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Feb. 21, 2006 - Freedomain Radio - Stefan Molyneux
37:26
108 Stock Swindles

Retirement Savings Plans and State Corruption

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Time Text
Good morning, everybody.
It's Steph.
It's 8.08 a.m.
on Tuesday the 21st of February 2006.
Hope you're doing well.
Sorry a little bit for the overmix or the high volume on the podcast last night.
I didn't quite realize until I listened to it later in the evening that It was a little loud, so rather than, of course, try and become quieter myself, a fairly near-to-impossible task, I'm actually going to just turn the mix down.
So hopefully this will be better today.
And maybe if you have that nice EAX tool that I have on my portable Rio, or my Creative Zen Extra, a nice EAX feature which allows you to do volume leveling, that might be helpful.
I know Christina's asked for it at home.
But you can't attach it to me, so I think she's going to be out of luck.
So I hope you're doing well.
We're going to talk this morning a little bit about a theory.
This is a theory.
I don't have any facts, not because I don't feel like looking them up.
I just don't think that they're available.
but I think it's an interesting framework for how to analyze government decisions.
One of the things, of course, that I've argued vociferously long and loud against is the argument from effect.
And one of the things that you can quite comfortably get into once you really understand the argument for morality is the knowledge and understanding that the government is not doing things to try and make your life easier or better or help you or anything like that.
The government is simply trying to expand its own power and that's the job of the government.
That's really what it's for.
And so when you get that into sort of your system, when you really net it into your system, you can start to come up with some pretty interesting understandings or theories, you could say, about why the government does certain things.
Now up here in Canada we have this fabulous system called Registered Retirement Savings Plans.
And they came in the 1960s and then there was a large expansion in the amount of allowable contributions in the 1970s.
And what they're for is, this is sort of the official story, this is the official story.
In order to help you save for your retirement, the government allows you to make contributions into the stock market, or into mutual funds and so on, basically into the stock market eventually, or at least into government bonds.
And the money that you put into that is deducted from your total taxable income.
So what that means is that you sort of get sucked into this plan, into this registered savings plan.
You don't have to pay taxes on the money that you put into the plan.
However, when you take your money out of the plan, which is serious later on in life when you have a much lower income, so after you retire, then the money is taxed at that point, but it is taxed at the rate that you're currently paying it.
So, for instance, right now, I'm in about a 50% tax bracket because I make over $65,000 a year, which in Canada is considered to be rich, which is kind of funny.
funny.
But so if I put in, I'm allowed to put in $13,500 a year into this registered retirement savings plan.
And so what happens is, if I make $100,000 a year, I'm going to get taxes tax at 50% to pay my $50,000 in taxes.
But if I put $10,000 into an RRSP, then what happens is my income is now only taxed as if it were $90,000.
And that means that I'm only paying $45,000 in taxes.
So I spent $10,000 to save $5,000.
But I have now $10,000 in my RRSP contribution.
bank account, so to speak.
and And so I'm sort of up five grand.
That's the idea, right?
I've saved $5,000 by spending $10,000, but I get to keep the $10,000 and cash it in later.
And so I'm up five grand, and that's sort of the whole idea behind it.
And everybody nags you all the time, and this is the season.
So, of course, Christina and I We went to see our financial advisor on the weekend, and we went over all of this sort of stuff, and she actually was talking about this, you know, this completely mad scheme, which is kind of funny, but we're still considering it on one condition, which I'll get into in a moment.
But the scheme is this, and, sorry, just to finish on the RRSPs, they're pretty common, and they are a 401k plan, I think is what they're called in the United States.
But I don't know to what degree they're prevalent in Europe, but I would not be at all surprised, because it's such a wonderful thing for government power that I would be shocked if governments hadn't adopted this wherever they conceivably could.
So, the scheme that Christina and I talked about with our investment advisor, our financial advisor on the weekend, runs like this.
So, if I borrow $100,000 tomorrow and invest that in the stock market, or in bonds, or in mutual funds, or debentures, or other such financial instruments, then I will get a certain amount of investment income from that $100,000, say $800 a month.
Now, I can use that $800 a month to pay off the principal on the loan.
