Hi! I have decided to move off the free wordpress.com servers and self-host my blog, for the greater freedom that self-hosting brings.
I hope to see you all there. My new address is:
I have posted part 1 of a 2 part series entitled “Ultimate Vampire Slayer”. I think you will like it!
As many of my readers know, I got an MBA from University of Southern California. During my time in grad school I was surprised to learn how many of America’s self-made millionaires earned their wealth from network marketing. As a result of this revelation, right after graduation I began looking for a network marketing company to invest my time in.
One of my graduate school peers invited me to a startup MLM. It was brand-new, and was a great idea. Unfortunately, several months after it began, it fell apart.
Several years later, having learned from my experience with startups I decided to investigate the best-known company in the MLM industry. I discovered that the company’s high growth curve had occurred 20 years earlier. It is too late to invest in that one, I believe.
Fortunately, I believe I have found an excellent MLM candidate. It’s called Skinny Body Care (SBC). They essentially market a single product, called skinny fiber. They have an exceptional compensation plan. Its major growth curve is dead ahead. The company has been in business now for ~ 1.5 years.
You can earn $1600 per month without ever sponsoring anyone. I don’t think any MLM has ever done this before. They are going to force the industry to re-write their compensation plans.
Be sure to visit: Skinny Body Care for more information!
You and I understand what it means to loan somebody something. If a friend or relative asks to borrow $100, we reach into our wallets and give the money to them. Everyone understands that we will suffer a loss in the event that the borrower fails to return what he has borrowed.
We unthinkingly assume that when we get a loan from the bank, that a similar dynamic exists. The bank gives us money from their “wallet”, and will suffer a loss if the money is not paid back. But that is simply not true. The dynamic is completely different in the case of a bank.
Maybe you are familiar with the term “fractional banking”. More than likely you either don’t know what it means, or simply have not taken the time to think it through. Lets’ take a moment to get our arms around the concept. Banks are required to maintain only a small fraction of their deposits on reserve. So, they can actually loan many multiples of their deposits to borrowers.
So, if you or I were to charter a bank, and capitalize it with an initial investment of $1,000 we could then loan out much more than $1,000 – as much as $100,000 – to future borrowers. But think about that for a moment. If we only have $1,000 in the cash drawer, how can we loan someone $100,000? Where does the extra $99,000 come from? Banks engage in this sleight of hand every day, whether it be for home loans, personal loan, or credit cards. Where do they get the money to lend, that they don’t actually have???
Do they run to a different bank to borrow the money they are loaning out? NO. They actually create the needed money out of thin air, like a magician pulling a rabbit from a hat. “Money” that did not exist a minute ago, is created at the moment that the borrower signs a note. The $10/hour bank teller makes an accounting entry, and PRESTO! the bank has a new $100,000 asset on their books. Sweet…
So now imagine our newly chartered bank, having a mere $1,000 in the cash drawer, suddenly has an accounting entry for a $100,000 asset as a result of a borrower signing a paper. A corresponding liability for the same amount is created simultaneously. And our bank’s books are balanced. There is both an asset and a liability, or a debit and a credit, for $100,000 on our books. Mind you, our books are balanced before the borrower pays us a dime in principal or interest. Think about that for a minute.
As a 21st century society, we should ask the question if our bank merits a 30 year stream of payments, at interest, for having done nothing but make an accounting entry. We did not loan money in the sense that we typically understand it. Our books were balanced before we made the loan, and after. The $100,000 did not come from our cash drawer. We still have all the cash we started with. We risked nothing in this transaction. The whole charade was just an accounting entry. Pretty good deal for our bank though, don’t you think? As bank owners/shareholders. we will now collect interest payments for the nest 30 years. Every month.
But then it gets better. We conned the borrower into giving us a mortgage on their house, in exchange for making an accounting entry. If they ever hit a rough patch, we will take their house and sell it , possible for much more than they borrowed. If we were immoral bastards we might even secretly hope that they hit such a rough patch at some date in the future.
It took maybe 3 months of labor by semi-skilled laborers, and an accounting entry by our bank clerk, to build the house, yet our borrower is on the hook to work for 30 years before he can get title to the home. This my friends, is a racket. Organized crime would be embarrassed to admit to this kind of activity.
But it gets even better (if you are the banker). Our bank then sells the note our borrower signed and probably sells the mortgage as well. Now we have significantly more than $1,000 in the cash drawer. Let’s say we now have $70,000 in the cash drawer. We then start the process all over again, with an upper limit of the amount we can loan greatly increased, since we have more cash in the drawer now. Maybe now we will loan some real estate developer a couple $ million – at interest. Pretty soon my banking partner and I will start looking at buying new yachts or private jets…
Now that we understand that our bank did not actually lend any of our money, but created the loan, by making an accounting entry, does your feelings of the dynamics/fairness of “paying what we owe” to the banks change? Do our borrowers really “owe” our bank anything at all?
Was not the book’s balanced before our borrower paid the bank a single dime? Further, was it not the borrowers’ signature that created the money in the first place? Then, whose “money” was it, that was supposedly borrowed? The bank’s, or the borrower’s, whose signature created the money?
