are.  I tell this story about my friend because the level of desperation that I saw come from a moral and upstanding man was alarming, to say the least.  Imagine the same level of crisis on a sovereign level.  What would an omnipotent state do?  A study of history shows the level of desperation that a state or government will take on in the face of bankruptcy and defaults.  The first potential government action that comes to mind for many based on recent events is the execution of bail-ins, where a creditor is forced to bear some of the burden of government largesse.  Typically this would be bondholders, but even depositors have become targets in recent instances.  The Prime Minister of Poland said that even private funds inside its state-guaranteed program would have bond holdings transferred to a state pension program.  Experts in the U.S. believe if instituted something like this could be expected.  See this video with comments from Jim Rogers and Ron Paul regarding this concern:

http://www.youtube.com/watch?v=Gzbbih0K1ek

When Mr. Rogers says, “They will take our retirement accounts” this is exactly what he is referencing, the forced conversion of retirement assets into US Treasury bonds.  Let’s face it friends, our government went broke years ago.  We passed the Rubicon long ago, but we still have a chance as individuals to protect ourselves.

We formed Perpetual Assets around the IRA LLC conversion process for this reason, to help Americans take back their hard earned retirement monies, to deleverage the corrupt commercial banking system, and to give people the power to shelter and ultimately control their retirement.  Use it to invest in a myriad of alternative asset classes, or buy your traditional stocks, bonds, and mutual funds, foreign currencies, or precious metals stored in YOUR possession.  The IRA LLC is the quintessential vehicle for financial freedom.  Freedom from bail-ins, Freedom from depository confiscation or re-hypothecation, and Freedom from the system and regulators, all while walking within the laws and regulations of our favorite entities like the IRS and DOL.  Set yourself Free!  Trust Yourself!

Will Lehr

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