Tuesday, October 14, 2008

What is Happening In Our International Political Economy?

We are living through some very interesting days, particularly when it comes to the rapidly changing landscape of the international political economy.

For some pretty cool picks on what is happening in the International Political Economy, check out this link:


posted by Ruel Haymond of Project Liberty

Read more!

Monday, October 6, 2008

Are We Headed for another Great Depression?

Posted by Dean Morgan of Project Liberty

Some say we are, so at the end of this message I will discuss what you can do to prepare for it.

But first, what I am about to tell you may shock you. In short:

1. Government intervention made the Great Depression worse, not better. Depending on who’s elected President, the same could happen again.

2. Too much government intervention, not a lack of regulation, caused our crisis.

3. The government is to blame, not irresponsible borrowers or greedy executives.

4. California is next in line for a government bail out.

5. Things will get much worse because of a game of financial chicken.

While we aren’t anywhere near another Depression (25% unemployment then vs. 6% now), some experts say a Depression is actually possible, especially if government makes the same mistakes it made trying to fix the Great Depression which started in 1929. As a result, the stock market didn’t recover to it’s pre-Depression level until 1954!

***Government Regulation Made the Depression Worse, Not Better***

Contrary to the popular belief that President Roosevelt’s big government programs caused a recovery, the Depression actually lasted much longer than it should have because President Roosevelt raised taxes and many businesses had to shut down leading to more unemployment.

***Too Much Government Intervention CAUSED our Current Crisis!!***

Will the Government save us this time? Don’t count on it. You simply cannot legislate a recovery. In fact, while many are calling for more regulations, if history is any indication, government intervention is likely to make matters WORSE.

And more to the point, the current financial crisis was actually caused by TOO MUCH REGUATION, not a lack thereof like most people assume. Here’s why:

Most of you know that lots of bad mortgages owned by Freddie Mac and Fannie May and other banks and brokerage firms is why we have a credit crisis. But exactly WHO is to blame?

DON’T BLAME THE BORROWERS: Sure, people shouldn’t borrow beyond their means, but let’s be real. When someone hands people free money for a house, car and anything and everything else, people will simply take it! It’s human nature.

DON’T BLAME GREEDY WALL STREET EXECS: Yeah, sure they ARE greedy, but greed is an unavoidable in a capitalist society. Fear and greed drive free markets, and always will. The FBI is investigating some firms, and they might find a few instances of fraud, but the fact remains that if you allow people to make easy money without breaking the law, they will!

DO BLAME THE GOVERNMENT!!: Not only was what the wall street companies doing legal, but the government encouraged it! Even worse, some in congress prevented attempts by those who saw the writing on the wall to pull the reigns.

Yes, blame the Government, because well-intentioned politicians, starting with Bill Clinton who enacted some low income lending policies, FORCED Fannie & Freddie to increase their portfolios of sub prime debt to unprecedented levels so that poor people could own homes.

And to ensure banks were loaning to people who couldn’t afford to repay the loans, a liberal group called ACORN, funded by Congressional Democrats, went around suing banks that refused to make what they called “financially irresponsible” loans.

In 2004 the Bush administration sounded the alarm and proposed legislative changes to reel in Freddie and Fannie that were voted down strictly along party lines in the Congress. In 2005 Josh McCain made another attempt, but the reform never made it out of the Democratic controlled committee to the Senate floor for a vote.

To ensure these bills would never pass, Fannie and Freddie spent hundreds of millions of dollars on lobbyists to ensure they could keep loaning to everyone and anyone. Senator Chris Dodd (D) Chairman of the Senate Finance Committee received the most campaign contributions of anyone in Congress throughout his many years. Barak Obama is #2 on the donation list after only 3 years in the Senate.

Here you can watch a bunch of politicians in one party saying Fannie & Freddie are just fine, while others try to sound the alarm unsuccessfully: http://tinyurl.com/3nkrp7

So, in the name of “fairness”, bad loans were made to people who couldn’t afford them, and the institutions doing the lending “kicked back” money to the politicians who protected them.

You see, it wasn’t a lack of regulation, but government interference in the private market FORCING banks to make bad business decisions that caused this mess.

***California may be Next in the Government Bailout***

Because of the current credit crisis, the State can’t get the loans it needs until tax time. The Governor has sent a letter to US Treasury Secretary Paulson stating that if things don’t improve by the end of the month, the State will need $7 Billion. 15 other states are in the same situation!

***Chicken or Egg? A Nasty Game of Chicken***

Banks are simply unwilling to lend until home prices start to rise. But it’s the availability of credit and loans that cause home prices to rise and fall! So banks and the housing market are playing a nasty game of chicken. And there’s a lot more properties in foreclosure that will get dumped on the market adding to the current supply, with few who can get loans to buy them, even if they qualify.

Unfortunately, the “bail out” bill won’t spark a recovery. It’s simply a plug in a leaking dyke. Even worse, some experts say 1 in 8 jobs are related to housing. Plus people aren’t spending, either because they won’t or they can’t. A new report says 1 in 5 car dealerships are about to fail.

***Prepare Yourself***

So what can you do? First, ensure you have reliable sources of income. Since anyone who has a job is susceptible to a layoff, ensure you have other methods for making money. In a down economy most people get hosed. Only a few prosper.

If you want to prosper too, determine who they are and do what they do!

In that regard, SOCALCIA has scheduled 2 of the most successful money makers in SoCal to speak: Jeff Adams and Bruce Norris. Jeff Adams will be our keynote speaker at this Thursday Oct 9, and Bruce Norris is coming November 20. Learn more at www.socalcia.com

Any other comments related to preparing yourself? Read more!

Wednesday, October 1, 2008

Should Investors Use Gold as Hedge During Times of Financial Uncertainty?

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

Yesterday when the House of Representatives voted down the financial bailout package,
the Dow Industrial experienced its biggest one-day drop in the Index's 102-year history falling 777.68 points.

And there still is no financial plan in place to help revive the economy.

Historically during times of financial uncertainty, investors have turned to Gold as a hedge. This is because gold is the type of investment that is always an asset. (not simultaneously someone else’s liability).

"Investors are leaning toward it as a hedge against what could happen next,” says Carlos Sanchez, a precious-metals analyst with CPM Group.

But, according to the author of an article I found at www.InflationData.com , Gold is actually a “crisis hedge’ not an “inflation hedge.”

During times of crisis, governments tend to lose control over the price of Gold. However, during more peaceful times, governments are able to keep a ceiling on the price of Gold. This causes Gold to move up in a “stair step” manner.

The author of this article at inflationdata.com also says that gold as an inflation hedge has “a very spotty record.”

But is Gold is a bad investment now? Of course not. However, I do tend to agree with the author’s notion about why the price of gold has not done well over the last twenty years. (See image: price of gold over last 20 years).

The author infers that Governments have historically been known to buy and sell Gold on a whim to create an a sort of “illusion of stability.” The low volume of the gold market compared with say the stock market also lends to it being seemingly easily manipulated by governments.

Most investors in my circle don’t know that, up until about five years ago, it was illegal to invest in gold in China. When that market opened up, obviously there was an increase in worldwide demand for gold when China was free to buy Gold. (See image: price of gold over last 8 years) By 2006, the Shanghai Gold Exchange had become the world’s largest trading exchange for gold bullion with its trading volume well ahead of London, New York, and Hong Kong! Now that’s an incredible fact to ponder on when looking at the price of gold.

But if not Gold as an effective inflation hedge then what are some other inflation hedges?

Commodities ?

Price Inflation is defined as the increase in the costs of various commodities. (Although it is also caused by an increase in the money supply). The idea is that, by investing in various commodities, you should be able to at least break even. What commodities have historically done well in times of inflation? Oil. And oil is also a primary component of the increase in the consumer price index. Also, think about the fact that China is also increasing the global demand for oil along with gold. China will also increase demand for other precious metals. And what about world demand for food and what that will do to its prices? Yippee.

 *Inflation indexed bonds ?

Yes, there is such a thing .These bonds have an inflation adjustment characteristic. But they are not adjusted according to the “actual” inflation rate of course.

Any other suggestions for inflation hedges besides the ones I’ve mentioned in this post? Or any thoughts on utilizing gold as an inflation hedge? Read more!

