White Hats Auxiliary Information Briefing 150

The Philippicae – What Cicero Didn’t See

White Hats Auxiliary Information Briefing #150  April 2 2020

After the assassination of Julius Caesar, Cicero, a senator who had no love of Caesar, and did not partake in the assassination, turned his attention to attacking the character of Marc Antony. He felt that Antony was just as much a threat as Caesar, and should have also been done away with.

The written attacks became known as “The Philippicae”, or “The Philippics”. They were intended to rally support of the senate against Antony. It worked, and the senate raised an army, declared Antony an enemy of the state, and commenced to do battle with Antony’s forces at Mutina and Forum Gallorum.

Both battles were victories for the senate, but their key generals, Hirtius and Pansa, were killed, and the armies were leaderless and open for acquisition. The local magistrate of Cisalpine Gaul who assumed command, Decimus Brutus, was one of Caesar’s assassins. Octavian (Caesar’s heir), refused to work with him, and the two armies soon switched loyalties to Octavian.

The senate scrambled to bypass Octavian and retake command of the armies. However, always the clever man, Octavian reconciled with Antony, and along with Lepidus, a military general once aligned with the senate, formed the First Triumvirate. This left the senate defenseless.

Cicero, an intelligent man, gifted orator and talented lawyer, had now become open for proscription, along with many other senators and persons of means. He had not necessarily acted without knowing what he was up against, but in the end, even his careful consideration of all matters simply didn’t work out. He was outmaneuvered by Octavian.

Eventually, Cicero was caught while trying to flee to the coast. He pulled aside his tunic, an offered the arresting legionary his neck, hoping for a swift, painless death. He was decapitated, and his head was staked in the Forum, where patrician nobles took turn stabbing his tongue with pens – a way of expressing their hatred and apparent jealousy for his gifted oratory. His hands were cut off and nailed to the senate house door, as a warning to anyone else who would write against the new triumvirate.

There is a lesson in all that. And it can be boiled down to a simple moral: Don’t take on a fight with an enemy you don’t know well, and especially with a flawed strategy.

But, what was flawed about his strategy? Cicero was not a military commander. He was just a senator, one of many. He didn’t exercise control on the field.

His flawed strategy was not the military conflict, but his instigating the affair with the Philippics, and angering someone (Antony) who still had considerable influence and power with very experienced military units from Caesar’s veteran legions.

Cicero, had no such influence on his own, save that via the senate. But, they were not Antony. And soldiers were quicker to follow a military leader they admired, rather than a bunch of bureaucrats they despised.

Cicero had also not judged Octavian’s potential to join Antony, and rally those whom were loyal to his adopted late father (Caesar). He was overpowered and had not the forces to defend himself in such an outcome that had befallen him.

I thank you for your forbearance with this history lesson. I will now make a relevant point with all this.

Last week, the Securities and Exchange Commission filed a complaint in Federal Court against the Meta1 Coin operation, and its principals, Robert Dunlap, et al. Long time RV/GCR talk show host and seminar promoter, Dave Schmidt, was also named in the complaint.

Long ago we warned that the law is clear on publicly offering and selling anything in the form of a security that offers a return on investment. In the US, such offerings, unless exempted, require a securities license, or at minimum, registration of the investment. The SEC has now stepped in to make that point with respect to the Meta1 offering.

There are many allegations of wrongdoing in the complaint, and we won’t even try to analyze it here. The courts will eventually decide if the allegations are true or not, and in time we will all know just what Meta1 was doing, and what its fate will ultimately be.

Aside from the main allegations, it was alleged in the complaint that:

“…During the SEC’s underlying investigation of this matter, the SEC subpoenaed each of the Defendants for documents and to appear to testify. Each Defendant returned the subpoena to the SEC with the word “Fraudulent” marked on every page. Schmidt refused to produce documents to the SEC, and refused to testify. Dunlap refused to produce documents.

He appeared for testimony, but refused to answer several important questions, such as whether he drafted the Whitepaper, claiming at various times the questions were ridiculous, the answers were none of the SEC’s business, and he “[has] no contract with the SEC.” Bowdler produced some documents, but refused to testify...”

The tactic of marking documents “fraudulent”, especially under these circumstances, and claiming that one “has no contract with the SEC”, or other government agency, under such similar circumstances, is often used by persons who take the position that they are “sovereign” or somehow not subject to the jurisdiction of the law because they are now a “secured party creditor” or some such thing.

The courts have repeatedly rejected the claims of people using such arguments, and those who have persisted in using such claims to prevail in a legal case have found themselves either fined for doing so, or jailed after being convicted for crimes when such defenses failed.

As we saw with Cicero, even the best thought-out plans can wither against the unknown and unpredictable. But, it is made even harder when you outright ignore, or blissfully act in ignorance of your opponents track record of victory against a tactic you are trying to use in defense. Further, you make yourself a wider target for doing so.

The government considers any use of fraudulent sovereignty claims against their jurisdiction as a sort of Philippic against them, and once you bring such claims onto the battlefield, you are at once in a very precarious position, with almost no defense. The ram has now touched the wall.

