Posts Tagged ‘debt’

Debt, Government, and Change, is it Too Late?

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During situations that are doomed to failure, when does “real” change finally come?

Answer 1: When the absolute end of the road is reached, standing at the edge of the cliff with no choice but to “change”, or fall into the abyss.

Answer 2: When external forces are applied to change the outcome prior to reaching the end, or a would-be conclusion.

Newton’s first law of motion pretty much sums it up, “An object at rest will remain at rest unless acted on by an unbalanced force. An object in motion continues in motion with the same speed and in the same direction unless acted upon by an unbalanced force”.

Change is not the easy way, the easy way is to keep on going in the same direction. Makes sense, yes?


This notion can be applied across the board, to the physical, to the philosophical, to the direction of our personal finances, our goals, our economy, our government, on and on…

During 2010 there seems to have been an increasing “sense” among many, that things aren’t quite right out there. That is, out there in the world – the economy, employment, governments.

There seems to be more and more vocalization about what has been happening around us, more vocalization than in the past. Many can’t seem to quite put their finger on it, and they are unable to quickly say, “The problem here is this“. That is because there is much more than “this”, more than one problem, there are many – many problems, many of which are intertwined, related, and affecting the overall feeling of uneasiness about the current direction we are heading.

Many are maxed out, stressed out, and are beginning to speak out.


Unemployment

How did we get here where the “SGS” unemployment rate is running nearly 23 percent in the U.S.  (the measurement method used prior to 1994)? Why does the government today use a method called “U.3″ to measure unemployment (currently 10%)? Why is it that the personal experiences of most folks interacting with other folks leads one to believe the SGS numbers more-so than the U.3 numbers?

Inflation

Why is it that the U.S. government numbers for inflation, today reflect a number less than 2 percent, while the method used to calculate inflation in 1990 would be more than 4 percent, and the method used to calculate inflation during 1980 would be more than 8 percent? Why is it that most Americans have a “sense” that their cost of living has been increasing more than the claimed percentage quoted by the U.S. government?

Spending

Why is it that more and more U.S. states are on the verge of bankruptcy? Why have most States and local municipalities continued to spend more while taking in less? Why are big funds and other investors, seemingly purchasing less and less bonds from these entities, which keep them afloat?

How is it that the U.S. government annual deficit is now 1.3 Trillion (and rapidly going higher) while the national debt is nearly 14 Trillion? How did we get to where every working American (using the governments own misleading numbers) owes 100 Thousand to the debt, not including any of the unfunded liability programs or other state and local debt obligations?

How is it even possible that when adding the current debt of federal government, state government, local government, business, household, and U.S. unfunded liabilities (social security, medicare, and medicare prescription drugs), that the total liability per U.S. taxpayer at this moment is a nauseating 1 Million each?! How many people know this?

Printing Press

Why is today’s 2010 dollar worth only 4 percent of the value it had during 1913 (the start of the Federal Reserve)? Why is it that every single brand new dollar that is printed by the Federal Reserve (a private bank), is then “loaned” to the U.S. federal government with a debt attached to it (interest)? Why does every new dollar put the U.S. further in debt? Why is it that we need a federal reserve system? Why can’t the U.S. federal government print its own money, without having to pay interest to a private bank and private organization of banksters?

Everyone must Work

Why is it required that both spouses have to “work” in the system to make ends meet? Why just a few decades ago would only one spouse need to work to provide a comfortable life for the family? Why have the corporations and businesses (after having cut back so drastically on employment while loading on work stress to those that are left) not hiring any workers back while their corporate profits and executive incomes are at record high levels?

Gold and Silver

Why has the price of gold and silver soared to such highs? Why are gold vending machines popping up in locations around the world, and why do we see so many ads from businesses buying gold and gold jewelery? Why is something like gold and silver being valued as real money by more and more people, and perceived to be worth what it is, in relative terms to a piece of Fiat paper printed with special ink? Why is gold worth more than paper?

Derivatives Time Bomb

What is this thing called “derivatives” which apparently has something to do with hundreds of Trillions of dollars of unregulated “bets” made on untold numbers of pre-packaged assets carrying various risks – something which if called due, would collapse the entire global economic system as we know it?

World Government Debt

Why is it that so many countries of the world are in nearly the same “boat”, the same situation, owing so much money and being so deep in debt, while the same game continues to play as though nothing is wrong?

