Financial Reserve

For discussion related to emergency preparedness, survival, self-sufficiency, food and water storage, guns, heat, light, building, gardening, etc.
Post Reply
Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

https://mishtalk.com/2017/04/30/economi ... er-matter/

The Fed likes to brag about the “We saved the world” recovery.

However, the unfortunate truth of the matter is a record Half of American Families Live Paycheck to Paycheck.

Does it Matter? Let’s investigate.


Unprepared for Nearly Anything

50% are woefully unprepared for a financial emergency.
Nearly 1 in 5 (19%) Americans have nothing set aside to cover an unexpected emergency.
Nearly 1 in 3 (31%) Americans don’t have at least $500 set aside to cover an unexpected emergency expense, according to a survey released Tuesday by HomeServe USA, a home repair service.
A separate survey released Monday by insurance company MetLife found that 49% of employees are “concerned, anxious or fearful about their current financial well-being.”
Deleveraging? Where?



A Fed study shows U.S. Households Will Soon Have as Much Debt as They had in 2008.

The Federal Reserve announced Friday that the U.S. has $1 trillion in credit-card debt. Consumers hit that number in the fourth quarter of 2016, but eased on revolving credit during January 2017. The Fed announcement showed revolving consumer credit hit more than $1 trillion once again in February 2017.

“Credit card debt is rising quickly, but delinquencies are still really low,” said Matt Schulz, a senior industry analyst at the credit cards site CreditCards.com. “Many Americans are doing a good job of controlling their debts, but eventually with big debts and rising interest rates, it’s likely that something will have to give.”

Paycheck to Paycheck “Good Job”

Excuse me for asking but if half the nation lives paycheck to paycheck, is that really indicative of doing a good job at managing debt.

And as for “low delinquencies”, I remind you of my April 26 article Subprime Credit Card Losses Bite Capital One: Income Down 20%, Charge-Offs Up 30%.

Nonetheless, I remind you of an important perception.

We Saved the World

Wall Street Journal Oct 4, 2015: How the Fed Saved the Economy
Washington Post August 26, 2009: Ben Bernanke: The Man Who Saved the World
Forbes Oct 5, 2015: Ben Bernanke On How The Fed Saved The Economy
January 12, 2013: How Tim Geithner Saved the Banks—With Ben Bernanke’s Help
Two Reasons Not to Worry

The stock market and housing are still going strong. We heard the same thing in 2007 but it’s different this time.
The bottom 50% of the economy simply do not matter.
The real crux of the matter is point number two.

The Fed does not give a damn about the bottom half of the economy even though it spouts continual lies about “income inequality.

The Bottom 50% Do Not Matter

As long as the Fed can keep stocks and home prices elevated, there is no concern about the food-stamp, rent-subsidized, Medicaid-supplement, disability-income, Obamacare-subsidized 50% of Americans struggling paycheck-to-paycheck.

That money rolls in guaranteed, month after month!

That 50% cannot afford a house is irrelevant as long as suckers keep paying $500,000 to two-bedroom shacks in LA.

The game is to keep asset prices up so that the top 50% keep spending. The bottom 50% are taken care of by government (taxpayer) subsidies noted above.

Here’s the real deal: Fed Expects a Second Quarter Rebound, Higher Equity Prices.

Repeat Performance

The Fed needs to keep asset prices elevated even though it’s pretty clear concerns are mounting over bubbles.

Can the Fed save the world again?

Previously, the bottom third did not matter. Then the bottom 40% did not matter. Now the bottom 50% do not matter.

That statement is a bit over the top. By how much I don’t know. But the trend is clear, as is the fly in the ointment.

Brexit was the first warning shot. Trump was the second.

As soon as the bottom 65% don’t matter, those 65% may vote to take matters into their own hands.

Mike “Mish” Shedlock

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Click on the link for the graphs.

http://charleshughsmith.blogspot.com/20 ... plode.html

MONDAY, MAY 29, 2017
How Debt-Asset Bubbles Implode: The Supernova Model of Financial Collapse

Gravity eventually overpowers financial fakery.

When debt-asset bubbles expand at rates far above the expansion of earnings and real-world productive wealth, their collapse is inevitable. The Supernova model of financial collapse is one way to understand this.

As I noted yesterday in Will the Crazy Global Debt Bubble Ever End?, I've used the Supernova analogy for years, but didn't properly explain why it illuminates the dynamics of financial bubbles imploding.

According to Wikipedia, "A supernova is an astronomical event that occurs during the last stellar evolutionary stages of a massive star's life, whose dramatic and catastrophic destruction is marked by one final titanic explosion."

A key feature of a pre-supernova super-massive star is its rapid expansion. As the star consumes its available fuel via nuclear fusion, the star's outer layer expands. Once there is no longer enough fuel/fusion to resist the force of gravity, the star implodes as gravity takes over.

This collapse ejects much of the outer layers of the star in an event of unprecedented violence.

The financial analogy is easy to see: when rapidly expanding debt consumes a critical threshold of earnings (fuel), the equivalent of gravity (default, inability to service the enormous debt) triggers the collapse of the entire debt/leverage-dependent financial system.

As I explained yesterday, if earnings stagnate or decline while debt races higher, eventually earnings are insufficient to service the debt and default is inevitable. The other problem that arises as more and more of earned income goes to debt service is that there is less and less disposable income left to support consumer spending--the lifeblood of economies worldwide.

Once debt service absorbs a significant chunk of household earnings, recession is the inevitable result as spending collapses once more debt cannot be loaded on households. In other words, debt is limited by earnings. If earnings decline, or fall far behind the expansion of debt, eventually borrowers can no longer borrow more, or refuse to borrow more.

At that point, consumer spending falls and recession generates a self-reinforcing cycle of declining sales, profits, employment and wages. Recession further reduces the ability and appetite for more debt, and this acts as "gravity" in the super-massive debt-star.

