Trump Exec Order: 401(k)s Into Bitcoin?

[Jacob Petersheim]

Not really political, I believe it's a done deal. We don't have a "finances" forum so I decided to stick it here.

I don't know whether to be alarmed or enthused. I don't know enough about this yet to decide.

If you don't have retirement savings in a US 401(k) plan then you won't care. But those of us who do might need to pay attention.

When 401(k) plans were brought into being, as far as I can tell they started out in bond funds. Within a few years stock funds were added as options. Later other things came along like "self-directed" 401(k)s. Lots of other details, yadda yadda, Roth 401(k)s came along, etc.

The story seems to be that Trump and his team feel that the investment range offered has crappier returns than people are entitled to. So the change allows redirection of existing investments into 3 categories of "alternative investments." Those are Real Estate, Private Equity, and Bitcoin.

This still has my head whirling a bit:

$9 Trillion Is About To Flood Into Bitcoin

This is actually an enormous change, one that may impact everyone in the US because it reorganizes the entire financial system And there may be other big moves coming as well.

As far as I can tell this sort of thing's impacts are very likely to spill over into other economies as well.


Does anybody know more about this E.O. yet?

 

[Yvonne Smith]

The White House announced that they will not be buying any bitcoin , and this is apparently making the people who invested into it very unhappy. Seeing lots of grumbling about this in the news today.
I don’t understand a thing about bitcoin, or any of the other digital currencies that are out there.

 

[Jacob Petersheim]

This isn't about the Administration buying Bitcoin or seizing it in criminal raids, but instead about permitting 401(k) investments in "alternatives" to those things allowed previously. Bitcoin falls into one of newly permitted categories of investments.

The broader "Stablecoin" issue is different, and unrelated to retirement accounts. It appears to substitute a series of Treasuries-backed Private Bank Digital Currencies for the CBDC concept.

So I think we are looking at three different topics, only connected because they all involve Bitcoin or other versions of cryptocurrencies.

 

[Marie Mallory]

I know nothing about Bitcoin.

 

[Jacob Petersheim]

Here is a little more on the changes. It sounds like there are 6 things added as investments.

• Private market
• Real estate
• Cryptocurrency funds
• Commodities (e.g. gold)
• Infrastructure projects
• Income annuities

These have to be passed by the SEC. Even then, your employer has to allow the passed options. It isn't clear that retirees would be able to redirect existing investments into these new investment classes.

 

[Axel Slingerland]

I've been saying Bitcoin was a scam since I first heard of it and every Republican I know (and yes, I know quite a few) has been telling me that's BS the whole time. Now do you think they will believe me? Probably not...

 

[Mary Stetler]

I've been saying Bitcoin was a scam since I first heard of it and every Republican I know (and yes, I know quite a few) has been telling me that's BS the whole time. Now do you think they will believe me? Probably not...

I believe you. If the internet goes down, where does all the bitcoin go? Or if people are able to bypass your password. Remember they guy who lost his? Millions lost.

 

[Don Alaska]

Bitcoin is just another fiat currency, but it is not backed by a nation's status, and if the internet gets destroyed...or you lose your password, you have nothing.

 

[Jacob Petersheim]

Keep in mind that there isn't any one Internet. Most of them are interconnected, but several of them only do so at specific, policeable points of contact.

In the 1990s too many State government data centers here started adding random interconnects. Before long we went back to non-TCP/IP site-to-site connections for critical data centers, and established shut-off points and protocols for their Internet connections. This became a problem as computer terminals and smart nodes got replaced by PCs and PC servers.

I hate to think how vulnerable most non-military networks have been allowed to become by today though.

 

[Axel Slingerland]

If the internet goes down, where does all the bitcoin go?

That's also how I feel about just about anything Internet, but specifically banking... But what can you do? The Feds put our entire lives on computers decades ago.

My most recent problem was with paying rent. Our landlord makes us pay it at Walmart. And if that has problem, what can we do? A few months ago, it didn't work. And it was the fifth of the month on a weekend, so I couldn't go to the office. And since I couldn't get in I didn't go there. If I had I would have seen a notice about that they taped to the door. And when I did go there I rolled right past it, because they taped it at a normal eye level, and I sit lower than that.

Fortunately, they were cool about it and waved the late fee. (I would been pretty upset if they didn't.) All I had to do was go back to Walmart and get a money order. It was a problem on the company network, which is based in Dallas, Texas. And it didn't get fixed for several months. I finally got smart and started calling the office before I drove to Walmart. It may only be 3 miles round trip, but it adds up if you're wasting gas...

 

[Mary Stetler]

That's also how I feel about just about anything Internet, but specifically banking... But what can you do? The Feds put our entire lives on computers decades ago.

My most recent problem was with paying rent. Our landlord makes us pay it at Walmart. And if that has problem, what can we do? A few months ago, it didn't work. And it was the fifth of the month on a weekend, so I couldn't go to the office. And since I couldn't get in I didn't go there. If I had I would have seen a notice about that they taped to the door. And when I did go there I rolled right past it, because they taped it at a normal eye level, and I sit lower than that.

