"Yad" (a Hebrew word) means "Open Hand"

By Charles Griffin, CLU, ChFC

It expresses the power by which one can achieve something. Silver, gold, money, all are akin to "Yad" today.  An open hand represents the power, the means to obtain things.  I think of the open hand and what can be done with it.  While a clenched hand, a fist, can be used for defense, an open hand (yad) gives us the power to be industrious.

With it we can grasp a hammer with which to build.  We can hold a pen through which thoughts and ideas can flow, conveying messages, communicating with others today and into the future, influencing individuals and the world.  The "Yad" can even enhance what a closed fist can provide in the way of defense as our open hand enables us to hold, grasp, and manipulate objects and/or weapons used for protection.

Now think of your IBC (Infinite Banking Concept) program as your "Yad".  Your IBC Program is your open hand that gives you the power to effectively and efficiently accomplish anything that you so desire.  It is a financial tool that is superior to any other.

With it you can build, you can help and/or provide for yourself and others.  You can influence minds.  You can get yourself and others out of debt.  A nation can become strong through private contracts with free men and everyone can become prosperous and independent, leaving the public welfare teat to shrivel up and wither on the chest of a once again vibrant republic.  Independence, pride in self reliance, the ability to provide true charity and to live prosperous and productive lives through our own industry and ability can once again cause this nation to flourish.

We are not dead, simply numbed by the politics of our day.  We need to find our "Yad" and use it, so go use it to build something bigger than yourself.

Compromise!

By Charles Griffin, CLU, ChFC

Family Wealth and Wisdom, Inc.
This article appeared in the July/August 2011 edition of Lancaster County Woman

Reprinted with permission from the Author

We hear of this daily in politics. It’s as if this is the right thing to do! Why is it that we need to move to the middle and compromise in order to be viewed as willing to get things done in order to move any issue forward? Maybe we shouldn’t be trying to move bad issues forward! Why do we tolerate such flagrant manipulation and/or violation of our own values, of our Constitution, and of the laws of nature?

So, just what is being compromised?

Usually, the right and proper thing to do is what is being compromised, and the result is that we end up with an idea, a principle, or a program that is inherently wrong. Compromising one’s opinion and/or self-serving goals may be a way to imply tolerance and to show a “go along to get along” mentality (until one can seize the opportunity to have it all), but compromising values and what’s right is just plain wrong! That’s right, it’s wrong! We should not have to choose between the lesser of two evils. Right is Right!

There are such things as absolutes. Truth, for example, is an absolute. None of us can determine, in and of ourselves, just what absolute truth is and what a right and proper value system is. We can only affirm it once we know it. Absolute truth was established a long time ago, prior to when anyone existed but the Creator himself. We can come to know truth only by knowing Him.

Sometimes we tolerate an injustice because we think that said injustice won’t affect ourselves very much. Far too often we simply don’t know what the effect will be upon ourselves and upon society around us. We’re too busy to be involved or we’re unfamiliar with what is really happening. While ignorance may seem to be blissful at times, it will never help one to be a proper steward of one’s assets.

Proverbs 27:23 tells us to be mindful of our flocks and to tend to our herds. How can we even come remotely close to knowing the condition of our assets today when we readily allow ourselves to be influenced by marketing and persuasive advertising to make less than prudent decisions? We do have freedom of choice! We can choose to resist the various offers and temptations that bombard us daily tempting us to indulge in immediate gratification.  While pleasure is not inherently wrong, its consequences and ramifications need to be taken into consideration when making decisions.

 

Ignorance, itself, breeds wealth transfers. Fortunately, ways do exist for us to eliminate many of the wealth transfers that cause us to have our productivity diminished. We can be more in control of what we do with our own assets. In order to obtain this position in life, proper structure and a deliberate process is important.

Thus, working within the “rules” as established, and understanding how they apply to one’s own individual situation, can be a monumental task as we collectively work overtime to get ahead or to just maintain the status quo!  We rely upon the "rules" established by the state to be fair and just while at the same time we depend upon imperfect and all too often self-serving individuals to administer and dose out "equity".

Unfortunately, our system of government has become so self-serving so as to make it difficult for the average citizen to practice freedom of belief when it comes to their own personal beliefs. Things become more complicated. We fall prey to “Conventional Wisdom” telling us what to do, where and how to invest, only to end up with the fruits of our labor being transferred unknowingly and unnecessarily.

 

It’s not impossible to adhere to one’s personal belief system. It’s just very difficult to do so when what we produce through our being productive is stolen or diminished in value by the very people who are sworn to protect our personal rights and freedoms.

 

Parkinson’s Law, simply summarized, states that 1) "work expands to meet the time envelope allowed", 2) "a luxury, once enjoyed, becomes a necessity", and that 3) "expenses rise to equal income."  Parkinson's Law is alive and well today.  1) It is extremely difficult for committees to produce good results.  Things are typically put off until the last minute and we get a rushed-through result.  2) How many of us want to do without, even if we've borrowed in order to do with?  3) Our wishes will always exceed our means to pay for them.

 

Each of us has to decide how we can be productive.  While a system, a plan, or a well-devised process can help one to avoid these very common pitfalls, if we choose to remain "average", then we can expect to end up with an average situation.  Being average does not mean retiring leisurely; very few Americans can do this.  The ones that strive to rise above average refuse to accept the "Conventional Wisdom" handed down to them.

