In The News Today
Posted August 20th, 2013 at 10:53 AM (CST) by Jim Sinclair & filed under In The News.
Jim Sinclair’s Commentary
Yes, worse than all this combined plus the Kennedy Coup.
GOTS, please.
America has entered one of its periods of historical madness, but this is the worst I can remember: worse than McCarthyism, worse than the Bay of Pigs and in the long term potentially more disastrous than the Vietnam War.
–John le Carré
Jim Sinclair’s Commentary
A few more lovely facts concerning your access to your Federally tax sponsored 401K retirement accounts, donations.
401(k)s: Delivery Problems of a Different Nature
Posted by Economics Voodoo, August 20, 2013 at 16:26
Continuing reports that banks are making it more difficult for their customers to remove their gold from the banking system, or atrading house getting its gold delivery as Germany faces a slight problem in its request to repatriate its gold being held at the Federal Reserve Bank of New York. There are also delivery problems of a different nature.
Recently I learned that a family member has been experiencing great, great difficulty in withdrawing their 401(k) funds forover a year now. I would like to share a few observations in case it helps to highlight the risks and issues with the 401(k) – worse yet, an unallocated 401(k) – that includes below, a notification and request for assistance in locating several individuals and why.
An unallocated 401(k) plan “co-mingles” or “pools”, i.e., combines individual employee 401(k) contributions into one 401(k) pool under the company name. One does not have dollars but “units” in the 401(k) pool that perhaps unbeknownst to many 401(k) contributors is an unallocated insurance annuity contract with an insurance company, and in this situation, with MetLife. The observations below speak to the individual risks, but more broadly since the 2007/2008 banking and financial collapse, this also means your 401(k) savings could approach zero ($0.00) should the insurance company fail (see posts on QE “printing money” and insolvent banking & financial system); this risk also applies to retirement or trading/stock accounts held at brokerage firms.
Whether allocated or unallocated, another unadvertised feature of 401(k)s in recent years is state and federal governments’ use of 401(k) withdrawals by the unemployed to disqualify them from receiving unemployment insurance “UI” benefits. Consider how many of the millions unemployed have learned the hard way that the exits have closed and what it means for their families, as others wait to find out. More in section II.
I. 401(k) Delivery Problems
I share my observations to highlight a sample of the issues one can encounter in terms of what happens to the 401(k) when a company is acquired or closes down, an increasingly common occurrence as indicated by the Small Business Administration data since 2007. The U.S. Department of Labor is monitoring the situation as it oversees enforcement issues and holds the repository on company-sponsored 401(k) plans. It seems many others around the country are in similar situations that are especially problematic at smaller companies.
1. You may be unaware that when a company closes or is acquired, federal law requires the 401(k) be closed and distributed to plan participants.
– The plan administrator (who may be the company VP and its general counsel) continues to keep the 401(k) funds at MetLife since 2009. After the company closes, the plan administrator may claim their responsibility ended.
Federal law requires plan administrator at the time of the company acquisition/closure to fulfill their fiduciary obligationover the 401(k) until the fund is closed and distributed to plan contributors (contributions returned to employees).
2. How quickly one loses access to the 401(k) account.
– Individual 401(k) statements may suddenly go dark. Online statements from ING showed a 401(k) balance of $0.00. For more than a year, you have no information nor access to your 401(k) account. Suppose 1,000 employees of a company experience this.
– You may receive no notification from ING nor MetLife nor the 401(k) plan administrator that your account “disappeared”. Why is ING involved? You may be unaware of the very fine print that ING provides your account statements for an un-named entity. For years, you may be unaware that MetLife “holds” your 401(k) and upon learning, they may not tell you who is the plan administrator.
This is a resource that provides public information about many company-specific 401(k) plans:http://www.brightscope.com/ .
(On a side note, MetLife “holds” the money but when ING stopped providing the statements ING sent the 401(k) money back to MetLife.)
– One may find that the more questions are asked about the 401(k) funds, MetLife and ING may become increasingly reluctant to answer questions [ING had a manager (legal counsel?) dictate to the client representative how to respond to your questions about your 401(k)].
– MetLife informs you that since your name is not on the 401(k) account, you (and other plan participants) are not authorized to request account statements nor access your 401(k) account – because you do not have one. That is because what you see in your on-line account statement is a digital entry of what you (think) have when ING provided reports and ING also states it can not ensure the accuracy of such figures. When the reporting went dark, you come to know that the true holder of the 401(k) account is the 401(k) plan administrator who has sole access and authority over the 401(k), even after the company closed.
(Consider the possibilities. In 2010 the U.S. Department of Labor created a criminal division to investigate and prosecute fraud and embezzlement of employee contributions in company-sponsored retirement and health plans, such as 401(k) trustees/administrators wiring employee 401(k) funds into their personal checking accounts, business accounts and a myriad other ways to defraud employee contributions. In other situations the U.S. Department of Labor obtains a court order to appoint a fiduciary to manage the 401(k) plan.)
3. You may request your plan administrator to withdraw your 401(k) funds.
–The company’s VP/general counsel also its 401(k) plan administrator may first say it is in progress for several months and then stop responding to e-mails about delays. Plan administrator may also retain an attorney to assist him in unlocking a disk from MetLife that contains information on employee contributions. You may not be sure what that means.
– After over a year as the plan administrator is encouraged to release the funds, it may take the plan administrator additional weeks to inform you that they do not have your mailing address.
So far, MetLife holds your 401(k) and the plan administrator has sole access to your 401(k), neither of whom has your address. That makes you a bit of a 401(k) third wheel.
4. The plan administrator may indicate he (she) is uncertain he has the authority to release the 401(k) funds.
– The VP/general counsel-plan administrator may be uncertain about his fiduciary obligations, but perhaps there is no uncertainty of his affinity to unallocated 401(k) insurance annuities with MetLife as he may be concurrently 401(k) plan administrator over another 401(k) with MetLife for another company where he is VP.
5. The 401(k) Closing Costs (“401(k) Hostage Ransom”)
– When the uncertainty subsides about his fiduciary obligation, the general counsel-plan administrator may inform you that in order to release the funds, he is assessing a closing cost fee that is equivalent to over 10% of the total value of the 401(k) pool that will be paid from the 401(k) pool. Suppose the total company 401(k) pool is $100,000. The plan administrator’s take would be $10,000.
If one makes significant contributions “units” to the 401(k) pool, one will pay that percentage of the “closing” costs. Had the 401(k) fund been closed when the company was acquired/closed, the cost to plan participants would have been about $0.00.
– At your request, the plan administrator may provide the 401(k) Summary Plan Description – the “401(k) SPD” that is very important to have when one least expects – that sure enough has language that plan participants will pay any costs to close the 401(k) fund.
In the case the SPD is an electronic file, you may wish to check the date when the SPD was created and modified as that language may not have existed because incidentally, the create and modified dates are stripped from the file. It reminds me of a similar experience at the Congressional Budget Office pertaining to a rather sensitive document from the assistant CBO director.
The Internal Revenue Service (IRS) requires companies to notify employees of any significant “material” change to the 401(k) SPD within 210 days of the end of the plan year.
