Showing posts with label Wealth Trail. Show all posts
Showing posts with label Wealth Trail. Show all posts
UPDATE: MagicPlan Retire & Enjoy
Here's the updated Spreadsheet that is more cleaner and easier to understand. Thanks to Ashal Jauhari's feedback on Bonus Rates differential:
There's been an overwhelming response to the previous post clearly validating that many have been impacted. An excel template is under preparation and will be posted shortly.
#Life Insurance #MagicPlan
#Life Insurance #MagicPlan
LIC policies Magic Plan – Retire & Enjoy! Surrender or Continue?
LIC policies Magic Plan – Retire &
Enjoy! Surrender or Continue?
Here's a case of an IT Engineer lady who
was 'sold' a total of 11 policies per above plan:
Date of Commencement of all eleven
policies was May 2004 with each policy maturing in 17,18,19, 20, 21,
22, 23, 24, 25, 26 years i.e first one matures when she turns 50 and
last one matures when she turns 60.
In terms of premiums, she pays a
total of 65840/- per year and has already paid for 12.5 years (2nd
half yearly premium of 32920/- is due in November 2016). So for the
first policy with SA of 155000 she has 5 years left to pay premiums,
2nd one 6 years, 3rd one 7 years and so on until 10th
14 years. She says the LIC agent introduced to her through a good
friend, had a look at her pay slip (she was naive) and
proposed her immediate savings under Sec.80C plus of course Retire &
Enjoy! She was told that from year 2021 onward, she doesn't have to
pay any more premiums but enjoy annual maturity values between Rs.2.5-3
lakhs for the next 10 years with Risk Cover (operative word should
have been the premiums for rest of the policies are deducted from the
maturity value of earlier year policy). Additionally, the 11th
policy was Jeevan Raksha Pension Policy with annual premium of
Rs.10000/- for 16 years.
Although it seems a bit late in the day
to consider surrendering above policies after having paid premiums
for 12 years, I could see that for half of these policies, she still
has to pay premiums for 10+ years. So I decided to dive deep and
analyze an answer to the following questions:
- Will it be financially productive to surrender the policies now?
- Upon surrender, will the SV enable the policy holder to recoup her 'losses' so to speak?
- Will alternative safe investments provide her returns over & above the Projected Maturity value?
First task for her was to get the
Status Report and Surrernder Value Quotation from LIC which she did. Based on the data in these reports, I
set out to enter the values in a Spreadsheet which is easy for any
layman to understand. I also tried to unravel the calculations using
a Surrender Or Paid up calculator. Below is a snapshot of the
Spreadsheet:
NOTES:
Above sheet is a consolidated analysis
to provide broad picture for better decision making. Perhaps results
may slightly vary if each policy is analyzed individually. Key
takeaway: the policy holder has lost previous 12 years of investment
returns or about 30 lakhs. If she had NOT been sold this policy, then
her premiums invested would have given her approx. 65 lakhs by the
last policy maturity due date in 2030. But then, its like saying had
one invested in Wipro in 1980, I would have been a crorepati today!
Going forward from here, there's
negligible difference between the maturity amount from LIC and the
returns from risk free RDs/FDs. So the verdict might as well be to
reconcile and continue to pay the balance premiums.
Is there any angle not covered in the
above? Inflation? Are there any other options not considered? No
Equity based investment considered due to risk factor plus
comparison had to be apples to apples.
Your views are welcome.
Above chart has been updated....
http://vishigan.blogspot.com/2016/08/update-magicplan-retire-enjoy.html
Above chart has been updated....
http://vishigan.blogspot.com/2016/08/update-magicplan-retire-enjoy.html
Mike Maloney in Horrible Car Crash with Tesla | GoldSilver.com
Below is an awesome piece of writing by Mike Maloney about his horrible crash experience and comparing it with the impending economic crash underway....
A Sunday Drive In My Tesla.
This story is written in 4 parts:
Part 1. The Car Crash
Part 2. The Economic Crash
Part 3. The Cars
Part 4. Freedom and the Pursuit of Excellence
LINK:
Mike Maloney in Horrible Car Crash with Tesla | GoldSilver.com
Change your words. Change your world.
This short film, courtesy Purple Feather illustrates the power of words to radically change your message and your effect upon the world. Imbibe it!
INDIA's RISE - How & When
Hans Rosling was a young guest student in India when he first realized that Asia had all the capacities to reclaim its place as the world's dominant economic force. At TEDIndia, he graphs global economic growth since 1858 and predicts the exact date that India and China will outstrip the US. Watch this fascinating presentation:
Stranger than Fiction? Or True to the last word? Decide for yourself! Who is SONIA GANDHI?
LINK below reproduced after spell-check & grammar.
