How Accountable To Your Wealth Are You?

"Only when the tide goes out do you discover who's been swimming naked."  - Warren Buffet

There has never been a better time to look at your finances then the present pandemic.

We've seen the market drop precipitously only to experience the best 50 day run in history.  Meanwhile, new unemployment numbers are in the millions and increasing each week.  The dichotomy of between what's happening on Wall Street and Main Street has arguably never been as stark as it is now. 

If you've been exposed in 2020 by a lack of liquidity (access to cash) and seen your overall net worth drop by greater than 15% in 30 day time frame, then now is the perfect time to rethink and reshape the foundation to your financial plan.  

There are critical elements this pandemic has exposed in the traditional financial model.  For the purpose of this article I'm going to focus on one area you probably give little thought to:

Your Savings Strategy

First...

What does your savings strategy look like?  

Do you save in a traditional bank?  Is your savings really an investment plan like a 401k?

These are important questions because whether you save your money in a bank or a government qualified retirement account, you've exposed your money to at least of 1 of the 3 main Wealth Destroyers that are eating away at your net worth.  

3 Wealth Destroyers

1. Risk:  Can you lose money?
2. Taxes:  How much of the growth do you keep?
3. Inflation:  Are you staying ahead of the invisible tax that reduces your purchasing power?

(There's also a 4th Wealth Destroyer which I'll get to in a moment)

Second...

Does your savings strategy make you more accountable, more efficient, and more profitable?

Let me ask you in a different way so you can better understanding of what I mean.  

How much value do you place on cash? 


For most people, the value is very low.  

If you pay cash for large items, you likely don't save money on a planned schedule.  You simply save what's necessary for your next big purchase or emergency.  This is important because not having a systemized plan means you place very little value on your saved dollars.

Think of it this way, when you borrow money from a traditional bank, you pay interest.  If you save money, you expect to earn interest.  Yet, when you use your saved dollars, you don't put any value on that money but this is a HUGE MISTAKE because of the opportunity cost of paying with cash from your traditional accounts.


Remember, you either pay or earn interest.  Paying with cash means you give up the ability to earn interest on that cash forever, and this is true even if you are great at replenishing your savings account!

You save up, spend, and start all over.  Rinse, Repeat.  It looks like this:

Let's now plug a high early cash value (Infinite Banking) Whole Life policy into the equation and see how it holds up to the 3 previously mentioned Wealth Destroyers.  

1. IBC Whole Life policies eliminate market risk,
2. IBC Whole Life policies remove the taxes on the growth, use, and transfer of those dollars,
3. Cash Values (and the future death benefit) are increasing at a pace that stays ahead of inflation,

and you have a Savings Strategy that incorporates an asset class that overcomes the 4th Wealth Destroyer:

The Constant Interruption of Growth

If you don't think this is important, ask yourself this:


How much money will pass through your checking/savings account in your lifetime never to be seen again? It's a large amount of money, am I right?!?  Wouldn't it make sense to allow that money to work for you all of your life rather than disappear forever?


When you use cash value to fund your lifestyle, pay for your kid's education, start or grow a business, or even prepare for retirement, you own an asset that you can use and re-use without interrupting the compounding curve of your saved dollars.

This is because cash values continue to grow on the full value even when there are loans taken.  You can't get uninterrupted growth with a traditonal bank account or 401k/IRA.

But to really make IBC work, you need to be accountable to your wealth!


A little discussed benefit to having an Infinite Banking Whole Life policy is how the use of this type of Savings Strategy makes you more accountable, efficient, and even more profitable than the traditional savings plan you currently use.  

People who don't understand how cash value life insurance works scoff at the notion of taking policy loans because they place little to no value on their saved dollars.  They don't know what they don't know...

Utilizing policy loans are critical to building your net worth because taking and repaying policy loans forces you to be accountable to your money, including when you use the cash values for investing.


On the point of using IBC for investing, my IBC Whole Life policies don't restrict me from making investments.  On the contrary, accessing the cash value via policy loans have made my investments more profitable by using leverage available in Whole Life policies to create two assets from the same dollar.


Here's the main point:

IBC forces you to replenish your wealth so that you never liquidate your savings without any intention of keeping it growing. 

