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One Of My Favorite Income Opportunities Just Got Cheaper

April 10, 2012 by  

One Of My Favorite Income Opportunities Just Got Cheaper
PHOTOS.COM
Interest received from municipal bonds is exempt from Federal income tax and, in many cases, State and local income taxes.

Last month, one of the market’s best high-income opportunities got a little cheaper.

If you take action right now, you can earn a safe 5 percent interest, tax-free.

The opportunity is in municipal bonds.

As you may know, municipal bonds are loans made to State and municipal governments. To encourage folks to invest in the government, interest received from “munis” is exempt from Federal income tax and, in many cases, State and local income taxes. These bonds are one of the great friends to the income-seeking retiree. And despite some mindless bearish forecasts over the past few years, “munis” have been a terrific income investment.

They still are. And last month, they went on sale.

In March, the biggest municipal bond fund and the largest exchange-traded fund tracking municipal bonds fell sharply — losing 1.5 percent and 2.5 percent, respectively — in less than three weeks. This may not sound like a big move, but for “boring” bonds, it is.

The decline was the result of a report from Moody’s, a credit-rating agency. Moody’s said the default rate for municipal bonds has doubled in the past two years relative to the average default rate from 1970 to 2009. The ratings agency also said it expects more local governments to default on bond payments.

I don’t pay much attention to what ratings agencies like Moody’s have to say. These are the same agencies that gave pristine ratings to the worthless mortgage bonds that helped cause the 2008 credit collapse.

Remember: The municipal bond market is huge; it’s over $3 trillion. Since 2010, defaults totaled close to $6.4 billion. The average recovery rate is nearly 70 percent. Even now, with higher defaults, only 21 have defaulted (compared to 28 this time last year). But most of the bonds are priced as if they’re expecting 10 percent to 14 percent default rates. To put that into perspective, in 2011, defaults totaled $2.8 billion — less than 1 percent of the total market. So even if defaults doubled (to $5.6 billion), that is still less than 1 percent of the market — and a long way away from 10 percent to 14 percent.

I expect prices to rise as the U.S. economy slowly improves. After falling 1.7 percent in 2009, State personal income rose in 2010 and 2011. And tax revenue has climbed for the past eight quarters. More tax revenue means more secure interest payments and lower default risk. Last month’s muni selloff was a huge overreaction by skittish investors.

Also, keep in mind that we saw a similar overreaction back in April 2011. My Retirement Millionaire subscribers have made a super-safe 23 percent because of it.

That overreaction was due to banking analyst Meredith Whitney. On 60 Minutes, Whitney claimed the municipal bond market was facing “hundreds of billions of dollars” in defaults. At the time, I wrote:

In my investing lifetime, 2008 was the record for muni defaults, but only a tiny $8.5 billion defaulted. And last year, 2010, it was only $2.8 billion.

Remember, the muni bond market is gargantuan: more than $3 trillion in outstanding municipal bond debt. You would think we’d have seen a lot of defaults by now. But we haven’t. It seems things are getting better, not worse.

When Whitney made her prediction, $30 billion exited municipal bond funds in just three months. The biggest muni bond fund is the Vanguard Intermediate-Term Tax-Exempt Fund (VWITX). Shortly after Whitney made her claims about massive defaults, VWITX plunged below $13 a share (from close to $14 a share).

But Whitney couldn’t have been more wrong about munis. In 2011, defaults totaled just $2.6 billion. That’s a hair less than the $2.8 billion defaults in 2010 and hardly the disaster industry “experts” were expecting.

And last year, the Barclays Municipal Bond index returned 10.7 percent, while the S&P 500 returned only 2.1 percent. And one of my Retirement Millionaire picks — the Invesco Insured Municipal Income Trust (IIM) — returned 23 percent. But earlier this month, after the Moody’s report, it fell an absurd 13 percent.

IIM Falls 13%

Just like last year’s overreaction, this one is an opportunity.