So, half goes to interest and half goes to the principal.
And then, what happens is, after 10 or 12 or 15 years, depending on interest rates over the long haul, and depending on the returns from my investment income, then I end up having paid off this loan.
So, I now have $100,000.
So the question is, why would you do that?
It wouldn't make any sense.
Why would you borrow $100,000 just to pay it off with the interest you get from investing it?
Well, the difference is that the interest that you pay is tax-deductible.
So if I'm paying $2,000 a year in interest, then that is tax-deductible.
So I get an extra $1,000, which is what I can put towards the principal, which helps pay it off more quickly.
So basically it's a fairly, it's not that complicated, but it's a little bit more complicated than a Canada Savings Bond.
So it's the idea that you borrow this money and then you get to pay it off and the interest that you get from the, sorry, the interest that you pay off is tax deductible.
So it ends up being a positive economic transaction because of this ridiculous rule about tax complications and deductions and so on.
Well, why is all this important?
Well, one of the things that Christina was asking me when we were driving back from our financial advisor, was she was saying, well, why are there RRSPs?
And I said, well, that's an interesting question.
I can tell you what I think, and I'm telling you now, out there, what I think.
I don't have any proof for this, but I don't think that proof exists.
And if it does, feel free to let me know, of course, and I will absolutely, if you like, credit you and praise you.
Or proof against, like proof either way.
But this is sort of the theory.
Now, the RRSPs came into vogue in the 1960s.
And the other thing that came into vogue in the 1960s in Canada and in America, and probably in Europe as well, was a massive expansion in the welfare state.
An enormous, ginormous, humongous expansion in government programs.
Now, these two things are not unrelated.
And so the question is, why did the government introduce our RSPs?
I mean, the government just doesn't wake up one morning and say, you know what?
We're really going to help people save for their retirement.
Because the government already has.
In Canada, and I believe in just about every Western democracy, a program which is forcing you to save for your retirement.
In Canada, it's called the... I can't remember the technical name for it, but it's basically they tax you and then they put it in a fund and then they pay you a pittance when you get older and you can't conceivably live on it.
And it's a retirement plan that's instituted by the state.
So of course the government is already forcing you to save for your retirement.
So what the hell is it doing with all this RRSP nonsense?
Well, people then feel, well, the government's really encouraging me to save by doing this and doing that, and the government is deferring its tax income, and therefore it must be some altruistic thing.
And so, you know, you may come across people who will talk about this kind of stuff as an example of a government program that works.
It's different from Social Security, because Social Security is a forced tax with an IOU at the end of it.
This is an optional program, but it's optional in the way that Surgery for appendicitis is optional as well, but it's not really that optional, really, when you think about it.
Because you either give the money to the government in the form of taxation, or you put it in this plan and hope that it's going to be around later and get taxed at half the rate.
So, I think that there's sort of two fundamental things to understand about the Registered Retirement Savings Plan, or whatever that equivalent is in your country.
Two important things to understand about it.
One is that it is a tax increase.
It is a tax increase insofar as If the government forces you to give, or strongly encourages you, let's say, to give more money to the government in the present while promising a certain form of IOU in the future, then it is a tax increase.
I don't care what you call it.
You can call it a registered retirement saving plan.
You can call it 401k.
You can call it a tax increase.
But it is absolutely a tax increase when you end up giving more money to the government through a particular program.
Now, the question then becomes, well, I'm not giving my money to the government.
I'm giving my money to the stock market.
Well, that is something that is worth having a little pause and a chant and an examination of, because one of the things that's important to understand, and this is what people understand in their gut about what they call capitalism,
Which is that the money market guys, the financial guys, the stock market guys, the big investment companies, the capital markets guys, those guys and the government are cheek by jowl, they are two sides of the same coin, they are the sound of one hand clapping, they are entirely entwined with one another.
And that's not the fault of capitalism, it's the fault of the state, but let's have a look at what that means.
One of the things that everybody knows about government is that it is a vociferous borrower of money.
It is a black hole of financial resources.
The trillions upon trillions upon trillions of dollars that have been borrowed by the state have been borrowed in a voluntaristic manner.
