As I write, the richest people in the world are divesting
themselves of long-term investments. Paris Hilton's personal fortune, something
she probably does not know originated from a loan from John D. Rockefeller,
will probably receive a notification that her interest in Hilton Hotels has
been sold. She may notice -- probably not.
Those who work for folks like Paris are, as you read this,
stuffing assets such as Hilton (the corporation, not Paris) into pink dresses
and pimping those long profitable but now matured enterprises out for sale.
This means prettying up the balance sheet and fluffing the pillows, mostly.
Those who do that work will be well compensated.
The Big Money People have left the room.
All of their cash is being carefully sequestered in banks,
remote from risk. What the action tells you is to expect that the final segment
of a long running con game is going into its final phase. Those in control are
drooling in anticipation of one long final suck on the life's blood of America.
The target is your money, the money you thought was safe.
The weapons are such Limited Partnerships as Kolberg, Kravitz Roberts & Co
(KKR), Blackstone Group LP, and Apollo. This will be a big operation. That is
why Blackstone went public last week. This week it is Apollo's turn. Limited
Partnerships issue hunting licenses on your wealth you did not know existed.
These LPs are opening their eyes, ready to go hunting for those huge
repositories of long term capital in which you are probably happily invested.
Your money, tucked into those cozily safe mutual funds,
IRAs, 401Ks, annuities or in your company pension plan are squarely in the
crosshairs. Think again and familiarize yourself with these terms.
Terms and tiny bits of history you need to know
for your own protection
Accredited
Investor -- Some one presumed to know how to protect themselves in the
shark infested waters of finance. Possesses a net worth of at least one
million, has an income of over $200,000.00 a year in addition to other
wonderful qualities. $300,000.000 if they are married, but that's an entirely
different article. More on that later.
Nonaccredited
Investor - An individual who, even if they are wealthy, does not meet
the sophistication criteria to be classified as accredited. Only 34 of these
are supposed to be involved in many high risk Limited Partnership style
ventures.
Investor
- Along with owning an asset they are also referred to in the financial trade
as 'patsies.'
Limited
Partnership -- A license to play with other people's money (OPM) with
virtual impunity. May be started by only one individual. "Two or more
partners formed to conduct a business jointly, and in which one or more of the
partners is liable only to the extent of the amount of money they have
invested, known as the "General Partner". Limited partners do not
receive dividends, but enjoy direct access to the flow of income and expenses,
if any is left after the GP and his friends get all their fees and
commissions."
Mutual
Fund -- As the name suggests, other people mutually using your money to
fund their deals; to you, a way for people to invest who really don't know
anything about the world of finance and markets and spread their risk around.
Many retirement funds are invested in mutual funds as well as IRAs, 401Ks,
annuities, and most corporate pension plans. These are very illiquid and can
take up to three days for a sales settlement to occur. Most major stock market
drops happen in a few hours leaving those holding these sorts of investments
SOL. That is why they are not allowed to invest in risky ventures, such as
Limited Partnerships. The Mutual Fund was created as a financial instrument to
use small investor capital to prevent a total market collapse. In other words
your safe money has been converted into a financial instrument that provides a
buffer for hedge funds to manipulate the market without a complete collapse.
The
Securities Act of 1933 - After The Crash the Federal government began
mandating more transparency in the sale of securities. This was to prevent the
con games then associated with the sale of stock and securities. There are a
variety of terms used in the industry for these schemes. That article will
follow soon.
Grid Business -- A business whose profits are
guaranteed by using government to deny you choices.
To continue . . .
So, how safe are you and your financial future? You are
actually already falling over the cliff in to penury, you just don't know it --
yet. Those you trusted to steer you into prosperity and security had designs on
all that lovely wealth, designs they have been manicuring for years now. You
accumulated your assets and savings with the sweat from your brow. It is about
to go Poof right before your eyes. You are enmeshed in a masterfully crafted
deception.
What you should have done was to invest in yourself first --
get rid of your debts. But that is hard to do when going into debt is so very
inviting. From every point on the chart you are urged to buy -- on credit. You
see new cars, new clothes, amazing vacations, and enticing luxuries. You hunger
and bite.
Consider the case of Mary Swan.
An only child, Mary inherited a home from her mother. When
Mrs. Swan bought the place it cost her $11,000.00. When Mrs. Swan died 10 years
ago the small home in Iowa was worth $80,000.00. There was no mortgage. Mrs.
Swan did not believe in debt.
Mary works in the local Five and Dime Store. A year ago she
had the home appraised and low and behold it was worth $160,000.00 and Vitech
refinanced the home for her and allowed her to borrow 125% of the value of her
home or $200,000. Mary bought her first new car and upgraded the house.
She also took a trip to Europe that had always been beyond
her means. Mary was sure the house would continue to go up in value. And even
if it didn't she invested the rest of the money. She would have enough, she was
sure, to make the mortgage payment.
The hard reality is that in two years Mary will be homeless.
Unable to make the new mortgage payments on her family's home she will need her
job, which pays only $500 a week, like never before. But that new car will have
finished the cycle of its planned obsolescence; or be repossessed if she cannot
make the payments, even if she does it will be worn out. Without the car she
will lose her job.
We all want a piece of the Rock, meaning we want financial
security; most of us know very little about the mysterious, esoteric world of
high finance. So we tend to be conservative about how we invest. We put our money
in things like mutual funds so we will never be confronted with a poverty
stricken old age, be unable to get our kids through college, or face medical
bills that destroy us financially. We want prosperity and the comforts of life
and all of us have worked hard to establish that for ourselves.
