By Kellene Bishop

hard money lending photo c/o peachstonecapital.com

Many years ago I frequently rubbed elbows with the hard-money world of commercial lending.  As an expert educator in the world of commercial finance, I simply could not have a functioning knowledge of the industry without being exposed to what was known as “hard-money lending.”  Hard-money loans typically come with some steep prices.  The first fee one would usually have to pay is an “application fee.” This particular fee is required simply for the privilege of having your funding request considered. Many such fees are non-refundable and would be as much as 1% to 3% of the value of the loan request.  After your project is given a preliminary approval you may then be required to pay a “commitment fee.”  This fee is anticipatory of the underwriting, inspection, legal, and appraisal costs that may or may not be necessary to process your funding request.  Regardless of what the anticipated costs really are on a project, commitment fees are typically another 1-3% of the total value of a funding request and to add insult to injury, they are usually non-refundable as well.  Then, assuming that all goes well during the processing of your hard money loan, just before closing you will get your written approval. However, in many instances you will be required to pay a “funding fee” which is essentially more money that you had to put up to show them your level of commitment to the funding. (Irrelevant of the fact that your other monies should have already clearly conveyed such a commitment previously.) This fee can be a mere $10,000-$50,000 or it can be greater.  In most instances this fee is refunded immediately upon the funding of your deal, but it’s still cash that you’ve got to come up with just to get your deal done. (Are you tired yet?)  Then, upon the closing and funding of your loan, you will be assessed approximately 15-22 points of the loan amount, plus an interest rate as high as 30 percent!  Are you worn out and horrified yet? 

hard money lending costs a wad of money photo c/o pitbullmortgageschool.com

To add insult to injury, folks, all of this is completely legal.  There are no regulations on commercial lending, and even less when it comes to lending with your own private money. So really, the hard-money lenders are untouchable. With so many fees collected without even having to fund a loan, you can bet that most hard-money lenders have vicious legal dogs to do their bidding in the event of a dispute.  What would possess a person to pay a non-refundable $5 million dollars simply for the privilege of applying for $50 million dollars at the cost of 20 points, an 18% interest rate, and 55% of their business revenue? It’s called desperation, folks. 

Obviously this finance scenario defies all common sense to most of us reading this.  I look at situations like this and say “Whoa, buddy. No deal is such a sure thing that it’s worth you putting all of this at risk.  If you’re deal is that viable, then surely you should be able to qualify for “real” financing, right?”  “If this is all you’ve got, walk away from the deal and wait for a more attractive one to come along.”  Wouldn’t you agree? 

Here’s the backside of such transactions that you should know as well.  Such deals are specifically created to be devious in order to give the hard-money lender the surety of not only getting their money back, but also laying claim to all work equity, sweat equity, intellectual property, and physical property in the event they don’t receive the expected return on their loan.  Some hard-money lenders actually HOPE that the client will default so that they get much more than their multi-millions of dollars lent at a 30% interest rate.  Oh, and one more thing—and this is the kicker…when it comes to commercial loans—especially hard-money loans, they can be called due at any time and for any reason.  Contemplate the consequences of such actions if you were to be in the middle of a billion dollar development project.  Your funds could dry up at a moments notice. You’ll want to remember this component of commercial lending in a moment.

Ok. Now let’s apply this to a real life scenario. I do so because I really need you to see this philosophy up close and personal in order for your perspective to be clear when I apply it to our relationships with other nations.

Frankly, when I was first exposed to hard-money lending, I ignored it. I thought it was absolutely despicable and refused to even acknowledge its existence. But then I found a very committed clientele group. In spite of my disgust with the hard-money world,  I quickly realized that there was a particular group of clientele which viewed the hard-money world as a dream come true.  And if it meant keeping their passion, dream or attempt at gross profits alive, they would embrace it at any cost.

Hard Money Lending photo c/o fivestarsmortgage.com

I once had a client who was an ideal guarantor for a hard-money loan. He required a loan amount of approximately $100 million for a project he wanted to get done in Brazil.  He was so convinced and passionate about the success of his project and the multi-billions of dollars that he would make as a result of it that he was open to whatever he needed to do to get the money for his project.  He was a very private man and thus did not want to go through all of the rig amoral of a formal loan application process. (You would be shocked at how many people pay top dollar for “quickie loans” just to avoid over exposure of their personal information.) He had not significant wealth to speak of, other than the planned wealth he had for this project—yet another reason he didn’t want to go through the mainstream commercial process, as he most likely would not qualify.  To make matters worse, he had to move very quickly (“Quick” and “commercial loans” do NOT belong in the same sentence together. In spite of mostly moving out of the commercial finance industry, I’ve still got a client left-over on a deal that I’ve been working on for nearly a year, now!) If he did not act fast, he was going to lose access to the mining and harvesting rights that he had originally inherited which were responsible for making his project so incredibly profitable.  So he contacted me for my help, paid my retainer fee, and we began the process.  Through one of my less-offensive hard-money contacts I was able to get him preliminarily approved for his $100 million. However, it would come at a price. His up-front commitment fee was $1.5 million, his deal would cost him 13 points, and his interest rate was 12% for the first year, and then increase a whole percentage point every year for the next 5.  Considering the alternatives though, this guy thought he was getting a sweet deal. 