Thursday, September 18, 2008

Gold Recorded its Biggest One-Day Gain in Nine Years

Is this the start of a new bull market in gold?
The price of gold soared 9 per cent in one session to end the Wednesday trading session at $US850.50 an ounce. This percentage gain was the most in one session since September of 1999.
BGF Equities analyst Warwick Grigor said, “A large move in gold overnight is a signal that times are changing. It is not an intra-market movement — it is more fundamental.” He also said, “This could be the start of a new bull market in gold.”
But why has the price of gold being going down in the last few weeks? One reason is that hedge funds have been getting rid of their gold to raise cash to pay brokers who had lent them money to make investments. However, this was slightly offset by the Fannie Mae/Freddie Mac bailout that actually pushed gold prices up.
Analysts think the price of gold will continue to rise in the next few months. What do you think and why?
Read more!

Wednesday, September 17, 2008

AIG´s $1 Trillion Bankruptcy Would Be World´s Largest Ever

The Fed Comes to the Rescue Again!!
AIG's troubles, similar to its Wall Street peers, stem from guarantees it wrote on mortgage-linked derivatives that have left it with a total of $18 billion in losses over the past three quarters as well as its stock price having fallen more than 91% so far this year.
As of yesterday, the Fed has agreed to loan AIG some $85 billion for a 79.9% stake in the company. Whew! Now that’s what I call a rescue! Get those printing presses running! They say that the loan will be repaid with the sale of AIG assets and not with taxpayers dollars. I don’t agree with this. I tend to think that the taxpayers will just continue to pay for the greed and mismanagement of assets that these companies have been running on for years.
Any thoughts on this?
Read more!

Monday, September 15, 2008

Want to Save Money in Taxes This Year?

Tax Deductions That May Surprise You
This post on savingtoinvest.com I passed on to friends as there were some items in there that I was unaware of. Particularly being able to deduct my mortgage insurance premium. I just purchased a house and got an FHA loan so my mortgage insurance is through the roof! Its good to know that I can deduct this. Also, deducting start-up costs for a business is something that a lot people tend to overlook, particularly when they are so wrapped up in getting their businesses going.
A lot of CPAs will not go out of their way to suggest creative deductions, they will just do what you tell them to do. This is why its good to know all of these types of tax loopholes when getting all of your tax stuff ready to hand in to your accountant at the end of the year, or whenever you do your taxes. By the way, one of the biggest tax loopholes of the rich that I had no idea about is called ‘Cost Segregation.’ I did a post about it last month on this blog. Here’s a link to it if you’d like to know more: http://thinktankinvesting.com/how-do-companies-like-trump-realty-and-wal-mart-save-millions-of-dollars-on-taxes/
Any other tax deductions that you’d like to enlighten us about? Please share!
Read more!

Friday, September 12, 2008

Bad Business Decision For Apple?

Apple Extends Exclusive Agreement With AT & T

I found this article on localtechwire.com and decided to blog on it because I have been thinking a little about this. I have been wondering why Apple would choose to go exclusive with one carrier in the first place. Any thoughts on why Apple would make this business move given the high demand for the phones? From the article came a few thoughts I agree with (see below).
"If Apple made the iPhone available for AT&T, T-Mobile, and Verizon users, can you imagine the selling frenzy? The company would be at the center of one of the most monumental days in the history of technology. If the iPhone 3G can sell this well on one carrier, I can't imagine how well it would sell on the top three."

”While I don’t think Apple has little faith in its product, I do think this is a poor decision. The iPhone has a chance to become not only the dominant smartphone for the coming years, but also the first real powerhouse in mobile computing. By limiting the device to one carrier, it limits its potential to reach such goals.”
Any other thoughts on this?

Read more!

Wednesday, September 10, 2008

6 Deadly Investing Mistakes

6 Deadly Investing Mistakes

Comments on article by William Lynott found at bankrate.com

Source: http://www.bankrate.com/brm/news/investing/20080822_6_investing_mistakes_a1.asp

Given that this article is coming from Bankrate.com I take a lot of things in there with a grain of salt. “Bill, I want you to create a piece called 6 deadly investment mistakes…yea yea, I’m likin’ the sound of that..”

Its definitely skewed like so many things on the Internet, including blog posts but it drew me in nonetheless.

Under mistake #1, I completely agree with Bill here but I always get a laugh from comments like that from Lisa Feathergill. She sounds like a typical stockbroker, "Remember, you haven't lost money until you actually sell the security. I know a guy who followed this advice and watched his million dollars in stock turn into zero dollars in a very short amount of time. Ouch!!

I agree with Mistake #3 that savvy investors make more money during downturns in the economy, however I’m having trouble with his stock pushing again. In my humble opinion, unless you are lucky, stocks wont’ make you rich Bill. Any comments on this?

I wholeheartedly agree with Mistake #6, Abandoning your investment strategy. Bill’s right. Whatever you decide to invest in, stocks, bonds, real estate, gold or silver…stick to the plan.

I think the worst thing any investor can do is react to the whims of the media about the investment environment, from wherever you are looking. Bill wrote, and I agree, “If the headlines are full of it and everyone else is doing it, you're probably too late.”

Does anyone have any other comments or thoughts on these 6 deadly investing mistakes? I’d love to hear from you. Read more!

Sunday, September 7, 2008

Why Proper Estate Planning Is So Important

I Already Have a Will, What Else Do I Need?

Many people are proud to say they have a Will already set up, but why is this not sufficient for estate planning?

Contrary to what most people believe, a Will doesn’t avoid probate, in fact, it guarantees probate. A Will must be verified by the probate court before it can be enforced. Another problem with a Will is that it can only go into effect after you die. But what if you become physically or mentally incapacitated?

What is probate? Probate is a court process required when you die to assure debts are paid and assets are distributed according to your Will. Assets are frozen during this process, and in California it can take from 6 months to 2 years! If you own property in more than one state, there may be a probate in each state. You must also pay probate fees to an attorney/executor in the amount of 5% of the gross value of your estate! Another problem with going into probate is that, during the probate period, the public is able to see what you owned and who your creditors were etc.

A Living Trust is similar to a Will in that it includes the instructions for what you want to happen with your assets when you die. But unlike a Will, a Living Trust avoids probate at death, and also prevents the court from controlling assets at incapacity. A trust simply transfers assets from your name to the name of your trust, which you control. The trust then owns your assets and you designate a back up trustee to handle your trust (according to your instructions). Upon your death, since your assets are “owned” by the Trust, there is nothing to probate.

Here are a few of the advantages of using the Living Trust over the Will:

    * Avoids probate at death
    * Avoids multiple probates if you own property in more than one state
    * Prevents court control of assets at incapacity
    * Provides maximum privacy
    * Allows quick distribution of assets
    *Assets can remain in Trust until beneficiaries reach the age(s) you want them to inherit
    * Can reduce or eliminate estate taxes
    * Can be changed or cancelled at any time
    * Difficult to contest
    *Can protect dependents with special needs

But one question I have is: what if I’m single with no children? Would it still be better for me to use a Revocable Living Trust instead of a Will?

Read more!

Thursday, September 4, 2008

Oil: How low can it go?

Oil: How low can it go?

Article found on CNN Money

With the little bit of relief that we’ve all experienced at the pump, it is easy for people to lose sight of the fact that six months ago we all would have thought that $3.75 was high. (at about $108 a barrel, the price of oil is around 50% higher than it was a year ago). Referring to this recent CNN Money article, although the article is extremely pessimistic, I do agree with the Resler’s insight about the proliferating effects of the higher prices on the consumer mindset, “even if they (oil prices) continue to fall, consumers may be wary for the next few months.”

Any thoughts or comments on this?

http://money.cnn.com/2008/09/03/markets/thebuzz/index.htm?postversion=2008090311 Read more!

Tuesday, September 2, 2008

Make a Comeback in a Stalled Job Search

Source http://lifehacker.com/5043382/make-a-comeback-in-a-stalled-job-search

Most business people are completely out of tune with this new phenomena of social media and really…how many business executives have time to regularly post on blogs or create a Facebook profile? Although its obvious to see how a blog in conjunction with a good resume is a must for tech professional on the job search, I also think that a blog is a good addition to a business executive’s job search. A blog is a great snapshot of a business executive’s projects, business ventures, and other accomplishments and interests. But who has time to create a mind blowing resume, much less a mind blowing blog? I found a professional blogger who created a blog for me relatively inexpensively and so far it has been an excellent accompaniment to my resume. But…I don’t know if it would actually help, “make a comeback in a stalled job search,” as the post on lifehacker.com indicates. If you are serious about a blog, use a professional blogger (person who blogs !) that has experience creating blogs. Particularly if you are considering a blog or forum for your business, there is a ton of research and traffic driving stuff that goes into it so leave it to pro bloggers.

