I have now been following the largest law in the history of our country. It was passed in 2010 with the most amount of lobbyists in the history of our country. This bill was originally 588 pages and eventually grew to over 22,000 pages. I am referring to The Dodd-Frank Act. It has been in the news now for months with much talk about it being revised. If you have been following me on national radio, I have spoken against this law because of its three major points:
- It changes the legal ownership of our money. Your hard earned money in retirements and bank accounts can now be seized by an entity in our government.
- It actually creates big banks and challenges the notion of banks that are “too big to fail”, which made 2008 more challenging.
- It restricted the flow of money into the economy by constricting small banks’ lending money to small businesses.
The Dodd-Frank Act to the Financial Choice Act
After much talk about fixing and revising all of the things that are wrong with the Dodd-Frank Act, finally, a bill was created called The Financial Choice Act. All of my hopes of fixing this flawed original bill were shattered, after reading this revised bill. There were a few people that cheered when the House passed the 588-page bill on June 8th by a margin of 233 to 186. Those against this new bill call it something different, “The Wrong Choice Act”. This bill is a deeply misguided measure that would harm the consumers, investors, and our whole economy. In all of my years of supporting the Republican Party, I can’t comprehend why they have made this bill more financially dangerous than the original bill. It eliminates two of the key reforms specifically designed to prevent another bailout.
Orderly Liquidation Authority
It removes the authority known as the Orderly Liquidation Authority (OLA). Dodd-Frank created a legal mechanism for financial regulators to dismantle large, complex financial institutions outside of a bankruptcy court. Previous to this there was no way to contain a company that was in trouble and unwinds their books. Evidence of this was when Bear Sterns was in trouble. If Bear Sterns could have been contained then Lehman Brothers also wouldn’t have gone under and neither would have Merrill Lynch. All three were some of the largest, financially sound, and oldest brokerages on Wall Street. All three went under within weeks of each other. Then the financial turmoil spread to banks and Fannie Mae, and Freddie Mac. Not stopping there because our financial system is systematically global and intertwined, this went across the globe and affected close to 100% of the world.
Former Fed Chairman, Ben Bernanke knows firsthand the perils of facing a crisis with a very limited way of containment. He said “Eliminating the OLA would be a major mistake because these are essential tools for ensuring that financial stress does not escalate into a catastrophic crisis”. Bernanke is not alone. More than 120 leading law professors and economists sent a letter to Congress last month opposing the elimination of the OLA. The letter stated, “There is unanimity in the conclusion that elimination of the Orderly Liquidation Authority would be a grave mistake”. Economists looked back and believe if there was a way of containing this it certainly would not have spread the way it did. Thus the reason to create a mechanism, the OLA, to dismantle a financial institution. The new bill removes that and creates massive uncertainty.
The Volcker Rule
Most people understand that what caused the 2008 financial crisis was that banks and financial institutions were leveraging money in risky investments known as derivatives. The Volcker rule was put in place to prevent banks from using customer deposits to conduct proprietary trading, or trading of speculative securities for the banks benefit. This rule was included in the original Dodd-Frank Act as a direct response to the rampant trading of derivatives that contributed to the financial meltdown. The new bill removes the Volcker Rule, which now gives a green light for banks and financial institutions to use your money to cause another 2008 like crisis.
This bill is full of insanity. Imagine if there was a widespread plague. We would do everything that we could to contain this. That would be the OLA. Let’s take this a step further. Imagine if there was a shot or a pill to make everyone immune from this ever happening again. That is the Volcker Rule. Both have been removed. The financial plague is coming with certainty. Many believe 2008 and what caused it, was never fixed. In addition to these two points, the legal ownership of your hard earned money is not changed. In both bills, you do not legally own your money anymore. This magnifies the next bailout. When it arrives, this time there will also be a Bail-In. Your hard earned money, your retirements, and bank accounts are clearly jeopardized.
Experts Predicting A Crisis Worse Than 2008
Every week for the last 7 weeks another person and or entity comes forwards and gives a severe warning about another 2008 type of a crisis or worse. Many ignored the warning signs prior to 2008. The “experts” that warned a major crisis was brewing in 2007 were crucified and labeled radicals. The opponents of these ideas said there is no way we will have any type of this meltdown. They said good quality stocks is the place you will want to be. The fact is those stocks went much lower than the index of the Dow. Recently I am hearing the same verbal tremors that were ringing out prior to 2008. Their crucifixion is not as great. The same ”Nay Sayers” then are now still is disbelief. They are describing this current market as poised for a huge up tic. Describing a very healthy economic environment in the U.S. as fully recovered. At the same time, legendary investor Jim Rogers recently came out and said to expect the worst crash in our lifetime between now and in the next few years. He said, “It’s going to be the biggest in my lifetime…it’s going to be serious stuff.” He cites the market is beyond its healthy timeline of correcting…”Every four to seven years since the beginning of the republic”. He said “The next time you are going to see governments fail. You are going to see countries fall. You are going to see parties disappear. You are going to see institutions that have been around for a long time—Lehman Brothers had been around for over 150 years. GONE! Not even a memory for most people. You are going to see a lot more of that next time around, whether it’s museums, or hospitals, or universities, or financial firms”. Even the Bank of International Settlements (BIS), who is known as the “Central Bank of Central Banks”…issued this warning last week, “A new financial crisis is brewing and it could hit with a vengeance. The end may come to resemble more closely a financial boom gone wrong”. This week San Francisco Federal Reserve Bank President John Williams said “The stock market seems to be running pretty much on fumes. It is something that clearly is a risk to the U.S. economy, some correction there”. Multiple bank analysts last week including Citi, JPM, BofA and Goldman, all are urging clients to go to cash. On Sunday prominent hedge fund manager Eric Peters said there will be a market avalanche over the next 8 months. These are just a few that are “coming out” and confirming something is really very wrong.
The warning signs are significant. Governments from 9 other countries that have already seized a portion their citizen’s assets created the pathway to do this legally. Their citizens that had their money seized, wished they would have heeded their countries warning signs. The United States has together more laws and entities to be able to seize American’s retirements and hard earned money than all of the other 9 country’s laws combined. Call my company today and learn how you can rollover your 401k or transfer your IRA, buy physical metals and hold them without a tax liability. If you don’t have a retirement and have funds in a bank account we can also help you as we have thousands of other investors.