Unfortunately, money doesn't fall freely from the sky. photo c/o www.fotosearch.com

In the best interest of my clients as well as my time and efforts, I would refuse to take on a client who was not fully educated and aware of the snags that exist on a hard-money loan. As a result, I always questioned them to make sure that they at least had the processing/commitment fees in order to move forward on their deals. After all, if they are trying to go into battle, but don’t at least possess their own body armor and a horse, I simply would not take them on as a client.  This particular client didn’t even balk at the amounts of money that I was talking about that he would need to provide to the hard-money lender and assured me that he had it.  Upon the request of his $1.5 million dollar commitment fee, he wired the funds to the lender.  After which he persisted to call me several times a day to get an update on his deal. Since I always educate and prepare my clients with proper expectations before agreeing to take them on, I finally got tired of his constant nagging and asked him what had changed on his loan scenario? Something HAD to have changed since I was quite positive when I agreed to take him on as a client that I told him that such desperate and intrusive behavior would not fly when I first took on his project.  After some further pressing, he finally came clean and informed me that he had borrowed the $1.5 million dollar fee from yet another hard money lender at an interest rate of 10 points and 15% interest per day! (Nope. Not a typo folks. There’s a real ugly world out there and it’s well funded with powerful and deep pockets.  Think about it folks. If you had lots of money, would you rather just put it in an interest bearing account making 5-8% interest or would you rather put out there in the form of a hard money loan earning points and high interest?)  

Now, I’m sure that many of you are reading this and wondering what in the world would possess a reasonable business person to do this? Who would be so desperate that they would be willing to pay so much just for this one project? Would you be shocked if I shared with you that there are over $1 trillion dollars of these types of transactions that take place in America every year? So, why am I telling you this?  Because I need you to see what desperation and ego really look like and how they can and DO skew ones vision of what is or is not an appropriate financial transaction.

When America needs more money there are only so many ways to raise it. The most obvious method to some would be to raise taxes.  To be frank though, raising taxes is typically one of the least effective ways for our government to raise money. Besides being a politically charged issue, raising taxes on persons is usually not fast enough, reliable enough, and frankly, it’s usually impossible to raise an amount sufficient to “stop the bleeding” on a particular financial crisis. A financial crisis usually calls for a lot of money and fast. Raising taxes is essentially viewed as a “too late penny ante” in comparison to other methods used by our government to raise funds. When you need hundreds of billions, or even trillions of dollars, your citizens aren’t exactly your first choice for getting it—fast. 

Foreign exchange photo c/o www.chairmanking.com/

While insurance salesmen or mortgage brokers may view their communities as their potential client pool, when you’re the U.S. of A, your client pool is made up of the financial heads of other nations.  In such instances, I’m sure you can appreciate that such financial negotiations are only successful with international allies.  I mean really, who borrows money or sells items to their enemies, right? In some instances, the money raised can be a temporary loan from a foreign nation or it can be in the form of selling off American assets. These assets can be in the form of weapons, intelligence, land, bonds or discounted currency. (The constitutionality of all of this simply cannot be fully addressed during the education of this topic. Sorry.)

As prosperous as America is, our nation has managed to be wholly dependent on the monies and OPINIONS of other nations—to the point that our sovereignty has literally been sold to the rest of the world.  In other words, our currency will take a free fall off of a mile high cliff if the other nations of the world cease to view it as an attractive asset.  Originally, our currency was not vulnerable to the scrutiny or slurs of others because it was backed by an unequivocal asset—gold.  On top of that it was also backed by bounteous land—capable of feeding the entire rest of the world, surplus harvests, burgeoning grain mills, seemingly never-ending water supplies, valuable military intelligences, and so much more “stuff” that other nations found to be highly valuable. Our U.S. currency used to be the symbol of such lucrative assets. As such, other nations wanted to invest in our currency. For over a century ours was the currency to invest in because by comparison the other nations had so little.  You know…the old “it’s easy to look like an eagle when you’re surrounded by a flock of turkeys” type of thing.  Unfortunately, all of our “sitting pretty” positioning has been watered down—particularly over the last 2 years—to the point of being unrecognizable.  And the desperation that other nations are presently experiencing is requiring them to reconsider investing in American in any way, shape or form. 

