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ОглавлениеTimeline of a Crisis
In August 2007, panic silently spread throughout the world. The banking system was seizing up. This set in motion a domino effect that threatens even now to bring down the entire world economy. In spite of massive government bailouts and stimulus packages estimated to be over $7 trillion to $9 trillion worldwide, some of the world’s biggest banking and business institutions, such as Citigroup and General Motors, continue to wobble. Their long-term survival is in question.
The crisis threatens not only major corporations and multinational banking conglomerates, but also the security of hardworking families. Today, millions of people who thought they were doing the right thing by following the conventional wisdom of going to school, getting a job, buying a home, saving money, staying free of debt, and investing in a diversified portfolio of stocks, bonds, and mutual funds are in financial trouble.
In talking with people around the country, I find that they are concerned and scared, and a number of people are suffering personal depressions after losing their jobs, homes, savings, kids’ college savings, and retirement funds. Many don’t understand what is happening to our economy or how it will eventually affect them. Many wonder what caused this crisis, asking, “Is anyone to blame? Who can solve the problem? And when will the crisis end?” With that in mind, I think it’s important to spend a moment reviewing the events leading up to our current crisis. The following is a brief and by no means comprehensive timeline highlighting some of the major global economic events that have led us to the precarious financial state we find ourselves in today.
August 6, 2007
American Home Mortgage, one of America’s largest mortgage providers, filed for bankruptcy.
August 9, 2007
French bank BNP Paribas, because of problems with U.S. subprime mortgages, announced it couldn’t value assets worth over 1.6 billion euros.
As global credit markets locked up, the European Central Bank injected nearly 95 billion euros into the Eurozone banking system in an effort to stimulate lending and liquidity.
August 10, 2007
A day later, the European Central Bank pumped another 61 billion euros into global capital markets.
August 13, 2007
The European Central Bank released another 47.6 billion euros, the third cash infusion totaling almost 204 billion euros in a span of three working days.
September 2007
Northern Rock, the largest mortgage broker and a large consumer bank in Britain, experienced a run on the bank by depositors. It was the first bank run in over 100 years.
The Presidental Campaign Heats Up
As the financial crisis spread around the world in 2007, the U.S. presidential campaign—which was to be the longest and most expensive political campaign in history—picked up steam.
During the early part of the campaign, even though there were clear signs that the world economy was on the verge of collapsing, the major presidential candidates rarely mentioned the economy as an issue. Rather, the hot campaign topics were the war in Iraq, gay marriage, abortion, and immigration. When the candidates did discuss the economy, they did so dismissively. (This was never more apparent than when presidential candidate John McCain later famously remarked in late 2008, “The fundamentals of our economy are strong,” as the Dow dropped a record 504 points that day.)
In the face of all the evidence of a mounting major financial crisis, where was our president? Where were our leading presidential candidates and financial leaders? Why were the media darlings of the financial world not warning investors to get out? Why were financial experts still encouraging investors to “invest for the long term”? Why were our political and financial leaders not sounding the warning call about this financial storm? Why didn’t they at least have the wisdom to stand up and say, “It’s the economy, stupid”? To quote a famous song, they were “blinded by the light.” On the surface, everything seemed fine, as evidenced by the next event in our timeline…
October 9, 2007
The Dow Jones Industrial Average closed at a historic high of 14,164.
A Year Later
September 2008
President George W. Bush and the U.S. Treasury asked for $700 billion in bailout money to save the economy, over a year after the European Central Bank had already infused 204 billion euros into the economy in August 2007 and almost a year after the Dow hit its all-time high.
Toxic financial derivatives resulted in the collapse of Bear Stearns and Lehman Brothers and the nationalization of Fannie Mae, Freddie Mac, and one of the world’s largest insurers, AIG.
Additionally, the U.S. auto industry revealed that it was ailing, and GM, Ford, and Chrysler asked for bailout money. Many states and city governments were also now asking for bailout money.
September 29, 2008
On a black Monday, after President Bush asked for bailout money, the Dow plunged 777 points. It was the biggest single-day point-based drop in history, and the Dow closed at 10,365.
October 1, 2008, through October 10, 2008
In one of its worst spans ever recorded, the Dow dropped 2,380 points in a little over a week.
October 13, 2008
The Dow began to exhibit extreme volatility, going up 936 points in one day, the best point gain in history, closing at 9,387.
October 15, 2008
The Dow plunged 733 points, closing at 8,577.