Right now, IIM is trading at almost a 3 percent discount to its net asset value (NAV). This fund is the equivalent to holding a long-dated (15 years to maturity) municipal bond paying around 5 percent in tax-free interest — which means you’re making safe, steady income for years.

The payout is all from real income and is tax-free at 5.82 percent. That equates to a taxable dividend of almost 9 percent for those in the top 35 percent tax bracket. Many other muni funds are offering similar deals.

In summary, many people are scared of the sector, but the numbers and facts just don’t support such a stance. And just like last year’s muni selloff, this one presents a great buying opportunity for folks seeking retirement income.

Here’s to our health, wealth and a great retirement,

–Dr. David Eifrig
Editor, Retirement Millionaire
 

P.S. In addition to muni bonds, I’ve recently recommended a handful of very safe investments you can make right now — all of which pay a high yield. Instead of depending on government programs and conventional Wall Street investments, many retirees are using these investments to get all the income they need for the rest of their lives. I think you’ll be surprised at what these investments are and how simple they are to use. You can learn about them right here.

Dr. David Eifrig Jr.

is the editor of two of Stansberry's best advisory services. One of his advisories, Retirement Millionaire, is a monthly letter showing readers how to live a millionaire lifestyle on less than you'd imagine possible. He travels around the U.S. looking for bargains, deals and great investment ideas. Already his average reader has saved $2,793 since 2008 (documented in each Retirement Millionaire issue). He also writes Retirement Trader, a bi-monthly advisory that explains simple techniques to make large, but very safe, gains in the stock and bond markets. This is a pure finance play and the reason Porter Stansberry loves having "Doc" on the team. Doc holds an MBA from Kellogg and has worked in arbitrage and trading groups with major Wall Street investment banks (Goldman Sachs). In 1995, he retired from the "Street," went to UNC-Chapel Hill for medical school and became an ophthalmologist. Now, in his latest "retirement," he joined Stansberry & Associates full-time to share with readers his experiences and ideas.

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  • Sirian

    Those that have the wherewithal to easily play the numbers, go for it. But those that are much more cautious, stick with gold and silver. Those two stand more firmly than bonds.

    • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

      Precious metals are doing so well because the dollar is collapsing Sirian! If the US dollar is replaced as the world standard currency, you’d better have a GOOD hiding place for your gold and silver! If the dollar ever starts to rebound, those prices will begin to QUICKLY fall! And if the worse case senerio ever does happen, can you eat your gold and silver? The ONLY reason that the market appears even somewhat stable right now is that they just keep pumping it full of air! One of these days one of the patches is going to compromise and the resulting explosion is going to be EARTH SHATTERING!!! What alot of people in this country aren’t grasping still is that we’re tied into this GLOBAL economy now, and as the rest of the world goes, so go we! Europe is still TEETERING on the edge of what could be a GLOBAL economic meltdown, the proportions of which will probably prove to be Biblical!!!

      “Go to now, ye rich men, weep and howl for your miseries that shall come upon you. Your riches are corrupted, and your garments are motheaten. Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days. Behold, the hire of the labourers who have reaped down your fields, which is of you kept back by fraud, crieth: and the cries of them which have reaped are entered into the ears of the Lord of sabaoth. Ye have lived in pleasure on the earth, and been wanton; ye have nourished your hearts, as in a day of slaughter. Ye have condemned and killed the just; and he doth not resist you. Be patient therefore, brethren, unto the coming of the Lord. Behold, the husbandman waiteth for the precious fruit of the earth, and hath long patience for it, until he receive the early and latter rain. Be ye also patient; stablish your hearts: for the coming of the Lord draweth nigh.” – James 5:1-8

      Pay special attention to the reason that God says He’s getting ready to take action! The cries of the workers in the fields who have been robbed by the ones in control! How’s your 401K doin’ these days?! A little better? That’s good!

