Where to Avoid Investing by James Jaeger
Sometimes the best places to invest money yesterday become the worst places to invest tomorrow. People and institutions change, things get over-regulated, the same policies are always applied ad nausium . . . good management teams leave, morale declines, idiots come on board. There are a million things that can make a once-lofty institution a liability to society. All the while the law of universal entropy requires that new organizing energy, new intelligence, is always applied to any institution, government or company in order to get or stay big. But big is not necessarily better, all that glitters is not necessarily gold and you may wish to keep up with the Jones'. You have heard all these sayings and may consider some of the them true at times. Well let's apply them to some standard investment vehicles we have known for many years:
We discuss why a movie, especially an independent feature, is the best place an investor can put their money at http://www.moviepubs.net/memos/whyinves.htm, now let's explore where one should NOT place their money, contrary to popular (but old and tired) opinion. Speaking of opinions, bear in mind that these are JUST my opinions. Many people like and stand by these organizations and there is a lot of good that can be said about them. I'm just going to take a contrarian stand here and give their securities a pass for the reasons cited below, and suggest you do as well.
- Trusts administered by corporate fiduciaries
- U.S. treasury bonds, notes and T-bills
- The MPAA studio/distributors
Trusts Administered by Corporate Fiduciaries
First, never place your assets into any trust account setup and recommended by your lawyer if he or she wants to place a bank fiduciary in there as a trustee and/or executor without giving you and the beneficiaries an on-going right to audit them for poor performance, as defined by some pre-agreed upon standard (such as the T-bill Rate or the S&P Average). In many cases settlers would do much better to will their money outright, using insurance to pay inheritance taxes, because the probate-system and the trust-system is setup and run by lawyers, accountants and bankers, who are now the only ones who understand it. It is similar to the morass the tax-system has evolved into. If you get into it, God forbid, you will find that it is setup, whether by accident or design, to obfuscate transactions to the layman. This leaves the banks, the law firms and the accountant open reign to "legally" over charge, customers, and under-perform -- all under the safe harbor of the "Prudent Man Rule" and other provisions in the Fiduciary Act. Ever heard of white collar crime? Ever heard of ENRON. Well NOW you have, finally. And their lapdog accountants didn't look so good either. Well this is what I'm talking about at its most sophisticated level but you can get screwed at your level too -- no matter where it's at. Lawyers and trust departments get away with "white collar crime" because the system basically allows it, it also uses "special" methods of accounting that only ($200-per-hour) trust lawyers and their rubber-stamping judges understand. Even some judges don't really understand their effects as exemplified by at least one Orphans' Court hearing I attended.
Further, the law, as it stands today, allows the Bank fiduciaries to take what they call "reasonable" fees from trusts and estates in probate. These fees are not reasonable. So entrenched is this system, I and several others had to form an activist group called Heirs & Beneficiaries to file a class action law suit. In investigating the area, we found that thousands of other people in the Commonwealth of Pennsylvania and other states, are being victimized as you read this.
On August 10, 1992, we won a judgement for $55,000,000 (with damages that may take the judgement as high as $100,000,000) whereby the Judge Marvin Katz found and stated: "This case is a clarion call to banks everywhere to reform their egregious practices that have long victimized their customers and others who have to deal with these institutions." (U.S district Court for Eastern Pennsylvania; John B. Upp v. Mellon Bank, civil action number 91-5229.) This judgement will undoubtedly be overturned as new class-action suits across the country are filed as people wake up to the situation.
U.S. Treasury Bonds, Notes and T-Bills
One of the safest investments the past hundred or so years was U.S. Government Bonds such as T-Bills, T-Bonds and T-Notes (hereinafter "Bonds"). This may no longer true thanks to the Federal Reserve System. The Federal Reserve System (the FED) is a government-sanctioned, quasi-private, banking cartel established in 1913. Its main architect was Paul M. Warburg, who was a partner with Kuhn, Lobe & Company representing the Rothschilds and Warburgs in Europe.
Today many feel the Fed is in "collusion" with the United States federal government (which ultimately guarantees its loans by your sweat, the American taxpayer), because the government is addicted to the fiat, debt-backed, currency it creates out of nothing (through the sale of the Bonds) for its big government spending and continual warfare projects.
The U.S. Government, by continually creating debt instruments (bonds) is devaluing our money supply because it is having the Federal Reserve issue checks "secured" by these debt instruments as if they were real assets. Just because they are backed by the "full force and credit of the United States" does not mean that they should be considered assets on the Federal Reserve's balance sheet. This is "creative accounting" at its worst and is, in effect, money created out of nothing and backed by less than nothing -- debt.
This money created through what's known as the Mandrake Mechanism (explained later), is what the Department of Defense, for instance, uses to pay its defense contractors with so they can continue to employ citizens (remember over 50% already work for either federal, state or local government) to build war machines to maintain the government's reason for existence.