Mutual Funds and those other kinds of investments, 401Ks,
IRAs, pension funds, did not exist in 1929. It was the demand for more secure
investments and ordinary investors reluctance to trust the power brokers that
caused them to be brought into existence. The generation that experienced the
depression demanded security first, after all they couldn't even trust the
federal government and the banks. We entered into a war to shock Americans back
into subjection.
It was an all cash no funny money society. You can't
multiply cash into a 10 to 20 multiple, especially if it's buried in the back
yard.
The problem is that those who run the finance game wanted
larger and larger percentages of our blood. We already talked about Short
Selling and the SEC
in prior articles, now we need to consider what is happening with mutual
funds and the like.
The accumulation of real money in mutual funds, IRAs, 401Ks
and our pension funds have probably been driving them insane with desire for
years now.
Savvy market manipulators see this locked up money as a
treasure they must steal before the collapse. You thought no one could get at
those funds. Oops. Wrong Again!
If you think you have security because you are invested in
mutual funds, possess a hefty bank account and a managed portfolio of stocks
you were assured will yield well, and live in a home with substantial equity,
you may be on thinner ice than you realize. If you listen carefully, this
summer you may well hear the sound of frigid ice of a heartless financial
system cracking under your feet.
Those instruments for investment, mutual funds and stock
portfolios, are being set up to be sucked dry. When the market goes South the
power brokers regular stock holdings can be quickly sold and capital conserved
immediately. It's called a "Stop Loss". You can't get a stop loss on
a mutual fund . . . SUCKER!
You thought it was a level playing field, well it's not, and
it never will be as long as the grasping gonzos who run Washington are still in
power. Who did you think is invested in those Hedge Funds? Hedge Fund Short
Sales will manipulate your mutual funds value into virtually nothing. With
complete 'security,' it's called a "Spread" or a
"Straddle". Meanwhile your mutual funds holdings and so-called secure
investments take three (3) days AFTER you persuade your investment firm this is
what you need done to be converted to cash.
In three days your money will be long gone! Sleeping
alongside all those fat cats money in Switzerland.
And now the kicker, demonstrating another fact about those
who are sucking us dry.
Look over the holdings of Blackstone Group LP. It is a long list
but take some time and just scroll through them. This LP is managed by people
who appear not have a clue of what is about to happen in the burgeoning
development of the new global infrastructure for communications, connectivity,
and the supply of digital information, let alone the fact that soon there will
be 75 MPG automobiles coming from China.
That is the first point. The bulk of the companies in which
they hold an equity interest are related to various points on the development
chart in the related fields of communication devices, phones, etc., Internet,
cable, business applications for the same, satellites, hardware, and enough
other points on that development front to tell the informed reader that they
are trying to anticipate every conceivable eventuality. You can't bet on every
placement on the crap table and walk away a winner. No one knows what is
eventually going to dominate the communications market. And remember how many
of these start ups are handled by Hedge Funds; just like cattle are herded to
the slaughter.
You can expect that most of these holdings, domestic and
foreign, will either implode because they were wrong, be chopped up for
consumption by Hedge Funds, or be acquired for pennies on the dollar in just a
few years without having done more than consume the hopes and expectations of
ordinary investors like yourself. That works for high-risk businesses like
Limited Partnerships. But why is your money there?
Remember that you, the uniformed investor, are not allowed
to invest in those risky ventures? The SEC is supposed to ensure that does not
happen.
However, that does not mean your professionally managed
mutual fund can't and won't do it for you. They are doing just that right now.
Blackstone Group, that very Limited Partnership, is a prime example. Now, you
might well own a few grains of their sandstone through your so-called 'secure'
investments.
I told you those in finance hungered for your funds; they
are now preparing to consume.
Many big mutual funds are heavily invested in such LPs right
now. Those in charge of those mutual funds are not accountable if there is,
gasp, an unexpected loss, remember that.
The SEC, charged since its beginning with ensuring that you,
the uninformed investor is protected, is taking no action, just to mention.
As an uniformed investor it is your derri�re that is
swinging naked over the swamp pit filled with crocs because you shouldn't be
able to invest in high risk securities. But you are just a bloke getting ready
to be stung by that cute little pea and a big shell game carefully and
strategically ignored by the SEC.
The proven holdings in that portfolio, which run along the
lines of a 'grid' business strategy, making their income from matured forms of
business, show some of this and that, a stew of businesses that act as scant
flavoring with no real direction or sense of the future. The prettified pig
wearing that fancy lipstick is now in the portfolio that secures your future --
while Paris's money takes a hiatus in the Rivera in the highest security venue
possible. Oh, and in a currency backed by GOLD not in the ability to print
worthless greenback into infinity.
Someone's interests are being protected. That someone is not
you, my friend.
Everyone involved is gambling with your money. Nice trick
when it works, right?
All of this leads to several natural questions. Why has the
SEC ignored the risk to uninformed investors? A word from the SEC could have
stopped operations that clearly violate both the intention and word of the law.
Which leads us to wonder where Chris Cox's doubtless significant coffers are
cached.
If Blackstone Group and their LP friends make you feel
secure, then grab that anchor and try floating. One thing to remember is that
there's Old Money and Bold Money, but there's no old bold money!
Melinda
Pillsbury-Foster is the granddaughter of Arthur C. Pillsbury. AC invented the
first circuit panorama camera as his senior project at Stanford in 1896 while
majoring in Mechanical Engineering. She has been studying the market and economics
through the filter of politics and anthropology for twenty years. Her political
blog is How the
NeoCons Stole Freedom. She is presently working on a book titled, �Off the
Grids to Freedom in One Easy Lesson.