Master Your Financial Destiny with Financial Literacy

Would Everyone Please Stop Shouting?

“To believe is very dull.  To doubt is intensely engrossing.  To be on the alert is to live; to be lulled into security is to die.”

This quote by Oscar Wilde is the purpose of this newsletter:  an honest inquiry into the nature of what is, a rigorous intellectual effort to sift through the barrage of information, disinformation, and misinformation available; to distinguish the credible from the propaganda, the reality from the rant.  Am I the only one who has noticed that anyone with the temerity to ask any question of political, economic, or financial significance in polite society these days risks being immediately overwhelmed with passionate polemics about Read more..

When Money Can’t Be Trusted

Money and wisdom do not always go hand in hand.  The Bible says in Ecclesiastes 7:12:  ”For wisdom is protection just as money is protection, but the advantage of knowledge is that wisdom preserves the lives of its possessors.” (New American Standard Bible, 1995)  I can’t possibly know what the author of those words long ago had in mind when he wrote about money, but in this column, money has no intrinsic value, but it serves as a store, or warehouse, of value.  When you work, you produce something of value, and then you seek to trade your product with others who have produced other things of value. 

Money is a symbol of the value in what was produced by work.  Money facilitates the trade, of value for value, between people.  It is easier to “store” or “warehouse” money than it is to store all the goods and services that that money represents.  Think about what a ridiculous burden it would be to store all the commodities we use in a single day of modern life.  We don’t stock up on a year’s supply of Cheerios, for example (at least not most of us), because we know that with this thing called money we can go down the street and pick up a box of cereal at a moment’s notice (at least as of this writing!).  And what do we trade for that box of cereal?  We exchange money.  We can’t eat money, but we can use it as a store of value and a medium of exchange.

Our modern world would not be possible without money to facilitate trade. . . .  Read more..

The Gods Among Us

In the beginning there was Money.  Well, not exactly.  There was barter.  There was a high degree of vertical integration, which is a fancy way of saying if you wanted something back then, it was pretty much up to you to grow it or make it yourself.  What trade existed was largely between members of the tribe or village or group.  If some guy made a pretty cool hunting knife, and his wife was nagging him for a deer to butcher and eat, a trade of the knife for the deer (or parts of it) might take place.  Trading was simple, uncomplicated, and very very slow.  Life was brutal and short.  At the end of the day, when you had run out of you, you had also run out of future.  You aged quickly and died young.  When groups of nomads found a place to their liking, they sometimes stayed, settled in, and became agrarian.  Society became more complex, and slightly greater specialization of labor became possible.  One family could grow things from the soil; another could domesticate animals as a source of meat.  There was still no Money.

Trading in this primitive context was still taking place among the so-called Indians on this North American continent when the first Europeans arrived.  The native Americans were fascinated with some of the baubles brought over by the Europeans and willingly traded furs for them.  Eventually some commodities became so commonplace and essential to daily life in primitive societies that they took on new importance as a means of facilitating trade.  Salt, because it was needed by everyone for daily purposes, came to assume more importance as a form of “money” than it formerly had as just salt.  Since everyone had salt, and used salt, goods and services were traded using salt as the store of value and medium of exchange between trading partners.  The same was true of other things of universal value, including furs.  Because of their prized ornamental value and scarcity, gold and silver  became universally accepted as Money. 

The term store of value is very important.  Without some universally accepted warehouse of value that had been produced, all exchange was limited to what could be immediately produced and immediately consumed.  No long term planning was possible, and without long term planning, the Industrial Revolution with its complex machines and processes was impossible.  Modern society was impossible.  The invention of Money was a prerequisite to all the amenities of life as we know it.  Without the invention of Money, we would all still be primitives.  In spite of Rousseau’s idealization of the Noble Savage, the Garden of Eden it was not.  Man was the victim of ignorance, superstition, disease, and unmitigated natural disaster the likes of which are only occasionally experienced today in the poorest parts of the world.

