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

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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

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REAL – America is the best nation in the world! But we cannot lose it to the ultra rich and elite.

By: Joshua Gayman

 

We can get back to the lifestyle we all want. But it will take REAL revolutionary change, and their will be massive sacrifice. But which is worse? To live as a slave or die as a free man? We have a compromise on our hands amongst freedom and slavery. We are all slaves to money. Fear is a distressing negative sensation induced by a perceived threat. We are living in a state of distressing negative sensation that continues to get worse each day as we work harder and longer while our quality of life diminishes. Every day that we compromise our time and labor for less and less is a day we must fight to get back.

Money is a man-made commodity – thus, we can easily wipe out our national debt by ending the dollar now. We must reclaim our own government so that to serve us. This would require a new federal government. we then need a new currency, banking system, and education system.

Do you want a good future and freedom for your children? If yes, then you must not be lazy. Too many people are choosing to labor for 10 hours per day rather than stop for 10 minutes and realize the full potential of their brain.

The global banking system has not only been the path to greater wealth for, but has at the same time been the vehicle through which the ultra rich have controlled and managed the enormous resources of our planet, and continue to do so. These resources are not limited to commodities. They include humans.

The rich love bubbles and they love depressions. When the rich desire for more man-made things, they allow more money to flow through the world. When they need to cash in on their *Dear Money, they simply constrict the money supply as to collect on all of the resources(collateral) that they “lent” to the people using their made up currency. At this time unemployment is no problem for the rich, but rather they find it to their benefit. The more unemployment, the more relief. The more relief, the more bonds. The more bonds, the more taxes. The more taxes, the more interest coupons they are able to clip on their bonds.” This means that the government becomes in more debt to them. When the government is in debt to them, WE are in debt to them. The government does not pay taxes, they are actually funded from taxes. Only WE pay taxes.

An international banker said in a letter to his son in 1932 in regards to control over man via money, “If young men like those in charge of our national finances can carry over the program as now laid out, we have the foundation of a great international hegemony of finance. The power given to the board to remove officers and directors anywhere in the country is a bold and masterful stroke of legislation. Of course, while these things will be done under the pretense of preventing bank failures, they will in fact, galvanize the central banking power down to the smallest village. Credit can then be so controlled that political uprising will be impossible and credit extension can be used strictly to hold class distinction tightly within bounds.… This is not so difficult as you might at first hand suppose. To properly do so, it is only necessary to control the letters which, on our modern times, simply means to control the press.”

How can you serve two masters – your Creator and your Government? The answer is that you cannot server two masters, therefore the Government had to create a system that tricks you into thinking you must serve them, where in fact, Governments must serve us, the people

Print Your Own Money

By: Joshua Gamen

Knowledge is the new coin. Since 1971, the dollar is debt. This happened when President Nixon took the US Dollar off of the gold standard(without the persmission of Congress). See, money as we know it today is not constant, but rather it is a derivative of the faith in that which is perceived as the money. Let me explain…

The Dollar is not real money. What gives value to the dollar is not that it is backed by the full faith of the US government, it is that people have faith that it is backed by the full faith of the US Government. The problem with this is, as many of us already know, the government is broke. The United States government literally runs like a household who has maxed all of its credit cards and refinanced their house to a mortgage greater than it’s value. The difference between the US government and a household who might do that, is that if a household did that, they would lose their house and no longer be able to borrow money to live. The US government, however, has the Federal Reserve, who depends on the government to stay afloat, so that they can continue to indebt the people of the United States and world, which count on the government.

There are too few people who realize the true root of our economic problem. The problem is our money. The thing that we work so hard for and try so hard to hang on to, is actually our biggest problem! The ultra rich who control the money supply want us to need more and more of their toxic money, as that is the only thing that gives it value! The more of the money we need, the more they print. The more money we need, the weaker we become, and the more we are headed towards socialism, where we fully depend on our government to provide everything for us.

The Federal Reserve does not provide anything of tangible value, they simply create money out of thin air which they then lend to the government and other banks, who in turn lend the money to people, in exchange for a debt in which they will never in their lifetime be able to pay off. Hence the name of the game, DEBT. The Federal Reserve has no reserves because they don’t have any real money. Why would they need to store money when the rules of the board game Monopoly apply to them in real life?(The bank never goes broke. Which is a real rule btw..)