6. You may ask the plan administrator questions about what happened to your 401(k) account and movements of money when your 401(k) ‘disappeared’.
– The plan administrator may retain an attorney who will charge you $250 an hour to answer questions or determine what information will be provided that will be billed to your 401(k) funds, in addition to the closing fees above. That is, the more questions asked about the 401(k) black hole, the more will be deducted from your 401(k).
7. You may also request a copy of your 401(k) statements since the account went dark.
– The plan administrator may also hire a 401(k) specialist who will charge $125 per hour to create the statements that will be billed to your 401(k) funds, in addition to the fees above. Since the plan administrator-attorney retained an attorney for himself, he may no longer communicate with you but only through the 401(k) specialist who consult with their attorney.
– Note the fact that the previous year’s statements need to be created indicates your 401(k) account statements do not exist. Recall that your funds have been pooled or combined with other plan contributors; at no time will plan administrator and his assistant (and their attorney) mention this.
How will you know your 401(k) is an unallocated insurance annuity? You do not.
If you are aware it exists, ask the plan administrator or look up your 401(k) at http://www.brightscope.com/. If these fields show “Insurance”, then your 401(k) is most likely an unallocated insurance annuity that incidentally has plan contributors paying the highest of plan management fees. Run. Run anyways.
– How many “units” of the 401(k) pool do you have? You may have no idea what “units” are because you thought you contributed dollars.
The only person who has that information is the 401(k) plan administrator, who may not have mentioned “units”. Perhaps few are aware that unallocated 401(k) accounts exists to ask about “units”. How are units calculated? Only the 401(k) plan administrator knows.
So far, estimated closing costs = 10% of 401(k) + $250 an hour attorney + $125 an hour for 401(k) statements.
Some people may pay what others characterize as this 401(k) “hostage ransom” due to not understanding the 401(k) and their lack of desire for you to understand the 401(k), and the expense of taking the plan administrator (or trustee) to court – Please know they know that.
8. During the 4 years when the 401(k) should have been returned to the employees, MetLife continues to collect fees for plan management/maintenance etc. of the 401(k) it “holds”; ING collects reporting fees; and Morgan Stanley collects “insurance and commission fees”. There may be other unreported or unknown fees known only to the 401(k) plan administrator and MetLife.
– These fees are taken out of your 401(k) funds. If you contribute more to the 401(k) pool, you will pay a greater percentage share of these fees.
On a side note, Morgan Stanley was bailed out in 2008 …its nearly $40 billion exposure to banks in France, explosion in derivatives activity… and Morgan Stanley is insuring MetLife (among the largest insurers in the world) with what capital…
– So far, you (and perhaps other plan contributors) may be the only one who does not want to be at this party but you can not leave, and it seems they will not let you leave.
– You may get the impression that every possible means of delays work to separate you from your 401(k).
9. Notification and Request for assistance.
We are now at about 1 ½ years later when the 401(k) account went dark.
– Generally all plan participants must sign-off on the release form to close and distribute the 401(k) funds; roll-overs are no longer possible once the company has closed. This means the distribution is delayed until former employees who contributed to the pooled 401(k) are found that is contingent on how motivated the plan administrator is to find them.
It has been about 4 years since the company was acquired and only recently did general counsel/plan administrator realize the funds must be returned to former employees.
If you are a former employee or know of one from LumenSoft Corporation who may still have their 401(k) account, please e-mail me using this contact form to help expedite the return of 401(k) funds to their rightful owners. LumenSoft Corporation was based in Minnesota and was acquired in 2009. LumenSoft’s former CEOs were David Nolby and Robert “Bob” Wallace in case you may recognize this company, and other senior management of the company who would like to assist your former employees to resolve this 401(k) issue.
Or as indicated by public information provided by brightscope.com, please notify LumenSoft’s former general counsel who is also the 401(k) plan administrator/sponsor, Richard B. Peterson, if you are a former LumenSoft employee who may still have 401(k) funds with the company as provided in the links below.
http://www.brightscope.com/form-5500/basic-info/558828//580168/Lumensoft-401k-Plan/2007/ andhttp://www.brightscope.com/form-5500/basic-info/217818/Meritide-Inc/221440/Meritide-Inc-401k-And-Profit-Sharing-Plan/2007/
UPDATE Aug. 21, 2013: Since this article was published yesterday, please note in the first brightscope.com link a change has been made so that the LumenSoft 401(k) plan information was replaced with another company (see attached). The new link (at least for the moment) is http://www.brightscope.com/form-5500/basic-info/558828//580168/Lumensoft-401k-Plan/.
The LumenSoft Corporation 401(k) (pdf), regardless of where that link goes.
The Form 5500 filing shows Richard B. Peterson as being 401(k) plan administrator and vice president simultaneously for two companies, LumenSoft Corporation and Meritide Inc. Records show he listed himself as CEO of Lumensoft after it was sold and no longer an active company; the situation seems a bit ambiguous. Perhaps you can contact him at both locations as both LumenSoft and Meritide 401(k) plans are registered to his name under the same address.
II. State & Federal Govt.: 401(k) Withdrawal Disqualify for Unemployment Insurance Benefits
In recent years, the public may be unaware that 401(k) withdrawals can disqualify them from unemployment benefits insurance. In states such as Colorado an unemployed person’s 401(k) withdrawals can disqualify them for receiving unemployment insurance benefits — with an interesting stipulation. Perhaps it is best conveyed by someone who was unaware the exit for him had closed:
“I never dreamed I’d have to have unemployment some day,” he said.
Jackson has been looking everywhere, including retail and home improvement stores, for more than a year. He hasn’t gotten anywhere.
“We’re lucky to get half way through the month before we’re completely out of money. It’s been rough,” Jackson said. “It’s a hard market right now to find a job, especially at my age.” …
After signing up for unemployment benefits, Jackson took out $10,000 to pay for [his son’s] college tuition. He said other than paying taxes, he was not penalized for taking the money out of his fund because it was for higher education.
But when he admitted to the Colorado Department of Labor and Employment he’d taken the money out, his unemployment benefits were cut off.
Jackson later learned it’s against the law in Colorado to take any money out of your 401k for one whole year if you’re receiving unemployment benefits….
When he applied for Colorado’s unemployment insurance benefit, he missed the fine print that stipulated in the event he withdrew from his 401(k),
“I will reinvest the money into a KEOGH or Individual Retirement Account, (IRA) for a duration of at least one year. I also understand that if I choose not to reinvest my lump-sum pension or retirement, UI benefits will be postponed from the date of receipt of the payment for the number of weeks equal to the total amount of the pension divided by the full-time weekly wage received from the employer.”
That is, in order to keep your unemployment benefits you must put your money back into the financial system or in other states, UI is reduced in some proportion to 401(k) withdrawals. One interpretation is the state wants to protect private retirement savings because of its concern for the people. A quick check shows this makes sense because the average unemployment insurance benefits in mid-2011 was $1,200 a month when the average family spends nearly $1,400 per month just on housing. That leaves Ma and Pa and the young’uns rather destitute to face issues such as home foreclosure, insurance, sending their kids to college (which after 4-5 years of college debt, 62% of graduates will be underemployed CNN link), etc. Since the 2007/2008 financial system collapse, the real unemployment rate continues to rise as wages turn lower and jobs more temporary. Behind Wal-Mart is the nation’s second largest employer, Kelly Services, a temporary work provider.