What events are causing other nations to wise up about their U.S. holdings?  Is it really that bad?  Is there anything that can be done to buffer ourselves from severe financial consequences?

Unfortunately, there are events which are taking place right now that are coming upon us quickly which could cause our American market to be flooded with useless U.S. currency. To make matters more sobering such a scenario MUST be combined with another serious issue of vulnerability.  Tomorrow, I will address exactly what that is.

 Until then…

get prepared.

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The Ultimate Deception

By Kellene Bishop

Deception. Photo c/o helpingpsychology.com

“Making something out of nothing” has often been the American Way. We take a simple idea and turn it into a business, providing jobs, tax revenue and overall security. In this instance, creating something out of nothing is in line with the true act of Creation—organizing matter. But it’s important to know that there’s a constant enemy that attempts to portray makes something out of nothing. This particular act isn’t Creation though. It is nothing more than a scam; an expensive parlor trick, that is intent on destruction and control; not enriching our surroundings like the true art of Creation. As one who is intent on independence and preparedness, it’s important that you are aware of this particular deception for it is truly the ultimate deception.

Understand that this article, as well as the last two, are written as the result of over 2,000 hours of study and research on this matter. I have read volumes and volumes of materials. And here I am trying to summarize it in 3 articles. As a result, I must apologize for my inevitable lack of words which would do this topic justice and encourage you to make it a matter of study for yourself. On thing I will tell you bluntly, money is SUPPOSED to be a complicated issue. If it’s complicated then the scam is less likely to be unveiled. So, buck the trend, I say.

As I shared in a previous article, money is not wealth. It is merely a symbol of the trade of goods and services which actually ARE wealth. Money is lifeless and barren. It has no ability to reproduce, duplicate, or compound. Such results are accomplished simply by persons who are willing to say that money has “increased.” I realize that such a statement may be hard to swallow. After all, we’ve been accepting of the theory of compounding and interest-bearing for decades. But the concept of interest being earned on money is simply a manmade façade. Aristotle says it best:

“Money is naturally barren, to make it breed money is preposterous, and a perversion from the end of its institution, which was only to serve the purpose of exchange and not of increase…Usury is most reasonably detested as the increases arises from the money itself and not be employing it to the purpose for which it was intended.”

Shoplifting photo c/o sjso.org

Allowing money to represent wealth and to use such a false representation to create even more money is as fraudulent as a shoplifter having stolen a good only to return it to the store to get their money back. Procuring goods or services without work or production of any kind is that actions of a thief. The shysters of our world are attempting to have us believe that they are increasing in wealth without having PRODUCED a single thing…not an action, not a product, not even a thought. This makes compounding and interest-bearing nothing more than robbery. 

So why is interest such a popularly applied method in our international world of finance? Because interest is about a gradual transfer of power from a society to an entity.

Here’s an example. I know that many of you would never think of using this particular service, but allow me to use it to better illustrate my point. Suppose you needed a couple thousand dollars for a medical procedure which would save your child’s life. So you’re willing to take an advance on your next month’s worth of wages in order to borrow that money ahead of time from one of those “cash your checks here” places. As a result, you are assessed a fee of 35% of the $2,000. To recap, you are borrowing $2,000 and you will be paying back $2,700. So, let’s zero in on what this “cash your checks here” place did to earn that $700. Did they contribute anything to the economy? Did they produce anything? Did they provide a particular expertise to society? No. They simply capitalized on your emotions and your fear. They have nothing but a barren building and neon signs. And for that they increased their barren money 35%. Wait, it is even more crazy than what I’m illustrating here.

When a bank takes in the result of your work, production, expertise, etc. in the form of your paycheck, they simply add more digits to the screen that you see when you log into your bank account. Maybe that sounds simplistic, but tell me I’m wrong. Where’s the actual MONEY? All they did was remove digits from your employer. They didn’t handle currency at any time whatsoever. Then, based on the accumulation of those “digits” that you see on the screen, that you and every other of their customers contribute, they are given a special lending authority from the Federal Reserve. The Federal Reserve says that for every $1.00 that they show on their books taken in as a deposit (ie: in the form of a paycheck) they are allowed to lend out 92% to the public and charge interest on it. So now let’s say that Mr. and Mrs. Jones decide that they would like to go on a cruise. Thus they ask to borrow $5,000 from the bank. The bank says “Sure. According to our books, we’ve got $5,000 to lend you. And we’ll be happy to do so at an interest rate of 10%.” The loan is simply a digital bookkeeping entry folks. To be clear. The bank is lending the Jones’s $5,000 as the result of other deposits on their books of only 8% more than this $5,000. Eight percent! What a cushion to prevent a run on the bank, eh? No wonder there have been a record number of bank bailouts AND the FDIC is now on the verge of bankruptcy.