Who is SONIA GANDHI? (Every Indian Should Know This)
Who is Sonia Gandhi:
There is officially no Sonia Gandhi. Her real name in passport is neither Gandhi nor Sonia. Its Edvige Antonia Albina Maino. Sonia is a Russian name and not Italian. However, Antonia is an Italian name and her passport is Italian. Though she has married Rajiv Gandhi* she never accepted change of title officially. (recall the time of turmoil in Indian politics when Sonia Gandhi was trying to be the prime minister, but ultimately Man Mohan Singh became her toy)
*Rajiv Gandhi: Actually Rajiv Khan being the son of Firoz Khan and Indira Priyadarshani. Gandhi is an assumed title to sentimentally lure Indians for their political benefit. They are Muslims by religion.
Father:
Stefano Eugene Maino is socially the father of Sonia. Her father was a German (Hitlers army). When Hitlers army went to Russia they were captured and imprisoned. He was captured near St. Peters burgh and was imprisoned for 20 years. But he became a member of KGB and his imprisonment was limited to 4 years. When he came back from prison he gave Russian name to his daughters. Social father because when she was born her father was in jail for 4 years. Biological father is unconfirmed.
Mother:
Paula Maino.
Family:
She has 2 sisters in Orbassano, Italy
Birthplace:
Sonia claims she was born in Besano, near Turin in Italy. However, as per her birth certificate, She is actually born in Luciana, in the borders of Switzerland. A resort town for German soldiers during war.
Education:
She initially put forward to Indian Govt. that she studied in Cambridge University which proved to be fake. She submitted an affidavit that she studied English in Bell Education trust at Cambridge. Even this was proven to be fake and was found she never got any education after class five. She was a young girl with no formal education living five years in England. How did she support her livelihood for 5 years? Any wild guesses?
Citizenship:
She has not given off her Italian citizenship. Indira Gandhi used her power to issue her an Indian Citizenship so that she can join Indian politics. She is holding an illegal citizenship in India. No action is being taken by Home Minister. Update: In January 1980, Indira Gandhi returned as Prime Minister. The first thing Sonia did was to enroll herself as a voter. This was a gross violation of the law, enough to cause cancellation of her visa [since she was admittedly an Italian citizen then]. There was some hullabaloo in the press about it, so the Delhi Chief Electoral Officer got her name deleted in 1982. But in January 1983, she again enrolled herself as a voter even while as a foreigner [she first applied for citizenship in April 1983]Link
Religion:
Christianity.
Bank Balance:
Rajiv Gandhi and his family owned 2 billion USD in Swiss Bank as of November,1991. Beneficiary of death of Indira Gandhi and Rajiv Gandhi was Sonia Gandhi.
Family:
Sonia's sister Alexandria(or Anuska) has 2 shops in Italy selling antiques stolen from India. Sonia used her power to smuggle Indian artifacts through Air India flights uninspected.
Sonia's son Rahul Gandhi, whose real name is Raul Vinci. He got admitted to Harvard in quota but was thrown off soon because he was incompetent. He has Italian citizenship since his mother never gave up her citizenship. He cannot officially become the citizen of India or any politician in India as long as he doesn't give up his Italian citizenship. Arrested in Boston airport for carrying 160,000 dollars cash, accompanied by Veronique (Spanish). Veronique is the daughter of Drug mafia leader. Rahul has also been accused for gang raping Sukanya Devi, whose petition to all courts in India have been rejected due to their political hold and the whereabouts of the family is unknown. However, the information is widely available online.
Here is another more credible LINK by none other than Dr. Subramanian Swamy
THE REAL OWNERS
"THE REAL OWNERS are the big wealthy interests that control things and make all the important decisions. Forget the politicians...they are put there to give you the idea that you have a freedom of choice...you don't! You have no choice....you have owners....they own you....they own EVERYTHING...they own all the important land, own & control corporations, they have long since bought and paid for the senate, the congress, the state governments.....they got the judges in their back pockets, they own all the big media companies so that they control just about all the news & information you get to hear, they got you by the ba$#@! They want more for themselves and less for everybody else. They DON'T WANT a population of citizens capable of critical thinking...that doesn't help them...that's against their interest.....THEY WANT OBEDIENT WORKERS....just smart enough to run the machines and do the paper work! Its a big club...and you & I are not in it!" George Carlin
"They Live" - Trailer & Movie!
 |
| Theatrical Release Poster |
From Wikepedia...
They Live is a 1988 science fiction/horror film directed by John Carpenter, who also wrote the screenplay under the pseudonym Frank Armitage (this is the name of one of the characters in the movie). Part science fiction horror and part dark comedy, the film echoed contemporary fears of a declining economy, within a culture of greed and conspicuous consumption common among Americans in the 1980s. In They Live, the ruling class within the moneyed elite are in fact aliens managing human social affairs through the use of a signal on top of the TV broadcast that is concealing their appearance and subliminal messages in mass media.
Watch a Trailer -
Carpenter is on record as attributing the film's initial commercial failure to result from an audience "[those] who go to the movies in vast numbers these days don't want to be enlightened". Fast forward to 2011, and you may realize that it applies even more so today!