And I use that term rather loosely, which is sort of what I'll explain in a moment.
But they haven't gone in and just stolen money and property.
They haven't nationalized everything.
I mean, they've regulated it.
It's fascism, right?
Communism is when the government actually just takes over everything, and fascism is when the government nominally leaves the resources in private hands, but taxes and regulates and organizes it to the point where it's kind of being managed by the government, but run by private industry, if that sort of makes sense.
So this is it's more of a fascistic situation that we have in most Western countries because the mass nationalization of resources was simply the which which happened in most of western europe after the second world war because they fought to and socialism so they thought that the best solution for that was to nationalize everything and what happened was it was such an obvious destruction uh... destructive factor in the economy that the money classes the ruling classes the powers that be
quickly realized, I mean within a decade or two or three, pretty quickly realized that it just wasn't going to work.
That getting people to nationalizing industries simply destroyed the economy and it would do so within their lifetime.
And of course people who are in power, in political and financial power, they don't care about what the economy looks like for the next generation really because their kids are going to be fine, right?
Their kids aren't going to have to work.
They'll be like, Trustafarians, mon.
They won't have to do too much of the old workin', mon.
So they don't care about things of the future.
They do care if there's a sort of a financial collapse now, which might affect their current fortune.
But they don't care so much about the future.
So that's sort of an important thing to understand.
So how does the government That's sort of a pretty important question.
So, when the government began its Great Society expansion programs of the 1960s in Canada, that included the massive government sinkhole and waste of socialized medicine.
And again, I use the term socialized unqualifiedly, but medicine there very qualifiedly.
So, the government needed all this money to get these programs going.
Where was it going to get the money?
Well, it had to turn to lenders.
It had to turn to Wall Street.
Now, Wall Street, how did they feel about lending all this money to the government?
Of course, the government, as I've mentioned before in a podcast about two months ago, the government doesn't want to raise taxes to pay for programs immediately because then there'll be a taxpayer revolt and people will say, are you crazy?
Doubling my taxes?
Forget about it!
What the government wants to do is it wants to get the programs going through borrowed money And then in five to ten years... Well, I mean, the people who put the programs in, for sure, don't want to charge the taxes that are required.
It's the same thing with the war in Iraq.
There's no way that people's taxes are going to go up 20 or 30 or 40 percent to pay for the war in Iraq, because then people would get off their duffs and do something about the war in Iraq, and that's really... that would interfere with the whole grab-the-money-from-the-treasury-before-the-system-goes-down theory.
Or practice, actually.
So...
The question is, when the government suddenly needs all this money so that it can get its programs going, get its bureaucracies entrenched and slowly increment the taxes and deficits up over time, well, quickly increment the deficits but slowly increment the taxes over time, The question is, why would people want to lend to the government?
I mean, the people in the money markets aren't stupid.
They're pretty intelligent people, if not necessarily the most menschy, moralistic kind of guys.
They know their own self-interest, just like most people do, and so the question is, why would they lend all this money to the government?
Well, they have to be bribed, obviously.
I mean, the government can't take guns out and force them to, because these are pretty educated people with access to the media.
And you can only trump up so many Millikan-style charges against a certain number of people.
You can't indict the whole capital markets industry, the money lenders.
So you have to find a way to bribe them, because it's not possible to force them.
You can force People who are poor, you can throw poor black kids in jail pretty regularly because they don't have a lot of high-profile access to the media, eloquent, able to afford judges and can expose the whole racket.
So the government will bully the poor, the government will bully the helpless, The government will bully the disenfranchised.
The government will even bully foreigners who have no capacity to defend themselves.
But the government ain't so big on bullying those who have some capacity to fight back.
So they can't just go and take all the money from the capital markets.
And that's too short-term a strategy even for the government.
Because, of course, if they go and pillage and nationalize all the capital markets and take over the stock market, then there'll be just a massive capital flight on the dollar.
The whole economy would collapse.
So they really don't have that as an option.
So they have to get the money market guys to lend them their money.
Voluntarily, so that they can pay for all of these programs, get the bureaucracies and the programs entrenched, get people whose self-interest is in the continuation of these programs firmly in place.
