Curried Wealth Building
Finding an Edge

If you want help with your finances, give me a call at 703-791-3243.
June 7, 2009
Issue 49  -  My Philosophy
 
This week I'd like to take a few paragraphs to describe my life philosophy, which directly corresponds to my investment strategy.  I will talk finances in the second half of the blog entry and I have some great stuff including a youtube video that is eye opening to say the least.  But first, my way of thinking.
 
To really explain where I am, I have to start with where I started.  I was raised in the Presbyterian faith and went to church on a semi-regular basis.  This, if you don't know, is one of the less harsh denominations, with little in the way of preaching what is right or wrong.  It tends to be a big get together with a sermon on a "life lesson".  Around the age of 13 I went to a church camp which was affiliated with the Assembly of God Church.  This is very much the polar opposite of the Presbyterians.  Fire and brimstone.  You'll go to hell if you don't do this or that.  To avoid this fate you must be "saved".
 
In most Pentecostal religions, it is expected that you will eventually declare (in church) that you have accepted Jesus Christ as your lord and savior and pronounce yourself "saved".  This is accompanied with very emotional music and laying on of hands.  It is a very emotional experience.  I was "saved" at 14 years old and didn't really think much of it.  (as could be expected from a 14 year old punk)  I basically continued going to this church because they had basketball and softball teams and the girls were cute.  Pretty much a 14 year olds pastimes.
 
As I got older and entered college, I pretty much didn't have a religion.  I would answer that I was a Christian if someone asked me but the adherence was weak and uncommitted.  This was my religious story for the next 5 years or so.  Shortly after I married my wife, I found a book in the used book store called "Dianetics".  As you may know this is the first book from L Ron Hubbard which eventually led to the creation of the "religion" Scientology. 
 
If you know me at all, it would be expected that I jumped into this with both feet.  Actually the information is fascinating and a lot of the times is very applicable to life.  (I still use lessons learned to this day)  Scientology is very much a cult, but not like your typical cult seen on television where people all live together.  (although there is a segment that does)  At it's very basis, Scientology is a life philosophy and life style.  To be a Scientologist is to be segregated from life.  They have their own vocabulary for everything including marriage and arguments.  This acts to shut you off from those who don't speak the lingo.  This is intentional. 
 
They want you to start depending on them for all spiritual and emotional help.  They offer courses and "auditing".  The courses consist of reading books and doing drills.  People go at their own pace and finish whenever the course checklist is completed.  Auditing is the other side of the equation where an auditor (counselor) takes you through various questions and techniques that are supposed to help release pent up energy from past upsetting experiences.  This can be done standing outside or in a room, or more commonly, with a device called an "e-meter"  (modified wheatstone bridge) which you are attached to via two cans.  A small electrical current is passed through them (and you) and the meter display moves in response to questions and your answers. 
 
The meter works to some extent and I witnessed things on it that couldn't be explained by basic electronics (I am an electronics engineer).  This gave me great confidence in the religion and techniques.  I made good progress emotionally and actually became quite confident and competent.  This is a common occurrence for new comers.  As the luster wears off, warts start to show up that mess up your thinking.  This includes advanced Scientologists with numerous problems and an unusually high percentage of adherents with terrible nicotine habits.
 
This is troubling because Scientology touts itself as the science of "knowing how to know".  With Scientology you are supposed to become almost superman like in your handling of any life problems or issues.  Scientologists "make things work" and anything less in unacceptable.  Unfortunately, the promises don't match reality.  People who you originally thought super slowly become human.  In fact the higher up a person is in Scientology, the more likely the person is really screwed up.  Due to peer pressure and in an effort to keep up the game, most people pretend things are great and this places tremendous anxiety on them.  (explains the high nicotine use)
 
Scientology is also very expensive.  Climbing up all the "levels" in Scientology can cost millions of dollars.  Each level promises bigger and better things and abilities which are never delivered.  In fact, it is probable in my opinion, that Scientology is booby trapped to ensure that people don't reach any spiritual enlightenment.
 