John Williams, Shadow Statistics
[Families gone from the middle class but the official statistics look great though. The widely reported official U3 unemployment rate ignores long-term discouraged workers who were ‘defined out of existence’ from the calculations since 1994 under the Clinton Administration; these millions of people are in ShadowStats alternate calculations.]
So, why are the unemployment insurance benefits laws written to force people to remain in the financial system? Consider that the $3.6 trillion in 401(k)s are the aggregate savings of the American public that is controlled by the largest banks on Wall Street and the financial institutions that collapsed in 2007/2008 but for the levitation above The Black Hole through various mechanisms… including your 401(k). “QE” quantitative easing, i.e., money printing is infinite but time is finite. [I am told of some people who traveled to Japan a few months ago that $100 U.S. dollar bills were not accepted.]
Perhaps after relieving the American public 40% of your net wealth (OTC derivatives) – mostly your home equity – the Federal Reserve Bank’s largest banks (its owners) and financial institutions are going in for your last lifeline:
Posted August 20th, 2013 at 10:53 AM (CST) by Jim Sinclair & filed under In The News.
Jim Sinclair’s Commentary
Yes, worse than all this combined plus the Kennedy Coup.
GOTS, please.
America has entered one of its periods of historical madness, but this is the worst I can remember: worse than McCarthyism, worse than the Bay of Pigs and in the long term potentially more disastrous than the Vietnam War.
–John le Carré
Jim Sinclair’s Commentary
A few more lovely facts concerning your access to your Federally tax sponsored 401K retirement accounts, donations.
401(k)s: Delivery Problems of a Different Nature
Posted by Economics Voodoo, August 20, 2013 at 16:26
Continuing reports that banks are making it more difficult for their customers to remove their gold from the banking system, or atrading house getting its gold delivery as Germany faces a slight problem in its request to repatriate its gold being held at the Federal Reserve Bank of New York. There are also delivery problems of a different nature.
Recently I learned that a family member has been experiencing great, great difficulty in withdrawing their 401(k) funds forover a year now. I would like to share a few observations in case it helps to highlight the risks and issues with the 401(k) – worse yet, an unallocated 401(k) – that includes below, a notification and request for assistance in locating several individuals and why.
An unallocated 401(k) plan “co-mingles” or “pools”, i.e., combines individual employee 401(k) contributions into one 401(k) pool under the company name. One does not have dollars but “units” in the 401(k) pool that perhaps unbeknownst to many 401(k) contributors is an unallocated insurance annuity contract with an insurance company, and in this situation, with MetLife. The observations below speak to the individual risks, but more broadly since the 2007/2008 banking and financial collapse, this also means your 401(k) savings could approach zero ($0.00) should the insurance company fail (see posts on QE “printing money” and insolvent banking & financial system); this risk also applies to retirement or trading/stock accounts held at brokerage firms.
Whether allocated or unallocated, another unadvertised feature of 401(k)s in recent years is state and federal governments’ use of 401(k) withdrawals by the unemployed to disqualify them from receiving unemployment insurance “UI” benefits. Consider how many of the millions unemployed have learned the hard way that the exits have closed and what it means for their families, as others wait to find out. More in section II.
I. 401(k) Delivery Problems
I share my observations to highlight a sample of the issues one can encounter in terms of what happens to the 401(k) when a company is acquired or closes down, an increasingly common occurrence as indicated by the Small Business Administration data since 2007. The U.S. Department of Labor is monitoring the situation as it oversees enforcement issues and holds the repository on company-sponsored 401(k) plans. It seems many others around the country are in similar situations that are especially problematic at smaller companies.
1. You may be unaware that when a company closes or is acquired, federal law requires the 401(k) be closed and distributed to plan participants.
– The plan administrator (who may be the company VP and its general counsel) continues to keep the 401(k) funds at MetLife since 2009. After the company closes, the plan administrator may claim their responsibility ended.
Federal law requires plan administrator at the time of the company acquisition/closure to fulfill their fiduciary obligationover the 401(k) until the fund is closed and distributed to plan contributors (contributions returned to employees).
2. How quickly one loses access to the 401(k) account.
– Individual 401(k) statements may suddenly go dark. Online statements from ING showed a 401(k) balance of $0.00. For more than a year, you have no information nor access to your 401(k) account. Suppose 1,000 employees of a company experience this.
– You may receive no notification from ING nor MetLife nor the 401(k) plan administrator that your account “disappeared”. Why is ING involved? You may be unaware of the very fine print that ING provides your account statements for an un-named entity. For years, you may be unaware that MetLife “holds” your 401(k) and upon learning, they may not tell you who is the plan administrator.
This is a resource that provides public information about many company-specific 401(k) plans:http://www.brightscope.com/ .
(On a side note, MetLife “holds” the money but when ING stopped providing the statements ING sent the 401(k) money back to MetLife.)
– One may find that the more questions are asked about the 401(k) funds, MetLife and ING may become increasingly reluctant to answer questions [ING had a manager (legal counsel?) dictate to the client representative how to respond to your questions about your 401(k)].
– MetLife informs you that since your name is not on the 401(k) account, you (and other plan participants) are not authorized to request account statements nor access your 401(k) account – because you do not have one. That is because what you see in your on-line account statement is a digital entry of what you (think) have when ING provided reports and ING also states it can not ensure the accuracy of such figures. When the reporting went dark, you come to know that the true holder of the 401(k) account is the 401(k) plan administrator who has sole access and authority over the 401(k), even after the company closed.
(Consider the possibilities. In 2010 the U.S. Department of Labor created a criminal division to investigate and prosecute fraud and embezzlement of employee contributions in company-sponsored retirement and health plans, such as 401(k) trustees/administrators wiring employee 401(k) funds into their personal checking accounts, business accounts and a myriad other ways to defraud employee contributions. In other situations the U.S. Department of Labor obtains a court order to appoint a fiduciary to manage the 401(k) plan.)
3. You may request your plan administrator to withdraw your 401(k) funds.
–The company’s VP/general counsel also its 401(k) plan administrator may first say it is in progress for several months and then stop responding to e-mails about delays. Plan administrator may also retain an attorney to assist him in unlocking a disk from MetLife that contains information on employee contributions. You may not be sure what that means.
– After over a year as the plan administrator is encouraged to release the funds, it may take the plan administrator additional weeks to inform you that they do not have your mailing address.
So far, MetLife holds your 401(k) and the plan administrator has sole access to your 401(k), neither of whom has your address. That makes you a bit of a 401(k) third wheel.
4. The plan administrator may indicate he (she) is uncertain he has the authority to release the 401(k) funds.
– The VP/general counsel-plan administrator may be uncertain about his fiduciary obligations, but perhaps there is no uncertainty of his affinity to unallocated 401(k) insurance annuities with MetLife as he may be concurrently 401(k) plan administrator over another 401(k) with MetLife for another company where he is VP.