And only then do they bother starting to raise the taxes, and by then it's too late, you can't get those programs out.
It's sort of like they've poured a color into water.
Food coloring into water, you simply can't separate it.
That's the whole idea.
So the question is how do they get the money market guys to lend hundreds of billions of dollars or at least billions of dollars to begin with to the government so the government can cover the cost of these programs and get them entrenched?
Well, I mean, there's lots of answers, and some of it is around a threat, and some of it is around a bribe.
So there's the stick and the carrot.
Now, the stick is that the government controls the money supply, and we can get into the money supply another time, but basically the government can print as much money as it wants.
And if it prints lots of money, that has a pretty deleterious effect on the bond markets in particular.
Those fixed return instruments that provide income over time are going to do pretty badly if there's inflation.
They're not going to be very popular, because if it pays 6% return over 25 years, if it's a particular bond, and then inflation is running at 4%, then your real return is only 2%, so nobody's going to want to buy it.
So they're going to have to raise the prices of those and there's just going to be a lot of problems.
So the government can threaten these guys with regulation.
It can threaten them with SEC investigations.
It can threaten them with manipulations of the money supply.
It can threaten them with raising the interest rates.
It can do lots of stuff to threaten the bond markets.
But that's not enough.
That's not enough.
Because the government needed so much money that you can't just get grudging acceptance of a regime.
The government needs the active participation of the bond market.
Because the bond markets can... I mean, there's lots of people in the bond market who can sort of go in and make their money through stock manipulation and get out.
So there's a revolving door, so people maybe aren't into it for the long run.
You have to have a longer-term self-interest in the government for the government to bully you in this kind of manner.
I mean, if you go and win the lottery, the government can't do much to bully you.
But...
So they can't just force everyone to do it.
I mean, they can, but they're just going to get a grudging compliance, and they're going to get lots of resistance, and people are going to start moving their money offshore, or they're going to tie it up in long-term investments and say, sorry, my hands are tied.
So the government really needed the active participation of the bond marks to get the money that it needed to get these social programs up and going without a significant impact to the taxpayer.
So, the answer, one of the answers in this theory that I'm going to start propounding is that the RRSPs, the... I'm going to call them 401ks because it's a bit... it's vocally challenged to keep saying RRSPs without sounding slightly retarded.
So, the 401k programs, the retirement savings programs, the government put these in place.
And why?
Because it wanted to help people save for their retirement?
Of course not!
Good God!
The reason that the 401k plans were put in place was to bribe the money market guys with enormous amount of investment cash that was now available to them that wasn't available before.
As I talked about in a podcast last December, the amount of money that is forced and shoveled and bullied and herded into the stock market is staggering.
It's in the tens or hundreds of billions of dollars.
Now, all of that money is available for money market fund managers, for the money classes, for the investment guys, for the Goldman Sachs.
It's all available for them and they never would have had that before.
I mean, that's a pretty impressive pile of cash to come herding into your marketplace.
So, my theory is that what happened in sort of closed-room meetings, and the reason that I think it's going to be tricky to prove, is that these meetings are not exactly recorded and broadcasted.
But the general movement was this.
In order to get loans from the money market guys, from the investment guys, the government had to promise them that it was going to top up To an equivalent degree, or more, the amount of money available to the stock market that it was taking out.
So, if the government needed to borrow $10 billion to get its program started, it needed to find a way to get $10 billion, or more, probably more, back into the stock market.
And it just wasn't able to do that with the current regulations that were in place.
Now, it simply couldn't raise taxes and then just invest that money in the stock market and do it that way because that would sort of be a zero-sum game.
They want additional money in the government.
They don't want to just sort of borrow 10 billion dollars and then have to reinvest that back in the stock market.
And, of course, the money market guys are pretty aware that lending money to the government is a way of ensuring future taxes increases.
I mean, there's no question of that.
If you buy a savings bond that your government puts out, all you're doing is guaranteeing that your taxes are going to go up in the future, because where is it going to pay the interest from?
It's not a money-making organization.
It's a money-printing organization, but all that means is that it will erode your savings through inflation.