If you are serious about accumulating wealth that can overcome all 4 Wealth Destroyers, it's imperative you evaluate your current savings strategy to be sure you setting the proper foundation for building wealth that can endure any financial storm.


And don't forget, just because a Whole Life policy is an unmanaged asset (it has guarantees and it can't lose money based on market whims), "practicing IBC" means you need to practice being accountable to the dollars you save!


Chances are you are already a good Saver.  You're just not saving in the best spot!

If you have questions about your current IBC plan or are looking to get started with IBC, you can connect with me here:  www.IBC.guru. 

Thank you,


John A. Montoya

Here’s Why You Should Only Work with an Infinite Banking Authorized Practitioner

When you need to prepare your taxes, you go to your tax professional.

When you set up your living trust, you go to an estate planning attorney.

When you want to buy or sell a property, you go to a real estate professional.

Foot issues?  See a podiatrist.  Is your baby is sick?  Go to a pediatrician.  Kitchen remodel?  Hire a contractor that specializes in kitchens.  And on and on we can go.

If this sounds like common sense, it’s because it is.  The point is we seek out specialists in their field when we have specific goals we want to accomplish.  It’s the best way to assure that we get what want-- the best advice from experienced professionals.

When it comes to the Infinite Banking strategy, there are specialists across the United States who have completed the necessary training and been approved by the Nelson Nash Institute to teach and implement the Infinite Banking strategy properly.  You can find an authorized practitioner here:  https://infinitebanking.org/finder/

Here is why you should only speak to an IBC Authorized Advisor:

Whole Life insurance is a financial product.  Infinite Banking is a financial strategy.

There’s no end to the amount of incomplete information about life insurance on the internet.  

There are many life insurance options and no one size fits all.  Anybody who tells you should only buy a certain type of life insurance product probably isn’t qualified to be giving advice in the first place or have a professional agenda to steer you to something only they can offer.

The best life insurance product is the one that accomplishes an individual’s goals and everybody’s situation and priorities are different.  If obtaining life insurance protection is your goal, you should work with a professional who can educate on the pro’s and con’s of all the different life insurance products available. 

Pretty simple.

Taking it a step further, if you are interested in learning more about Infinite Banking, it’s important to know Infinite Banking can be accomplished with different financial products but none as well as a participating Whole Life policy from a mutual life insurance company. 

Definition of product:  an article or substance that is manufactured or refined for sale.

Definition of strategy:  a plan of action or policy designed to achieve a major or overall aim.

If you want to incorporate Infinite Banking into your personal financial picture, then you want a strategy, not a product.  To that end, you want a specialist who knows the field better than the rest.

In working with an IBC authorized practitioner, you’ll be working with someone who practices the strategy and can speak about their personal experiences.  They should be able to tell you exactly how they’ve used the strategy to build wealth.  If they can’t do that, they have not fully implemented IBC. 

Furthermore, any advisor can speak about a Whole Life policy but most advisors don’t even own a Whole Life policy let alone practice Infinite Banking.  Owning and practicing Infinite Banking with a properly designed IBC Whole Life policy is a world of difference!

In addition to the specific Infinite Banking training they receive, all IBC authorized advisors must own their IBC designed policies in order to be certified practitioners by the Nelson Nash Institute. 

   

It’s worth mentioning that not all Whole Life policies are the same and certainly not up to the criteria needed to be used for Infinite Banking.

Example, people who buy final expense whole life policies technically have a whole life policy but this is far different policy from the type of whole life policy an IBC authorized advisor would use for Infinite Banking.  Final expenses have little to no cash value growth and no flexibility or collateral capacity to use for banking purposes.

Another example are Gerber baby policies.  These are technically Whole Life policies but they are non-participating policies which means they pay no dividends.  They also cannot be used for banking purposes. 

Switching gears, it pains me to say that there are advisors who advocate and teach Infinite Banking but are not Infinite Banking authorized advisors.  They have not been interviewed by the Nelson Nash Institute, passed the necessary curriculum and gone thru the mentoring program to be approved as an IBC authorized advisor.   They contribute nothing to the community of advisors who have committed to upholding the highest levels of integrity to the public who are asking for the Infinite Banking strategy.