Scientology is also very time consuming.  At my peak, I was spending 20 hours a week at the "church".  I advanced very quickly on the training side of Scientology  (Scientology has two ways to advance: training and auditing)  and became a high level auditor.  The interesting thing is that the lower levels do give people a lot of improvement and they usually feel great.  I believe this is a ruse to trap you into the cult because as things get worse you will tend to fixate on the good points of the past instead of the failings of today.
 
Scientologists worship L Ron Hubbard.  His picture is literally everywhere in the organizations.  In fact, and this where the cult behavior is introduced, if you disagree with anything that he wrote, YOU have the problem.  Most times it will be blamed on a misunderstood word and maybe some incorrectly done drills.  These will be continued until you "get it" and then you can continue.  You quickly realize that going along to get along is the path of least resistance.  Later this comes back to haunt you as the irregularities mount and contradictions appear.  Because you are indoctrinated into the "it's you" thinking, if it doesn't make sense, you assume you missed something.  It's actually a beautiful trap and it springs very slowly.  Hubbard eventually, in your mind, becomes omnipotent and any failings of it are the sole fault of its practitioners.  The possibility that Scientology may be wrong or not work is the farthest thing from your mind. 
 
As the levels advance, and I never made it this far, crazier and crazier things are presented to the adherents, and due to there indoctrination, most just go along.  The hundreds of thousands of dollars spent is also a good incentive to keep plugging away.  Eventually people go one of 3 roads.  They either leave disappointed and return to normal life (me), stay in but in only a part time basis which is the largest segment of the church, or you join staff.  Staff is either a full-time job or in the extreme, you join for life and live at the church.  These are the most devoted people since they gave up their outside lives.  Once you are in it is most difficult to leave, and if you do, you are ostracized.  There are many stories of spouses leaving the church and their significant others never speaking to them again.  The brainwashing is that complete.
 
After I left Scientology and found out it was a dangerous cult, I decided to do a thorough investigation of religions.  This lasted about a year and I found that none really met my criteria.  It seemed that anything organized always turned into something "unpure".  Eastern religions did seem to be more interested in personal enlightenment and betterment but none were perfect.
 
From that time forward my philosophy has been a hodgepodge of pieces from different religions, including Scientology, Buddhism, and several esoteric studies.  My main philosophy could be broken down into a few thoughts:
 
1.  Man is more than a body. 
2.  When the physical body dies it's not the end of consciousness. 
3.  A positive outlook has positive effects on influencing outcomes. 
4.  Thoughts can become real tangible things. 
5.  Creative imagination helps form the future. 
6.  The universe (or God if you like) gives MANY hints about what to do next, you just have to be aware enough to see the hints and then act on them. 
7.  Most people go through life and never once follow their instincts. 
8.  That little voice in your head, if you will, is not self generated. 
9.  Positive affirmations and expectations will, if done consistently, lead to positive outcomes.
10.  Almost any disease can be self healed.
 
If you are interested in where my philosophy comes from I would recommend you start with a couple books.
 
1.  Fundamentals of Thought by L. Ron Hubbard.
2.  Biology and Belief by Bruce Lipton
3.  Think and Grow Rich  by Napoleon Hill
 
I don't agree with everything in these books but they are quite interesting and give you lots of things to think about.  I will be adding more books as time goes by. 
 
 
Ignore That Man Behind the Curtain
 
 
Even though there have been some signs of improvement, my outlook continues to say that we are in for a world of hurt sometime in the next 6-12 months.  The good news is just not believable. 
Remember the U.S. is a consumer led economy.  Over 70% of our economy is the consumer.  Without the consumer our economy is going to sink.  As you can imagine with mass layoffs occurring there is a huge drop in consumer spending.  The Federal government has been spending like crazy to make up the difference but the state governments (who have to balance their budgets) tell the real story:
 
 
"U.S. States Poised to Cut Budgets for Second Year

By William Selway and Darrell Preston

June 4 (Bloomberg) -- U.S. states are ready to slash spending by the most in at least three decades, as officials cope with deficits that may persist long after the end of the worst recession in half a century, a survey found.