Posted by Corey Read more!

Why Generation Y is broke


This article on MSN Money really caught my eye. The article said that “…some 85% of those aged 25 and older hold a high school diploma, and 27% have a college degree, and is of course, the most technologically sophisticated to date…”

But this same generation has zero financial literacy. Most twenty-somethings can barely manage their own personal finances much less knowing what a balance sheet and/or income statement is. And with the introduction of so many new financial products, young people are even more doomed in this new financial landscape. Should financial literacy be taught in schools so that we don’t raise another generation on debt? Any comments? Read more!

Friday, August 29, 2008

10 Things Millionaires Won't Tell You

Source: http://www.smartmoney.com/10things/index.cfm?story=september2008-10-things-millionaires-will-not-tell-you
1. "You may think I'm rich, but I don't." While $1 million was a tidy sum three decades ago, you'd need $3.6 million for the same purchasing power today. So what does it take to feel truly rich? The magic number is $23 million, according to Fidelity.

2. "I shop at Wal-Mart..."

3.    "...but I didn't get rich by skimping on lattes." So how do you join the millionaires' club? You could buy stocks or real estate, play the slots in Vegas — or take the most common path: running your own business. That's how half of all millionaires made their money, according to the AmEx/Harrison survey. About a third had a professional practice or worked in the corporate world; only 3 percent inherited their wealth.

4.  "I have a concierge for everything.

5. "You don't get rich by being nice."

6. "Taxes are for little people."
The wealthy tend to derive a higher portion of their income from dividends and capital gains, which are taxed at lower rates than wages (15 percent for long-term capital gains versus 25 percent for middle-class wages). Also, high-income earners pay Social Security tax only on their first $97,500 of income.
But the big savings come from owning a business and deducting everything related to it.

7. "I was a B student."
According to the book "The Millionaire Mind," the median college grade point average for millionaires is 2.9, and the average SAT score is 1190 — hardly Harvard material.

8. "Like my Ferrari? It's a rental."
Why spend $3,000 on a Versace bag that'll be out of style as soon as next season when you can rent it for $175 a month? For that matter, why blow $250,000 on a Ferrari when for $25,000 it can be yours for a few weekends a year?

9. "Turns out money can buy happiness."
It may not be comforting to folks who aren't minting cash, but the rich really are different. "There's no group in America that's happier than the wealthy," says Taylor, of the Harrison Group. Roughly 70 percent of millionaires say that money"created" more happiness for them, he notes. "People experience their day very differently when they have a lot of money," Stevenson says.

10. "You worry about the Joneses — I worry about keeping up with the Trumps."
"Millionaires are always looking up," says Schiff, "and think it's better up there."
Posted by Corey of Project Liberty
Read more!

Thursday, August 28, 2008

How Do Companies Like Trump Realty and Wal-Mart Save Millions of Dollars on Taxes?

Loopholes of the Rich: What is Cost Segregation?
Steve Ruf and Darrell Weaver of Cost Segregation Authority joined us for a Master Mind last night to talk about how to enjoy enormous tax savings on your commercial properties.
Cost Segregation is a way to increase/accelerate depreciation and maximize tax deductions on commercial property. By performing a study, whereas they do a reclassification of assets to increase cash flow and maximize tax deduction, investors can enjoy benefits that are unknown to most investors.
Cost segregation is now approx.10 yrs old. How did cost segregation get into the main stream? The IRS put conditions on it to control how it is used. Surprise, surprise! Large real estate companies use this method, such as Trump Realty and the Bellagio. Small producers are usually not familiar with cost segregation. Darrell Weaver adds that it is essentially a “tool of the rich.”
Please add your two cents on cost segregation if you have some cents…!
Contact info for Darrell Weaver: dweaver@costsegauthority.com
Posted by Corey of Project Liberty
Read more!

Wednesday, August 27, 2008

As gas prices go down, so will food, right? No.

Consumers hoping for easing of supercharged inflation likely won’t see it

Corn and soybeans have dropped 24 percent and 17 percent, respectively, in the last two months but food prices have continued to go through the roof. If commodity prices have dropped, why are food costs still going up? This article says that retail prices for cereal, eggs, cheese and meat generally lag by several months or longer. With commodity prices being so high this past year, its no wonder that retail food prices in the U.S. have jumped on average 6 percent this year — triple the normal inflation rate of around 2 percent.

I thought it was just a rumor that food manufacturers have done such things as “shrinking boxes of cereal and bags of potato chips so they can sell less product for the same price.” The article also mentions a factor that is keeping food prices high: Although commodities prices have gone down, they're still well above historical levels. Corn and soybeans have dropped 24 percent and 17 percent, respectively, in the last two months but are still about double where they were two years ago.

Any comments on this supercharged inflation or what the future holds in regard to food prices?

Posted by Corey of Project Liberty

Read more!

Tuesday, August 26, 2008

Why is Florida gas cheaper??

My father in law has a home in St. Lucie Florida. I asked him yesterday what was the price of gas? $ 3.68 per gal. What’s up with that? How in the name of cents, can I be paying $3.98 up here in Kaysville, even up to $4.03. Any one out there have any ideas? A limo driver told me that us here in Utah should be getting gas cheaper, because is comes from Wyoming, and that Florida gas comes from over in Saudi or some where. I don’t know if this is true or not, but if it is, that’s pretty bad that, oil from Saudi is cheaper than our own right under our feet!

Back home in the Bahamas 3 weeks ago, gas was $6.27 per gallon and diesel was $6.72, lets hope it don’t reach that much here, it’ll be a whole lota people peddling to work.
Dino Read more!

Friday, August 22, 2008

What Is the Tytler Cycle? Where Is the United States In This Cycle?

What is the   What is the Tytler Cycle ?

Alexander Tytler, a Scottish historian who lived at the same time as the American Founding Fathers, who described a repeating cycle in history. He had found that societies went through this same cycle again and again, and that the cycle lasted roughly 200 years each time. Tytler said the cycle starts out with a society in bondage. Then it goes in this sequence:

Spiritual Faith
Then starting over with Bondage

Tytler organized these items in a circle:

So to give a little more on the sequence above, a society starts out in bondage, meaning no or very limited freedoms. Now faced with a very difficult situation (bondage), they turn to religion and religious faith. Through this they achieve the courage they need to fight for and win their freedom. Next, through the benefits of freedom, they achieve an abundance in material things.

Now we start into the other side of the circle/cycle. We get selfishness and laziness setting in. Then we get apathy and finally dependence. Then we arrive back up at the top with bondage again.
Most of Tytler's work has been completely lost. I found this cycle to be very interesting in relation to where we are in the United States today. Everyone has said we are somewhere on the left side of the circle. I think we are somewhere between Apathy and Dependence. Any opinions on this? Comments?

Posted by Corey of Project Liberty

Read more!

Thursday, August 21, 2008

Is Now a Good Time To Do Some Real Estate Investing Overseas?

What should you look for in an overseas property investment? Now that investing in property in our economy has become a risky venture in itself, maybe it’s time to look overseas. I’ve heard that it is a drawn out process (also mentioned in the article) and don’t know if it is worth the hassle. Does anyone have any thoughts or is currently contemplating investing overseas?

http://www.realestateweblog.org/due-diligence-and-overseas-property-investment.php Read more!

Wednesday, August 20, 2008

Nouriel Roubini, Economics Professor, Announced Our Current Crisis Before it Happened and Lost His Job Because of it

People are finally paying attention to Nouriel Roubini’s thoughts on the future state of our economy. After being dismissed two years ago after envisioning the events that have caused this recession , economics professor Nouriel Roubini is being taken more seriously this time around. While others are announcing we have seen the worst of these problems, Roubini disagrees. (Quote in article: “We have a sub prime financial system,” he said, “not a sub prime mortgage market.”) But what does this mean? Any thoughts or answers to this question?

http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?_r=2&pagewanted=all&oref=slogin&oref=slogin Read more!

Results From Simulated Options Trade From Last Month

For anyone that did a simulated option trade as we discussed at last month’s Stock & Options Trading Symposium, here are the results:

SLB closed at 91.41 on Friday Aug 15th, which was the options expiration day. Right at the bottom of the trading range. Therefore, both legs of the options strangle that we entered, closed OTM and both legs of the option trade closed profitable… ie… you would have made $2050 on a $5k investment in one month!!

