Austrian Economics and Private Banking

Hundreds showed up in downtown Nashville to listen to scholars of Austrian Economics and practicioners of Private Banking discuss the economy and finance…. BORING! No Way! 

BobMurphy-BarryPage

Robert P. Murphy, PhD and R. Barry Page, FRC share a laugh in Nashville.

 

Robert P. Murphy, PHD, was on hand. He is the author of several books including Capitalism, The Great Depression and The New Deal, study guides to Ludwig von Mises’ Human Action and Murray Rothbard’s Man, Economy and State, as well as co-author of How Privatized Banking Really Works, which was released at the event.
TomWoods-BarryPage

Thomas E. Woods, PhD and R. Barry Page, FRC

 

Taking a break from his busy schedule, Thomas E. Woods, PhD, resident scholar at the Mises Institute, and the author of the recent New York Times best-seller Meltdown, was on hand sharing his metaphors and Austrian philosophy. Woods new book, Nullification was just released.   

What is Private Banking and what does it have to do with Austrian Economics?   

R. Nelson Nash’s Infinite Banking Concept™ is publicly recognized as one of the most creative financial strategies of this Century and is anchored solidly in Austrian Economics.   

Infinite Banking teaches the process of using your current flow of finances versus consumption of money, for integrating protection and wealth accumulation enabling one to enhance their assets without creating additional liabilities.   

Austrian Economics observes the existence of economic law, inexorable forces of cause and effect that operate very much as other natural laws. It recognizes the laws of supply and demand, the cause of inflation, the operation of foreign exchange rates, and the subjective nature of economic value. Scholars are advocates of property rights and the freedom to contract and trade. It celebrates the contribution of business to society, while doggedly opposing taxes, price controls, and regulations that inhibited enterprise.   

Infinite Banking embraces the Austrian Economists view of economic law by providing you an opportunity to escape conventional thinking and free yourself from financial slavery. Becoming Your Own Banker is not a tax-qualified idea of any sort. The Income Tax Law, as we know it today, has only been around since 1913.  Life insurance has been around for over 200 years and is not a creature of any tax code.  It is nothing more than like-minded people contracting with one another to solve a financial problem.   

On the other end of the spectrum is Keynesian Economics and the Federal Reserve. The Fed and Keynesians think we can spend our way out of the mess we’re in. They are content with businesses being destroyed and government dependency. Completely contradictory to the free enterprise, small government libertarian viewpoint.   

Bill Dudley, from the NY Fed, recently came out saying that the recovery is a “bit less than expected”! The Fed will continue to spend the publics’ money as it creates money out of thin air furthering our economic problems. At least there was some positive news from the Fed, Bernanke said that extending the Bush Tax Cuts would help maintain stimulus in the economy.   

Currently, the Bush tax cuts will expire for 2011. Here’s what will happen if Congress does not intervine. As it stands now, the marginal tax brackets will expire at the end of 2010. There will be no 10% bracket for 2011, the remaining brackets will return to the original 2001 levels ( 15%, 28%, 31%, 36%, and 39.6%).   

As far long-term capital gain tax rates, in 2010, if you sell shares of stock that you’ve held for more than a year, the gain is long-term capital gain, generally taxed at the maximum rate of 15%. If you’re in the 10% or the 15% marginal income tax bracket, however, you will pay no federal tax on the long-term gain (0% rate applies). So, if you’re a married couple filing jointly, your taxable income is $68,000 or less, you’ll pay no federal tax on the gain.   

Absent any new legislation, in 2011, a 20% rate will generally apply to long-term capital gains. Those in the 15% tax bracket (no 10% bracket in 2011) will pay the tax at a rate of 10%. Special rules may apply for qualifying property held for five years or more.   

Qualifying dividends are taxed in 2010 using the same capital gain tax rates as described above, in 2011 they’ll be taxed as ordinary income.    

The choice is yours… You can follow the socialist viewpoint and build your life around liberal laws and government control or you can educate yourself, practice sound money principles and leave a legacy for your heirs.   

It should be an easy choice,
Barry Page, RFC   

Barry Page is recognized as a leading expert on life insurance and private banking. He is a Registered Financial Consultant and independent life insurance agent who helps clients with tax advantaged investment alternatives. He specializes in showing families how to create system of finance and banking to leave as a Legacy. His practice utilizes the Austrian Economics approach to money and markets.   

His practice is based in Ocean Springs, MS and he services clients throughout the Southeast. He can be reached here: http://legacyinsuranceagency.com/contact.html   

Don’t Believe the Hype about Financial Reform

Don’t Believe the Hype about Financial Reform The Unintended Consequences of Investing with Uncle Sam

With all of the hype from the mainstream press about financial reform, consumers might assume that the Dodd-Frank bill will actually help their financial portfolio. A closer look though at the affects of the financial regulatory changes might reveal some unintended consequences.