The Infinite Banking System is designed to give you back control of your productivity.  By private contract between free men and women you protect and preserve what you've acquired.  You have access to it whenever you desire, without asking for permission or approval of some lending institution or having to pay a penalty to access your money.  You are not subject to the whims or manipulations of the market.  You can control how your money is put to work and who benefits by it.  You can finance your own business or that of someone else's.  You can take a more active role in cultivating a loved one's career or be more generous in some way.

We can all do this! We simply need to know how.  We need to become more responsible for our own outcomes.  Don't take your dreams and desires for granted.  Minimize your wealth transfers and become more involved in how your wealth is used.  You earned it.  You should have a say in how it's distributed.  The cost of finding out how is miniscule.  Ignorance could be devastating.  Please call us with your goals and aspirations.  We can help you get there sooner and more efficiently.
 

 

 

 

The Keys to Economic Growth

The Keys to Economic Growth
By Congressman Ron Paul

Recent economic data show that U.S. job growth in May was negligible, while the official unemployment figure – at least the figure the Labor Department admits to – rose to 9.1%. The real unemployment figure, however, as compiled by economist John Williams, may well be higher than 20%. It is clear the U.S. economy is in terrible shape, and that no amount of government spending or Federal Reserve quantitative easing can reduce unemployment, increase real productivity, or address our debt fiasco. U.S. jobs and productivity are dependent on the accumulation of private capital to finance existing businesses or fund new entrepreneurial activity. Private capital – whether

accumulated by profitable U.S. businesses, invested by private equity and venture capital firms, or attracted from abroad – is the key to economic growth and new jobs. But we cannot create jobs if

we demonize profits, punish risk-taking capitalists, and stay hostile to foreign investment.

The steps to encouraging capital investment and creating new jobs in America are simple, though not easy:

 

• First and foremost, we must create a sound U.S. currency backed by gold or some other commodity respected by the market. No nation in history with a rapidly depreciating currency has attracted private capital. Unless and until we prohibit the Treasury and Federal Reserve from essentially creating money and credit from thin air, we cannot restore the U.S. economy.

• Second, we must create a favorable regulatory environment for U.S. business. This cannot be stressed enough. When businesses don’t know what’s coming next from the EPA, when Obamacare spikes their healthcare costs, or when the Dodd-Frank bill adds almost unknowable regulatory compliance burdens, businesses simply will not expand and hire. It is time to start shrinking the federal register.                     
• Third, we must stop spending trillions of dollars overseas on foreign wars. There is no point in debating a foreign policy we cannot afford. It no longer matters what neoconservatives want. Our interventionist foreign policy is financed on credit, and our credit limit has been reached. Our economy would be infinitely better off if those trillions of dollars had never been removed from the private economy or added to our debt. 

• Finally, we must completely revamp the U.S. tax system and move to a territorial model that does not tax foreign source income. U.S. corporations are sitting on more than a trillion dollars in foreign earnings that cannot be repatriated to the U.S. because of taxes. We need to stop taxing unpatriated funds to bring those earnings home. Better yet, we need to abolish the income tax altogether.

The U.S. economy is in deep trouble. Congress needs to act immediately to restore the rule of law and create an environment that rewards, rather than punishes, the critical components of any healthy economy: capital accumulation and investment.

In this struggling economy it is essential for politicians to take a step back and think about what government has been doing to business in this country.  In less than 200 years, the free market, property rights, and respect for the rule of law took this nation from a rough frontier to a global economic superpower.  Today, however, our nation and our economy clearly are headed in the wrong direction.

Of course, America has never enjoyed absolute freemarket capitalism: creeping government intrusion and special interest political patronage have existed and increased since our founding. But America historically has permitted free markets to operate with less government interference than other nations, while showing greater respect for property rights and the rule of law. Less government, respect for private property, and a relatively stable legal environment allowed America to become the wealthiest nation on earth.

 

By contrast, the poorest nations almost always demonstrate hostility for free markets, private property, and the rule of law. Capital formation, entrepreneurship, credit, and wealth accumulation are uniformly discouraged in poor countries. Private

contracts are not reliably enforced, and private property is not secure in the hands of owners. The predictable result is widespread poverty and misery.

 

 

Infinite Banking Concepts is Ridiculously Simple!

Infinite Banking Concepts is Ridiculously Simple!

 

Those of you that have attended Nelson's seminar have heard him make this statement. Below is a recent seminar “after action review” that mirrors Nelson’s comment.

I went to a seminar that was about banking and money. The three main topics were saving, loans and repaying the loans. In the savings part of the seminar the speaker [Nelson] told us the importance of saving money and not spending everything we make. Once enough money is saved, we can begin to take a loan from the money we saved.

The loans that we take from our own “bank” have to be paid back with interest just like a normal bank would charge us.

When we pay back our loans with interest you have more money in your savings instead of giving the money to the bank.

The speaker made it very clear that you should only take loans that you can repay. He also said that the more interest you pay yourself, your savings is greater.

This made sense to me because, you shouldn’t spend your money like crazy and you should have to save for the future. -- Natalie Lasko, age 8

Infinite Banking – How it Works?

 

 

Infinite Banking – How it Works

By Gary Vande Linde

Why I am Interested in the Concept

Three years ago I left a large company, where I had served as the division engineer for the past twelve years, to become part owner in a small business. The owners hoped that the experiences I had would prove useful in creating a long range plan for their business and developing a disciplined approach to the use of their financial resources. I was comfortable with the methods and techniques needed to implement these concepts since I had used and supported them in my previous role as an engineer. The issues that I was not prepared for and frankly has been a surprise, is the challenge that small businesses face in the procurement and/or development of a source of working capital to fuel the growth and expansion of their business.