Posted by Cary Valerio of Project Liberty Read more!

Thursday, August 14, 2008

Slight Reprieve in Oil Prices Won’t Last Long

I observed an interview of Robert Kiyosaki this week in regards to oil/fuel prices and the long term forecast. Kiyosaki claims that the primary reason for our current oil price situation is the devaluation of the dollar. Oil is purchased in dollars and as the United States continues to print more dollars the value declines which directly results in escalating oil prices. There are obviously other factors that cause the price of oil to rise including demand and oil speculators, however, the primary culprit is the declining value of the dollar. Kiyosaki also says to enjoy the slight reprieve we've observed over the past couple of weeks because in the long term, if the dollar continues to decline in value, we can expect to see gas prices well over $6.00 or $7.00 a gallon.

Posted by Glenn Crawford of Project Liberty Read more!

Wednesday, August 13, 2008

Bush Signs Sweeping Housing Bill –The Looters Strike Again!

This article in the N.Y. Times brings to my mind a book by Frederic Bastiat entitled, ‘That is Which is Seen and That Which is Not Seen.’ In this book, Bastiat discusses the implications of legislation such as this and its unseen effects on our economy and on the people as a whole. For example, its seems that this legislation will “keep more deserving American families in their homes,” as Mr. Fratto says. But what are the far reaching effects of this legislation?? The article hints on a few things such as the quote from Mr. Walker. What do you think???

Posted by Corey of Project Liberty


WASHINGTON — President Bush signed into law on Wednesday a huge package of housing legislation that included broad authority for the Treasury Department to safeguard the nation’s two largest mortgage finance companies and a plan to help hundreds of thousands of troubled borrowers avoid losing their homes.

Mr. Bush signed the legislation, which Congress approved last week, shortly after 7 a.m. in the Oval Office, the deputy White House press secretary, Tony Fratto, said.

The law authorizes the Treasury to rescue the mortgage finance giants, Fannie Mae and Freddie Mac, should they verge on collapse, potentially by spending tens of billions in federal monies. Together, the companies own or guarantee nearly half of the nation’s $12 trillion in mortgages.

Partly to accommodate the rescue plan for the mortgage companies, the bill raises the national debt ceiling to $10.6 trillion, an increase of $800 billion. The bill also creates significant liabilities and risks for taxpayers, that are virtually impossible to calculate.

“We look forward to put in place new authorities to improve confidence and stability in markets, and to provide better oversight for Fannie Mae and Freddie Mac,” Mr. Fratto said. “The Federal Housing Administration will begin to implement new policies intended to keep more deserving American families in their homes.”

Though the legislation was the product of months of intensive work by lawmakers in both parties and has been hailed as the most aggressive intervention by the government into the housing market in more than a generation, perhaps since the New Deal, no members of Congress were invited to the signing.

The enactment of the legislation comes in the same week that the administration announced that Mr. Bush would leave behind a record $482 billion deficit, which will probably grow substantially if home values continue to decline and if there are further reductions in corporate and personal income as many economists are forecasting for the rest of the year. Because of the growing deficit, Democrats said, the debt ceiling had to be lifted regardless of the housing bill.he budget office has estimated that 35 percent of the refinanced loans will end up in trouble again.

Mr. Walker noted that other government interventions in the private market, including a rescue of the Chrysler automobile company had provided an opportunity for taxpayers to profit. But when it comes to the mortgage giants, he said, there is no upside.

“The way this is structured,” he said. “It’s only a matter of how much the taxpayers are going to lose.”

Supporters of the legislation — including Senator Christopher J. Dodd, Democrat of Connecticut and Senator Richard C. Shelby, Republican of Alabama, the leaders of the banking committee, and Representative Barney Frank, Democrat of Massachusetts, the main author of the legislation in the House — say the law represents the best way to help stabilize the housing market, potentially putting a solid floor under declining prices.

The bill includes an array of other aid for troubled borrowers, and about $15 billion in housing-related tax breaks. It also includes nearly $4 billion grants to local governments to buy and refurbished foreclosed properties, which Mr. Bush had opposed even as he signed the measure. The White House views that provision as a giveaway to banks and other lenders who own the seized properties.

Read more!

A Couple Useful Resources for Investors or Businesspeople

Remember the Milk: Task Management tool that lets you keep all your tasks organized in one place, but separated by as many categories as you need. TOTALLY BEATS OUT OUTLOOK - hands down!

Chandler 1.0: is a Serious, but Rough, To-Do Manager:an open-source, cross-platform scheduling app, was conceived back in 2002 as a potential Outlook-killer—a free organizer that would process all your email, calendar appointments and tasks into one smooth workflow, no matter what format or system they were on. Over its long and storied development, intriguingly chronicled in the book Dreaming in Code, Chandler morphed into a meekly-dubbed "Note-to-Self Organizer." There's a lot of neat ideas in Chandler, implemented in rough ways, and if you're a serious to-do hound, it just might find a place somewhere in your work flow. Check out some screenshots of this long-awaited Personal Information Manager and decide for yourself.  Click to check out the full article on Lifehacker.com

Jott.com: If you've ever been out on the road and remembered something you needed to do later, jott's perfect for you! It's free and you simply dial into your number, leave yourself a message and then get the email reminder when you get back to your computer.

Diarised Helps You Select The Best Meeting Time:  If you need to schedule a meeting and want to skip the hassle of emailing and playing phone tag to establish what time works best for everyone invited, a web-based schedule optimizer like Diarised will save you a headache or two. Visit Diarised and plug in information about the meeting, a description, the email addresses of the meeting attendees, and a list of potential meeting times. Diarised notifies attendees via email and they select the best meeting time. Diarised sends you an email summary of the optimal times. excerpted from Lifehacker.com

Posted by Bruce Ferre of Project Liberty Read more!

Upcoming Symposiums and Events in Salt Lake City

August Events:

* Investing: Oil & Natural Gas Symposium– Saturday, August 16th 2008, 9 a.m. to 6 p.m. (Understand important variables unknown to most oil and gas investors, ask questions and receive feedback about industry-specific terminology from experienced professionals in the industry, and take advantage of an opportunity to engage in discussions with the experts. This is not a sales pitch for oil and gas investments but a valuable learning experience for anyone thinking of investing in oil and gas).

* Creative Real Estate: Mortgages & Contracts Symposium - Saturday, August 16th 2008, 9 a.m. to 6 p.m. (Gain an in-depth understanding of the legal contracts involved in real estate transactions and the different types of real estate paper that are out there. Learn creative ways to structure your contracts and mortgages for better leverage).

* Investing: Intellectual Creations & Property Symposium - Saturday, August 16th 2008, 9 a.m. to 6 p.m. (Learn from several experts about how to properly protect your ideas which are your most valuable assets).

September Events:

* Venture Capital & Hard Money Lending Symposium – Saturday, September 20th 2008, 9 a.m. to 6 p.m. Understand the games of Venture Capital and Hard Money Lending from several insider perspectives. This is not a sales pitch but an authentic educational experience you don’t want to miss!

* Creative Real Estate: Liquidations Symposium - Saturday, September 20th 2008, 9 a.m. to 6 p.m. (With a glut of homes on the market, learn creative tools and techniques for liquidating real property in a buyer’s market).

For information regarding upcoming Project Liberty events in Salt Lake City contact: corey@bray-conn.com
Read more!

Tuesday, August 12, 2008

Where is the best place in the US to invest for Appreciation?

PMI Summer 2008 Risk Index Indicates Risk Intensifying in Areas With Previous Rapid Home Price Growth

WALNUT CREEK, Calif., July 1 PRNewswire-FirstCall

PMI Mortgage Insurance Co., the primary U.S. subsidiary of The PMI Group, Inc. (NYSE: PMI), today released its Summer 2008 U.S. Market Risk Index(SM), which ranks the nation's 50 largest metropolitan statistical areas (MSAs) according to the likelihood that home prices will be lower in two years. In general, risk continued to intensify in many of the MSAs where home price growth had significantly exceeded historical norms during the housing boom, but continued to decline in many other areas across the country.

A complete copy of the Summer 2008 PMI ERET report and an appendix that provides data for all 381 U.S. MSAs is available at: http://www.pmi-us.com/eret.

