See: http://www.washingtonpost.com/wp-dyn/articles/A32472-2004Dec28.html See: http://news.ft.com/cms/s/17bbe32c-592f-11d9-89a5-00000e2511c8.html See: http://www.forbes.com/forbes/2005/0110/036.html?_requestid=7879 See: http://www.forbes.com/home/free_forbes/2005/0110/162.html See: http://www.sennholz.com/dollarstandard.html See:
http://www.freep.com/money/business/homes29e_20041229.htm EDITOR'S
COMMENTS Too Big to Audit? Waking up this morning and looking outside here in Central Missouri, there was a nice fog outside such that I could see the trees in the back half-acre, but not much beyond. On the surface today's articles of news and op-ed do not look related at all. Cutting through the fog, the inter and intra relationships are awesome. The first two articles are about what happens when you tell the truth. You get fired. KPMG has been Fannie Mae's accountant and auditor since 1969. Firing KPMG ends a 35 year relationship. This is very similar to local Boone County Lenders I have worked for since 1976 who have placed me on their GSE blacklist because I told the truth about the local real estate market -- that it was overbuilt and an accident waiting to happen. The signs [literally and figuratively] are everywhere -- Increased foreclosure notices in the Columbia Daily Tribune cutting across all social and price range barriers for realty, more office space and retail construction than the market can truly absorb given an historic average interest rate range of 7-8% [past 20 years], and our prevalent "build it, and it will sell' mentality with young pup builders who are financed out their Kazoo, including the red builder $40,000 pick 'em up truck with the gun rack and ABC Home Builder stenciled on the 4-doors. Is Fannie Mae too big to audit? No, but firing KPMG does buy them more time to hide as many dead cats as possible, to keep them from being thrown publicly out there on the table. Gee, Damage Control is pretty serious business when the boat has taken a torpedo below the water line. Imagine what an iceberg would do to Fannie's boat at full steam ahead? The last article by Susan Tompor at Detroit Free Press is a rude awakening of being over 50-something and having 25-30 years more of debt to pay on the mortgage and the home equity loan, thanks to our Monetary Charlatan FED Chairman and the Boys at the FED. The US Government is also equally responsible in this little debt tirade, because it encourages the enslavement of mortgage debt, since folks can "deduct" the mortgage interest on their 1040s at tax time. Further encouragement by Big Government lies in the 1031 or Starker Exchange where folks can sell real estate without capital gains taxes, if they roll the sale proceeds into a more expensive property, taking on more debt, of course. Americans are taxed from the womb to the grave, yet one cannot deduct the tax one pays on retail sales, groceries, gasoline, utilities, or that new SUV. You can deduct taxes on personal property and real estate for the IRS, as part of the mortgage interest carrot, however. The establishment of the Federal Reserve and the Income Tax and the IRS all happened at the same time in 1913 and 1914. Welcome to Trivial Pursuit! Accounting for the Accounting The two articles from Forbes.com and Professor Sennholz are about money. Paper money. Legal Tender Fiat Paper Money. Legal Tender Monopoly Fiat Paper Funnie Monie unbacked by specie [gold and silver bullion]. Now here is where the fog gets really interesting. Here is the simple chart for the US FRN [ehhh US Dollar which no longer Constitutionally exists]. Pretty nasty looking is it not? "Give
me control
of a nation's money and I care not who makes the laws." The Rothschild Family was instrumental in establishing the Federal Reserve in the USA in 1913. One of the best, easy to read books on the creation of the FED, is the Creature from Jekyll Island by Ed Griffin. Mr. Lincoln talked to a representative from the Rothschilds to finance the Union during the War of American Secession. The Rothschilds quoted a very high rate of interest. Mr. Lincoln took the Rothschilds at their word, and his printed his own money, the greenback, in essence telling the Rothschilds to take a flying leap. Greenback issuance was later declared Unconstitutional and they finally all were redeemed in specie, with the usual insider trading. What is interesting is that Mr. Lincoln's Treasury Secretary Salmon P. Chase, who helped established the greenback, later helped declare the paper money un-Constitutional when he was Chief Justice of the Supreme Court in 1870. Gee, ain't politics an expediency at grand larceny?!!! What does the money issue have to do with Fannie Mae? or the Hypothermia of Debt... Most folks view real estate as a way to make money, whether it is commercial property or a personal home. Well, this is like being in a very dense fog. This myth is perpetuated by the Federal Reserve as they inflate the currency of FRNs while destroying the actual purchasing power of the FRN -- it's what we call inflation, or more paper money chasing fewer goods and services, or the dilution effect by having more of the stuff floating around. What a "wealth effect," ehhh? Given that real estate with a building on it, is, has always been, and will be a depreciating physical asset, there is a certain dichotomy in the wealth effect. What supposedly depreciates goes up in market price [I didn't say market value, did I?]. Fannie Mae, and any GSE for that matter, is not too big to be audited, and the skeletons as well as the dead kitty kats found. Government guaranteed monopolies should be audited, including the Federal Reserve and its minions. The similarities between the GSEs and the Federal Reserve which are both able to create money out of thin air are remarkable. The FED uses the Mandrake Mechanism. The GSEs use money market mutual fund intermediation. Both the FED and the GSEs book of business is based on the Debt of the American Public. Both rely on the ability of the consumer to pile debt on real estate to help keep this paper legal tender fiat paper money system afloat. This all works well to the advantage of the Carpetbaggers inside the Beltway as they can tax and spend, keeping us all in debt. This is a synergistic relationship, and a symbiosis at monopoly. Where we all get into deep ice water [think of it as a big iceberg field in the middle of the Atlantic] is when we cannot service the debt and make those payments. That is called hypothermia. The life lost on the RMS Titanic when she went down in April 1912 wasn't the fact that folks drowned for the most part. They died from the hypothermia from the chilly waters of the North Atlantic. This is the slow trip to a Code Blue. Paying off your mortgages and home equity loans as quickly as you can, as well as your credit cards and other loans, is the soundest advice one can give to the American Public given the financial mess our Nation finds itself in. This is contrary to what Wall Street, the FED, the GSEs, and the Carpetbaggers inside the Beltway and their IRS legislation and tax deductions would have the American Public believe. It is the best way to avoid hypothermia [Code Blue] to preserve the Economic Freedom for your Families and your Future. In the current market environment, the risk of debt is far too great. Depending on real estate to protect one's capital and wealth base, given the current monetary system, is in our view, a most risky enterprise and folly. Never go into a fog, if one can help it. Ole Bear, Editor Columbia, MiZ-Zou-Rah © 2004 Realty Reality |
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