The Federal Reserve

							Illegal to Own Gold?
   Executive Order 6102 required everyone to
    turn over all their gold ownership except for
    up to $100 in Gold Coins.
   The bill was signed April 5, 1933.
   Citizens were to deliver gold by May 1,
    1933
   The intention was to increase to value of
    Gold. Value was changed from $20.67 to
    $35.
   Gerald Ford appealed the order which went
    into effect December 31, 1974
•Who   owns the Federal Reserve?
   •The Federal Reserve System is not "owned" by anyone and
   is not a private, profit-making institution. Instead, it is an
   independent entity within the government, having both public
   purposes and private aspects.
   •The twelve regional Federal Reserve Banks, which were
   established by Congress as the operating arms of the
   nation's central banking system, are organized much like
   private corporations--possibly leading to some confusion
   about "ownership." For example, the Reserve Banks issue
   shares of stock to member banks. However, owning Reserve
   Bank stock is quite different from owning stock in a private
   company. The Reserve Banks are not operated for profit,
   and ownership of a certain amount of stock is, by law, a
   condition of membership in the System. The stock may not
   be sold, traded, or pledged as security for a loan; dividends
   are, by law, 6 percent per year.
   •Source: http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm
The Federal Reserve
   According to Mullins the larges 8 banks who
    own Federal Reserve Stock are:
     Citibank, Chase Manhattan, Morgan Guaranty
      Trust, Chemical Bank, Manufacturers Hanover Trust,
      Bankers Trust Company, National Bank of North
      America, and the Bank of New York
     His claim is that many of these banks have large
      ownership from foreign countries, many Europe,
      large portion in British Columbia.
     He also claims that the New York Reserve Bank has
      foreign interest and it is the New York Reserve Bank
      that controls the Federal Reserve
     Can we conform what Mullins said?
   Source Mullins, Eustace. 1983. Secrets of the Federal Reserve. Staunton, Va.: Bankers Research
    Institute.
The Federal Reserve
 New York Federal Reserve Bank is only 1
  of 12 Federal Reserve Banks
 Federal Reserve not actually controlled by
  New York Fed, but controlled by the Board
  of Governors (the Board) and the Federal
  Open Market Committee (FOMC)
 There is a claim that foreigners own portion
  of the stock of the Federal Reserve
 There is a law that allows a limited amount
  of stock to be sold to the public. No more
  than $25,000 is allowed to be sold to any
  person or organization
The Federal Reserve
   Public stock is only to be sold if member banks do not
    raise a minimum of $4 million of initial capital for each
    reserve bank.
     This has never happened!!
     Stock has only been sold to banks who are a member of the
      Federal Reserve System.
 Claim: Since those 8 banks own the largest share of the
  New York Federal Reserve, they control the Federal
  Reserve.
 The New York Federal Reserve Bank has 1000 members.
 Votes are not based on percentage of shares.
 SEC requires that if any organization owns more than 5%
  of shares of a publicly traded firm to made public
     Because of this, it is evedint that no foreign organization owns
      more than 5%.
Who Gets the Federal Reserve
Profits?
 In 1995, Federal Reserve had net
  income of $23.9 billion.
 $23.4 billion was transferred to Treasury.
  (97.9%)
 Federal Reserve banks kept $283
  million.
 Remaining $231million was paid to
  stockholders as dividends.
   Reference: http://www.usagold.com/federalreserve.html
Gold vs. Silver
   August 8, 1786 – The dollar approved as an
    approved monetary system
   Coinage Act of 1792 – established the dollar
    as the basic unit of account for the United
    States.
   Discovery of large silver deposits in late 19th
    century brought the value of silver down.
     Conflict in Congress as to whether they should
      switch from Silver to Gold Standard
      ○ Benefit to keeping silver standard, farmers could pay off
        debt quickly
      ○ Benefit to switching to gold standard, align with
        European markets better.
Nixon Shock
 The gold standard was officially adopted
  through a series of legislations from
  1873 to 1900.
 1971 Dollar was removed from the gold
  standard.
 1972 US dollar was reset the gold value
  of 38 dollars per troy ounce
Silver Standard
 Silver certificates were printed
  representing money from 1878 to 1964.
 Since early 20s they were available in
  $1, $5, and $10 notes.
Money Statistics
 Average debt for 22-29 Year old:
  $16,120.
 Average debt per household rages
  $8,000 to $14,000
 84% of students have a credit Card
 On Average Consumers have 13 credit
  obligations
Plan for the Future
 There is never a good time to start
  planning for your financial future. DO IT
  NOW!!!
 Managing money is essential
 Managing money is part of building a
  foundation for your future
Spending Money
 1. Keep track of everything you spend
 2. Subtract Total from monthly income
     If you get a negative number, you need to
      make some changes
     Need or Want?
     Wants vs. Can I afford?
Putting things into perspective
   Average Price for Coffee $1.50
   3 cups per day = $4.50/per day =
    $1642.50/year
   Breakfast = $5, Lunch = $8, Dinner =$10
   Eating = $23/day, $690/month $8395
   Food and coffee = $10,037.50
   We spend $400/month for family of 4.
     This includes diapers, eating out regularly and
      convenient foods.
Budget Guidelines
 20% for debt payments
 30% for rent
 10% for savings
Looking for a Bank
 Look for charges and fees
 Interest rates and cash back
 Ability to having low balance on
  checking account without extra fees.
 Checks, Credit Cards, Debt Cards Etc
 ATM Access (don’t use ATM more then
  once per week)
 Check into option of Credit Union
General Suggestions
 Direct Deposit
 Auto deduct/online bill pay
 You have to know where your priorities
  are
 Priorities lead to prosperity.
Digging our of debt
 Credit Cards are dangerous
 One college student spent $4000, ended
  up with $30,000 debt from fees
 66% of college students have credit
  cards
 If debt is necessary for school, look into
  student loans
Credit Card Smarts
 Lowest Interest Rate (look past
  introductory rate)
 No Annual Fees
 No Hidden Fees or Charges
 READ THE FINE PRINT
     New credit card tricks
Student Loans and Tuition
 Subsidized – Government pay interest
 Unsubsidized – interest accrues
 Pell grand and other grants available
 Average tuition for 4 year school:
  $25,000
 Average student loan payment: $252
 Average total interest paid: $8,343
Student Loan Payment Options
 Deferment: Time period in which
  payments are not required
 Forbearance: Temporarily stop loan
  payments because of financial
  hardships
 Income Sensitive Payments
Average Student Loan Debt
 1990: $6800
 2007: $22,000
 2015: $32,000
Credit Score
 Most important grade you will see
 Credit Report: Your credit relation history
 Make Payments on time
 Pay bill in full each month
 Check credit report annually
     https://www.annualcreditreport.com/cra/inde
      x.jsp
     Three Credit Bureaus.
      ○ Experian, TransUnion, Equifax
Ways to Save
   CD’s
     Good rates Jan 2009
      ○ 6 months : 3.24%
      ○ 1 Year: 3.7%
      ○ 5 Year: 4.24%