October 28, 2008
The Dow gained 889 points, the second best point gain in history, closing at 9,065.
November 4, 2008
Barack Obama was elected president of the United States with the campaign slogan, “Change We Can Believe In.” He will take over a government that has by now committed $7.8 trillion in various forms to salvage the economy.
December 2008
It was reported that Americans lost 584,000 jobs in November, the biggest posted loss since December 1974. Unemployment was reported at a 15-year high of 6.7 percent, with nearly two million jobs lost in the United States alone in 2008. Additionally, it was reported that China, the world’s fastest growing economy, lost 6.7 million jobs in 2008, an indication that the global economy was in severe distress and on the verge of meltdown.
Economists finally admitted the U.S. economy had been in a recession since December 2007. One year later, the economists finally figured it out?
Warren Buffett, who many consider the world’s smartest investor, saw his company, Berkshire Hathaway, lose 33 percent of its stock value in a year. Investors took solace in the fact that the fund outperformed the market—by losing less than the average. That’s comforting.
Yale and Harvard universities announced their endowment funds lost over 20 percent in a year.
GM and Chrysler received $17.4 billion in government loans.
President-elect Obama announced an $800 billion stimulus plan centered on massive infrastructure projects aimed at easing the record U.S. job losses—this was in addition to the $7.8 trillion already committed by the U.S. government.
December 31, 2008
The Dow closed at 8,776, down 5,388 points from its record high achieved just over a year earlier. It was the worst yearly performance for the Dow since 1931 and equated to $6.9 trillion in lost value.
Back to the Future
Faced with such an overwhelmingly bad economy, President Bush pushed through a landmark bailout plan aimed at saving the economy, saying, “This legislation will safeguard and stabilize America’s financial system and put in place permanent reforms so these problems will never happen again.”
Many people breathed a sigh of relief, thinking, “Finally, the government is going to save us!” The problem is those are not the words of President George W. Bush. Those are the words of his father, George H. W. Bush. In 1989, the first President Bush asked for $66 billion to save the savings and loan (S&L) industry. The $66 billion did not solve the problem; the S&L industry disappeared from sight. On top of that, the estimated $66 billion rescue package eventually cost taxpayers over $150 billion—more than twice the amount originally estimated. Where did all that money go?
Like Father, Like Son
Twenty years later, in September 2008, President George W. Bush asked for $700 billion and made a similar promise: “We’ll make sure, as time goes on, this doesn’t happen again. In the meantime, we got to solve the problem. And that’s why people sent me to Washington, D.C.” Why is it that a father and son said almost the same thing about saving the economy almost 20 years apart? Why was the first President Bush’s promise to fix the system broken?
All the President’s Men
The main campaign slogan of President Barack Obama’s campaign was, “Change We Can Believe In.” Given that slogan, we must ask a question: Why did President Obama hire many of the same people who worked in the Clinton administration? That doesn’t seem like change. It seems like status quo.
During the election, why did Obama consult Robert Rubin, who just recently resigned as head of Citigroup, a company on the verge of its own collapse and that has received some $45 billion in bailout funds, for advice on the economy? Why did he appoint Larry Summers to be director of the White House National Economic Council and Timothy Geithner, former head of the Federal Reserve Bank of New York, to be his secretary of the treasury? All of these men were members of the Clinton economic team and played a part in the repeal of the Glass-Steagall Act of 1933, an act that forbade banks from selling investments. Banks selling investments in the form of derivatives is a big reason why we are in this mess today.
In overly simple terms, the purpose of the Glass-Steagall Act of 1933, crafted during the last depression, was to separate savings banks, which had access to Federal Reserve funds, from investment banks, which did not. Clinton, Rubin, Summers, and Geithner succeeded in repealing Glass-Steagall in order to legitimize the formation of Citigroup, the biggest “financial supermarket” in U.S. history. Many people do not know this, but at the time of its formation, Citigroup was in violation of the Glass-Steagall Act.
The following is a comment by Kenneth Guenther, CEO of Independent Community Bankers of America (the small bankers of America), made to PBS in 2003 about the formation of Citigroup:
Who do they think they are? Other people, firms, cannot act like this… Citicorp and Travelers were so big that they were able to pull this off. They were able to pull off the largest financial conglomeration—the largest financial coming together of banking, insurance, and securities—when legislation was still on the books saying this was illegal. And they pulled this off with the blessings of the president of the United States, President Clinton; the chairman of the Federal Reserve system, Alan Greenspan; and the secretary of the treasury, Robert Rubin. And then, when it’s all over, what happens? The secretary of the treasury becomes the vice chairman of the emerging Citigroup.