And, when the opponent is the SEC, there is serious power behind that ram. And claiming that your opponent does not even have a right to ram your wall, after they have, is not going to scare them away, or rebuild the wall.

We will certainly watch with great interest how this case turns out. There are larger issues at stake within this case, but we will leave that for another time.

Moving on…

The adoption and innovation in the digital asset realm continues, and with increasing interest and demand. There is tremendous value all around at this time. Be sure, the buying windows for many of the new up and coming ideas will not last forever.

The upcoming BTC halving and continuing Wall St and other interest in this sector is queuing up to create a potential explosion in value that could be unprecedented. Big interests, exceeding several trillion dollars in combined worth, are continuing to invest in and develop in this sector.

I learned from many years of experience that wealth is best acquired by investing in value, and holding on through any and all volatility, comments, opinions, reasons to vary from that approach.

By combining the patience of an investor and the boldness of a speculator, and becoming an “investolator”, you can benefit from such an approach without losing sleep, getting ulcers, betting on chart patterns, reading chicken bones in a bowl, spitting Bacardi on your wife, or wondering which Youtube “analyst” with unknown credentials is the right guru to follow.

Simply locate value, take a reasonable position size based on your personal risk capital, and hold it. Value will create demand. And in this sector, that demand, combined with declining availability in BTC, (which is currently a liquidity reserve that most other alt coins transact in and out of) will force an effect on price.

But, timing is critical. Getting in early, ahead of the halving and large capital influx, may have a tremendous affect on the potential future gain.

The last two times the BTC code mandated a halving, many coins experienced severely irrational gains in appreciation. Spectrecoin, Reddcoin and Verge, for example, handed investors profits of $2,000,000, $2,700,000 and $5,000,000 for every $500 ventured. And this was before the kind of significant commercial interests we now see coming into this space.

Similar gains were had with NEO and Etherium. There were many who saw what was coming, quietly bought and waited, and made millions. Others dithered, questioned, nit-picked over “flaws”, over-analyzed charts, engaged in Pavlovian peer-enforced skepticism, or simply just didn’t know.

Will such gains happen again? I don’t know, but I would guess that the chances are probably better now than they have ever been in the past. Always keep in mind that, at this time, it is not necessary to take huge risks to make potentially huge gains. So, for what I would spend over a weekend in Vegas, I can instead place such resources into something that no slot machine can probably return.

The key is picking good projects. This is where your job to do good homework and research comes into play. There are many resources out there to help you do this, so find one you find agreeable, and stake your claim if you so choose.

In the event that public RV paper exits fail, you now have a hedge, with low buy-ins, should you choose to partake. One that has come along at the right time and probably stands a much better chance than paper returns might. We had always hoped that people could exit their paper before the anticipated run-up in the digital asset markets. But, time is running out for such preferred sequences to take place.

At present, our understanding of what we watch for is as follows:

The Global Settlements remain un-settled. Do not be surprised if such remains so throughout 2020. The opposing party obviously do not fear legal repercussions. Even in these trying times, when the industrial might of our land has come to a near halt, these money-changing, hobnail-toed parasitical vermin refuse to release what is not theirs; depriving the nation of much needed revenue to cope, in a truly sublime display of their contempt for the general welfare.

We continue to watch for private group transactions and the attendant Brontosaur-sized turds that they will deposit once they transact – including any possible public transactions. While we cannot detail such, the groups will proceed first before any public chances can materialize.

If you are in a legit group, continue to maintain silence and obey all admonitions to you concerning confidentiality. Failure to do so could be costly. We understand that legitimate groups are making good progress. However, details simply are not possible to share openly at this time.

With the current epidemiological hysteria, there are some who are convinced that this “crisis” will be used to implement central bank digital currencies. The legal language describing digital wallets/digital dollars in the latest US stimulus bill is intriguing, so the notion of some new form of monetary infrastructure being enabled is perhaps a viable possibility.

What this has to do with anything we watch for is still not clear. However, it is interesting to think that releases which parallel the general stimulus payments would probably go unnoticed in form, but the results would be “expected” in such a case and less of a “surprise” if released solely without a public stimulus at the same time. We will see.

The death rate from the current viral outbreak is terrible, but still far less than other natural killers. Remember the Tsunami of 2004? It killed c230,000 people in one afternoon. A similar event directed at either of the U.S. coasts would kill millions, and send our economy into a tailspin that would take years to recover from.

Many were not prepared for this recent, rather mild breakout; a love tap compared to what could happen in the future. How prepared do you think most are for a real natural event, one that really has a punch to it?

Earthquakes, volcanic eruptions, storms, diseases, meteor impacts, terrorist originated biological attacks, etc. Are you ready for such?

As long as we continue to manage the earth with politics and money, we will be left wide open to allowing the least qualified persons to prepare for or manage such events, so you better be self-sufficient.

Always be ready for anything. That way, if you are wrong in your predictions, you can still be right.

We are still waiting for WHR #48 part two. We will post it when ready.

Get ready for a wild ride for the rest of 2020.

