Got Scared?

Speed Reading: Got Scared?

Did you hear Secretary of the Treasury, Paulson? He just figured out that the
$700 Billion he spent to bailout the banks to loan money to consumers, just did
not do the trick. He’s not scared it is just, I am sorry; it was a nice try, but no cigar.

If at first you don’t succeed – do you give up and hide under your desk?

Are you worried about the state of the world, the U.S. economy or your personal fiefdom, which consists of your family and livelihood?

Stop watching CNBC and reading the Washington stories; their job is to shock you
into keep watching for the next story. Stay tuned, there’s more bad news to follow.

Thrill ‘em, chill ‘em, make them laugh or make them cry, is what it takes to attract and keep an audience. Google: Mike Todd, Hollywood producer.

History

What was the average take home pay in 1933, the middle of the economic Depression?

Answer: $1,500 a year or $30 a week was average. Farmers did not make that much,
they were lucky to earn $800-$1,000 annually, but they had their food paid for.

The price of food in 1933 was like this: milk 14 cents a quart, eggs a nickel a dozen,
and bread 9 cents a loaf. Compare those price to what you pay today.

During the 1930s 86 thousand businesses cratered, 10,000 banks busted out, and the
depositors lost all their bucks. Unemployment in 1933 was at 33%, when today we are shocked at 6.5%.

The manager of the bank was earning up to $75 a week, based on the success of
his specific branch. And guess what, entrepreneurs were buying up land and factories at pennies on the dollar. Remember – these are the good old days.

G. Washington

Did you know George Washington offered to serve as President for free, and Congress said, no thanks?

The facts are Congress recognized the power of human nature and the principal of setting a precedent. If you don’t pay George, maybe he’ll feel free to be corrupt, and
accept bribes, and what if the next president cannot afford to work for free?

Article II, Section 1, Clause 7: The President is paid $25,000 annually, and the Vice
President, $5,000 yearly, out of the Treasury of the U.S. Wait – that was April 30,
1789, and that was a huge amount of money compared to even 1933 salaries.

Where was the money to pay George and John Adams (V.P) coming from?
Congress left that small problem for later, and hoped George would either borrow
on the credit of the U.S. or Congress would pass some excise taxes.

They found the $25K for George the Wash, and $5K for John Adams and never
looked back.

Coda

The American Revolution was built on the credit of an insolvent group of colonies,
who were in a war against the most powerful and richest country in the world,
Great Britain. Who in his/her right mind would loan money to the deadbeat Continental Congress?

France, the Dutch in the Netherlands, and Spain were foreigners who for their own
political or financial reasons gave millions to the U.S. when the hopes of repayment
were very doubtful.

By the end of the war, (Treaty of Paris, 1783), the U.S. owed $11.7 million to foreign governments, and were $1.5 million in arrears for unpaid interest.

The U.S. was broke, and also owed money for unpaid salaries to 24,000 soldiers, and unpaid vendors for food, uniforms, military equipment, and ammunition, for a total of $40 million.

Lastly, the Congress (Article VI of the U.S. Constitution) was legally responsible for
the earlier debts of the Confederation of States forming the United States of America. We owed the states $25 million.

All added up, the bankrupt U.S. in 1783 owed a total of about $76 million, so they rounded it off at $80 million. What a million here or there, even then?

Assumption Act of 1790

The insiders decided in 1780 to pay off the U.S. indebtedness in the sum of $80 million, with dinero they did not have, in order to build a good reputation as a future borrower.

G. Washington, Thomas Jefferson, James Madison, and Alexander Hamilton, told Robert Morris, later U.S. Superintendent of Finances he had ten years to find the $80 million. Congress passed the Assumption Act and enacted excise taxes, and pulled it off.

The good news is the Dutch, French and Spanish were paid off, and the U.S. was not
labeled a deadbeat. You might be interested to know that some insiders clipped maybe $10 million of the $80M by speculating (betting) the U.S. would survive
as a world power after the Revolution.

Involved were about ten U.S. Senators, the Speaker of the House of Representatives, and friends of George W, Hamilton, and Robert Morris. They had salespeople roaming the U.S. buying up Revolutionary War Bonds, Notes and Bills at about half of one-cent on the dollar of face value.

They made a killing by paying one dollar in gold (15 to 1) in silver, for Continental
money and financial indebtedness. Get this: the insiders bought up the allegedly worthless Federal and State Bills, Notes and Bonds for one-half-penny on the dollar, for each $1 of real gold or silver (species). But was it a bargain?

Speculators as Thieves of Heroes

Would you take real dinero today, for pieces of paper not worth a Continental,
or be stubborn and wait ten years and hope to make out?

Merchants, soldiers and investors took the gold or silver today and ran. The insider
speculators had confidence in the future of the U.S. and they won their bet.

These same speculators in 1792 joined together under the Buttonwood Tree on Wall Street, and helped form the New York Stock Exchange. Some things never change, huh?

Endwords

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See ya,

copyright © 2008, H. Bernard Wechsler, www.speedlearning.org hbw@speedlearning.org 1-877-567-2500 toll-free
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