How to Avoid Becoming a Victim of Financial Scammers. Long Bonds Say, "Creak! Pop!"

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Originally published at: https://peakprosperity.com/how-to-avoid-becoming-a-victim-of-financial-scammers-long-bonds-say-creak-pop/

In today’s discussion, Paul Kiker of Kiker Wealth Management recounts how his clients have been experiencing a growing number of scam attacks of increasing sophistication, mainly targeting the elderly.

To protect yourself (or your loved ones), he advises:

  • Use a separate email ONLY for your financial accounts (and no other uses)
  • Change your passwords monthly
  • Use two-factor authentication
  • NEVER give any information to anybody over the phone if they have called you
  • If someone official-sounding calls you (from your brokerage or state for federal government), and then advises you to look up the number by Googling it, BEWARE! The scammers may have compromised your device, and you will pull up a bogus number during your ‘search.’
  • Anybody asking you anything over the phone, HANG UP. If it was a legitimate IRS or FBI (or whomever) inquiry, let them come to your home and detain you and work it out within the court system.
  • Do not use debit cards. Use credit cards instead. Debit card charges are much harder to reverse if compromised.

Remember, the system has limited safeguards to prevent you fr om being a victim of fraud, but once you’ve been defrauded, the system has excellent guards in place to prevent your financial institution from bearing any of the expense or responsibility.

In his 26 years of being in the business, Paul has never seen or experienced the level of fraud attacks that are currently underway.

After that timely and important advice, we discussed the bond markets signalling that ‘something is very wrong.’

Japan’s 30-year bond is “blowing out” and with the BOJ being a 52% holder of all Japanese government bonds, this means huge losses for the central bank.

But, hey, somebody somewhere is nursing trillions in losses, which we can surmise from the fact that in 2019 there was more than $18 trillion of negative-yielding debt in the system:

Negative-yielding debt means debt whose rate of interest that it “pays” is below zero. You have to pay someone, like Germany, to allow it to borrow your money. This wasn’t just nuts, but stark, raving bonkers.

As Lawrence McDonald pointed out, the poor saps holding Apple’s 2060 bonds yielding 2.55% are sitting on a 43% capital loss.

Well, 2.55% is a lot better than “below zero,” so it’s likely that all those proud buyers of negative-yielding debt are facing equivalent losses (depending on the duration of their bonds).

Finally, the UK 30 year ‘Gilts’ are also busy blowing out:

For some reason, the entire financial world has decided that long-term bets on government debt are not all that compelling at the present moment. Gee, I wonder why?

Trade safe, everyone!

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I see that scam and fraud topic part of longer continuum in social trust… ie structures get weaker, people have nearly noone to ask “dumb questions”, authorities may also laugh and punish you for that. Thus it is prime hunting ground especially with technology making things so much easier and this “attitude” making society in general lazier ie removing those structures by assumption and overemphasis on technology. When 4th turning and stagnating governance does imploding system, it adds up.

One thing is for certain, these same cyclical trends have been repeatedly in history. But no other time they had these prime technology tools available. So it was some sort of scam in person albeit eg hotel may rob your belongings in medieval time, you are still not exactly sure who was it, but it couldnt be someone remotely from other side of world.

We’ve also seen in history less “technological” people have taken over more sophisticated folks, if trust and social cohesion is too rigid and stagnant for reasons… eg huns in mongolian 1000 years ago were like startups challenging slow, clumsy, bureacratic decision making militaries and societies. This trend is repeated many times. French army prior WW2 was said to be better in almost any way, also technology, than german one in 1939 but they had horribly “soviet style” slow, painful bureacratic decision making structure and culture. By stagnant times I mean that aspect, as peaceful times seem to create that inefficiency and ignorance to systems(in corporate side that is zombie companies that were kept alive over a decade…until 2019+, basicly foodstamp equivalent in companies).

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I am already worried about myself as a future older person. As decision-making gets harder with age, what a nightmare to also face increasing sophistication of attacks, up to and including fully spoofed voices of loved ones and total situation dominance that might include the voice prints of people I knew in high school.