WHA

You’ve got to expect things are going to go wrong. And we always need to prepare ourselves for handling the unexpected. -Neil Armstrong

 https://whitehatauxiliaries.com/2020/04/02/information-briefing-150/

Why I’m NOT Lending You the Money

Why I’m NOT Lending You the Money

Dear Friend: Here Are 41 Reasons Why I’m NOT Lending You the Money

By Len Penzo

I recently saw a curious article in the Huffington Post that attempted to explain why our friends often fail to repay money that they borrow from us. In a nutshell, the piece offered five reasons:

You refuse to ask for the money back.

You make it too easy for your friends to ignore you.

You didn’t get the loan in writing.

Your friends assume that their unpaid debt won’t result in a broken friendship.

Your friends never planned to give you the money back in the first place.

Strangely enough, the author failed to offer the most logical — not to mention obvious — reason why anyone would ever welch on a loan from a friend or relative: they’re a deadbeat.

Truth be told, I have occasionally loaned money to my financially-pinched friends and relatives. Not often, but I have.

In several cases, I’ve offered the cash with no strings attached because I believed the bind they were in was due to something out of their control.

That being said, if you happen to be a friend of mine who’s been thinking about asking me for a loan, keep in mind that your odds of success will be extremely remote if one or more of the following are true:

You refuse to get a job — any job.

You’ve got a million reasons why you can’t work a second job.

You drive a brand new Lexus when a 1997 Honda Civic will do.

You insist on living somewhere with a high cost-of-living even though your income (or lack thereof) can’t support it.

You fail to understand that debt is a mortgage on your future.

Your priorities are all screwed up.

You live in a larger home than you can reasonably afford.

You refuse to raise additional cash by selling some of your “toys.”

You prefer to blame others for your poor financial situation.

You’re materialistic.

You fail to comprehend the concept of value.

You’ve got a closet full of $200 designer jeans.

You own a $500 handbag.

You wear $400 Louis Vuitton Millionaire sunglasses.

You play the lottery on a regular basis.

Your teenager drives a brand new car when a beater will do.

You think money grows on trees.

You insist that packing a brown bag lunch is waste of time.

You recently completed an ambitious kitchen remodel even though it didn’t really need it.

You own five dogs, three cats, a cockatoo and an anaconda.

You refuse to quit smoking.

You’re woefully disorganized.

To continue reading, please go to the original article here:

https://lenpenzo.com/blog/id15845-dear-friend-here-are-41-reasons-why-im-not-lending-you-the-money.html

There’s A Major Sovereign Debt Crisis Looming

There’s A Major Sovereign Debt Crisis Looming

Notes From The Field By Simon Black 

April 2, 2020  Bahia Beach, Puerto Rico

By the mid 1300s, the Republic of Florence in modern day Italy had experienced one of the greatest economic booms in human history.

In less than a century, Florence had grown from a tiny, irrelevant backwater to become one of Europe’s largest cities and preeminent financial center.

The expansion was truly impressive. Florence’s population had grown 10x. It had become a leading manufacturer in both weapons and textiles.

(Many etymologists believe the word ‘pistol’ is derived from the name of a town near Florence called Pistoia, which was renowned for its quality arms.)

And the city’s innovations in the banking industry were revolutionizing business across Europe.

Florence’s phenomenal economic success is quite similar to what the United States experienced in its early history.

Naturally, though, they managed to screw it up.

At the turn of the century in the year 1300, the Republic of Florence’s public debt was quite manageable at just 50,000 gold florins. That’s less than $100 per capita in today’s money.

By 1338, after a series of costly wars and expensive public works projects, Florence’s debt had ballooned to 450,000 gold florins. Four years later (after yet another war) it had grown to 600,000 gold florins.

This was crippling to public finances given that the government of Florence was paying between 10% and 15% interest on its debt.

To make matters worse, some of Florence’s most prominent banks had made bad loans to foreign governments-- most notably to King Edward III of England, who had suffered terrible defeat against France in what would become known as the Hundred Years War.

Edward would ultimately default on his Italian bank loans, sparking a terrible banking crisis in Florence.

News traveled quickly that the most powerful financial center in Europe was in trouble. The government was near ruin, and the banks were collapsing.

And then came the plague.

In 1348, the Black Death ravaged Florence, wiping out at least 25% of its population. The famed Italian author Giovanni Boccaccio was living in the city at the time, and he wrote about his first-hand experiences in the Decameron:

“[S]uch terror was struck into the hearts of men and women by this calamity, that brother abandoned brother, and the uncle his nephew, and the sister her brother, and very often the wife her husband. What is even worse and nearly incredible is that fathers and mothers refused to see and tend their children, as if they had not been theirs.”

Business and commerce ground to a halt. Tax revenue dried up. Florence’s government was unable to pay its debts. People were wiped out.

As local politician Giovanni Villani described the situation, “Our republic has lost all its power and our citizens have nearly all been impoverished.”

Amazingly enough, Florence’s misfortune didn’t stop there.

In the late 1340s, torrential rains destroyed local agricultural production, resulting in widespread famine.

City managers tried desperately to import food, but because Florence’s credit was so poor, few traders were willing to do business with them.

