Jeff’s note: Before I get to today’s essay, I’d like to congratulate all the Delta Report members who generated a 300% win in just 48 hours with our first “Breaking Point” penny option trade on Citigroup.
We appreciate that so many of you wrote in about your experience and have included your responses in the reader mailbag.
Stay tuned for more of these types of gains in our portfolio.
Now, read on to see how I feel about the U.S. government’s handling of our money…
Stand back, Charles Ponzi and Bernie Madoff.
Your crimes were atrocious. But they’re microscopic planktons in the ocean of fraud being perpetrated by the U.S. government.
Imagine this…
You’ve stuck to a savings plan your entire working life. Each month, you automatically tuck away $744 – whether you can afford to or not. It comes out of your paycheck, right off the top, and goes into what is presented to you as the world’s safest bank account.
Sometimes it’s hard to do. You pass up taking your spouse out to dinner or taking the family to Disneyland for a three-day vacation. Saving the money is more important. It’s your future, after all. Your retirement. So you stick to it – month after month, year after year.
Imagine doing this for 46 years. That’s 552 deposits of $744 each… for a grand total of $410,688. That’s quite a nest egg.
But over that time, the U.S. dollar has fallen in value, and inflation pressures have eaten away at the purchasing power of your savings…
Nonetheless, you’re confident the interest earned on your 46 years’ worth of deposits is enough to make up for most of the loss in purchasing power. After all, in a truly free market environment, interest rates rise as inflationary pressures persist.
Now, imagine it’s time to start taking your money out and living off your savings. You’ve labored and saved for 46 years. You’ve sacrificed some of the finer things in life in order to save 12% of your monthly income for retirement.
“Congratulations,” says the trustee of your funds. “You’ve saved enough to receive $1,400 per month for the rest of your life.”
Congratulations? Really?!
If you haven’t already guessed by now, I’m writing about the Social Security system. And I’m furious.
You see, I just received a statement of my future benefits, and the math doesn’t make sense.
The actuarial tables say I’m likely to live until 84 years old. So if I pay into the system until I’m 62, and then start taking Social Security, I’ll have 22 years of payments at $1,400 per month. That’s a total of 264 payments – a total payout of $369,600.
That’s more than $41,000 less than what I would have paid into the system. No interest. No capital gains. Never mind inflation and the drop in the value of the dollar – the Social Security Administration is stealing $41,000 from me.
And they’re stealing it from you, too.
Of course, we all know the system is bankrupt. We all know the promises made can’t be kept. And we all know the statement I just received most likely overstates my future benefits. So, my $41,000 loss is actually going to be much worse.
And still, our FICA deposits are automatically deducted from our paychecks, and our employers automatically match the contributions.
Why do we let this happen?
If someone held us at gunpoint and demanded we give them 12% of our paychecks every week in exchange for a future benefit we knew was a total lie, we’d fight back.
Don’t steal my money. Don’t lie to me. And don’t try to pass it off as something charitable for the “greater good.”
Let me keep my money. Let me invest it myself. And let me enjoy the benefits or suffer the consequences of my own decisions.
If I do well, I can live like a king and the $1,400-per-month paycheck from Social Security won’t have any added benefit. If I don’t do well and I blow my entire retirement savings on poor stock investments or on swampland in Kansas, I’ll live by my decisions.
That’s the thinking that prompted me a few years ago to write a letter to the Social Security Administration…
You can keep everything I’ve paid into the system thus far (just over $240,000).
In exchange, don’t take any more of my money. I’ll never make a claim. My descendants will never make a claim. I’ll raise my kids so that they’d rather deliver pizzas or work at McDonald’s when they’re 60 years old before cashing a check from the government.
That’s a $240,000 windfall gain for you, and I don’t even get a tax deduction for it.
What do you say?
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There was no response.
Yet they keep taking my money and sending me statements that are filled with empty promises of substandard performance.
