Silver down as Dollar is propped up by Euro problems, but QE coming

News from the BRIC nations this week. News from the Federal Reserve… QE…..Spain…When will the madness end? Dollar again propped up in short term by Euro problems, but fundamentals point to a coming implosion of silver and gold prices. Bernanke breaks bread this week with Wall Street Bankers.

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Banks Are Walking Away From Houses

A city in the Cleveland, Ohio area has demolished 1,000 livable houses in the last year and plans to tear down another 20,000. Their thought is that with 20% of the homes in the town vacant, they are not making the neighbor’s values worth less, they’re making them worthless! Here’s my take..

 

Bailout: The name of the game

It is absolutely madness. Yesterday was a huge injection of dollars into the global financial system by central banks. It seems fiat currencies are swirling the drain now.. Look for precious metals to surge again and listen for new talk of a one world currency..It’s only a matter of time. However, as Robert says, “The people who understand that they must increase their financial education, save themselves and not rely on the rich, or the government, survive and thrive in times of crisis”

So increase your financial education which will lead to increase in cash flow. Rely on God and your faith, not the rich or the government, and thrive in these times of oppertunity! – Joshua Gamen

—————————————-

In my book, Conspiracy of the Rich: The 8 New Rules of Money, I write that bailouts are the name of the game. This means that the ultra rich will never suffer like the middle class and poor do in financial crisis. The institutions that are deemed “too big to fail” will always be bailed out. This also means that sometimes big institutions prefer financial crisis because they know they will be bailed out, and they also know they can make a lot of money from those bailouts.

This week, a bombshell hit on the lending practices of the Federal Reserve to the largest banks in the world during the peak of the financial crisis. As Bloomberg reports in an article entitled, “Secret Fed Loans Gave Banks Undisclosed $13B,”

“The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he ’wasn’t aware of the magnitude.’ It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.”

Additionally,

“The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.”

Big gets bigger.

Everyone knew that the name of the game is bailouts for institutions that are too big to fail, and while news agencies have been talking about the gargantuan $7.7 billion in commitments by the Fed to save the economy, the details released this week through the Freedom of Information Act show what we’ve known all along – the rich will say anything to protect their ass-ets and build their balance sheets.

For instance, in November of 2008, Bank of America’s CEO, Kenneth Lewis said that his bank was “one of the strongest and most stable banks in the world.” On that same day, Bank of America owed $86 billion to the Federal Reserve in emergency loan money.

Jamie Dimon, CEO of JP Morgan Chase, told his shareholders in 2010 that he only borrowed from the Fed to encourage others to borrow from the Fed. In reality, the bank borrowed twice its cash holdings from the Fed, and on one day in February 2009, borrowed a colossal $48 billion – one year after the creation of the Fed’s emergency lending program.

All in all, the big six banks comprised of JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley accounted for 63 percent of all daily average lending by the Fed to banks and financial institutions, receiving over $160 billion in TARP funds and borrowing around $460 billion from the Fed.

During that time, “Total assets held by the six biggest U.S. banks increased 39 percent to $9.5 trillion on Sept. 30, 2011, from $6.8 trillion on the same day in 2006, according to Fed data.”

Additionally, the Fed helped prop up both Bear Sterns and Wachovia with emergency loans as they were being gobbled up by JPMorgan and Wells Fargo respectively. The Fed transferred $50 billion in secret loans to Wachovia to prevent financial collapse until Wells Fargo could seal the deal, and they sent $30 billion in secret loans to Bear Sterns so that JPMorgan could wrap up that deal—all while providing $29 billion in financing to JPMorgan to fund the deal.

Essentially, the Fed protected the bigger banks and helped them grow even bigger by keeping brain-dead banks on financial life support long enough to graft them into the bodies of bigger financial institutions like a financial Frankenstein.

This was all done in secret, and without the knowledge of the American people and the Congress.

The safety net.

This type of behavior is reckless because it creates a false safety net. The big banks and the ultra rich know they will be bailed out and so they take even greater risks, putting the economy at even greater risk, and playing games with your money.