It was a historic and unprecedented fall from power; Florence had gone from being one of the wealthiest cities in Europe to literally begging for food in less than a decade.

I can’t help but wonder which countries are going to be begging as a result of our modern crisis.

Just like Florence in the 1300s, there are dozens of countries who were already in severe financial hardship going into this pandemic.

Now their tax revenues are dwindling, and they’re forced to spend absurd amounts of money to stimulate their economies.

A few years back our holding company acquired a private business in Australia that, thankfully, is holding up extremely well.

The CEO of that company called me a few days ago to tell me about some of Australia’s stimulus efforts; in addition to waiving payroll taxes, extending tax deadlines, and making direct loans to businesses, the Australian government is now directly subsidizing certain employee wages, up to $3,000 per month.

We’re seeing similar stimulus packages all over the world.

In the United States, of course, the government recently passed a $2 trillion stimulus plan… though I expect they’ll quickly realize that $2 trillion buys them about 4-6 weeks.

So if this pandemic drags on, they’re going to have to spend another $2 trillion, and another $2 trillion after that.

Remember that US government debt increased by $10 trillion in the first few years following the last financial crisis. It certainly seems reasonable to expect a repeat performance.

Some places will be able to afford such prodigious spending.

Norway, for example, has ZERO net debt. Norway’s government has such a massive financial surplus that they could tell every citizen, “Stay home and do nothing for the next six months,” and just write a check for everything. They wouldn’t need to go into debt by a single penny.

Italy, on the other hand, is a basket case.

The Italian government has no savings, and its debt burden even before this crisis was more than 120% of GDP.

Moreover, Italian banks were also teetering on the edge of disaster before the pandemic hit. I suspect most of them are completely insolvent now.

Making any forecast right now is remarkably difficult. Every scenario is on the table, and absolutely anything can happen.

But it seems pretty clear that the most heavily indebted countries are in big trouble… and we may be looking at a major sovereign debt crisis over the next few months.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/theres-a-major-sovereign-debt-crisis-looming-27612/ 

Why You Need a National Emergency Fund

Here’s How Much Emergency Cash You Need Stashed if an Emergency Happens

Jaime Catmull  GOBankingRates  April 1, 2020

You’ve probably heard time and again that it’s important to have a rainy-day fund set up “just in case” something unexpected were to happen. But we’re now at a time when having an emergency fund is more vital than ever.

The coronavirus pandemic has already had devastating effects on the economy at large and, on an individual level, it has led to job loss and reduction of hours for many workers around the world.

Even if the coronavirus’ financial impacts haven’t hit you personally yet, here’s how to be prepared in case it does — plus how to set up a fund for unexpected future national emergencies.

Why You Need a National Emergency Fund

Part of being prepared for any contingency, big or small, is having a reserve of emergency cash at your disposal at all times. When you can’t rely on accessing your funds electronically, you’ll need some legal tender to buy food, gas or other necessities.

“Whether it’s Mother Nature or some other disaster out of your control, you always want to be prepared by having some emergency cash on hand,” said Annalee Leonard, an investment advisor representative and president of Mainstay Financial Group. “Banks and ATMs may not be up and running for days after a strong storm. I recommend my clients have three to five days’ worth of spending money, just in case.”

How To Decide How Much To Save

To decide how much to save for an emergency fund, you’ll need to ask yourself a couple of questions:

How much will I need for an extreme catastrophic event?

How much can I afford to save?

“It’s wise to have a small amount of physical cash at home for the truest of emergencies when banks are not operating,” said Priyanka Prakash, managing editor at Fit Small Business, a company that finds the best small-business software, services and financing options.

Aim To Save $2,000

“Individuals should be prepared to pay for essential or non-discretionary expenses out-of-pocket,” said Brett Tharp, CFP and financial planning education consultant at eMoney Advisor. “Temporary lodging or shelter, fuel, food, water and necessary medications fall into this category. This will differ for each person depending on their level of preparedness or perception of how likely a catastrophic event might be.”

Two-thousand dollars should cover those costs.

“The rule of thumb I advise my clients is to keep $1,000 to $2,000 in cash in case banking operations are shut down due to a national emergency or catastrophe,” said Gregory Brinkman, president of Brinkman Financial in Tulsa, Oklahoma.

There's No 'Magic Number' for How Much To Save in Your Emergency Fund

Despite these suggestions and what some other experts might advise, though, there’s no magic amount you should have nestled away in your emergency fund. The answer for how much you should save for an emergency situation is that you should do what feels right to you. No matter the amount, an emergency fund is absolutely necessary — so make it a priority to build one.

Even if you can’t afford to save much, it’s better to save something rather than nothing, Prakash said. So if you can only afford to set aside $1,000 for an emergency fund, that’s better than not saving at all.

The Cost of Covering Necessities

Take into account that in a national emergency, inflation will rise, demand for necessities will increase and price gouging will likely ensue. With all that in mind, in addition to your regular emergency savings, you should prepare to have enough to cover the following costs in a national emergency situation:

Water — 10 gallons         $28

Gas — 20 gallons              $44

Portable solar generator               $130

Battery-powered lights   $20

Emergency solar hand-crank radio             $20

Prices for gas and water will likely be much higher in the event of an actual national state of emergency. Note that the items in the table are emergency purchases for one person.

