I recently received some disturbing news that I felt critical to pass on to you.

As we’ve been writing for over four years now, it’s long been a common approach for government sliding into insolvency to confiscate wealth from their own citizens.

Charles I of England infamously commandeered 200,000 pounds of his own citizens’ gold right before the English Civil War in 1638. Roosevelt confiscated his entire nation’s gold holdings roughly three centuries later.

And of course, Cyprus raided domestic bank accounts earlier this year in a desperate attempt to bail-in the national banking system.

The United States government is in debt to the tune of nearly $17 trillion. What’s more, Uncle Sam has to borrow money just to pay interest on the money they’ve already borrowed… and they’re still posting trillion-dollar annual deficits.

The only reason that the US government is still in business is because the Federal Reserve has been buying the vast majority of newly issued US Treasury bonds… in some cases as much as 90%.

The problem with this method, aside from being a completely fraudulent system, is that the Federal Reserve is quickly reaching the point of insolvency itself.

As we’ve explored in recent letters, the Fed’s capital ratio (a significant measure of it’s financial health) is at a laughably small 1.53%. And as the Fed continues to expand its balance sheet buying even more of the Treasury’s debt, its capital ratio gets smaller and smaller.

The government is soon going to be in a position to seek ‘other’ sources of funding, just as we saw in Cyprus earlier this year.

And as we’ve been saying for years, one of the most likely targets is retirement savings.

There are tens of trillions of dollars in the US retirement system, predominantly in 401(k) and IRA accounts managed by big financial institutions.

And it would be quite simple for the government to mandate that a portion of those retirement accounts be invested in the ‘safety and security’ of US Treasuries. The big institutions who manage the accounts would have no choice but to comply.

In fact, it wasn’t too long ago that the new Consumer Financial Protection Bureau began talking about ‘helping’ Americans manage their retirement savings.

Jim Rogers and Ron Paul spoke about this at our event in Santiago, Chile – watch the video below:

This gives you the authority to directly manage your retirement funds, allowing you a lot of flexibility to ship your savings overseas, invest in foreign real estate, etc. as long as you stay away from a clear set of ‘prohibited transactions’ that the IRS outlines.

These IRA structures are incredibly flexible, and I think one of the best ways for people to safeguard what they’ve worked their entire lives to build.

One of the attorneys that I work with routinely has specialized in setting up these types of structures. He’s an accomplished tax professional with decades of experience under his belt, and he recently told me that the IRS is no longer ‘allowing’ this type of structure.

Of course, no LAW has been passed. No vote has been conducted. The IRS simply decided by policy in its sole discretion to stop allowing Americans to create this structure, and hence, force them to keep their retirement savings in the US.

My attorney’s understanding of this policy is that the agency is trying to ‘protect’ taxpayers from potential consequences. But the end result is that US taxpayers now have one fewer option to safeguard their retirement savings abroad to keep from getting Cyprused.

My colleagues and I are working on another solution, and hopefully will receive some clarification on the matter from the IRS.

In the meantime, this underscores a critical point: there is a finite window of opportunity on many of these steps to safeguard your wealth, preserve your freedom, and ensure your family’s future security. And it’s important to take action while the window of opportunity closes.

Because, once it does, there may not be another option.

The world is swiftly moving to the dangerous place where nations won’t be able to do business with each other because they don’t trust the institutions that control wealth, which includes central banks, commercial banks, and governments. It will happen when the purveyors of international commodities, oil especially, refuse to accept the letters of credit issued by untrustworthy intermediaries. And when that dark moment arrives, nations will throw tantrums. The USA may be the loudest baby in the playpen.

The USA is veering into a psychological space not unlike the wilderness-of-mind that Germany found itself in back in the early 20th century: the deep woods of paranoia where our own failures will be projected onto the motives of others who mean to do us harm. Of course, even paranoiacs have enemies. There are quite a few others who would like to harm the USA, at least to bamboozle and paralyze us, to push back against our influence on their culture and economies. But the tendency here will be to magnify the supposed insults while ignoring our own suicidal behavior.

Historians will remark that it was a beautiful August with bright days and cool nights for sleeping, and the Hamptons were ablaze with self-satisfied egos, and that nobody was paying attention to all the mischief that was set in motion the previous spring, not to mention the many seasons of bad behavior that preceded it. And when they returned from vacation, lo, the world was in crisis. What a surprise.