As Professor Oliver Williamson says, “The banks that were too big got even bigger, and the problems that we had to begin with are magnified in the process. The big banks have incentives to take risks they wouldn’t take if they didn’t have government support. It’s a serious burden on the rest of the economy.”

Of course, this should come as no surprise, as the Fed doesn’t exist to protect the middle class and the poor. Rather, it exists to protect banks and the ultra rich. Something they’ve shown they can do well, efficiently, and without government knowledge or intervention.

Learn the rules of the rich with a financial education

All this is to show what I’ve been saying for many years, you can’t rely on the government to save you, and your definitely can’t rely on the Fed. The government doesn’t even know what’s going on in our financial policy and the Fed hides those details in order to help their friends on Wall Street…after all, the people who run the Fed used to work there, and probably will again someday. You don’t bite the hand that feeds.

If you want to avoid getting wiped out by the next financial crisis, you must understand the rules of the rich and play by those rules. With a new presidential election heating up this year, I’m sure you’ll hear many calls for hope and change on both sides. Many people will believe that their candidate will make a difference and that this will be the time things will change.

The reality is that nothing has changed in decades. The rich take care of the rich and grow richer. The poor and the middle class grow poorer. And the people who understand that they must increase their financial education, save themselves and not rely on the rich, or the government, survive and thrive in times of crisis.

Take charge of your financial future so that you can live large when hard times come.

Written by: Robert Kiyosaki

Is “Occupy Wall Street Confused?”

“Some of those individuals that are demonstrating are against profits and against companies. I do a lot of criticism of wall street and the banks, but I think if people get rich because they are insider traders with the federal reserve system or are getting contracts form the government, and then they get bailed out when they get into trouble, no wonder people get upset. But if you have a Steve Jobs, that is very wealthy because he produced a good product and the people loved the product and he produced a lot of jobs, I think that is entirely different.” -Ron Paul

 

 

S&P downgrades US debt

“If the US Government was a family, they would be making $58,000 a year, they spend $75,000 a year, & are $327,000 in credit card debt. They are currently proposing BIG spending cuts to reduce their spending to $72,000 a year. These are the actual proportions of the federal budget & debt, reduced to a level that we can understand.”

– Dave Ramsey

3 months ago S&P downgraded the economic outlook on US debt from “stable” to “negative.”

Last week Moody’s downgraded the economic outlook on US debt from “stable” to “negative.”

Last night S&P downgraded the US debt from it’s sterling “AAA” rating to” AA+ with a negative outlook.”

Just like S&P and Moody’s didn’t downgrade subprime CDOs until the mortgage-backed bonds they held were practically worthless, S&P waited for U.S. debt obligations to reach five times GDP and for the U.S. dollar to lose 84% of its purchasing power over the course of a single decade.

 

One World Currency

By: Joshua Gamen

Could there be a one world currency?

As a citizen of the best country in the history of the world, the United States, I would have said no 5 years ago. I would have told you that’s a terrible idea. The United States is home of the US Dollar. And to the United States government, the Dollar represents a global license to print money. This is because the Dollar has stood as the Reserve currency of the world since 1944(google: Bretton Woods). No other country in the world has the same power to literally just print money with a printing press, because other countries have to convert their currency to Dollars before performing global trade.

But the times, they are a changin’!

Fast FWD 5 years to present day

All of those dollars printed since 1944 were leveraged further using debt and fractional reserve banking. We are all familiar with how debt increases the money supply. Fractional reserve banking is the process of expanding the money supply further by banks issuing new loans every time a deposit is made. This means when u put $100 in the bank, they turn it into $1000 in loans.

After decades of printing money into existence and operating in a system ran by debt, the house of cards crashed in 2007. A huge run on the system occurred from ’02 to ’07 when Debt flooded the world like never before. The country thrived as they lived on the money the banks loaned them. Loans that existed off of money which was printed into existence from nothing and charged interest on. Banks thrived as housing was used to further leverage the money supply by being used as collateral for more debt. But 2007 exposed the system. In 2007, the economy fell like Jenga when society could no longer make the minimum interest payment on it’s debts. Banks tried to patch the hole in the bubble by dropping interest rates to zero so that the system could stimulate debt to stay afloat, but it was too late. The debt was already too much to repay.

