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Hello, Subscriber!
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The very peculiar this past week was the threat of seizure of private assets from people exercising their right to protest the actions of those who are "under contract" to render them services. People elected to public office and who have assumed they bear the authority to hoist rules and regulations on us are truly under contract as our "servants". (image courtesy: toonpool.com)
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If we don't have the right to voice our opinion as "employers", then where is freedom and how long has it been locked out of our reach while we were too busy to pay attention? Are these servants not in breach of contract? Yes, they are! So how are they held accountable? Great questions, but I cover that topic on other forums.
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I made the point last week that, "your [financial] wealth is held in property". Money, real money, is a substantive property that is valuable of itself. What we have commonly come to view as "money" is currency, a receipt for the energy we expend at work, for which we receive no value until we trade it someplace like the grocer or gas station. Of course that only works as long as the grocer or gas station accepts such currency in trade. (I know, I've said it repeatedly, and I'll keep beating that horse into pudding until my fellow Americans hear me...)
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Today's point: Your private assets, in particular, what you think is "your money", are at risk as long as these are held in places like banks where you don't completely control access to what you believe is yours. And the forms in which you hold value, bear risk in loss of purchase power, especially when the forms have no inherent value.
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The concept of counter-party risk is that an account holder is dependent upon the custodian to deliver to them the value that they purchased and own. In a bank, you own an interest in the business of the bank. In a credit union, literally "shares" of the cooperative agreement with other depositors. You must trust that whatever value you deposit will be delivered to you when requested. There have been times in recent history when that system has been "closed".
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Many found in the events around 2008's Housing Bubble and after 9/11/2001 that banks and Wall Street can close and may not open for days. ETM's were offline, accounts frozen, and "your money" in the banking system was not accessible. When and if they open is a matter of when it is in the best interest of the bankers and brokers and has very little whatsoever to do with whether anything they hold is "your private property". You'll find such situations covered somewhere in their "Terms of Service".
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In short: banks today cannot be trusted. Most banks have more liabilities (bills and debts) than assets (money) and are therefore insolvent (quote: Alasdair Macleod) yet still taking your money and promising they'll be responsible with it. I use the banking industry for the sole remaining purpose for which they serve any use: conveniently transmitting partial account values to your utility providers and creditors each month. Outside of that, I keep a few hundred dollars in my checking to back my debit card purchases for gas and groceries. I expose no more of my money to the whims of their system than that; period. I will not assume to tell you what you should do with your "money", but I don't mind sharing what I do with mine.
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So, how much of your currency do you hold in cash in case you need to cover expenses quickly when banks are "closed". And, how much of your savings, your long-term value or wealth, do you hold in a form that will maintain it's value in trade no matter what happens around you? Can you easily get to these stores of value in a crisis?
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We're quickly approaching a financial environment and time in history when such questions will be pertinent, however peculiar they sound.
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If you don't know how to prepare yourself for such inevitabilities, I put several chapters into my MoneySmart book that can help. Budgeting in chapter 2, Financial Goals of chapter 3, and the "Guide to Wealth" discussion of wealth accumulation and alternative cash flow are all available as online courses on my website. I grant you, the hour is getting late but the only time it's too late to buy fire insurance is when the house is already burning. So, consider your options and seek education, guidance, and assistance if you need it; and do it soon.
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Hopefully inflation here in the U.S. doesn't get anywhere near this bad. But if the U.S. Dollar drops to its inherent value of zero, what's the value of anything divided by zero? "infinity". That's where a 100-Trillion unit currency note comes from. Note the 2008 date on the Zimbabwe example above. "Hope for the best, but prepare for the worst."
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Challenge: When U.S. Dollars were backed with 371-4/16th grains (24.06 grams) of fine silver, exchange of "receipts to money" bore a 1:1 ratio. Based on today's spot price alone ($26), how much silver might you get today, for "one dollar"?
[see end of email for the answer]
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If you find this interesting or helpful, please share it.
Here's some more noteworthy information:
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Canadian PM "...Trudeau to Crack Down on Canada Trucker Bank Accounts..." If connected to the Federal Reserve, the government already has an "off switch" on what you think is "your money". With the digital currency they don't even need to ask the banks; "click" and "your money" is gone. Fascism bears its fangs. [Morgan video at 9:00/15:29] [insurance also] [LINK]
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Michael Oliver, founder of MSA Research, discusses the unprecedented events of economic and geo-political significance and what it means to your wealth, safety, and security. See this week's question 2 below for a little practical application of Michael's info. [LINK]
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"World War E Has Begun - But What Is It?" A 30-minute conversation with Mike Maloney and Adam Taggart reviewing the newest form of nation-state conflict: cyber-warfare; the attempt to knock the opponent or threat back to pre-internet, pre-computer technology if only temporarily. [LINK]
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"But I'm not driving, I'm "traveling". While it is semantic deceit, it is turned against those who first hoist it upon unsuspecting people. "Driving" is a commercial term used when "transporting" "passengers" or "cargo" for hire; more commercial terms. How often do you do this? If your answer is "never", perhaps you have no need to be "licensed" to enjoy your freedom to travel in your private property either! [LINK]
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I've moved my financial services business from public to private. Learn how government policy like regulations and taxes can be kicked to the curb!
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Challenge: Michael Oliver estimates that the swing of gold to compensate for inflation might be as high as 8:1 vs. it's low at $1050. If silver is historically 15:1 availability and value to gold, what might silver's price in dollars rise to?
[see end of email for the answer]
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Merch helps keep your eye on what's important:
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Saving 15% might be important... Enter code: "REALMONEY" in the coupon field at checkout in my Spring.com stores and save 15% until 3/25/22!
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MoneySmart Success
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Being "MoneySmart" is a matter of managing that which you have well so you have more to manage! And, as with the points made this week, know the difference between currency and "real money".
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Tee Ranter Patriotic Tee
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Everything you love hinges on your liberty, your freedom to pursue and obtain it. That concept in the USA has been so entrenched for so long that some don't realize what life would be like without it.
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MoneySmart Chapter Tours
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Having more money to manage is matter of the habits you use to manage the money you have! Check out the MoneySmart online chapter tours here:
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