This is evil manifest.

Plan accordingly.

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I’m totally against Debit Cards. Use a credit card from the same bank as your debit card, establish a small credit line and charge your purchases on the credit card. Pay off that credit card DAILY. Same as a debit card with a lot more protection. Problem solved.

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I am the Senior Executive Classifier for the IRS, and previously worked at VA. I PROMISE YOU no legitimate government employee will call you as the first contact. You will always receive a letter first. I myself enjoy messing with these idiots by asking questions any legit fed can easily answer (what’s your emplid (DOT employee id number), what title, series and grade are you, etc.). If you have any questions about any IRS documentation or contact received, I highly urge you to contact TAS (Taxpayer Advocate Service). They are the arm of the IRS empowered to assist taxpayers and they operate outside of the usual IRS hierarchy. Their contact info can be found at IRS.gov. DO NOT click on IRS.com. It is not legitimate.

Toni

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received a text message and FB IM today, both stating I won Tesla car and to follow the link to process.

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I have couple questions I was pondering…

  1. Why has it taken 30+ years for japanese interest rates now suddenly skyrocket… US and EU/other places adjust them up n down constantly.

  2. As we know plaza accord type “markets” exist(Chris has in many episodes talked how lots of events in markets are not natural), ie central banks and FED closely cooperate their policies among western nations monetary/fiscal policy, is this visible there? This happened 2019 and during covid, despite public appearance rhetorics can be totally different. However even despite those cooperation moves, japanese rates have been long time way lower than anything else.

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Aaron Day is riding on the Ver train and anything he says should be investigated thoroughly. If you don’t like Bitcoin he will reinforce and amplify your worries.

Ver while being severely mistreated by the US gov nearly destroyed BTC by trying to fork it in a way that would limit its decentralization which is one of BTC’s strongest features.

Sources to challenge Day and Ver are:

Anthony Pompliano

and

Matthew Kratter of Bitcoin University

Just to name a few far better sources.

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Thank you Paul for bringing up the subject of scams. Having been scammed a little over a year ago and lost a third of all my assets and had to sell my home and move to a rental in order to rebuild my capital, I have personally found out just how devasting and sophisticated these scamming operations can be. And that was without the horrors that are coming with AI. Losing a third of my assets at now age 78 has been a huge setback. The scam involved several “institutions” and 7 people and put me and my wife through the worst month of our lives. They scared the hell out of me, frankly. Multiple accounts “had been set up in my name and millions of dollars were being laundered thru those accounts, and oh by the way we found an abandoned car registered to you near the Texas border with blood all over the seats and 50 pounds of cocaine in the trunk” etc… No matter what questions I asked their answers were always well prepared. I’m sure they use psychologists and focus groups. They know exactly what to say and how to say it. In talking to the Schwab crime person after the fact, he told me he knew of many stories just like mine and that almost nobody manages to escape if caught in one of these things.
I was going to write the whole thing up for everybody here and I’m sorry to say I have failed to do that. It isn’t something I wish to revisit, but also there has simply been a great need to just put it behind me, reorganize my life and keep moving. I am managing to do that, but lady fortune is going to have to smile if I am going to live a lot longer. I look at the whole experience as a really bad trade and have mostly put it behind me, but it has been very painful and it is hard to believe I could have been so stupid to get sucked in. No one I know can believe it happened to me. But that’s the thing. It can happen to anybody, from Fortune 500 execs to Joe sixpack.

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This is something I worry about. Having a husband with dementia it’s an even larger concern.

I have tried to make all legitimate phone calls come to my cell. He only uses the landline and has no computer or tablet. He uses Alexa to retrieve info he formerly googled. (Computers became too confusing) We have a rule that he has to check the caller ID before answering the phone. We have a reminder conversation about scams and how they work and he usually says he just won’t answer unless he recognizes the name and number.

Interesting the timing. I am in the process of moving away from a 20 year old email account and am segregating various types of use across more than one now.

I did elder care in my home twice before and it is amazing what they try to do via the mail, now it’s digital and so many more tools are available.