If you prefer to be enlightened, watch the full length movie here -
(I want...) The Earth Plus 5% by Larry Hannigan
This video..."I want the Earth plus 5%" written by Larry Hannigan in 1971, explains how and why power is exercised over everyone through the money system. There's nothing wrong with the money system itself...its the present mathematically impossible system which gives power...
The sole purpose is to explain the simple maths of reality and the current Banking System – that is - 100 plus NOTHING does NOT equal 105 – and that charging interest on something that is created out of nothing, makes it impossible to repay, giving great power to those who do create money out of nothing - ie the Banks.
Money is NOT a commodity, it is a system of debit-credit bookkeeping - nothing more.
If you prefer to download a pdf file and read later, download here.
Larry Hannigan website LINK
Changing the Equation in STEM Education
Backed by 100 CEOs and the first American woman in space, President Barack Obama announced a new initiative on Thursday to pump up the mediocre U.S. performance in math and science.
Posted by on September 16, 2010 at 06:03 PM EDT
Today, President Obama announced the launch of Change the Equation, a CEO-led effort to dramatically improve education in science, technology, engineering, and math (STEM), as part of his “Educate to Innovate” campaign. Change the Equation is a non-profit organization dedicated to mobilizing the business community to improve the quality of STEM education in the United States.
The United States is falling behind our foreign competitors in STEM subjects. According to one, study American 15-year-olds ranked 21st in science and 25th in math compared to other countries. In his remarks to day, the President emphasized the importance of providing American students with a solid foundation in these subjects in order to compete in the global economy:
President Barack Obama speaks at the announcement of the "Change the Equation" initiative in the South Court Auditorium of the White House. The initiative seeks to improve science, technology, engineering and math (STEM) education to better prepare students to lead in the 21st century economy. September 16, 2010. (Official White House Photo by Pete Souza)
The President also emphasized the importance of the government working together with teachers, parents, students and businesses to achieve these goals
The audience, reflected in a window at left, listens as President Barack Obama speaks at the announcement of the "Change the Equation" initiative in the South Court Auditorium of the White House. The initiative seeks to improve science, technology, engineering and math (STEM) education to better prepare students to lead in the 21st century economy. September 16, 2010. (Official White House Photo by Pete Souza)
Posted by on September 16, 2010 at 06:03 PM EDT
Today, President Obama announced the launch of Change the Equation, a CEO-led effort to dramatically improve education in science, technology, engineering, and math (STEM), as part of his “Educate to Innovate” campaign. Change the Equation is a non-profit organization dedicated to mobilizing the business community to improve the quality of STEM education in the United States.
The United States is falling behind our foreign competitors in STEM subjects. According to one, study American 15-year-olds ranked 21st in science and 25th in math compared to other countries. In his remarks to day, the President emphasized the importance of providing American students with a solid foundation in these subjects in order to compete in the global economy:
We’re here for a simple reason: Everybody in this room understands that our nation’s success depends on strengthening America’s role as the world’s engine of discovery and innovation. And all the CEOs who are here today understand that their company’s future depends on their ability to harness the creativity and dynamism and insight of a new generation.
And that leadership tomorrow depends on how we educate our students today -- especially in science, technology, engineering and math.
We know how important this is for our health. It’s important for our security. It’s important for our environment. And we know how important it is for our economy. As I discussed this morning with my Export Council, our prosperity in a 21st century global marketplace depends on our ability to compete with nations around the world. And we are never going to win that competition by paying the lowest wages or simply by trying to offer the cheapest products. We’re going to win by offering the most innovative products. We’re going to win by doing what we do best, which is harnessing the talents and ingenuity of our people to lead the world in new industries. That’s how we can create millions of new jobs exporting more of our goods around the world.
President Barack Obama speaks at the announcement of the "Change the Equation" initiative in the South Court Auditorium of the White House. The initiative seeks to improve science, technology, engineering and math (STEM) education to better prepare students to lead in the 21st century economy. September 16, 2010. (Official White House Photo by Pete Souza)
What I’ve also said for a long time is that our success will not be attained by government alone. It depends on teachers and parents and students and the broader community. It depends on us restoring an insistence on excellence in our classrooms and from our children.
And that’s why last year I challenged scientists and business leaders to think of creative ways to engage young people in math and science. And now they are answering the call.
All across this country, companies and nonprofits are coming together to replicate successful science programs. New public/private partnerships are working to offer additional training to more than 100,000 teachers and to prepare more than 10,000 new teachers in the next five years.
Media companies are creating content to inspire young people in math and science. And businesses are working with nonprofits to launch robotics competitions and other ways for kids to make things and learn with their hands.
So now we’re building on this effort. The business leaders gathered in this room with this board at the helm are launching a new organization called “Change the Equation” to help our country reach the goal of moving to the top in math and science education. It brings together a coalition of more than a hundred CEOs from the nation’s largest companies who are committed to bring innovative math and science programs to at least a hundred high-need communities over the next year.