The banks then had to foreclose on the houses because they weren’t receiving payments. The banks want interest, not rent, so the houses are useless to them. This caused a flood of supply to the housing market and drove values down. The housing crash was absorbed to them because they got reimbursed by insurance companies like AIG. That is what then caused the stock market crash in 2008. Fannie and Freddie crashed first, then huge public insurance companies like AIG went bankrupt from reimbursing the banks for their foreclosure losses. Financial stocks tumbled and brought the other sectors down with them, causing the stock market to fall 50 percent.

The banks needed the insurance companies to keep bailing them out, so they got the government to issue that huge bailout. In addition to their beloved insurance companies receiving hundreds of billions of dollars, they got plenty for themselves thrown into the package. They then used their money to buy up the little banks, furthering their empire of banks.

Now the banks were posting record profits from the money they had received from the government and insurance companies, but the public was still in shambles. Even with the government dumping trillions of Dollars into the system, unemployment soared as housing continued to crash from the continually increasing supply of housing led by foreclosures, loans stopped and trade halted, both globally as well as on a local scale.

With the US economy on life support, the rest of the world stopped investing in it. This means foreign nations stopped purchasing our debt. To keep the economy going, more Dollars were printed and injected into the economy, which devalued the existing dollars. Now we are on the brink of another Jenga. This time the collapse would be much more devistating, as it would be caused by the exposure to the currency bubble that the Dollars has been in. The cause of the bubble: Too much currency in circulation. The problem is that there are significantly more Dollars in circulation than there is production of goods and services. This inevitably leads to the increase in prices to all goods. This also means, unless you are getting a pay increase to adjust for the increase in prices, you won’t be able to live the same as before. In addition, if you have money in savings, it will now buy you less than it would have in the past.

Foreign countries have took notice of our currency manipulation, and they don’t like it. Most notably China, who is fighting to have their currency, the Yuan, replace the Dollar as the reserve currency of the world. The reason they don’t like supply of Dollars flooding the world is because it means the interest they are collecting from investing in the US is being paid back to them in Dollars, which are lower in value than they were when these foreign nations invested in the US.

A currency crash, which is economically referred to as hyper-inflation, would result in a world depression.

I believe that we will see this happen very soon, as we are seeing the value of the dollar plummet, while at the same time more and more dollars being printed. This is why commodities such as oil, gold, and silver have been skyrocketing since this mess began in 2007.

So what will happen when this happens? I believe it will cause a global reliance on government, which will then cause one of two scenarios. The first scenario being a merge of the biggest nations in the world into a one world government, and the second being a world war for control of a world government. Either way, freedoms will be lost and quality of life diminished. But I will assure you, someone, somewhere, will be gaining power from the whole thing..

Short Sales with Arms Length Transaction Affidavit – Attorney Take

SCREW THE ULTRA RICH, WORLD BANKS, AND FED

By Joshua Gamen

This post is about a History lesson not taught in schools. For almost a century many things about money have been concealed, it is part of my mission to help spread the truth to as many friends and fellow good people as possible. I dedicate this post to the following people:

First off, my father, Brent Gayman, who with his life showed me that it is critical that anyone who wants to be free, must mind their OWN business. You can not be free working for another man, period. He may not be the wealthiest man on Earth, but he has always stayed free. I have always admired how he could be there at all my  sports games, field trips, doctor visits, etc – because he always controlled his own schedule.

Secondly, the NBA great Travis Outlaw – for it was at his condo my senior year of high school, where I first picked up off his coffee table the book “Rich Dad Poor Dad”(written by Robert Kiyosaki), while kicking his butt at Knockout Kings on Playstation. This book opened my eyes to what they do not teach in schools.