“The Federal Reserve Bank is not a bank. That idea is as illusionary as our money.” -Robert Kiyosaki(Author of Rich Dad Poor Dad)

My point on this topic tonight, however, is not that the Federal Reserve is a hoax(Although it is), but that money in our modern day is based off of ideas. If you have something that others will believe in, you have created value.

For example, Mark Zuckerberg has no idea what he was creating when he started Facebook. As pointed out in the movie “The Social Network,” Mark’s goal was not to make money by selling ad space online, it was to create something in which EVERYONE would think was cool. Facebook was born. Now there are millions of Facebook users across the globe, and Mark Zuckerberg is the youngest BILLIONAIRE in the world. Mark printed his own money, billions and billions of dollars of it, by taking an idea and creating something others wanted.

The good news is, you can financially educate yourself, and use your own ideas and/or debt to legally print your own money. Let me give you a real life example. Since I have not asked the parties for their permission to publish their names on the internet, I will use simple made-up names..

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Jonny finds a 3 bedroom house for sale at $60,000 in Phoenix, Arizona. He gets a mortgage(debt) for $55,000 to purchase the property, and promises the private lender he will give them a down payment of $5,000 within 90 days. Jonny puts up the house for sale and markets it by saying, “Buy with no bank!”

Jonny then finds Bobby and Sue, who make good income but have damaged credit due to the recent foreclosure on their credit report(They simply could not make the payment anymore on their old house after their neighbors were paying 1/3 of the monthly bill to rent the house next door). Bobby and Sue need a house, because they have 3 large dogs and cannot stand the thought of keeping them in an apartment. So they give Jonny the $10,000 they had saved up while not paying their mortgage for 6 months, and receive the option to purchase the house at any time they want over the next 5 years for $70,000. Their monthly rent is $900, which is half the price they were paying in the house they got foreclosed on.

Bobby and Sue are very happy. They now have a house again in which they can call their home, and put their creativity and personality into it while keeping the equity for themselves. For them, all of the money and work that they put into the house increases their standard of living, but not at the expense of throwing the equity away, as was the case if they did anything more than sweep the floor at their old house.

But Jonny is the one who really makes out on this deal. Jonny did not save his paychecks to get the $60,000 to buy the house, he simply took out a private loan himself, requiring a down payment of only $5,000, which he had 90 days to come up with. His monthly payment on the private mortgage was only $600, even at 12% interest.

Jonny got $10,000 in his pocket before he ever paid out $5,000. So not only did he have someone else pay for his down payment, but he is also putting an instant $5,000 in his pocket on top of it, and another $300 into his pocket each month that he has the property. If Bobby and Sue buy the property, Jonny simply pays off his $55,000 loan and realizes another quick $5,000.(He owes $55,000, but Bobby and Sue owe him another $60,000 to buy off the house legally, in addition to the $10,000 they already gave him). If Bobby and Sue decide to move, Jonny can put the house right back on the market and do the same deal again for someone else. The down payment he received from Bobby and Sue will more than cover any short term vacancy.

Jonny has legally printed his own money, and will continue to print his own money every month that he has someone pay rent to him to live there. He has made money from nothing. He took on new debt, and created an idea in which was worth a greater debt to someone else. Rather than use that debt to weigh him down, he uses that debt to work for him. Some day the house will be paid off. This is really an infinite return.

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There are many more examples that could be given, but the point is that money is an idea. Knowledge is the new money.

It doesn’t matter if the economy sees inflation(cost of goods and services going up) or deflation(costs of goods and services going down), the name of the game is debt. Debt is what the ultra-rich are after.

If you want to have more money, your knowledge of money needs to include learning to use debt to create cash flow, then manage that cash flow. Whether you do that with real estate, businesses, the stock market, the internet, or whatever your idea may be.

Future of the Global Economy

Joshua Gamen talks about how the history of the global economy has brought us to our current global economy, as well as the future global economy we are headed towards.

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