From 2010-2016 I have focused on a specific topic that relates to the crisis of 2007. To bring awareness to the consumer of how our own government has passed laws, created unconstitutional legal entities, and given them massive power over U.S citizen’s hard earned money. I have given seminars, spoken a multitude on national radio, wrote several newsletters, and a white paper that has 7 editions, titled “The Coming Bail In”. All are centered around the topic of how the government has clearly set up legal jurisdiction to seize bank accounts, IRA’s, and 401k’s, to name just a few financial accounts. This is not a conspiracy or a fairy tale in some far-off land. This is in our own soil. Our country is following in the footsteps of 9 other countries who have done a Bail In already since 2009. Seizing their citizens bank accounts and retirements/pensions.
Before I get started on the Bail In
You might be wondering about my stance. I am a fee market guy, believe in free capital, less government, and I am a Trump supporter. I supported Trump when there were 16 Republican candidates running for office. This doesn’t mean I agree with how President Trumps acts. Neither does this mean I support 100% of his policies, but close. So, now that that is out of the way, let me explain why the government is needing to ramp up once again the possibility of seizing your money.
2017 Banner Year in Many Ways
Think about this, in 2017 we experienced an incredible economy, a euphoric stock market, and job growth, all at historic levels. It was truly a banner year for our country in many ways. Some may ask then why are you writing about this?
Let’s take a closer look at this. In 2017 the country brought in a historical amount of revenues, the largest in history, $3.3 Trillion. We also had the largest loss compared to revenue in history. Last year our government lost $1.2 Trillion. This is by its own admission in the recent annual government report that came out three weeks ago. Keep in mind that this happened with a booming economy. We were not at war, and not in a recession. This is when a country should be paying down their debt, not going on a massive spending spree. Our current spending has already surpassed every president except the previous administration, former President Obama. Yet it is on a trajectory course, and unless reined in, will outspend Obama. While this is going on, the Treasury also announced in February that they must increase the number of Treasuries being created to $955 Billion, up 84% from the previous year. This is the biggest percentage jump, and dollar jump for the Treasury in the history of our country. This is being done to subsidize our government spending. A week after, that the Treasury comes out with their annual report and says there is a shortfall of Treasuries. More are needed to be created in the amount of $1.16 Trillion. A week later, the Treasury reported that they have an additional shortfall of $250 Billion for the week. Last week, the Treasury reported the shortfall was another $300 Billion for that week. Wall Street also announced that Treasuries are not being bought at the level of issued and the Treasury had to repurchase them. During this time Congress passed a historic Omnibus spending bill of $1.3 Trillion that President Trump signed. This is not the $1 Trillion Infra Structure bill, that still is in the wings to come. This is all happening while the Federal Reserve is selling Treasuries along with China.
Back to the Future
Something of great significance happened on March 13th. The Senate passed Senate, bill S. 2155 in a 67 to 31 vote under the disguise of ” easing bank rules” (a similar House bill already passed) that puts the Bail In, or what The Congressional Budget Office (CBO) calls “a tax payer bail out” much closer.
If the terms “Bail In”, “a tax payer bail out”, “a wealth tax”, or “a capital levy tax” is new to you, then I would highly suggest you contact my company and get the white paper titled “The Coming Bail In”, How To Protect Yourself From It Affecting You”. Again, Congress just put the consumer at risk for the next bank failure and gave banks a green light to cause another 2007. For the last two decades, Congress has written so many items in a bill, up to a dozen items called pork. Some are beneficial while others I stop and say to myself “What is Congress thinking?” This was the case with the Dodd Frank Act that passed in 2010 as well as this bill that I am referring to that was just passed. The major contributing catalyst that caused the 2007 meltdown was bank leverage and banks not having enough liquidity of cash deposits on hand to handle their losses when they were overly leveraged in derivatives. Because of that, a law was passed to require banks to put several factors in place, so this would not fall on the shoulders of Americans bailing out banks when there were bank losses. Banks were required to have the following:
- Enough capital on hand in deposits (not yours and my money, but the banks money) to be able to survive. This is defined as capital planning and requirement deposits
- Annual Stress Test. Just like a person might have a stress test to see how their heart reacts while under stress, a bank since 2010 was require having an annual bank stress test. This test shows the healthiness of a bank. For understanding from 2010-2012 there was no a single bank that passed the simple stress test by the Federal Reserve. It tells us that our banking system was not healthy. Obviously if we would have known that before 2007 then things would have been much easier. Unfortunately, that is no longer required if this bill is signed by President Trump.
- A Living Will. Just as what happens when a person dies, hopefully that person wrote out a will that tells all beneficiaries what is going to happen to their assets upon their death. For banks it is similar. A Living Will describes how a bank will unwind from other financial entities such as other banks and brokerages to be able to contain the unraveling of that specific bank.
If President Trump signs this bill into law, we are going back to the past but this time on steroids. There is 2.5 times more leveraged money called derivatives today than there was prior to 2007. Derivatives are what brought down the system, especially when there was little cash on deposit. In addition, our debt is far greater today than in 2007. In 2007 our national debt was $9 Trillion and today is over $21 Trillion. When 2007 hit most were in denial that it could happen which is the same for our current environment. There are a few wise high-end net worth investors that run companies hedge funds, or work for brokerages, that are sounding the alarm. You might ask, “What to do you?” Now is the time to diversify and buy gold. In 2008 stocks fell 30-45% and gold rose over 50% in 2008. Gold then went on a multi-year run, more than doubling in three years. It took over 6 years for the Dow back to its 2007 levels before the downturn. If you are one that lost money between 2007-2012 then you should call landmark capital to learn how to get your portfolio protected. This time the crisis coming might be much more severe. This time we have all the laws in place to seize American’s money. At the end of the day somebody needs to hold the dollar. China doesn’t, The Fed doesn’t, not enough investors on Wall Street want too, and soon pensions won’t. There will come a time that this will all happen, and it will be the straw that breaks the camel’s back. Don’t think so? You might want to think again and ask yourself, “Did they (the Fed, the government, or any entity) fix the “system” in 2008?” If the answer is “No”, then you know you need gold!