wrote in message
...
On Sat, 12 Jun 2010 11:07:57 -0700, "nom=de=plume"
wrote:

The gov't doesn't need to "save" money as much as it needs to have money
available. The gold standard was highly flawed and died an appropriate
death.

The point was, with a metal standard they could have extra money in
reserve. With the federal reserve model it is just what you have in
tax revenue and what you print or borrow. There is no reserve. The
"trust fund" is a huge lie. It is just a promise to raise taxes that
the population will not tolerate.


Boomers will not be pulling money out en masse. In fact, some of the
boomer
generation has already hit retirement age. It's a spread of about 15
years... something like that. Most with substantial 401K-like savings
will
likely pull it out in drips and drabs. Only someone foolish would pull
it
out at once, esp. given the tax consequences.


That is yet to be seen isn't it? If a person is in debt and sees that
pile of money, they will cash it in. The only boomers who are retired
are the ones who are not in debt.

It's not needed. The "money in reserve is in the form of treasury notes,
which are invested in the general economy. Storing a lot of metal doesn't
really do much and it's certainly not readily usable.

Treasury notes are really nothing but paper that represents whatever
the fed says the money supply should be. It is like electricity in the
grid, you can't really store money if you are the guy who prints it.
It would only result in a decrease in the money supply.
When metal was the standard, your government was as rich as the metal
they held. Everything else was an IOU. We abandoned the metal standard
and made all of our money IOUs. I can understand the justification but
it comes with the danger of simply printing money and that can degrade
into hyper-inflation. These days they call that "monetizing the debt".
You balance the books but your money becomes worthless.
That is the fear in the EU with the P.I,G.S. They are writing checks
they do not have the money to cash and dragging down the Euro for the
countries who do have fiscal responsibility.

Metal is metal. It's not a good measure of wealth, esp. today. The T-notes
represent "value" as best as can be determined by global markets. The Fed
has limited control over that. Inflation is the danger you're talking about.
It's the job of the Fed not to let it get out of control. They're doing a
pretty good job. No reason to think that'll change.


Not really... there are always foolish people, but there are lots of
people
already in debt who don't pull out their money. As I said, the tax
consequences alone usually give people pause. Many boomers are in debt in
one form or another... mortgages are a good example. Most people think of
their home as an asset, but if you owe money, it's really a liability...
certainly one kind of liability that's easy to live with, even in
retirement.


The tax consequences disappear at 59.5 years old. If you are carrying
a big balance on a 29.99% credit card, that 10-15% you will have to
give Sam starts looking very attractive.

Completely untrue. If you liquidate a regular IRA, you have to pay taxes on
whatever you receive over some base amount. There are certainly going to be
people with a 30% rate, but the vast majority won't be in that situation.
And, as I said, it's not going to happen all at once. Where are the ones who
have that rate now? I don't see any run on the banks happening.