The United States is $22 trillion in debt. How will the national debt impact the average American? In today's USMR Market Insights, Coy Wells talks about debt, IRAs and 401Ks.
Can the Government Take Your IRA?
Coy Wells: 00:01
Right now we're continuing to talk about the IRAs and the risk that currently sits there. After our last video, a lot of consumers were calling in and asking me questions about whether the government can actually come in and take your IRA. Now, I'm not a doom and gloomer, or a conspiracy theorist by any stretch of the imagination and I don't know whether the government can or cannot, but what we do know is that in 2013 when debt levels after the housing crisis got extremely high, there was a lot of concern about that. Matter of fact, Bloomberg News in 2013, specifically talked about the Consumer Protection Bureau. The Consumer Protection Bureau is actually designed to help protect the American people's money, but at that point in time, they were actually talking about stepping in and helping Americans manage, keyword is manage, and help the American people manage more than $19 trillion.
Coy Wells: 00:51
They had put into 401Ks and IRAs specifically at that time. Now, whether that means they're going to come in and take it or not. But the theory behind it, according to many, when you read the article, if you've read the article, where they were talking about the American people and their retirement accounts being taken advantage of. And now I don't know how people's 401ks and IRAs – being taken advantage of, I don't that was by the broker or by other people, but if the government was talking about it, they were actually in my opinion, talking about probably distinguishing some of the debt. We know that the social security has been under attack for a long period of time and we know several months ago that they're now dipping into the social security retirement trust fund. So, whether they have the ability to do that or not, I can't give you a direct answer because I don't have anything to go on other than an article that was written in 2013. In my opinion, the biggest risks today, there's two groups that are at risk.
Coy Wells: 01:43
Those individuals who are over the age of 70 who have money sitting in IRAs, 401ks and the stock market, and if you have money in an IRA or 401k, you know that that money is diversified in the stock market. The second group of individuals that I'm worried about is the millennials. The government of the United States voiced their concern about a day of reckoning at some point in time happening, the Treasury Department specifically talked about a recession worse than 2008 and that it could be worse than the Great Depression. We also know that the stock market today is overvalued still at a point that exceeds what we saw during the Great Depression. And we also got confirmation just a few weeks ago that corporate debt is sitting at 3.3 trillion. So that would explain that when the Obama administration printed more than $4 trillion, where a lot of that borrowed money went or that borrow money went and why low interest rates were kept subdued for a long period of time.
Coy Wells: 02:34
If you're retired and you're over the age of 70 and we go into a deep seeded recession, a recession that lasts longer than normal, let's say eight, nine, ten years, you don't have time for that money to recover in that time frame. If your children inherit that money and we lose on the dollar and we lose on the stock price, you're losing twice and your kids are still subject to the same woes that are there. Today you have to understand, if you're a millennial, the majority of that group is not working, they've never done without. So the conservative group, and the majority of the money that is there today, is a generation that's in their age bracket from about 37 to about 87 years of age with money sitting in retirement accounts or the beginning of their retirement account that's at risk. We're not at an age, the younger generation from 37 to 65 or 70 years of age, we've still got a little bit of time if we have a major correction for that money to make itself back up, like most of us have done since the 2008 crisis.
Coy Wells: 03:29
But if we have a deep seeded recession, those who are retired who have money sitting in that sector can't afford to lose that money. We know that right now the US economy just broke 22 trillion in debt. There's roughly $24 trillion sitting in retirement accounts. Can they take it? I don't know. Will they take it? I don't know. It's something that's been discussed in the past, but it was also at a point in time when the debt levels were extremely high, and we're much higher than we were back then. The information is critical. We're headed into uncharted waters, and most of us know that. There's not a person that I talked to on the phone today that has either diversified in precious metals, or in the process of considering precious metals that denies the fact that their intuition and their gut feeling is telling them that we're in trouble financially as a country that's not an unknown.
Coy Wells: 04:14
It's been talked about and talked about and talked about by the government, by financial advisers, by ourselves, and the retired people know that. They're waiting for a sign. The signs are there. To get more information about what we we're talking about, click on the link below to download our latest report, the Gold IRA Protection in the Risk Zone. You can also get a copy of all our other reports, if you click on the resource library link listed below. If you're watching us on YouTube, subscribe to our channel so you don't miss a single episode. I'm Coy Wells in U. S. Money Reserve's market insights.