Friday, January 27, 2012

Plunder: A Respectable Word Now

So then, work for 50 years and save for your retirement. Be careful with your money, put it away religiously in a conservative minded fund, with a generous but safe interest rate. When retirement comes upon you, as it surely will, you have the means to support yourself. Maybe even a little cruise to Alaska or New Zealand.

Not.

You see, the Oxford dictionary definition for the word 'plunder' has changed from "steal (goods), typically using force and in a time of disorder" to "steal (goods), typically using monetary easing and interest rates and in a time of order".

Nice going Federal Reserve. Yes, they announced officially yesterday that ZIRP (the zero interest rate policy) will be with us for at least two more years. A set policy of 2% inflation is going to be strictly kept to. That is, in these violent days of a deflationary spiral as debt goes to its true worth, the Fed will 'ease' (print) to keep inflation steady.

The wee problem is, this destroys wealth placed in conservation funds. It destroys the value of the savings over decades that people have stored for their retirement. To even get close to a positive rate of return, senior citizens may have to resort to wild speculation with all the risk consequences that entails. According to the Fed, that should be in the share market.

Otherwise, day by day, their wealth is plundered as inflation is high and interest rates low.

But that isn't all. No one is really that safe. The MF Global fiasco showed commodities investors, that even though you own precious metals certificates on the COMEX, you are still exposed to the largest shark in the water. Sharks like JP Morgan Chase who cheated and stole their gold.

Plunder is coming in all forms now. The regulatory authorities do not seem to have the resources to stop it.

Anyway, the definition of plunder has beeen changed. Get used to it.

Or get smarter.


Gold in New Zealand dollars: $2103.68 per oz
Previous all-time high: $2311.02 per oz (15 Nov, 2011)

Silver in New Zealand dollars: $40.87 per oz
Previous all-time high: $59.19
per oz (30 Apr, 2011)
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