5. The 401(k) Closing Costs (“401(k) Hostage Ransom”)
– When the uncertainty subsides about his fiduciary obligation, the general counsel-plan administrator may inform you that in order to release the funds, he is assessing a closing cost fee that is equivalent to over 10% of the total value of the 401(k) pool that will be paid from the 401(k) pool. Suppose the total company 401(k) pool is $100,000. The plan administrator’s take would be $10,000.
If one makes significant contributions “units” to the 401(k) pool, one will pay that percentage of the “closing” costs. Had the 401(k) fund been closed when the company was acquired/closed, the cost to plan participants would have been about $0.00.
– At your request, the plan administrator may provide the 401(k) Summary Plan Description – the “401(k) SPD” that is very important to have when one least expects – that sure enough has language that plan participants will pay any costs to close the 401(k) fund.
In the case the SPD is an electronic file, you may wish to check the date when the SPD was created and modified as that language may not have existed because incidentally, the create and modified dates are stripped from the file. It reminds me of a similar experience at the Congressional Budget Office pertaining to a rather sensitive document from the assistant CBO director.
The Internal Revenue Service (IRS) requires companies to notify employees of any significant “material” change to the 401(k) SPD within 210 days of the end of the plan year.
6. You may ask the plan administrator questions about what happened to your 401(k) account and movements of money when your 401(k) ‘disappeared’.
– The plan administrator may retain an attorney who will charge you $250 an hour to answer questions or determine what information will be provided that will be billed to your 401(k) funds, in addition to the closing fees above. That is, the more questions asked about the 401(k) black hole, the more will be deducted from your 401(k).
7. You may also request a copy of your 401(k) statements since the account went dark.
– The plan administrator may also hire a 401(k) specialist who will charge $125 per hour to create the statements that will be billed to your 401(k) funds, in addition to the fees above. Since the plan administrator-attorney retained an attorney for himself, he may no longer communicate with you but only through the 401(k) specialist who consult with their attorney.
– Note the fact that the previous year’s statements need to be created indicates your 401(k) account statements do not exist. Recall that your funds have been pooled or combined with other plan contributors; at no time will plan administrator and his assistant (and their attorney) mention this.
How will you know your 401(k) is an unallocated insurance annuity? You do not.
If you are aware it exists, ask the plan administrator or look up your 401(k) at http://www.brightscope.com/. If these fields show “Insurance”, then your 401(k) is most likely an unallocated insurance annuity that incidentally has plan contributors paying the highest of plan management fees. Run. Run anyways.
– How many “units” of the 401(k) pool do you have? You may have no idea what “units” are because you thought you contributed dollars.
The only person who has that information is the 401(k) plan administrator, who may not have mentioned “units”. Perhaps few are aware that unallocated 401(k) accounts exists to ask about “units”. How are units calculated? Only the 401(k) plan administrator knows.
So far, estimated closing costs = 10% of 401(k) + $250 an hour attorney + $125 an hour for 401(k) statements.
Some people may pay what others characterize as this 401(k) “hostage ransom” due to not understanding the 401(k) and their lack of desire for you to understand the 401(k), and the expense of taking the plan administrator (or trustee) to court – Please know they know that.
8. During the 4 years when the 401(k) should have been returned to the employees, MetLife continues to collect fees for plan management/maintenance etc. of the 401(k) it “holds”; ING collects reporting fees; and Morgan Stanley collects “insurance and commission fees”. There may be other unreported or unknown fees known only to the 401(k) plan administrator and MetLife.
– These fees are taken out of your 401(k) funds. If you contribute more to the 401(k) pool, you will pay a greater percentage share of these fees.
On a side note, Morgan Stanley was bailed out in 2008 …its nearly $40 billion exposure to banks in France, explosion in derivatives activity… and Morgan Stanley is insuring MetLife (among the largest insurers in the world) with what capital…
– So far, you (and perhaps other plan contributors) may be the only one who does not want to be at this party but you can not leave, and it seems they will not let you leave.
– You may get the impression that every possible means of delays work to separate you from your 401(k).
9. Notification and Request for assistance.
We are now at about 1 ½ years later when the 401(k) account went dark.
– Generally all plan participants must sign-off on the release form to close and distribute the 401(k) funds; roll-overs are no longer possible once the company has closed. This means the distribution is delayed until former employees who contributed to the pooled 401(k) are found that is contingent on how motivated the plan administrator is to find them.
It has been about 4 years since the company was acquired and only recently did general counsel/plan administrator realize the funds must be returned to former employees.
If you are a former employee or know of one from LumenSoft Corporation who may still have their 401(k) account, please e-mail me using this contact form to help expedite the return of 401(k) funds to their rightful owners. LumenSoft Corporation was based in Minnesota and was acquired in 2009. LumenSoft’s former CEOs were David Nolby and Robert “Bob” Wallace in case you may recognize this company, and other senior management of the company who would like to assist your former employees to resolve this 401(k) issue.
Or as indicated by public information provided by brightscope.com, please notify LumenSoft’s former general counsel who is also the 401(k) plan administrator/sponsor, Richard B. Peterson, if you are a former LumenSoft employee who may still have 401(k) funds with the company as provided in the links below.
http://www.brightscope.com/form-5500/basic-info/558828//580168/Lumensoft-401k-Plan/2007/ andhttp://www.brightscope.com/form-5500/basic-info/217818/Meritide-Inc/221440/Meritide-Inc-401k-And-Profit-Sharing-Plan/2007/
UPDATE Aug. 21, 2013: Since this article was published yesterday, please note in the first brightscope.com link a change has been made so that the LumenSoft 401(k) plan information was replaced with another company (see attached). The new link (at least for the moment) is http://www.brightscope.com/form-5500/basic-info/558828//580168/Lumensoft-401k-Plan/.
The LumenSoft Corporation 401(k) (pdf), regardless of where that link goes.
The Form 5500 filing shows Richard B. Peterson as being 401(k) plan administrator and vice president simultaneously for two companies, LumenSoft Corporation and Meritide Inc. Records show he listed himself as CEO of Lumensoft after it was sold and no longer an active company; the situation seems a bit ambiguous. Perhaps you can contact him at both locations as both LumenSoft and Meritide 401(k) plans are registered to his name under the same address.
II. State & Federal Govt.: 401(k) Withdrawal Disqualify for Unemployment Insurance Benefits
In recent years, the public may be unaware that 401(k) withdrawals can disqualify them from unemployment benefits insurance. In states such as Colorado an unemployed person’s 401(k) withdrawals can disqualify them for receiving unemployment insurance benefits — with an interesting stipulation. Perhaps it is best conveyed by someone who was unaware the exit for him had closed:
“I never dreamed I’d have to have unemployment some day,” he said.
Jackson has been looking everywhere, including retail and home improvement stores, for more than a year. He hasn’t gotten anywhere.
“We’re lucky to get half way through the month before we’re completely out of money. It’s been rough,” Jackson said. “It’s a hard market right now to find a job, especially at my age.” …
After signing up for unemployment benefits, Jackson took out $10,000 to pay for [his son’s] college tuition. He said other than paying taxes, he was not penalized for taking the money out of his fund because it was for higher education.
