The central bank of the strongest economy in the European Union has explicitly stated that you are responsible for your country’s fiscal obligations—and would be even if you voted against them! …introduced a blanket taxation rate of .03% on all bank account deposits, in a move aimed at… generating revenues for the country’s cash-strapped autonomous communities. … says a US lockdown of four to six weeks could control the pandemic and revive the economy. And you have no recourse. As you’ve seen before, the possibility is being discussed as we speak. The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. It's the RMD on your total amount subject to … It’s a complete A to Z guide on how to diversify internationally. This is a BIG risk to any cash savings you have (click here to learn how you can mitigate inflation and preserve your portfolio’s value with peace of mind). This view effectively nullifies all objections. © 2020 Equities News | Equities.com, Inc. * All dates and time are being displayed in Eastern Standard Time (EST). The policies put in place so far, such as budgetary austerity, are little match for the size of the problem, and may make things worse. Is there an easier pool of cash than Americans’ savings? $7.3 trillion in US IRA accounts is too large for them to ignore. It’s used up by the first £12,500 of your wages. Also, in 2008, a U.S. House of Representatives subcommittee heard testimony in favor of scrapping 401(k) plans and switching to “guaranteed retirement accounts.”. In my opinion, the goal of FATCA is to keep US savers trapped in US banks and in the US dollar, in case the US wants to implement a Cyprus-like bail-in. I'm sorry, but in order to complete what you're trying to do, you must be logged in. Meanwhile, they still had an obligation to pay contributions for it. You will have no recourse. Now, you may think that the government is not “allowed” to go take money from your personal savings account. This opens the door to all kinds of dubious actions on the part of politicians, including—to my point today—capital controls. twitter. And it’s not just the Germans. If the government takes a portion of your assets, legally, who will you sue? “I live here, work here, shop here, spend here, and invest here. Originally Answered: When can the bank or government take your money from your own personal account ? The thought of the government repossessing your bank accounts might sound scary, and it is, but escheatment is an important process that helps the government keep the financial system running smoothly. Well, apparently if you take out $10k or more, this must be reported to the Feds by the bank. The momentum is clearly gaining steam for some form of capital controls being instituted in the near future. The following quote sent shivers down my spine…. Good answers here on when banks (or government) can take money under normal circumstances. As investors, our only goal is to look at what happens in the world around us and react. Santiago, Chile. Am I saying this is definitely going to happen? There seems to be little recourse when they are wrong and it is the individuals who suffer the most not our government. So that the government would raise $9 billion over the next decade. On February 12, 2014, Reuters reported on an EU commission document that states: The savings of the European Union’s 500 million citizens could be used to fund long-term investments to boost the economy and help plug the gap left by banks since the financial crisis. Now – to be clear, they are suggesting that, after a Biden inauguration, he should impose a nationwide lockdown on ALL 50 States. And the government can – and does – change the rules and restrictions anytime they want. That happened right here in the United States, and it was so recent… that if you were born any time before 1985, you probably had a grandfather or a father who watched it happen. You can pay in as many times as you like, but the most you can … Now, when it comes to questions of “how will people work” or “how can businesses survive,” the answer is they will hand more free money out (to everyone). In April 2013, Obama proposed to cap retirement accounts at $3 million…. Remember – when you put cash in a bank, it now belongs to the bank. And don’t expect anyone below your tax bracket to feel sorry for you. Ha, the “Government” pretty much does what it wants. If your bank doesn’t leave enough money in your account to cover upcoming cheques or pre-authorized debits, it can then charge you a NSF (non-sufficient funds) fee, which can lead to a situation where your debt grows quickly. And the 10% wealth-grab would, of course, be on top of regular income taxes, sales taxes, property taxes, etc. A capital levy corresponds to the principle of national responsibility, according to which tax payers are responsible for their government’s obligations before solidarity of other states is required. These were the fifth and sixth times in 20 years it had borrowed federal workers’ retirement money. While the possibility of the government “borrowing” from individual savings accounts may seem outlandish, you may find this history of government asset seizures to be interesting and useful. His name is Ezekiel Emanuel, and