The highest risk of future price declines remains in Riverside-San Bernardino-Ontario, CA (95.5), followed by Fort Lauderdale-Pompano Beach-Deerfield Beach, FL (92.2), and West Palm Beach-Boca Raton-Boynton Beach, FL (91.9). The areas with the lowest risk of price declines are in Fort Worth-Arlington, TX, Dallas-Plano-Irving, TX, and Pittsburgh, PA, each at less than a 1 percent chance. The risk of lower prices in two years declined in 35 of the nation's 50 largest MSAs, and among all 381 MSAs, 326 experienced a decline in risk. Among the top 50 MSAs, 16 ranked in the two highest risk categories, and among those, 15 were in California, Florida, Nevada, and Arizona. Risk of lower prices in two years is greater than 50 percent in all of these MSAs.

Risk scores translate directly into an estimated percentage risk that home prices will be lower in two years. The Summer 2008 Risk Index is based on first-quarter Office of Federal Housing Enterprise Oversight (OFHEO) data.

                  PMI Summer 2008 PMI U.S. Market Risk Index

    Rank   MSA                                                                               Score

    1      Riverside-San Bernardino-Ontario; CA                               95.5
    1      Fort Lauderdale-Pompano Beach-Deerfield Beach; FL       92.2
    1      West Palm Beach-Boca Raton-Boynton Beach; FL            91.9
    1      Orlando-Kissimmee; FL                                                      91.1
    1      Las Vegas-Paradise; NV                                                     88.1
    1      Tampa-St. Petersburg-Clearwater; FL                                 86.6
    1      Santa Ana-Anaheim-Irvine; CA                                          85.8
    1      Los Angeles-Long Beach-Glendale; CA                            85.7
    1      Miami-Miami Beach-Kendall; FL                                      84.8
    1      Sacramento-Arden-Arcade-Roseville; CA                         82.2
    1      Phoenix-Mesa-Scottsdale; AZ                                            79.6
    1      San Diego-Carlsbad-San Marcos; CA                               78.0
    1      Jacksonville; FL                                                                 73.2
    1      Oakland-Fremont-Hayward; CA                                       72.8
    2      San Jose-Sunnyvale-Santa Clara; CA                                51.3
    2      Providence-New Bedford-Fall River; RI-MA                   43.4
    3      San Francisco-San Mateo-Redwood City; CA                  35.7
    3      Washington-Arlington-Alexandria; DC-VA-MD-WV      21.4
    3      Nassau-Suffolk; NY                                                          21.2
    4      Edison-New Brunswick; NJ                                              16.2
    4      Virginia Beach-Norfolk-Newport News; VA-NC             13.8
    4      Boston-Quincy; MA                                                          11.8
    4      Detroit-Livonia-Dearborn; MI                                           11.1
    5      Portland-Vancouver-Beaverton; OR-WA                          8.7
    5      Minneapolis-St. Paul-Bloomington; MN-WI                     8.2
    5      Newark-Union; NJ-PA                                                      6.5
    5      New York-White Plains-Wayne; NY-NJ                          6.0
    5      Baltimore-Towson; MD                                                    5.5
    5      Warren-Troy-Farmington Hills; MI                                   5.3
    5      Cambridge-Newton-Framingham; MA                             4.3
    5      Atlanta-Sandy Springs-Marietta; GA                               2.0
    5      Seattle-Bellevue-Everett; WA                                          1.7
    5      Chicago-Naperville-Joliet; IL                                           1.5
    5      Philadelphia; PA                                                              1.4
    5      Nashville-Davidson--Murfreesboro--Franklin; TN          1.3
    5      St. Louis; MO-IL                                                             1.0
    5      Milwaukee-Waukesha-West Allis; WI                            <1
    5      Cleveland-Elyria-Mentor; OH                                         <1
    5      Austin-Round Rock; TX                                                 <1
    5      Denver-Aurora; CO                                                        <1
    5      Charlotte-Gastonia-Concord; NC-SC                             <1
    5      Kansas City; MO-KS                                                      <1
    5      Columbus; OH                                                                <1
    5      Cincinnati-Middletown; OH-KY-IN                               <1
    5      Indianapolis-Carmel; IN                                                  <1
    5      San Antonio; TX                                                             <1
    5      Houston-Sugar Land-Baytown; TX                                <1
    5      Pittsburgh; PA                                                                 <1
    5      Dallas-Plano-Irving; TX                                                  <1
    5      Fort Worth-Arlington; TX                                               <1

SOURCE PMI Mortgage Insurance Co.
Any comments?
Posted by Dean Morgan of Project Liberty

Read more!

Thursday, August 7, 2008

Gold,Peace and Prosperity by Dr. Ron Paul

For anyone interested in the topic of Gold, check out this book that discusses gold that I think everyone should read. It is called “Gold, Peace, and Prosperity” by Dr. Ron Paul. You can also watch the video on Youtube here:

Has anyone read it and would like to comment? Any comments on the video?

Posted by Dave Carlson of Project Liberty

Read more!

Monday, August 4, 2008

Irena Sendler -VS- Al Gore

Isn’t it wonderful what more we can accomplish when we stop caring what other people think. Any comments?
Posted by Jake Lewis of Project Liberty

Read more!

How Undervalued is Silver Compared to Gold?

A few things to consider when thinking about investing in Silver or Gold. Silver is way under valued compared to gold. First lets look at the silver to gold ratio. On average over the last 6 months the ratio has been 52:1. In other words it takes 52 oz of silver to purchase 1 oz of gold. The US mint calls it 50:1. On their one ounce silver coin is stamped "one dollar" and on their one ounce gold coin is stamped "fifty dollars". This alone is a huge deception! Now look at the actual physical supply of gold and silver in existence today. It is 17:1; this means for every oz of gold that exists there is 17 oz of silver. Now lets look at the highs of the 80's. Gold reached $850 per oz and silver reached $49.50. This is a 17:1 ratio. Now look at the current gold price of $910 an oz. This means silver should be $53.53; but it is not. The current price of silver is only $17.50. What an awsome deal!!! I highly recommend buying silver right now!

Posted by Eric Malachowski of Project Liberty Read more!

Friday, August 1, 2008

Master Mind Discussing Illinois Land Trusts with David Henderson

Creating a Win-Win-Win for Investors, Sellers, and Buyers

In the current real estate market there is a glut of two parties. You’ve got a glut of sellers who may or may not be in bad loans who all want to sell now. Then you’ve got a glut of buyers who, with the dramatic changes in the lending environment, cannot get loans to buy. David Henderson says, “As an investor, you don’t want to own property, you just want to control it.” The Trust is a tool that allows you to control (not own) multiple properties. David recommends the book, ‘A Fortune In Free Real Estate,’ for a more in-depth look at the Trust process.

Real Property vs. Personal Property: After Real Property is placed in a Trust, it ceases to be ‘real property’ and turns into ‘personal property.’

The Trust itself has 4 different documents:

1. Trust Document

2. Beneficiary Designation Document (defines each beneficiary’s interest in the Trust.

3. Assignment of Beneficial Interest Document

4. Occupancy Agreement (like a standard lease)

**All of these documents are closed at a Title Company.

What about the Due on Sale Clause? Trust does NOT trigger the Due on Sale Clause.

Good Market Opportunity: There is a glut of both buyers and sellers in the market right now. Buyers that cannot qualify for loans to homes and Sellers that cannot refi or cannot sell with so many homes on the market.

Seller Carries Note: David approaches ‘For Sale By Owner’ Sellers. Sellers must be willing to carry the Note until the Trust is terminated in 36 mo. when the buyer is able to refi the property. All of David’s buyers in his Trusts have been able to refi before the 3 yr deadline when the Trust is terminated.

Cash Down Returned to Buyer: Buyers for the property, or your ‘Resident Beneficiary’ must have 5% down plus 1st months rent. (No credit necessary but do they have the cash down to buy the home?) The selling point on this is that this 5% is returned to buyer when the Trust is terminated.

Terms are flexible: To make a deal work, all of the terms are flexible. Whatever the seller or the buyer needs to enter into the Trust with you, the investor, make it happen!

Leverage your Realtors: Realtors can bring people to you that cannot qualify for a loan if you are willing to offer them a commission. David says this is his best source of referrals.

How do you convince the buyer to become a resident beneficiary in a Trust?

Tax benefit given to ‘Resident Beneficiary’

5% down at inception of Trust is returned to buyer at time of Trust termination.

Can offer a split in future appreciation with buyer when Trust is terminated.