But when he admitted to the Colorado Department of Labor and Employment he’d taken the money out, his unemployment benefits were cut off.
Jackson later learned it’s against the law in Colorado to take any money out of your 401k for one whole year if you’re receiving unemployment benefits….
When he applied for Colorado’s unemployment insurance benefit, he missed the fine print that stipulated in the event he withdrew from his 401(k),
“I will reinvest the money into a KEOGH or Individual Retirement Account, (IRA) for a duration of at least one year. I also understand that if I choose not to reinvest my lump-sum pension or retirement, UI benefits will be postponed from the date of receipt of the payment for the number of weeks equal to the total amount of the pension divided by the full-time weekly wage received from the employer.”
That is, in order to keep your unemployment benefits you must put your money back into the financial system or in other states, UI is reduced in some proportion to 401(k) withdrawals. One interpretation is the state wants to protect private retirement savings because of its concern for the people. A quick check shows this makes sense because the average unemployment insurance benefits in mid-2011 was $1,200 a month when the average family spends nearly $1,400 per month just on housing. That leaves Ma and Pa and the young’uns rather destitute to face issues such as home foreclosure, insurance, sending their kids to college (which after 4-5 years of college debt, 62% of graduates will be underemployed CNN link), etc. Since the 2007/2008 financial system collapse, the real unemployment rate continues to rise as wages turn lower and jobs more temporary. Behind Wal-Mart is the nation’s second largest employer, Kelly Services, a temporary work provider.
John Williams, Shadow Statistics
[Families gone from the middle class but the official statistics look great though. The widely reported official U3 unemployment rate ignores long-term discouraged workers who were ‘defined out of existence’ from the calculations since 1994 under the Clinton Administration; these millions of people are in ShadowStats alternate calculations.]
So, why are the unemployment insurance benefits laws written to force people to remain in the financial system? Consider that the $3.6 trillion in 401(k)s are the aggregate savings of the American public that is controlled by the largest banks on Wall Street and the financial institutions that collapsed in 2007/2008 but for the levitation above The Black Hole through various mechanisms… including your 401(k). “QE” quantitative easing, i.e., money printing is infinite but time is finite. [I am told of some people who traveled to Japan a few months ago that $100 U.S. dollar bills were not accepted.]
Perhaps after relieving the American public 40% of your net wealth (OTC derivatives) – mostly your home equity – the Federal Reserve Bank’s largest banks (its owners) and financial institutions are going in for your last lifeline:
- “KKR to Carlyle Target $3.6 Trillion in 401(k)s Accounts.” Bloomberg Apr 4, 2013.
- “Big Banks Go After 401(k) Trillions.” BloombergBusinessweek Mar 11, 2011. “It’s one of the top priorities” at JP Morgan Chase.
- PBS’s Frontline series in April 2013 on 401(k)s featured “The Retirement Gamble”, segments which include “Why the 401(k) is a ‘Failed Experiment’” and “The ‘Train Wreck’ Awaiting American Retirement”.
Jim’s Mailbox
Posted August 21st, 2013 at 11:08 AM (CST) by Jim Sinclair & filed under Jim's Mailbox.
Dear Jim/Peter,
I’ve been trying unsuccessfully for many months to have my shares transferred to DRS. My account is UK based (current nominee broker is ‘TD Direct’, related to TDAmeritrade group).
Are you gentlemen aware of any brokers in the UK that deal with Canadian stock (ie miners) which other CIGAs have confirmed provide a smooth DRS procedure?
Many thanks in anticipation and for your continued support of us all.
Warm regards,
CIGA Roham
Dear Roham,
You should contact Mishka com Dorp of Sprott Global Resource Investments Ltd. He has been successfully helping others CIGAs with both US and Canadian stocks regarding DRS. His contact details are:
http://sprottglobal.com/contact-us/
Mishka vom Dorp
Sprott Global Resource Investments, Ltd.
1910 Palomar Point Way Suite 200
Carlsbad, CA 9200
+1 760-444-5254, fax:+1 760-683-6704
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Hi Jim,
Most all our net worth is held in IRAs currently being held by Schwab. We have minimal cash in the bank and are working to GOTS. Our issue is that most of our net worth is in IRAs currently held by Schwab and if we pull them all out at once we will pay significantly(15-25%) more in taxes than if we spread these withdrawals over 4-6 years(our income is low so we can take a significant amount out before hitting the upper rates). I understand the risk of cash in the system, and of stocks held in street name with firms like GS, but I am having trouble understanding the risk associated holding stocks with Schwab or Fidelity. These firms don’t trade, and have cash reserves for business downturns. I would greatly appreciate some help understanding what situations could develop where stocks held with these folks would be at risk.
Likewise, I believe IRA accounts very likely will be taken over by Govt., it just seems that there would be some advance notice of this, or if there weren’t you could just pull your funds when it happened and deal with taxes then.
Thank you, and everything you do is much appreciated,
CIGA Bob
Hi Bob,
Jim’s advises that western governments worldwide, in concert with the IMF, will target retirement accounts because they represent easy targets. The OTC derivatives mess has to be funded and retirement accounts are simply too tempting. It will not be difficult for your retirement investments to be substituted for worthless sovereign paper via some special issue. This will be done whilst the spin doctors and MSN tell everyone that the nationalisation is for the greater good and that you are better off with the sovereign paper anyhow. You simply will not have any lead time to exit your retirement accounts and to bank on that is to invite financial disaster.
I understand that exiting retirement accounts and paying the penalties is not easy but the alternative is to own worthless paper in the midst of a crisis where paper savings will be wiped out, retirement accounts, pensions, insurance and annuities all will be devalued through inflation. If your stocks are with a broker then they are being held in a street name and are exposed to counterparty risk. Jim advises that you should eliminate all third parties between you and your investments, so at the very least the stocks in your IRA need to be held in certificated or direct registration form in the name of the trustee on behalf of the yourself. However, that will not protect your IRA from a nationalisation. Hence Jim’s call to GOTS now.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Dear Jim or Peter,
In your GOTS points you have listed no federal retirement funds. Does this mean retirement for Federal employees only or any IRA or 401k held by private citizens? If this includes IRAs and 401k would you recommend liquidating an IRA and taking tax and penalties? Our IRA is invested in gold coins but obviously not in our possession. Other than this we are pretty much out of system.
Thanks,
CIGA Rick
Dear Rick and Lynne,
The reference is to all retirement accounts. Jim’s advises that western governments worldwide, in concert with the IMF, will target retirement accounts because they represent easy targets. The OTC derivatives mess has to be funded and retirement accounts are simply too tempting. It will not be difficult for your retirement investments to be substituted for worthless sovereign paper via some special issue. This will be done whilst the spin doctors and MSN tell everyone that the nationalisation is for the greater good and that you are better off with the sovereign paper anyhow. I understand that exiting retirement accounts and paying the penalties is not easy but the alternative is to own worthless paper in the midst of a crisis where paper savings will be wiped out, retirement accounts, pensions, insurance and annuities all will be devalued through inflation. Hence Jim’s call to GOTS.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Hello Jim,
Thank you for all you do day after day for us. We really appreciate it. Hope you are feeling much better now.