Depositing a check photo c/o wincor-nixdorf.com

Let’s remember that YOU didn’t deposit any cash into their bank account. You deposited a piece of paper that is a representation of the work that you’ve contributed to your employer. And it’s not likely that very many other people have deposited actual cash into a bank account. Usually they end up depositing digits on a piece of paper. So, how is the bank “earning” $500 on their $5,000? What did they produce or contribute or provide to society? AIR! The money by which they are basing their 92% lending ratio is a façade. And they are charging $500 for the privilege of the Jones’s passing a long that façade to someone else. This process is repeated again and again and again. Your retirement funds are based on this façade. And the money that the “cash your check here” place had to lend you is based on the acceptance of this façade. I like how the author, Ken Bowers, calls this kind of play so succinctly. He says “if anyone else tried to do that, it would (be) called counterfeiting.” But every single bank in the world does it, courtesy of the authority granted to them by the Federal Reserve Bank and its cronies.

When you pay back the $700 to the “cash your check here” place, how did you get it? By actually working, right?  When the Jones’s pay back their loan to the bank, how did they get the money to pay it back? By actually producing something, right? How absolutely crazy is it that we are basing our weekly survival, our future, our retirements based on this hollow corpse of a sham? We produce real goods and services and then exchange them for fake ones? What a DEAL, eh?

What few people realize is that the Revolutionary War was actually fought in part over the worthless nature of the Continental Dollar. The government insisted on paying the troops with them, yet the same government would not accept them as payment of people’s taxes. The Continental Dollar decreased to a value of only two cents per dollar! Our U.S. dollar is actually only worth 2-3 cents based on what buying power a dollar had in 1913 before the Federal Reserve was created.

There is no gold in Fort Knox.

The largest problem is, is that there is NOTHING tangible to back up our currency. There is no gold in Fort Knox.  It was already leveraged. There isn’t even wheat in our storehouses. Our rich farmlands which were the epitome of the production and wealth of our nation have been marginalized at every turn. The land grabs that you see throughout our nation on behalf of the U.S. Government are simply to collateralize our debt to international banking powers (in the name of foreign nations.) Land is actually worth something because it’s tangible. And thus the more land the U.S. Government claims to be their own, the more they can collateralize the bogus currency they borrow from other nations. So you see, they are required to have something tangible to back up their loans taken from other nations, but they are not required to have anything tangible to back up the money we rely on in our daily lives.

So why do I say that such a façade represents the shifting of power from a society to a couple of banks? Because, the only way to pay back any loans is by producing real goods or services. The interest rates are created superior to the anticipated output of the production a given nation. When the nation can’t pay it’s debt in full then the financial powers begin to influence every area of policy—and I do mean EVERY area. I don’t think it’s a coincidence that our money reads “In God We Trust.” Because indeed, in God we DO trust. Isn’t it ironic that the vile perpetrators of this scam would use such a sacred claim in an effort to make us feel more trusting and confident in this charade?

OK. So what can you do to break away from relying on such an empty scam? What I keep telling you. Put your faith and trust in real and tangible goods and services and NEVER allow yourself to pay interest. I have invaded some of the most lofty circles of this deception myself over the last 15 years. I have heard their plans and their shifty reasoning. I have seen them claim that $1 billion dollars is suddenly worth $1.2 billion after a mere 24 hours, and ashamedly I bought into it all thinking that I was somehow superior to others because I knew how money works. Hah! I knew how money was portrayed to work, but it was a big wake up call after I discovered how it really “worked.” After falling for the façade of interest and compounding I finally was beaten. Having to start over I vowed that I would NEVER, EVER allow myself to play the interest bearing game again. I hope you will do the same as wisely and as speedily as is prudent.

Copyright 2009 Preparedness Pro & Kellene Bishop.  All rights reserved.  You are welcome to repost this information so long as it is credited to Preparedness Pro & Kellene Bishop.

