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                                   May 2011
In This Issue
Spaces & Places ....
Are You Building Wealth in 2011...
Tell Others! ...
The Choice Is Always Yours ...

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Spaces & Places 


May 16-20:

Albuquerque, NM


June 23-27: Southern Oregon


June 27-July 3: Seattle


   Do you live in any of these areas and have friends or colleagues who you want to introduce to Self-Empowered Banking (SEB)?    


   If so, then consider hosting a SEB Roundtable, while Julie Ann is in your area.  For more information, contact Julie Ann via email or at 312.957.9400 x 403.  

Are You Building Wealth in 2011?


   If not, then maybe it's time to set up your own privatized banking system.

   It's never too early or never too late to set up a Self-Empowered Banking System. Whether you're 6, 60 or anywhere in between -- NOW is the perfect time to get started building wealth with Self-Empowered Banking.

   To learn more about how Self-Empowered Banking can get you on the road to financial freedom and real wealth creation, contact Julie Ann Hepburn or call 312.957.9400 x 403.

Tell Others! 

Are you reaping the rewards of Self-Empowered BankingDo you know someone else who could benefit from learning more about how Self-Empowered Banking works and whether it's right for them?

   We would be delighted to talk with them further, please refer them to NPCG: Julie Ann Hepburn or at 312.957.9400 x 403.

  Thanks in advance for your help!

Quick Links

     For those of you who attended Your Financial Destiny (YFD 2011) on March 18, 2011, we hope that last month's Building Wealth tapped you on the shoulder and got you thinking once again about the current state of the US economy.  If it did, then you know that National Private's Self-Empowered Banking is the best way to 'secede' from a financial system that is destined to continue failing us all.


     Last month, we promised to bring you the next two speakers from the day-long YFD 2011.  But, as we reviewed the video from the day, we felt that the information that Carlos Lara, co-author of "How Privatized Banking Really Works," presented is so important that we are devoting this entire issue to his segment.  By learning more about why we got into the current economic mess, you'll better understand how to harness the power of privatized banking. 


      In July we'll conclude the YFD 2011 recap series with the last three speakers: Robert Murphy PhD, Nelson Nash and me.


     In the meantime, for those who may have missed the post on Facebook or LinkedIn, we invite you to take a look at a blog post by Robert Murphy PhD that addresses the recent comments by Fed Chairman, Ben Bernanke in the Federal Reserves' first major press conference.  I think you'll find it very interesting.  Read it here: Murphy on The Bernanke 


     As always, I am available to talk with you about your financial picture and am committed to helping you build wealth through the ME-power of Self-Empowered Banking.  



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Julie Ann Hepburn

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The Choice Is Always Yours ... Part 2

     As you'll remember from last month, one of the key messages that Dr. Robert Murphy presented in his segment was that signals mean something when it comes to the economy's performance. Following up on that idea, speaker Carlos Lara takes us back into history to show us why our economy ended up in the current mess and what can be done to get us out of the quagmire that exists.

     According to Lara, much of today's economic distress begins at the Central Bank -- our Federal Reserve System.  This institution is shrouded in mystery, is accountable to no one, is not audited and has no oversight by any Congressional committee.  Yet, it is in complete control of our nation's money supply, which means it also controls our personal money supply.  The Federal Reserve and the commercial banks are linked in a system that create dollars out of thin air, which has brought us to our current crisis. 


     But how did the concept of a central bank get started?  Banking is an ancient industry -- first we bartered in order to get what we needed, then we began to use agreed upon items -- mostly gold -- as a medium of exchange.  Therefore, it was the goldsmith who prevailed and created a form of what we now call a 'central bank."


     With gold as the prevalent medium of exchange, people stored their gold in the goldsmith's 'money warehouse' and were given a receipt in exchange.  Over a period of time, it evolved that people simply traded the receipts for payment of goods -- creating a form of paper money.


     Eventually, the goldsmith's figured out that they could mass produce or counterfeit the receipts and earn money by circulating them in the marketplace.  As long as no one -- either individuals or other goldsmiths running money warehouses -- brought the receipts in for redemption in gold, the system worked. Now mind you, this is a highly inflationary process and morally wrong.  


     To maintain this kind of a banking system -- lending money when there is not enough gold to cover redemption -- requires a structure of deceipt and collusion.  It misrepresents to the public that all of their money is stored back safely at the 'money warehouse' when only a fraction of it is really there.


     The goldsmiths' fear was always that all of those holding receipts would demand their gold on the same day and cause a 'run on the bank' or that some competitor warehouse would present a receipt for more gold than was stored. To remedy this, the goldsmiths agreed among themselves and their most powerful clients, not to present each other with more receipts than any one of them could exchange for gold.


     This agreement was the seed of the central bank as we know it today.  The first formal central bank was the Bank of England formed in 1694 the result of a crooked deal between a near bankrupt government and a corrupt group of financial promoters. Our central bank -- the Federal Reserve was formed in 1913 by some of the most powerful banking names (Morgan, Rockefeller, et. al.) in the United States.


     According to Lara, our money and our society has not been the same since the Fed was established.  He also notes that 'personal income tax also began at the same time. 


Fiat vs Real Money


     As we know from the above history, money was created by society as a necessity.  Bartering was way too inconvenient and so gold and silver became the exchange mediums of choice.  This was considered 'real money' and was often called 'sound money.'


     At one time, all coins in the US were made of gold or silver and paper money was often a 'silver or gold certificate.' Holders of gold or silver certificates could demand either silver or gold coins to redeem the paper certificates. Our money supply was tied to the amount of gold or silver available.