The audience, reflected in a window at left, listens as President Barack Obama speaks at the announcement of the "Change the Equation" initiative in the South Court Auditorium of the White House. The initiative seeks to improve science, technology, engineering and math (STEM) education to better prepare students to lead in the 21st century economy. September 16, 2010. (Official White House Photo by Pete Souza)
Its INDEED all about Money, honey!
What follows is a very entertaining, creative, and educational movie about the money system in Canada. Yes, it’s almost all applicable to the entire debt-backed money world, be it USA or INDIA. There are some editorials you may not agree with, but I think it’s worth your time overall. This is a good one to share with those who may not be familiar with the way money works – in other words nearly everyone!
Total running length is 1 hour and 36 minutes. You can view their homepage here: Oh Canada – The Movie
Here's a short sample:
This Link will take you to all the parts of the full video!
Total running length is 1 hour and 36 minutes. You can view their homepage here: Oh Canada – The Movie
Here's a short sample:
This Link will take you to all the parts of the full video!
The Foundation of Wealth
Reproduced here is an excellent piece from Nathan's Economic Edge blog....
The Foundation of Economics
I’ve been talking a lot to people lately about the rule of law and how important it is to the foundation of our economy. It is THE critical element, without it, no functional economy. You can have massive human and natural resources, but without the rule of law, you will not have capital formation and you will not have an economy that works.
The basis of a functioning economy is a rule not of man, but of nature. It is natural because man can attempt to manipulate or bypass the process, but man will lose every time they stray outside of the rules. The same rules win out every time they are tested, just like gravity. The basis of economies are ruled by the same rules of mathematics and of physics, it is bound and limited in its construct by both. Create a system that is not harmonious with those bounds and well… welcome to exponential math and the limits of the physical world.
Sometimes when what you’re doing isn’t working, it’s best to get back to the basics. Allow me to start with a most fundamental concept, one that many people are aware of but may not be able to verbalize real well. I call it BE – DO – HAVE. The concept is simple. In order to have, you must first BE, then DO… THEN you can HAVE. Take, for example, the lotto winner. They skip right over BE and DO and proceed straight to HAVE. This is what people are attempting to do every time they gamble, every time they buy that ticket at the 7-11.
And what happens to those lucky enough to win, do they hold onto their wealth? Of course not, they failed to first BE and then DO. Thus they do not HAVE for very long.
My point? The same thing is true for nations. This is the root of socialism and WHY it is not harmonious with nature. Sharing the wealth destroys work ethics, it undermines BE and DO. It is an attempt to HAVE from the efforts of others. I was in the Soviet Union at the height of the cold war, I saw the lack of work ethic first hand. I saw how it impeded the progression of mankind – it was like stepping back in time 50 years or more. Innovation? Forget it. Security? No way. Freedom? Hardly.
Of course Plutocracy, rule by the rich, is hardly efficient at advancing humankind either. That doesn’t work because it too eventually destroys work ethic, serfs and slaves forced to give away all their productive efforts will eventually give up.
A Dictatorship, Mr. Chavez, is also an attempt to proceed directly to HAVE while skipping over BE and DO. This is why dictatorships do not last; they too are not harmonious with nature.
So let’s take a look at the basis of a healthy and functioning economic system, one that is built upon a solid foundation.
Pyramid of national wealth:
Note that the first bricks of the foundation are built upon the rule of law. They are not built upon money and they are not built upon human or natural resources. The rule of law comes FIRST, without it the others are meaningless.
If you attempt to head straight to wealth, you are skipping over BE and DO. This is the current method, it is top down, not bottom up. This is why money printing fails, it is not real wealth, and it is the “solution” being offered. It is destined to fail in exactly the same way that the gambler is destined to die broke.
Think that our nation can just go straight to creating jobs? Never happen, will never work without first starting at the foundation and building your way up to it. Think you know the answer to job creation? Build this project, build that project? If you think that you can just fire up job creation, you are mistaken.
Large projects and infrastructure building, real wealth, cannot be stolen, it cannot be dictated. In order to create jobs, the rule of law must be in place, a system of exchange and way of providing capital must work, there must be human resources at the appropriate level, there must be natural resources available, and THEN you can HAVE jobs that build wealth.
THE RULE OF LAW:
The rule of law is necessary FIRST because without it capital will not be formed, it is not attracted, it will not concentrate. Would you give your money to Hugo Chavez as an “investment?” Would you lend your money to someone who is constantly changing the rules of the game? Would you put your money to work by giving it to a lazy person with no work ethic? Would you lend your money to someone who spends three times what they earn?
NO? Neither would I. Capital, you see, is free to come and go as it pleases, it is a part of nature and it cannot be contained, not in the long run.
Lawmakers skipping over and creating new procedures to pass healthcare? Is that the Rule of Law? Bailing out bankrupt companies, is that the Rule of Law? TARP, Quantitative Easing, Mark to Fantasy accounting, government buying of mortgage paper, are those the things that comprise the rule of law? Private individuals charging people interest to use their own money system, is that the Rule of Law?