Financial supernova collapse has two pathways which we call deflationary and inflationary. But the key point here is these are simply different pathways to the same result: the collapse of the financial system.

In a deflationary supernova, defaults--and the avoidance of additional debt--are the gravity that overwhelms the forces of expanding debt. Once the losses and risk are visible to all participants, the herd psychology changes, and participants no longer believe that central banks "are now the ultimate power in the Universe."

Central banks can create currency and credit, but they can't create earnings or productive real-world wealth. These are the limiting dynamics of any debt-dependent system.

The fantasy is that free money--limitless credit to corporations and Universal Basic Income to debt-serfs--will magically create earnings and expand productivity. But this FantasyLand exists only in overheated self-serving imagination: in the real world, free credit is used to buy back stocks and indulge in other financialization trickery, not invest in higher productivity.

And the debt-serfs scraping by on Universal Basic Income have no ability to borrow more and few means to generate meaningful productivity gains.
The other pathway to implosion is to print currency with sufficient abandon that debtors have enough money to service their debts. Emitting sufficient new free money to re-set all the unpayable debt destroys the purchasing power of the currency--a supernova implosion that is little different than the deflationary implosion. The inflationary pathway results in the destruction of the currency, impoverishing everyone holding the currency.

While the idea of debt jubilee is appealing to everyone who doesn't own debt-based assets (mortgages, auto loans, student loans,etc.), it is anathema to those who do own most of the debt-based assets--who just happen to be the wealthy and powerful who run our pay-to-play "democracy."

If history is any guide, the wealthy and powerful who run our pay-to-play "democracy" will never relinquish their wealth. Only a financial collapse can re-set the system.

The financial implosion triggers social and political upheavals. Recall that one person's debt is another entity's asset. When debt is blown off in either a deflationary or inflationary implosion, all the "wealth" represented by debt is also blown off.

So what survives a financial supernova? There are three classes of things that are still functioning after a debt/fiat-currency supernova: real-world tools/productive assets that were owned free and clear, and non-fiat-currency financial assets that are difficult for failed states and central banks to steal/expropriate.

The third class is human/social capital, i.e. the knowledge and experience in your head. Not only will my Skil 77 power saw still be around, so will my knowledge of how to be productive with this tool.

Proponents of precious metals and cryptocurrencies both see their favored assets as survivable assets that are difficult to steal/expropriate. It's difficult to predict just how desperate failing Status Quo institutions will get as their debt-fiat-currency dependent "wealth" and "power" implodes, but we are probably safe in assuming they will get fanatically zealous about stealing/expropriating everything they can get their self-serving hands on before the tides of History wash them away.

If they take my Skil 77 power saw, what are they going to do with it? Sell it for pennies to a crony of the central state? How will removing my ability to be productive help sustain their imploding regime? Removing productive capacity and suppressing my willingness to be productive will only hasten the collapse of their failed regime.

The Venezuelan Bolivar is the model of currency collapse: this is not some long-ago history--this is the present:

And how much did expanding debt boost productivity? Oops! Rapidly expanding financialized (i.e. unproductive) debt is Kryptonite to productivity.

Expanding credit has fixed everything! That's precisely what the Imperial managers think just before the debt supernova implodes.

Federal debt has tripled--no problem, let's triple it again, and then triple that.There is no upper limit on how much currency the Empire can borrow or print, right? "We are the ultimate power in the Universe now," etc.

Gravity eventually overpowers financial fakery. Central banks can add zeroes to currency and the super-wealthy can use their unlimited lines of credit to buy up everything in sight, but when the Empire collapses, the debt-assets of the super-wealthy are blown off in the supernova along with all the other artificial constructs of our corrupt, corrupting, rapacious, exploitive system.

User avatar
konigking
captain of 100
Posts: 109

Re: Financial Reserve

Post by konigking »

Ever hear of UPMA? It's a small company that just moved into my small town. So I looked it up online and was quite intrigued.

Utah is one of four states (and the first) to declare through legislation that precious metal coins printed by government can be legitimately used as money. The constitution says currency is to be printed by the federal government, but elsewhere it says that states can mint gold and silver coins.

Any-who, UPMA is an exchange where you can buy gold and silver coins. And the idea is you can use those coins to buy goods and services from other members of the exchange. That's interesting. But here's where it gets real interesting: they claim you should never be subject to capital gains taxes that result from the appreciation of value of your coins. They reference multiple cases to prove that. They don't say that the law says that explicitly, but I think they do a good job showing how case law is on their side.

My feeling is, why not join the exchange? Maybe you should too. Just pump money into my little community if ya know what I mean.

Joking aside, I'm curious to know your thoughts. Anyone. Do the research so I don't have to. Here's the website with the most interesting stuff:

https://www.upma.org/resources/monetary-intent

And my disclaimer is that I'm giving no financial advice. Really. I don't know how good or bad this thing is.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

konigking wrote: June 14th, 2017, 11:12 am Ever hear of UPMA? It's a small company that just moved into my small town. So I looked it up online and was quite intrigued.

Utah is one of four states (and the first) to declare through legislation that precious metal coins printed by government can be legitimately used as money. The constitution says currency is to be printed by the federal government, but elsewhere it says that states can mint gold and silver coins.

Any-who, UPMA is an exchange where you can buy gold and silver coins. And the idea is you can use those coins to buy goods and services from other members of the exchange. That's interesting. But here's where it gets real interesting: they claim you should never be subject to capital gains taxes that result from the appreciation of value of your coins. They reference multiple cases to prove that. They don't say that the law says that explicitly, but I think they do a good job showing how case law is on their side.

My feeling is, why not join the exchange? Maybe you should too. Just pump money into my little community if ya know what I mean.