The most telling line is the last one: “The secretary of the treasury [Robert Rubin] becomes the vice chairman of the emerging Citigroup.” As we’ve discussed, Robert Rubin was Obama’s advisor during the presidential campaign.
President Obama’s current secretary of the treasury is Timothy Geithner. He was undersecretary of the treasury from 1998 to 2001 under Treasury Secretaries Robert Rubin and Lawrence Summers. Summers is Geithner’s mentor, and many call Geithner a Robert Rubin protégé. Oh, what a tangled web we weave.
In other words, these same men are partially responsible for triggering this financial crisis. By allowing the combining of savings banks with investment banks, these guys accelerated the sale of the exotic financial derivatives that Warren Buffett called “weapons of mass financial destruction” and that have helped bring the entire global economy to its knees. How can there be change if the same people who expanded this financial mess remain in charge? What does President Obama mean when he promises change we can believe in?
Republicans, Democrats, and Bankers
One reason why Presidents Bush, Sr., and Bush, Jr., said almost the same words, that a bailout would save the economy and never happen again, is because they were elected to protect the system—not fix it. Could one reason that President Obama hired virtually the same financial team from the Clinton administration be because he was interested in protecting the same system—a system designed to make the rich get even richer? Only time will tell. Although President Obama was proud of the fact that he did not accept campaign money from lobbyists, the truth remains that his financial team is full of insiders who helped usher in the crisis they are now charged with fixing.
The only candidate who consistently mentioned the economy and the growing financial crisis during the early part of the 2008 presidential campaign was Representative Ron Paul of Texas, a true maverick Republican. Writing for Forbes.com on March 4, 2008, he stated, “Unless we embrace fundamental reforms, we will be caught in a financial storm that will humble this great country as no foreign enemy ever could.” Unfortunately, not enough voters cared to listen.
Reader Comment
I voted for Obama because I believe he is a sincere and compassionate leader. And, no matter how intelligent he may be, or anyone working with him, you, Robert, have taught me to see that financial education in this country is scarce! I worry that the folks in charge simply do not have a very high financial IQ.
—virtualdeb
Reader Comment
It seems that President Obama and his team are focused more on short-term tactical Band-Aids rather than long-term strategic goals. To date, all the “actions” taken by the new administration have been to plug the holes in the dike and shore it up a bit. There seems to be no attention to determining the underlying root cause and changing the foundation flaws that led to the current financial crisis.
—egrannan
The Roots of the Crisis
It is said that Mayer Amschel Rothschild, founder of one of the most powerful banking families of Europe, once observed, “Give me control of a nation’s money supply and I care not who makes the laws.” To understand today’s financial crisis, it is important to understand the relationship between the U.S. government, the Federal Reserve System, and some of the most powerful people in the world. This relationship is depicted in the overly simple diagram below:
In 1913, the creation of the Federal Reserve System granted the very rich of the world the power to control the money supply of the United States and fulfilled the spirit of Rothschild’s sentiments. Many people don’t know or understand that the Federal Reserve System is not a government institution or a bank, nor does it have any reserves. Rather, it is a banking cartel run by some of the most powerful men in the financial world. The creation of the Fed was basically a license to print money.
Another reason the Federal Reserve System was created was to protect the biggest banks from failing by providing liquidity to those banks when they were in financial trouble, which protected the wealth of the rich, not of the taxpayers.
We see this in action even to this day. In 2008, when President Bush authorized $700 billion in bailout money, Secretary of the Treasury Henry Paulson, formerly of Goldman Sachs, in conjunction with the Federal Reserve, immediately handed out billions of dollars in TARP (Troubled Asset Relief Program) money to the biggest banks in the country, his friends, no questions asked.
The reality of the situation is that the TARP bailout money went straight from our pockets—taxpayers’ pockets—into the pockets of the banks and corporations that helped create our financial mess in the first place. We were told the money was given to the banks with a mandate to lend it out, but our government was either unable or unwilling to enforce that mandate—or both.