Terms of the deal are legally binding through the Trust documents (buyer is protected!)

For more information, contact David Henderson of Project Liberty dbhenderson8356@msn.com
Read more!

Thursday, July 31, 2008

9 ways you can take advantage of this terrible economy

I like the 9 suggestions in this article. Particularly #1, #3, and #6. (See below) However, most people don’t have the slightest idea how to do these things. Investing in financial education is first and foremost the best investment you can make. If I could add a #10 to this list, I would make #10, Join Project Liberty.

Posted by Corey of Project Liberty

1. Buy foreclosures and invest in real estate

It’s a buyer’s market for sure. You don’t want to look back in ten years from now and have a “shoulda, coulda, woulda” moment. Even if prices aren’t low in your area, explore different towns and states for commercial locations and empty lots. Even if you don’t have the resources and funds to develop right now, stake your claim while you can.

3. Start a company

Sure, there are a lot of companies shutting down but this maybe the right time to start a company up. Here are some tips to think about if you want to launch a start up:

- Look for an industry or market with a large number of businesses closing. Are the big competitors shutting down? If so, you’ll have less competition.

- Research the reason why they closed.

- Find a solution and an opportunity in what they did wrong.

- Many of the companies shutting down are large corporations. So one of the best things going for you is being small but thinking big.

6. Learn

During times like these there is plenty that you can learn. Such facts as:

- Where the US gets most of its foreign oil from.

- How much gasoline the US uses. Read more!

Wednesday, July 30, 2008

Debt Slavery: Why Are Americans So Willing To Dig Themselves Deep Into Debt?

The New York Times has an article that tells the story of Diane McLeod and her insurmountable debt. http://www.nytimes.com/2008/07/20/business/20debt

Even though she’s going through foreclosure on her home, she's still getting credit card offers from "Urban Bank!”

With the aftermath of the sub-prime crash still wreaking havoc, Americans are finding themselves in very uncomfortable debt positions. The blog post on the Consumerist asks, ‘What happened to our values?’ I don’t think it’s a question of values, I think it’s a question of education. Students graduate high school without the slightest idea of what awaits them in terms of credit and debt. Most of them don’t even know what an income statement or balance sheet is. Why do we have such a financially illiterate populace here in the U.S. and what can be done about it? Read more!

Monday, July 28, 2008

Is this a joke? Constitutionality of New Speed Limit Bill

Does Congress have the Constitutional authority to make this law?

Posted by Cary Valerio of Project Liberty

Congress asked to consider new speed limit


W.J. Hennigan (Contact)
Monday, July 28, 2008

Check your rearview mirror. It's back. The controversial and widely ignored national speed limit, lifted in 1995 after an 11-year run, is again being touted in the halls of Congress as a remedy for skyrocketing gas prices. The lead proponent, Sen. John W. Warner, Virginia Republican, is sponsoring the Immediate Steps to Conserve Gasoline Act. The measure aims to curb high fuel costs by asking the federal government to take another look at reimposing a national speed limit.

Mr. Warner does not define what the national speed limit should be, but notes that when the U.S. had a national 55 mph speed limit from 1974 to 1995, an average of 167,000 barrels of oil were saved each day.

High-speed traffic zips along Interstate 270 in Montgomery County.

Despite the potential savings, the idea doesn't sit well with most Americans. A Rasmussen poll released on July 7 said that 59 percent of voters oppose the proposed reinstatement of the 55 mph national speed limit, with only 34 percent supporting it.

"My own son came up to me and said, 'Pops, this is not a good idea,'" Mr. Warner said, referring to his race-car-driving son, John W. Warner IV. "But I have to try to bring the pressure off the American people at the pumps."

To find a suitable speed limit, Mr. Warner wrote a letter to Energy Secretary Samuel W. Bodman asking him to find which speed would be the most fuel-efficient, so the greatest savings for U.S. consumers can be achieved. A spokeswoman did not confirm the speed that meets Mr. Warner's requirements, but the Energy Department's Web site tells motorists that for each 5 mph over 60 mph they drive, they are essentially paying an additional 30 cents per gallon for gas.

When the national 55 mph speed limit was first imposed, the country was going through a fuel-conserving frenzy brought on by a 1973 oil embargo. Gas prices were through the roof, and the cars that were built in those days were genuine gas guzzlers.

Allison Shelley / The Washington Times Rep. Jackie Speier, California Democrat, proposed the Gasoline Savings and Speed Limit Reduction Act as her first bill after taking office in April. Her bill would set a national speed limit at from 60 mph to 65 mph, depending on location.

There is no such embargo today, and cars are much more fuel efficient, but demand has driven gas prices to record-breaking highs. To put it in perspective, in June 1974, the average price for a gallon of gas went from about 40 cents to 55 cents a gallon. Adjusted for inflation, that's about $1.90 and $2.70 in today's dollars. Now the national average is around $4.02 a gallon.

Mr. Warner's argument is that slower driving saves money and gas because cars get their highest fuel efficiency at speeds of about 55 mph. Therefore, lower speeds will put a damper on demand.

But Jim Baxter, president of the National Motorists Association, says people never paid attention to the first law. So how will it help this time around?

Read more!

Wednesday, July 16, 2008

Wealth Mindset Doctor, Dr. Paul Jenkins Shares Views on Success

There is no substitute for hard work. With all of the talk and hype lately about positive imaging, don’t forget that the only way ideas transform into reality is through good old fashioned hard work. A friend of mine shared this quote with me last week:

“I learned that the only way you are going to get anywhere in life is to work hard at it. Whether you're a musician, a writer, an athlete or a businessman, there is no getting around it. If you do, you'll win. If you don't you won't.”

- Bruce Jenner

Don’t be afraid to do what it takes.

Posted by Dr. Paul Jenkins PhD ‘Wealth Mindset Doctor’ Project Liberty Read more!

Real Estate News

Despite upbeat predictions from many in the housing industry, the nationwide slump in home prices could last for a long, long time-especially if you count the toll exacted by inflation. Chief economist Lawrence Yun of the National Association of Realtors predicts that nominal house prices will bottom out by the middle of this year, and then resume a 3%-plus yearly increase. Not bad, on the surface-but possibly no better than inflation. Housing does remain a good hedge against inflation over very long periods of time. If the past is any guide, homes will continue to provide investors with solid protection against inflation for periods of 20 years or more. The problem is, a lot of us may not want to hang on to our homes for two decades. (Gene Epstein of barrons.com.) If the national average for selling or refinancing your home is 3-5 years, home owners are going to need a way to beat inflation costs. Economic reports show that if consumers feel wealthy they will spend more money. For most how much equity they have in their home, is a big part of that. Any comments or ideas on the future of the market?

Posted by Corey Curwick of Project liberty

Source: Stepping Stone Financial Newsletter Read more!

Thursday, July 10, 2008

Global Feudalism: Fact or Fiction

In a recent July article, Joan Veon, a financial planner and international reporter, discusses the globalization of the U.S. Banking System and the continued, negative repercussions of having central banks. The process of globalizing the system is as follows:

"The globalization of our financial system goes hand in hand with the need for a global stock exchange and global accounting system to harmonize the cross-border activities of transnational corporations and banks. To facilitate this process is the interdependence, or mutual dependence between countries, which came about as the barriers fell. With a globalized stock exchange, insurance system, and accounting system, we will need a GLOBAL REGULATORY SYSTEM to accommodate the changes from national to international. This will all fit in with recent calls for a global central bank."

According to Veon, the Treasury Department has put forth a proposal entitled "Blueprint for a Modernized Financial Regulatory Structure" to regulate this system. A portion of the Blueprint states:

"Foreign economies are maturing into market-based economies, contributing to global economic growth and stability and providing deep and liquid sources of capital outside the United States. The increasing interconnectedness of the global capital markets poses new challenges: an event in one jurisdiction may ripple through to other jurisdictions. The convergence of financial services providers [the Banking Modernization Act] and financial products has increased over the past decade. Financial intermediaries and trading platforms are converging. Financial products may have insurance, banking, securities, and futures components" (emphasis added). Mrs. Veon believes that this plan "constitutes the final take-over by the Federal Reserve of our nation's economy" So, what are the negative repercussions? Only the following:

Banking charter will now include all financial institutions, including savings and loans, state chartered banks, and credit unions

Control of the U.S. financial future

Control of where we live

Control of how we live

A massive, modern-day feudal system

The Federal Reserve will be the Market Stability Regulator constituting total control over what happens in the market

Entire mortgage system will be federalized

Federal Reserve will have control in the insurance industry

Congress loses completely its constitutional role of controlling America's financial sovereignty becoming more obsolete and useless

Does this concern anyone? It concerned Thomas Jefferson enough to say, 200 years ago, ""The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution...if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."

