Will Climate Change Zero out Your 401(k)?

  • Global elites call for war on climate change
  • Climate change… or control?
  • Jim Rickards: “The elites are coming for your 401(k)”
  • WallStreetSilver plans another silver coup
  • A millennial investor on the “unrealized gains debacle”… Election stealing and baby boomer “prophets”… And more!

Ugh — this guy…

Prince of George Wales

Right. Because a “war footing” is working out so well with the virus. And before that, the War on Terror, the War on Drugs, the War on Poverty…

As you’re probably aware, heads of state and other potentates are gathered in Glasgow, Scotland, this week for a “climate change” summit.

We don’t take up the topic of climate change very often here. Money and markets are our beat — if you want to thrash through the question of whether climate change is happening, or to what extent, there’s no shortage of places on the Interwebz you can go.

At the same time, we’re also keenly aware that the issue isn’t about climate or carbon — it’s about control.

More than once we’ve cited the former investment banker and government whistleblower Catherine Austin Fitts: “Let me tell you what the most dangerous policy action in the world is.

“It is to decide that a phenomenon such as climate change is our No. 1 problem, that we need urgent action on it before understanding who is going to control the policy discussion and implement the solutions. Build a consensus that man-made climate change is our No. 1 problem and I assure you that our mystery governance system will use it to achieve a global taxation system and more centralized control.”

Ms. Fitts was writing in 2014. The move toward a “global taxation system and more centralized control” has been steady… but also glacial in its speed.

Indeed for the longest time, global elites have framed the climate-change issue in maddeningly vague generalities — promising “action” without specifying what those actions should be or how they would affect your everyday life.

Occasionally you come across unicorns-and-rainbows assurances of a seamless transition to electrified transportation and a power grid fed mostly by renewables, with no sacrifice of a First World lifestyle.

Heck, that’s the implied promise behind $555 billion in “green” spending packed into the Democrats’ tax-and-spend extravaganza being negotiated in Washington right now.

But now and then, the mask falls — as with the study released last summer that says to make a difference to the planet, an American family of four would have to be confined to 640 square feet of living space.

As for transportation, the average adult would be limited to the energy equivalent of 16–40 gallons of gasoline a year… and air travel would be limited to one flight every three years.

On one level, even the U.S. president knows it’s all a crock.

On Sunday, he was confronted by reporters before the summit about his recent call for oil-producing nations to step up production (a call that seemed to exclude the United States, but whatevs). Hypocritical much?

“On the surface, it seems like an irony,” he responded. “But the truth of the matter is — you’ve all known; everyone knows — that the idea we’re going to be able to move to renewable energy overnight” is “just not rational.”

Still, whether in Washington or Glasgow, powerful people are starting to make decisions that will affect your life.

Including your financial life — which is most definitely our beat here.

That brings us to a peculiar report the White House released last month asserting that “U.S. financial markets and institutions face systemic risks from climate change.”

The term “systemic risk” — with its implications of banks failing and retirement accounts wiped out — was chosen deliberately.

“Its inclusion in this road map reflects our belief that because many financial models and investment portfolios still rely on out-of-date assumptions of climatic stability, climate change is already creating severe disruptions to our economic and financial system,” said Bharat Ramamurti, deputy director of the National Economic Council.

Some of the changes in the works are relatively harmless — i.e., factoring climate change into the White House’s long-term budget forecasts.

But others amount to the feds messing with your personal finances for the sake of climate-change ideology.

The report builds on an executive order the president issued in May. And it’s not the only one in the works. “A separate forthcoming strategy,” Axios reports, “is expected to focus more heavily on federal oversight of how banks and other financial institutions address the topic.

“The May order tasks the Treasury Department, as head of the multiagency Financial Stability Oversight Council, with crafting analysis on improving risk disclosures and stitching climate-related financial risks into regulation and supervision.”

What does that mean practically? Jim Rickards joins us today with a laundry list:

  • The feds will “use their existing control of the banks to force their climate agenda by dictating how banks lend and how you are allowed to spend,” he says
  • “HUD will be required to factor climate alarm into decisions on federally insured or guaranteed mortgages
  • “The Labor Department will evaluate retirement plan managers, including 401(k) and IRA advisers, based on how they factor climate alarm into their investment decisions
  • “Banks will be told they cannot lend to the oil and natural gas sectors (or will face higher capital charges if they do)
  • “Risk managers at institutional investors and hedge funds will be required to include climate alarm models in their portfolio allocation decisions.

“At a more granular level,” Jim warns, “you might be denied a line of credit or business loan if your activities do not conform to those deemed acceptable by the climate alarm crowd.”

His bottom line: “Climate alarm is no longer limited to discussions about the power grid and electricity generation. The elites are coming for your 401(k)s, IRAs and bank accounts if you don’t conform to their deluded climate wish list.

“It’s a good idea to move at least part of your net worth out of mainstream investment vehicles and into asset classes that are more difficult for regulators to reach such as physical gold, silver and land.”

[Ed. note: If Jim’s message resonates with you, you should know he recently implemented a massive change to his flagship newsletter Strategic Intelligence — now entering its eighth year of publication.