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Conspiracy Abounds

By Kellene Bishop

There is a bumper sticker that I was indelibly impressed with when I was 13 years old. It said “Just because I’m paranoid doesn’t mean they aren’t after me.” I share that with you today because people seem to have a heightened sensitivity to the word “conspiracy.” Any time they hear something that sounds like it is a conspiracy, they dismiss it. Well folks, “Just because it’s a conspiracy, doesn’t mean it isn’t real.” You may not like the word or meaning of the word conspiracy, but it doesn’t mean that it isn’t upon us. Frankly, it hasn’t left us since Cain killed Abel. (Even earlier than that if you want to delve deeper).

What does all of this have to do with financial preparedness? I’ve discovered personally that if you understand how money REALLY works, then you may very well be sickened by the state we find ourselves in. However, in understanding it, you may also survive the ill effects of such a conspiracy. That’s kind of like having to perform an emergency tracheotomy with a straw, a knife, and some tape. It’s not easy on the stomach, but it will indeed save a life.

This monetary information is critical for us to know now in order to be better prepared and it’s critical information to know for later—in the midst of the aftermath—so that we do not repeat these mistakes when our country needs to be rebuilt after a financial collapse of any kind.

Money is representation for value of goods or services exchanged

Before I delve into the real life players of this conspiracy, I really need to make sure that we’re all on the same page as to what money really is. Money was intended to be one thing, and one thing only—a universal representation of the value of the goods or services that have been exchanged. 

Goods and services are produced. They are created based upon materials that are available or assembled, or they are based upon expertise and skills provided to another person. The value only exists when they have value to another person. For example, I wouldn’t give much more than a bowl of Cheerios to listen to some pious Harvard professor spout the merits of the environment. And yet someone, somewhere is willing to pay hundreds of thousands of dollars just to have access to his expertise. This same philosophy is manifest in every single thrift store in America. The store is full of goods that no longer hold any value to the person who donated it. However, the thrift store is able to put a price tag on each item based upon the value that another person may see in that item. Now suppose we didn’t have money as a universally recognized symbol of that value. This would mean that someone would walk into a thrift store and offer to pay for that item based on the goods or services that they possessed. What if the only service that person possesses is the knowledge and experience of a running back for the Dallas Cowboys. Famous or not, it’s not likely that anyone in the store would be interested in exchanging a vase, a desk, some shoes, etc just so that this guy could run with a ball, right? It would be just as difficult if someone walked into the thrift store armed only with tofu which they wanted to use in exchange for their product, or homegrown Chia pets. So, instead of hoping that the store or service company we go to is in the market for our tofu or Chia pet, the currency system was created. Currency was presented into our nation ONLY to provide a universally recognized symbol of the value of the goods or services that were exchanged.

So here’s the rub. Money has no value in and of itself. Just like the having the registration to a vehicle is worth nothing in and of itself. The value is in the vehicle. So, if money has no value, then how does anyone with a logical mind accept that money compounds its own value simply by sitting there?! This insanity is perpetuated for no other reason than by those who are willing to move this deceptive agenda forward as well. In other words, everybody knows that something inanimate does not compound in value or go up in value simply by sitting there. And yet we all fall for the deception when it comes to money.

A lie told often enough becomes truth” -Vladimir Lenin

Originally there was some rationale to this deception. In order to avoid an all out falsehood, the original plan was that currency was only to be issued in direct correlation to the amount of precious metals of gold and silver that the U.S. Government had to back it with. At least the value of gold and silver could go up in value based on supply and demand. If the amount of currency that was issued never exceeded the amount of gold or silver in reserve, then the system would be sound. However, such has not been the case since the “Federal Reserve System” came into play. There have NEVER been any reserves to back up the currency that is now in circulation and there never will. 

I won’t be able to address this issue fully in one part. So I’ll wrap this portion up with one critical point. Wealth is not based on money. Money is not wealth. Money is inherently barren. It cannot breed more money. Only produced goods and services are wealth. The wealth of which is based on goods and services that are necessary for the sustenance and comfort of life. So, in the name of preparedness, I implore you to use this worthless currency while you can, to obtain as much real goods and services as you need to survive for at least a year. Then you will be truly wealthy, not deceived.

Tomorrow we’ll discuss the Federal Reserve System. The deception begins simply with the name. They are not federal. There is nothing in reserve. And it is certainly not a universal system.

• Financial Preparedness Part I — Conspiracy Abounds
• Financial Preparedness Part II — The Conspiracy Players
• Financial Preparedness Part III — The Ultimate Deception

Copyright 2009 Preparedness Pro & Kellene Bishop.  All rights reserved.  You are welcome to repost this information so long as it is credited to Preparedness Pro & Kellene Bishop.

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