We love to hear from readers! Please email your question or comment to Independent Living editor Lee Bellinger ([email protected]). Please include your name and home state. You may also reach us via postal mail (P.O. Box 1240; Clover, SC 29710-4240).
Thanks For Your Kind Words and What I Would Do Now
Wynard S. writes: I have listened to and followed your advice for a number of years now and I have every respect for your genuine care of the American people and your efforts in trying to prepare them for what’s about to happen to America.
I have a question! When the dollar ceases to exist, won’ t the stock market cease to exist as well? Won’t social order cease to exist as we know it?
Lee responds: First of all, I thank you for your loyal support! As for the dollar and stock market ceasing to exist, I don’t view what’s going to unfold in quite such stark terms. In the very long run, yes, the dollar could become completely worthless. But that won’t necessarily take place within my lifetime or yours.
What will take place, in my opinion, is that the dollar will st eadily depreciate. Inflation will rise from its currently depressed rate as America’s debt crisis hits home. The true measure of the fiscal gap the U.S. faces is an astounding $210 trillion, according to economist Laurence Kotlikoff. That represents a whole lot of trillions. New currency units will have to be created in order for the government to avoid defaulting on its debt and entitlement spending promises.
In a worst-case scenario, dollar-denominated bonds could become worthless (or nearly worthless). But I don’t see that happening to the stock market, barring outright nationalization of American corporations. Remember, stocks represent shares of companies that have tangible assets such as land, factory equipment, inventories, etc. Shareholders would still be the legal owners of those assets regardless of whether the U.S. dollar fails.
The book value of blue-chip corporations should actually increase in terms of dollars as the dollar falls versus real assets. Of course, actual busines s profitability could suffer in the event of a currency crisis that leads to economic turmoil and social unrest. That’s why you want to own some hard assets, such as gold and silver, directly.
About Collecting Social Security Abroad
Randall B. writes: If one moved to another country & was receiving Social Security disability & supplemental income would they be able to continue receiving one or both of these? I know I can continue to receive my retirement payments through Social Security but the other two mentioned above are what my spouse is receiving now. She is not at retirement age yet.
Lee responds: Your spouse could run into difficulty with Social Security disabi lity benefits. Generally, after more than 30 days living outside the country , a citizen is no longer eligible to receive disability benefits. However , you should contact the Social Security Administration (800-772-1213) to get a more definitive assessment of her eligibility after going over the particulars of her situation.
About Inexpensive Ways to Improve Your Personal Situation
Ruth H. writes: What do you suggest for those of us without money to get ahead of the coming messes….stocking food and meds and knowing what to do in case etc. is overwhelming when I know that I just do not have the money to get all of this stuff. A hundred dollars may as well be a million when it comes to any extras . I KNOW it all is so important and I want to be ready but how do I do that without much money? Honestly how?
Lee responds: I wish I could tell you that money doesn’t matter. But the reality is that it will take some money to stock up on a few bare essentials ahead of price spikes, shortages, and potential social chaos.
Having said that, there are many things you can do to increase your personal security and preparedness that won’t cost you anything. Developing and growing social networks within your community is one of the most important steps you can take. You’ll find many free resources at your local library – books, DVDs, In ternet access, and often workshops and support groups that meet there.
Look for creative ways to cut unnecessary expenses. There’s no reason to shell out $150 or more per month for cable TV and Internet services when you can get free wi-fi at libraries, coffee shops, and any McDonald’s.
Breaking the TV and Internet habit can be difficult at first. But not having these distractions available to you at all hours of the day will allow you more time to focus on more productive activities. Such as reading books, meeting new people in your community, and taking up gardening or other hobbies that can make you more resilient to outside threats.
Finding Like-Minded People Matters
Bob M. writes: Lee, I would like to know if there is anyway I could contact other people who are your newsletter readers and agree with everything it stands for. You are right when you talk about everyone thinking that a person who wants to prepare for what looks like a very dangerous future, not only in the U.S. but the world. Even my family thinks I am crazy to be concerned enough to put limited resources towards this end. I need to know some like-minded people where I can feel among other patriots who live nearby.
Lee responds: I’d like to be able to help facilitate social networking. I also have to respect the privacy of those subscribers who don’t want to be contacted or have their names revealed. Therefore, I can’t share anyone’s name directly. But we do have a Facebook page where subscribers are welcome to interact (facebook.com/ IndependentLivingNewsletter). You can probably also find like-minded people in your area throug h gun enthusiasts, survival/prepping clubs, political organizations, and the like. If you’re having trouble finding groups of interest, check local newspapers and search th e Internet – meeting announcements are often posted on Craigslist and/or Meetup.