Joking aside, I'm curious to know your thoughts. Anyone. Do the research so I don't have to. Here's the website with the most interesting stuff:

https://www.upma.org/resources/monetary-intent

And my disclaimer is that I'm giving no financial advice. Really. I don't know how good or bad this thing is.
Hi, thanks for the introduction to UPMA. Their thinking seems to be clear-headed and logical. My only complaint against a service like theirs is if I can't hold something in my hand, I don't really own it. If you get involved, please provide an update.

User avatar
konigking
captain of 100
Posts: 109

Re: Financial Reserve

Post by konigking »

Thanks, Silver. My brother has the same concern. He works with a guy who puts most of his retirement into gold and has given the same advice.

I assume that if you knew with 100% certainty that your gold was 1) safe and 2) accessible whenever you want it, such an arrangement would be better than in a safe at home? Or am I missing something else?

UPMA offers members that meet certain criteria to be involved in their regular audits. Even seeing the gold in the vaults. But that's not 100% certainty.

Another thing I've considered is the idea of just putting in a small chunk of money with UPMA. Then do a few transactions each year. Seems you would be in a good position to argue you use your gold as a currency, as shown by your own history. And the law would be on your side more likely.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

konigking wrote: June 14th, 2017, 11:50 am Thanks, Silver. My brother has the same concern. He works with a guy who puts most of his retirement into gold and has given the same advice.

I assume that if you knew with 100% certainty that your gold was 1) safe and 2) accessible whenever you want it, such an arrangement would be better than in a safe at home? Or am I missing something else?

UPMA offers members that meet certain criteria to be involved in their regular audits. Even seeing the gold in the vaults. But that's not 100% certainty.

Another thing I've considered is the idea of just putting in a small chunk of money with UPMA. Then do a few transactions each year. Seems you would be in a good position to argue you use your gold as a currency, as shown by your own history. And the law would be on your side more likely.
I'm the first to admit that there are no guarantees in life, no matter how tightly you hold your assets. So the closer you can get to the "100% certainty," the better. I do like that the company is in your area. Why not stroll in there and ask for a tour? It probably wouldn't hurt to put a little non-grocery money in there and see what happens. Do a few transactions, as you mentioned. I'm miles and miles from UT or I would definitely check the place out.

Does UPMA actually sell precious metals? I couldn't find that on their website? If not, and you want a good source, let me know. If they do, their selling premiums may be part of how they finance their operation. Not necessarily a bad thing, but always try to buy as inexpensively as possible.

User avatar
konigking
captain of 100
Posts: 109

Re: Financial Reserve

Post by konigking »

I will check it out. And I'll return and report.

The do make money off selling gold and silver US minted coins.

User avatar
harakim
captain of 1,000
Posts: 2819
Location: Salt Lake Megalopolis

Re: Financial Reserve

Post by harakim »

I heard a surprising story on NPR today. In addition to raising the rates, the fed was going to do something else. I wish I could remember what it was.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

harakim wrote: June 15th, 2017, 6:54 pm I heard a surprising story on NPR today. In addition to raising the rates, the fed was going to do something else. I wish I could remember what it was.
I think you're referring to the Fed reducing their balance sheet. I can't find the most recent article about it on zerohedge, but here's someting to look at:
http://www.zerohedge.com/news/2017-05-2 ... -september

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

It's a great time in the world to be a billionaire especially when billionaires fill the key roles in both business and government. The rest of us are underrepresented in both those areas and our situations will only worsen.

I hope you are not in the group of people mentioned at the end of the article.

http://www.zerohedge.com/news/2017-06-1 ... 1-bcg-says

Richest Americans Will Control 70% Of Country's Wealth By 2021, BCG Says

by Tyler Durden
Jun 17, 2017 10:00 PM

Being rich is great. But being rich in America? That’s even better.

With US stock benchmarks trading just below record highs, and Treasury yields not too far from the all-time lows reached last summer, the gulf between the world’s wealthy elite – those 18 million households worldwide with more than $1 million in assets – and everybody else is rapidly widening.

According to a new study by Boston Consulting Group via Bloomberg, these households - with a total head count of roughly 70 million people, or about 1% of the world’s population - control 45 percent of the $166.5 trillion in wealth. By 2021, they will control more than half, suggesting that, while wealth inequality in the rest of the world is simply accelerating, in America, it’s gone into overdrive. Right now, 63 percent of America’s private wealth in the hands of U.S. millionaires and billionaires, BCG said. By 2021, their share of the nation’s wealth will rise to an estimated 70 percent.

“The share of income going to the top 1 percent in the U.S. has more than doubled in the last 35 years, after dropping in the decades after World War II (when the rich were taxed at high double-digit rates). The tide shifted in the 1980s under Republican President Ronald Reagan, a decade when “trickle-down economics” saw tax rates for the rich fall, union membership shrink, and stock markets spike.”

In its report, BCG puts the global rate of wealth creation in 2015 and 2016 at 5.3 percent, though the consulting firm expects it to accelerate to about 6 percent annually for the next five years. Those gains will accrue almost exclusively to the wealthiest Americans, while wealth held by everyone else is just barely growing.

Of course, there’s a caveat: In America, most of these gains exist only on paper. More than 70% of new wealth creation is derived from the rising value of rich investors’ portfolios. The rest is what BGC describes as “new wealth creation” aka real money earned by workers and entrepreneurs. Globally, the share derived from asset valuations falls to about 50%.

“In the U.S., the creation of “new” wealth is a minor factor, making up just 28 percent of the nation’s wealth increase last year. It’s even lower in Japan, at 21 percent. In the rest of the Asia Pacific region, meanwhile, two-thirds of the rise is driven by new wealth creation.”
The richest Americans could receive an additional bump if/when President Donald Trump pushes the fiscal agenda on which he campaigned through Congress – an agenda that includes tax cuts, deregulation and trillions of dollars’ worth of new infrastructure projects. However, since the exact details of these policies are not yet widely known, it’s difficult to predict their specific impact, BCG says.

“’No one knows’ what kind of tax changes will become law, said BCG senior partner Bruce Holley. However, “this could buoy the [growth in U.S. wealth] that we are predicting.”