As an engineer, working for a large company, having a ready source of working capital was never a concern for me. Rather, if I could demonstrate that a particular piece of equipment or machinery or change in our process would generate either increased revenues or decrease cost enough to pay for the modification in two years or less the money was on its way. However, in a small business setting I was soon faced with the reality that although we could see many places where improvements to our process would realize us huge benefits in terms of cost savings or quality improvements we had a difficult time procuring a source of capital to help us implement these changes. I soon realized that without some source of working capital the rate at which we could grow our business was limited. It was at this time that I began to talk with what I call “money thinkers” to see how other small businesses were cracking this nut. One day an uncle of mine who does financial planning gave me a book he had recently read on “The Infinite Banking Concept”. He asked me to read the book and said he believed the ideas could prove useful to me in solving some of our business cash problems.

Upon first reading of the book, it seemed reasonable, sound, and caused my imagination to explode with ideas. I immediately saw a method of building working capital for our company that would solve several other problems simultaneously. At the same time I found myself feeling skeptical. If this is such a good idea why are other people not using it? How could something this simple work? Are the claims being made true? How can I prove the ideas to myself? The list goes on and on. So I took out a sheet of paper and began writing down every question I could think of and every potential application that came to mind. I then began to contact people who could help me analyze each question or opportunity. Over a period of about six months I began to work through my list – adding new questions as they arose and new opportunities as they became apparent. When I got to the point that I felt confident enough to discuss the ideas in front of a group, I asked the members of my investment club if they would listen to a presentation and help me evaluate the strengths and weaknesses of the idea.

In preparation of that meeting I gave various members of our investment club copies of Mr. Nash’s book and met with others individually to present the ideas over lunch. My thinking was that the ideas run counter to what many people have been taught and people need a little time to sort through the ideas at their own pace. I believe that the ideas Mr. Nash is presenting are so simple and yet so powerful that the natural reaction is to be skeptical – cautious. If people are rushed with an idea that has such far reaching implications, I believe that they will reject the idea out of fear that something is being sneaked past them.

The following paper was what I gave to the investment club ahead of time so that they would have had time to familiarize themselves with the concepts. My goal was to boil Mr. Nash’s book down to a paper with the basic ideas behind “The Infinite Banking Concept” so that an individual could read through it in about ten to fifteen minutes and have enough information to stew on.

 

Infinite Banking - Basic Concepts

The essence of the “Infinite Banking Concept” is to recover the interest that one normally pays to a banking institution through the use of dividend paying life insurance and then lending those funds to others so that the policy owner makes what a banking institution does. Funds may be lent to any party including your-self and earnings grow within the policy tax deferred. Thus you are both reducing your tax burden and capturing monies for yourself that a banking institution normally would receive.

A foundational principal of the concept is that anytime you can cut the payment of interest to others and direct that same market rate of interest to an entity you own and control, which are subject to minimal taxation then you will have improved your wealth generating potential significantly. (Insurance companies do pay taxes – it is just that dividends in an insurance policy are not taxed – we will talk about this later.)

A concept or principal that must be understood before we began is that we are not talking about investing here rather we are talking about financing. Financing is a process not a product. Financing involves both the creation of and maintenance of a pool of money and its use. However we will see that when a financing system is combined with an investment system the combination of the two will always out perform an investment system. When the system combines reduced tax liability with a financing engine and allows complete control over your investments there appears to be no system capable of generating wealth with as much consistency or speed. (Please see page 68 – “Becoming Your Own Banker”)

A second concept or principal we must all agree on is that you finance everything. You either finance by: 

• Paying interest to someone else – a bank, lender, etc.
• Or giving up interest you could have earned otherwise. (When you pay cash the interest the money could have earned is forfeited)

 

For these reasons when we are discussing investment alternatives we must not only weigh the return we will receive but we must also evaluate what we are forfeiting or giving up. This mind set will become more important as we evaluate the “Infinite Banking Concept”.

For all of the reasons mentioned above every person should be fully engaged in two businesses.

• Your occupation
• Banking

Of the two businesses mentioned above, banking appears to be the one that has the greatest potential for helping a person generate long term wealth.

 

If we look at the average American we will find that most Americans spend about $ 0.24 - $.34 of every dollar on interest expense. (Home, Car, Boat, Credit Card, etc.) For example if you look at the purchase of a home, approximately 85 % of the monies paid during the first five years of your     mortgage are interest payments.

Also looking at the average American we find that about $ 0.30 of every dollar is paid in taxes.

Summing these quantities we see that the Average American is paying from $ 0.54 to $ 0.64 of every dollar they earn on interest expense and taxes. If a legal, legitimate method could be developed to simply capture half of this loss the wealth creating ability of the average man would be significantly improved.

In short, if these two sources of revenue could be captured then you would be further along in generating wealth for yourself than if you made good investments in the market that were achieving high rates of return.

As a note, the methods we are about to discuss are used by Wachovia Bank. To capitalize a portion of their banking system, Wachovia has purchased over nine billion dollars in dividend paying life insurance on their top executives. This pool of capital is one of the sources of working capital the bank draws on to fuel their banking system.

