Part 1

MONEY, THE FEDERAL RESERVE, AND ECONOMIC ARMAGEDDON

Featuring:

Federal Reserve Expert G. Edward Griffin; former Assistant Secretary of the Treasury and Father of Reaganomics Dr. Paul Craig Roberts; author of the most successful financial book in history (”Crisis Investing”) Doug Casey; David Icke; Doug McIntyre; economist David McAlvany; and activist Alex Jones of prisonplanet.com.

Action Points:

1. What is Fractional Reserve Banking?
   Fractional Reserve Banking is the banking practice in which banks keep only a fraction of their deposits in reserve (as cash and other highly liquid assets) and lend out the remainder, while maintaining the simultaneous obligation to redeem all these deposits upon demand.
2. What is the Federal Reserve Act?
   The Federal Reserve Act is the act of Congress that created the Federal Reserve System, the central banking system of the United States of America, which was signed into law by President Woodrow Wilson and issues/prints money out of thin air for the United States of America with interest.
3. What is the dictionary definition of the word “cartel”
   According to Webster’s Dictionary, a cartel is (1) a written agreement between belligerent nations; (2) a combination of independent commercial or industrial enterprises designed to limit competition or fix prices (3) a combination of political groups for common action.
4. What is “fiat” currency?
   Fiat money is a form of currency which is deemed valid and legal because the government says that it is, not because it is backed by a commodity such as gold or silver.
5. Who is the chairman of the federal reserve board?
   Currently, the chairman of the federal reserve board is Ben Bernanke.
   Is he elected or appointed?
   The current chairman was appointed by George W. Bush and sworn into office on February 1, 2006, for a term lasting until January 31, 2010. He was re-appointed for a second time by President Obama in 2009.
6. What is America’s current national debt?
   According to TreasuryDirect.gov, the current debt (as of 7/1/10) is 13,178,317,356,215.73. There is a more up-to-date-reading at US Debt Clock.org or if you ever find yourself in NYC’s Time Square area, you can visit the clock in person.
7. Who is Barack Obama’s Secretary of the Treasury?
   The current United States Secretary of Treasury is AIG bailouter and Goldman Sachs flunky, Timothy Geithner.What is his position on the Federal Reserve?
   Geithner was President of the Federal Reserve before Obama appointed him Secretary of the Treasury.
8. What is the difference between the Federal Reserve and a private bank?
   What is nothing? because the Federal Reserve is a private bank. I guess the difference would be that the Federal Reserve lends money to the government and other banks, while a commercial private bank is a bank that lends money to you and/or your business?
9. Research the word “usury”.
   According to Webster’s Dictionary, usury is (1) archaic : interest (2) the lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates; (3) an unconscionable or exorbitant rate or amount of interest; specifically : interest in excess of a legal rate charged to a borrower for the use of money.
   How does this relate to the practice of fractional reserve banking?
   Well in the case of the Fed and the most of the US banking system, with only $1,000 actually in reserve in the bank, the bank can lend out $10,000 ($9,000 of which doesn’t exist) and then charge you the interest on the $10,000.
10. Write down in your own words, how a bank can collect interest on “nothing”.
    I think this continues from the above answer. The bank only has the $1,000 on deposit, but was able to create an additional $9,000 because they only needed to actually have 10% on deposit. But even though the money only “virtually” exists, once they “lend” it to you, the banks interest rates apply.
11. Milton Freidman provided a simple rule for determining the optimal rate of inflation. This was called the Friedman rule. Research this.
    The Friedman rule is a monetary policy rule proposed by Milton Friedman, who advocated setting the nominal interest rate at zero. According to the logic of the Friedman rule, the opportunity cost of holding money faced by private agents should equal the social cost of creating additional fiat money. It is assumed that the marginal cost of creating additional money is zero (or approximated by zero). Therefore, nominal rates of interest should be zero. In practice, this means that the central bank should seek a rate of deflation equal to the real interest rate on government bonds and other safe assets, to make the nominal interest rate zero.
12. Why is inflation considered a “hidden” tax?
    Because inflation puts more money into circulation, diluting the value of the money you have in your pocket or in the bank.
13. What does it mean to be the “world reserve currency”?
    A reserve currency is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, and commodities such as oil, gold, etc. The US Dollar has been the reserve currency since World War II, but probably not for much longer.
14. What is currently the world’s strongest currency?
    Probably the Euro, since it takes $1.5 to buy one, but I heard the Euro’s actually pretty worthless too.
15. What countries are most likely to benefit from a global economy?
    I would say that in the end, no one. But for the sake of argument, Mexico, China, Japan and/or any other country where they pay their people slave wages to to our jobs.
16. How would the US government finance itself if the Chinese ceased to be its creditors?
    You got me.
17. Read this article. Write down your opinion of the proposed Amero token.
    http://www.snopes.com/politics/business/amerocoin.asp
    The article says that all rumors about the Amero are false, but goes into great detail about how the Euro came about.  So, while I can believe the actual pictured coin could be fake or a simulation, I wonder if they wrote similar articles in Europe before they debased all of their currency and stuck them with that now worthless piece of crap

Part 2 – Financial Armageddon

IDENTIFYING THE FOUR FINANCIAL STORMS THAT ARE THREATENING TO DESTROY YOU AND YOUR FAMILY

Featuring:

Renowned economist David McAlvany.