      • Sirian

        Oh I understand TomW, that’s why I’d prefer to stick with the two. If everything collapses, which may very well happen no doubt, then whether you can eat gold or silver really won’t matter much. But it will give you a definite bartering advantage over a piece of worthless paper. Precious metal prices have been swinging up and down recently but why? The uncertainty of what directions the financial markets will go due to this, that or whatever happens to be the most pressing at any particular moment. Political influences involved? Of course they are. Direction of wars that are taking place, civil uprisings – Syria as example – and what the end results will be. This year will be very uncertain, almost mystical. Taking in to account the behind the scenes deals and loans that the Fed alone has engaged in doesn’t seem overly promising. Bernanke is by conviction a true Keynesian. So you take the actions of the Fed, the ECB and no telling what other quiet financial actions that have been perpetrated on the global financial system (Soros) I seriously doubt if the dollar will fully recover. Earth Shattering – absolutely! What worries me Tom is how people are going to react. James 5:1-8 says a tremendous amount – how many will listen though? That is where the problem truly lies, our Lord has been ignored way to long.

      • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

        Gremlins are at work big time trying to block me from sending this Syrian, But I’m determined to get this thru! Third attempt!!! That was an excellent choice of words, “mystical”!!! I’m especially interested in the days leading up to 12/21, pray that everyone will keep their sanity! I’m also extremely impressed with your knowledge of the situation Syrian! You go cowboy!!! That’s the reason I’m always trying to get people to at least consider how Bible prophecy relates to the world news! If you can sit down and watch a 1/2 hr. of the world news, you pick the channel, any channel. Then pick up a Bible and read ch. 21 in the book of Luke, and if you don’t see IT happenin’ folks, you’re both spiriually and physically blind!!! I’ll pray for ya! It’s like it’s unfolding right before your eyes! For the Born Again Christian, WHAT A GLORIOUS TIME TO BE ALIVE!!! Praise be, HALLELUJAH! Did everyone hear me?! What are the chances of ALL these things, ALL happening at the SAME time?!! I wish Jimmy “The Greek” was still around to ask, I wonder where he placed his bet?!
        In a unrelated, yet RELATED story Sirian, and seen’s that ya brought up his name, have ya heard this one yet cowpolk?! Guess Who’s Buying Gun Companies? This has been checked out and it’s true. Marlin Firearms is already closing it’s doors! Even if you do not own a gun you still need to know this.This information needs to be known by all Americanswhether they are gun owners and sportsman or not. The biased media is NOT informing us of these activities. Who is buying companies, manufacturing guns ?!! For the last several years a company called The Freedom Group has been buying up gun and ammunition manufacturers. Some of the companies are Bushmaster, Marlin, Remington, DPMS, Dakota Arms and H&R. Some people worry that this Freedom Group is going to control most of the firearms companies in the United States. If you control the manufacturers you can decide to stop selling to civilians. What a perfect way to control guns.However, if you do some digging you will see that The Freedom Group is owned by a company called Cerberus Capital Management. And guess who controls Cerberus?!! GEORGE SOROS !!! One of the most evil men on this planet who wants to restrict or ban all civilian guns. This needs to published and broadcast in the media groups. Why have we not heard about this in the “mainstream” media?

        If you don’t know who George Soros is, you need to do some research. He backed Obama with millions of dollars
        and Obama is his puppet on a string. Soros is an avowed communist/Marxist and single handedly destroyed
        the financial systems of several European countries. He has promised to do the same to United States.

        Send this to every gun owner in America .

        I haven’t checked this story out personally, but my sourse claims that they have and it is all legit!!!

      • Firefly

        The information on bonds is only for the very rich. Only those who own their home outright, and who have at least a years supply of non-perishable food and water and all the everyday things they need, should consider bonds of any kind. I wouldn’t consider them even then. Notice how few have replied to this because instinctively most know this, and since God is no respecter of persons, I would suggest that all believers pray about any big and most small moves they make these days.