How Insurance Works

1.  In developing an insurance policy several steps must take place. These are as follows:

• Actuaries develop a statistical model based on the lives of ten million selected people. The model predicts the number of people that will die each year within the selected population. The model covers people from the age of birth until one hundred years of age.
•  After the actuaries have developed the population model, rate makers will take this information and determine what the company will have to charge in order to pay the death claim promised and make the whole system work.
• Lawyers make legal and binding contracts that are offered to the public through a sales force.
• An administrative organization made up of executives, clerks, etc. oversees and administers the whole system.

 

2. So far so good. The contract you sign is unilateral. The insurance company promises to do certain things if you meet the standards of acceptability and make your premium payments.

 

3.  If you will look at your contract closely you will see that you are the owner of the contract not the insurance company. The owner is the most important person in the play that is unfolding.

 

4.  To make the insurance plan work the owner (you) must make payments into the company insurance company) and the insurance company must put this money to work in order to produce the benefits promised. This is usually done in conservative financial instruments such as bonds, mortgages, etc. Sometimes an insurance company will invest in speculative investments such as real estate or joint ventures but this is usually a small part of the investment portfolio.

 

5.  Now since you are the owner of the policy and not the insurance company you outrank every potential borrower who wishes to use the money in your policy that is available to be lent.

 

6.  Since you are the owner of the policy and you out rank every other borrower you have absolute control over the equity (cash value) that has accrued in your account.

 

7.  In essence the insurance company can only lend the equity (cash value) in your policy to other places if the policy owner (you) does not exercise his option to use the money at the interest rate agreed.

 

8.  By investing the premiums paid the insurance company creates an ever increasing pool of money to service the policy.

 

9.  Now at the end of the year the directors call in the accounts and ask “How did we do on John Doe’s policy in comparison with the assumptions made by the actuaries and the rate makers?”

 

10. Based upon this comparison a dividend may be declared.

Why is a dividend not taxable?

Let’s look at an example.

1. The rate makers determine that John Doe’s policy will cost him $ 1.00 / year for the insurance he wants.
2. Now the insurance company recognizes that several factors may cause the $1.00 / Year estimate to be wrong such as high administrative cost, larger than expected death claims, or lower than expected earnings.
3. As a result they apply a fudge factor and bump the rate to $ 1.10 / year. This extra $ 0.10 is the capital that makes the system viable.
4. After a few years the directors call the accounts in and ask “How did we do on John Doe’s policy in comparison with the assumptions made by the actuaries and the rate makers?”
5. The accounts report we have collected $ 1.10 in premium on John Doe’s policy and it has only cost us $ 0.80 to deliver the promised death benefit.
6. As a result the directors now have $ 0.30 to make a decision with.
7. Since the directors are smart people they decide to place $ 0.025 into a contingency fund and return the remaining $ 0.275 as a dividend.
8. Since the dividend is not an actual “gain” but is rather a “return of premium” the dividend is not considered a taxable event.
9. Unlike a dividend declared in a security which may lose its value as the stock rises or falls a dividend declared in an insurance policy can never lose any of its value. Once a dividend is declared it is guaranteed - it can never loose its value.
10. If the owner will use the “dividend” to purchase additional Paid Up Insurance (No cost for acquisition or sales commission) the result is an ever increasing, tax deferred accumulation of cash values that support an ever increasing death benefit.
11.  This pool of money has no real governmental strings attached as to how, when or why it may be used and can be passed on to the next generation with limited or no estate taxes.

But it seems risky

A point to consider about an insurance policy is that they are designed to become more efficient over time no matter what happens. How can this be?

Insurance policies become more efficient over time because over the life of the policy the cash value is guaranteed to reach the face amount of the policy. As a result the insurance company faces an ever decreasing “net amount of risk”.

Possible Uses of the Infinite Banking System

 

Medical Insurance – This system works well for people who are “un-insurable”.
Car Insurance
Life Insurance
Buy Sell Agreements
Pension plans for employees
Home Mortgages
Car, Boat financing
Equipment financing
Estate planning & Wealth X-fers
Charitable trust and giving
College savings plan
Leasing business
Retirement planning
Eliminates need for Social Security
Can cover multiple generations – good method of teaching and transferring wealth to successive generations.
Business financing
Others - ?

How are Dividends and Interest Payments Calculated - ?
 
1.  Usually a life insurance policy will grow the cash value in a policy account in three ways. These are:
     a. Premium payments are credited to the cash value of the policy
     b. Interest Payments are made on the cash value in the policy.
     c. Dividends payments are made based on the cash value of the account.

2.  As a rule of thumb, a policy will have a blended internal rate of return (the rate of return – before tax - based upon the net effect of both the interest and dividend payments to the policy holder) of approximately 6% to 8%.

3.  Interest payments are usually based upon the cash value in an account. Usually the insurance company will establish either a fixed or a minimum and maximum interest rate that will be paid on the cash value in an account.

4.  Dividends payments are once again a function of the cash value of the policy and calculated as discussed above.

5.  When you borrow from your policy your dividends continues. The reason your dividend continues is because borrowing from your policy does not decrease the cash value in your policy. Rather, the cash value in your policy is used to collateralize your loan.

6.  The insurance company loans the monies to you at some rate of interest they deem necessary to make the policy work. This is what you are paying for the use of the money.

7.  If you decide to pay extra interest on your loan the difference between what the insurance company expects and what you pay goes straight to increasing the cash value of your account.

8.  This extra money grows your dividend payment and helps to create an ever growing pool of money for your “banking system”.

9.  Remember that all growth within the policy has occurred tax free and these cash values and death benefits can be passed onto the next generation with no or limited tax implications.