But, The question then was, how do we get these money market guys to give us all this money?
Well, we have to find a way of herding billions upon billions of dollars into the stock market that people would not rationally put into the stock market otherwise.
And this is where the 401k plans come in.
And this is the genius, the evil, stinking, vile genius of this kind of transaction.
This is the kind of manipulations of power that occur with a state that people simply can't track.
This is why the idea of a democracy is kind of like a joke, right?
I mean, it's kind of funny to say that we get to vote for George Bush or John Kerry or Stephen Harper or Jack Layton up in Canada, and think that these idiot face models have anything to do with what is actually going on behind the scenes.
Because if you look at what happened, I mean, I'm just going to talk about Canadian statistics.
The stock market manipulations that came out of the RSPs were introduced.
In the 1960s and then in the 1970s there were significant expansions in the amount of money that you were able to put in to these plans, to these programs.
And when it started there were like 20 billion dollars invested in the early 1970s and then by the early 1980s it was over 70 billion dollars.
So 50 billion dollars just in Canada.
It's a pretty small economy.
It was much larger in other countries.
50 billion dollars moved into the stock market in a matter of eight or so years.
Well, that's pretty significant.
That's a pretty significant rearrangement of capital within the marketplace.
Now, another reason why the money market guys would be less likely or less willing to lend to the government is that they actually have a choice.
They actually have a choice.
They can invest in private industry.
They can invest in these entrepreneurial startups or blue-chip stocks and so on.
Or, you know, they can even buy the bonds that are put out by large private sector companies, which will give them an annuity over a longer period of time, which is pretty guaranteed.
So, they have those options.
Why would they want to invest in the government?
When they knew it was going to raise their taxes, when they knew it was going to be squandered, when they knew that they would be able to collect interest for maybe a generation or so, but then the whole thing would collapse, when they knew that they faced the risk of the government simply paying them back through printing off money.
So, why would they take that risk?
I mean, they know the private sector.
The private sector is a reliable generator of wealth.
Why would they lend to the public sector?
So that's another reason why when the government goes and says, listen, I need to borrow 10 billion dollars from you guys, they'd say, you know, actually, we think we'd rather invest it in some entrepreneurial startups or some blue chip stocks, because that's a little bit more like what we understand.
That's a little bit more something that we know is going to work and that's going to pay us back and that is not nearly as subject to The manipulation that comes from a monopoly of political power.
So, it was also that the government needed to redirect the money from productive uses.
Therefore, the bribery situation was pretty important.
So, if the government said, listen, you lend me 10 billion dollars and I will make sure that you get 10 billion dollars or more over the next couple of years invested in the stock market.
Now that's not all going to go to you as an institutional individual situation, but trust me, a rising tide raises all boats.
Everything's going to do pretty nicely.
You guys are going to make out like bandits because you're going to get an enormous number of unsophisticated people Being herded into the stock market who don't have the education, the experience, the sophistication, the understanding, the knowledge, the depth to protect themselves.
They say that in every bull market, sorry, in every bear market money is made by those who went through the last bear market and is lost by those who are going through their first bear market.
So experience is pretty important in the stock market.
And you're hurting billions upon billions upon billions of dollars, tens of billions of dollars in Canada, probably hundreds of billions in the United States.
You're hurting all of that money into the stock market and people don't have a clue what they're doing.
So you are going to be able to just manipulate the hell out of any stock you want.
You're going to be able to make your own fortunes.
You're going to be able to be stinkingly rich.
Because you're going to have an incredible vault of money that's going to be jammed into the stock market, that is going to bid up everything, that is going to just slosh back and forth like water in an overfull bathtub, just spilling over.
There's going to be so much money, it's going to be ridiculous.
And that's a pretty cool way to get money out of the money market guys, to get them to lend to the government while giving them something in return that is pretty compelling.
So you have this stick, right?
You can threaten them with investigation.
You can, you know, threaten them with review or audits.
You can threaten them with lots of different tricks, both legal and financial and accounting-based, that the government has regulations over.
You can threaten to impose a capital gains tax that is going to make capital gains far less attractive relative to taxation.
A capital gains is the tax that you pay on the money that you receive, the profit that you receive, or the income you receive from your investments.
