The Cons of Debt Monetisation

Read the commentary from Steve Saville in full: http://www.321gold.com/editorials/saville/saville071712.html



"Even believing that under certain conditions the central bank does no harm (rather than does some good) when it creates new money requires disabling the part of the brain devoted to logic and common sense. Of course it does harm! Adding to the supply of money cannot possibly add to the total wealth in the economy, and yet some people get richer as a result of the monetary injection. If some people get richer while the total wealth is not increased, then other people must be made poorer and what we are dealing with is a forced transfer of wealth.
We now get to the essence of what central bank debt monetisation is: a means of transferring wealth from some people to other people."

I wish more people understood this!!

Are Precious Metals The Only Way To Go?

Will there be anything safe other than metals and art as the mess becomes further known?

I can’t comment on art as an asset class since I own nothing of value in that category.  Metals however can purchased by someone of any means.  That said, I regularly buy precious metals for physical possession and storage elsewhere.  I also advise my clients on doing so for at least a small portion of their overall assets.  Some will, some won’t.  There, however, is no arguing that silver and gold have maintained their purchasing power for thousands of years while currencies of every monarchy and government have been purposely diluted to the point of revolution and/or worthlessness.

Ultimately, nothing will preserve value like metals.  But there are two problems with owning metals.  First, knowing when to sell.  The only people who think they know have something to sell and at best, it’s only a guess.  Prices will fluctuate wildly, more so for silver, so it takes a strong stomach to ride the ups and downs of this very manipulated market.  Secondly, metals produces no income.  Regarding the 2^nd issue, I’ve found that the best way to purchase metals is through a Bank on Yourself policy.  This is because a policy loan, no matter how it is used, will continue to earn interest and dividends.  If used to buy metals, the full cash value of the policy continues to grow as if never touched.  It allows you to own and control two assets with the same dollar. A true win-win.

There is a monthly metals programs I utilize for small purchases each month that I’m happy with.  When I purchase in larger amounts for physical delivery, I use one of my policies to borrow from and payback.  I have no crystal ball on how long the government can continue to kick the can down the road.  It could be a few years, or it could be a couple decades.  I am certain, though, that 1) the dollar will continue to lose value (so I hedge my assets by purchasing metals) and 2) that there will always be need to control the flow of money (privatized banking aka the Infinite Banking Concept).  

Private contracts for money held domestically is a must because life insurance companies (compared to traditional banks and Wall Street) are the most financially solvent of all finance institutions.  Owning metals is also must in my opinion.  If you can combine both, you have the opportunity to ride the ups and downs of the metals market while knowing you’re continuing to earn interest and dividends on your gold/silver holdings.  If the dollar crashes hard, you’ll be able to pay back your policy loans with the proceeds of your heavily appreciated metals portfolio.  Think of it as insurance for your insurance. 

Eventually, my gut feeling is that the western financial system will fail, but banking won’t go away.  Money allows the exchange of goods and services and, ultimately, money must be warehoused somewhere. The process and business of banking will survive even as other businesses come and go because every business and household must decide where to keep their money.  My best advice, practice privatized banking and use the banking process to purchase metals with a portion of your money you want to protect against the loss of purchasing power. 

Worst case scenario, depending on how deep the dollar crash is, it’s not going to take a lot of precious metals to be instantly better off than most who don’t own even an ounce of silver and face the prospects of being completely wiped out.  Compare that to a household that perhaps has any % of their net worth in metals.  The household with any % of metals is infinitely wealthier compared to the household that has none.

Here's What's Wrong With Medicare in a Nutshell

This segment is from: http://www.dollarvigilante.com/blog/2012/7/3/american-medicalcare-its-terminal.html

 How can Americans justify lining up for Medicare while being against ObamaCare?

The most common response to this question?  "I paid for it.  I deserve it." 

The problem with that response?  It is wrong. Charles Hugh Smith summarized the numbers as follows: 

"Medicare tax is 2.9% of wages, 1.45% each for employer and employee. If the typical worker makes $30,000 a year for 35 years, then lifetime earnings are about $1 million. If we take the $40,000/year average, then that rises to around $1.4 million in lifetime earnings. The 2.9% Medicare tax thus totals about $30,000 to $40,000 in lifetime contributions for the average worker.  The average benefits extracted from the system run from $393,000 to $525,000 (due to the benefits extended to non-working spouses, benefits for never-married people may be somewhat lower). Average annual costs per beneficiary run as high as $18,000, though expenses typically rise significantly in the last year of life."

Medicare isn't insurance.  It is not something you fund with a willing counterpart taking the risk for a negotiated premium based on individual underwriting. Medicare is welfare, plain and simple.  It is a government transfer program.  Few receiving Medicare today paid enough to justify the government largess they are now receiving (or are hoping to receive). 

Medicare is nothing more or less than a contemporary bread line for the sick and is destined to hasten the bankruptcy, and ultimate default by the United States.

The Experts Get It Wrong Again

"Employees who work for companies with low fees and strong investment options — and who are fortunate enough to retire during or after a bull market — can do well in 401(k)s, experts say."