Over 800 pages of politically charged financial regulation can be found in the bill. And while, from a consumer standpoint, this may sound like a good thing, it will probably add to the confusion already involved with investing. The legislation does provide some protection for the consumer, however these small improvements will have little positive impact for the average family.

Once again the Federal Reserve has bypassed scrutiny and emerged as the ultimate financial regulator. Nary a mention has been given to auditing this cartel though that was the first intent of Congressman, Ron Paul.

Taking a look at what will actually occur for most, we will cover the most common places that people park their money.

http://rcm.amazon.com/e/cm?t=pma101-20&o=1&p=8&l=bpl&asins=1615456473&fc1=000000&IS2=1&lt1=_blank&m=amazon&lc1=0000FF&bc1=000000&bg1=FFFFFF&f=ifrQualified Retirement Plans (401k, 403b, IRA, etc)
Popular investments such as those offered by employers, because they may offer tax-benefits and are considered to be conservative, could see these regulatory decisions affecting the costs and availability associated with these plans. What’s worse is that the full affect of the reform may not be known for some time.

Because of the gray area left in the bill, regulators have 15 months to study the issue. This could ultimately drag down the returns of these investments. Primarily these studies will involve “swaps”, “wraps” and “derivatives”, all of which can be found in typical retirement accounts. Kent Mason, partner at Davis & Harman LLP and outside counsel to the American Benefits Council, says this “would have an immediate and very troubling effect on 401(k) plans across the country.”

Mutual Funds
Although their is little mention of mutual funds in the Dodd-Frank bill, it is likely that the legislation will affect the holdings of these funds.

Their is also uncertainty for bond funds which could further increase volatility. The (FDIC) Federal Deposit Insurance Corporation, will have more control to sieze troubled financial institutions, and have leeway to pay investors differing amounts on bonds, though they may be holding identical bonds issued by that particular institution. This could cause uncertain investors to dump the bonds at the first sign of trouble or to demand higher yields.

Bob Auwaerter, head of fixed income at Vanguard Group says this “can have all sorts of unintended effects”. The potential result is unequal treatment of bondholders which “will reduce liquidity and lower the price.”

Even worse, typical mutual fund investors, who are prone to trying to time market-buying decisions, could be affected by advertising. “Hot funds”, touted by financial magazines, coordinated with advertising could result in misinformation being passed along to consumers.

Derivatives
At yearend 2009, there were $464 TRILLION in outstanding derivatives. While the new bill seems to focus on this problem, it is doubtful that the new provisions could have prevented the financial crisis.

Dividends
Probably the most troubling to investors is the taxing of dividends. Without further congressional action, the top dividend tax rate will skyrocket to 39.6% in 2011. Senate Finance Committee Chairman, Max Baucus (Dem. Mont.), will be a key player in the future debate over the taxation of dividends.

Brokerage Accounts
The (SEC) Securities and Exchange Commission will have authority under the bill to impose the same standard of “fiduciary” duty on brokers that currently apply to investment advisors. Meaning that brokers must provide advice that is in clients’ “best interest”. What exactly does this mean? How does a broker, that you have probably only spoken with on the phone, know what is in your best interest?

The bottom line is that the bill will provide minor improvements to consumer laws that regulate the financial industry. BUT, the major changes resulting in increased regulation will affect everyone from banks to insurance companies, resulting in more confusion and less profits.

Fortunately, there is one financial instrument that can keep you out of the confusion and chaos that congress continues to pursue. If you do your homework, you’ll find that good, old-fashioned whole life insurance has survived for hundreds of years intact.

There are many flavors of life insurance, so you’ll want to make sure you are dealing with an experienced agent that does business with a “mutual” life insurance company. Mutual life insurance carriers pay dividends to policyholders, and the owner of the contract controls the policy. You can learn more about the extraordinary benefits offered by whole life insurance here: http://legacyinsuranceagency.com/lifeinsurance/wholelife.html

Until next time,
Barry Page, RFC

Barry Page is recognized as a leading expert on life insurance and private banking. He is a Registered Financial Consultant and independent life insurance agent who helps clients with tax advantaged investment alternatives. He specializes in showing families how to protect their assets, income and lives utilizing a macro-financial approach to planning.

He has created a service that caters to families and business owners that are frustrated with the risks involved with the stock market, but still want competitive returns. His specialized knowledge and services help consumers find alternatives to traditional investing and the stock market that not only safely protect their savings, but also provide tax advantages.

His business is based in Ocean Springs, MS and he services clients throughout the Southeast. He can be reached here: http://legacyinsuranceagency.com/contact.html

Are You Tired of the Market Roller Coaster? Here’s What To Do

Discover the Alternative To Traditional Investing

While the market goes up and goes down, you don’t have to. You can get off of the roller coaster and discover the alternative to traditional investing.