These things are gouging huge holes in the foundation of our economy. They are causing capital to flee. This is a part of why so many do not have jobs, and why we are becoming less wealthy as a nation. It begins at the foundation. Who is responsible for maintaining the rule of law, the foundation? It is WE the People.
MONEY/ EXCHANGE SYSTEMS:
Money and exchange systems are necessary to provide working capital. Want to build a nuclear power plant? Where’s the capital coming from? Capital concentration is completely necessary to the advancement of human kind. A person and his capital can accomplish little things. Combine capital with several partners and you have the basis to accomplish something greater – the core of a simple partnership or business.
Want to send wooden sailing ships across the ocean without risking ALL your capital? Better have some limited liability, the foundation of corporations and the next level of capital formation that was necessary to advance humankind.
Want to accomplish something larger than is capable by a corporation? You will need capital that is directed and formed by government. That capital, however, will not last long if it is manufactured or not formed in accordance with the rule of law.
Let’s go back and visit the way in which capital is free. You may recall from the following diagram from my article Asset Classes and Capital Flow…
There are 5 principal asset classes:
1. Currencies – for capital to flow from one asset to another, it must first be exchanged for currency.
2. DEBT – Debt, because our money is backed by debt, it is as large an asset class as currency. Yes, debt, although likely a liability to you is an asset to someone else. An asset to someone, like say, the central bank who issues an instrument of debt when YOUR money is created.
3. Equities – Providing working capital for corporations is an essential process for capital formation. This is, in case you have forgotten, the reason that we have stock markets. No, they do not exist for the pleasure of market makers, quants, banks, or gamblers in derivatives.
4. Real Estate – Sections of the earth. Under our current rule of law, by the way, you don’t really own, you rent.
5. Commodities – Things of the earth.
It’s a fascinating study watching money pour from one asset class to another. The equity bubble in technology leading up to the year 2000… pop, into currency, into real estate… pop, into DEBT, pop… and now which asset class do you see capital flowing to?
New home construction lowest level on record. No, not there, keep looking. Meanwhile, with each cycle the DEBT piles higher, our money system adds on another three zeros. We are forgetting the basics, it’s time to head back to the fundamentals.
Link
The Foundation of Economics
I’ve been talking a lot to people lately about the rule of law and how important it is to the foundation of our economy. It is THE critical element, without it, no functional economy. You can have massive human and natural resources, but without the rule of law, you will not have capital formation and you will not have an economy that works.
The basis of a functioning economy is a rule not of man, but of nature. It is natural because man can attempt to manipulate or bypass the process, but man will lose every time they stray outside of the rules. The same rules win out every time they are tested, just like gravity. The basis of economies are ruled by the same rules of mathematics and of physics, it is bound and limited in its construct by both. Create a system that is not harmonious with those bounds and well… welcome to exponential math and the limits of the physical world.
Sometimes when what you’re doing isn’t working, it’s best to get back to the basics. Allow me to start with a most fundamental concept, one that many people are aware of but may not be able to verbalize real well. I call it BE – DO – HAVE. The concept is simple. In order to have, you must first BE, then DO… THEN you can HAVE. Take, for example, the lotto winner. They skip right over BE and DO and proceed straight to HAVE. This is what people are attempting to do every time they gamble, every time they buy that ticket at the 7-11.
And what happens to those lucky enough to win, do they hold onto their wealth? Of course not, they failed to first BE and then DO. Thus they do not HAVE for very long.
My point? The same thing is true for nations. This is the root of socialism and WHY it is not harmonious with nature. Sharing the wealth destroys work ethics, it undermines BE and DO. It is an attempt to HAVE from the efforts of others. I was in the Soviet Union at the height of the cold war, I saw the lack of work ethic first hand. I saw how it impeded the progression of mankind – it was like stepping back in time 50 years or more. Innovation? Forget it. Security? No way. Freedom? Hardly.
Of course Plutocracy, rule by the rich, is hardly efficient at advancing humankind either. That doesn’t work because it too eventually destroys work ethic, serfs and slaves forced to give away all their productive efforts will eventually give up.
A Dictatorship, Mr. Chavez, is also an attempt to proceed directly to HAVE while skipping over BE and DO. This is why dictatorships do not last; they too are not harmonious with nature.
So let’s take a look at the basis of a healthy and functioning economic system, one that is built upon a solid foundation.
Pyramid of national wealth:
If you attempt to head straight to wealth, you are skipping over BE and DO. This is the current method, it is top down, not bottom up. This is why money printing fails, it is not real wealth, and it is the “solution” being offered. It is destined to fail in exactly the same way that the gambler is destined to die broke.
Think that our nation can just go straight to creating jobs? Never happen, will never work without first starting at the foundation and building your way up to it. Think you know the answer to job creation? Build this project, build that project? If you think that you can just fire up job creation, you are mistaken.
Large projects and infrastructure building, real wealth, cannot be stolen, it cannot be dictated. In order to create jobs, the rule of law must be in place, a system of exchange and way of providing capital must work, there must be human resources at the appropriate level, there must be natural resources available, and THEN you can HAVE jobs that build wealth.