The Cost of an Emergency Kit

You should already have some kind of emergency kit that includes these recommendations from Money.com:

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/much-emergency-cash-stashed-emergency-174430084.html

How to Manage Your Finances During a Depression

How to Manage Your Finances During a Depression

By Enero Febrero

By all measures, it has been a bad month for the American economy. Whether or not we’re about to enter a deep full-scale recession — or possibly even a depression — isn’t quite clear yet.

However, it’s fairly obvious that the coronavirus pandemic has had a significant impact on the monetary outlook of virtually every person on the planet.

Given that fact, it’s important for business owners, investors, entrepreneurs, and professionals in all walks of life to understand how to manage their finances during an economic downturn. Thankfully, there are proven ways to help you do exactly that. Here are four of the most basic ones:

Don’t Panic!

One of the hardest things to do during a recession is to remain calm. After all, no one likes to see the stock market plummet, interest rates hitting near zero, or a spike in unemployment.

Yet, individuals who manage their finances successfully know not to panic during trying times just as they don’t get ahead of themselves in bull markets. Resist the urge to empty your 401k or pull all of your savings out of the bank. Doing so will only make your personal financial situation worse.

Prioritize Your Purchases

An “essential purchase” under normal circumstances and an essential purchase during a recession are two different things. Individuals and businesses alike need to take a hard look in the mirror and decide what products or services they need to invest in, and what they can let slide.

Business owners can create a priority list that includes important items like point of sale solution software or a new VoIP phone system. Similarly, individuals should cut out frivolous purchases and focus on issues that are most pressing in the short term.

To continue reading, please go to the original article here:

https://lenpenzo.com/blog/id60171-how-to-manage-your-finances-during-a-depression.html

How to Deal With Unexpected Change

How to Deal With Unexpected Change

By Karima Mariama-Arthur  March 26, 2020

Change is inevitable. When you’re expecting it, the transition can feel easy. When you’re not, it can be devastating.

Without question, your perception of change influences your response to it: Will the shift produce a positive or negative outcome for you? Will it be challenging, causing you to stretch and experience some periods of discomfort? Or, will it inspire you to get up early and stay up late, preparing for its new and prominent role in your life?

For better or worse, here’s what to do when change rears its head and requires you to pivot with it:

1. Acknowledge that the change is the new normal.

Denying the existence of change rarely frustrates its staying power. Instead of rejecting change, our most rewarding course of action is to acknowledge its presence and effect on our way of life.

In a new and riveting TED Talk called Coronavirus Is Our Future, global health expert Alanna Shaikh shares insights on the global pandemic in a straightforward and approachable way. She makes clear that our collective, human experience is the new normal.

She urges that while we cannot escape the multi-faceted impact of this crisis, we can admit our vulnerability to it and appreciate its influence on our global ecosystem. To be clear, this is the first logical step in confronting any kind of change and initiating the way forward.

2. Explore your feelings about the change.

In the midst of juggling competing interests, it’s equally important to sit with your thoughts as you navigate change. Becoming intimately acquainted with what you feel will help you see things clearly and make better decisions about what matters the most.

Because the enormity of the change itself can be so distracting, seldom do we take the time to self-reflect and explore our emotional well-being, which includes self-awareness and self-management. When you prioritize your internal experience as you process change, you ensure your emotional well-being, as well as your overall progress.

3. Prepare for it.

Taking appropriate action in the direction of change will help make certain that things go more smoothly for you. And the earlier, the better. Preparation requires asking yourself key questions about where you are now and where you intend to be, as you reimagine yourself in the “new normal.”

What resources will you need? What sacrifices will you need to make? How much time will be required? Will you need help to effect the outcome? Get clear on the strategy and tactics that will help you overcome any roadblocks to your success. Then, without hesitation, execute.

To continue reading, please go to the original article here:

https://www.success.com/how-to-deal-with-unexpected-change/

How To Use Your $1,200 Stimulus Check

How To Use Your $1,200 Stimulus Check

Here's how to use your $1,200 stimulus check from the government's coronavirus relief package

Aimee Picchi, USA TODAY March 30, 2020

Millions of workers and their families will receive a one-time check from the government as part of the coronavirus stimulus package. Most adults will get $1,200, while children will receive another $500.

For workers who have already lost their jobs because of the pandemic’s hit to the economy, that extra money will likely be immediately put to good use — paying rent, mortgages, utility bills and more.

But if you have a paycheck, what’s the best use of that money? Should you save it, pay down debt or spend it to help keep your local economy working?

It’s a tricky calculation given the unknowns facing many families, such as whether the pandemic will linger for months or if businesses will resume normal operations within weeks. Layoffs are rippling through the economy, not only hurting restaurant workers but professionals such as lawyers and insurance providers.

On top of those “what ifs,” America’s outstanding credit card debt and other types of revolving debt have reached an all-time high.

What do you want to know? We're answering coronavirus questions daily. Ask here.