With regards to your post a few days ago in the context of "Free Gold":
During "The Great Reset", with the dollar trading at or below low .70, QE to infinity in high gear, and the emancipation of physical gold from paper gold complete, what are your thoughts regarding the "Free Gold" thesis of a onetime significant revaluation upwards in the price of physical gold? Is this a likely event in your opinion?
Thanks so much for your time and expertise.
Your friends in central Florida,
CIGA Kathy and Bill
Dear Kathy and Bill,
Jim advises that concept of free gold is a long term one. His view is that the ‘Great Reset’ will occur between 2016 and 2020. The reset will see the development of a new monetary system characterised by the following:
1. A virtual reserve currency only traded by central banks.
2. The currency will be tied voluntarily to the value of each central bank’s gold, valued at market.
3. And by voluntary arrangement tied to a M3 of the Western world M3.
4. Gold will then have traded for 2 to 5 years emancipated from the paper gold market as the price discovery mechanism.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
I get it, but others don’t. Trying to do what I can to help.
WRT Bail-ins, would Treasury Direct be an option for individuals?
CIGA Beth
Hi Beth,
Jim advises that if you are referring to assets in a Treasury Direct account, whilst being safer than cash deposits, they would not protected from the effects of the ‘bail in’. Nothing is safe in the Western system. You simply must get out of that system, as to delay or look for an alternative that still leaves you in any Western bank, institution or brokerage is inviting disaster.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Mr. Sinclair,
I am in the camp of almost every Austrian Economist and Gold Bug in that this Fiat Monetary System will not end well. However, I find myself wondering why most of these "experts" still only suggest holding up to 30% in precious metals. If these experts have conviction, then why so low a percentage? My wife and I see no solid, safe investment for our young children other than gold/silver. Thoughts/Suggestions?
Thanks for your work,
CIGA Dustin
Dear Dustin,
Jim advises that you should look to invest one third of your net liquid net worth in gold and gold related investments without using any margin. The average investor will not commit anything like that percentage of their assets but Jim is advising such as his view is that the generational bull market for gold will continue for some years and the price will appreciate substantially over that time. You will also have read about his view that there will be a ‘Great Reset’ which will see the development of a virtual reserve currency that will include gold along with a basket of fiat currencies. This will ensure that gold will not fall away in price as it did after the last bull market as it becomes emancipated from the paper gold market.
In that climate an investment of one third in gold will result in outstanding returns and for the average investor it is the prudent course to limit one’s exposure to that level.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Posted August 21st, 2013 at 11:08 AM (CST) by Jim Sinclair & filed under Jim's Mailbox.
Dear Jim/Peter,
I’ve been trying unsuccessfully for many months to have my shares transferred to DRS. My account is UK based (current nominee broker is ‘TD Direct’, related to TDAmeritrade group).
Are you gentlemen aware of any brokers in the UK that deal with Canadian stock (ie miners) which other CIGAs have confirmed provide a smooth DRS procedure?
Many thanks in anticipation and for your continued support of us all.
Warm regards,
CIGA Roham
Dear Roham,
You should contact Mishka com Dorp of Sprott Global Resource Investments Ltd. He has been successfully helping others CIGAs with both US and Canadian stocks regarding DRS. His contact details are:
http://sprottglobal.com/contact-us/
Mishka vom Dorp
Sprott Global Resource Investments, Ltd.
1910 Palomar Point Way Suite 200
Carlsbad, CA 9200
+1 760-444-5254, fax:+1 760-683-6704
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Hi Jim,
Most all our net worth is held in IRAs currently being held by Schwab. We have minimal cash in the bank and are working to GOTS. Our issue is that most of our net worth is in IRAs currently held by Schwab and if we pull them all out at once we will pay significantly(15-25%) more in taxes than if we spread these withdrawals over 4-6 years(our income is low so we can take a significant amount out before hitting the upper rates). I understand the risk of cash in the system, and of stocks held in street name with firms like GS, but I am having trouble understanding the risk associated holding stocks with Schwab or Fidelity. These firms don’t trade, and have cash reserves for business downturns. I would greatly appreciate some help understanding what situations could develop where stocks held with these folks would be at risk.
Likewise, I believe IRA accounts very likely will be taken over by Govt., it just seems that there would be some advance notice of this, or if there weren’t you could just pull your funds when it happened and deal with taxes then.
Thank you, and everything you do is much appreciated,
CIGA Bob
Hi Bob,
Jim’s advises that western governments worldwide, in concert with the IMF, will target retirement accounts because they represent easy targets. The OTC derivatives mess has to be funded and retirement accounts are simply too tempting. It will not be difficult for your retirement investments to be substituted for worthless sovereign paper via some special issue. This will be done whilst the spin doctors and MSN tell everyone that the nationalisation is for the greater good and that you are better off with the sovereign paper anyhow. You simply will not have any lead time to exit your retirement accounts and to bank on that is to invite financial disaster.
I understand that exiting retirement accounts and paying the penalties is not easy but the alternative is to own worthless paper in the midst of a crisis where paper savings will be wiped out, retirement accounts, pensions, insurance and annuities all will be devalued through inflation. If your stocks are with a broker then they are being held in a street name and are exposed to counterparty risk. Jim advises that you should eliminate all third parties between you and your investments, so at the very least the stocks in your IRA need to be held in certificated or direct registration form in the name of the trustee on behalf of the yourself. However, that will not protect your IRA from a nationalisation. Hence Jim’s call to GOTS now.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Dear Jim or Peter,
In your GOTS points you have listed no federal retirement funds. Does this mean retirement for Federal employees only or any IRA or 401k held by private citizens? If this includes IRAs and 401k would you recommend liquidating an IRA and taking tax and penalties? Our IRA is invested in gold coins but obviously not in our possession. Other than this we are pretty much out of system.
Thanks,
CIGA Rick
Dear Rick and Lynne,
The reference is to all retirement accounts. Jim’s advises that western governments worldwide, in concert with the IMF, will target retirement accounts because they represent easy targets. The OTC derivatives mess has to be funded and retirement accounts are simply too tempting. It will not be difficult for your retirement investments to be substituted for worthless sovereign paper via some special issue. This will be done whilst the spin doctors and MSN tell everyone that the nationalisation is for the greater good and that you are better off with the sovereign paper anyhow. I understand that exiting retirement accounts and paying the penalties is not easy but the alternative is to own worthless paper in the midst of a crisis where paper savings will be wiped out, retirement accounts, pensions, insurance and annuities all will be devalued through inflation. Hence Jim’s call to GOTS.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Hello Jim,
Thank you for all you do day after day for us. We really appreciate it. Hope you are feeling much better now.
With regards to your post a few days ago in the context of "Free Gold":
During "The Great Reset", with the dollar trading at or below low .70, QE to infinity in high gear, and the emancipation of physical gold from paper gold complete, what are your thoughts regarding the "Free Gold" thesis of a onetime significant revaluation upwards in the price of physical gold? Is this a likely event in your opinion?
Thanks so much for your time and expertise.