THE RULE OF LAW:
The rule of law is necessary FIRST because without it capital will not be formed, it is not attracted, it will not concentrate. Would you give your money to Hugo Chavez as an “investment?” Would you lend your money to someone who is constantly changing the rules of the game? Would you put your money to work by giving it to a lazy person with no work ethic? Would you lend your money to someone who spends three times what they earn?
NO? Neither would I. Capital, you see, is free to come and go as it pleases, it is a part of nature and it cannot be contained, not in the long run.
Lawmakers skipping over and creating new procedures to pass healthcare? Is that the Rule of Law? Bailing out bankrupt companies, is that the Rule of Law? TARP, Quantitative Easing, Mark to Fantasy accounting, government buying of mortgage paper, are those the things that comprise the rule of law? Private individuals charging people interest to use their own money system, is that the Rule of Law?
These things are gouging huge holes in the foundation of our economy. They are causing capital to flee. This is a part of why so many do not have jobs, and why we are becoming less wealthy as a nation. It begins at the foundation. Who is responsible for maintaining the rule of law, the foundation? It is WE the People.
MONEY/ EXCHANGE SYSTEMS:
Money and exchange systems are necessary to provide working capital. Want to build a nuclear power plant? Where’s the capital coming from? Capital concentration is completely necessary to the advancement of human kind. A person and his capital can accomplish little things. Combine capital with several partners and you have the basis to accomplish something greater – the core of a simple partnership or business.
Want to send wooden sailing ships across the ocean without risking ALL your capital? Better have some limited liability, the foundation of corporations and the next level of capital formation that was necessary to advance humankind.
Want to accomplish something larger than is capable by a corporation? You will need capital that is directed and formed by government. That capital, however, will not last long if it is manufactured or not formed in accordance with the rule of law.
Let’s go back and visit the way in which capital is free. You may recall from the following diagram from my article Asset Classes and Capital Flow…
There are 5 principal asset classes:
1. Currencies – for capital to flow from one asset to another, it must first be exchanged for currency.
2. DEBT – Debt, because our money is backed by debt, it is as large an asset class as currency. Yes, debt, although likely a liability to you is an asset to someone else. An asset to someone, like say, the central bank who issues an instrument of debt when YOUR money is created.
3. Equities – Providing working capital for corporations is an essential process for capital formation. This is, in case you have forgotten, the reason that we have stock markets. No, they do not exist for the pleasure of market makers, quants, banks, or gamblers in derivatives.
4. Real Estate – Sections of the earth. Under our current rule of law, by the way, you don’t really own, you rent.
5. Commodities – Things of the earth.
It’s a fascinating study watching money pour from one asset class to another. The equity bubble in technology leading up to the year 2000… pop, into currency, into real estate… pop, into DEBT, pop… and now which asset class do you see capital flowing to?
New home construction lowest level on record. No, not there, keep looking. Meanwhile, with each cycle the DEBT piles higher, our money system adds on another three zeros. We are forgetting the basics, it’s time to head back to the fundamentals.
Link
A note of appreciation from the rich!
Let's be honest: you'll never win the lottery.
As a result, you don't have the education, upbringing, connections, manners, appearance, and good taste to ever become one of us. In fact, you'd probably need a book the size of the yellow pages to list all the unfair advantages we have over you. That's why we're so relieved to know that you still continue to believe all those silly fairy tales about "justice" and "equal opportunity" in America and the world.
Of course, in a hierarchical social system like ours, there's never been much room at the top to begin with. Besides, it's already occupied by us — and we like it up here so much that we intend to keep it that way. But at least there's usually someone lower in the social hierarchy you can feel superior to and kick in the teeth once in a while. Even a lowly dishwasher can easily find some poor slob further down in the pecking order to sneer and spit at. So be thankful for migrant workers, prostitutes, and homeless street people.
Always remember that if everyone like you were economically secure and socially privileged like us, there would be no one left to fill all those boring, dangerous, low-paid jobs in our economy. And no one to fight our wars for us, or blindly follow orders in our totalitarian corporate institutions. And certainly no one to meekly go to their grave without having lived a full and creative life. So please, keep up the good work!
You also probably don't have the same greedy, compulsive drive to possess wealth, power, and prestige that we have. And even though you may sincerely want to change the way you live, you're also afraid of the very change you desire, thus keeping you and others like you in a nervous state of limbo. So you go through life mechanically playing your assigned social role, terrified what others would think should you ever dare to "break out of the mold."
Naturally, we try to play you off against each other whenever it suits our purposes: high-waged workers against low-waged, unionized against non-unionized, Black against White, male against female, American workers against Japanese against Mexican against.... We continually push your wages down by invoking "foreign competition," "the law of supply and demand," "national security," or "the bloated federal deficit." We throw you on the unemployed scrap heap if you step out of line or jeopardize our profits. And to give you an occasional break from the monotony of our daily economic blackmail, we allow you to participate in our stage-managed electoral shell games, better known to you ordinary folks as "elections." Happily, you haven't a clue as to what's really happening — instead, you blame "Aliens," "Tree-hugging Environmentalists," "Niggers," "Jews," Welfare Queens," and countless others for your troubled situation.
