**Throughout the entirety of our journey, our goal is to recapture debt. To accomplish this task we must begin with a paradigm shift in our thinking. Instead of giving our hard-earned money to banks and financial institutions who use our money to gain wealth for themselves, we will bring our hard-earned into our own storehouse (becoming our own bankers) so that we can create our own wealth! This storehouse is a dividend-paying (participating) whole life (permanent) insurance policy set up properly (customized) by an Infinite Banking Concept-oriented broker through a reputable mutual life insurance company.
You and I hear words like derivatives, P/E ratios, alpha index, and we think we’re hearing from “the smartest people in the room.” Are we?
Paul Krugman, Nobel-prize winning economic and political columnist (aka “the smartest guy in the room”) was apparently tired of Congress “threatening” to not raise the debt ceiling in an effort to get our unfathomable $18 trillion debt under control. Krugman suggested (out loud) that because a legal loophole allows the Treasury to mint platinum coins in any denomination, President Obama need only mint a trillion dollar platinum coin.
If you’re tempted to think Krugman has a point, let me assure you, he doesn't. Value is determined by the buyer, not the seller. Anyone who has bought or sold a home (or has a modicum of intelligence) is well aware of this principle.
In an August 7, 2011 interview, former Federal Reserve Chairman Alan Greenspan (another “smartest guy in the room”) was asked if U.S. Treasury Bonds were still safe. Quote: “Very much so. This is not an issue of credit rating. The United States can pay ANY debt it has because we can always PRINT MONEY to do that. So there is ZERO probability of default.” Seriously?
We believe these are the smartest guys in the room because we’re insecure. We haven’t been taught to break down financial matters into their simplest form. Let’s change that.
The Federal Reserve (central banking system) was founded in 1913 as the result of a financial panic in 1907. The Fed is made up of banking CEO’s who aren’t elected by the people but appointed by the President. Their job is to regulate currency and monitor banks. Since their inception, among the numerous boom-bust cycles we’ve endured, the U.S. dollar has lost 97% of its value. Great job!
As Greenspan boasted, central banks can create unlimited money out of thin air. They call this art form “QE” (Quantitative Easing) rather than its rightful name: PRINTING MONEY OUT OF THIN AIR WHICH HAS NOTHING OF REAL VALUE BACKING IT! But I digress.
The Fed lends its “Monopoly Money” to governments by buying government bonds. This artificial demand for government debt drives bond yields down to zero and even negative. (Photo by Pixabay.)
Remember those 10-year Treasury Bond auctions? Bond buyers will eventually figure out what you and I have known instinctively: printed money is worthless! When they finally realize that paying interest rather than earning interest to own government debt is not fiscally sound, one of two things (or both) will occur. Either the central banks will be the only ones left with their Monopoly money and the markets will collapse or the Federal Reserve will have to entice bond buyers by raising interest rates. Raising interest rates even as slight as 1% to 2% will ... only God really knows what will happen then.
Life is you becoming "the smartest people in the room" while avoiding those who claim to be "the smartest people in the room."