Your friends in central Florida,
CIGA Kathy and Bill
Dear Kathy and Bill,
Jim advises that concept of free gold is a long term one. His view is that the ‘Great Reset’ will occur between 2016 and 2020. The reset will see the development of a new monetary system characterised by the following:
1. A virtual reserve currency only traded by central banks.
2. The currency will be tied voluntarily to the value of each central bank’s gold, valued at market.
3. And by voluntary arrangement tied to a M3 of the Western world M3.
4. Gold will then have traded for 2 to 5 years emancipated from the paper gold market as the price discovery mechanism.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
I get it, but others don’t. Trying to do what I can to help.
WRT Bail-ins, would Treasury Direct be an option for individuals?
CIGA Beth
Hi Beth,
Jim advises that if you are referring to assets in a Treasury Direct account, whilst being safer than cash deposits, they would not protected from the effects of the ‘bail in’. Nothing is safe in the Western system. You simply must get out of that system, as to delay or look for an alternative that still leaves you in any Western bank, institution or brokerage is inviting disaster.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Mr. Sinclair,
I am in the camp of almost every Austrian Economist and Gold Bug in that this Fiat Monetary System will not end well. However, I find myself wondering why most of these "experts" still only suggest holding up to 30% in precious metals. If these experts have conviction, then why so low a percentage? My wife and I see no solid, safe investment for our young children other than gold/silver. Thoughts/Suggestions?
Thanks for your work,
CIGA Dustin
Dear Dustin,
Jim advises that you should look to invest one third of your net liquid net worth in gold and gold related investments without using any margin. The average investor will not commit anything like that percentage of their assets but Jim is advising such as his view is that the generational bull market for gold will continue for some years and the price will appreciate substantially over that time. You will also have read about his view that there will be a ‘Great Reset’ which will see the development of a virtual reserve currency that will include gold along with a basket of fiat currencies. This will ensure that gold will not fall away in price as it did after the last bull market as it becomes emancipated from the paper gold market.
In that climate an investment of one third in gold will result in outstanding returns and for the average investor it is the prudent course to limit one’s exposure to that level.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim’s Mailbox
Posted August 22nd, 2013 at 11:27 AM (CST) by Jim Sinclair & filed under Jim's Mailbox.
Jim,
Can you smell it? No really, take a big whiff. Can you smell it now? It’s the smell of “sh*t hitting the fan.”
GOTS!
CIGA Wolfgang Rech
Nasdaq trading halted due to technical issue
By CNBC
Nasdaq said on Thursday it was halting trading in all securities until further notice due to a problem affecting quote dissemination.
Dozens of publicly traded companies, including high-profile companies such as Apple (AAPL), Microsoft (MSFT) and Facebook (FB), were showing their shares halted. The Nasdaq status message was time stamped at 12:14:03 ET.
A spokesman for the SEC said, "We are monitoring the situation and are inclose contact with the exchanges."
The Nasdaq (NDAQ) options markets also issued a "system update" saying they were recommending firms route all open orders elsewhere.
The New York Stock Exchange said it had halted trading in all Nasdaq securities at its request and was cancelling orders. The NYSE otherwise declined comment.
More…
Jim,
Something you might find very interesting, regarding "Shadow Banking". Recently posted on Bloomberg website. Below quote says it all. Here’s the full article…
Lenders including UBS AG and HSBC Holdings Plc have warned that plans by global regulators in the Basel Committee on Banking Supervision to set minimum collateral requirements for non-centrally cleared swaps trades will prompt a global liquidity squeeze as banks struggle to locate enough securities to satisfy the standards.
CIGA Geert
Jim,
Looking at the recent questions/answers that have been posted on JSMineset, it seems like people do not understand how bad it will get; how the system will fracture so thoroughly that most of our purchasing power, left in the system, will disappear.
When you wrote of the importance of having a hobby farm to secure reliable food, this really drove the point home for me.
When you wrote that pensioners are an endangered species, I take you more literally than not.
When you wrote of the greed of the destroyers and their derivatives I do not take it as allegory.
When you wrote that Gold will go to $50K, it seemed to me that everything we know must change. Terms like ‘The Great Leveling’ seem intended to conjure specific images for the reader.
Have I misunderstood? Please help us understand, Jim.
Gratefully,
CIGA JaWa
CIGA JaWa,
The gold price of $50,000 is fully predicated on the emancipation of physical gold from paper gold as the mechanism of price determination.
Jim
Jim,
Been following your website for about a year now at the recommendation of a friend, and appreciate the perspective it provides. I have a question with regard to how you would recommend a person like me position their 401k/IRA’s. I don’t trust the advice I’m given, frankly, from my Wells Fargo advisor.
Quick synopsis of me: Wichita, KS; 44 year old family man; $800-900K net worth; no debt of any kind; own some physical gold in my possession; good job (engineer), great wife, excellent kids, 1 cat I’d like to get rid of…
Of my net worth, probably ~$500-600K is in 401k/IRA’s/529 instruments. In my major 401k account (~$400K), I have put it all in money market options at this point in a holding pattern – no equity-based funds, no bond funds. I have also signed up for self-directed account so that I can have more flexibility going forward. So, in my position, what would you likely do? Utilize the self-direction to invest the money how? Or, would you go to the extreme of actually cashing those out and taking the tax & penalty hits?
Let me add the disclaimer that the direction I take is fully my responsibility – I realize you are not providing “professional advice” and I hold you free of any liability based on your points of view.
If you come to the central part of the country, I’d love to attend one of your meetings.
Thank you for your time,
CIGA Harley
Hi Harley,
Jim’s advice regarding retirement accounts is very clear, if you can exit such accounts you should do so now without delay. The penalties you pay now will be dwarfed by the losses you will suffer when retirement accounts are nationalised. The reason he is saying it should be done now is that at some point soon you may not have the option to exit. If you don’t exit then your hard earned retirement investments will be replaced by worthless sovereign paper. If you have retirement accounts that you cannot exit, then at the very least end any voluntary contributions.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
I have followed your advice regarding GOTS: DRS for myself and companies I control. I have also limited my personal bank account to $100,000 (My wife is very helpful making sure my bank account doesn’t get too high!).
I have one problem. I manage a company with over a million dollars in its bank account and with a Broker, which is also owned by a bank. This company already has physical gold and silver and numerous gold and silver investments.
Question: We need funds available to meet corporate needs. Any thought on how to protect the corporate cash in the bank and with the broker?
CIGA Jeff
Dear Jeff,
Jim has advised that any reliance on the FDIC guarantee is pointless and that for large sums of money you should seek to open an account outside of the Western system. Singapore is the suggested jurisdiction, however international banking is a complex undertaking which should only be utilized for the express purpose of safeguarding your funds from the effects of a bank failure or a bail in. As a matter of course you should seek advice from a tax attorney in your jurisdiction.
If you wish to open a bank account in Singapore the following banks may allow you to do so, subject to your individual circumstances. Your personal attendance would be required.
DBS Bank Ltd
Overseas Chinese Banking Corporation Ltd(OCBC)
United Overseas Bank Ltd(UOB)
You should also note that since the inception of the FACTA legislation foreign banks are demanding higher levels of deposits from US citizens and in some cases they are not opening accounts at all for them.