In primitive society, wealth was limited to whatever a person could produce in a day, or a month, or a year of his own individual effort.  All other wealth was acquired by confiscating the values produced by others at the point of a spear, or in time, at the end of a gun.  All great monuments of history were made possible by the confiscation, not only of others wealth, including their grain, their herds, their tools, but also the confiscation of the people themselves, physically.  People became property, to be used and exploited by their conquerors.  When Rome was starving because of crop failure, their solution was to conquer Egypt with their legions, make that part of North Africa a vassal state and require them to ship their grain to Rome at prices Rome dictated.  You might say that Rome “nationalized” Egypt;  Cleopatra, in name at least, still “owned” the means of production, but the prices were dictated by Rome, her Master.  For a while, she was able to continue her pretense of being in charge of her country, of being Queen.  Then one day Caesar extended an invitation she could not refuse:  to come to Rome to visit, as his “guest”.  The dress code for the event was a little intimidating–naked, in shackles, to be paraded as the spoils of war through the crowds of Roman rabble and oglers, the nobility and the great unwashed.  Cleopatra committed suicide.

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An Open Letter to Robert Kiyosaki

 

In case you don’t know, Robert Kiyosaki is the author of the Rich Dad series of books on financial literacy, and he and his beautiful wife Kim are the creators of the board game called Cash Flow, a marvelous financial learning tool for young and old alike.  I am a fan of Robert Kiyosaki.  I met him and his wife in a bar in Pittsburgh, PA.  They are very genuine, down-to-earth, and friendly people.  They are for-profit educators, and they clearly have a passion for their subject.  And yes, I really believe Robert’s story about his rich dad and his poor dad.  I don’t think Rich Dad is a figment of Kiyosaki’s imagination.  So I am a believer.  I don’t make statements like that very often.  I have something to say to Mr. Kiyosaki, a disagreement I want to air with him.

Dear Mr. Kiyosaki:

If you are reading this, you already know we are kindred spirits and I admire what you do and share your commitment to financial education.  In a recent article you wrote that some of your best financial advice is to not be average.  That comment was the source of considerable outrage on the part of your readers, judging by their comments.  Perhaps they wanted your message gift-wrapped in softer language, but I couldn’t agree with you more. 

Very few people truly comprehend the mind-numbing reach and power of their government, and its insatiable appetite for their earnings and its religious zeal to dumb them down and control their lives.  Therefore they do not understand how much the odds are stacked against them in their endeavor to break free from the rat race.  They do not understand that to be average is to have no chance.

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Why the Bank Always Wins

The BIG BANKS, that is.  The Big Banks always win.  And Big Money.  R-e-a-l-l-y BIG Money always wins.  Money so big it moves around the globe swiftly and silently and at the speed of light, and you can’t even attach a name to its owners.  We’re not talking about the neighbor down the street with the new Mercedes that he is so proud of.  We are talking about money so big it can bring down governments, and prop up governments, dictate terms to governments.  We are not talking about the millionaire next door.  Nor am I talking about your lovely neighborhood bank, or even the biggest bank in your state.  I am talking about the people who decide which banks fail and which ones don’t.  I am talking about the people who allow some banks to fail so that  THEY can buy up the failed bank’s  assets with pennies on the dollar—oh, and that’s pennies on YOUR (tax) dollar, not THEIR dollar.  The politicians are their pawns, who are rewarded and punished according to their compliance and cooperation.  The only thing these people fear is, well, YOU.  You are part of the herd, and they fear the herd.  These people don’t like democracy, they don’t like the light, and they only pretend at transparency.

To read about what you can do NOW

to improve your financial literacy

and put money in your wallet

continue to the end of this article, or click here:

http://www.phoenixlogistical.com/education.html

 

Empires have always been about the control of the many by the few.  It was said that the sun never set on the British Empire, and the most amazing feat of the British Empire is that it controlled so much of the earth’s surface with the tiniest of military garrisons and outposts scattered around the globe.  In most of those places, if the local populace had risen up against them, the tiny British garrisons would easily have been overrun and sent packing.  They had the greatest navy in the history of the world, but no navy could have kept them safe everywhere, and especially inland.  The secret of their superiority was the quality of their information.  They knew the value of information; they knew that information was power.  The maintenance of power required keeping the masses in ignorance.  And as long as the masses could be fed, amused, and kept poor, nothing would ever change.  It was important to keep the masses poor, because that kept them too busy and too tired to interest themselves in anything other than the tyranny of survival.  And the purpose of empire was to extract wealth from far flung lands and bring it home to a privileged few.