America remains home to the highest concentration of millionaires and billionaires in the world, and their ranks are growing fast: Today, about 7 million Americans are worth more than $1 million. BCG expects that number to balloon to 10.4 million by 2021 - an annual growth rate of 8 percent, or about 670,000 new millionaires each year.

China has the second most millionaires and billionaires, at 2.1 million, though its population is four times the size of the US.

Within the US, glaring disparities exist from region to region. As Fortune reported back in 2015, roughly two-thirds of America’s millionaires and billionaires live in 12 metro areas, mostly wealthy enclaves along the coasts.

Meanwhile, according to the Federal Reserve’s latest survey of household economics and decision-making, a quarter of American adults can’t pay all their monthly bills, and 44% have less than $400 cash on hand in case of an emergency.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Oh, boy. He used the word "imminent."

http://www.zerohedge.com/news/2017-06-2 ... and-rising

GE's Pension Time Bomb: $31 Billion Shortfall... And Rising

Tyler Durden's picture
by Tyler Durden
Jun 20, 2017 1:45 PM
Authored by Mike Shedlock via MishTalk.com,

GE has the largest pension shortfall in the S&P 500. It’s a $31 Billion Balance Sheet Hole That Keeps Growing.

At $31 billion, GE’s pension shortfall is the biggest among S&P 500 companies and 50 percent greater than any other corporation in the U.S. It’s a deficit that has swelled in recent years as Immelt spent more than $45 billion on share buybacks to win over Wall Street and pacify activists like Nelson Peltz.

In the last two years, GE spent little more than $2 billion on total pension contributions, which hasn’t been nearly enough to keep the overall shortfall from widening. (The company also curtailed capital investments.) At the end of last year, its pension had $94 billion in obligations but only $63 billion in assets — a funding ratio of 67 percent.

In addition to the “anemic” free cash flow from its industrial businesses, GE’s pension hole and its indebtedness helped subtract roughly $8 a share from its equity value, based on a sum-of-the-parts analysis by Cowen & Co. That’s equal to $70 billion in market capitalization. To put it another way, the discount amounts to eight years of per-share earnings based on 2016 results.

The company has the largest projected benefit obligation of any S&P 500 member and among the top 10, no one has a lower funding ratio.

Because interest rates are still relatively low, it’s possible for GE to borrow money it needs to cover its shortfall. Verizon Communications Inc. and FedEx Corp. sold bonds this year to do just that.
Default Danger

Nobody is suggesting that GE is in imminent danger of defaulting on its pension obligations and many analysts say the company still has years to address the bulk of its shortfall. What’s more, a rising rate environment helps GE winnow its pension deficit by boosting its expected return.

And the longer its pension remains underfunded, the costlier it becomes. The Pension Benefit Guaranty Corp., a government agency that acts as a backstop when plans fail, has more than tripled its rates for companies with funding deficits, and they’re set to rise even more in the next two years.
Dividend Yield, Market Cap

I fail to see how GE can afford to keep paying a 3+% dividend. But the moment GE lowers the dividend, its share price will likely crater.

Pension Bomb

Time Bomb Talking Points

Current Liabilities: $94 Billion.
Current Assets: $63 billion.
Shortfall: $31 Billion.
Obligations: $47 billion in pension benefits to its retired employees and their beneficiaries over the next 10 years.
Pension Trust owns 32.9 million GE shares at the end of 2016.
Assumptions: 7.5 percent return.
GE’s non-pension debt: $130 billion.
GE needs to come up with nearly $5 billion a year for 10 years just to meet pension obligations. That assumes an annualized rate of return of 7.5% a year.


Warning bells are flashing. Returns are far more likely to be zero or negative than anything approaching 7.5%.

The danger of default is real. I suggest likely, even though default isn’t “imminent”.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

The banksters in the Trump administration are not going to do anything with the 800-pound gorilla in the room. Our status as debt slaves continues and actions by the elites to own all our assets continue unchecked.

Another informative article by Brandon Smith. He's getting correcter and correcter. I really appreciate how he responds to his readers' questions.

http://www.alt-market.com/articles/3221 ... -oblivious

The Federal Reserve Is A Saboteur - And The "Experts" Are Oblivious
Wednesday, 28 June 2017 03:28 Brandon Smith


I have written on the subject of the Federal Reserve's deliberate sabotage of the U.S. economy many times in the past. In fact, I even once referred to the Fed as an "economic suicide bomber." I still believe the label fits perfectly, and the Fed's recent actions I think directly confirm my accusations.

Back in 2015, when I predicted that the central bankers would shift gears dramatically into a program of consistent interest rate hikes and that they would begin cutting off stimulus to the U.S. financial sector and more specifically stock markets, almost no one wanted to hear it. The crowd-think at that time was that the Fed would inevitably move to negative interest rates, and that raising rates was simply "impossible."

Many analysts, even in the liberty movement, quickly adopted this theory without question. Why? Because of a core assumption that is simply false; the assumption that the Federal Reserve's goal is to maintain the U.S. economy at all costs or at least maintain the illusion that the economy is stable. They assume that the U.S. economy is indispensable to the globalists and that the U.S. dollar is an unassailable tool in their arsenal. Therefore, the Fed would never deliberately undermine the American fiscal structure because without it "they lose their golden goose."

This is, of course, foolish nonsense.

Since its initial inception from 1913-1916, the Federal Reserve has been responsible for the loss of 98% of the dollar's buying power. Idiot analysts in the mainstream argue that this statistic is not as bad as it seems because "people have been collecting interest" on their cash while the dollar's value has been dropping, and this somehow negates or outweighs any losses in purchasing power. These guys are so dumb they don't even realize the underlying black hole in their own argument.