In mid-December 2008, when USA Today asked banks what they were doing with the bailout money, JPMorgan Chase, a bank that received $25 billion in taxpayer money, replied, “We have not disclosed that to the public. We’re declining to.” Morgan Stanley, a bank that received $10 billion, replied, “We are going to decline to comment on your story.” The Bank of New York Mellon responded, “We’re choosing not to disclose that.” The bank bailout money was really just a rich friend bailout, employed to cover those friends’ mistakes and obvious fraud, not to save the economy.
The proof is in the pudding. As the Wall Street Journal reported on January 26, 2009, in an article entitled “Lending Drops at Big U.S. Banks,” “Ten of the 13 big beneficiaries of the Treasury Department’s Troubled Asset Relief Program, or TARP, saw their outstanding loan balances decline by a total of about $46 billion, or 1.4%, between the third and fourth quarters of 2008, according to a Wall Street Journal analysis of banks that recently announced their quarterly results.” This is even as they scooped up $148 billion in taxpayer TARP funds intended to stimulate lending.
If President Obama really wants to make changes in Washington, he needs to change this cozy relationship between the Federal Reserve System, the U.S. government, and the rich and powerful. And maybe he will. But by putting President Clinton’s financial team in his administration, it does not seem likely. It seems he will do as past presidents since Woodrow Wilson have done—protect the system, not change it.
Reader Comments
I must say that reading your first chapter has opened my eyes. I am only 23 years old and never fully understood what the Federal Reserve System was or what it did for our country. I have to say that it does not shock me; I am truly grateful that you have been honest and are not afraid to give the truthful definition of what a lot of things mean and stand for. It is however truly sad that taxpayers are affected by this and a lot of them do not even know or understand it!
—jacklyn
We hear the media speak of “the Fed” as if it is some mystical behemoth, when in reality, it is not what the general public thinks that it is. I had no clue that this was not a government or bank institution. It really worries me that this entity has almost limitless power with a lack of true oversight. The question becomes, how did they rise to such a prominent position?
—Kthompson5
By some estimates, the combined worldwide losses in commodities, stocks, bonds, and real estate are greater than $60 trillion. So far, the world’s banks and governments have put up nearly $10 trillion in efforts to fix the problem. What about the other $50 trillion? Who will cover those losses? Where did that money go? Who will bail us out, the people who really lost money and now must pay for our own losses and the losses of the rich via bailout money paid for with our tax dollars?
The year 2013 will mark the hundredth anniversary of the Federal Reserve System. For nearly 100 years the Fed has pulled off the biggest cash heist in the world. This cash heist is a bank robbery where the robbers do not wear masks, but rather business suits with American flag pins in the jacket lapels. It is a robbery where the rich take from the poor via our banks and our government.
While a student sitting in Dr. Buckminster Fuller’s class in 1981, I was disturbed to hear him say, “The primary purpose for government is to be a vehicle for the rich to get their hands into our pockets.” Although I did not like what he was saying because I only wanted to think great things about my country and its leaders, deep down inside of me, and based on my own experiences, I knew there was some truth in what he was saying.
Until that time, I had my own secret doubts about government. As a child, I often wondered why the subject of money was not taught in school. As a Marine pilot in Vietnam, I wondered why we were fighting the war. I also witnessed my dad resign his position as superintendent of education to run for lieutenant governor of the state of Hawaii because he was very deeply disturbed by the corruption he found in government. An honest man, my dad could not stomach what he witnessed after he became a high-ranking government official, a member of the governor’s staff. So, although Dr. Fuller’s words were not words I wanted to hear, because I do love my country and do not like criticizing it, his words were disturbing enough to become my wake-up call. In the early 1980s, my study began, and my eyes were opened to facts that many powerful people do not want us to see.
How Does This Affect Me?
In the big picture of personal finance, there are four financial forces that cause most people to work hard and yet struggle financially. They are:
1. Taxes
2. Debt
3. Inflation
4. Retirement
Take a moment and reflect briefly on how much these four forces affect you personally. For example, how much do you pay in taxes? Not only do we pay income tax, but also sales taxes, gasoline taxes, real estate taxes, and so forth. More important, to whom do our tax dollars go and for what causes?
Next, how much does the interest on debt cost you? For example, how much does interest on debt cost you on mortgage payments, car payments, credit cards, and college loans?
And then take a moment to think about how much inflation has affected your life. You may recall that not too long ago people began flipping houses because prices were going up so rapidly. During that same period, the prices of gasoline, a college education, food, clothing, and more were climbing steadily—but incomes weren’t. Many people did not save because it was smarter to spend today rather than pay more tomorrow. That was inflation in action.
