no third solution

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401(k) – Holding the Bag

October 10th, 2008

The stock market decline continues today. This is a ridiculous sell-off. AIG is rapidly drawing down their “loan”, General Motors’ market-cap is less than what it was in 1929.

I would like to purchase physical gold and/or silver. Ideally, I would like to swap my 401(k) holdings for gold and/or silver. Unfortunately, I can’t touch the 401(k) until I retire, unless a hurricane hits my house or I lose a limb and become permanently disabled.

So, for the time being, I can either put money in to my 401(k) , and watch it fucking evaporate overnight, (I have lost 41% of FY2008’s contributions) or I can forgo the 401(k) contributions and watch the money fucking evaporate on a bi-weekly basis through taxes. My Net is approximately the same, regardless of whether I contribute to the 401(k).

Many people are probably watching substantially more paper money evaporate in their retirement accounts. I’m young enough that, according to conventional wisdom, I should be alright. But if I were 45, and had lost 20% or 30% of my retirement savings in a few short months, I’m not sure what I’d be doing. Most people are, to some extent, captive in this sort of situation. Almost everyone with a salaried job, and many people with an hourly job, have been convinced over the last few decades, that channeling money from their paycheck, into the stock markets, is a great idea.

Without passing judgment on that advice, it certainly doesn’t appear to be a great idea right now.



  • KipEsquire says on: October 10, 2008 at 12:50 pm


    I would hope that your 401(k) has a money-market option.

  • 1955 Design says on: October 10, 2008 at 2:07 pm


    As a followup to KipEsquire, your fund family that your 401k is in probably has a gold or precious metals fund.

    Although I am not sure that now is the time for that investment, either …

no third solution

Blogging about liberty, anarchy, economics and politics