IF someone put their savings into an account or into treasury bonds and earned interest from the moment the Fed began quickly undermining dollar value way back in 1959, then yes, they MIGHT have offset the loss by collecting interest. However, this argument, insanely, forgets to take into account the many millions of people who were born long after the Fed began its devaluation program. What about the "savers" born in 1980, or 1990? They didn't have the opportunity to collect interest to offset the losses already created by the Fed. They were born into an economy where saving is inherently more difficult because a person must work much harder to save the same amount of capital that their parents saved, not to mention purchase the same items their parents enjoyed, such as a home or a car.

Over the decades, the Fed has made it nearly impossible for households with one wage earner to support a family. Today, men and women who should be in the prime of their careers and starting families are for the first time in 130 years more likely to be living at home with their parents than any other living arrangement.

People are more likely to be living with their parents now than back during time periods in which young people actually wanted to stay close to their parents to take care of them. That is to say, most young people are stuck at home because they can't afford to do anything else, not because they necessarily want to be there.

This is almost entirely a symptom of central bank devaluation of the currency and its purchasing potential. The degradation of the American wage earner since the Fed fiat machine began killing the greenback is clear as day.

The Fed is also responsible for almost every single major economic downturn since it was established. As I have noted in the past, Ben Bernanke openly admitted that the Fed was the root cause of the prolonged economic carnage during the Great Depression on Nov. 8, 2002, in a speech given at "A Conference to Honor Milton Friedman ... On the Occasion of His 90th Birthday:"

"In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again."

Bernanke is referring in part to the Fed's program of raising interest rates into an economic downturn, exacerbating the situation in the early 1930's and making the system highly unstable. He lies and says the Fed "won't do it again;" they are doing it RIGHT NOW.

The Fed was the core instigator behind the credit and derivatives bubble that led to the crash in 2008, a crash that has caused depression-like conditions in America that we are still to this day dealing with. Through artificially low interest rates and in partnership with sectors of government, poor lending standards were highly incentivised and a massive debt trap was created. Former Fed chairman Alan Greenspan publicly admitted in an interview that the central bank KNEW an irrational bubble had formed, but claims they assumed the negative factors would "wash out."

Yet again, a Fed chairman admits that they either knew about or caused a major financial crisis. So we are left two possible conclusions — they were too stupid to speak up and intervene, or, they wanted these disasters to occur.

Today, we are faced with two more brewing bubble catastrophes engineered by the Fed: The stock market bubble and the dollar/treasury bond bubble.

The stock market bubble is rather obvious and openly admitted at this point. As the former head of the Federal Reserve Dallas branch, Richard Fisher, admitted in an interview with CNBC, the U.S. central bank in particular has made its business the manipulation of the stock market to the upside since 2009:

"What the Fed did — and I was part of that group — is we front-loaded a tremendous market rally, starting in 2009.

It's sort of what I call the "reverse Whimpy factor" — give me two hamburgers today for one tomorrow."

Fisher went on to hint at his very reserved view of the impending danger:

"I was warning my colleagues, Don't go wobbly if we have a 10 to 20 percent correction at some point... Everybody you talk to... has been warning that these markets are heavily priced." [In reference to interest rate hikes]

The Fed "front-loaded" the incredible bull market rally through various methods, but one of the key tools was the use of near-zero interest rate overnight loans from the central bank, which corporations around the world have been exploiting since the 2008 crash to fund stock buybacks and pump up the value of stock markets. As noted by Edward Swanson, author of a study from Texas A&M on stock buybacks used to offset poor fundamentals:

"We can't say for sure what would have happened without the repurchase, but it really looks like the stock would have kept going down because of the decline in fundamentals... these repurchases seem to hold up the stock price."

In the initial TARP audit, an audit that was limited and never again duplicated, it was revealed that corporations had absorbed trillions in overnight loans from the Fed. It was at this time that stock buybacks became the go-to method to artificially prop up equities values.

The problem is, just like they did at the start of the Great Depression, the central bank is once again raising interest rates into a declining economy. This means that all those no-cost loans used by corporations to buy back their own stocks are now going to have a price tag attached. An interest rate of 1% might not seem like much to someone who borrows $1000, but what about for someone who borrows $1 Trillion? Yes, borrowing at ANY interest rate becomes impossible when you need that much capital to prop up your stock. The loans have to be free, otherwise, there will be no loans.

Thus, we have to ask ourselves another question; is the Fed really ignorant enough to NOT know that raising rates will kill stock markets? They openly admit that they knew what they were doing when they inflated stock markets, so it seems to me that they would know how to deflate stock markets. Therefore, if they deliberately engineered the market rally with low interest rates, it follows that they are deliberately engineering a crash in markets using higher interest rates.

Mainstream economists and investment "experts" appear rather bewildered by the Federal Reserve's exuberance on rate hikes. Many assumed that Janet Yellen would hint at a pullback from the hike schedule due to the considerable level of negative data on our fiscal structure released over the past six months. Yellen has done the opposite. In fact, Fed officials are now stating that equities and other assets appear to be "overvalued" and that markets have become complacent. This is a major reversal from the central bank's attitude just two years ago. The fundamental data has always been negative ever since the credit crisis began. So what has really changed?

Well, Donald Trump, the sacrificial scapegoat, is now in the White House, and, central bank stimulus has a shelf life. They can't prop up equities for much longer even if they wanted to. The fundamentals will always catch up with the fiat illusion. No nation in history has ever been able to print its way to prosperity or even recovery. The time is now for the Fed to pull the plug and lay blame in the lap of their mortal enemy - conservatives and sovereignty champions. They will ignore all financial reality and continue to hike. This is a guarantee.

In the Liberty Movement the major misconception is that the Fed is attempting to "catch up" to the next crash by raising interest rates so that they will be ready to stimulate again. There is no catching up to this situation. The Fed has no interest in saving stock markets or the economy. Again, the fed has raised rates before into fiscal decline (during the Great Depression), and the result was a prolonged crisis. They know exactly what they are doing.