   Recommended Emergency Fund: 3-6
    months living expense
     Money Market Account
Saving for Retirement
   IRA vs. Roth IRA
     IRA
      ○ Tax Deferred (pay taxes when you take it out)
     Roth IRA
      ○ Pay taxes first, then growth is tax free

   401k
     Same concept as IRA, but employer
      sponsored
     Employer Matched
Compound Interest
    5% Interest Rate
   $50 Per Month
     30 Years: $41,856
     20 Years: $20,831
     10 Years: $7,924
   $100 per Month
     30 Years: $83,712
     20 Years: $41,663
     10 Years: $15,848
   $200 per Month
     30 Years:
      $167,425
     20 Years: $83,326
     10 Years: $31,696
Compound Interest
     5% Interest Rate          10 % Interest Rate
   $50 Per Month         •$50 Per Month
     30 Years: $41,856      •30 Years: 108,566
     20 Years: $20,831      •20 Years: $37,801
     10 Years: $7,924       •10 Years: $10,518
   $100 per Month        •$100 per Month
     30 Years: $83,712      •30 Years: $217,132
     20 Years: $41,663      •20 Years: $75,603
     10 Years: $15,848      •10 Years: $21,037
   $200 per Month        •$200 per Month
     30 Years:              •30 Years: $434,264
      $167,425               •20 Years: $151,206
     20 Years: $83,326      •10 Years: $42,074
     10 Years: $31,696
Getting Insured
   Health Insurance
     Average uninsured hospital visit $3300
     1 in 3 adults don’t have it (20 million people
     have no health insurance)
 Life Insurance
 Renters Insurance
Self Employment
 Taxes (set aside 30%)
 Cost of Operation
 Careful records for IRS
 Penalties for not paying taxes as you go
 Health insurance and other costs
 Set aside 15% for health insurance &
  business insurance
 Set aside 10% for retirement
Great Website of Reference
   http://www.pbs.org/wned/