True Diversification is Your Best Defense
Gary G. writes: In October 2016, SEC regulations will require that money market funds now open to big institutional investors must allow their shar es to fluctuate in line with the money-market value of their holdings. At least one large institutional purveyor of such funds is reportedly preparing to convert several of its ‘Prime’ funds to government bonds, allegedly for safety reasons and to prevent their share price from dipping below one dollar per share. What do you believe are the chances such a transformation may become a window of opportunity for government confiscation of so me of our retirement funds? Should we consider taking any preemptive action at this point?
Lee responds: I don’t see this particular rule change as a precursor to direct confiscation. But it could put holders of money market funds at greater risk.
The illusion that money funds are risk-free was broken in 2008, when some funds broke the buck and others nearly folded. Under the new rules, money market funds sold to individuals can still (aim to) maintain the $1.00 stable value. But all money market funds will be allowed to “temporarily” prevent investors from making withdrawals, or impose fees on share redemptions, during periods of heightened volatility.
The bottom line is that during a financial crisis, money market funds may not be safe. To reduce your risk, stick with the largest and most liquid funds issued by the most financially strong companies. Consider Treasury-only money market funds to minimize credit risk. And diversify into alternative means of holding cash, including gold and silver coins.
Government Tinkering with Private Retirement Fund Rules a Key Danger for the Young
Martin F. writes: RE: “Take Charge of Your Retirement Accounts Before it’s Too Late” by Seth Van Brocklin [March 2015]. Quote: “Possible Steps include mandatory ownership of Treasury bonds, confiscatory withdrawal taxes, or outright asset confiscation.”
That seems to say it all. However, how might you see it playing out in the following stages? New contributor to 401k/IRA after implementation? 40 year old with funds previously contributed and new monies contributed after the implementation? Retiree at 70&1/2 not adding contributions but taking Minimum Requir ed Distributions?
Seth Van Brocklin responds: The younger you are, the greater the risk that your retirement accounts will be tinkered with and that the rules for accessing your own funds will be changed to your detriment. For those already taking distributions in retirement, you have greater flexibility as to whether and when to take out more than the required minimums. There still could be tax consequences to wrestle with, though.
Part of retirement planning involves informed speculation on what your future marginal tax rate will be in comparison to your current rate. There’s a good chance tax rates will go up, but in retirement you may be able to plan to minimize taxable income in some years so that you’re in a lower bracket. If you find yourself i n a lower bracket one year,
you might consider taking extra distributions from retirement accounts as a defensive measure.
About Electricity Rationing
Bob H. writes: I sincerely believe you are right that Obama wants federally mandated power rationing. In his first campaign he said “electricity rates would necessarily skyrocket”. He wants carbon taxes and complete elimination of our biggest source of electric generating capacity, coal. We could find ourselves in a strangle-hold bureaucratic control of our ability to live in our homes. Power rationing is a very real and horrific fear, and it will be physically unavoidable whenever generating capacity does not meet consumer demand.
…I know the liberals have discussed energy subsidies for the poor, possibly to be paid for by carbon taxes. Control is what the progressives really want, and I doubt they, even themselves,
believe the climate change hustle.
Lee responds: It certainly smacks of hypocrisy when Progressive elites inhabit energyhogging mansions and leave gigantic carbon footprints whenever they jet off to some event to lecture the rest us about conservation. Voters spoke clearly in the mid-term elections. They want more drilling, more fracking, more pipelines, and an end to the war on coal. Meanwhile, Alex Epstein’s book The Moral Case for Fossil Fuels is far outselling the screeds by opponents of fossil fuels.
The left is being forced to retreat on its energy restriction agenda, at least for now. But just as forced water rationing has begun in rain-deprived California, a power grid crisis could give leftists an excuse to start rationing electricity use.
Also, I have a new video that teaches you how to build your very own solar generator for a fraction the cost of buying one. It’s a free service I am offering to Independent Living readers. Thank you for paying attention and good luck! Go to www.independentlivingnews.com/landing/pw
I want to add something.
In the last Independent Living, an accompanying letter that talked about the PowerWhisperer suggested that I consulted with Dr. Vincent Pry about the EMP threat. That’s not accurate. I was referring instead to his recent, amazing testimony before Congress concerning the EMP threat and the possibility of terrorism taking out the U.S.A. power grid. It is very powerful testimony.
There was also a reference which suggested that the Noah Foundation has endorsed the PowerWhisperer. I apologize for the miscommunications. My friends at the Noah Foundation kindly told me I did not need to disclose this, but I feel that it is appropriate to do so.
The Noah Foundation does a lot of hard political work pressing utilities, federal officials and state legislatures to avert EMP disaster by hardening the grid before disaster strikes. I am a strong supporter of their mission. [To learn more about the important work of the Noah Foundation, go to www.thenoahfoundations.com]