What does the Fed gain from this sabotage? Total centralization. For example, before the Great Depression there used to be thousands of smaller private and localized banks in America. After the Great Depression most of those banks were either destroyed or absorbed by elite banking conglomerates. Banking in the U.S. immediately became a fully centralized monopoly by the majors. In a decade, they were able to remove all local competition and redundancy, making communities utterly beholden to their credit system.

The 2008 crash allowed the banking elites to introduce vast stimulus measures requiring unaccountable fiat money creation. Rather than saving America from crisis, they have expanded the crisis to the point that it will soon threaten the world reserve status of our currency. The Fed in particular has set the U.S. up not just for a financial depression, but for a full spectrum calamity which will include a considerable devaluation (yet again) of our currency's value and resulting in extreme price inflation in necessities.

The next phase of this collapse will include the end of the dollar as we know it, making way for a new global currency system that uses the IMF's SDR basket as a foundation. This plan is openly admitted in the elitist run magazine 'The Economist' in an article entitled "Get Ready For A Global Currency By 2018."

It is important to understand what the Fed actually is — the Fed is a weapon. It is a weapon used by globalists to destroy the American system at a given point in time in order to clear the way for a new single world economy controlled by a single managerial entity (most likely the IMF or BIS). This is the Fed's purpose. The central bank is not here to save the U.S. from harm, it is here to make sure the U.S. falls in a particular manner — a controlled demolition of our fiscal structure.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

When I was a young kid, two dimes could buy you a gallon of gas. These days, two dimes can still buy a gallon of gas...if they are the dimes of my youth which were made of silver.

If you don't own any real money in your Financial Reserve, why do you continue to resist? Please share your biggest fears or objections to owning precious metals in this thread so we can discuss and overcome those hurdles.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

We've been warned and warned again. Have we obeyed?

https://www.lds.org/topics/family-finances?lang=eng

“We encourage you wherever you may live in the world to prepare for adversity by looking to the condition of your finances. We urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt. … If you have paid your debts and have a financial reserve, even though it be small, you and your family will feel more secure and enjoy greater peace in your hearts” (All Is Safely Gathered In: Family Finances).

Every family has the responsibility to provide for its own needs to the extent possible. The responsibility to manage family finances should be shared between husband and wife with an attitude of trust and openness. Wise financial management can provide security and promote family well-being. Members may experience financial troubles due to unemployment, overspending, unexpected emergencies, or mismanagement of finances. Paying an honest tithing, living within your means, saving for unexpected expenses, and avoiding debt are essential parts of financial stability.

Read More…

https://www.lds.org/ensign/1987/06/pay- ... e?lang=eng

JUNE 1987 PAY THY DEBT, AND LIVE

FIRST PRESIDENCY MESSAGE

Pay Thy Debt, and Live
By President Ezra Taft Benson

Pay Thy Debt, and Live

In the book of Kings we read about a woman who came weeping to Elisha, the prophet. Her husband had died, and she owed a debt that she could not pay. The creditor was on his way to take her two sons and sell them as slaves.

By a miracle Elisha enabled her to acquire a goodly supply of oil. Then he said to her: “Go, sell the oil, and pay thy debt, and live thou and thy children of the rest.” (See 2 Kgs. 4:1–7.)

“Pay thy debt, and live.” How fruitful these words have ever been! What wise counsel they are for us today!

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

http://www.zerohedge.com/news/2017-08-0 ... intsukuroi

What Investors Can Learn From the Japanese Art of Kintsukuroi

by GoldCore
Aug 1, 2017 7:57 AM

Kintsukuroi or Kintsugi is the Japanese art of repairing broken pottery with gold and silver.

The Japanese like to consider it a way of not only repairing the item but also transforming it into something new which is pristine and has a new potential.

For the philosphers in the art world they like to ask how can something of such beauty be created from a shattered vase or bowl?

Our politics, markets and economy are broken. With each passing day we see more evidence of a globalised, interconnected world that is also increasingly politically and financially fragmented.

In turn this is raising tensions between and within countries. Especially between the 'haves' and 'have nots.'

We have seen this before, many times in history, when the greed of mankind and his belief in infallibility leads us to believe we can perform unprecedented financial experiments. The more we push on with the experiments, rather than learning from history, the bigger the cracks and damage.

Jim Rogers recently expressed his disgust at banks’s claims that had they not acted as they had in response to the financial crisis then things would be worse.

Rogers disagrees, all they have done is papered over and widened the cracks… "propping up zombie banks and dead companies is not the way the world is supposed to work. ... It's been nine years and we have nothing to show for it [economically] except staggering amounts of debt.”

In order for Kintsugi to transpire the artist must ‘see’ a cracked pot differently. A new perspective has to be taken. The pot is not broken, it is not useless instead it is something which has potential to become stronger and better.

We must begin to look at our economy in a similar light. Our savings are not useless, in the same way our economic system is not useless.

But they are weak in their current state, they should be made stronger rather than forced to take on more pressure.

The art of seeing differently

Last week, came the news that global debt levels were 327% of world gross domestic product (GDP), at $217 trillion in the first quarter of 2017. We have added over $120 trillion since the financial crisis.

In the weeks before the world’s top money managers had rung the warning bell that this pot was ready to crumble. Marc Faber told CNBC that ‘everything’ is in a bubble with the risk that:

“One day this bubble will end,” and as a result people will lose 50% of their wealth.

Mohammed El Erian, part of the global financial elite but someone who we should all listen to, has also expressed similar concerns to Faber.

He wrote on Bloomberg that because of reduced liquidity resulting from simultaneous policy tightening by central banks, he has some serious doubts about the sustainability of the current overextended bull market in stocks.

Meanwhile Bill Gross believes markets in the US are at their highest risk levels post-2008 as investors are paying a high price for taking chances.

The low (and negative) interest rates of central banks are artificially driving up asset prices. This is creating little growth in the real economy and as a result is punishing individual savers and businesses.