“The natural reaction is to use it all to pay down debt,” says Matt Schulz, chief industry analyst at CompareCards. “Paying down debt is a good thing, especially in crazy economic times, but it can make a lot of sense to take a little bit of that money you were going to put toward debt and stash it in a rainy-day fund.”

The fact is, four in 10 adults say they would struggle to come up with $400 in an emergency, according to the Federal Reserve’s annual check-in on Americans’ financial health. Given that millions of Americans are likely to face a fiscal crunch in the coming weeks, they should consider putting part of that stimulus check aside for that potential emergency, experts say.

A Financial Buffer During Coronavirus

Financial experts typically recommend socking away between three to six months of income in an emergency fund, a goal that may seem out-of-touch with the daily realities of many families even in the best of times.

But research from the JP Morgan Chase Institute has shown that most households need much less than that to create a helpful financial buffer — in fact, six weeks is typically enough. (You can use this widget at JP Morgan Chase to determine the size of your ideal buffer.)

While that might represent a big chunk of your stimulus check, having the money set aside can help you avoid a cycle of high-interest debt, Schulz notes.

To continue reading, please go to the original article here:

https://finance.yahoo.com/news/heres-1-200-stimulus-check-131613792.html

Corona Panic Part 1

Corona Panic Part 1

Mar 2, 2020 by Morgan Housel

It’s OK to not have an opinion on topics you don’t know anything about. And I don’t know anything about coronaviruses. But I have a few thoughts about how people think about risk.

We should remember Daniel Kahneman’s advice: “Human beings cannot comprehend very large or very small numbers. It would be useful for us to acknowledge that fact.”

This is the first global crisis in the social media age. What we’ve learned from social media in the last decade is that 1) information spreads fast, 2) false information spreads fastest because it’s more sensational, and 3) tribal identities are heightened when debates take place online vs. in person, so healthy debate quickly descends to a my-team-versus-yours battle.

FDR said, “The only thing we have to fear is fear itself,” in an era when the only information source was a morning newspaper, edited and fact-checked by professionals, written by journalists who weren’t motivated by likes, retweets, or paid per click.

Uncertainty amid danger feels awful. So it’s comforting to have strong opinions even if you have no idea what you’re talking about, because shrugging your shoulders feels reckless when the stakes are high. Complex things are always uncertain, uncertainty feels dangerous, and having an answer makes danger feel reduced. We want firm answers when things are the most uncertain, which is when firm answers don’t really exist.

We’re not mentally prepared to think about widespread risk. Here’s German psychologist Gerd Gigerenzer in his book Risk Savvy:

People aren’t stupid. The problem is that our educational system has an amazing blind spot concerning risk literacy. We teach our children the mathematics of certainty—geometry and trigonometry—but not the mathematics of uncertainty, statistical thinking.

And we teach our children biology but not the psychology that shapes their fears and desires. Even experts, shockingly, are not trained how to communicate risks to the public in an understandable way.

Risk has three parts: The odds you will get hit, the average consequences of getting hit, and the tail-end consequences of getting hit. How people respond to risk is heavily influenced by the tail-end consequences of getting hit, even if it’s the least probable outcome.

This is a multi-disciplinary problem. It’s part biology, part statistics, part politics, part sociology, part psychology, etc. No single person has all the answers.

During the financial crisis it was clear that specific people would be hurt (those heavy in debt) and specific people would be fine (no debt, lots of cash). Viruses are different because they don’t care about how much money you make.

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/corona/

We’ll Get Through This

We’ll Get Through This

Mar 9, 2020 by Morgan Housel

In the 1930s an Ohio lawyer named Benjamin Roth kept a detailed diary about what he saw during the Great Depression.

In the late 1930s, when the depression had mostly passed, he summarized a few points he had learned from the debacle. He wrote:

“Business will always come back. It will remain neither depressed nor exalted.”

“The stock market forecasts business in only a limited way. The beginning of a stock market movement usually is caused by the trend of business but in the end the movement is carried too high or too low—by the extreme optimism or despair of human nature.”

“Depression is time of greatest profit. The investor who has liquid funds and the courage to act can lay the basis for great profits.”

It’s silly to compare the last week to the Great Depression – unemployment is near a record low and the market is still up over the last 10 months. It’s also hard to think of a time when sentiment has changed so far, so fast, than the last week. And what’s really silly is to assume that abrupt shift won’t both feed on itself and lead to tangible economic problems.

But let me offer some advice, echoing Benjamin Roth’s lessons from 90 years ago: We’ll get through this.

It won’t be easy, and for some it will be agonizing. But no one should be surprised when a market economy that offers so many benefits occasionally asks something in return.

Keep a few things in mind.

1. Booms plant the seeds of busts. Busts do the same in the opposite direction.

There are no exceptions to Newton’s third law of physics. Every action has an equal and opposite reaction.

It’s tempting to fall for the siren song of booms because it’s so easy to extrapolate a positive trend without accounting for its offsetting factors. Booms make people complacent, assets expensive, and businesses fragile – all of which are easy to discount and hard to even measure when things are going well. It’s usually only in hindsight that we look back and realize how oblivious we were to the forces building up against us.