Bailouts

Why have we been hearing about so many “bailouts”, ranging from privately held businesses, foreign banks, to entire country governments?

When a company or entire government is bailed out, what does that really mean? Since it makes sense that their debts would not be wiped clean (that wouldn’t be fair, would it?), but refinanced instead – with more cost in the end, doesn’t this just delay the inevitable?

And more important, who ends up paying for the bailouts? Are you and I, the taxpayers, the ones who have to pay? Is that why it has been so easy for government bodies to be willing to bailout seemingly every big company, bank, bankster, or country that gets in too deep over their heads, because “they” don’t really have to pay for it – you and I do? Is that why?

These are just some of the questions that “thinking” people are beginning to ask and vocalize among themselves. Something is not quite right. That is for sure.

The real question is, is it already too late to change and prevent a disaster, given the current dire facts? Can there be real change in time to prevent a collapse?

Some think not and are preparing for the worst. Others think it can be done, but only through great pain. Still others do not even realize what is happening around them – and assume that everything will be alright – because everything has always been alright.

What is your position? What are you doing to protect and prepare for the eventualities?



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Survival Without A Paycheck? How Much Time?

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If you really thought about it, how many paychecks away from homeless are you?

Survival without a paycheck, becoming homeless, or having to move in with friends or family, is something that most people probably do not ever think about. The belief is that somehow we will never be without a decent paying job, the bills will always get paid, and nothing that bad could possibly happen to me. But please consider this, if you and – or your spouse lost your job and were without a steady paycheck, how much time would you have before things get terribly bad for you?

Serious thought should be given to this “what if” scenario, because the economic times that we are living in today, are uncertain at best. A seemingly stable employment could vanish overnight resulting in no more paychecks, throwing your survival instincts into overdrive. The corporate machine takes little account for many of the qualities that may seem good and rock-solid to you. Instead, it is always about the bottom line, profit, of course. Although rarely said in the halls of the corporation, the longer you’ve been employed there and the older you are, the easier it is to replace you with a younger, eager, “cheaper” and “trainable” body. Face it, your years at the office have probably provided a decent paycheck, raises, maybe bonuses, and you might feel quite comfortable in the feathered nest that you’ve made for yourself at the office. Believe me, the bean-counters notice, and you are a target in today’s hard times environment.

So back to the question. How many lost paychecks, or how long without a paycheck before things get desperate? If you sat down and analyzed your current financial obligations, you might be surprised to discover that it wouldn’t take that long at all. Over the years the system has made it real easy to live large and have the toys that we want. We are all probably guilty to some extent, having not resisted all of the tasty treats during the good times, but have you managed to squirrel away enough cash or investments from your paychecks to buy you some time in the event of a personal financial disaster? Have you taken on more debt than you probably should have? Or are you one of the lucky ones who have been fortunate enough to have built a nice financial cushion and are mostly free from debt. The later is probably the exception to the rule out there.

When the paycheck stops coming and you stop paying bills, bad things start to happen very quickly. Not paying your credit cards is one thing, but when you stop paying mortgage, rent, or utilities, this is quite another thing. Realistically you will only have a few months before you are in serious trouble and are being actively pursued. Soon after, you will be forced to live without your home or apartment and your survival will suddenly become forefront in your mind. Are you certain that your friends or relatives will take you in? If they do, how long will it be before that situation gets tense? Most of us have had friends or family stay at our home for a period of time while visiting (or maybe it’s the other way around). You know how little time it takes before everyone has pretty much had “enough” of each other. It’s not easy.

The point is this… at least consider your current financial condition and what would happen to you and family without a paycheck. Make some adjustments if need be. Base your future decisions and purchases with this in mind. Survival and preparedness is not always about beans, bullets, and band-aids, but is also about your finances, your money. Today’s form of money is what it is, and until it is not, be smart and rid yourself of its debt obligations the best that you can. Be financially cautious and be prepared for a financially secure survival.



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The New Civil Rights Movement?

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Will the new civil rights movement be the abolishment of the current debt money system, fractional reserve banking? A system that is entirely based on debt money, arguably robbing us of our human right to greater human potential?

Should “too big to fail” banks be bailed out?

Is a gold backed money system really the answer to today’s problems with fiat currency?