We're also very pleased that many of you still embrace the "work ethic," even though most jobs in our economy degrade the environment, undermine your physical and emotional health, and basically suck your one and only life right out of you. We obviously don't know much about work, but we're sure glad you do!
Of course, life could be different. Society could be intelligently organized to meet the real needs of the general population. You and others like you could collectively fight to free yourselves from our domination. But you don't know that. In fact, you can't even imagine that another way of life is possible. And that's probably the greatest, most significant achievement of our system — robbing you of your imagination, your creativity, your ability to think and act for yourself.
So we'd truly like to thank you from the bottom of our heartless hearts. Your loyal sacrifice makes possible our corrupt luxury; your work makes our system work. Thanks so much for "knowing your place" — without even knowing it!
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Found this at http://www.scroogle.org/. A neat search tool that overrides google ! Check it out.
Bubble # 6 unfolding !
Bubble #6: Global Warming
Fast-forward to today. It’s early June in Washington DC. Barack Obama, a popular young politician whose leading private campaign donor was an investment bank called Goldman Sachs – its employees paid some $981,000 to his campaign – sits in the White House. Having seamlessly navigated the political minefield of the bailout era, Goldman is once again back to its old business, scouting out loopholes in a new government-created market with the aid of a new set of alumni occupying key government jobs.
Gone are Hank Paulson and Neel Kashkari; in their place are Treasury chief of staff Mark Patterson and CFTC chief Gary Gensler, both former Goldmanites. (Gensler was the firm’s co-head of finance.) And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits – a booming trillion dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade.
The new carbon-credit market is a virtual repeat of the commodities-market casino that’s been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won’t even have to rig the game. It will be rigged in advance.
Here’s how it works: If the bill passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy “allocations” or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billion worth of carbon offsets will be auctioned in the first seventy years – one of his top economic aides speculates that the real number might be twice or even three times that amount.
The feature of this plan that has special appeal to speculators is that the “cap” on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand-new commodities market where the main commodity to be traded is guaranteed to rise in price overtime. The volume of this new market will be upwards of a trillion dollars annually; for comparison’s sake, the annual combined revenues of all electricity suppliers in the U.S. total $320 billion.
Goldman wants this bill. The plan is (1) to get in on the ground floor of paradigm shifting legislation, (2) make sure that they’re the profit-making slice of that paradigm and (3) make sure the slice is a big slice. Goldman started pushing hard for cap-and-trade long ago, but things really ramped up last year when the firm spent $3.5 million to lobby climate issues. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) Back in 2005, when Hank Paulson was chief of Goldman, he personally helped author the bank’s environmental policy, a document that contains some surprising elements for a firm that in all other areas has been consistently opposed to any sort of government regulation. Paulson’s report argued that “voluntary action alone cannot solve the climate-change problem”. A few years later, the bank’s carbon chief, Ken Newcombe, insisted that cap-and-trade alone won’t be enough to fix the climate problem and called for further public investments in research and development. Which is convenient, considering that Goldman made early investments in wind power (it bought a subsidiary called Horizon Wind Energy), renewable diesel (it is an investor in a firm called Changing World Technologies) and solar power (it partnered with BP Solar), exactly the kind of deals that will prosper if the government forces energy producers to use cleaner energy. As Paulson said at the time, “We’re not making those investments to lose money.”
The bank owns a 10 percent stake in the Chicago Climate Exchange, where the carbon credits will be traded. Moreover, Goldman owns a minority stake in Blue Source LLC, a Utah-based firm that sells carbon credits of the type that will be in great demand if the bill passes. Nobel Prize winner Al Gore, who is intimately involved with the planning of cap-and-trade, started up a company called Generation Investment Management with three former bigwigs from Goldman Sachs Asset Management, David Blood, Mark Ferguson and Peter Harris. Their business? Investing in carbon offsets. There’s also a $500 million Green Growth Fund set up by a Goldmanite to invest in green-tech … the list goes on and on. Goldman is ahead of the headlines again, just waiting for someone to make it rain in the right spot. Will this market be bigger than the energy-futures market?
“Oh, it’ll dwarf it,” says a former staffer on the House energy committee.
Well, you might say, who cares? If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Maybe but cap-and-trade, as envisioned by Goldman, is really just a carbon tax structured so that private interests collect the revenues. Instead of simply imposing a fixed government levy on carbon pollution and forcing unclean energy producers to pay for the mess they make, cap-and trade will allow a small tribe of greedy-as-hell Wall Street swine to turn yet another commodities market into a private tax-collection scheme. This is worse than the bailout: It allows the bank to seize taxpayer money before it’s even collected.
“If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedge fund director who spoke out against oil-futures speculation. “But we’re saying that Wall Street can set the tax, and Wall Street can collect the tax. That’s the last thing in the world I want. It’s just asinine.”