Benjamin Ficker, who loaned me a stack of books written by Robert Kiyosaki, including the book “Retire Young, Retire Rich,” before I departed on a vacation to Maui, Hawaii with my friend Sean Stamm, where I read this book – and my mindset forever changed. I went home from that vacation and made over $8,300 that month – at age 21, solely credited to this new mindset.

And Aaron Niehuser, who wrote me an email today, asking me questions which led me to write this blog post, and see more clearly my vision for the future.

MY FORMAL EDUCATION

My formal education was short. After high school, I went on to play junior college football in Northern California, where I started at fullback. The following year, I transferred to Southern Oregon University, where I redshirted due to bad grades in the classroom from my freshman year in junior college. I lasted one football season and term at SOU, before flunking out of school.

In high school, I got by in the classroom solely so that I could play sports. My parents never rode me very hard about my grades, I was usually a B student, mixed in with some A’s, and some C’s. I really didn’t care much to learn about biology, literature, an obviously manipulated history curriculum, or much else that was taught. I knew I was not going to make my money as a teacher, but rather as a businessman of some kind, owning my own business.

After college, I began my real education: SALES. I enjoyed it from the beginning, and have never looked back. While learning how to sell, I spent many slow afternoons at the car lot reading books on sales, financial literacy, accounting, and economics. I now control my own schedule and my own destiny, owning 50% of a real estate business that operates in both Phoenix, Arizona and Portland, Oregon.(Thanks again to friend and business partner Benjamin Ficker.)

HISTORY LESSON

This lesson begins in the year 1903, when the US Education System was taken over by the General Education Board – founded by John D. Rockefeller. That year, the influence of education was taken over by the ultra-rich.(Sound like a good idea to you???!!!)

When I first learned of this, it finally clicked why formal education was never for me. Though passionate about playing football, I was never motivated enough to sit through 8 hour days of lecture about subjects which did not show me a personal benefit, followed by more wasted hours studying textbooks in subjects I would not apply. (I’m not saying I NEVER enjoyed a lecture here or there. And I must give some credit to math in school, and also to my Freshman Economics Teacher Shawn Abbott.) But primarily, what I know I have picked up on my own education venture.

FAST FORWARD 10 YEARS

A decade after the rich took over our education system, the Federal Reserve(FED) was born in 1913. Created by a group of ultra rich businessmen and bankers at Jeckyll Island off the coast of Georgia, by names including JP Morgan(JP Morgan Chase…), and to no surprise, John D. Rockefeller. The Federal Reserve was created in a deal struck between bankers and the US Treasury. It is not federal, not American, has no reserves, and is not a bank.

GREAT DEPRESSION

In the year 1929, the United States entered into what is known as the Great Depression. During this depression, many government agencies were born, including the Federal Deposit Insurance Corporation(FDIC), the Federal Housing Administration(FHA), and Social Security. Through this time period, the government took MASSIVE control over our lives via taxes. Many of these agencies are responsible for the mess we are currently in(See: FHA, Fannie Mae, Freddie Mac). The problems those 3 agencies are responsible for will be DWARFED by the unfunded time bombs of Social Security and Medicare, which are estimated to be $50-$60 TRILLION DOLLAR bombs! The largest demographic in our population is the Baby Boomers(the people born from the World War II generation), and are currently RIGHT NOW beginning their entrance into retirement. Uh oh….

1933 – President FDR(Franklin Delano Roosevelt), asked all Americans to turn in their gold coins. The government paid the people of the United States $20.22 per ounce of gold. Then, FDR immediately raised the price of gold to $35 per ounce. The government cheated Americans out of about $15 for every ounce of gold turned in. What a cash heist! If anyone was caught holding gold coins, the punishment was a $10,000 fine and 10 years in jail. I believe the reasons behind this were: 1) To get the people used to paper money as the only currency of the world, and 2) Because the government was already broke. They had already allowed the FED to print so much paper currency, that they could not back that currency anymore with the amount of gold they had.