Quoting unnamed "experts" is another way the media pushes conventional wisdom and molds your financial behavior.  The 401k experiment has had over 30 years to get it right.  The so called "experts" are wrong.

WILL YOU BE FORTUNATE ENOUGH TO RETIRE DURING OR AFTER A BULL MARKET?  Fees matter but not as much as losing 20% or more of your nest egg at the wrong time!

Don't fall for the BS.  What you want are guarantees, safety nets, and free withdrawals anytime.  Wall Street cannot and does not provide them. 

If you have a 401k or IRA, let me know please.  The more options you have now, the more peace of mind you'll have later.  That's the truth no matter how you slice it.

You can reach me here:  www.IBC.guru


Thank you,


John Montoya

Term or Whole Life Insurance?

Most people I encounter who own life insurance typically only have term insurance. This is often because their friends and family have only ever had term insurance. So when faced with the choice of purchasing a permanent life insurance policy like a Whole Life insurance contract, people will struggle with the decision to do something that is unfamiliar to them.

To compound the difficulty in making such important and potentially a life or generational altering decision, most financial advisors and life insurance agents are not properly trained to structure a Whole Life contract the way the authorized advisors with Bank on Yourself are taught to do.

The conventional wisdom about Whole Life insurance is that it's unaffordable. This couldn't be when you  further from the truth!  It's only expensive if you work with an advisor or agent who doesn't understand the mechanics of how a Whole Life policy works and is unable or unwilling to properly design a policy for you!!

The big secret about a properly designed Whole Life policy is the application of special riders that reduce the cost of insurance and build cash value from the very first premium payment. These special riders allocate the majority of the total annual premium into the savings portion of the policy which puts the cash value growth on hyper-drive.

When the premiums dollars in a Whole Life contract are properly allocated, the commission an advisor receives is nearly 100% bypassed. In fact, an advisor or agent who utilizes these special riders goes from making up to 100% of the annual 1st year commission on the total premium to just 1.5% on the portion of premium allocated into these special riders. On a typical Bank on Yourself Whole Life contract, 50-70% of premium dollars are allocated towards these little known riders.

So if less premium is going to pay a commission on a Whole Life product, that means 50-70% of the premium is going to your cash value right away! Is it any wonder why advisors and agents fail to structure a Whole Life contract that best serves both your short and long term planning needs? Don't get too mad at them if you already a Whole Life policy though. It's very likely your advisor was never trained to structure a Whole Life policy the way Bank on Yourself certified advisors are trained to do so. Having been part of two very well known and respected insurance companies as a career agent, I can tell you firsthand, the financial planning community doesn't teach what I offer in my private practice. More on this below.

Another fallacy about Whole Life is that it has an investment component built into it. Whole life policies are NOT investments.  Whole life policies actually have a savings component, NOT an investment component. What's the difference? Saving accounts are engineered to protect and grow assets. They are never exposed to the risk of market loss. A whole life contract guarantees to grow the cash value each year. The only type of permanent life insurance with an investment component is a variable universal life policy which like any investment has the potential for both loss or gain. I would stay away from those.

By comparison, term insurance has no savings component. It is purely a death benefit policy that offers a fixed premium for a fixed "term". For individuals and families on a very tight budget, it is the optimal way to afford life insurance and the correct recommendation. For individuals and families who have more discretionary income to put toward savings, there is a better way to structure a life insurance portfolio by often combining both term and Whole Life insurance contracts.

Probably the most surprising fallacy is thinking a fee based and/or Certified Financial Planner will know how to structure a well thought out life insurance plan. While a fee based advisor is a good option in general, for specific life insurance purposes, I'd recommend an advisor who understands how to use single and level paid up addition riders on a whole life contract combined with term insurance to properly design an affordable and flexible life insurance portfolio. If they cannot sit down with you and show how your premium dollars are being allocated into the special riders I focus on, then they are not going to be able to explain the benefits these riders provide.

My experience with fee based or Certified Financial Planners I have interviewed is that they have never been taught to use paid-up-addition and term riders to make a whole life policy both affordable and flexible. They also have never been taught how to create a banking system utilizing Whole Life policies.

Having been thru the CFP curriculum with the American College the oversight in the coursework regarding life insurance planning is quite telling. A properly structured whole life contract not only provides an increasing permanent death benefit but an accessible, tax-favored savings account in the form of available cash values, too. This type of IBC designed Whole Life  is not the same type of policy that is commonly misunderstood and generically sold by the financial planning industry.

Bottom line, people will always stand to benefit from having a savings account and no widow or beneficiary will ever turn away an income tax-free transfer of wealth. If your budget has room to put away money for a rainy day and you would like to have that money work for you without exposing it to risk of loss and future taxes, it'll interest you to see how you can expand the life insurance protection you provide to your loved ones by using the same dollars you'd otherwise put in a bank at a lower rate of return, or possibly at risk of loss in the stock market.

For a private consultation, you contact me here:  www.IBC.guru.  And to answer the question at the top: Term or Whole Life? It can be a blend of both.

Thank you,

John Montoya