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Utah's Step-by-Step Strategy in support of...
NanaRepublic
 April 13 2024 at 08:27 pm
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From the tenthAmendmentcenter.com Original article by Mike Maharrey. Jumping into this topic in the middle of the article... "The problem is it’s almost impossible to pass sweeping legislation that addresses every aspect of anything, much less something as far-reaching and complex as sound money and monetary policy. Success against the largest government in history requires more than tough rhetoric or big talking in social media posts. It requires a sound strategy – as the founders recognized, a step-by-step approach that can be implemented over time. The Federal Reserve and the U.S. government have monopolized money and locked us into a fiat monetary system for more than 100 years. We won’t establish a sound money system in a day by passing a single bill. Here’s a crucial point to understand: there is no silver bullet. Anyone promising one is either lying to you or more likely hasn’t made an effort to address the issue beyond posting online about how anything less than their idea is a “waste of time.” The real waste of time is trying to do too much at once. After all the time and effort, you usually end up with nothing. However, an incremental, step-by-step approach is proven to be effective. It just takes more time and energy. This is exactly how Utah has evolved into a growing haven for sound money. " < skipping a bit about the methodical step-by-step process of creating the law around sound money in Utah, but it's important reading. In my state, the democrats do this incremental approach all the time... I call it "moving the ball down the field."Here's a bit more...> "The Utah Specie Legal Tender Act has also led to the creation of the Goldback, a local, voluntary medium of exchange. Goldbacks are “gold-weight” notes made from physical gold. The 1 is 1/1000 of an ounce of Troy weight gold; the 5 is 5/1000 or 1/200 of a Troy ounce, and so on. The company created a process that turns pure gold into a spendable physical form for small transactions. It describes the goldback as “the world’s first physical, interchangeable, gold money, that is designed to accommodate even small transactions.” UPMA General Counsel Larry Hilton noted that the Utah Goldback is legal tender in the State of Utah because of the Specie Legal Tender Act “This means that under Utah State law, the Goldback is a voluntary legal tender in Utah. The goal is for the Goldback to circulate within the State.” The Goldback has been enthusiastically embraced in Utah. The UPMA estimates that Goldback acceptance may be as high as 50 percent among small business owners. Because of this strong demand – both inside Utah and from other states, the company has been able to launch Goldback editions in Nevada, New Hampshire, Wyoming and South Dakota. With more likely soon. In 2022, Utah opened the door for the use of Goldbacks to grow even further by expressly repealing the sales tax on the sale of all “goldback” notes. @Valueside and @CanadianLibertarian, what are your thoughts on the implementation of sound money in Utah, and the potential to replicate this process in other states/countries? Which states/provinces would be good candidates in the future for this type of long term (10 year + ) effort?Do you think this process could this be replicated at a city, county level?Is it possible that at some point, if we got to a critical mass of communities with sound money, fiat money would lose a war of attrition? Interested in your thoughts, thinkers! Learn more here...
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My #1 Strategy For Surviving The High Cost Of...
David Reavill
 April 17 2024 at 11:52 am
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I don’t have to tell you that the Cost of Living is skyrocketing. The Consumer Price Index shows that the cost of most items we purchase regularly has increased by over 10% in just two years. But, as you know, that’s only part of it. Some food items are up over 30%, while gasoline prices look set to rise soon due to the conflict in the Middle East. I was recently asked what my number one recommendation for surviving this economic storm would be. Here’s the strategy I’ve adopted for the Reavill household and one I suggest for you. My first recommendation is that we all approach our finances professionally and dispassionately. It’s easy to get emotional in times like this when we look at the monthly bills. Lately, our expenses may be greater than our income, which will likely cause panic. Don’t. I’ve been the financial officer/treasurer of three firms and one not-for-profit. More than once, I’ve seen these organizations nearly bankrupt. And that can cause more than one sleepless night. But you should know this: no one, including your banker, wants to see you bankrupt. It might seem like everyone is against you, but the reality is that if you fail, so do they. Your lenders do NOT want to see you fail. So here is today’s reality: interest rates have risen dramatically over the past few years. The nation’s central bank, the Federal Reserve, has raised interest rates by about 5 1/2% (the Fed Funds Rate). Unfortunately, you and I can’t borrow at those rates; that’s reserved for Fed Member Banks. As consumers, we will borrow at a much greater rate, and choosing just which rate is our task. Of course, as interest rates have risen, the best option is no debt. Pay off all your credit; it doesn’t matter where interest rates go. Unfortunately, for most of us, zero debt isn’t an option. So, our number one priority is finding the cheapest form of debt. Generally, the cheapest debt is secured by collateral because those loans have the least risk for the lender. For instance, a first mortgage on your home generally has a lower interest rate because the lender can always foreclose on your property if you fail to pay. So, the first place we will look for a loan is asset-based loans, like a mortgage, a home equity line of credit (HELOC), or another secured loan. The caveat is that we must be doubly sure we can meet those future loan payments; otherwise, we might lose our home. However, many of us don’t have access to a loan on our property, so we need to look at a personal loan — a loan not secured by some asset. From the banker’s point of view, these loans are more risky and come with a higher interest charge. The most common type of this loan is a credit card. Credit Cars are not secured by collateral. Instead, the lender relies on your ability to earn