        What is coming may be slowed down if we can replace at least half of the 13 senators who call themselves Democratic who are up for re-election in November along with the President, but just replacing the president, while essential, will not be enough. He has increased the debt as much in his short tenure as all the debt from George Washington to the older George Bush. The interest alone is now over THREE THOUSAND MILLION DOLLARS a day, and since that amount is so humongous it can only be paid with inflation. All the money of all the rich wound only make a dent in what we now owe. We reached the tipping point when we elected our first anti-biblical president. He is not just against Catholics, but all Christians and Jews as well, and as a true politician he will say and do anything to be re-elected. The time for prayer is now, and those who don’t know this are at a great disadvantage.

        In our county a young teacher who was only making $90,000 a year was recently arrested for stabbing another teacher and in one major union city over 200 teachers who are unfit to teach because of various reasons from child molestation to who-knows-what cannot be fired because of union contracts, and so they show up each day to do nothing, and get paid by property taxes, some earning over $100,000 a year to watch TV. We have become that people that the Bible says when “Good shall be called evil and evil shall be called good”, and even hidden code in the Hebrew Bible (usually called “The Bible Code” clearly says we have entered what is often called “The Last Days”. We have spit in God’s face one time to many and will in the years and decades ahead see what it is like when He says, “Try it on your own if that is what you really want!” I thank God I was born in the USA and not in some Muslim or Communist dominated country but we have not valued what God gave us when he inspired the men who gave us the U.S. Constitution and for years now we have tried to convert it into some sort of Marxist paradise for workers, free from all restraint or morality. I do not believe what is coming will be the end of the world but from here on it, the next ten or twenty years it may seem like it. Some believe Iran will attack us next year as they are believed to have sleeper agents in most American cities, and the violent Muslims who hated their homelands so much they left now hate our freedoms and the Constitution so much they are trying to recreate their homelands here (not all of course). I offer no advice, except to suggest prayer to the God of all, for help and direction to see us through the dark days that are coming. He can lighten them a bit for those who listen. May God bless all who read this, and heed this!

      • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

        AMEN!!! Brother! Or is it sister Firefly?

      • http://PersonalLiberty Alondra

        Dear Firefly, I read your posting and I cried. I felt your deep sadness and grief for this great country, which is so profoundly echoes with my, and I am sure with many Americans’. In contrast to you I was not born in the USA but in the huge communistic country with the strong dictatorship and strong censorship regime. I did not miss an opportunity to escape, which I did mostly for my children, because I badly wanted that they grew up in the FREEDOM and LIBERTY.
        For me it’s UNBELIEVABLE that during election of 2008 people did not see who in reality Obama was. But now it’s more inexplicable and puzzling for me that he still has support of Independent (not Democratic) voters. People absolutely spiritually blind. They absolutely do not understand what it will mean for them and their children if he will be re-elected. I hope he will not. We know who definitely will vote for him: ACORN, UNIONs, COMMUNISTS, DEMONcrats, Planned Parenthood. All these groups together will not give him the majority votes. Therefore they will use the same criminal tactics of 2008:

        http://www.youtube.com/watch?v=3-MzKvVi1FI&NR=1&feature=endscreen
        http://www.youtube.com/watch?v=JxGFmWtykqg&feature=email

        And also unlawful donations:
        http://www.youtube.com/watch?v=UzRzsWc0Kds&feature=topics

        These actions are the serious threat to the democratic process of the elections on all levels.
        The IMPOSTOR never was and is not a Christian as he claims to be. The Church he attended during 20 years is based on the James Cone theology that nothing has to do with Christ and His Teachings.
        http://www.youtube.com/watch?v=3hGtRUEB6sA&feature=related
        http://www.youtube.com/watch?v=YDueSvfSlrM&feature=related

        For obama koran is a “holy” book, not BIBLE. He hates Christianity and BIBLE.
        http://www.youtube.com/watch?NR=1&v=0GFKqOf8EHQ&feature=fvwp
        http://www.youtube.com/watch?v=DrJQ8_vGOuI&feature=related

        He despises CONSTITUTION and the Founding Fathers.
        He is replacing American VALUES by his “values” of immorality, parasitism and racism.
        But in this entire situation the most I am stunned by the inaction of the Republicans. Knowing that in the White House in the Oval Office is presiding despicable USURPER/CRIMINAL/FELON and do nothing. It’s just unbelievable that all this is happening in America. Republicans betrayed people TRUST.