The states may reduce general fund spending, the money allocated at the discretion of lawmakers, by 2.5 percent to $653 billion during the next budget year, the most since at least 1979, according to a survey released today by the National Governors Association and the National Association of State Budget Officers. That would come on top of a 2.2 percent cut in the current year, which ends this month for all but four states.

Spending will fall two years in a row for the first time in the survey’s 30-year history, Scott Pattison, executive director of the budget officers group, said at a press conference.

“These are some of the worst numbers we’ve ever seen,” said Pattison. “Forty-two states had to go back and cut budgets after they were signed by the governors this year.”

The recession that began in December 2007 has dealt a blow to local governments as rising unemployment, cutbacks in consumer spending and a $7 trillion plunge in the U.S. stock market last year decreased revenue collections. State officials are expected to face gaps between expected revenue and spending totaling $230 billion through the budget year ending in 2011, according to the report.

The effects of state budget problems may be more widespread during the coming year. Thirty-five states recommended spending less for the year ahead, five more than pared back during 2009."
 
 
How fast are the feds spending?  This 3 minute video puts things in a great perspective:
 

 

So Obama is spending almost three times faster than Bush!  Bush was spending faster than any previous president and now we are going three times faster?  Are you kidding me?  Yet, most everyone just loves the job Obama is doing.  Mass delusion is the only explanation.  That, and a manipulated media and data releases.  Media manipulation?  You don't think that can happen?  What if our Treasury Secretary was laughed at during a speech in China?  That would be reported, right?  WRONG!  From Gata:
 
"Geithner laughed at and booed

The Financial Times earlier this week said that

In response to a question after his speech, Mr. Geithner told the student audience that ‘Chinese assets are very safe,’ drawing loud laughter from his student audience—a reflection of skepticism among many Chinese about the wisdom of building up large foreign reserves.

The Telegraph in London was even more severe when it said, tersely, that "US Treasury Secretary Tim Geithner was laughed at by an audience of Chinese students after insisting that China’s US assets are safe…. The comment provoked loud laughter from the audience…"

But the US media avoided any reporting of the laughter that greeted Mr. Geithner’s speech. None of the US television stories reported laughter; none of the US newspapers reported the laughter; none of the US magazines covering the trip reported the laughter… but the laughter was loud; it was palpable and it was very, very real.
 
Unreal isn't it?  How is this overlooked by the media?  Because they are controlled by the money brokers, that's how.  After all there are "green shoots" everywhere.  Oh wait, not all of them are green:
 
"Bankruptcy filings rise to 6,000 a day as job losses take toll

By Christine Dugas, USA TODAY

Consumer and commercial bankruptcy filings are on pace to reach a stunning 1.5 million this year, according to a report from Automated Access to Court Electronic Records. While well below the record 2 million filings in 2005, the number of filings is up sharply from last year's 1.1 million, says Robert Lawless, professor of law at the University of Illinois.

Bankruptcy filings took a dramatic nose dive after a 2005 bankruptcy reform measure was signed into law to curb bankruptcy abuse and make it harder to erase debts."
 
 
Now remember, the new bankruptcy laws didn't allow you out of mortgage debt as easily.  So why are more and more people filing?  They have no choice.  It's so bad that the Fed is bringing back an old favorite, no money down loans:
 
 
"Feds Bringing Back No Money Down Mortgages
 

happyfamily_tbi.jpgBack in the heyday of the mortgage boom, lenders eliminated many of the so-called "barriers" to home-ownership, such as the requirement that buyers make a downpayment on their homes. This was a great way to juice the market for homes and mortgages, but it also turned out to be a great way to encourage defaults. In fact, the practice of eliminating down-payments seemed so closely linked to mortgage defaults that Congress outlawed one version of it.