As more and more people learn that our paper and digital money actually come from a secretive private organization entirely outside the boundaries of the US government, not accountable to the citizens of the nation, they are questioning why the US Federal Reserve system exists at all.

Documentary producer Bill Still does an excellent job addressing that question and others. A former newspaper editor and publisher, having produced the highly acclaimed documentary, “The Money Masters”, Bill Still has now released a new documentary titled, “The Secret of Oz”, which has been voted 2010 Best Documentary at BIFF and winner of the Silver Sierra Award at Yosemite film festival.

The DVD can be purchased here: The Secret of Oz

The documentary does a superb job at explaining how money is created, the history of central banks and debt-based money systems, and potential solutions to today’s economic crisis. The film urges the public to take the power to create money away from private bankers and return it to the government (which has been done 6 times in US history).

He masterfully explains it’s not what backs our money, it’s who controls its quantity.

Today, most all nations of the world are based on the same privately owned money system, one where money gets created as debt to the government.

It is suggested that instead of a government creating bonds (debt), it should be creating dollars.

Thomas Edison once said, “If our nation can issue a dollar bond, our nation can issue a dollar bill. Both are promises to pay, but one promise fattens the usurers and the other helps the people.”

Henry Ford once said, “It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning.”

People often say things like, “Congress isn’t responsive to the people”. Of course they are not… politicians are responsive to those with the power. Right now the banks have the power. We have to take back the power of the nations money. With the power of the banks diminished, the politicians will become responsive to the voters once again.

It is suggested that no bank is too big to fail and we don’t need their expensive compounding interest system. The nation can print its own money, debt free. It doesn’t mean that the banks would go away, only their business model would change.



Bill Still has taken the extraordinary step to make his documentary film, The Secret of Oz, freely available to view. It can be viewed here.

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The Greater Depression may have only just begun

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Leverage, the use of credit or borrowed funds to improve one’s speculative capacity and increase the rate of return from an investment.

If used within reason, leverage will sustain growth. But if used in excess, leverage will destroy. Much of the developed world has been using excess leverage for far too long, and many believe we are in the end game of the current economic cycle.

I believe that most of us instinctively know the real reason behind the great recession that we have been in, that is, too many people are in too much debt. For too long, easy money and easy credit through extremely low interest rates and willing banks, has fueled the engine of economic growth. The problem is, there is always and end to this particular game, and it’s not a pretty ending.

Debt upon debt is not sustainable and eventually must be de-leveraged or unwound. Why, you ask? Well, despite the fact that banks had been allowing insane levels of borrowing with virtually no down-payment, or none at all (thanks to willing Fed and gov’t policies), or proof of the ability to pay the loan, there is only so much money that you can possibly borrow and actually afford to make the payments. Although this is so common-sense, how could so many have allowed themselves to go to the razor edge of income versus ability to pay? Once maxed out, there is no other option but to pay the loans while having no money whatsoever to continue to borrow more. Game over.

The debts must be paid off or the assets sold. There is no other way.

During late 2007, when the tipping point occurred, the slow healing process began. People began to pull back on their spending, mostly from necessity (they couldn’t borrow any more – they were maxed out). This in turn slowed down the ‘economy’ which in turn set in motion company layoffs and cutting corners to maintain profits. This in turn led to lower tax revenues collected by local, state, and federal governments. A viscous circle which requires that all participants cut back, de-leverage, and reduce debt.

The US federal government (and many others), instead of cutting back on it’s own expenditures, as the rest of us must do, is instead spending even more, resulting in an enormous debt burden that cannot possibly be paid off at current levels. If we stop paying our mortgage, the bank will take our home. The government however has something that we don’t have, a printing press. They are trying to avoid a very painful system crash by spending even more money (printing both digital money and paper money) while at the same time encouraging citizens to spend more.

During 1929 leading into the Great Depression of the 1930′s, US household debt as a percentage of GDP was 100 percent.

Leading into today’s Great Recession, household debt again had reached 100 percent of GDP.

The de-leveraging period during the Great Depression of the 1930′s resulted in an 80 percent reduction in household debt of GDP, while today US household debt has only decreased by about 8 percent. There has been no where near enough de-leveraging.

So, one might logically conclude that the Greater Great Depression has only just begun…



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Economic Recovery and Survival Preparedness

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economies-of-the-world-are-like-a-house-of-cards

Don’t let an ‘apparent’ economic recovery fool you into spending more of your money foolishly!