Proper Protocol and Procedure

Proper Protocol and Procedure

 “Banking is a process not a product” is what I frequently remind people who seem to concentrate too much on the insurance part of the Infinite Banking Process instead of what they are supposed to be concentrating on.  It isn’t the insurance policy that is going to make IBC perform best, it is you and the procedures that you follow.

This became crystal clear to me the other day when my flight instructor told me to follow proper procedural landing protocol as I approached a new runway.
 

What in the world is proper procedural landing protocol, you might ask?  Well, it’s like this.  You want to enter an airport’s airspace at a specific altitude above ground, at a specific angle, and you need to announce your intentions and follow the airport traffic pattern.  You also need to make sure that you follow the correct airspeeds for your make and model of aircraft or you could end up tail down on the ground.  Each phase of the landing has a unique airspeed and angle of descent that must be adhered to or your landing could be your very last.  Those last landings are the type you want to avoid and that is why there are proper procedural protocols to followed because they will insure that each landing is a success and not terminal. (And I’m not referring to the airport terminal!)
 

Being your own banker can be successfully enjoyed by many if they will follow the proper protocol and procedure.  But when these principles are ignored or violated you will kill the most profitable business in the world.
 

So, what are the proper procedural protocols for being your own banker? 
 

R. Nelson Nash, the author of Becoming Your Own Banker, tells us there are four proper procedural protocols to follow:

• Think Long Term --- at least three generations
• Capitalize --- pay your premiums
• Borrow against capital
• Pay yourself back with high interest rates --- it’s the only way to eliminate other bankers in your life

These four simple procedures will create more wealth in your life than anything else that you can imagine.  The problem for some folks is they lack the desire, discipline and determination to accomplish these basics.  They instead want to focus on the life insurance part of the equation, and in doing so, they fail to master the proper protocol.  The end result can be financially debilitating.

Again it’s much like landing an aircraft.  If you do it well you get the opportunity to do it again.  If you don’t do it well then things can become terminal as you crash your future financial opportunities.

Respectability

Not too long ago it was considered a disgrace to be “on the dole.”  Today, according to The Wall Street Journal[i], 49.1% of the population lives in a household where at least one member receives some form of government benefit.  That statistic is staggering.
 

Yet does this mean that folks need to “be on the dole” because they are worse off than they were 40 years ago when “being on the dole” was frowned upon by society?  Consider the following facts.

• “Three quarters of Americans with incomes below the official poverty level have air-conditioning (only 1/3 of Americans had air-conditioning in 1971)
• 97% of poor people own color television sets (fewer than half the population had a television in 1971)
• 73% of those considered to be living in poverty own a microwave oven (less than 1% of the population owned a microwave oven in 1971)
• 98% of those whose income is below the national poverty level own a DVD or CD player (nobody owned these products in 1971 as these products didn’t even exist)
• 72% of the declared “poor” in America today own a motor vehicle”[ii]

Of course the idea that wealth can be evenly distributed or apportioned to everybody fairly in a society is a fraud and everybody should know this.  But the grandiose assumption that government can accomplish such a feat is based on the idea that there is only a specific amount of wealth which is available...regardless of production.  Let me be very candid with you here.  Such an idea is a lie.
 

Contemplate a field of wild berries or herbs, or any other product that nature produces without human effort.  How does this product reach a point where it creates any value to anybody without labor?  It can’t!  You can either expend the effort to pick and eat the produce for yourself or you can expend the human effort, also called labor or human value, to pick this naturally occurring product and market the harvest to others.  The latter provides a benefit to both the purchaser and the producer.  This is because those who can’t “afford” the time or effort necessary to harvest for themself can still benefit from those who do “afford” the time and effort to do so.  And those who afford themselves the time and effort are benefited from the price that the purchaser pays them.  Therefore, both the one expending the human effort to harvest the produce and the one who purchases the produce once it is harvested is benefited in this process.  And the amazing fact is that the produce would have gone to waste (been of no value) had the human effort not been expended to harvest it.
 

Now apply the grandiose idea of wealth redistribution.  Whose wealth?  Who created this wealth?  In other words who spent the human effort (value) to create something of worth out of something that had no worth?  And why should that which has been created by one person be taken away from them and distributed to another without due compensation?  Such behavior only debases the human effort (value) which has provided us with a civilization instead of a barbaric social existence.
 

The fact that so many of today’s society are bankrolled by government redistribution plans tells us that a less productive, more barbaric and less cultured society awaits us in the near future.  And we can see the beginning signs of this even today.  The process of altering this inevitable course of human events is to share with others how they can create more human value which will produce a better civilization for all instead of empowering certain citizens to steal the human value of others to subsidized their standard of living.
 

In the past this honorable objective was accomplished through education and entrepreneurship.  Today our education system has been largely turned upside down because the schooling system employs many who’ve never produced anything in their life time to teach others to do the same.  And entrepreneurs are punished and penalized by burdensome bureaucracies which prevent them from producing products that could benefit everybody if left unfettered.   Then when an entrepreneur does succeed they are taxed to the point where the product produced becomes too costly to benefit anybody but the government. 
 

And I suppose you don’t get really excited about working hard and having your ability to earn a profit abridged by regulations which divert your profits to others who’ve opted to let you work hard while they simply stand by and exercise their right to vote in favor of  redistributing your profits for their benefit. 
 