All IBC authorized advisors take very seriously a code of ethics to structure and implement only the correct type of Whole Life policies for the Infinite Banking strategy.  It’s because advisors were using the Infinite Banking name and peddling different recommendations that Nelson Nash created what was first called the Infinite Banking Institute, later changed to the Nelson Nash Institute by the board of directors to honor Nelson and his legacy.

My advice:  work with an IBC authorized advisor who is trained and vetted versus those who fail to meet the requirements and can potentially put you at risk by recommending policies that are not right for the IBC strategy. 

If an advisor is promoting IBC but is not a verified advisor on the Nelson Nash Institute website, you should ask him/her why that is.   

Action Plan:  3 Steps

1.      Connect with an IBC authorized advisor.  Get a high level overview and learn the basics of the strategy.  If it makes sense logically, request a customized plan.

2.      Complete a financial analysis with your IBC authorized advisor.

3.      Schedule an online or in-person appointment to review your IBC recommendations.  If the plan makes sense for you, start the underwriting process to implement. 

John A. Montoya

www.IBC.guru

JLM Wealth Strategies, Inc.

IBC® Authorized Practitioner

CA Life#0C42222

 

IBC - Which is Better? Direct vs. Non-Direct Dividends ("YOU'RE MAJORING IN THE MINORS!")

Let's start by getting a couple things out of the way when it comes to dividends on a participating Whole Life policy:

1.  You have growing cash value (guaranteed interest and non-guaranteed dividends that become guaranteed once declared) when loans are taken.

2.  One option is not necessarily better than the other.  That said, someone trying to sell you a policy might try to persuade you otherwise for their own purpose (they might only work with one type of company).  

3.  Infinite Banking Authorized Practitioners are (or at least should have been trained to be) completely agnostic.  They shouldn't favor one over the other for reasons explained below.

What follows below is a deeper dive into the world of Whole Life dividends to help further your Infinite Banking (aka IBC) knowledge.  

-----

There are two types of dividends you can get in the Whole Life world. 

1. Direct Recognition Dividend
2. Non-Direct Recognition Dividend

From a marketing point of view, advisors will “sell” non-direct as the best option because dividends are unaffected by loans. 

However, this is a half-truth. 

There is no free lunch which we all know to be true in life.  Same lesson applies here with direct vs non-direct.  If a life insurance is paying the same dividend regardless of whether a person requests a loan, that means there is something else going on. 

Here is the other half for the full picture on non-direct dividends.  Life insurance companies that pay a non-direct dividend pay out lower dividends to everybody to offset the cost of borrowing from the general fund of the life insurance company for those who do take loans.   

Essentially, those who do not take policy loans are subsidizing those that do.

So the question becomes would you rather have the potential for the highest dividend you can get every year?  Or would you be happy with a lower but level dividend for all years?  With a direct recognition dividend, you have the highest potential for dividends without having to subsidize other people who may or may not take policy loans.  You still get declared dividends when loans are outstanding.   They are not taken away from you because you have a loan.  However, you will get a reduced portion of the dividend if a loan is taken.

Back in 2007 I emailed Nelson Nash, author and creator of Becoming Your Own Banker (the pioneer of IBC) and he surprised me by calling me out of the blue.  He was already well into his 70’s at that time.  I wasn’t expecting an email back let alone a phone call.  I had emailed him about direct vs. non-direct because I wanted to know which was better for my own situation before I started recommending a particular choice to my clients.

The first thing he said to me after introducing himself was to thank me for reading his book and for  helping him to spread his message about IBC by being a professional in the industry.  Then in his thick and sage Alabama accent which I recognized as Nelson’s right away even though we’d never spoken before (no introduction needed!), he said something I have never forgotten.

He said in that kind, old man Alabama drawl, “Now son, you’re majoring in the minors!”

What a thing to say!  If he didn't already have my utmost attention, he surely had it then.

Now you have to know Nelson had a certain way of teaching fundamental truths.  If you’ve read Becoming Your Own Banker (it’s worth re-reading from time to time), you know he uses analogies and euphemisms quite a bit to explain important points that should not be taken for granted.  

That's exactly what he did with me over the phone at 7:53am PST while I was packing my little ones into the car for a ride to their pre-school.  It instantly hit me what he was saying and has stuck with me ever since.