Cap-and-trade is going to happen. Or, if it doesn’t, something like it will. The moral is the same as for all the other bubbles that Goldman helped create, from 1929 to 2009. In almost every case, the very same bank that behaved recklessly for years, weighing down the system with toxic loans and predatory debt, and accomplishing nothing but massive bonuses for a few bosses, has been rewarded with mountains of virtually free money and government guarantees – while the actual victims in this mess, ordinary taxpayers, are the ones paying for it.
It’s not always easy to accept the reality of what we now routinely allow these people to get away with; there’s a kind of collective denial that kicks in when a country goes through what America has gone through lately, when a people lose as much prestige and status as we have in the past few years. You can’t really register the fact that you’re no longer a citizen of a thriving first-world democracy, that you’re no longer above getting robbed in broad daylight, because like an amputee, you can still sort of feel things that are no longer there.
But this is it. This is the world we live in now. And in this world, some of us have to play by the rules, while others get a note from the principal excusing them from homework till the end of time, plus 10 billion free dollars in a paper bag to buy lunch. It’s a gangster state, running on gangster economics, and even prices can’t be trusted anymore; there are hidden taxes in every buck you pay. And maybe we can’t stop it, but we should at least know where it’s all going.
Link
Hyperinflationary Depression
The day-to-day economic news can really mess with your head. The economic data is filtered through a lens that believes we can return to previous economic activity. We can not. Thus most commentary from F-TV will confuse you. Data stats that are observed through a lens from 1999, will not get you real economic information.
Therefore, let’s look at the big picture.
We are being set up for a hyperinflationary depression triggered by a world-wide fiat currency crisis.
Our current global economy that is built on debt and leverage must have large amounts of credit and liquidity just to maintain the status quo. Right now, the powers that be are sustaining the economy by printing money. In this environment investments are only as solvent as their ability to roll over their debt. There is too much debt in relation to the economic activity to sustain it.
More and more money must be printed. This money is sustaining what economic activity is already there, keeping it from imploding. It is not going into economic growth that will produce credit availability or liquidity for capital investment. Thus the economy is at a complete standstill, debt is deflating, credit is frozen, even while mounds of paper money are being injected into the world economy.
Soon, some of that printed money will make its way into prices for real things. Note that debt is deflating, not prices. (Prices are staying the same or inflating, depending on what it is.) Too much printed money will chase too little goods, since the economy is currently at a standstill not creating more goods.
When goods are too expensive to purchase, the economy will then implode again. This time, even if credit is available at a low-interest rate (which is highly questionable), the cost of real goods will make it too expensive to grow the economy.
This is the cycle of a hyperinflationary depression. Deflation in debt, then too much printed money to “fix” deflation, then too much money causing inflation (and at the rate we are printing) hyperinflation in prices. Thus a contraction in the economy or what we call a depression.
This is a catch-22 situation (caused by an imbalance between real economic growth and debt): death by fire (hyperinflation) or ice (deflation). The powers that be have chosen death by fire.
Hyperinflationary depression: deflation in debt (frozen credit) and inflation in prices that cause a contraction (of at least 25%) in economic activity.
Physical gold and silver are good investments because the price of “real things” (or a currency backed by real things) will go up in relation to the amount of printed money. Then the investor may sell those real things to get capital and purchase sound businesses to get the economy moving again. Only then, will we be able to grow the real economy and move out of a depressionary cycle.
There have been many hyper-inflationary depressions in history. The most recent was in Zimbabwe in the last decade. Germany had one during the 1920′s. And the United States experienced a hyper-inflationary depression during the period before and after the Civil War.
This is a cycle. Prepare for it, since you now know it is coming. Like all other hyper-inflationary depressions before, it will end.
I am 100% sure that the U.S. will go into hyperinflation. Not tomorrow, but the problem with the government debt growing so much is that when the time will come and the Fed should increase interest rates, they’ll be very reluctant to do so and so inflation will start to accelerate.
-Marc Faber, Bloomberg, May 2009
Rebuttal from Marshall Auerbuck here.
The inability to tax and dependency on foreign currency are central to hyperinflation or national solvency. Moreover, in Zimbabwe and Weimar, it was the trashing of productive supply that created inflation (think supply versus demand).
Groovygirl’s comments on the rebuttal quoted above.
Groovygirl would suggest that the lack of national productivity (i.e. all hard production moved to China/India/Mexico) is/will close that loop. In addition, a main difference between Zimbabwe and Germany and the US is that those countries started out with actual production. The US “produces” financial services and healthcare services. Those services will contract/disappear/move as the economy contracts. There is no production to lose, it’s already gone.
Tax revenue is already down. The government is setting up a scenario in this baby boomer majority where they pay people medicare, social security, and unemployment and those people just return a portion of that money in taxes. That is not real tax revenue. That is an inability to tax.
In addition, if the USdollar is not the global reserve currency (which it will not be at some point), US Treasuries in USDollars all of sudden turn into a foreign debt obligation problem.
Hyperinflation is coming.