Value is created out of what exists.  And the same is true about money.  When government authorizes the printing of large sums of money they are simply redistributing your wealth without your consent.  The only way to stop this is to learn to use your dollar more than once.  This is what bankers learned and master, at your expense, hundreds of years ago.  Today you can learn to do the same thing with your own money.  Wealth should never be distributed except voluntarily through charity or benevolence.  Stop allowing your hard human effort to be wasted and learn how charity really ought to work.  When you do the world will become a better place for everybody.  That’s just the way human value works.

Tomas McFie   2012-05-31

10 Things Every American Family Should Know About The Federal Reserve

From The American Family Association Website

10 Things Every American Should Know About The Federal Reserve

Thursday, February 09, 2012 9:23 AM

What would happen if the Federal Reserve was shut down permanently?  That is a question that CNBC asked recently, but unfortunately most Americans don't really think about the Fed much. Most Americans are content with believing that the Federal Reserve is just another stuffy government agency that sets our interest rates and that is watching out for the best interests of the American people.  But that is not the case at all. 

The truth is that the Federal Reserve is a private banking cartel that has been designed to systematically destroy the value of our currency, drain the wealth of the American public and enslave the federal government to perpetually expanding debt.  During this election year, the economy is the number one issue that voters are concerned about.  But instead of endlessly blaming both political parties, the truth is that most of the blame should be placed at the feet of the Federal Reserve.  The Federal Reserve has more power over the performance of the U.S. economy than anyone else does.  The Federal Reserve controls the money supply, the Federal Reserve sets the interest rates and the Federal Reserve hands out bailouts to the big banks that absolutely dwarf anything that Congress ever did.  If the American people are ever going to learn what is really going on with our economy, then it is absolutely imperative that they get educated about the Federal Reserve.

The following are 10 things that every American should know about the Federal Reserve....
 

#1 The Federal Reserve System Is A Privately Owned Banking Cartel 
 

The Federal Reserve is not a government agency.
 

The truth is that it is a privately owned central bank.  It is owned by the banks that are members of the Federal Reserve system.  We do not know how much of the system each bank owns, because that has never been disclosed to the American people.
 

The Federal Reserve openly admits that it is privately owned.  When it was defending itself against a Bloomberg request for information under the Freedom of Information Act, the Federal Reserve stated unequivocally in court that it was "not an agency" of the federal government and therefore not subject to the Freedom of Information Act.
 

In fact, if you want to find out that the Federal Reserve system is owned by the member banks, all you have to do is go to the Federal Reserve website....
 

The twelve regional Federal Reserve Banks, which were established by Congress as the operating arms of the nation's central banking system, are organized much like private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year. 
 

Foreign governments and foreign banks do own significant ownership interests in the member banks that own the Federal Reserve system.  So it would be accurate to say that the Federal Reserve is partially foreign-owned.
 

But until the exact ownership shares of the Federal Reserve are revealed, we will never know to what extent the Fed is foreign-owned.
 

#2 The Federal Reserve System Is A Perpetual Debt Machine 
 

As long as the Federal Reserve System exists, U.S. government debt will continue to go up and up and up.
 

This runs contrary to the conventional wisdom that Democrats and Republicans would have us believe, but unfortunately it is true.
 

The way our system works, whenever more money is created more debt is created as well.
 

For example, whenever the U.S. government wants to spend more money than it takes in (which happens constantly), it has to go ask the Federal Reserve for it.  The federal government gives U.S. Treasury bonds to the Federal Reserve, and the Federal Reserve gives the U.S. government "Federal Reserve Notes" in return.  Usually this is just done electronically.
 

So where does the Federal Reserve get the Federal Reserve Notes?
 

It just creates them out of thin air.
 

Wouldn't you like to be able to create money out of thin air?
 

Instead of issuing money directly, the U.S. government lets the Federal Reserve create it out of thin air and then the U.S. government borrows it.
 

Talk about stupid.
 

When this new debt is created, the amount of interest that the U.S. government will eventually pay on that debt is not also created.
 

So where will that money come from?
 

Well, eventually the U.S. government will have to go back to the Federal Reserve to get even more money to finance the ever expanding debt that it has gotten itself trapped into.
 

It is a debt spiral that is designed to go on perpetually.
 

You see, the reality is that the money supply is designed to constantly expand under the Federal Reserve system.  That is why we have all become accustomed to thinking of inflation as "normal".
 

So what does the Federal Reserve do with the U.S. Treasury bonds that it gets from the U.S. government?
 

Well, it sells them off to others.  There are lots of people out there that have made a ton of money by holding U.S. government debt.
 

In fiscal 2011, the U.S. government paid out 454 billion dollars just in interest on the national debt.

That is 454 billion dollars that was taken out of our pockets and put into the pockets of wealthy individuals and foreign governments around the globe.
 

The truth is that our current debt-based monetary system was designed by greedy bankers that wanted to make enormous profits by using the Federal Reserve as a tool to create money out of thin air and lend it to the U.S. government at interest.
 

And that plan is working quite well.
 

Most Americans today don't understand how any of this works, but many prominent Americans in the past did understand it.
 

For example, Thomas Edison was once quoted in the New York Times as saying the following....
 

That is to say, under the old way any time we wish to add to the national wealth we are compelled to add to the national debt. 
 

Now, that is what Henry Ford wants to prevent. He thinks it is stupid, and so do I, that for the loan of $30,000,000 of their own money the people of the United States should be compelled to pay $66,000,000 — that is what it amounts to, with interest. People who will not turn a shovelful of dirt nor contribute a pound of material will collect more money from the United States than will the people who supply the material and do the work. That is the terrible thing about interest. In all our great bond issues the interest is always greater than the principal. All of the great public works cost more than twice the actual cost, on that account. Under the present system of doing business we simply add 120 to 150 per cent, to the stated cost. 
 