And finally, most people have money taken out of their checks and placed into retirement accounts like a 401(k) before they ever get paid. That money goes directly to Wall Street, where it is “managed” by someone the employee doesn’t even know. On top of that, additional money is skimmed through fees and commissions. And, today, many people do not have enough money to retire because they have lost all their wealth in the stock market crash.
It is important to understand that these forces of taxes, debt, inflation, and retirement are kept alive by the Federal Reserve System’s license to print money. Prior to the Federal Reserve, Americans paid very little in taxes, there was neither national debt nor much personal debt, there was very little inflation, and people did not worry about retirement because money and savings retained their value. Here is a brief and simple explanation of the relationship between the Fed and these four forces.
1. Taxes: America was relatively tax-free in its early days. In 1862 the first income tax was levied to pay for the Civil War. In 1895, the U.S. Supreme Court ruled that an income tax was unconstitutional. In 1913, however, the same year the Federal Reserve System was created, the 16th Amendment was passed, making an income tax permanent. The reason for the reinstatement of the income tax was to capitalize the U.S. Treasury and Federal Reserve. Now the rich could put their hands in our pockets via taxes permanently.
2. Debt: The Federal Reserve System gave politicians the power to borrow money, rather than raise taxes. Debt, however, is a double-edged sword that results in either higher taxes or inflation. The U.S. government creates money, rather than raising taxes, by selling U.S. bonds, IOUs from the taxpayers of the country that eventually have to be paid for with higher taxes—or by printing more money, which creates inflation.
3. Inflation: This is caused by the Federal Reserve and the U.S. Treasury borrowing money or printing money to pay the government’s bills. That’s why inflation is often called the “silent tax.” Inflation makes the rich richer, but it makes the cost of living more expensive for the poor and the middle class. This is because those who print money receive the most benefit. They can purchase the goods and services they desire with the new money before it dilutes the existing money pool. They reap all of the benefits and none of the consequences. All the while, the poor and the middle class watch as their buck gets stretched thinner and thinner.
4. Retirement: As stated, in 1974, the U.S. Congress passed ERISA. This forced Americans to invest in the stock market for their retirement through vehicles like the 401(k), which generally have high fees, high risk, and low returns, and gave Wall Street control over the country’s retirement money.
Reader Comments
Living in Zimbabwe, which has had the highest inflation in the world of over 5,000 billion percent, I have come to understand the added advantage of not keeping money (currency). Basically, the price of a good changed three times in one day and there was need to lock down the value in the morning and resell the product in the evening, which meant a nice profit.
—drtaffie
I think the most evil of the four is inflation. It affects the poor and the middle class equally. The middle class pays more taxes than the poor, but everyone pays equally through inflation.
—kammil2
The Beginning of the End
I started this chapter with an important date: August 6, 2007. That was the day that American Home Mortgage, one of America’s largest mortgage providers, filed for bankruptcy.
The reason this date is important is because it marked the point where debt had gone too far. The global system could not absorb any more debt. On August 6, 2007, the debt bubble burst, and today we have deflation, which is a much more serious problem than inflation—something we’ll go over in more depth in future chapters.
To save the world, President Obama has to stop deflation. The primary tool he has for fighting deflation is inflation. This means he will have to employ massive amounts of debt and print more money out of thin air. And ultimately, this means higher taxes, debt, and, if he is successful, inflation.
Think of the global economy as a big hot-air balloon. Things were going along splendidly until August 6, 2007, when too much hot air—debt—caused a tear in the balloon. As the horrifying ripping sound spread, central banks of the world began pumping more and more hot air—debt—into the balloon in an attempt to keep it from crashing to the ground and causing a depression.
In his book A Tale of Two Cities, Charles Dickens famously wrote, “It was the best of times, it was the worst of times; it was the age of wisdom, it was the age of foolishness.” Amazingly, things have not changed much since Dickens wrote that in 1859.
For some people, deflation makes these the best of times. The cost of living is going down as the prices of oil, real estate, stocks, and commodities drop and thus become more affordable. Apparently, Walmart isn’t the only one rolling back prices. The central banks and governments of the world, hoping people, businesses, and governments will get deeper into debt by borrowing more money, are pumping trillions of dollars into the economy at interest rates near zero—virtually free money.