        But people deserve the government and the President, which they elected. The 20th President of the USA and a Christian minister James A. Garfield said:

        “…people are responsible for the character of their Congress. If that body be ignorant, reckless, and corrupt it is because the people tolerate ignorance, recklessness, and corruption.”

        “If we wiped out the entire Congress and sent common people who have no political experience, we would get far better results than we have today.” – U.S. Senator Tom Coburn, MD

        “We the PEOPLE, are the rightful masters of both Congress and the courts; not to overthrow the Constitution, but to OVERTHTOW men who pervert the CONSTITUTION.” – Abraham Lincoln

        The first Chief Justice of the U.S. Supreme Court, John Jay, stated in 1784:
        “The BIBLE is the best of all books, for it is the Word of God and teaches us the way to be happy in this world and in the next. Continue therefore to read it and to regulate your life by its precepts”

        “Of all the dispositions and habits which lead to political prosperity, religion and morality are indispensable supports.” George Washington

        All these state men understood that BIBLE and religion play very important and positive role in the society affairs.

        “It is impossible to rightly govern a nation without God and the Bible”. – George Washington

        I am inviting you and everyone who loves this country and everyone with the good conscience to “steadfastly pray” the next prayer every day:

        “When he is judged, let him be found guilty, and let his prayer become sin. LET HIS DAYS BE FEW, AND LET ANOTHER TAKE HIS OFFICE.” (Psalm 109:7, 8) Amen.

        I provide the link of the song “Rachem” “Mercy” which is based on the prayer of Daniel (Daniel 9:15-19). It’s very actual for America in present days. It on Hebrew, but is very inspiring. I hope you will like it.
        http://www.youtube.com/watch?v=mX99NZx9Mfs&feature=related

        http://www.youtube.com/watch?v=YqHrKc0DEgw&feature=related

        God bless you and God BLESS America and our troops.

    • DaveH

      5% interest? Wow, that’s almost enough to keep up with the real inflation rate:
      http://www.shadowstats.com/alternate_data/inflation-charts
      Then what happens when the consumers catch on that their dollars are becoming worth less and the serious price inflation starts? Typically when price inflation starts manifesting in a major way, the Federal Reserve starts tightening and interest rates go up, resulting in bond prices going down to adjust. There is nothing safe about bonds, especially with our true money supply booming (see next link).

  • former walmart person

    http://www.infowars.com/city-of-roswell-ga-bullies-andrew-wordes-to-death-over-his-backyard-chickens/

    off topic, but I am convinced farmers are the biggest wusses ever. Farmers / chicken breeders, food preparation dudes and duddetts have all the discipline in the world to slave under the hot sun all day, but immediately crap their pants upon government thuggery.

    We have unions for every damn reason EXCEPT unions against tyranny. Where are all the cops banding together and threatening strike if the government gives them tyrannical orders? The real RED NECKS were HEROES. The #@%#%@ elite have pushed in our minds that red necks are stupid southern boys. The truth is that red necks were the first union members who actually faced plane bombs and machine guns in exchange for sane mining safety enhancements. They would secretely ID themselves with red cloths around their necks.

    LONG LIVE THE RED NECKS!!!

    • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

      I agree fwp! LONG LIVE REDNECKS!!! This is off topic also, stocks are such a bore and usally always cause ulsers! Has anybody heard about this?!!

      http://www.youtube.com/watch?v=Cji4Vlydb9A&feature=relmfu

      Speakin’ of causin’ ulsers!!!

      • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

        Why?!!

        “We believe, given the changing political landscape in Egypt, that it is in the best interests of the United States to engage with all parties that are peaceful, and committed to non-violence, that intend to compete for the parliament and president.” – US Secretary of State Hillary Clinton, concerning the engaging of talks with the Muslim Brotherhood as a legitimate contending party in Egyptian politics.