he thinks an eight-week NATIONAL lockdown is necessary to control the pandemic. They benefit from having no limit to the amount that the government will protect, in contrast to normal bank's savings accounts. It goes on to say that plans to replace 401Ks would include that the “government would at least partly take over sponsorship of these accounts”. Unfortunately, it’s not just savings. Back in April, we told you about President Barack Obama’s proposal to cap retirement accounts at $3 million in an effort to generate much-needed revenue for the federal government. One of the most disturbing methods of taking people’s hard earned money is when the IRS or even local authorities use “Civil Forfeiture” as the basis for it. The result? People far removed from that small island nation had to wonder: "Can this happen here?" Could the Government ‘Borrow’ from Your Savings Account? The bank OWES you the money back, but it is under no obligation to actually give it back to you. And there is perhaps no easier pool of cash to ‘borrow’ than Americans’ retirement savings. Well, it’s self-evident that putting all of one’s eggs in any single basket, no matter how safe and sound that basket may seem, is risky—extremely risky in today’s financial climate. And gold was ILLEGAL to own or possess until the early 1970s. … or lose the right to the basic state pension. But there is another thing that many overlook. Just for this post office saving account has to be linked with Aadhaar. US taxpayers with retirement accounts can set up a special kind of IRA structure that allows you to take control of your retirement savings, and even ship it offshore if you want to, completely legitimately. And the government would be able to spend the saved-up resources on whatever else they wanted. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. Will individual governments jump on this bandwagon? To understand what my team and I are doing about it, click here to reserve your seat at our client-only webinar on strategies for profiting in this rapidly shifting environment. “Directed” means “compulsory” in the above statement, and you may not have a choice if “regulation of cross-border capital movements”—capital controls—are instituted. Fortunately, you don’t have to be a target. Lots of it. I suggest taking a portion of that money and getting into the most explosive growth trends of the next 10 years. . Just so I am not at risk of alienating 50% of my readership, I just want to very quickly say – we don’t have a political bias here at Wyatt Investment Research. It’s no secret that the government needs money. In more recent times, countries that find themselves in a debt crisis have resorted to dipping into citizens’ retirement accounts. National savings and investment (NS&I) National savings and investment is a government backed form of savings account, meaning that they offer a secure way to store your money away. I’m convinced that this is the most common—and important—strategic investment error made today. Of course, the next question is “With whose money?”, Aside from the Fed having printed more money in the single month of June than the United States had printed in its first 200 years of operation…. In 2009, the Irish government seized €4bn for rescuing banks… And then €2.5bn in 2010 to support the bailout of the rest of the country. So if you die at age 85 and leave your IRA to your 55-year-old son, he could withdraw money from that … They say that there has to be a new way of thinking about retirement. If you forget about your savings account, the government could take possession of your savings account through a process called escheatment. Can the Government Take Your 401k? The government gained control over $14bn of people’s hard-earned money. This generally occurs in situations where you have an outstanding government debt. The decision of the government in Cyprus to simply take money out of people's bank accounts there sent shock waves around the world. ), Bloomberg reported in December 2012 that the “IMF has endorsed the use of capital controls in certain circumstances.“, This is particularly important because the IMF, arguably an even more prominent institution since the global financial crisis started, has always had an official stance against capital controls. Reinhart and Mr. Rogoff suggest debt write-downs and ‘financial repression’, meaning the use of a combination of moderate inflation and constraints on the flow of capital to reduce debt burdens.”