     Fiat money on the other hand is money that the supreme law of the land declares as legal tender - in the US it's the dollar, in Europe the Euro and so on.  When fiat money came into being in the US -- during the 1930s, people began to hoard gold and so President Roosevelt took gold out of circulation and placed it in Fort Knox to promote the use of fiat money.  The money supply was still backed by gold, but citizens could no longer hoard gold or use it as a medium of exchange.


     In 1944, the dollar, backed by gold, became the basis for all the fiat money worldwide. When the value of the dollar eventually weakened, foreign governments began to demand gold for their US dollars.  This eventually lead to President Nixon taking the US off the gold standard in 1971, which left us with dollars that could be created as needed to fund government.  Creating money became a game of paper chasing paper, which could easily be inflated or deflated at the discretion of the central banks.


What Is Inflation?


     Many people think inflation is higher prices, but one has to look deeper to really understand that this argument only deflects attention away from the real cause, and ultimately, the real cure of inflation.


     When Nixon fully disconnected the US dollar -- our fiat money - from gold, what he did was de-value our currency, essentially making it worthless.  It has only the value that the government says it has. In essence, he did what the goldsmiths did when they flooded the market with counterfeit gold storage receipts -- he promised to make good on the nation's debts without having enough 'real money' (gold) in the warehouse to satisfy these debts.  

     Given that, what we now know, is that inflation is not only high prices -- it is the de-valuing of the currency by increasing the money supply.  The more money the Fed creates by lowering interest rates, the lower the value of the money.  The lower the value of the money, the more money that is needed to purchase goods and services, hence prices rise.


     Unfortunately, the signal it sends to investors, entrepreneurs and others is that things are booming, when in fact, it is the Fed increasing the volume of money into the economy to falsely create a boom cycle.  The higher the volume of money, the less it is worth and we experience inflation, higher prices and eventually collapse.


     There are many examples throughout history but the fall of the Roman Empire is perhaps the most telling since it really began much earlier than the date of its collapse. Many historians believe it actually started when Caesar debased the Roman coins by mixing the gold with less valuable metals in order to increase the volume of money available to finance the extravagances of the government -- eventually they became worthless and the Empire collapsed.


     If this sounds familiar, it should -- it is inherent in the nature of governments to tamper with the money supply for their own benefit.  It is  also exactly what Ben Bernanke and the Fed have been doing with the quantitative easing program, which is explained in detail in the video below.  


Quantitative Easing Explained
Quantitative Easing Explained

     What they are doing is pouring money into the system by buying assets like government bonds, and all the while driving prices up and sending the wrong signals.  It's the same process that lead us to the collapse of 2008, as well as the previous 'busts' of the last several decades.    


      Remember, governments have no money of their own -- it can only spend what it can take from its citizens. Taxes are never enough, yet it's spending trillions. Where does it come from? It sells assets -- like bonds. Who's the biggest buyer of government bonds?  The Federal Reserve. Where does the Fed get its money?  In the old days they printed it, now a days, they simply create it electronically.  We're now $14 trillion in debt with no mechanism in place to buy back the bonds.


     On top of this, the commercial banks are part of the problem with their ability to loan $9 for every $1 they take in as a deposit.  The more money they pump into the economy, the higher the prices. 

     No matter how you look at it -- inflation is really the pumping of money into the economy, i.e., increasing the volume of money or the money supply.  The end result of this action is higher prices and eventual collapse. 


Keynes' Pandora's Box


     The US and many other industrialized countries practice the theories of economist John Maynard Keynes.  In 1936, he put forth The General Theory ..., which basically stated that the way to get economies moving was to spend your way out of the downturn even if it meant deficit spending, and don't worry about how to pay the debt. In essence, he believed that:


All Spending = All Income and All Income = All Spending


     And so, what we've seen for the past several decades in the US, is the Fed and the government deficit spending in order to stimulate the economy. While this appears to work, what we've also seen is that about every eight to ten years, we experience a 'bust' cycle, each one worse than the previous one.  As the world's money supply becomes more unified, the effects are felt worldwide. 


How Do We Get Out of This Mess?


     Now that we've painted a pretty complete picture of the forces that brought us to this economic mess we're in, how do we get out it?  There are many economic theories that contain kernels of a solution but we believe that the Austrian School of Economics offers the most complete solution: The Sound Money Solution, which advocates three actions:

  • Tie the dollar back to gold or 'sound money' -- thereby ending the ability to create money out of thin air and putting an end to inflation. 
  • Enter into Privatized Banking -- put the control of money back in the hands of individuals and removes government from the nation's purse strings.
  • Eliminate Central Bank (Federal Reserve) -- As a result of instituting Privatized Banking, there is no longer a need for a Central Bank, which has allowed our government to grow to a gargantuan size. 

     With these three actions in place, our taxes would go down, we would save more and as Dr. Robert Murphy explained -- it is savings that fuel investments -- and ultimately, our economy could get strong again.

     According to Lara, to implement The Sound Money Solution would require a significant change in public opinion of over 10% and so it is highly unlikely in our lifetimes that it will ever be implemented in its entirety.  However, Privatized Banking is here now, and it is something anyone can put in place immediately.

     By taking control over your money through a privatized banking system, such as NPCG's Self-Empowered Banking System, you can 'secede' from the traditional financial system without having to march on Washington or take any radical actions.

     The economic problems of this country did not happen overnight as you can see by Carlos Lara's history lesson. They will not be solved overnight but you can take matters into your own hands right now by becoming more knowledgeable about how

Privatized Banking can work to benefit you.

     To read more about How Privatized Banking Really Works, buy the book from our website: LARA & MURPHY BOOK

     Coming in July, we'll feature highlights from Dr. Robert Murphy, Nelson Nash and Julie Ann Hepburn's presentations.  

     In the meantime, for more information or to set up a Self-Empowered Banking System, please contact Julie Ann Hepburn via email or at 312.957.9400 x 403