Economic Recovery? Are You Kidding Me?

If you have pulled back on your spending during the past year or two since the meltdown of the stock market in 2008, go ahead and keep on scrimping and being smart with your money. The main stream media and government politicians want you to believe that things are much better now and they are hoping and planning that you will start spending more of your money.

There are ongoing efforts to maintain the philosophy of a throw-away society, and a society where we should keep up with the Joneses by buying the latest shiny things, bling, new cars, gadgets and toys. Instead, in our opinion, you should be spending your discretionary money on survival preparedness, a well stocked and secure home, and on tools and skills for self-sufficient living.

Not a whole lot has actually changed to justify the Wall Street comeback since March, 2009 other than massive company layoffs and other tricks to maintain or squeeze higher profit margins. The majority of consumers have not much, if any more money to spend than they did immediately before the 2008 crash. So why then does the main stream continue to spout off that things are getting so much better? Maybe the bankster gangsters of Wall Street are flush with money, but Main Street is not. How many vacant store fronts do you see around you in your travels? Lots, I’m sure.

Don’t let the attempted brainwashing get to you. Stick to your plan and keep preparing for worse times ahead. The economies of the world are teetering, and are essentially intertwined as a stacked house-of-cards that could come tumbling down at any time, and very quickly.

Many (or all?) fiat (paper) currencies are currently being challenged for their worth. Governments are severely in debt and owe billions and trillions of dollars. Lenders are realizing that there is little or no chance of being paid back at present levels of value. Governments would like nothing more than to continue to dilute the value of paper money (print and create more out of thin air) so to pay back existing debt with future money which is worth far less. This means that your money will continue to purchase less and less product as time goes on. Governments will (are) also looking for new ways to tax us. Hide your wallets.

What Should We Spend Our Money On?

So, what should we be doing with our money? In my opinion, first and foremost, check for spending hemorrhaging and stop the bleeding! Are you shopping for essentials or wants? Are you shopping smart?

Any debt should be paid down, especially any non-house-mortgage debt like credit cards, car loans, or other higher interest rate loans. Debt is THE life blood of the beast that keeps people shackled.

Thinking back to the days of our grand parents and great grand parents, debt was unheard of. People knew how to take care of themselves back then. What I mean by that is, people were able to survive without the help of government and social programs. They were largely self-sufficient. It is incredible what has happened in just a few short generations. The problem is, it is so bad now, that those of us who are somewhat self-sufficient will be adversely affected by those who are not – when TSHTF. Desperation will lead to unrest and violence.

Pay down all debt beginning with the debt with the highest interest rate. Pay the most you can afford on that one while paying minimums on whatever else you have. It is extremely important and beneficial to pay more than the minimum payment itself, the extra of which will go directly to the principal balance and greatly reduce the time to pay it all off. Once it is paid off, move to the next highest interest debt and continue until it is all gone. Being debt free will bring on an amazing feeling of joy. While you are paying off your debt, it is important to visualize and imagine this feeling. It will help tremendously. Believe it! It will happen!

While you are paying off your debt, it is advisable to spend some extra money on developing at least a minimal food storage supply. Your survival is more important than that of the bank. The amount of food storage is a personal decision and will depend upon the number of people in the household that you will be supporting. It should be fairly easy to save up at least a one month supply of extra food that could be used in the event of a minor disruption. Once you have established that minimum, go ahead and build up more if your instincts tell you to. I personally would recommend a next goal of a 3 to 6 month supply before challenging yourself for even more.

If you buy the foods that you normally eat, and if you rotate your stock, you will be saving money in the long run because food prices will always continue to rise. The more usable food storage that you have, the more money you will have effectively saved. The peace of mind of having significant food storage will surprise you. Knowing that you have in your possession, a quantity of an essential element of survival, you will discover that you have a new outlook and attitude towards life. You will feel empowered like you never have before. You can snub your nose at ‘the system’ and continue to move on towards other self-sufficiency preparations. It really is a rewarding way of life, and one that will give you a calm sense of happiness and satisfaction. You will sleep better at night.

A warning though, if you take the Red pill and go down this road of survival preparedness, your eyes will open to many things including what is really going on around you in this crazy world. Once you see it, there’s no turning back (for those of you that have watched The Matrix). If you would like to remain ignorantly bliss, just take the Blue pill and go down with the ship…

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