Then these checks, spent by the defense contractors, eventually find their way into the nation's commercial banks as demand deposits. Under the fractional reserve system (regulated by the government-sanctioned Federal Reserve banking cartel in two-step with itself), the money is lent out to customers and interest is charged. But since the banks have learned by experience that all of the customers do not usually come by to demand their deposited money at the same time, the banks lend out more than they have on deposit -- as much as nine times more. This further inflates the money supply and devalues our dollars. The only ones that win are the banks with the above system known as the "Mandrake Mechanism."
As of January 1, 2003 September our national debt was $6,389,356,141,156.55. In round numbers that's $6.4 Trillion. In prior years it was:
09/30/2002 . . . $6,228,235,965,597.16
09/28/2001 . . . $5,807,463,412,200.06
09/29/2000 . . . $5,674,178,209,886.86
09/30/1999 . . . $5,656,270,901,615.43
09/30/1998 . . . $5,526,193,008,897.62
09/30/1997 . . . $5,413,146,011,397.34
09/30/1996 . . . $5,224,810,939,135.73
09/29/1995 . . . $4,973,982,900,709.39
09/30/1994 . . . $4,692,749,910,013.32
09/30/1993 . . . $4,411,488,883,139.38
09/30/1992 . . . $4,064,620,655,521.66
09/30/1991 . . . $3,665,303,351,697.03
09/28/1990 . . . $3,233,313,451,777.25
09/29/1989 . . . $2,857,430,960,187.32
09/30/1988 . . . $2,602,337,712,041.16
09/30/1987 . . . $2,350,276,890,953.00
In ten years the national debt has increased $2 trillion. And this rate is accelerating. If you want to keep tabs on the National Debt go to http://www.toptips.com/debtclock.html or enter "National Debt" in at a search engine and a real-time counter will give it to you to the nearest dollar.
For all the hoopla on TV and the news, Congress has no intention to pay this debt off because your money supply is backed by this debt. It cannot be paid off under the Federal Reserve System. The hoopla is window dressing to obfuscate the situation and keep you confused as to how the money supply works.
Since the number of Federal Reserve Notes in circulation is $1,103,700,000,000 and the national debt is over $6,389,356,141,157 -- IT DOES NOT TAKE A GENIUS TO REALIZE THAT IF THE NATIONAL DEBT WERE ATTEMPTED TO BE PAID OFF (AS CONGRESS IMPLIES) THERE WOULD BE NO MORE MONEY IN CIRCULATION. Therefore there is really no attempt to pay off the national debt under the current fraudulent promises and proposals promulgated by Congress and the President, and as mentioned the Federal Reserve System.
So in a nut shell, it is bad business to buy Bonds if you think you will be safe in the years to come -- because when the public at large becomes aware of what is happening -- your security will be down the tubes.
And none of this takes into consideration the balance of trade situation the US has had for the past several decades where we have been exporting inflation because the dollar has so far been the world's de facto currency. The dynamics of the situation could change almost over night with the success of the EURO and/or foreign nations failing to roll over their bonds.
For more information on the Federal Reserve, the problem and some suggested solutions, get a book called The Creature from Jekyll Island at The Reality Zone. It is probably at your local library or bookstore, but if not, you can order a copy by calling 800/282-2873, or writing to AMERICAN MEDIA, P.O. Box 4646, Westlake Village, CA 91359-1646.
The MPAA studio/distributors
The MPAA studio/distributors are comprised of the following, and only, the following companies:
- Walt Disney Company
- Sony Pictures Entertainment, Inc.
- Metro-Goldwyn-Mayer Inc.
- Paramount Pictures Corporation
- Twentieth Century Fox Film Corp.
- Universal Studios, Inc.
- Warner Bros.
There have been volumes written about these 7 old companies that distribute 90% of the hackneyed movies we see. But it all boils down to one simple principle why you should avoid investing any of your money, or time in these companies: they're all basically the same. They're all clones of each other. Their management teams have been playing musical chairs for 90-some years. As such, the people that control these companies have totally mixed and diluted each other. It's like a sever case of corporate incest. The management group, some say cabal, shares similar or identical ideas, views of life, jokes, prejudices, and political affiliations, heritage, and even race and sex. It's so blatant and obvious, but sensitive, that if I were to even MENTION certain elements in the demographic that controls their top-most executive echelons, I would be labeled a bigot.
But you say a lot of good movies have been produced by the MPAA studio/distributors. Sure, but you'll never see any of the money generated by them. Have you ever heard the term creative accounting? Well the implications of this Hollywood practice are well-documented in three books:
I suggest you get and read these three books, all available at Amazon.com, if you are ever thinking about investing any money or time in any of the MPAA companies. You may want to re-consider. If you don't read books you might review some of the short articles and materials at the Film Industry Reform Movement at http://www.FilmReform.org.
- Indecent Exposure
- Fatal Subtraction
- The Feature Film Distribution Deal
NOTE: his article should not be construed to be an offer to buy or sell any securities. Permission is granted by the copyright owner to disseminate this article in whole or in part provided credit is given to the author (with a link to the article's source URL at
and this NOTE is not removed.
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