I have no doubt I can achieve a better return on my money than the government can. And I trust my own abilities to take care of my family when times are tough.
So, what do we do? Frankly, I don’t know. I’m not smart enough to tell you how to fight the government and to avoid confiscation of your rightly earned property.
I am smart enough, however, to know when I’m being played as the “mark” in a con game.
Bernie Madoff ended up behind bars when the regulators finally figured out he was making up numbers and stealing money from his investors.
It appears the government was simply getting rid of the competition.
Best regards and good trading,
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Jeff Clark
Reader Mailbag
Last week, Delta Report subscribers made their first “Breaking Point” penny option trade – a 300% win on Citigroup (C) in 48 hours. And we asked them to write in. Here’s what a few said…
I couldn’t believe my eyes! My very first Citigroup “Breaking Point” trade returned 611% – far exceeding my expectations. Thank you Jeff, for bringing me this new trading opportunity.
– Michael G.
Yes, that was a great trade! I trade your recommendations a bunch of different ways. Sometimes I’ll go with your long-term recommendations. But if I like the chart setup, then I’ll also do a short-term, and no more than two weeks. Sometimes I’ll take a loss and roll to the next week. But I didn’t get in right away.
I don’t have time to keep up with market conditions. I rely heavily on your updates on market conditions. I definitely appreciate your work. Your advice has helped me learn how to use proper position sizing.
Sometimes full 10 contracts to open, and sometimes two or three to build positions on. I’ve been doing a “take the money and run” strategy. Since December, and before this trade, my account reached a high of a little over 1,400%! Thanks for your insight, along with your staff.
– Mary B.
I’ve been reading Jeff’s daily reports and watching his videos for about a year now. Wednesday night, I was able to become a Delta Report member. I saw the Citigroup recommendation and planned on entering the position Thursday morning. JPM had just reported disappointing earnings and banking stocks were declining and Citigroup was down about $1. I was confident in Jeff’s recommendation. You guys know what happened next, and I ended up buying the put credit spreads back.
That’s maybe the best percentage gain I’ve had on any trade. Great job, Jeff and team. Thanks for all your hard work and sharing your knowledge so a novice like me can learn and succeed.
I can’t wait for the next recommendation. I really enjoy your explanation about why you like the trade and the criteria used to make your decision. I’m really excited about the next two years – making more money and becoming a much better trader. Thanks again.
– Sean O.
I played the first trade using the new service and cashed out with 261%. It’s enough to pay half of the subscription on the very first trade. I hope to see more of these.
– Douglas G.
I have been a Delta Report subscriber for years and appreciate your daily pragmatic and thoughtful analysis of the market. I’m very excited by the “Breaking Point” addition. With Citigroup, I was unable to enter your recommendation as I saw it too late.
Instead, I entered a lightly different trade (I felt confident in that based on all the education you provide). That trade went from $0.29 to $1.90, up 655%. Your education and recommendations are invaluable to a retired guy trying to generate increasing wealth in a volatile market.
– Rudiger W.
Wow. That’s my one-word explanation to describe my first few hours going through the Delta Report training classes. I’m in the autumn part of my life as Sinatra once sang, and to be honest, it’s pretty overwhelming. I can’t wait for the blinders to be lifted and for everything to become clearer.
It reminds me of when I was a lot younger trying to transition from flying small airplanes to handling a jet helicopter. Once the aviation company turned me over to a helicopter instructor who spent many years flying in Vietnam, everything changed. One day as we flew over Atlanta’s downtown, I landed on a heliport on top of one of Atlanta’s tallest skyscrapers… having had the professional discipline and training that provided the confidence I needed.
I thank you, ahead of time, for walking me through my first trade in a few days. That’s when the blinders will come off, and I’ll have the confidence I need to land on success.
– Gordon W.
Thank you, as always, for your thoughtful comments. We look forward to reading them every day. Keep them coming at [email protected].