        “Allah is our objective. The Prophet is our leader. Quran is our law. Jihad is our way. Dying in the way of Allah is our highest hope.” – The motto of the Muslim Brotherhood, this is the same group who so prouldly proclaimed responsibility for the assassination of Anwar Sadat in 1981.

        “And for their saying, “Verily we have slain the Messiah, Jesus the son of Mary, an apostle of God.” Yet they slew him not, and they crucified him not, but they had only his likeness, and they who differed about him were in doubt concerning him: No sure knowledge had they about him, but followed only an opinion, and they did not really slay him, but God took him up to Himself. And God is mighty, wise!
        There shall not be one of the people of the Book but shall believe in Him before his death, and in the Day of Resurrection, He will be a witness against them.
        For the wickedness of certain Jews, and because they turn many from the way of God, We have forbidden them goodly viands which had been before allowed them.” – Sura 4:156-158

        Muslims claim that Christians and Jews are intolerant reguarding them. These verses from their own holy book plainly show that it is them who have been intolerant towards both religions from their very conception.

        “I do hereby, upon this Bible , and the mysterious legend of the Koran, and its dedication to the Mohammedian faith, promise and swear and vow…that I will never reveal any secret part or portion whatsoever of the ceremonies…and now upon this sacred book, by the sincerity of a Muslem’s oath I here register this irrevocable vow…in willful violation where of may I incur the fearful penalty of having my eyeballs pierced to the center with a three edged blade, my feet flayed and I be forced to walk the hot sands upon the sterile shores of the Red Sea until the flaming sun shall strike me with the livid plague, and may Allah, the god of Arab, Moslem, and Mohammedan, the god of our fathers, support the entire fulfillment of the same. Amen. Amen. Amen.” – The Shriner’s oath, to become a Shriner you must be a 32nd degree Mason and swear this oath. Just fun and games?! Yeah, right!!! WAKE UP AMERICA!!!

        Keep your eyes on the skies, Jesus is coming! I don’t believe it’s going to be the same one that’s spoken of in the Quran, He loves y’all and so do I!!!

        What’s wrong with our country? Please watch this ten minute video. This plaque infects both side of the asiles!!!
        http://www.youtube.com/watch?v=bj3AECSKmhU

      • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

        Why?!!

        “We believe, given the changing political landscape in Egypt, that it is in the best interests of the United States to engage with all parties that are peaceful, and committed to non-violence, that intend to compete for the parliament and president.” – US Secretary of State Hillary Clinton, concerning the engaging of talks with the Muslim Brotherhood as a legitimate contending party in Egyptian politics.

        “Allah is our objective. The Prophet is our leader. Quran is our law. Jihad is our way. Dying in the way of Allah is our highest hope.” – The motto of the Muslim Brotherhood, this is the same group who so prouldly proclaimed responsibility for the assassination of Anwar Sadat in 1981.

        “And for their saying, “Verily we have slain the Messiah, Jesus the son of Mary, an apostle of God.” Yet they slew him not, and they crucified him not, but they had only his likeness, and they who differed about him were in doubt concerning him: No sure knowledge had they about him, but followed only an opinion, and they did not really slay him, but God took him up to Himself. And God is mighty, wise!
        There shall not be one of the people of the Book but shall believe in Him before his death, and in the Day of Resurrection, He will be a witness against them.
        For the wickedness of certain Jews, and because they turn many from the way of God, We have forbidden them goodly viands which had been before allowed them.” – Sura 4:156-158
        Muslims claim that Christians and Jews are intolerant reguarding them. These verses from their own holy book plainly show that it is them who have been intolerant towards both religions from their very conception.