But, this is the world we live in. Should we wait and see how it plays out? Bury our heads in the sand?

Or, should we instead think about what we can do differently. How we can look at his situation and take a new perspective, give it some potential and extended future?

Like the art of kintsukuroi we may be able to give it a second chance, with gold.

Gold is for everyone: Some are already filling the cracks with gold

“The world breaks everyone, then some become strong at the broken places.” Ernest Hemingway

Countries around the world (including large nations such as Russia and China) are acquiring gold at an accelerated rate in order to diversify their reserve positions. When you consider the already substantial reserves in the US, Germany and the IMF, we may already be moving quietly towards a default gold standard.

There is a reason these countries and organisations are accumulating and/or holding onto gold. They know that when things take the inevitable turn for the worst, gold will alleviate the financial and monetary damage.

They know this because whilst their economic policies might not reflect any knowledge of history, history including the recent crisis shows them that gold has survived history because of it’s ability to hold value and act as a safe haven.

Unfortunately the chances of the majority of the world’s leaders realising how they can fix the cracks before they become breaks, are low.

But that doesn’t mean investors can’t embrace gold to fix the cracks that their finances and investments are exposed to.

As with the broken pots, gold just needs to be a small part of your portfolio.

A small allocation confers stability and insurance. Jim Rickards argues that the solution to the risks we are all exposed to is to allocate 10% of your portfolio to physical gold or silver:
‘That will be your insurance when the time comes.’

You might ask why isn’t there a rush to gold if it’s the way to secure our portfolios? Only the smart money is diversifying into gold now - as was the case before the first financial crisis. Martin Armstrong of Armstrong Economics recently said:

‘Gold and the stock market will take off when people realize that government is in trouble. When they lose confidence, that is when they will start to pour into tangible assets.’

Conclusion - Reinforce the financial cracks with gold

Really kintsukuroi is about highlighting imperfections. Many reading this might ask why on earth one would want to highlight the imperfections in the banking system and the global financial system rather than just starting from scratch.

We don’t need to go so far as to lose our wealth in order to realize how we can protect ourselves.

There is no changing the damage that has been done. We cannot erase the past, only learn from it.

How do you learn from things? By remembering what has happened and by incorporating those lessons into every day life.

We can do that with gold. We can learn from the past mistakes and bring gold into our portfolios to protect and grow our wealth.

Gold has consistently proven itself in times of economic distress. Those who have benefited the most from this are the ones who bought their insurance and reinforced the cracks prior to the shattering crash.

User avatar
Toto
captain of 1,000
Posts: 1372
Location: Salt Lake City, Utah

Re: Financial Reserve

Post by Toto »

Hey Silver, watch this…

https://youtu.be/qnFr1ttmFKI

In particular, watch it here…

https://youtu.be/qnFr1ttmFKI?t=1403

Excerpt:

“I use debt as a proxy for all the new money that’s been printed. And you see what they do when they do that reset is they cover some level of how much money is out there, and that we’re not going to know they do it. But since gold if finite, and debt is infinite until nobody trusts it anymore, easily put, I’m not going to get you to the penny, but at least I’ll get you to the vicinity, YOU TAKE ALL THE DEBT AND DIVIDE IT BY ALL THE GOLD, (my emphasis) and so right now that number is somewhere…north of nine thousand dollars in gold, in terms of dollars, and six hundred dollars in terms of silver, and what I think is interesting is people go; “Whoa whoa, nine thousand?” Well that’s because we’ve been trained to put value in in dollars when they have no value until you convert them into a good or service. So what gold primarily does is it hold your wealth even.”

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Excellent, Toto. I watched for a few minutes at the 2nd link and will try to see the rest later.

The message is clear: Our financial reserve should be measured in ounces, not dollars. Fiat will fail so don't rely on fiat.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Toto wrote: August 1st, 2017, 11:12 pm Hey Silver, watch this…

https://youtu.be/qnFr1ttmFKI

In particular, watch it here…

https://youtu.be/qnFr1ttmFKI?t=1403

Excerpt:

“I use debt as a proxy for all the new money that’s been printed. And you see what they do when they do that reset is they cover some level of how much money is out there, and that we’re not going to know they do it. But since gold if finite, and debt is infinite until nobody trusts it anymore, easily put, I’m not going to get you to the penny, but at least I’ll get you to the vicinity, YOU TAKE ALL THE DEBT AND DIVIDE IT BY ALL THE GOLD, (my emphasis) and so right now that number is somewhere…north of nine thousand dollars in gold, in terms of dollars, and six hundred dollars in terms of silver, and what I think is interesting is people go; “Whoa whoa, nine thousand?” Well that’s because we’ve been trained to put value in in dollars when they have no value until you convert them into a good or service. So what gold primarily does is it hold your wealth even.”
Sobering stuff.
"The ultimate plan to chip us all," he says.
"It's food, water, energy, security, community, barterability, and wealth preservation," she says.

Sound like "prepare every needful thing" and have a "financial reserve" which are commandments from God.

Thanks for sharing. I think it will soon be too late for middle-class people to prepare in time. The poor, forget about it. The rich may be able to skate a while longer.

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

This chart shows when most Americans made the switch to being debt slaves -- 1990 or 1991. President Benson warned us about debt in 1987, as have prophets since then. They are called seers because they can see what's coming. We ignore them at our eternal peril.
https://www.lds.org/ensign/1987/06/pay- ... e?lang=eng
20170804_dusen_0.jpg
20170804_dusen_0.jpg (22.76 KiB) Viewed 2203 times

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Debt, debt and more debt. Raise your hand if you got out of debt as the prophets warned you to do. Fancy charts at the link below.

http://www.zerohedge.com/news/2017-08-0 ... ns-hit-new

US Credit Card Debt Surpasses Financial Crisis Record, As Student And Auto Loans Hit New All Time High

by Tyler Durden
Aug 7, 2017 3:19 PM

Who would have expected that today's otherwise boring monthly consumer credit report would be the day's most exciting event. Well, moments ago the monthly update from the Federal Reserve confirmed that as of the end of June, total revolving (i.e. credit card) credit rose to $1,021.7 billion, an increase of $4.1 billion on the month, and a new all time high, taking out the previous record high set during the summer of 2008.