Direct vs. Non-direct ultimately doesn’t matter in the big picture of IBC.  

The whole point of Infinite Banking is to own and control a system of money that you are constantly directing your flow of money into so you can eliminate the middle man (traditional banks).  The freedom of control and use of money for any purpose while enjoying all the perks of an ultra-safe and ultra-liquid cashflow management system where you are guaranteed to have uninterrupted (tax-free even!) growth and access for life is the main point.  

Banks become super wealthy because they rob of us this freedom by fooling us into believing we need them.  We don't!  They are the middle man in the money game that seeks to control the flow of your money for their profit.  

He went on to explain to me that all I need to do is have “a good administrator (life insurance company) to handle administration and paperwork.”  The dividends will be there as they have been for 150+ years and counting. 

So to return to the discussion of direct vs non-direction and understanding the difference… while it may be good to know (especially if the only thing learned is a half-truth), it ultimately isn’t the reason why you choose to go with one life insurance company or another. 

Getting back to Nelson’s bigger picture, if a person is really doing IBC correctly, they are going to have multiple policies (with different companies – direct and non-direct dividends) over time which will eventually incorporate their total cashflow.   

It’s not an either/or proposition on which is better because you are going to receive dividends whether you have a loan outstanding or not.  It essentially comes down to: 

Are you okay subsidizing yourself and others who take loans (non-direct) and therefore take a reduced dividend for all years or obtain the highest potential dividend based on your own loan borrowing and repayment schedule… 

But as Nelson reminded me years ago: don’t lose sight of the bigger picture ("don’t major in the minors!").

Nelson instructed everyone to do 4 things to achieve Becoming Your Own Banker:

1. Think long-term.
2. Don’t be afraid to capitalize (open a policy and max-fund a properly designed Whole Life policy).
3. Don’t steal the peas (repay your loans at a “higher interest rate” – another euphemism meaning re-capitalize quickly so have capital for your next opportunity).
4. Stop working with the middle man (i.e. traditional banks).

If you have more questions you'd like answered about Infinite Banking, let me know!  You can find me at www.IBC.guru.

Thank you,

John A. Montoya

JLM Wealth Strategies, Inc.

Bank On Yourself® Authorized Advisor

IBC® Authorized Practitioner

CA Life#0C42222

Calendar: Schedule Now

Baby Boomers Reveal Their Deepest Financial Regrets

Two impact statements from this article:

"Worse yet is that I am college educated but still had no financial knowledge."

"Then the market tanked and I had no safe haven for my hard earned money."

Guess what two things I focus on in my practice... Truth is simple.


http://yhoo.it/121aiOT

 

What Have I Done? Baby Boomers Reveal Their Deepest Financial Regrets

yhoo.it

Over 50, underfunded, and ill-prepared for retirement. Unfortunately, that’s an all-too-common scenario for the Baby Boomer generation – those born between 1946 and 1964 -- many of whom are still smarting

Protecting Yourself From Confiscation

Via Robert Mish, from Steven Saville's  http://www.speculative-investor.com

Protecting yourself against government confiscation

Government confiscation of wealth can take many forms. Here are some examples:

1) Taxes, duties and royalties

2) Nationalisation of assets

3) The forced exchange of one asset for another of lesser value, such as the compulsory exchange of gold for dollars in the US in 1933 and pension funds in some countries being forced to invest in government debt.

4) The arbitrary impositions of laws and regulations that reduce the values of investments

5) Capital controls that prevent money from being transferred to a more desirable location, thus ensuring that the money remains available to the government for future harvesting via taxation or forced investment in government debt.

6) Licenses and fines

7) Price controls

8) Inflation

Specific and detailed tactics for protecting yourself against government confiscation are outside the scope of the TSI newsletter and largely outside our expertise (our specific tactical knowledge is mostly limited to our personal experience and would not be relevant to the majority of our readers), but in general terms it boils down to internationalising yourself and your assets.