        “I do hereby, upon this Bible , and the mysterious legend of the Koran, and its dedication to the Mohammedian faith, promise and swear and vow…that I will never reveal any secret part or portion whatsoever of the ceremonies…and now upon this sacred book, by the sincerity of a Muslem’s oath I here register this irrevocable vow…in willful violation where of may I incur the fearful penalty of having my eyeballs pierced to the center with a three edged blade, my feet flayed and I be forced to walk the hot sands upon the sterile shores of the Red Sea until the flaming sun shall strike me with the livid plague, and may Allah, the god of Arab, Moslem, and Mohammedan, the god of our fathers, support the entire fulfillment of the same. Amen. Amen. Amen.” – The Shriner’s oath, to become a Shriner you must be a 32nd degree Mason and swear this oath. Just fun and games?! Yeah, right!!! WAKE UP AMERICA!!!

        Keep your eyes on the skies, Jesus is coming! I don’t believe it’s going to be the same one that’s spoken of in the Quran, He loves y’all and so do I!!!

        What’s wrong with our country? Please watch this ten minute video. This plaque infects both side of the asiles!!!
        http://www.youtube.com/watch?v=bj3AECSKmhU

    • Steven Narbonne

      Strong good sense here. It is time and past time to start banding together against the govt. , obamopuss, and the myriad legions of leeches that insist on being peter pans. but do it soon as they (the left) will certainly soon totally control all communication avenues including phones, the net and email. we had better form secret ways to talk to each other and to filter out the fed. agents that will try to infiltrate. the time for reform is long past and too late. we have to rebuild.

  • http://gillysrooms.blogspot.com GILLYSROOMS IN AUSTRALIA

    I’m not an expert in USA Municipal Bonds however one only has to look at the yield of government bonds in Greece and other European neighbours to understand what can happen to your safe capital investment. I’m not so sure your municipal bonds will pay out on maturity despite the aparent tax free earning yields achievable now.

    Many of our Australian Municipal pension plans managers invested their substantial retirement funds in the USA prior to the GFC in 2008 but lost the lot, so what makes anyone feel like they your bonds are going to pay 100%. In my opinion I would want to see a 15% prior to thinking of investing my money…but if I’m using other peoples money then thats a different risk. I,d be risking your money not mine. . On the other hand your municipal bonds are better than Russian Bonds, but bonds are only as safe as the ability of the taxpayers to pay more taxes to repay the principal.

    Your could have a situation in the future where you will have to sell your own property to pay the tax to allow your municipal county to repay you your own investment back, however the. End result…you get no profit and no capital back…..all while your Counties and States use your own money to keep other people in employment or gaining large contracts using your money….Might be better to live a better life now with your own savings than share it with other strangers? .

    • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

      Excellent point GIA!!! I really don’t think that it would ever be allowed to go that far!

      “We are free today substantially, but the day will come when our republic will come to impossibility because it’s wealth will be concentrated in the hands of a few. When that day comes, then we must rely upon the wisdom of the best elements in the country to readjust the laws of the nation to the changed conditions.”
      James Madison

      In the immortal words of one of my favorite Yanks, “Give me liberty, or give me death!!!”

      • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

        What?! Nobody wants to play today?!! WHERE IS EVERYBODY?!!!

      • Firefly

        It’s what I said above about everyone knowing instinctively about what is what in this regard.

  • http://www.facebook.com/profile.php?id=100003309707389 Tom W.

    How many people knew that Barack Sr. served in WWII?!!

    http://www.youtube.com/watch?v=Fv4jnlkxOaw

    • Void1972

      Tom W.
      You are a breath of freash air in this gas chamber called America. Your post are right on and you back it up with facts!
      God bless you and all good folk who fight for America!

      • Tom W.

        To GOD be the glory Void! Just doin’ my job, but thank you so much!!!
        Keep your eyes on the skies, JESUS IS COMIN’! He loves y’all and so do I!!!

    • Steven Narbonne

      Really? Which side was he on or need I ask?

  • Steven Narbonne

    Just a brief heads-up. Bonds are still just paper. Gold and silver are not. Other interesting tradables are ammunition, liquor, freeze-dried foods (MRE’s and the like) and medicines. These things and others have intrensic value. Just a thought and one man’s opinion.

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