As we approach the reality of a global central bank, what is the solution?
Posted by Ruel Haymond of Project Liberty

Reference: THE FINAL GLOBALIZATION OF THE U.S. BANKING SYSTEM, http://www.newswithviews.com/Veon/joan54.htm.
Read more!

Wednesday, July 9, 2008

Large US investment banks will be able to access emergency cash from the Federal Reserve into next year if market turmoil persists

The Fed going way out of bounds. What about moral hazard and banks with this emergency cash? Comments? Posted by Corey Curwick of Project Liberty Article Link from FT.com: Feds ready to extend bank aid 

Fed ready to extend bank aid

By James Politi in Washington

Published: July 8 2008 13:53 | Last updated: July 8 2008 22:43

Large US investment banks will be able to access emergency cash from the Federal Reserve into next year if market turmoil persists, Ben Bernanke said on Tuesday in a sign of the growing concern among policymakers that financial strains could continue for some time.

The signal from Mr Bernanke is likely to soothe Wall Street, in that it confirms Fed support for investment banks through the credit crisis. US stocks rose on Tuesday, the dollar rallied against the euro and oil prices staged their biggest retreat in months.
Video: Michael Mackenzie on Fed move - Jul-08
US mortgage regulator tries to ease fears - Jul-08
US hopes of housing recovery subside - Jul-09
Full text of Bernanke speech - Jul-08
In depth: Central banks - Jun-12
Editorial comment: Fed must beware inflation risks - Jun-26

As well as signalling fears that the effects of market turmoil may be felt for longer than hoped, extending the credit facility would press Congress to tighten regulation of investment banks.

Speaking in Virginia at a forum on mortgage lending for low-income households, Mr Bernanke said: “We are currently monitoring developments in financial markets closely and considering several options, including extending the duration of our facilities for primary dealers beyond year-end, should the current and exigent circumstances continue to prevail in dealer-funding markets.”

In March, the Fed granted primary dealers – a term that covers investment banks such as Lehman Brothers and Merrill Lynch – access to emergency cash for at least six months in an effort to stabilise the US financial system on the same day it helped rescue Bear Stearns with a $29bn loan.

Previously, access to emergency funding was only allowed for commercial banks such as Citigroup and JPMorgan.

Although the moves helped stabilise credit markets for several months, worries about mortgage debt and the health of financial institutions have flared up again.

More evidence of the depth of the US housing crisis came yesterday when a measure of pending home sales fell at an unexpectedly steep rate of 4.7 per cent in May.

The regulator of Fannie Mae and Freddie Mac sought to ease investors’ fears that the two government-sponsored mortgage financiers might have to raise billions of dollars of capital in response to potential accounting changes. James Lockhart, director of the Office of Federal Housing and Enterprise Oversight, told CNBC that “an accounting change should not drive a capital change.”

Worries that Fannie and Freddie would have to raise more capital sent their shares plunging 16.2 per cent and 17.9 per cent, respectively, on Monday. However, their share prices were up 11.94 per cent and 13.01 per cent, respectively, on Tuesday.

Mr Bernanke’s comments came as Congress was preparing to examine what kind of changes to financial regulation should be made in the wake of the credit crisis. The House financial services committee will on Thursday hold its first hearing on the topic, with testimony expected from Mr Bernanke and Hank Paulson, Treasury secretary.

In his speech on Tuesday, Mr Bernanke said Congress “may wish to consider” whether new tools were needed to liquidate a “systemically important” investment bank on the verge of bankruptcy, as with Bear Stearns.

The Fed chairman said Treasury should take a lead in this process and that one option was a structure allowing federal regulators to set up a “bridge bank” to help a securities firm – a strategy used for failing commercial banks.

“A bridge bank authority is an important mechanism for minimising public losses from government intervention while imposing losses on shareholders and unsecured creditors, thereby ­limiting moral hazard and mitigating any adverse impact of ­government intervention on market discipline,” Mr Bernanke said.

The Fed chairman also indicated the US central bank would release fresh guidelines on mortgage lending next week.

The S&P 500 closed up 1.71 per cent at 1,273.70, rebounding from a loss of 0.8 per cent on Monday. Oil fell to $136.04, down from last week’s record $145.85. The dollar was up 0.4 per cent versus the euro.

Copyright The Financial Times Limited 2008
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Saturday, July 5, 2008

Urgent Alert: Why Gold Will Jump $200 in One Day

I am sounding a "trading alert" in this column. The alert is cheap gold. Dirt-cheap gold.

As any contrarian knows, the biggest, fastest payoff a speculator can earn is when an extreme situation corrects itself.

For instance, betting against tech stocks was unbelievably profitable in 2000. This was one of the greatest extremes in the history of finance. Techs traded for 100+ times earnings (many had zero earnings), so the likes of Cisco, Yahoo, and JDS Uniphase had tremendous distances to fall.

The same goes with homebuilding and mortgage stocks in 2007. "Extremely" stupid lending practices helped send mortgage giant Countrywide Financial from $43 per share to $5 per share in just 12 months. Shorting Countrywide and homebuilding shares was like sitting down at a broken slot machine.

Right now, we have an extreme situation in the commodities market… one you can use to make a lot of money in gold. It all comes down to the gold/oil ratio. Because gold and oil respond similarly to inflationary pressures, the two tend to trade in a predictable range.

Over the past 25 years, one ounce of gold has bought, on average, 15 barrels of oil. When an ounce of gold can buy 20 barrels of oil, it's expensive and due for a fall. When an ounce of gold can buy less than eight barrels of oil, it's cheap and due for a rise.

Right now, gold buys you just 6.5 barrels of oil – less than half its traditional purchasing power. The tremendous rise in crude oil prices is the cause of this situation. Crude has gained 155% in the last 18 months. Gold has gained "just" 50% in the same time. As you can see from the chart below, this disparity has left the rubber band pulled extremely tight.

There's no guarantee this extreme will work itself out quickly. But this is one trade worth keeping on the radar. If oil stubbornly refuses to correct from its levels above $140, gold could easily pop to $1,000 and beyond in just a few days. In 2005, a similar extreme reading preceded gold's rise from the mid-$400s to the mid-$600s.

If you haven't bought gold as "catastrophe insurance," now is a great time to do so. If more cockroaches crawl out of the mortgage debacle and into mainstream headlines, you'll likely get a $100-$200 per ounce jump in your investment. Whether it's through buying bullion, gold stocks, or an ETF, right now is an extreme opportunity in gold.

Good investing,

Brian Hunt,
Editor in Chief, DailyWealth
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Wednesday, July 2, 2008

Physical Therapist Looking to Start a Business

I am a physical therapist. I treat patients with injuries like back and neck strains, tendonitis, post surgery patients like knee surgery or something like that. My hands-on treatments (massage, joint mobilization etc) are billable as are other activities such as therapeutic ultrasound, electrical stimulation, therapeutic exercise, etc.

I would start the business without employees, other than myself, but would likely hire within (weeks or months) 1-4 other employees as aides and/or administrative. It is likely that I would outsource my billing.

My main source of income would be insurance payments with co-pays and some cash patients, liens and work comp claims. I would have very little overhead, some supplies mostly. In the beginning, I would possibly work in a fitness facility with the "owner" of the fitness business who owns most of his own equipment and machines. He leases a space and then subleases to other businesses. I would likely be paid on a percentage of collections basis that would increase as revenue increases.

My questions are the following:

Can I create a corporation for this business and not use it for awhile? My situation is a little unsettled right now. The gym owner and another Physical Therapist who owns his own business have both gone with S-corporations. This is where I was leaning.

Who should help me setup my corp. or can I do it myself with little pain and suffering?

Should I create this corp with the situation unsettled or should I wait? The economy could unravel fairly quickly leaving me to look for other employment and likely unable to start my own business any time soon.

What are the major pros and cons of S-corp vs. LLC? I don't see myself getting big enough for a C-corp.

What would I need to do with each structure in the future? I have read that in some instances I might need to be holding yearly stock holder meetings or other such corporate stuff. I am looking for as simple as possible with as little personal exposure to liability as possible as well as tax benefits, which I do not know how to take advantage of nor do I understand them very well.