Internationalising your assets involves spreading your wealth over multiple political regions, such that no single government can take an action that jeopardises your financial well-being. To be a little more specific, it makes sense to spread assets/investments between North America (the US and Canada), Asia (mainly Singapore and Hong Kong), the Asia-Pacific region (Australia and New Zealand), and parts of non-euro Europe (e.g., Switzerland and the UK). Some countries in Central and South America (Mexico, Panama and Chile being three examples) could also make suitable homes for a portion of your capital. The extent to which you spread your wealth geographically will, of course, depend on how much wealth you have. The more wealth you have, the greater your need for international diversification.

Internationalising yourself involves having at least two official travel documents and is of greatest importance if you are a US citizen, the reason being that if you only have a US passport then internationalising your assets will be far more difficult than it should be. This is because the actions of the US government have transformed US passport-holders into pariahs from the perspective of most financial institutions outside the US.

Confiscation via inflation is the one form of government theft that you can't effectively protect yourself against by internationalising your assets, because all major currencies are being inflated aggressively. With there being widespread commitment to the wrongheaded belief that a strong currency is a liability, this is unlikely to change in the foreseeable future.

There's No Point In Fixing A 401k Lemon (When There's Already A Better Alternative!)

I happened to read an article on Kiplinger.com today about overhauling the 401k.  I say "happened to" because it appeared on a friends Facebook timeline.  I wouldn't normally read mainstream drivel especially when coming from a Wall Street blowhard site like Kiplinger's but the title "Bold 401(k) Overhaul" caught my attention.  I knew I'd be disappointed and in that regard the article succeeded mightily.  The proposed ideas would only exacerbate the problem 401k's create in the first place. (By the way, I do offer a better alternative rather than just criticize the 401k to pieces.)  These problems are highlighted below by yours truly who felt compelled to reply to NickV's comment:


"Wow, so many negative comments on 401k's. I thank my lucky stars that my wife and I have them. We are middle class and at age 50, we have accumulated $2M so far. To all the people who think the game is rigged, good luck living on SS in your golden years."

My reply:

"I ran some numbers using a 401k calculator (on dinkytown.net) assuming you've contributed 20% of income starting at age 22 with a $70k salary increasing at 4%/yr. I also assumed your employer has been giving you a 50% match up to 6% of your contributions. You would need an annual (not average) rate of return 3.8% to reach $1m in your 401k after 28 years. Multiply that by 2 to equal $2m that you and your wife have accumulated. 

My point is that you've taken an absurd amount of market risk to earn a paltry 3.8% annual return after expenses. As you get older, you'll have to reduce your risk exposure even further which will lower your rate of return even further. You could have paid your income taxes upfront instead of postponing that tax bill for retirement and seen your after tax contributions achieve an internal rate of return closer to 5% without any market risk in a dividend paying whole life policy structured with at least 60% of premiums in Paid Up Additions. You would have also received lifetime death benefit protection for each of you, and no penalties or taxable consequences for using your money anytime along the way. 

People are steered toward 401k plans but they lock up your money, put it at risk, and force you to pay taxes on your distributions. Tell me how your 401k option is better than the plan I use that provides me with 100% use and control of my money, guaranteed growth, tax free use of my money including retirement income, protection for my family and I get it without any luck, skill, or guesswork needed with a 401k. 

The game is rigged Nick. You could have done a lot better without all the risk. Wall Street and Kiplinger's would hate to lose you as a client though which is probably why they'll keep feeding you the same lines about maxing 401k's, dollar cost averaging, buy term and invest the difference, you'll be in a lower tax bracket when you retire... all conventional wisdom that has burned millions of people who keep doing the same thing and expecting different results. By the way, you don't have $2m in your 401k. The IRS has probably around 25% or more claim on it assuming tax brackets don't rise (big assumption for a revenue starved government) and don't forget your state income taxes, too. I do sincerely wish you the best with your plan."

The goal of sharing my reply to NickV is to educate people about options since so many people believe a 401k plan is the only retirement plan available.  As an authorized advisor with Bank on Yourself, I can assure you there is at least one other solution you probably haven't heard of and no Wall Street advisor will ever share with you.

To learn more about how I help people move away from the roller coaster ride of a 401k retirement plan and teach them about Infinite Banking, please contact me at www.IBC.guru.

Thank you,

John Montoya

Taxes, Taxes & More Taxes

Tax his land,
Tax his bed,
Tax the table,
At which he's fed.

Tax his tractor,
Tax his mule,
Teach him taxes
Are the rule.