. Neel Kashkari – the president of the Federal Reserve of Minneapolis – is the person suggesting it, to be exact. If you have a savings account, there is a limit to how many withdrawals you can make. Further, the IMF has already studied how much the tax would have to be: The tax rates needed to bring down public debt to pre-crisis levels are sizable: reducing debt ratios to 2007 levels would require, for a sample of 15 euro area countries, a tax rate of about 10% on households with a positive net worth. If you have the money in your savings, then pay at least some of your student loan. Meaning, in the years 2011-2024. In 2015, President Evo Morales nationalized $10.2 billion held in individual retirement accounts. If you ask me, it’s about control. Argentina’s famous corralito Many mainstream economists support capital controls. And that’s based on rosy government projections. The appeal is that such a task, if implemented before avoidance is possible and there is a belief that is will never be repeated, does not distort behavior, and may be seen by some as fair. (So make sure you own enough gold, and avoid government bonds like the plague.). It will be fast, cold, and cruel. If your savings account has $10,000 and earns 0.2% interest, you are only taxed on the $20 in interest the bank pays you, not on the principal that drove those earnings. With that out of the way (no pitchforks, please), I do want to bring your attention to something a member of President-elect Biden’s coronavirus task force said recently . You can pay money into your Help to Save account by debit card, standing order or bank transfer. Ireland Government plans to take more cash from our dormant accounts. Thankfully, trade unions protested and the government “only” used about 20% of the original plan. You’ll get growth that beats the interest you can earn in a savings or money market account or CD by a country mile. Currently those who inherit an IRA are allowed to take distributions from the IRA over the lifetime of the beneficiary. It covers gold ownership and storage options, foreign bank accounts, currency diversification, foreign annuities, reporting requirements, and much more. Then? So let me share a few key points from my Sprott presentation and let you decide for yourself if you need to reconsider your own strategy. Your money can also be "taken" under not so normal circumstances if the bank has to be bailed out and depositors are forced to take part in the bail out. By Jeff Clark, Senior Precious Metals Analyst, Discover what solutions are right for you—whether you’re a big investor or small, novice or veteran, many options are available. Given the amount of indebtedness in much of the world, inflation will certainly be part of the “solution,” with or without outright confiscation of your savings. May 11, 2011. A lot of it. Then, after all the gold was collected, he immediately increased the price per Troy Ounce of gold to $35, dropping the purchasing power of all Americans’ cash holdings by nearly 40% literally overnight. And it could very well crush your savings and dreams of retirement. Note that the criterion is not billionaire status, nor millionaire, nor even “comfortably well off.” The tax would apply to anyone with a positive net worth. they can not take it out of your savings account, but they can garnish your wages, seize any tax refund money, ect. That's all. If I ever delve into politics, it’s only to tell you what people are saying and what it might mean for your money and investment strategies. So, to skeptics regarding the value of international diversification, I would ask: Does the country you live in have a lot of debt? Money will be redistributed to benefit communities around the country, Treasury promises This regime will be designed to ensure that, in the unlikely event a systemically important bank depletes its capital, the bank can be recapitalized and returned to viability through the very rapid conversion of certain bank liabilities into regulatory capital. Instead, governments should take stronger action, much as rich economies did in past crises. Both your principal and growth can be accessed with no taxes due, under current tax law. It’s the risk of the United States federal government of going into your 401(k), IRA, or even your savings account, and “borrowing” it to pay for social programs and wealth redistribution schemes. Capital controls allow politicians to do anything to your wealth they deem necessary. Workers would put in 5% of their pay and the government would deposit $600 a year and guarantee a 3% return. A bail-in is what they call it when a government takes depositors’ money to plug a bank’s financial holes—just as was done in Cyprus last year. Sign in with your social account? If you hold the wrong kind of bank accounts, Finance Minister Jim Flaherty may have your savings in his cross-hairs. To read our full disclosure, please go to: http://www.equities.com/disclaimer. Could it happen to your savings? Here’s a “short” list of countries that couldn’t resist the temptation to take from people’s savings and investment accounts. I recommend you make a lot of money FAST because time is not on your side. Fair enough, but the “capital levy” prescription is still a confiscation of funds from individuals’ banks or brokerage accounts. I only ask because they keep asking how much I have saved when I fill benefit forms. How the US government will seize your retirement account Simon Black. Because once you put your money into those plans, the government controls it, not you! In 2010, the country’s government told its citizens to either remit their individual retirement savings to the state…. There are some instances when the government can take money from your bank account. If you live in Europe, the writing is on the wall. Yes, your retirement account is now a “captive domestic audience.” Are you ready to “lend” it to the government? 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