There really is a better way… and it won’t keep you up at night.

You’ve probably heard that life insurance is a bad investment. And, that you should buy the cheapest term insurance available. Well something else that you’ve probably heard is “you get what you pay for.”

YES! You can protect your hard earned money and build wealth using tried and true, dividend paying, life insurance.

While the investment firms and banks want you to believe that the stock market is the ONLY way to invest and make money, they too own life insurance.

BOLI is the name for Bank Owned Life Insurance, and if you’ll do your research you’ll find that all of the major banks own lots of it. As a matter of fact the FDIC (Federal Deposit Insurance Corporation) actually encourages banks to own life insurance: http://www.fdic.gov/news/news/financial/2004/fil12704.html

Total BOLI Assets (in billions)
Held by Bank Holding Companies in 2007
BHCS BY ASSET SIZE 2007 2006 Change
Over $10 billion $ 104.63 $ 88.59 18.1%
$1B – $10 billion $ 9.89 $ 9.55 3.6%
$500M – $1 billion $ 3.03 $ 2.86 4.5%
All $ 117.55 $ 101.00 16.4%
*Source: Michael White-MullinTBG BOLI Holdings Report – 2008 edition

BANKS THAT OWN BOLI State BOLI
Bank of America NC $ 13,883,173
Wachovia NC $ 12,874,000

JP Morgan Chase OH $ 7,181,000

Citibank NV $ 3,281,000
Regions Bank AL $ 1,253,146
Bancorp South MS $ 168,005
*Partial list compiled from: The Pirates of Manhattan

If permanent life insurance is such a bad investment, why do you think banks own so much? And, if you listen to who is saying “buy term” it’s usually the banks and Wall Street. Why? Because they are now selling term insurance and it is the MOST Profitable for them, and of course they want to sell you their mutual funds. Mutual fund managers rake in hundreds of millions of dollars every year, while you take the risk and whether or not they make money or not.

So, why do they tell you to “buy term and invest the difference”, while they do just the opposite? Well, that’s how they make their money, even if you LOSE… That’s right, they make money even when they lose your money. They tell you to buy while the market is down, and to “dollar cost average”, what a bunch of crap! Yet, they still won’t you to bail them out!

Have you ever considered your what YOUR LIFE is worth to YOUR FAMILY? This is your Economic or Human Life Value. Winston Churchill said this about using life insurance to protect the economic value of a human life:
“If I had my way I would write the word insurance over the door of every house because I am convinced that for the sacrifices which are considerably small, families can be secured against catastrophes which would otherwise smash them up forever.”

The political commentator, humorist and international celebrity Will Rogers said this:
“A man who dies without adequate life insurance should have to come back and see the mess he created.” Rogers later died, in 1935, in a plane crash in Barrow, Alaska—and life insurance benefits were one of his estate’s largest and most important assets.

You too can enjoy the many benefits of life insurance while protecting your family. Here’s a partial list of what life insurance can do for you:

  • It takes care of your family if you die too soon.
  • It takes care of you if you live too long.
  • It is self-completing if you become permanently disabled.
  • The waiver of premium guarantees the premiums are paid.
  • It can have catastrophic benefits if you have cancer, heart attack or stroke, to help even if you don’t die.
  • It can have terminal illness benefits that will pay when you are diagnosed, allowing you to put things in order before you die.
  • It can provide long-term care benefits, drawing from your cash-value.

And, if that isn’t enough to get your attention, then you may want to learn about the banking benefits of dividend paying, cash-value life insurance. The Infinite Banking Concept is a way to recapture the interest that you pay to others and put it back into your “bank”. You can learn more and order the book Becoming Your Own Banker here: http://legacyinsuranceagency.com/byob

So, get off the roller coaster and stop risking your wealth. You don’t have to get out of the market, but you may want to diversify with some safe alternatives like annuities and life insurance. Download a Free Report: http://legacyinsuranceagency.com/alternative

Until next time,
Barry page, RFC

Barry Page is recognized as a leading expert on life insurance and private banking. He is a Registered Financial Consultant and independent life insurance agent who helps clients with tax advantaged investment alternatives. He specializes in showing families how to protect their assets, income and lives utilizing a macro-financial approach to planning.
He has created a service that caters to families and business owners that are frustrated with the risks involved with the stock market, but still want competitive returns. His specialized knowledge and services help consumers find alternatives to traditional investing and the stock market that not only safely protect their savings, but also provide tax advantages.

His business is based in Ocean Springs, MS and he services clients throughout the Southeast. He can be reached here: http://legacyinsuranceagency.com/contact.html