The Recession is Over: BS! – Take II

By: Joshua Gamen

I am downright ticked off when I hear politicians say that the recession is over and that we are in a recovery. I understand what they are trying to do(gain votes), but it disturbs me when politicians play off of the naive, hard working Americans. I don’t like it when business people do it either. It seems every other commercial I see on TV now days is from an insurance or “investment” company, begging people to give them their money so that they can have a “bright future,” or “safe retirement.” Hear this: there is no shortcut. If it were so easy that you could just hand your money to someone until you retire and have them pay your retirement for you, the government would do that. Or wait, isn’t that what social security is? Then again, social security and medicare are estimated to be a $50-$60 TRILLION dollar time bomb! We will start to see in the near future that there is no money in these funds, as the massive demographic of baby boomers begins to try to retire. No, it’s just not that easy. If you want a brighter future and a cozy retirement, you need to be financially literate – understand how money works. A good first step would be to take notice that financial “advisers” are actually in fact, financial salespeople! And politicians will play off of whatever emotions they need to so that they can gain your vote, and along with it, power – for themselves and the ultra-rich of whom they represent.

The recession is not over. First of all, it’s a depression, the government just quit using the term after the the “Great Depression.” Unemployment is still soaring, the government manipulates the numbers and does not count the people that they don’t want to count, to manipulate the statistics so that they can brag about recovery to gain votes. US trade is not increasing either, and the world is moving away from the dollar. Countries are not buying US debt anymore. Housing prices are not seeing any stabilization, people still can’t get a mortgage and the number of foreclosures is still growing. I have yet to see one stat on CNN that suggests housing is rebounding that makes any sense to me, and I work in real estate every hour of every day! The only thing I hear that is up these days is luxury luggage, which is a clear indication of the only people profiting from these economic times are the rich. The middle class is being wiped out right now and it is time for that demographic to get their minds right and take action! Individually, the best thing you can do is get yourself educated. In this global economy where our dollar is drowning(which happens to be the reserve currency of the world), knowledge is the new currency.

Last month I wrote the post “BS: The recession is over.” – This month I would like to elaborate on some of the details.

When you look at the size of our deficit, the size of our debt, China getting out of dollars, Russia moving out of dollars, rich oil-producing countries moving out of the dollar, less global confidence in the dollar, China hoarding gold, it becomes obvious that these are trends that clearly show that we are a bigger credit risk than we have ever been. Our debt is absolutely out of control. Soon we will have debt that is 100% of our Gross Domestic Product. This means that our nation’s debt will be the same as the value of the goods and services that our whole nation produces in a year. These trends will effect our national security, our standing in the world, our quality of life, etc. We are headed towards financial instability. If we keep this up, the dollar will soon be removed from the world’s reserve currency. What’s more scary is I don’t see anything coming that is going to fix these problems.

Look at Obama’s budget, TRILLION dollar deficits FOREVER! Now I realize that some people do have faith in the dollar, but long term, when you look at countries like China, Japan and Russia moving out of the dollar, you have to see that the world is losing confidence in the US and in the dollar. We desperately need China and everyone else to buy our bonds. We operate on debt, if we can’t get people to buy our debt, we can’t operate! Our living standards are headed down and if we don’t do something soon, our living standards will never be the same.

Inevitably, I do believe we are going to see some changes in the near future. All you have to do is look at Obama’s popularity rating. What historically has created change has been president’s before them creating disasters. If you look at what created Ronald Reagen, what created Bill Clinton, even what created Obama, it is the President’s before them creating disasters to open up the minds of the people to vote in changes. Look at George Bush, he was an absolute disaster, so along came Obama. We got what we wanted, a bigger disaster! While American people will get bored with the details, they will demand change!

The change is going to have to be very different to create a successful shift. They are going to have to be committed to cutting our costs and shrinking the cost and size of the government. To shine some light on the disaster that is currently in the White House, we are trying to add a new entitlement(a guarantee of access to benefits based on established rights or by legislation) to healthcare. Are you freaking kidding me!!!??? If you are for this, I am sorry, but financially speaking you must be absolutely crazy! We can’t pay for any of the entitlements we already have! We can’t pay for medicare, we can’t pay for medicaid, social security is BROKE, literally. The freaking post office is broke! Everything is bankrupt, and we are adding a new entitlement???!!! Harry Reid(Senate Majority Leader) and  Nancy Pelosi(Speaker of the House of Representatives) are actually trying to get us to believe that we are going to cut the deficit doing this! CRAZY BS!

The American people need to demand an administration that is going to balls up and shrink the size and cost of government, shrink the debt, and shrink the deficit. Make no mistake, we are going to have huge pain in doing this. But I do believe the American people will pay the price if they understand the logic of what is needed. Nobody understands the logic of what is going on right now. I don’t claim to either. None of this makes any sense. The guys who created this mess are in Washington making speeches of what we need to do, that’s freaking BS!

 

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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