And so you could do all of that, but all of that would simply make the bond market angry.
And because the bond market is flexible, I mean, geographically flexible.
If you go anywhere at once, pretty much, you're just going to chase money out of the country and you're not really going to get much of what you want.
Or, at best, you're going to get this grudging compliance that is very hard to enforce and is really a short-term proposition.
So they had to come up with a system wherein people were going to be forced to put their money into the stock market, but it couldn't be a tax.
So this idea of a retirement savings plan is just pure genius.
Because people feel like they're getting money back from the government.
They're like, wow, you know, it's like a tax refund.
Oh, I'm getting money back!
It's like it was your money to begin with.
But it's genius, because they say, wow, the government's helping me save for my retirement.
The investment guys get to sit down and say, wow, you know, look, there's this great new program, you put this money in, it's deducted from your tax, it's sitting there, and so on.
And so it's wonderful.
Because the IOUs are completely Deferred into the future, and we'll get into the consequences of this in a second, but I think it's clear to understand what a stroke of financial genius this was in terms of forcing people at gunpoint to put their money into the stock market or lose it.
And it gets people to pay more and more of their money into this government-sponsored program, which puts the money into the stock market, which then frees up the money in the stock market to be lent to the government.
So if the government forces 50 billion dollars into the stock market, and this is just one of many programs that do this, then, by heavens, look!
There's 50 billion dollars or more, or some portion of it, available for lending to the government, which otherwise would just be completely unavailable.
So they're basically taking money from the till and replacing it with counterfeit money.
So the books look great, but it's all nonsense, because it's all going to come crashing down.
So what are the effects of this going to be?
Well, the effects of this are pretty simple.
The amount of money that is in the stock market is going to be strongly affected by the government debt.
So the government debt at some point is going to overwhelm the government's capacity to pay for it, and my estimation is 15 years or so, 20 years at the outside.
Because, demographically, that's when you just have so many people retired, so few people working, relative to the retirees, and the medical expenses go up enormously.
And, I mean, people get very expensive as they age.
They're like cars.
So, all of that is going to occur, and that's going to break the back of the state.
But people don't care, right?
The people who are in power right now, they don't care.
They'll be fine.
They can always go to an island.
They can just get out.
They're not stuck in any way, shape, or form, because they've, you know, it's like Gorbachev, right?
I mean, Gorbachev was being paid a pittance.
As the leader of Russia in the 1980s, and then when the Russian state collapsed, I mean, he's got two houses, he's got a dachau on the Black Sea, he's got a beautiful mansion in California.
I mean, he's not stuck there with no pension and no income.
He's out, baby.
He's good to go.
His family fortune is made.
So, they don't care about the fact that the economy as a whole is going to collapse, but what is going to happen Is that the money that you're putting in to your 401k plans, your retirement savings plans, I mean, what are you getting in return?
Well, it's a bunch of numbers on a piece of paper.
You're not getting any actual assets.
You're not getting a house.
You're not getting an iPod.
You're not getting a car.
You're not getting anything that you can use or sell or trade or anything like that.
What are you getting?
Well, you're getting a printout.
Ooh, look, these numbers, they have some commas.
I must be rich.
Now, what are the odds?
I'm 39, and I guess I'll retire.
I'd like to retire at 55, but let's just say I go to 60.
Well, that's another 31 years until I get to retire.
Well, what are the odds that, given the amount of government borrowing, given the amount of expenses the government is yet to start absorbing, what are the odds that I'm actually going to get to cash in on all this money?
Well, if you look at the history of these kinds of situations before, you know that the stocks just evaporate.
I mean, the particular history to look at is the history of Germany in the 1920s, during this time of hyperinflation where you had to buy loaves of bread with wheelbarrows of money and you can also look at Brazil anymore in Argentina more recent times that they just get this hyperinflation and Which is basically what happens when the government runs out of money and starts printing, and the whole thing just goes crashing down.
And that's what's going to happen to our RSPs and to our 401k plans.
The odds of them being around in 20 or 30 years, or if you're younger, even longer, you know, not particularly high.