Action Points:

1. Financial Storm 1 “the easy money game”. How can easy money become a financial crisis?
   Because when the Federal Government can just create all of the money it needs, backed by nothing, , that leads to inflation or hyperinflation and the money you have is worthless.
2. Read the Federal Reserve Act. Write down how this act enabled the “easy money game”.
3. Write and example of how you have fallen for the “easy money game”.
4. Think this through for yourself. List all of the ways you can protects your money in case of hyper inflation.
   Get out of the dollar. Invest in tangible things not affected by the rise and fall of interest rates, like gold, silver, fine art, real-estate.
5. What did John Maynard Keynes mean by “the marginal efficiency of capital”?
6. Financial Storm Two “The derivative death trap”. What does this mean?
   Investment groups took risks related to real estate assets and spread them around all over the world, getting companies to AAA rate the transactions. This caused individuals, states and even countries assumed this were good investments based on the high rating and invest all their real assets and when the speculations didn’t work out, everyone and everything fell because there was so much bad risk out there and too much greed on the part of the financial institutions.
7. Financial Storm Three “debt addiction”. What does it mean?
   Americans are almost programmed to be in debt. We believe that we can, deserve and need to have whatever we want right now with no money or anything to back it up and now we no longer have the ability to even make the money to pay it back. People pay for their McDonald’s with a credit card. That’s just crazy.
8. Financial Storm Four “death of the dollar”. What does this mean?
   The dollar is soon to be replaced as the world’s reserve currency and with inflation, over spending, overprinting, derivatives, blah blah blah, it has pretty much become worthless.
9. Historically, what happens to an economy that loses its manufacturing base? Research one example.
   What happens? Exactly what’s happening to the US right now. No manufacturing, no jobs. No jobs, no one to pay taxes, no one to invest, no one to save, no one to consume. As the factories close, the businesses based around supporting that industry are gone, like restaurants, clothing, advertising, travel, etc. Like Bethlehem, Pennsylvania, which now relies on money from casino gambling to stay afloat.
10. What was the “bank deposit guarantee bond”?
    is a situation in which a financial institution promises, or guarantees that the debtor will meet their debt obligation to other lenders and creditors, and if not, the guaranteeing financial institution will fulfill it.
    Why is it no longer being offered?
    Because the insurer was losing money when the debtor could not meet their debt obligation.
11. Write three new things you can do now to protect yourself financially.
    (1) Educate yourself. (2) Get as liquid as possible. (3) Eliminate debt.
12. Write it down now. Financially, where are you strong, where are you weak?
    as if!
13. Get as liquid as possible. Write three ways you can do this.
    (1) eliminate debt. (2) get rid of useless assets. (3)
14. Make a list of your “useless assets”.
    ok
15. Remove debt – List all the ways you can do this.
16. Keep it simple. What are you invested in that you don’t fully understand. Write it down.
    OK
17. Know what’s important. What is the most important thing to you? Write it down.
    Does me count?
18. What REALLY matters to you? Write it down now.
    Again, does me count?
19. Think for yourself. Write down three reasons why this is important.
    (1) Only you know YOU. (2) What works for someone else might not work for you. (3) In the end you can’t trust anyone but you.
20. Understand the times you live in. Why is this important? Write it down.
    Because if I had paid more attention to what was going on in the world, like globalization, derivatives, the housing market, I would have anticipated what was to come and been able to do something to protect myself when I had the chance.
21. Be flexible. List three ways in which you can be more flexible.
22. Plan ahead. List three ways in which you have planned for the future.
    (1) I bought good sneakers in case the zombies come.
23. Develop a mindset of survival. On a scale of 1-10, how survival-minded are you? Write it down.
    A would say a six.
24. Never give up. Just write it down. “Never give up”.
    NEVER GIVE UP! or the zombies win.
25. If supply lines were cut, what would you need to survive for a month? Make a list.
    Food, water, radio, batteries, money, zombie sneakers, analog items.
26. What is today’s spot price of gold? Write it down.
    $1,212.04
27. What is today’s spot price of silver? Write it down.
    $17.83
28. www.prudentbear.com. Write it down.
    Features articles from around the world of things that are happening that impact the financial system.
29. www.mcalvany.com. Write it down.
    This is the host of the DVD. His company does a weekly commentary to let them know what’s going on in current events and how it affects you.
30. www.ft.com. www.economist.com.
    The Financial Times and The Economist financial reports not from the main stream media.
31. www.stratfor.com. Write it down.
    International reporting on world events of a geo-political and geo-strategic nature.
32. www.cfr.org. Write it down.
    To find out what the elite are thinking and the direction of their politics.

Related Articles:

Federal Reserve Owners and History

Encyclopedia of Stupid – John Maynard Keynes