TAKING ADVANTAGE THROUGH WAR

In 1944,  the Bretton Woods agreement was made, with the illusion that it was to smooth out the economic conflict resulting of World War II. In effect, this made the US dollar the reserve currency of the world, requiring other nations to peg their currency to the dollar, which was pegged by gold. This international currency agreement created the World Bank and the International Monetary Fund(IMF). This replicated the Federal Reserve system globally. This act lasted through 1971.

1971

In 1971, President Nixon severed the link between the dollar and the gold standard, for good. Nixon realized that the link between gold and the dollar was draining our central banks of their gold reserves, so he cut the ties. With one stoke of his pen(with no permission from Congress), the global economy was forever changed. This led to one of the greatest economic booms(if not the greatest), in the history of the world. Now the Fed could print as much money as they wanted, turning the US dollar into Monopoly money(the bank never goes broke!) The World Banks now had a monopoly on currency, and the economy shifted from operating on money, to operating on debt. After 1971, the US economy could only increase by increasing debt, and that is when the bail outs started.(They were nothing new by 2007!!!) In the 1980s, the bailouts were in the millions. By the 1990s, they were in the billions, and today they are in the trillions and growing. This change in the rules of money, may be the biggest financial event in world history, allowing the United States to print money at will by creating more and more debt, cleverly disguised by what is known as US bonds. Never before this, had the world’s money been backed by one nation’s debt, a giant IOU from United States tax payers.

That year, the dollar stopped being money, and became a currency. The word currency is derived from the word current. A current must keep moving or it loses value. This is why today, savers are losers. To retain any value, a currency must move from one asset to another(IE:  Stock market to real estate to precious metals). Thus, people who parked their money in the stock market or a savings bank lost money. Debtors become winners as the US government prints more and more money, increasing debt and inflation.

In theory, if people payed off their debt, modern money would disappear.

Then in 1974, the US Congress passed the Employee Retirement Income Security Act(known as ERISA, or as called today, 401K). Before ’74, a company’s pension plan provided a paycheck for life. After 1974, defined benefit pension plans shifted to defined contribution retirement plans. This means they had to save their money for retirement. Another cash heist was created by millions of people being forced to shove their money into the stock market and savings accounts, for mutual fund managers and bankers to play with until the workers retired. If the pension plan runs out of money or a stock market crash occurs, the people are SOL(out of luck and on their own).

2007

In 2007, when sub-prime borrowers could not pay their mortgages any longer, the expansion of debt stopped and the debt market collapsed. This led to the financial crisis we are in today.

The United States has financed it’s insane debt by selling the debt to Europe, Japan, and China. If these countries lose confidence in our government and currency, another financial crisis will occur. And this is now starting to happen, as there is global talk of China trying to replace the dollar with the Yuan as the reserve currency of the world.(I don’t see this happening, at least anytime soon – but there’s talk about it – google it…) If you and I stop buying homes and using credit cards, the crisis gets worse, and as you probably know, it is very difficult right now to obtain a mortgage or get a new credit card or an increase in your credit limit. If you already have a mortgage, try getting a home equity loan…

SILVER LINING – CONCLUSION

All of this does create an oppertunity for ANYONE who is willing to invest in their financial education and benefit from the circumstances. Assets are cheap. It is now more important than ever to invest in a financial education centered around leveraging good debt(debt used to buy assets that put money in your pocket), and cash flow(money that comes to you monthly over and above what you are paying as a price for the debt). I have talked a lot about silver and gold lately, and while they are a great hedge against inflation, it is important to also invest in assets like businesses and real estate, which will put money in your pocket. In the event of hyperinflation(which we will see, just like Germany did pre-World War II), precious metals will have a HUGE dollar amount pegged to them, but remember, dollars will be worthless. You will be able to trade them for other assets like food, real estate, etc, but it is important to have assets that provide you cash flow. Even if the cash is not in the form of US dollars. A good business provides REAL value, so you will always get something in return for what you are providing.

I strongly suggest, encourage, and recommend that you verify everything you see and read. Form your own opinions, but I sincerely hope these facts help shine some light on the truth for you.

-Josh