I think simplifying is best at some point as you age. Also knowing where things are and how they work and at the same time having a second pair of eyes. Example, having a broker and banker you trust. If anything comes up, you hang up, or close the email and call your banker or broker. They can look and see if there are flags on your account of if whatever scary thing is indeed true.

Such simplification prior to the last lap can also make end of life care and handling an estate go much smoother, and such things can be discussed across an estate lawyer a trusted financial adviser, and a CPA for a holistic plan.

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I can vouch for this. In the last 45 days I received a number of warning texts about the money I owe to the DMV for unpaid parking tickets, and they are very threatening. I was at the DMV a week ago for another reason and I talked with a policewoman there about it…she said it is overwhelming and they’ve never seen it this bad.

I’m also getting a lot of the “we can’t deliver your package yet, we need more info” type emails.

I was concerned enough after this episode to enroll in a credit and dark web monitoring service. Thanks, guys.

Also, if you have elderly family members you simply must, every few months at minimum, keep an eye on their bills. My father was perhaps the kindest person I ever met, and they played on his heartstrings with mail containing all these sad stories. It was in Dad’s nature to give generously, which put him on all kinds of mailing lists and it really got out of hand. I feel for anyone who is doing this for an elder: it feels awful, as if you are prying into someone’s personal affairs, but if you don’t they can so easily fall victim to these things…

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I’m not so sure the authorities will help. I had a card double scanned a few years ago got the CC company involved immediately. We knew exactly where it was done. So they sent me to the local police. AND the big bank called the local police to ask for immediate action (before the scammers moved on). Now we knew this was a scam in a retail establishment so lots of people impacted, but a small impact on each.
Police said if it wasn’t over $10,000 (in an individual case) they wouldn’t follow up. Bank and I were furious. If they’d use our information to get an immediate search warrant they would have found the scanner and shut down a RING. And this was an easy one to do.

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Silver just broke $38 an ounce.

Spot hit $38.24.

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I’m reminded of a couple in our campground that won Readers Digest (is that still a thing?). They lost their IRA, their bank accounts, even their house. But still, they sat in the parking lot of the campground every night waiting for the car to be delivered.

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Wife has run into a problem with her medicare payments from SSI to advantage insurance. Just kind of blew it off, but thanks to your video, we’re going to actively start tracking that down.

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@galpin So sorry to hear this. I have an aunt & uncle who were similarly scammed as well. They are in their early 80s. It was devastating in so many ways over an above financially. They lost about 100k and had their 50k line of credit maxed out. My heart broke for them when I heard about it.

@waltergerhardt a question: why pay off the credit card daily? Why not just wait for the monthly bill & pay off in its entirety, avoiding any interest charges? Timing large purchases to coincide with billing cycles is smart money management. I see no reason to pay off daily, especially if one is paying cash at the bank to pay off their balance. Is there a specific reason you pay it off daily?

For my own protection I have long treated my email addresses & phone number like a credit card, from the security perspective. I do not give them out easily or to just anyone. No entering contests or filling out coupons with that info has greatly reduced the amount of spam I get. I believe it helps to minimize the risk of scams - if they cannot reach you they cannot scam you. And I never answer my phone, especially unknown callers. It is easy to quickly call back someone I know, while avoiding talking to someone I have no desire to talk to.

Other things I am doing/have done:
-not saving credit card or shipping data in online shopping applications where ever possible. Convenience has a price.
-using one specific credit card for online transactions only, and nothing else.
-never using my debit card online
-I have set up alert notifications on all of my bank accounts to notify me by text or email of any and all transactions over 10.00. This enables a rapid response if there is any illegitimate activity on any account.
-I use cash as much as I can, and have drastically reduced the use of my debit card, instead using a credit card, which as pointed out, offers better protection.

There is no question in my mind the threats faced are multi-faceted, the dangers enhanced by AI. Not only can they scam our assets, they can scam our very lives via impersonation, to the point of creating digital twins. The case for going back to analogue as much as is possible for one’s personal circumstances grows greater with each passing day.

