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.

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 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

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 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
Read more!

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
Read more!

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

Read more!

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
Read more!


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