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The Global Poker Playoffs: a short story about Money Supply

Mayer Amschel Rothschild, the godfather of modern banking, purportedly said “Give me control of a nations money supply and I care not who makes the laws.”  What did he mean by that?  Is it true?  Since the Federal Reserve Bank controls the money supply of the United States as the world’s largest and most influential Central Bank, does this mean that this institution is more powerful than Congress, more powerful than the Executive Branch of the government, that it operates above and beyond the control of the Republicans or Democrats?  Is the Federal Reserve above the law?  Was Rothschild right?  What exactly is the money supply, anyway?

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Why the Federal Reserve Exists

Here we go with the vocabulary thing again.  I promise to make this easier than your last root canal.  The Federal Reserve Bank is a central bank.  Central banks are created to control and manipulate the money supply.  The money supply is the aggregate total of all the money in circulation in an economy.  It is often referred to in the media and the industry as M.  Controlling the money supply frees governments from the responsibility of living within their means.  It makes it possible for them to counterfeit money.  All governments have laws making counterfeiting their currency illegal.  That is because all governments have a monopoly on counterfeiting and do not tolerate competition in the business.

Governments counterfeit money in the exact same way all counterfeiters do; they print it, and slip it into circulation into the economy.  They spend it.  They spend more money than the economy produces because they do not want to live within their means.  They do not want to live within their means because they use money to buy votes.  They give out goodies in return for favors; favors in the form of legislation that promotes the welfare of one group over another group; favors that line their individual pockets, reward their friends, punish their enemies, and above all, favors that get them re-elected.

Other reasons are given, of course, for the existence of the Fed.  But it is axiomatic that all governments seek continual expansion of their powers, and control of the public purse and the power to tax is the Holy Grail for power seekers.  The founding fathers of this country feared government more than anything, and the Constitution they framed was to protect us, not from foreigners, and not from each other, so much as from our elected government itself.  The debates about economic policies are a sideshow and a distraction; the main event is the relentless expansion of executive power and the quiet transfer, not only of wealth, but of personal liberties as well.  Without economic freedom based on individual rights, private property, and the right to keep and dispose of our earnings as we choose, there is no freedom at all. Read more..

Financial Literacy: When a Bank Collapses

There has been so much debate about bank bailouts, and most people have nothing more than uninformed, generalized opinions on the subject, usually based on personal philosophies about the proper role of government in our nation’s economy. Bernanke and the Fed have maintained that the bailout was absolutely necessary in order to stop the economy from charging over a cliff. Is this what really happened? Or are the big banks an informal extension of the government already, and the taxpayers are routinely called upon to bail them out due to their poor business judgments? And if the latter is true, then surely such government “protection” creates a moral hazard in that the banks know  no matter how foolhardy or careless they may be,  when push comes to shove their survival is assured, i.e.  Big Business always gets saved by Big Government! Exactly how did the banks, particularly the Big Banks, get in so much trouble? How exactly was this related to the real estate bubble? Get part of the picture in this short video: Financial Literacy: When a Bank Collapses at http://www.youtube.com/watch?v=oG0ry145ymc.

Financial Literacy: Deflation: When an Economy Implodes on Itself

As I have discussed in other posts, every good, service, and commodity has a value, and that value is denominated, or measured in terms of the national currency; in our case the value of anything is measured in dollars.  (Go to Billionaires Who Can’t Afford a Loaf of Bread:  http://www.youtube.com/watch?v=HGfsQimC0mw)  Even money has a value that fluctuates, and there are events that trigger changes in the value of money.  Money is measured by it’s purchasing power, and economists spell this with capital letters Purchasing Power (PP).  Money by itself has no value; it is only a symbol and a medium of exchange, so the real question is how much of anything can you exchange a dollar for??  I have covered what happens during a period of inflation, and the costs of everything as measured in dollars goes up, which means the value of the dollar (or its purchasing power) goes down.  People think they are better off with rising wages, but factoring in the decreased ability of those wages to purchase, they are actually worse off. 

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