Now the federal government is bringing back the days of 0% down. From Business Week:

Buyers who haven't owned a home for three years or longer are eligible for an $8,000 tax credit, thanks to a provision in this winter's stimulus package. Now, under a little-noticed program announced May 29, the Federal Housing Administration will steer the funds to cover closing costs directly—in some cases even offsetting the 3.5% minimum down payment FHA loans require. That's enough to cover most or all of the down payment and fees for homes up to the U.S. median price, now about 9,000.

Officials hope "monetizing" the tax credit will help revive the housing market, because meeting closing costs is one of the biggest hurdles for new home buyers. The National Association of Home Builders predicts it will add 40,000 to the 160,000 sales originally expected to be spurred by the tax credit. Supporters say the move avoids the worst effects of seller financing, in that the credit is essentially the buyer's money, and government assistance doesn't give sellers a perverse incentive to inflate prices in an unsustainable manner.

What could go wrong?"
 
 
What could go wrong indeed.  What's next? No doc loans?  If things are getting so much better, why is the Fed lowering standards?  Because things aren't getting better.  Don't believe me?  Why don't you ask the officers of major corporations.  This from Gata:
 
 
"As for stock valuations....insiders continue to dump stock heavily

A report is out this morning which shows that corporate insiders continued to sell stock during the last 2 weeks at a staggering rate. The ratio of dollar value of sells to buys was 27:1 - which may be an all time record high for the ratio. The outright amounts were $335 million in sells vs. just $12 million in buys. The report is here:

http://pragcap.com/despite-green-shoots-insider-selling-picks-up

This seems quite at odds with the reports coming from these same insiders about the economy showing signs of improvement. Once again the public is being duped into chasing stocks higher while those in-the-know sell their worthless paper to common lemmings."
 
 
So the insiders are selling, hmmmmmm.  I wonder why?  Maybe things aren't "looking up"?  If things are more perilous than they appear what would you do?  Let's look and see what an INSURANCE company is doing:
 
 
"Northwestern Mutual Makes First Gold Buy in 152 Years

June 1 (Bloomberg) -- Northwestern Mutual Life Insurance Co., the third-largest U.S. life insurer by 2008 sales, has bought gold for the first time the company’s 152-year history to hedge against further asset declines.

"Gold just seems to make sense; it’s a store of value," Chief Executive Officer Edward Zoresaid in an interview following his comments at a conference hosted by Standard & Poor’s in Brooklyn. "In the Depression, gold did very, very well."

Northwestern Mutual has accumulated about $400 million in gold, and Zore said the price could double or even rise fivefold if the economy continues to weaken. Gold gained 10 percent last month, the most since November. The commodity has more than tripled since 2000, rising for eight straight years. Gold futures for August delivery slipped $4.80 to $975.50 at 4:03 p.m. in New York…"
 
 
Insurance companies, by nature, are very conservative.  They have to be or it turns into a disaster like AIG.  So why would a conservative company, that hasn't bought gold in its entire 152 year history be doing this?  Because they view this as save.  As things get worse, you will see more and more follow suit and then the gold fireworks begin.  I have also claimed that Fort Knox probably has very little gold as it has probably been leased out to keep the price down.  Some claim that is nonsense and very unlikely.  They might want to read this:
 

"Mint can't account for missing gold, silver

News ServicesJune 3, 2009
A significant quantity of gold, silver and other precious metals is unaccounted for at the Royal Canadian Mint.

External auditors are investigating a discrepancy between the mint's 2008 financial accounting of its precious metals holdings and the physical stockpile at the plant on Sussex Drive in Ottawa.

The mystery raises possibilities from sloppy bookkeeping to a gold heist.

Officials with the commercial Crown corporation are saying little and refuse to confirm the amount and value of the unaccounted for gold, silver and palladium."
 
Take this opportunity to get some gold.  Follow this conservative insurance company.  Protect your family.  No one knows when the flood towards precious metals will occur, but it WILL occur.  I hope you're positioned correctly.