My Financial Fitness Center

What a difference a year makes.

admin — Thu, 06 Nov 2008 15:40:19 +0000

For many in this country economics have become a nightmare. On top of all of the basics about how money works, another layer has come completely unraveled. That being the business of “shadow banking”. The public would be wise to become very intimate to the games afoot. The alphabet soup of derivatives first must be made comprehensible to be controlled. In the mid-90s while in banking, it was clear at least in the little unit that I was in, that swaps, and derivatives could cause a meltdown. The fear was that by becoming increasingly opaque, that the force of greed would eventually drive the creation of increasingly idiotic insturments that would be foist on the wary and unwary alike. As early as July 07 the auction system for debt backed securites (CDOs) started to stutter. http://en.wikipedia.org/wiki/Collateralized_debt_obligation Institutions were backing away from taking on the touted “same as cash” insturments. The bigger fool theory was in play however. Methodically, institutions such as Wachovia Securities, Merrill Lynch, and others pushed hundreds 0f millions of dollars of these into the hands of individuals, small business, and even companies like Earthlink. The instruments were created by companies such as BlackRock and Nuveen. By mid-Februar7 08 the market for these siezed up entirely. We are talking about a 300 billion dollar market freezing up. Understand, that individuals and businesses had been told that these things were money market accounts, (same as cash). Many buisnesses and personal economic lives came to a screeching halt. The following illustration is from OECD Organization for Economic Co-Operation and Development Financial regulation institutions were flooded with complaints. The brokerages insisted that they had done nothing wrong. Investigations ensued. Brokerages agreed to make their smaller investors whole at least. As of this writing of November 08 the bulk of funds are till tied up. It is expected that most of this will be restored to the investors by the end of the month.This however, unfortunately was the tip of the iceburg.The press was pretty much unwilling to cover the story. It was far far from something that would cook down into simple buzz words.It took the total melt-down in September to get the press to cover the issue.There is more than a little speculation that patronage by Wall Street of the major media outlets was the censoring influence on the media. The appearence of the Bernanke and Paulson in Congress on Sept 23, with the demad for 700 billion dollars to wall street finally got some attention.Where is the accountability you may ask? It isn’t too much a stretch to get the idea now in November that to a large degree the money being paid back to investors for the CDOs will effectively come out of the pockets of the US Treasury. Two days after the Presidential Election the markets continue to sputter. The word on the street is that that market is not pleased with the idea that full the street will not get full bonuses at year end. Specifically Dick Fuld of Lehman Brothers is being cut off at year end with no Bonus. Last year his bonus was a clear 34 million dollars.Alan Greenspan’s dicipleship of Ayn Rand gave him a blind spot in the area of regulation. On October 24th 08 he was quoted as saying to teh House Committee on Oversight and Reform, “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself especially, are in a state of shocked disbelief.” Clearly Rand’s notion of enlightened self-interest did not trump raw greed for the banking industry. For more on Rand, see Objectivism and the 1957 novel “Atlas Shrugged”.This all plays nicely into the capital C Conspiracy Theorists who are ready to gloat over the “I told ya so’s”. The short form of all this is that all nation stakes are being shown that the Nation state is a thing of the past. ”All must bow to the new masters of the world, International Banking interests”.The international bankers becomes the New Vikings demanding tribute from all conquored lands. The barbarians are at the gates. Will the New Vikings prevail? Stay tuned…. J.

Central Banks…. Get used to it.

admin — Fri, 16 Nov 2007 00:34:58 +0000

Since posting the various pieces on Central Banks, there has been a fair amount of chatter about how the United States, might do away with the Federal Reserve and replace it with a currency based on say…. Gold. The idea may have some charm. The only rub is that Central Banks are the way of the world economy. There is an organization that is worth knowing about. The BIS (Bank of International Settlements). Here is a list of the central banks for various countries who clear internationally using the BIS. Bet you can’t find a major country which is not on the list. http://www.bis.org/cbanks.htm

On a lighter note…. Here is a bit from a contender for Fed Chair. Enjoy… http://www.youtube.com/watch?v=4cCiyuqvKQo

The crusade here is for financial literacy.

Nothing Fishy Here…

Carpe Diem,

James T. Horne

What’s Party Got to Do With It

admin — Sat, 10 Nov 2007 15:24:15 +0000

Whether we like it or not, Central Banking is in place and Fractional Reserve systems are the backbone or (lack of it) of world economies. The game in play is a lot larger than the interplay between Republicans and Democrats in the US body politic. If you are following this blog, hopefully you have caught the videos along the way. Having said that, take a look at the following institution, Bank for International Settlements. A site which explores the mechanisms in more detail is the one world trust page on BIS. I quote from the page…

The Bank for International Settlements (BIS) is an intergovernmental organisation (IGO) whose membership consists of central banks and national monetary authorities. Its role is to foster international monetary and financial cooperation and to serve as a bank for central banks.

Established in 1930, the BIS is the world’s oldest financial institution. While initially set up by Belgium, France, Germany, Great Britain, Italy and the United States to channel German war reparations to other European states, its membership and its mandate have since expanded considerably. Today, it not only fulfils a wide range of banking services for its members but also acts as a forum to promote discussion and policy analysis. Through a number of important committees that operate out of the Bank’s offices in Basel, the BIS plays a central role in setting new international standards and codes to promote greater global financial and monetary stability. The BIS has also provided finance in the context of IMF-led stabilisation programmes.

I feel that it is important to know the way things work. Ignorance is not necessarily bliss in the area of finance, as more and more of us see every day.

The US Dollar is losing it’s dominant position. Don’t take my word for it, check the news.