The other option could be for your company to seek true custodian ship, which is when the company asks for and pays for a letter from its bank that states that the company’s assets are being held segregated from the balance sheet of the bank.
In regards to the brokerage account your company holds, you should leave no excess funds in that account, rather only deposit what is needed to for trading requirements and of course ensure that any shares are held via DRS or in certificate form on behalf of the company. It is an underlying principle that you must eliminate all third parties between your company and its investments.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
Does GOTS include closing Roth Ira accounts for which taxes have already been paid? If so, why is this recommended?
Thank you,
CIGA Gerald
Hi Gerald,
Jim’s advice is that all retirement accounts are at risk of nationalisation. The reason is simply because retirement accounts are a easy target and they represent a huge pool of funds ($18 trillion as of the end of 2011). Whether the taxes have been paid or not will not make a difference. All retirement funds face the prospect of being substituted for worthless sovereign paper.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Posted August 22nd, 2013 at 11:27 AM (CST) by Jim Sinclair & filed under Jim's Mailbox.
Jim,
Can you smell it? No really, take a big whiff. Can you smell it now? It’s the smell of “sh*t hitting the fan.”
GOTS!
CIGA Wolfgang Rech
Nasdaq trading halted due to technical issue
By CNBC
Nasdaq said on Thursday it was halting trading in all securities until further notice due to a problem affecting quote dissemination.
Dozens of publicly traded companies, including high-profile companies such as Apple (AAPL), Microsoft (MSFT) and Facebook (FB), were showing their shares halted. The Nasdaq status message was time stamped at 12:14:03 ET.
A spokesman for the SEC said, "We are monitoring the situation and are inclose contact with the exchanges."
The Nasdaq (NDAQ) options markets also issued a "system update" saying they were recommending firms route all open orders elsewhere.
The New York Stock Exchange said it had halted trading in all Nasdaq securities at its request and was cancelling orders. The NYSE otherwise declined comment.
More…
Jim,
Something you might find very interesting, regarding "Shadow Banking". Recently posted on Bloomberg website. Below quote says it all. Here’s the full article…
Lenders including UBS AG and HSBC Holdings Plc have warned that plans by global regulators in the Basel Committee on Banking Supervision to set minimum collateral requirements for non-centrally cleared swaps trades will prompt a global liquidity squeeze as banks struggle to locate enough securities to satisfy the standards.
CIGA Geert
Jim,
Looking at the recent questions/answers that have been posted on JSMineset, it seems like people do not understand how bad it will get; how the system will fracture so thoroughly that most of our purchasing power, left in the system, will disappear.
When you wrote of the importance of having a hobby farm to secure reliable food, this really drove the point home for me.
When you wrote that pensioners are an endangered species, I take you more literally than not.
When you wrote of the greed of the destroyers and their derivatives I do not take it as allegory.
When you wrote that Gold will go to $50K, it seemed to me that everything we know must change. Terms like ‘The Great Leveling’ seem intended to conjure specific images for the reader.
Have I misunderstood? Please help us understand, Jim.
Gratefully,
CIGA JaWa
CIGA JaWa,
The gold price of $50,000 is fully predicated on the emancipation of physical gold from paper gold as the mechanism of price determination.
Jim
Jim,
Been following your website for about a year now at the recommendation of a friend, and appreciate the perspective it provides. I have a question with regard to how you would recommend a person like me position their 401k/IRA’s. I don’t trust the advice I’m given, frankly, from my Wells Fargo advisor.
Quick synopsis of me: Wichita, KS; 44 year old family man; $800-900K net worth; no debt of any kind; own some physical gold in my possession; good job (engineer), great wife, excellent kids, 1 cat I’d like to get rid of…
Of my net worth, probably ~$500-600K is in 401k/IRA’s/529 instruments. In my major 401k account (~$400K), I have put it all in money market options at this point in a holding pattern – no equity-based funds, no bond funds. I have also signed up for self-directed account so that I can have more flexibility going forward. So, in my position, what would you likely do? Utilize the self-direction to invest the money how? Or, would you go to the extreme of actually cashing those out and taking the tax & penalty hits?
Let me add the disclaimer that the direction I take is fully my responsibility – I realize you are not providing “professional advice” and I hold you free of any liability based on your points of view.
If you come to the central part of the country, I’d love to attend one of your meetings.
Thank you for your time,
CIGA Harley
Hi Harley,
Jim’s advice regarding retirement accounts is very clear, if you can exit such accounts you should do so now without delay. The penalties you pay now will be dwarfed by the losses you will suffer when retirement accounts are nationalised. The reason he is saying it should be done now is that at some point soon you may not have the option to exit. If you don’t exit then your hard earned retirement investments will be replaced by worthless sovereign paper. If you have retirement accounts that you cannot exit, then at the very least end any voluntary contributions.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
I have followed your advice regarding GOTS: DRS for myself and companies I control. I have also limited my personal bank account to $100,000 (My wife is very helpful making sure my bank account doesn’t get too high!).
I have one problem. I manage a company with over a million dollars in its bank account and with a Broker, which is also owned by a bank. This company already has physical gold and silver and numerous gold and silver investments.
Question: We need funds available to meet corporate needs. Any thought on how to protect the corporate cash in the bank and with the broker?
CIGA Jeff
Dear Jeff,
Jim has advised that any reliance on the FDIC guarantee is pointless and that for large sums of money you should seek to open an account outside of the Western system. Singapore is the suggested jurisdiction, however international banking is a complex undertaking which should only be utilized for the express purpose of safeguarding your funds from the effects of a bank failure or a bail in. As a matter of course you should seek advice from a tax attorney in your jurisdiction.
If you wish to open a bank account in Singapore the following banks may allow you to do so, subject to your individual circumstances. Your personal attendance would be required.
DBS Bank Ltd
Overseas Chinese Banking Corporation Ltd(OCBC)
United Overseas Bank Ltd(UOB)
You should also note that since the inception of the FACTA legislation foreign banks are demanding higher levels of deposits from US citizens and in some cases they are not opening accounts at all for them.
The other option could be for your company to seek true custodian ship, which is when the company asks for and pays for a letter from its bank that states that the company’s assets are being held segregated from the balance sheet of the bank.
In regards to the brokerage account your company holds, you should leave no excess funds in that account, rather only deposit what is needed to for trading requirements and of course ensure that any shares are held via DRS or in certificate form on behalf of the company. It is an underlying principle that you must eliminate all third parties between your company and its investments.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com
Jim,
Does GOTS include closing Roth Ira accounts for which taxes have already been paid? If so, why is this recommended?
Thank you,
CIGA Gerald
Hi Gerald,
Jim’s advice is that all retirement accounts are at risk of nationalisation. The reason is simply because retirement accounts are a easy target and they represent a huge pool of funds ($18 trillion as of the end of 2011). Whether the taxes have been paid or not will not make a difference. All retirement funds face the prospect of being substituted for worthless sovereign paper.
Regards,
Peter Mickelberg
Communications Consultant
www.jsmineset.com