But here is the point: If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good. 
 

We should have listened to men like Edison and Ford.
 

But we didn't.
 

And so we pay the price.
 

On July 1, 1914 (a few months after the Fed was created) the U.S. national debt was 2.9 billion dollars.
 

Today, it is more than more than 5000 times larger.
 

Yes, the perpetual debt machine is working quite well, and most Americans do not even realize what is happening.
 

#3 The Federal Reserve Has Destroyed More Than 96% Of The Value Of The U.S. Dollar 
 

Did you know that the U.S. dollar has lost 96.2 percent of its value since 1900?  Of course almost all of that decline has happened since the Federal Reserve was created in 1913.
 

Because the money supply is designed to expand constantly, it is guaranteed that all of our dollars will constantly lose value.
 

Inflation is a "hidden tax" that continually robs us all of our wealth.  The Federal Reserve always says that it is "committed" to controlling inflation, but that never seems to work out so well.
 

And current Federal Reserve Chairman Ben Bernanke says that it is actually a good thing to have a little bit of inflation.  He plans to try to keep the inflation rate at about 2 percent in the coming years.

So what is so bad about 2 percent?  That doesn't sound so bad, does it?
 

Well, just consider the following excerpt from a recent Forbes article....
 

The Federal Reserve Open Market Committee (FOMC) has made it official:  After its latest two day meeting, it announced its goal to devalue the dollar by 33% over the next 20 years.  The debauch of the dollar will be even greater if the Fed exceeds its goal of a 2 percent per year increase in the price level. 
 

#4 The Federal Reserve Can Bail Out Whoever It Wants To With No Accountability 
 

The American people got so upset about the bailouts that Congress gave to the Wall Street banks and to the big automakers, but did you know that the biggest bailouts of all were given out by the Federal Reserve?
 

Thanks to a very limited audit of the Federal Reserve that Congress approved a while back, we learned that the Fed made trillions of dollars in secret bailout loans to the big Wall Street banks during the last financial crisis.  They even secretly loaned out hundreds of billions of dollars to foreign banks.
 

According to the results of the limited Fed audit mentioned above, a total of $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010.
 

The following is a list of loan recipients that was taken directly from page 131 of the audit report....
 

Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion 
 

So why haven't we heard more about this?
 

This is scandalous.
 

In addition, it turns out that the Fed paid enormous sums of money to the big Wall Street banks to help "administer" these nearly interest-free loans....
 

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the "too big to fail" banks, the Fed also paid them over 600 million dollars to help run the emergency lending program.  According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in "fees" to the very financial institutions which caused the financial crisis in the first place. 
 

Does reading that make you angry?
 

It should.
 

#5 The Federal Reserve Is Paying Banks Not To Lend Money 
 

Did you know that the Federal Reserve is actually paying banks not to make loans?
 

It is true.
 

Section 128 of the Emergency Economic Stabilization Act of 2008 allows the Federal Reserve to pay interest on "excess reserves" that U.S. banks park at the Fed.
 

So the banks can just send their cash to the Fed and watch the money come rolling in risk-free.
 

So are many banks taking advantage of this?
 

You tell me.  The amount of "excess reserves" parked at the Fed has gone from nearly nothing to about 1.5 trillion dollars since 2008....

 

But shouldn't the banks be lending the money to us so that we can start businesses and buy homes?
 

You would think that is how it is supposed to work.
 

Unfortunately, the Federal Reserve is not working for us.
 

The Federal Reserve is working for the big banks.
 

Sadly, most Americans have no idea what is going on.
 

Another example of this is the government debt carry trade.
 

Here is how it works.  The Federal Reserve lends gigantic piles of nearly interest-free cash to the big Wall Street banks, and in turn those banks use the money to buy up huge amounts of government debt.  Since the return on government debt is higher, the banks are able to make large profits very easily and with very little risk.
 

This scam was also explained in a recent article in the Guardian....
 

Consider this: we pretend that banks are private businesses that should be allowed to run their own affairs. But they are the biggest scroungers of public money of our time. Banks are lent vast sums of money by central banks at near-zero interest. They lend that money to us or back to the government at higher rates and rake in the difference by the billion. They don't even have to make clever investments to make huge profits. 
 

That is a pretty good little scam they have got going, wouldn't you say?
 

#6 The Federal Reserve Creates Artificial Economic Bubbles That Are Extremely Damaging 
 

By allowing a centralized authority such as the Federal Reserve to dictate interest rates, it creates an environment where financial bubbles can be created very easily.
 

Over the past several decades, we have seen bubble after bubble.  Most of these have been the result of the Federal Reserve keeping interest rates artificially low.  If the free market had been setting interest rates all this time, things would have never gotten so far out of hand.
 

For example, the housing crash would have never been so horrific if the Federal Reserve had not created such ideal conditions for a housing bubble in the first place.  But we allow the Fed to continue to make the same mistakes.
 

Right now, the Federal Reserve continues to set interest rates much, much lower than they should be.

This is causing a tremendous misallocation of economic resources, and there will be massive consequences for that down the line.
 

#7 The Federal Reserve System Is Dominated By The Big Wall Street Banks 
 

Even since it was created, the Federal Reserve system has been dominated by the big Wall Street banks.
 

The following is from a previous article that I did about the Fed....
 