There can be opportunity in adversity. There is a lovely quote attributed to one of the Rothschilds. “When times are uncertain, invest in futures”

There are opportunities in change. One needs to be able to recognize them and, as the Latin poet Horace said….”Carpe Diem” (Seize the Day).

Yours,

James T. Horne

Armchair Economic Philosopher — Not

admin — Thu, 11 Oct 2007 19:26:55 +0000

What reason do I have for creating this blog, or this site for that matter?

Freedom has been a watchword for most of my life. I have to say that I never felt as trapped as I did when I was under the economic gun. First when I was growing up and my dad, a disabled Vet died of cancer and we were in a world of financial hurt. Then in the aftermath of 9-11 when my financial universe shattered. I have seen it all, from homeless to the yuppie 6 figure fantasy life.

In between, I have seen life from the views of White Collar, Blue Collar and sometimes, no collar at all.

The one thing that is perfectly clear is that you can be a credit slave at the bottom of the economic heap or anywhere up the line. This realization may be becoming more and more common, not just to the U.S. Citizen but to the rest of the world.

What I do now for a living is teach people to trade futures contracts for a living. It has been absolutely amazing to me how many people I run into who are in a financial bind. So much of a bind that it becomes doubtful that their minds would be clear enough to trade the futures contracts. In part this site is for those folks. The good news is that if it sounds like I am talking about you, there is something you can do about it. Personally, I have seen financial ruin more than once. You really can dust yourself off and make a go of it. I have. I bet you can too.

It all starts with seeing that there is a problem. Then learning more about the extent of the problem. Next: learning what can be done about it.

James T. Horne

Saturday Night Live-On Debt Free Living

admin — Thu, 04 Oct 2007 13:47:54 +0000

One of the members of the Shadowtraders Community shared a SNL skit with me.

This is a must see, and is very short.

Don’t Buy Stuff You Can’t Afford

Stupidity

admin — Sun, 30 Sep 2007 12:53:09 +0000

Why so many videos linked from this blog, you may ask. One of the reasons is that they are a lot more alive as communications than simple text. Another is that not many people have the patience to read these days. Video has become the books of the 21st century.

There is a dark side to this. If you feel that you are in a world that is becoming dumb and dummer you may see some of the reasons why.

The video was published with a test tone and a black background at the beginning. In spite of this flaw it is otherwise very much a quality product.

Definition of STUPIDITY

Viewing time 1hr 11min.

There are two commerical videos which are worth viewing. “Maxed Out”, and “In Debt We Trust”. They are not available on the internet. One of the lessons in these is to what extent the population is being conditioned to use debt and credit cards. Why? The profits to the financial institutions are “obscene”.

James T. Horne

Perspective on World Banking

admin — Thu, 20 Sep 2007 12:38:41 +0000

If you follow the earlier posts you are taking a journey into the world of international finance. One of the the keys is to use your critical thinking skills. I know, critical thinking has gone somewhat out of fashion these days.

So don’t be too quick to make hard and fast decisions based on the new information that you may find.

I worked in banking for several years. I found that many of my banking associates did not have much understanding of the Federal Reserve System. The did understand the very complex part of the banking systems in which they were involved of course. In most cases big picture knowledge was lacking.

The “Freedom of Speech” of the backers of International Banking is supported on nearly every front in commercial media. There is not a lot of publicity in the media about how it all works. Some say this is a conspiracy of silence. Decide for yourself.

There are other conflicting perspectives about what may be a more proper way to run economies. A principal argument of the proponents of the alternative systems typically point to the basis of money being based on debt in the current system of international finance.

The alternative systems call for other factors, typically an exchangable good such as Gold or Diamonds. A primary argument for going to a commodity based standard is to minimize external controls.

A fallacy to the argument is simply this. Commodities are exchanged on international markets. It is also said that the control of gold is already in the hands of the current international bankers.

These comments are not meant to be necessarily supportive of the current system of finance. Understand, that there may be weaknesses in some of the other arguments when examined outside of their rhetorical framing in their presentation.

Critical thinking is the key to understanding the subject in the face of conflicting perspectives. In politics and banking there is something called the golden rule. “He who has the gold rules”. In any case for our purposes we can say, “Knowledge is Power”.

James T. Horne

The Creature From Jekyll Island

admin — Wed, 19 Sep 2007 23:21:50 +0000

This video is principally a documentary based on the book of the same name.

Run time is 42 minutes.

My question is this. Whether the situation is good or bad; are things so far along

that particular road to turn around.

After watching the video, tell us what do you think?

Creature From Jekyll Island

James T. Horne

Money, Banking and the Federal Reserve System

admin — Wed, 19 Sep 2007 02:58:01 +0000

The Spanish Milled Dollar was the first currency of the United States.

Even stocks were based on pieces of 8. A quarter was notably 2 bits, or two pieces of 8.

This documentary favors gold for backing currency. It also provides a solid understanding the subject matter as of it’s publication which is 1966. It has it’s own bias and perspective.

Viewing time 41 minutes.

As to the conclusions…

Think for yourself.

Money, Banking and the Federal Reserve

James T. Horne

Money as debt… How Modern Money Works

admin — Tue, 18 Sep 2007 18:56:11 +0000

Paul Grignon presents a brilliantly clear video which provides the basis of understanding the way money really works in the world economy.

Whether or not you agree with his perspectives, the subject is well covered.

The video runs 84 minutes.

Money as Debt

The second part of his video proposes a solutions to the questions which are raised.

Here is a much longer video which covers the material with a perspective of the history of western civilization.

This video runs 3 hrs 35 min.

The Money Masters

The perspective of the video is unfavorable to the Federal Reserve System. You may agree or disagree with the conclusions. Nevertheless, the historical events are well documented but not very well known. Understanding, the nature of world economics if nothing else makes world events more comprehensible and predictable.

James T. Horne