The same thing happens in reverse during busts. Relative to literally five hours ago, people are more aware of the risks they’re taking, businesses are looking for ways to get more productive, and assets are priced for better future returns – all of which are easy to discount and hard to even measure when things are falling apart.

It’s strange to think that we’re better positioned for future growth this week than last week. How can that be, given everything that’s happened? Well, it may get worse. But every step down plants the seeds for the next ride up.

2. Compounding is not about earning the highest returns. It’s about earning pretty good returns for the longest period of time possible.

Earning 20% a year and getting washed once a decade will leave you worse off than earning 8% a year and being able to hold your ground when times get rough. That’s so obvious. But it’s times like this that you realize financial “survival” is not just relevant to the broke and paranoid; it’s the single most important ingredient to long-term growth.

“Survival” means different things. It means having a strategy whose downsides you’re preemptively familiar with, so you’re prepared both psychologically and financially when they occur.

To continue reading, please go to the original article here:

https://www.collaborativefund.com/blog/well-get-through-this/

The ‘Small’ Business Administration Is Now Bigger Than Walmart

The ‘Small’ Business Administration Is Now Bigger Than Walmart

Notes From The Field By Simon Black 

March 30, 2020  Bahia Beach, Puerto Rico

As you’ve probably already heard, the US government unleashed a giant tsunami of money on Friday, passing a $2 trillion stimulus bill to help boost the economy during the Covid pandemic.

Let’s put that number in context:

$2 trillion is more than it cost to wage 18+ years of war in Afghanistan and Iraq.

It’s nearly THREE times the size of the bailout from 2008.

It exceeds ALL corporate and individual income tax revenue collected by the IRS last year

We are clearly living in unprecedented times… and this bailout is equally unprecedented.

Among the bailout’s many provisions (which go on for more than EIGHT HUNDRED pages!) is a whopping $350 billion to the Small Businesses Administration.

The Small Business Administration is ordinarily a tiny federal agency. But this funding exceeds the budgets of the Army and Navy COMBINED. It’s 8x the size of the United States Marine Corps. It’s more than the entire market capitalization of Walmart.

You get the idea. The SBA just became one of the biggest organizations in the world.

Now, in normal times, the SBA’s mission is to help startups and small businesses obtain bank loans; it’s usually pretty difficult for a startup to borrow money from a bank loan because the business is too risky, and banks don’t want to lend.

So the SBA’s role is to provide a guarantee for the loan. They’re essentially telling the bank that if the business fails and doesn’t pay back the loan, the federal government (i.e. American taxpayers) will make up some of the difference.

This guarantee doesn’t make a small business loan risk-free for banks-- there are still things that can go wrong. But the guarantee helps reduce the risk.

But typically, in order to receive an SBA guarantee, business owners have to provide their own ‘personal guarantee’ to the government. In other words, if the business owner defaults, the government can seize their assets in order to recover loan losses.

That’s the way SBA loans normally work. But these times are not normal.

According to this new bailout legislation, “no personal guarantee shall be required,” and the government “shall have no recourse against any individual shareholder, member, or partner . . . for nonpayment”.

In other words, the legislation implies that these loans don’t have to be paid back.

Moreover, the law also states that “no collateral shall be required for the covered loan.”

So you don’t even need any assets to qualify. In fact you need barely anything to qualify… except a pulse.

According to the legislation, “any business concern, nonprofit organization, veterans organization, or Tribal business. . . shall be eligible to receive a covered loan” as long as you have fewer than 500 employees.

Honestly the only real requirement is that you have to keep paying your employees. That’s the entire point of the legislation-- lawmakers wanted to provide funds so that small businesses could continue paying workers.

The maximum loan amount is equal to your payroll costs over the last 12 months multiplied by 2.5.

*Payroll costs include salaries, wages, and payments paid to employees and independent contractors, including yourself, up to $100,000 each. It also includes medical insurance payments, retirement benefits, state/local tax, and payments for sick leave, family leave, or vacation.

*Payroll costs do NOT include federal income or unemployment tax withholdings, or compensation for employees based outside of the United States.

So if you had, say, $400,000 of qualifying payroll costs over the past year, your maximum loan amount is $1 million.

And the maximum interest rate (according to the legislation) is just 4%.

If you have a qualifying business and you want to apply for a loan, you can do so here:   https://covid19relief.sba.gov/

Now, I’m sure that plenty of people will use these loans as intended-- to stay in business, continue paying workers, etc. And eventually they’ll do the honorable thing-- pay the loans back, with interest.

But let’s be honest. Countless people are going to completely abuse this. They’ll borrow as much money as they can with absolutely no intention of paying back a single penny.

This means there’s going to be a ton of loan losses.

Remember-- banks are the ones who will be making these loans, using their depositors’ money. YOUR money.

And even with the SBA guarantee, there are still things that can go wrong. If the paperwork was wrong, if the loan wasn’t made in the prescribed way, if the business didn’t actually qualify, etc. the banks can still suffer losses.

(Taxpayers will obviously suffer huge losses as well.)