The New York representative is the only permanent member of the Federal Open Market Committee, while other regional banks rotate in 2 and 3 year intervals.  The former head of the New York Fed, Timothy Geithner, is now U.S. Treasury Secretary.  The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks. 
 

#8 It Is Not An Accident That We Saw The Personal Income Tax And The Federal Reserve System Both Come Into Existence In 1913 
 

On February 3rd, 1913 the 16th Amendment to the U.S. Constitution was ratified.  Later that year, the United States Revenue Act of 1913 imposed a personal income tax on the American people and we have had one ever since.
 

Without a personal income tax, it is hard to have a central bank.  It takes a lot of money to finance all of the government debt that a central banking system creates.
 

It is no accident that the 16th Amendment was ratified in 1913 and the Federal Reserve system was also created in 1913.
 

They have a symbiotic relationship and they are designed to work together.
 

We could fill Congress with people that are committed to ending this oppressive system, but so far we have chosen not to do that.
 

So our children and our grandchildren will face a lifetime of debt slavery because of us.
 

I am sure they will be thankful for that.
 

#9 The Current Federal Reserve Chairman, Ben Bernanke, Has A Nightmarish Track Record Of Incompetence 
 

The mainstream media portrays Federal Reserve Chairman Ben Bernanke as a brilliant economist, but is that really the case?
 

In 2005, Bernanke said that we shouldn't worry because housing prices had never declined on a nationwide basis before and he said that he believed that the U.S. would continue to experience close to "full employment"....
 

"We’ve never had a decline in house prices on a nationwide basis. So, what I think what is more likely is that house prices will slow, maybe stabilize, might slow consumption spending a bit. I don’t think it’s gonna drive the economy too far from its full employment path, though." 
 

In 2005, Bernanke also said that he believed that derivatives were perfectly safe and posed no danger to financial markets....
 

"With respect to their safety, derivatives, for the most part, are traded among very sophisticated financial institutions and individuals who have considerable incentive to understand them and to use them properly." 
 

In 2006, Bernanke said that housing prices would probably keep rising....
 

"Housing markets are cooling a bit. Our expectation is that the decline in activity or the slowing in activity will be moderate, that house prices will probably continue to rise." 
 

In 2007, Bernanke insisted that there was not a problem with subprime mortgages....
 

"At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency." 
 

In 2008, Bernanke said that a recession was not coming....
 

"The Federal Reserve is not currently forecasting a recession." 
 

A few months before Fannie Mae and Freddie Mac collapsed, Bernanke insisted that they were totally secure....
 

"The GSEs are adequately capitalized. They are in no danger of failing." 
 

For many more examples that demonstrate the absolutely nightmarish track record of Federal Reserve Chairman Ben Bernanke, please see the following articles....
 

*"Say What? 30 Ben Bernanke Quotes That Are So Stupid That You Won’t Know Whether To Laugh Or Cry"
 

*"Is Ben Bernanke A Liar, A Lunatic Or Is He Just Completely And Totally Incompetent?"

But after being wrong over and over and over, Barack Obama still nominated Ben Bernanke for another term as Chairman of the Fed.
 

#10 The Federal Reserve Has Become Way Too Powerful 
 

The Federal Reserve is the most undemocratic institution in America.
 

The Federal Reserve has become so powerful that it is now known as "the fourth branch of government", but there are less checks and balances on the Fed than there are on the other three branches.
 

The Federal Reserve runs the U.S. economy but it is not accountable to the American people.  We can't vote those that run the Fed out of office if we do not like what they do.
 

Yes, the president appoints those that run the Fed, but he also knows that if he does not tread lightly he won't get the money from the big Wall Street banks that he needs for his next election.
 

Thankfully, there are a few members of Congress that are complaining about how much power the Fed has.  For example, Ron Paul once told MSNBC that he believes that the Federal Reserve is now actually more powerful than Congress.....
 

"The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress." 
 

As members of Congress such as Ron Paul have started to shed some light on the activities of the Federal Reserve, that has caused many in the mainstream media to come to the defense of the Fed.
 

For example, a recent CNBC article entitled "If The Federal Reserve Is Abolished, What Then?" makes it sound like there is absolutely no other rational alternative to having the Federal Reserve run our economy.
 

But this is not what our founders intended.
 

The founders did not intend for a private banking cartel to issue our money and set our interest rates for us.
 

According to Article I, Section 8 of the U.S. Constitution, the U.S. Congress has been given the responsibility to "coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures".
 

So why is the Federal Reserve doing it?
 

But the CNBC article mentioned above makes it sound like the sky would fall if control of the currency was handed back over to the American people.
 

At one point, the article asks the following question....
 

"How would the U.S. economy then function? Something has to take its place, right?" 
 

No, the truth is that we don't need anyone to "manage" our economy.
 

The U.S. Treasury could be in charge of issuing our currency and the free market could set our interest rates.
 

We don't need to have a centrally-planned economy.
 

We aren't China.
 

And it goes against everything that our founders believed to be running up so much government debt.
 

For example, Thomas Jefferson once declared that if he could add just one more amendment to the U.S. Constitution it would be a ban on all government borrowing....
 

I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government to the genuine principles of its Constitution; I mean an additional article, taking from the federal government the power of borrowing. 
 

Oh, how things would have been different if we had only listened to Thomas Jefferson.
 

Please share this article with as many people as you can.  These are things that every American should know about the Federal Reserve, and we need to educate the American people about the Fed while there is still time.