Coupled with the monthly $8.3 billion increase in non-revolving credit, which also rose to an all time high of $2,834.1 billion...

... means that total consumer credit in June increased by $12.4 billion, slightly less than the $13.9 billion expected and modestly less than the $18.4 billion increase in May, to $3,855.8 billion, also a record high.

Taking a closer look at the quarterly update in non-revolving debt, we find that for another consecutive quarter, both student and auto loans hit record highs, of $1.450 trillion and $1.131 trillion respectively, although there does appears to be a modest slowdown in credit issuance for these two largest categories.

Considering the recent sharp revision to the US household savings rate, which wiped out $250 billion in personal savings with the stroke of an excel pen...

... the fact that US households increasingly have to rely on their credit cards to support their daily lives will hardly come as a surprise.

User avatar
Toto
captain of 1,000
Posts: 1372
Location: Salt Lake City, Utah

Re: Financial Reserve

Post by Toto »

RED ALERT CRYPTO NEWS: "BLOCKCHAIN: The Devil Uses It To Destroy The World" -- The Global Unit of Account from the USD to the SDR

August 08, 2017

The Global Unit of Account from the USD to the SDR has started -- Lynette Zang


https://www.youtube.com/watch?v=SYPsygSHnAs

User avatar
Toto
captain of 1,000
Posts: 1372
Location: Salt Lake City, Utah

Re: Financial Reserve

Post by Toto »

More from Sean and Lynette Zang

Brad Peters – Intel Software Designer:

“Sean, if a global crypto coin controlled by the BIS comes to internationalize property onto their crypto block chain, they get their One World Government and one world currency all in the same stroke.”

Watch the follow up interview with Lynette Zang here: https://www.youtube.com/watch?v=sG3Ju8AhCKM

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Toto wrote: August 9th, 2017, 12:01 am RED ALERT CRYPTO NEWS: "BLOCKCHAIN: The Devil Uses It To Destroy The World" -- The Global Unit of Account from the USD to the SDR

August 08, 2017

The Global Unit of Account from the USD to the SDR has started -- Lynette Zang


https://www.youtube.com/watch?v=SYPsygSHnAs
I watched this video at lunch yesterday and forgot to thank you for it. It seems there are still some pieces of the puzzle missing, but I do like the lady's analysis.

User avatar
Toto
captain of 1,000
Posts: 1372
Location: Salt Lake City, Utah

Re: Financial Reserve

Post by Toto »

Between Jim Willie, Catherine Austin Fitts, and Lynette Zang, it seems that the hand basket is about to spill the entirety of its contents. This should be a clarion call for constitutional restoration, but it seems the vast majority of the Elders are still asleep in the poppy fields. There may still be some time, but the window is closing faster than a pupil in the bright light of day.

Personally, my favorite Coins are Morgan and Peace Dollars as I consider them LAWFUL money of the united states, according to the coinage act of 1792, as they contain 371.25 grains of silver, followed by the lightened coins of junk silver because they are readily identified in a barter situation. However, considering Lynette’s advice, I am considering starting a “coin collection” of gold coins as they are not subject to confiscation under current “supposed” laws. I also learned that Ron Paul only accumulate numismatic coins.

But then sometimes I wonder if precious metals will be of any value at all in a global debt slave scenario. I still maintain a 3 month reserve of FRN’s just in case there is an opportunity to pass through the reset and come out on the winning side. But at this point; I’m not holding my breath.

That’s all I have for now. Been too busy being a happy idiot in the struggle for the legal tender to discuss any further. But I do recommend the videos posted above. I think Zang is right on the money!

BTW, I can honestly raise my hand about the being out of debt thing. I have barterable skills, and need to go make kale chips, freezer pickles, and still looking for a good recipe for pickled beets. Between demands for my value production, and gardening chores, my plate spilleth over!

Silver
Level 34 Illuminated
Posts: 5247

Re: Financial Reserve

Post by Silver »

Toto wrote: August 10th, 2017, 7:12 pm Between Jim Willie, Catherine Austin Fitts, and Lynette Zang, it seems that the hand basket is about to spill the entirety of its contents. This should be a clarion call for constitutional restoration, but it seems the vast majority of the Elders are still asleep in the poppy fields. There may still be some time, but the window is closing faster than a pupil in the bright light of day.

Personally, my favorite Coins are Morgan and Peace Dollars as I consider them LAWFUL money of the united states, according to the coinage act of 1792, as they contain 371.25 grains of silver, followed by the lightened coins of junk silver because they are readily identified in a barter situation. However, considering Lynette’s advice, I am considering starting a “coin collection” of gold coins as they are not subject to confiscation under current “supposed” laws. I also learned that Ron Paul only accumulate numismatic coins.

But then sometimes I wonder if precious metals will be of any value at all in a global debt slave scenario. I still maintain a 3 month reserve of FRN’s just in case there is an opportunity to pass through the reset and come out on the winning side. But at this point; I’m not holding my breath.

That’s all I have for now. Been too busy being a happy idiot in the struggle for the legal tender to discuss any further. But I do recommend the videos posted above. I think Zang is right on the money!

BTW, I can honestly raise my hand about the being out of debt thing. I have barterable skills, and need to go make kale chips, freezer pickles, and still looking for a good recipe for pickled beets. Between demands for my value production, and gardening chores, my plate spilleth over!
I heartily thank you for your contributions. The info source you introduced is quite good. Blessings on you and yours and here's hoping that the reset is as short as possible.

Post Reply