“The world is changing in profound ways right now,” he explains. “And you need to be prepared. That’s why I’m launching an entirely new level of Strategic Intelligence.”

Click here now to see exactly what Jim’s talking about.]

To the markets… which are inching higher into record territory.

The Dow’s sprint past 36,000 yesterday couldn’t stick, but today might be a different story by day’s end. The S&P 500 is likewise in the green, and the Nasdaq has crested the 15,600 level.

Gold is losing a bit of ground at $1,789, but silver is by far the bigger loser — down 62 cents as we write to $23.42.

In this regard, we should note that the tiny crowd on Reddit called WallStreetSilver — 164,000 users versus 11.1 million on the WallStreetBets board — plans to attempt another silver squeeze, following up a failed attempt last January.

The target date is this Friday, Nov. 5 — in homage to both the Gunpowder Plot and the movie V for Vendetta.

Which is not to be confused with the movie War for the Planet of the Apes and its “Apes together strong” call to action among the Reddit bunch, but it’s all getting mashed up now…

Silver Raid

Elsewhere in the commodity complex, crude has tumbled nearly a buck to $83.18. But Bitcoin is approaching record territory again, up 4% to $63,931.

No economic numbers of note, but today is the start of the Federal Reserve’s every-six-weeks meeting to set policy. The widespread expectation is that come tomorrow, the Fed will chart a course to “taper” its $120 billion a month in bond purchases, at a pace of $15 billion a month.

Which ought to be real interesting in light of the news yesterday that the Treasury expects to issue $1.02 trillion in debt during the fourth quarter — up dramatically from a previous estimate of $703 billion.

If the Fed doesn’t step in to sop up all that new liquidity, who does? Could get interesting…

To the mailbag: “Being slightly younger compared with the main demographic of your readers (I’m 36) and still a novice investor, l was wondering about the unrealized gains debacle.

“Due to my newbie status, with all the talk of unrealized gains, have unrealized losses ever been brought up in the recent history of Congress? Or even raising the amount of capital losses one can declare from the current $3,000?

“Been a member for about a year now and have enjoyed reading The 5 during the week especially since I get exposed to news not censored like the mainstream media.”

The 5: The chatter in D.C. about a “billionaires’ tax” on unrealized capital gains never got far enough to seriously tackle the question of offsetting losses. Still a good question, though!

As for the current $3,000 cap on capital losses, yes, that’s one of the more outrageous elements of the tax code simply because it’s not adjusted for inflation.

Indeed, the current level was enacted by Congress in 1978 — several years before you were born! If it were adjusted for the official rate of inflation, it ought to be nearly $12,500 now. (Of course, if your portfolio is held entirely in tax-advantaged retirement accounts, it’s a moot point.)

Finally, thank you for your kind words and for helping ensure we have a fresh supply of readers to take the place of the ones who are inevitably — shall we say — “aging off.”

“I’ve decided to write as it seems the discussion of who is guilty of stealing the last election just won’t go away,” a reader corresponds.

[Really? Must you? But please, go on…]

“One side is determined to prove it was not possible with all the safeguards in the system and the other side is just as sure that it did happen, along with ironclad ‘proof’ that it did.

“I’m going to suggest everyone on both sides of the issue find a copy of the Feb. 14, 1961, Look magazine and read the article titled ‘How to Steal an Election.’ They even have pictures of voters receiving gifts after voting. So there really is nothing new under the sun. Methods change, political parties attempting to influence election outcomes change places and large contributions come from new and different sources but the basics never change. I was not old enough to vote in 1960 but I remember the discussions after the election. Sixty years later we have changed the names of the candidates but we are still having the same discussions.

“Thanks for your daily insights on current ideas and trends as we attempt to make some sense of what is really happening in our world.”

The 5: You raise an interesting point: There’s nothing new under the sun, true, but why the current extreme level of sturm and drang relative to 1960?

At the risk of giving offense, your Gen-X editor chalks it up to boomer narcissism.

At the risk of generalizing, boomers tend to think of themselves as the FIRST GENERATION TO EVER, well, do anything — have sex, raise kids, get old. Or if they weren’t the first generation ever, then they REVOLUTIONIZED those passages of life.

The problem comes when this mindset is turned to the civic sphere. Why of course, boomers are the first generation to ever experience a “stolen election” — be it Trump in 2016 or Biden in 2020. It’s big. It’s dramatic. It gives their life meaning apart from the mundane stuff of their daily existence, their families and communities.

Boomers are a “prophet” generation, to use the taxonomy of Strauss and Howe, authors of The Fourth Turning and other books about the passing of generations.

Prophet generations come along every 80 years or so. Previous prophet generations gave us FDR and Lincoln — BIG, TRANSFORMATIONAL stuff in the midst of a crisis era, turning the economy and society inside-out.

Bill Clinton was elected too early in life to be that sort of figure, much as he wanted to. George W. Bush thought he could use the War on Terror to be that figure, and failed. Barack Obama and Donald Trump, each in his way, promised a fundamental transformation… but neither could deliver.

Now we have Joe Biden, who hails from the previous “Silent” generation, as a transitional figure to whatever comes next.

But we’ve probably not heard the last of the boomers…

Best regards,

Dave Gonigam
The 5 Min. Forecast

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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