Thank you for any help you can give me.

Posted by Steve Anderson

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Tuesday, July 1, 2008

What Is Our Money Really?

Federal Reserve Notes are not money because they don't have any intrinsic value. They cost two cents to make regardless of denomination. That's an obvious shocker to a lot of people - the fact that someone actually makes a 98 cent profit on every dollar bill; a $99.98 profit on every $100 bill.

Presuming it is the government that does this (actually it's not - the Federal Reserve is no more federal than Federal Express - more on that at another time), one might wonder why it (the government) needs so much money in taxes, license & permit fees, citations, fines & penalties and confiscations, and all the other perhaps subtler methods it uses to remove us from our property.

Federal Reserve Notes are negotiable instruments that discharge debt, but they are not money. They are not backed by silver anymore like they were in the days of the silver certificates, nor are they backed by any other commodity that meets the definition of money. The collateral for Federal Reserve Notes is the future labor of the people of the United States as evidenced by the birth certificates. That's a very loaded sentence that we will go into more in a minute, but one of the keywords is future. In other words it doesn't exist now, it may exist later. So Federal Reserve notes are in that category of negotiable instruments called "promises to pay" or promissory notes. They are debt instruments.

In reality, we can't actually pay any debts anymore because all of the real money has been extracted from society. All we can do now is discharge debts. All we have to do it with is fake money or counterfeit money. Are our Dollars, these Federal Reserve Notes, are they counterfeit money?

Any comments? Thoughts? Agree? Disagree?

Posted by Jared Matola of Project Liberty
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Monday, June 30, 2008


What if I told you gasoline is cheaper today than it was 45 years ago! Its true and I can prove it!!

In 1963 gasoline was about $0.30 to $0.35 per gallon. Back then there were these things called silver dollars and they were interchangeable with paper dollars. So one dollar would buy you about 3 gallons of gasoline. (By the way when was the last time you received a piece of real silver as change?) Today that same silver dollar worth $17.50 will buy you over 4 gallons of gas! What's going on?!?!!

Any comments?

Posted by Eric Malachowski of Project Liberty Read more!

Saturday, June 28, 2008


I get a lot of questions about this. At one of the last Master Minds, one of the participants posed a scenario in which he has a company where he purchases aircrafts and then leases them out. These aircrafts are useful for this purpose for about 3 years, at which time they are usually sold and replaced. He asked me what type of corporate entity he should use and also how he would go about accelerating the depreciation of the aircrafts in this first 3 years. I will attempt to answer his question in this posting.

The income of a C corporation can be taxed twice: once at the entity level and again at the individual level when profits are distributed as dividends to shareholders. Not so with an S corporation or LLC; the income from these entities passes through directly to the owner’s individual tax return, thereby escaping double taxation. In this regard the S corporation and LLC enjoy an advantage. However, Section 179 of the Internal Revenue Code (modified after the September 11 attacks and again as part of the Economic Stimulus Act of 2008) can enable owners of C corporations to save thousands of dollars more per year on taxes than if they were to use the S corporation or LLC structure. Section 179 deals with the election to expense business equipment in the first year that it is placed into service (see “Qualifying Property” at the link I’ll give below) as opposed to depreciating it over the course of its useful life. The same deduction is also available to the owner of the C corporation on his individual tax return. Yes that’s right. The owner of the aircraft leasing business can claim the deduction for his aircraft on his corporate return and then again on his individual return. Gotta love that loophole!

Using another example, suppose in 2007 a business owner purchased $125,000 of computer equipment, used 100% for business purposes; and a $50,000 SUV (weighing at least 6,000 pounds--see http://www.section179.org/section_179_vehicle_deductions.html ) used 50% for business. The maximum 2007 section 179 write-off is $125,000, so an S-corporation or LLC would allow the owner to reduce taxable income by the full cost of the computer equipment; however, because the owner is not considered an entity separate from the S-corporation or LLC for tax purposes, the SUV would not be available for section 179 treatment. But the owner of a C-corporation could write off the computer equipment on the corporation’s return; then reduce his taxable personal income by $25,000 ($50,000 cost X business use %, subject to $25,000 limit for SUVs) for the vehicle.

We use 2007 as an example because the Economic Stimulus Act of 2008 allows amended returns to be filed for 2007 at late as October 15, 2008—assuming extensions have been obtained. But 2008 has its own unique Section 179 allowances, chief of which are increased limits and bonus depreciation. The maximum amount that can be expensed under Section 179 for 2008 is $250,000 and the phase-out begins at $800,000 (e.g. if 2008 equipment purchases total $900,000, the available 179 deduction is reduced dollar-for-dollar by the amount in excess of the cap, to $150,000) increases of $125,000 and $300,000, respectively, over 2007. In addition, bonus depreciation of 50% (in addition to regular annual depreciation) is available for 2008. See http://www.section179.org/section_179_calculator.html for an example. As the table below indicates, Section 179’s generosity is scheduled to evaporate as of 2010.

Though Section 179 cannot be used to reduce taxable income below zero (that is, to generate a loss), it can be exploited to produce tax savings that are more than cash paid for expenses. With a non tax/capital lease, $250,000 a person or entity can write off $250,000 in leased equipment, despite cash outflows for the lease payment being substantially less than this amount. See http://www.section179.org/leases_and_section_179.html.

Comments? Questions?

Posted by Greg Miller, CPA

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Thursday, June 26, 2008

Listen to PL Advisor interview on Gold Investing with Dr. Paul!

For this episode of Live On Purpose Radio, Dr. Paul interviews Eric Malachowski, who has an interest in and considerable experience with gold and silver. The diluting of paper money is discussed, with the solution being a return to real value, both in our money and in our focus. Finding the ways that you can personally add real value to others is the foundation of establishing a firm economic future.

The interview can be heard here at Live Purpose Radio Read more!

Using the Illinois Land Trust as a creative tool for real estate acquisition or liquidation. What are the potential pitfalls in this deal scenario??

At one of our Master Mind sessions, we had John Acquisto join us to illustrate how these Trusts can be used as a creative vehicle for acquiring or liquidating real property. John Acquisto specializes in helping investors use this tool properly. John gave us a variety of examples where an investor could use the Trust in an acquisition and/or liquidation. However, we only saw all of the good sides, or how the deal could work successfully. What I want to know is: What are the holes? OR how could this deal potentially fall apart? Let’s consider one of the examples he gave us at the Master Mind:


  • Kevin is trying to sell a house and has a loan on the property. (Seller)
  • Melanie has amazing credit score, 780.
  • Rick wants to buy the property. (Buyer)
  • John is intermediary, putting the deal together. (Investor)

Let’s say the Seller, Kevin, has an adjustable arm loan and is going to lose the property as he can no longer afford to make the payments. The Lender agrees to do a short sale, and Melanie (the FICO borrower) buys the property at a discounted price. (Takes a loan on the property in her name). Rick (the buyer) agrees to buy the property, making payments on Melanie’s loan. Here, the Investor has structured the deal with Rick to purchase the property at a higher value than the loan Melanie has on the property. This would be a positive cash flow every month from the difference between Melanie’s mortgage payment and Rick’s payment. In this example, you can structure the Trust Documents such that you can create this unique deal scenario. The Trust is like “silly putty for real estate” in that you can use it to accomplish whatever creative ends you wish to achieve through it. The percentages to the beneficiaries in the Trust as described by the Trust documents could potentially be:
  • Positive Cash Flow every month: Investor beneficiary and Credit beneficiary in the Trust split the positive cash flow each month. (the difference between Rick’s payment and Melanie’s debt service on the loan).
  • Investor beneficiary gets 75% of equity when Rick “purchases” the property. Credit beneficiary could get 25% of this beginning equity. (Terms are obviously negotiable here).
  • Future Equity in this transaction: If Rick refinances at a later date or finds a buyer once the property has appreciated above his loan amount, he then gets 50% of Future Equity. Investor beneficiary gets 40% of future equity, and credit beneficiary gets 10%. (Sometimes credit beneficiary will demand more like 25% of future equity out of the transaction).
As I understand it, the best part about using a Trust to structure a deal like this is that the Trust documents can be written such that each party in the deal has their part legally defined and everyone is protected. However, what are the potential pitfalls here? Could anyone comment on this and help me see them if there are any??

by Corey Curwick of Project Liberty. Read more!


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