But despite these risks, the legislation specifically tells banks that “a covered loan shall receive a risk weight of zero percent.”

Translation: banks should count these small business loans as ‘risk free’ even though there’s a strong chance that tons of people will never pay them back.

The legislation also says that banks “shall not be required to comply” with accounting rules that require them to disclose when their loans go bad.

So the government is essentially telling banks to make loans to everyone, with no personal guarantee, no recourse, and no collateral… and to maintain these loans on their books as risk free. And even when these loans default, to continue reporting them as risk-free.

What could possibly go wrong???

It’s clearly a great time to be a borrower. That’s one thing we learn from bailouts—they’re always going to take care of people in debt, and help people go into more debt.

But it’s more concerning to be a depositor.

Even with the SBA guarantee, it’s obvious that banks are riskier than they want you to believe.

To your freedom & prosperity, Simon Black, Founder, SovereignMan.com

https://www.sovereignman.com/trends/the-small-business-administration-is-now-bigger-than-walmart-27604/

How Much Gold and Silver Should People Own?

How Much Gold and Silver Should People Own?

By Len Penzo

Ever since I started writing about the importance of owning physical gold and silver as insurance against the inevitable failure of the US dollar, I’ve been receiving an increasing volume of questions in my inbox from folks curious to know more about precious metals.

With that in mind, here’s one that I received last week from Joshua:

How much gold and silver should a person own? I’m 38, with a wife and three kids. My only debt is a mortgage and a small bank loan. Going by your prep list for a possible financial collapse, I’m well prepared.

My plan is to start buying precious metals mostly as an insurance against dollar devaluation. So how heavily should a middle-class guy be buying precious metals, assuming I have an extra $1000 per month?

There is no single right answer to how much gold and silver we should own, if only because there are so many variables that are dependent on personal circumstances.

Most of the so-called “experts” suggest holding no more than 10% of your net worth — excluding home equity — in precious metals. The biggest problem with that rule of thumb is that it’s virtually meaningless for folks who have a small or negative net worth. I also think it’s a bit too conservative considering the ever-growing risk of a currency failure.

The first step in determining the “right” amount of wealth insurance needed to survive a currency failure is to identify a realistic dollar-price of gold if it were based soley upon the actual currency supply and the amount of gold held by the US Treasury and world central banks. For that, let’s go to macroeconomist Jim Rickards, who deftly explains the calculation this way:

The combined M1 money supply in the world is about $24 trillion. That includes the United States, China, the Eurozone and Japan. Those four entities combine for over 70% of global GDP.

Now, the official gold in the world is about 33,000 tons (107 million troy ounces). That’s not counting private gold, because private gold is not part of the money supply.

Historically, central banks have run successful gold standards with only 20% gold backing; in most of the 20th century, the US had 40% gold backing.

I use the higher number, 40%, because I think a higher number might be needed to restore confidence in event of a collapse. The point is, 40% is a debatable, but reasonable figure.

Now, if you back 40% of the $24 trillion of (currency) supply with the amount of official gold, it implies a gold price around $9000 an ounce. But I predict $10,000.

So How Do I Arrive At $10,000?

That’s because I expect central banks to print a lot more money by the time this issue comes to a head. So, by the time the printing presses stop running around the world, that $9000 number will likely be in the range of $10,000.

The point is, $10,000 an ounce is not pie in the sky. It’s not a number I pulled out of a hat to get headlines. It’s the actual mathematical implied non deflationary price of gold. If you reintroduced a gold standard at a lower price, it would be deflationary. They’d have to reduce the money supply in order to bring it into alignment with the price of gold.

Others believe that confidence will only be restored if the dollar-price of gold is based upon 100% backing — at least for a short period of time — which would result in an equivalent minimum purchasing power of roughly $22,500 in today’s dollars.

Are those numbers a pipe dream? Perhaps, but I think they are close.

That being said, I am confident that both silver and gold are extremely undervalued at today’s prices — especially when you consider the number of dollars currently in circulation and central banks’ sustained and coordinated currency-printing programs known as “quantitative easing.”

So, for my planning purposes, I take Rickards’ conservative approach and assume a post-reset purchasing power equivalent of $10,000 per ounce of gold.

I also conservatively assume that the gold-silver ratio will drop from roughly 80:1 today to 30:1 after the reset. I say “conservatively” because, since 1687 the average ratio has been slightly more than 27:1. If I’m right, and gold climbs to $10,000 per ounce, then the post-reset purchasing power of silver will be equivalent to $333 per ounce.

Based upon those assumptions we can determine how much physical gold and silver we need to get to the other side of a currency reset.

For example, if you want enough insurance to provide the equivalent purchasing power of, say, $100,000 after an economic collapse, then you’ll need to accumulate 10 ounces of gold (10 x $10,000).

On the other hand, five ounces of gold and approximately 150 ounces of silver (5 x $10,000 + 150 x $333) should get you $100,000 worth of insurance too.

See How That Works?

To continue reading, please go to the original article here:

https://lenpenzo.com/blog/id23998-economic-collapse-101-how-much-gold-and-silver-should-people-own-2.html