Fortunately, they were cool about it and waved the late fee. (I would been pretty upset if they didn't.) All I had to do was go back to Walmart and get a money order. It was a problem on the company network, which is based in Dallas, Texas. And it didn't get fixed for several months. I finally got smart and started calling the office before I drove to Walmart. It may only be 3 miles round trip, but it adds up if you're wasting gas...

Yikes.
This is supposed to be easier with technology. The plans they had 'for us' hadn't been thought out so well. They should have kept a back up plan instead of forcing us into the 'matrix'.
I keep fighting it every step of the way.
And with the invasion of illegals? Why did the offering of english and spanish in menus on phones happen everywhere decades ago? You don't think the WEF, UN, our government or whomever didn't have this planned?

 

[Axel Slingerland]

Yikes.
This is supposed to be easier with technology. The plans they had 'for us' hadn't been thought out so well.

It was never "for us", it was more like "keeping track of us". I remember having my police record checked on the NCIC system in the early 1970s, on the FBI computer network in 1976 when I had to pass my first Presidential Security Clearance because President Ford made a Campaign Speech at Old Faithful in Yellowstone, and my second one in 1978 when President Carter was on vacation in the Grand Tetons. These background checks were long before PCs. As a hilarious side note, when I looked up the year of Carter's vacation, this came up on Google's AI Overview:

As of December 2024, former President Jimmy Carter has passed away and is no longer vacationing in the Grand Teton mountains. However, during his time in office, he and his family did vacation in the Grand Tetons, where they went sailing and trail riding.

Is this Artificial Intelligence or Absence of Intelligence?

Why did the offering of english and spanish in menus on phones happen everywhere decades ago?

Just be glad it's typically only English and Spanish. There are dozens of different languages spoken in America.

 

[Mary Stetler]

It was never "for us", it was more like "keeping track of us". I remember having my police record checked on the NCIC system in the early 1970s, on the FBI computer network in 1976 when I had to pass my first Presidential Security Clearance because President Ford made a Campaign Speech at Old Faithful in Yellowstone, and my second one in 1978 when President Carter was on vacation in the Grand Tetons. These background checks were long before PCs. As a hilarious side note, when I looked up the year of Carter's vacation, this came up on Google's AI Overview:


Is this Artificial Intelligence or Absence of Intelligence?


Just be glad it's typically only English and Spanish. There are dozens of different languages spoken in America.

Funny, I could not get here with the link in my email.
Someone watching?

 

[Axel Slingerland]

Something watching?

 

[Jacob Petersheim]

Digging into it a bit further, cryptocurrencies seem to be much more like rare commodities (notable example: gold).

In these schemes a "coin" is a specific set of very large numbers that relate to each other in a unique way. A very simple example would be a number that is the product of multiplying two large prime numbers. These three numbers would, together, comprise a simple "coin."

The rarity/scarcity lies in the difficulty of finding such triads of large numbers.

Real cryptocurrencies use more complex relationships among the large numbers as well as cryptographic "blockchain" schemes on top of that to unambiguously define "ownership." I.e. otherwise somebody could just copy your "coin numbers" and claim ownership.

"Mining" cryptocurrency seems to involve spending vast amounts of computing power to sift through the possibilities, testing one after another until another valid combination of large numbers is found. Each one found must be searched against all of the others already found and added to the blockchain. If new and unique and valid, a new "coin" can be added in the system.


While this sounds entirely goofy on the face of it, I am beginning to see how it could relate to gold. While the US will not buy Bitcoin, they have been seizing it in crime prosecutions and selling it off for years now. Bitcoin seems ephemeral, or even fictional in nature. But is gold any different for most people?

Today Trump is talking about hanging onto seized Bitcoin as another form of "reserve asset" to back Treasury Bills and Stablecoins.

One Bitcoin's value is set by global market forces, i.e. what people will pay for it, its scarcity, as well as the sheer consumption of energy required for the computations in "mining" the stuff. Much like gold. A Stablecoin's value would be derived from that, somewhat as a Dollar is derived from gold at a set price today.


If it all sounds like a multi-layered shell game of shadows and no substance... I get that.

This is a slog, but he does his best to give an overview of current plans:

Trump’s Secret Crypto & Gold Plan to Survive the US Debt Collapse

 

[Axel Slingerland]

I remember having my police record checked on the NCIC system in the early 1970s, on the FBI computer network in 1976...

Something I forgot to mention when I posted that was they responded to the request for my NCIC records (something I didn't even really know I had at the time) in about 20 minutes. And if you believe what they showed on TV at the time, that was pretty quick for a nation wide computer given how slow computers were in the 1990s, much less even farther back to 1978. Now they can look up your entire life in seconds, from databases far more advanced than the old NCIC systems...

 

[Jacob Petersheim]

Trump Just Shook Up 401(k)s FOREVER (Pay Attention!)

More choice, possibly better opportunities for outcomes.

But it mainly applies to those not yet retired... and with a regular long-term job with some company. Maybe IRAs will become more liberalized next?