Holders of massive pools of money are waiting like vultures for the right moment to flood back into the market and pick clean the bones of dead and dying companies. For well-positioned investors, this is the opportunity of a lifetime to snatch up assets at a discount. For well-positioned businesses, now is the time to gain market share, as their competition goes under due to bankruptcy. These people see abundance.
For others, these are the worst of times.
The cost of living may be going down, but these people are unable to reap the benefits because they no longer have a job to cover even their basic living expenses, or they are so saddled with debt that they owe more money than their assets are worth—and the assets they have are really liabilities, such as their houses.
The central banks of the world are flooding the system with money, but it is not helping these people because they cannot get loans for cars or houses. As the money supply blows up like a balloon, their access to that money shrinks.
These people do not see the opportunity of a lifetime. They do not have pools of money waiting for the right deal. They see scarcity and feel fear. Many wonder if they will lose their jobs, homes, savings, and retirement, if they haven’t already.
The difference between those who find it to be the best of times and those who find it to be the worst of times is simply knowledge and financial IQ. The great failure of our education system is that it does not teach people about how money really works, and what it does teach is antiquated and obsolete—the old rules of money. They teach you how to balance a checkbook, but they don’t teach you how to grow a balance sheet—or even read one for that matter.
They teach you to save your money, but they don’t teach you about inflation and how it steals your wealth. They teach you how to write a check, but they don’t teach you the difference between assets and liabilities. One wonders if the system is intentionally designed to keep you in the dark.
In today’s world, you can be an academic genius but still be a financial imbecile. This goes against the conventional wisdom, especially when we equate people who have high-paying jobs like attorneys or doctors with being financially and academically smart because they make a lot of money. But as we’ve seen, making lots of money doesn’t mean you are financially intelligent, especially when you spend and invest that money unwisely—or turn your money over to people who do not care if you make or lose money. Always remember there is a big difference between job security and financial security, and true financial security requires a sound financial education based on the realities of the real world of money.
That is why I was not surprised when our economic crisis spread wider than just the mortgage defaults of subprime borrowers. The talking heads and our leaders appeared to be surprised. That is why our presidential candidates did not mention the problem during the campaign. They toed the line for as long as they could, assuring us that there was no crisis and that our financial problems were limited to poor people not paying their mortgages. As we now know, the problem was not just poor people with too much debt. The problem started at the highest levels of government and finance. Millions have lost much of what they spent their lives working for because they have no undestanding of the new rules of money and how they affect our lives. And that is a systemic problem that can’t be solved by one charismatic politician.
So here we come back to the question posed in the title of this chapter: Can Obama save us? The correct question should be: How can we save ourselves? The answer, and the key to our freedom from the tyranny of our economy, is knowledge. By educating yourself about money and how it works, you unlock the potential within yourself to break free from the mentality of scarcity and see the abundance all around you. For you, these truly can be the best of times.
Personally, I do not expect government or big business to save me. I simply watch what the powers that be actually do, more than what they say or promise, and I respond accordingly to those actions. Knowing how to respond, rather than follow, and taking confident action, rather than waiting to be told what to do, requires courage and financial education.
I believe our financial problem is too big and getting bigger. It is out of control. It is a monetary problem more than a political problem. It is a global problem, not just a U.S. problem. There is only so much Obama can do, and what he can do I fear may not be enough. Worst of all, the people really pulling the strings in the financial world do not answer to the president of the United States. They do not need his approval to do what they do. They are beyond the control of world governments and their elected leaders.
How Can We Save Ourselves?
When I am asked what I would teach if I were in charge of financial education for our school system, my answer is: “I would make sure the students understood the relationship between taxes, debt, and inflation before leaving the school system.” If they understand that, they will have a more secure financial future. They would be able to make better financial decisions for themselves rather than expect the government or so-called “financial experts” to save them.
Reader Comment
Because of things that I learned through financial education, I have known for a long time that my 401(k) was not the great investment it was touted to be, and today I’m better for having that knowledge. I’m reminded of something else Robert said which is, “It’s not silver, gold, or real estate that make you rich; it’s what you know about silver, gold, or real estate that makes you rich.”
—dafirebreather
Ultimately, this book is about the relationship between taxes, debt, inflation, and retirement. These form the foundation for the new rules of money. This book will equip you to take control of your own financial future by giving you the knowledge necessary to understand these forces, and thus the new rules of money. And once you understand these things, you’ll be in a position to opt out of the conspiracy of the rich and to live a life of true financial freedom.