Food for thought.
We all know people who cheered the downfall of communism, the “Evil Empire”, some 20 years ago. A uni-polar world of American leadership, a “New American Century” was to commence. Dreams of “peace dividends” abounded… Peace was at hand, and prosperity beckoned.
But something happened on the way to that glorious future. The peace dividend check got lost in the mail. Military expenditures went through the roof to the point that the Unitary power of America was spending more on instruments of destruction, than the rest of the planet combined! America launched a series of wars in the name of liberation that seemed to always involve people of color being slaughtered. Of course, a certain religion seemed particularly targeted.
Asset manias took off like a rocket – first in internet companies, then in housing. The same generation who laughed hysterically when Saturday Night Live did a skit in the late 70’s, that suggested: “inflation is our friend. If we just keep inflation going, we’ll all be millionaires” bought that fable hook line and sinker in the decades that followed. The belief grew that we could all get rich by selling each other our overly-valued homes for ever-increasingly preposterous amounts. Bankers and financiers mastered the art of legalized theft, while corporations were rewarded with tax breaks and ever-rising share prices every time they laid people off, or sent American jobs to some overseas locale.
Contrarians constantly warned that America was on a path to ruin, but almost without exception oracles such as Ron Paul were marginalized or otherwise ignored. Even now, as Rome is burning, talking heads on the news reach for any straw they can, rather than solicit the advice of those who warned of the coming depression in years and decades past.
Some 7 years ago millions of Americans took the streets prior to the start of the disaster that is the Iraq war. They clearly stated what is now obvious but to the most ideologically blinded: the war rationale was a blatant series of lies and obfuscations, hiding a sinister purpose which would end badly for all involved. Nevertheless the war was launched, and the not-so-silent majority was again proven right. Estimates of the death toll in Iraqi lives reach as high as 1 million, and the dead and wounded American lives are estimated as high as 40,000. What a tragic waste!
Here is an insight we can now glean from events of the last 20 years since the fall of the Berlin Wall. Capitalism/democracy was not “the answer”, as we were led to believe. Ironically, the only capitalists in America, by definition, are those with capital. And almost no one in America has any of that. Most Americans have only debts, credit lines, and paper assets which have no foundation, as many are now discovering to their great dismay. (The feudal serfs of our age that cheered on capitalism must have brought a belly laugh amongst the “real” capitalists, but I digress.)
Democracy is and always was a poor excuse/substitute for the Republic that the founders intended. Democracy is truly a case of three wolves and a sheep voting on what to eat for lunch. It is inherently and intrinsically flawed, as it guarantees a condition of the rich getting richer and the poor getting poorer. Unfortunately most of us labored under the illusion that we were counted amongst the wolves. Increasingly we are learning that we are now, and always have been, amongst the sheep.
So we knew that communism was bad, destined to fail, and were delighted to have seen it’s demise. We are now belatedly coming to recognize that the capitalist/democratic model we thought was the answer, is likewise flawed. We are witnessing its death pangs in slow motion. It is not quite so exciting to see “our” model fall though, since this time WE are the ones being swept into poverty as a result, instead of Russians or eastern Europeans whose names we can’t even pronounce…
There is an additional level of psychic discomfort that comes with not seeing any other obvious economic/social model to follow. If not communism, democracy or capitalism, what is the model that the world should embrace to build the world of the 21st century and beyond?
The central bankers of the world have a plan that involves humanity being enslaved to servicing un-payable interest forever, paid in some global fiat currency they can produce at whim and at no cost to themselves. However, they will find that their plans will fail. Exactly how they will be defeated by humanity remains to be seen. Nevertheless, their failure is assured, just as a tree whose roots have just been cut, is doomed even though it still looks like a healthy plant.
The answer the world is looking for is to be found in a model of one worldwide family under God. Idealistic you say? Absolutely. Nevertheless, this is the solution we are looking for. It is the ONLY solution that will lead us out of the tremendous spider web we labor under today.
A friend of mine and I were discussing recent news events the other day, trying to discern possible solutions. Eventually it became clear that the intense weight of a crushing spider web of contracts, legalities operating under color of law, multiple jurisdictions, etc, were so thoroughly binding every aspect of our lives, that changing the rules at any given level was not remotely enough to set us free.
We need a thoroughly profound change of heart, a deep, to the bottom-of-our-soul realization that every child on the street, on every continent, of every religion and skin color, is OUR child, every senior citizen is OUR parent and OUR grand-parent. Such a profound realization can and will lift us to the new level we all long for.
Left to our own devices, history strongly suggests that this is a pipedream which will never happen. But fortunately for us, we are not being left to our own devices.
History is pushing us to the place that we are destined to go in the very near future. We are being brought to a place where we will have no choice but to recognize that we either evolve or we perish. I am highly confident we as a species will make the right decision.
That fork in the road is not all that much further down the road… Scary? Perhaps, but not if you know that we are not alone on this journey. Preparations have been laid for decades, and the conditions for our ultimate success have already been met…