There's absolutely no capacity for the system to be sustainable.
Mathematically, it's completely predictable and true.
And it's a simple fact of logic and life that anything which is unsustainable is unsustainable.
Anything which mathematically cannot continue cannot continue and won't.
And what's going to happen?
Well, the government isn't going to come and take your house because that's kind of labor-intensive and you might have a gun and the government doesn't really like doing any of that stuff.
They prefer doing this Slithery, slippery, silkily evil stuff behind the scenes by manipulating your cash in ways that you can't control or even track.
So, what's going to happen?
Well, the government's going to start grabbing money from the stock market.
It's going to start grabbing money to stave it off, right?
At this point, it's just a complete emergency.
It's like a junkie looking for its next fix.
It's just going to grab money from wherever the hell it can.
And what it's going to do is it's going to create situations wherein it really becomes unprofitable to invest in the stock market.
It's really going to become a negative situation because so much financial predation and problems are going on.
So, in the end, the upshot is going to be that the numbers that you have on your piece of paper are going to go bye-bye.
And that's sort of an important thing to do.
Now, have I accidentally got myself in this situation?
Of course, yeah.
I mean, I sort of started pretty early in life and didn't really understand the economics of it until later, so I'm perfectly willing to get involved in these kinds of schemes.
And I need to check this with my financial advisor.
You can check it with yours.
And, I mean, if you want to listen to more of this kind of stuff, Harry Brown, you know, You know, it's to my investment knowledge as I am to AP, but you want to get your hands on some kind of transferable or fixed kind of resource.
So you don't want to, you know, hey there's stocks that somebody else is managing that I can't get any access to because they're locked in and I have to pay taxes if I withdraw plus penalties and blah blah blah.
That's not really what I would call cash.
It's not really what I would call a resource.
So you want to have some of your money in cash, of course.
You want to have some of your money in stocks.
You want to have some of your money in bonds.
And you want to have some of your money in gold.
Each one of these particular situations has benefits depending on economic circumstances.
I'm guessing that most people who have investment money have most of it in the stock market in one form or another.
Not because we all love the stock market, but because we've sort of heard it in there.
So, my particular approach is to say, okay, well I'll do this 100k thing for sure, but I want to get it in gold.
I want to get it in something that is a thing that can't just sort of be wished away.
So, that's the approach.
I'd be surprised if I'm allowed to do it, but if I'm not allowed to do it, I'm not going to do it, because I'm not taking on a $100,000 liability when it's pretty clear that the state economics are going to collapse, certainly before I retire.
At least, if not when I retire, I plan to retire for a good 30 or 35 years.
It's going to happen at some point, and all of that money is just going to vaporize.
And so I'm not going to take that liability on, because if it happens sooner, then I'm left with pretty much no stock income and $100,000 liability, which I have to pay off with real money.
So that's no good, really.
So this is the kind of approach that you can take.
Now, this is just a theory as to what happened.
I don't have any proof that the money market guys in the government got together and said, they sort of rubbed their hands together.
Excellent, in that Mr. Burns kind of way.
And said, this is what we're going to do.
I don't have any proof of that, but it's just too perfectly logical a situation to say that there's no chance of it at all, that this is for sure not what happened, because the coincidences are too strong, the motivations are too strong, and we know once you get over the idea that the government is ever going to try and help you, then it's a lot easier to see more clearly what the government's up to and what its motivations are.
So, the last thing I'll say is that the final genius of all of this is that the government put all of this stuff in place and people said, wow, you know, this is great because I don't have to... I'm getting tax deductions and so on, so I don't have to pay as much in tax.
But, of course, the funny thing is that all the government does is raise the tax over time to more than compensate for the money that they're giving you back for the RRSP.
So they still end up with the high taxes that they wanted You have the RRSP which frees up money from the capital markets to be lent to the government and is a great incentive for getting the money markets and money classes in line.
And you heard all these unwilling, unsophisticated, unknowledgeable people in the stock market where they get pillaged and they're happy because they're giving away more of their real money and getting pieces of numbers on a piece of paper which in the long run are going to amount to precisely squat.
So I hope that that's been helpful.
Thank you so much for listening as always.
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