Tax his work,
Tax his pay,
He works for
peanuts anyway!

Tax his cow,
Tax his goat,
Tax his pants,
Tax his coat.

Tax his ties,
Tax his shirt,
Tax his work,
Tax his dirt.

Tax his tobacco,
Tax his drink,
Tax him if he
Tries to think.

Tax his cigars,
Tax his beers,
If he cries
Tax his tears.

Tax his car,
Tax his gas,
Find other ways
To tax his ass.

Tax all he has
Then let him know
That you won't be done
Till he has no dough.

When he screams and hollers;
Then tax him some more,
Tax him till
He's good and sore.

Then tax his coffin,
Tax his grave,
Tax the sod in
Which he's laid...

Put these words
Upon his tomb,
'Taxes drove me
to my doom...'

When he's gone,
Do not relax,
Its time to apply
The inheritance tax.
Accounts Receivable Tax
Building Permit Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Dog License Tax
Excise Taxes
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel Permit Tax
Gasoline Tax (currently 44.75 cents per gallon)
Gross Receipts Tax
Hunting License Tax
Inheritance Tax
Inventory Tax
IRS Interest Charges IRS Penalties (tax on top of tax)
Liquor Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Personal Property Tax
Property Tax
Real Estate Tax
Service Charge Tax
Social Security Tax
Road Usage Tax
Recreational Vehicle Tax
Sales Tax
School Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone Federal Excise Tax
Telephone Federal Universal Service Fee Tax
Telephone Federal, State and Local Surcharge Taxes
Telephone Minimum Usage Surcharge Tax
Telephone Recurring and Nonrecurring Charges Tax
Telephone State and Local Tax
Telephone Usage Charge Tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft Registration Tax
Well Permit Tax
Workers Compensation Tax

STILL THINK THIS IS FUNNY?
Not one of these taxes existed 100 years ago, & our nation was the most prosperous in the world. We had absolutely no national debt, had the largest middle class in the world, and Mom stayed home to raise the kids.

What in the heck happened? Can you spell 'politicians?'
I hope this goes around THE USA at least 545 times!!! YOU can help it get there!!!

GO AHEAD. . . BE AN AMERICAN!!!

SEND THIS TO EVERYONE YOU KNOW

Taxation is Theft

Lew Rockwell posted a great article from Judge Napolitano.  You can find the full article here: http://lewrockwell.com/napolitano/napolitano96.1.html

Everything he writes here is powerful and hits home with me and hopefully with you as well.  Here's my favorite part:

For 150 years, the federal government was run by user fees and sales of government land and assessments to the states for services rendered. It rejected the Hamiltonian view that the feds could take whatever they wanted, and it followed the Jeffersonian first principle that the only moral commercial exchanges are those that are fully voluntary.

This worked well until the progressives took over the government in the first decade of the 20th century. They persuaded enough Americans to cause their state legislatures to ratify the Sixteenth Amendment, which was designed to tax the rich and redistribute wealth. They promised the American public that the income tax would never exceed 3 percent of income and would only apply to the top 3 percent of earners. How wrong – or deceptive – they were.

Yet, the imposition of a federal income tax is more than just taking from those who work and earn and giving to those who don’t. And it is more than just a spigot to fill the federal trough. At its base, it is a terrifying presumption. It presumes that we don’t really own our property. It accepts the Marxist notion that the state owns all the property and the state permits us to keep and use whatever it needs us to have so we won’t riot in the streets. And then it steals and uses whatever it can politically get away with. Do you believe this?

There are only three ways to acquire wealth in a free society. The inheritance model occurs when someone gives you wealth. The economic model occurs when you trade a skill, a talent, an asset, knowledge, sweat, energy or creativity to a willing buyer. And the mafia model occurs when a guy with a gun says: "Give me your money or else." 

Which model does the government use? Why do we put up with this?

Rick Rule's Secret To Successful Resource Investing

"What's odd to me is that people elbow each other out of the way to crowd into a sector when the sector is expensive and frothy, and they leave in disgust when the sector evidences some value.

If you and I were walking one of the great shopping districts of the world... and on the left-hand side of the street there was a row of signs that said, "50% off," "70% off," "All goods marked down," "We got a business sale/moving away sale," and on the right-hand side of the street, there were little, discreet signs that said, "All goods marked up," "No discounts," "No sales," "No value to customers," of course we'd want to be walking the left side of the street.