The USA cannot come to terms with the salient facts staring us in the face: that we can’t run things as we’ve set them up to run. We refuse to take the obvious actions to set things up differently. Instead, we’ve tried to offset the accelerating losses of running our unrunable stuff with accounting fraud, aimed at pretending that everything still works. But the accounting fraud has only accelerated the gathering disorder in the banking system. That disorder has infected our currency and the infection is spreading to all currencies. What a surprise that the first pandemic to strike an overstressed global immune system was not bird flu after all, but a sickness of money.

Near the center of that money sickness was the blitzkrieg against gold and silver in the spring, when arrant serial selling dumps were executed against the money metals to un-money them. The net result was only that a lot of that ancient money flowed from the places pretending it was valueless to the places that never adopted that pretense. At stake in that rather massive movement was the supposed value of the other stuff that pretended to hold value, namely sovereign bonds, and especially the treasury paper issued by the USA. After all, US Treasury bonds and notes were, in the eyes of bankers, the functional equivalent of cash-in-hand. Alas, the world was starting to choke on it — not least the US central bank itself, which had been gorging at the monthly auction buffet for years and was now stuffed to the gills. In fact, it had grown too fat to even leave the room where the buffet had been set up.

Anyway you look at it, there is no escape from the looming crisis of confidence. The “primary dealer” banks and commodity exchanges behind the spring gold smash are out of tricks and out of gold to play tricks with. Their partner, the US Government has two tricks left: confiscation of gold in private hands a la Franklin Roosevelt’s ploy of 1933, or punitive taxes on private sales of gold. What worked in 1933 might not go over so well now, in a land full of preppers armed to the teeth and long-simmered in gall. It brings to mind the bumper-sticker about prying things from people’s cold dead hands. As for the tax gambit, I venture to say that many holders of gold hold it in expectation that there may shortly be no effective government left to depend on to do the wrong thing. Meanwhile, over in the land of paper wealth, the interest rate on the 10-year US Treasury bond clicks up a basis-point here, a basis-point there, like a remorselessly rising sea level. It won’t take many more clicks to put, for instance, the Federal Reserve Bank of New York under water.

I felt sorry for President Obama, going about the country trying to appear historically heroic without doing a damn thing, really, to face down to the monsters in our own midst. But then one hears the rumor of Larry Summers’ imminent appointment to chair the Fed, and it is no longer possible to feel sorry for Obama, but rather to feel sorry for the nation laboring under such a conclave of would-be wizards.

I just don’t see how the world financial system doesn’t blow up this fall, when the digested remains of the last miso-glazed oyster tidbit passes through the cloacal fundament of the prettiest girl in Sag Harbor. When it does blow, at least the NSA will have its prepared “to-do” list, and then perhaps all the unemployed can be enlisted at $8 an hour to harass the rest of the people trying to go about their daily lives. The roar you hear in the distance this September will be the sound of banks crashing, followed by the silence of business-as-usual grinding to a halt. After that, the crackle of gunfire.

The Treasury debt outstanding is $16.74 trillion. Of that, $4.84 trillion is money the U.S. owes itself. For that reason, explains Matt Phillips of Quartz, “many analysts tend to focus on the $11.91 trillion in debt that is publicly available to be traded.”

Hamilton’s study, however, examined the federal liabilities that are not included in the government’s officially reported numbers. Specifically, he examined the federal government’s “support for housing, other loan guarantees, deposit insurance, actions taken by the Federal Reserve, and government trust funds.”

Not surprisingly, Hamilton found that Medicare and Social Security represent the bulk of future U.S. debt obligations, coming in at $27.6 trillion and $26.5 trillion respectively.

The study’s $70 trillion debt estimate may actually be overly optimistic. Boston University economics professor Laurence J. Kotlikoff, who served on President Ronald Reagan’s Council of Economic Advisers, says the nation’s true debt obligations are three times that figure.

“If you add up all the promises that have been made for spending obligations, including defense expenditures, and you subtract all the taxes that we expect to collect, the difference is $211 trillion. That’s the fiscal gap,” Kotlikoff told National Public Radio. “That’s our true indebtedness.”

Hamilton concedes that other scholars may arrive at different figures.

“Some may argue that the current off-balance-sheet liabilities of the U.S. federal government are smaller than those tabulated here; others could arrive at larger numbers,” writes Hamilton. “But one thing seems undeniable—they are huge.”