income to pay off the credit card loan. Here’s where we come to some real anomalies in the Credit Card market that you can take advantage of. A couple of years ago, finding a credit card that charged only 13–18% was typical. Back then, interest rates were low, and US consumers were meeting all their debt payments. (This was due to good jobs and Government Stimulus Payments.) So, credit card interest rates were some of the lowest ever. In the past two years, most credit cards have raised their interest rates by an average of 5%. But here’s the catch: there is a vast difference in the kind of credit card you get. A person with very good credit, with a standard no-frills card, was charged 13% in Q1 2022; today, they’re charged 18% on the same card. It’s not great, but as we’ll see, it’s so much better than other cards. The worst kind of cards in this category are store cards. They’ve gone from 25% interest on average to 30% currently. No one can afford to pay 30% interest. It may be painful, but pay down or remove Store Cards. The same applies to those “bonus” cards, which reward you for your purchases. They’re charging nearly the same as Store Cards. Recently, I got rid of my Amazon Card. Although it gave me a 5% credit on purchases, it still charged me 28%. I can’t afford that either. The 5% credit is a one-time bonus, while the 28% interest is compounded monthly. “Compound Interest” is the natural killer here, and you must avoid high-rate cards like the plague. Currently, the most significant interest charge is the Master Card by First Premier Bank. They charge 35.99%, a rate no doubt matched by some of the store cards we discussed. Credit cards charge compound interest, which is interest on your interest. You get charged interest if you don’t pay off your credit card this month. Next month, assuming you still haven’t paid off the card, you will be charged interest on the card’s new balance, which includes last month’s interest: you are paying interest on last month’s interest charge! That might not seem like a big deal, but let’s see how it works. Assume you borrow $1,000, make no further purchases, and make no payments. In five years, you will owe $5,891 on that $1,000 you borrowed, nearly 6X what you borrowed through the “magic” of compounding interest. It’s the fast lane to the poorhouse. Let’s look at an alternative; it will be a low-interest rate card with no frills. There are still cards out there that charge as little as 15%. Making the same assumptions with this new low-interest card, again borrow $1,000 and make no purchases. In five years, you will now owe $2,107. That’s a savings of $3,784 (72%) — a saving that could make all the difference in your lifestyle. These low-interest rate cards aren’t hard to find. Here are a couple of places to begin your local search. Credit Unions are my number one candidate. If they offer credit cards, they’re often very low rates. As mentioned, I just closed out my Amazon Card and moved to a low-interest Credit Union Card at less than 15% interest. Corporate Cards and Affinity Cards are other good candidates. You may work for a company that offers cards for its employees, often at excellent interest rates. You may be a member of a club or organization like the Automobile Club, the AARP, another Retirement Group, or a service organization like the Kiwanis or Elks. Check to see if any of these offer low-interest cards. Finally, many banks are utilizing a strategy to offer low rates on balance transfers. These usually include an up-front fee, but that’s often well below any interest rate charge. Citibank offered an interest-free balance transfer, good for two years, with an up-front fee. Doing a little math showed it was a desirable loan. So here’s my number one strategy for surviving today’s high-interest rate environment: Avoid Store Cards, bonus cards, or any special gimmick card. Look instead for the lowest pure interest rate loan or card. It’s no time to get fancy. Follow me here on ThinkSpot for more stories from the ValueSide.
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Tomorrow's GDP Will Set The Tone For The Quarter
David Reavill
 April 24 2024 at 01:08 pm
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Tomorrow at 8:30 a.m. Eastern time, the financial world will be on high alert as the Bureau of Economic Analysis unveils its first estimate of Q1 GDP. This figure holds immense significance, providing the most crucial snapshot of the economy’s macro status. Despite the possibility of revisions, this initial estimate offers Wall Street the most comprehensive view of the economy. Investors and speculators have already taken their positions, with the bond market leading. The reason is apparent: Street will use this GDP reading to speculate on the Federal Reserve’s next move. A slowdown in GDP could prompt the Fed to ease its tight money policy. Conversely, robust GDP growth could signal the Fed’s decision to maintain or even raise interest rates, a scenario that Wall Street is not keen on. GDP (green, left scale) 10 Year US Treasury at constant yield (Blue, right scale) So, we were presented with an irony: While the Street would like a moderately strong economy and especially strong earnings, it doesn’t want GDP so strong that the Fed continues to stand pat with its high (from the Street’s perspective) interest rate policy. GDP has been notoriously difficult to predict over the past year. In 2023, the economy experienced a very tepid 2.1% growth in Q2, followed by a very strong 4.9% growth in Q3. GDP finished the year in 2023 with a solid 3.4% growth, so that’s the comparison for tomorrow’s reading (3.4%). Unfortunately, almost no one believes that the economy is still growing at that rate. Virtually all analysts see the economy slowing; the average estimate is a 2.5% GDP growth rate. GDP Now, the rolling estimate of GDP by the Atlanta Fed, also sees a slowing economy, with its estimate at 2.9%. I’m hard-pressed to find anyone who sees the economy getting more robust. Yet, it is not likely that the Fed will change its stance on interest rates; at least, that is how the bond market sees it. For the last couple of weeks, bond yields have been rising, partly because bonds see the Fed standing pat and partly as a reaction to that brief rally a few weeks ago anticipating a Fed rate cut. Tune in tomorrow, an hour before markets in New York open, to see the most important data point of the quarter and an indication of the Fed’s future direction in interest rates. Follow me here on ThinkSpot for more stories from the ValueSide.
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