Well, the left side of the street is what a bear market is. It's a bunch of goods on sale. And the idea that people avoid those sales and only pay attention to the market when goods are fully priced, is, I guess, one of the things that's caused me to be a success. Other people abdicate any chance they have to get ahead in this market. While I feel sorry for them, I'm delighted on my own behalf."

 If those aren't words of wisdom to hold on to, I'm not sure what would be. 

No Free Lunch

In the 1960s, Milton Friedman famously explained that "there's no such thing as a free lunch." If the government spends a dollar, that dollar has to come from producers and workers in the private economy. There is no magical "multiplier effect" by taking from productive Peter and giving to unproductive Paul. As obvious as that insight seems, it keeps being put to the test.

You can do that voluntarily by sending a check to the US Treasury and that would be fine and acceptable because it's your choice (freedom) alone. Unfortunately, that's not how the system of taxation operates. Everyone is forced to pay taxes or face fines, penalties, or jail time. There is no liberty in being coerced to pay taxes. 

Tax payers have no clue where the money we pay goes. Most of the money collected in taxes goes to pay the interest on the national debt. 40 cents of dollar the government spends is financed just adding to the national debt. 

There are two types of taxes: what you pay by threat of law and what is stolen from you in the form of inflation. Most of us are aware of direct taxation but clueless about the other silent tax. Government programs are financed by a broke govt borrowing endless paper money backed by tax slaves and in the end it just makes everybody just a bit more poorer although they just don't realize why.

Eventually, the world will wake up and the way it's turning out, I'm pretty sure the rest of the world will see first what Americans are too distracted to see.  Governments around the world are broke and they are coming after the money you and I have saved.  Cyprus is the latest example and those that say it can't happen here are in denial.  It's been happening here since 1913.  The government here, in partnership with the Federal Reserve, just aren't as obvious about it.  

Learn the difference between a hard default and a soft default.  By all appearances we are headed towards the latter which is why the public is so unaware.  On the surface, things seem fine but still waters run deep.

Advice from a Customer

Forwarded from Mish International:

well, boys and girls, Its not looking good for the home team.

other than--

 central banks are buying the most gold hand over fist in decades.

Russian and China buying gold by the ton. literally.  800 tons for the Chinese in 2012, as example.

the Fed creating 85 billion a month in new monies. officially.  the real number is unknown. or where the money is going. (ahem-euro banks).  for example if you recall in 2008, officially, the Fed gave the banks 850 billion. later we find out the real number was closer to 8 trillion. some say 15 trillion. see here: http://abcnews.go.com/blogs/business/2011/11/fed-gave-banks-trillions-in-bailout-bloomberg-reports/

no major bankster has gone to jail for crimes that have bankrupted the nation. or for money laundering for "terrorists" or drug cartels.  or for stealing money from allocated accounts.  ahem.... MFglobal.  I interpret this to mean that the banks are large and in charge, and will continue to do what is  best for the banksters.  regardless of the cost to the country. 

the currency wars are now in progress.....  see japan, for example. in its ongoing devaluation of the yen.

the monetary base in the US  has grown exponentially over the last few years. only the lack of velocity of money has kept inflation from showing its ugly head.

unless you count the rise in the cost of food, energy, and medical care. but if you can survive on cheaper computers alone, then there is no inflation.  (an let us not even discuss the manipulation of the CPI numbers.)

the Fed is locked into ever increasing money creation.  the paper currency  loses value in ever increasing percentages.

thus the fundamentals in favor of bullion  have not changed to any degree that I can see. 

in fact the case for precious metals as wealth storage without counterparty risk is stronger than ever.

thus this downside blow in the precious metals makes no sense in that light.

in the light that the west does not want a hyperbolic rise in the price of gold   and......

the East wants to buy gold at the lowest price.....................then this price bombing makes perfect sense.  (the Chinese jamming the market lower, no, say it aint so, joe)

however,  as the great Lord Keynes once said, markets can remain irrational longer than you can remain solvent.

all that said, I would use this price bombing as an opportunity  to buy more bullion.

Al.