Being awake and aware has never been more important. It sucks and is a frustrating way to have to live. And yet, we must. I can’t go on, I will go on, doing the best I can in an increasingly complex world.

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We had a friend who was getting scammed so bad around 2005 that we ended up moving him in with us. He was getting two entire bins of mail every day or two. His junk scam mail was in large bundles stacked into bins that were in parcel lockers and he wound have keys placed into his male slot. It was horrific. I checked his checkbook register and saw a mess where he was unable to write it all down and unable to do the math any longer. I went to the bank and pulled the history as he had out me on the account as co-owner years before. It was awful! In about 3 months it had amounted to 30k. They were using the checks he had mailed to make EFT transfers from his checking account.

He lived with us until his dementia was too bad and we could not leave the house because he might cause problems or get hurt. By this time he had no benefit from living with us over a nursing home anyway his mind was too far gone. I then paid the nursing home each month from his account, until he passed and over saw his care there, with twice or more a week visits and or outings to restaurants with my family. Had the scams kept up, he might have ended up in a really bad place. He made it to 91 with some resources to spare, in a nursing home he picked himself and smoked cigarettes in the courtyard with his 50 year old roommate…until he forgot to. Amazingly he never became an unpleasant person excepting one period that lasted a couple months, where he was a bit cranky.

The scam that infuriated me the most was a mailing that had fake carbon paper. They had printed up with colored ink something that looked like a formal 3 part copy from years gone by. It was meant to trick the mind of an elder. Sick and diabolical. The second sheet had smudges and faded purple black text and everything.

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George,

Thank you for even sharing this. I completely understand wanting to move past this tragic and toxic episode.

For those of you who don’t know, George is a daring-do adventurer, bush-pilot, and financial industry pro.

I absolutely love this article he wrote for Peak a few years back:

And this one too:

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@preppy you have the most beautiful heart :two_hearts:

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You are so right. When I had a credit card double swiped a few years ago, I was at a local IT security lunch and happened to be sitting next to an FBI agent. When I mentioned my problem, his response was the same had happened to him a couple of months before. He agreed it was a problem that the police refused to investigate a small loss and thought that looking at small things that would identify a larger scam network made more sense.
I’ve been using cash more often, even for larger purchases. I suppose that will put me on their radar, but backing off of credit cards makes sense. AND the small businesses I deal with prefer cash so the CC charges don’t eat so much of their profits.
On general principles, I don’t like checks. They are more expensive to process, compared to debit cards and it’s not obvious to me that they are all that much safer than a debit card, as many big box stores make them electronic at once, a few even hand you back your check.

When I was working, I had separate online identities (separate emails) for business and personal use, because I knew some of my personal interests would not be popular with the big bosses. Then one day it occurred to me that I no longer wanted to work for the kind of jerks that would hold my personal opinions against me. Then GoDaddy totally trashed security on my business account by moving it to Microsoft 365. I started using my gmail account instead but that’s turned out to be even more problematic. It is just SOOO much work to close or move all the things that are linked to an account. I guess, at the very least, I need to set up a safer account for banking, as I just had a fraudulent doordash item post to one of my credit cards.

WHAT A WASTE OF TIME Not only are they stealing our assets and peace of mind, they are stealing our time. I like what Glen is trying to do, but no way I have time to make the changes he’s suggesting. I’d love to just pay someone to do it, but then I’d have to learn a new system with much less convenience. And, I need new tires and a new garage door - oops, do I take care of things in the real world or the virtual world. I’ve been prioritizing the real world, but may need to spend more effort on digital dangers.
I cut back on Microsoft, but now I see that Google has become even more evil. I think every time we find a better, safer vendor, we’ll soon discover that they have vulnerabilities that AI is already exploiting. Or, even worse that they have been bought out or run into bankruptcy by one of the big robber barons.

@cmartenson I know you’re using LLM/GPT and to be honest, because the search engines often turn up paid listings and “fake news”, I often do also - When it’s not super critical. Yes, it’s convenient and sometime useful, although you can never believe what you get.
How do we protect ourselves from them?