MORAL ARMOR'S Economic Warning for Americans

For years we've suffered under recession, prompting us to ask, When will it end? My answer is, It's only the beginning.”

Historically, recessions are the result of high interest rates, pushed up as the result of loose money policies. Recovery comes when citizens begin to spend more wisely, save money and pay off their debts, but not this time. Never before have credit policies been so loose for so long, and there has been no decrease in consumer debt. It's still on the rise, but Americans are NOT fundamentally to blame; immoral monetary policy is.

Banks used to consider a safe loan applicant to have a 36% or less Debt to Income Ratio (debt divided by gross income). This percentage is a time-proven figure indicating the financial health of an individual. Now, during the worst economy in twenty years and with no signs of recovery, our banks gladly loan to applicants with a 56% Debt to Income. What has changed? Are banks suddenly more generous? I don't think so. One good question to ask is, Why are banks willing to accept the additional risk? But the real question to ask is, Where is this money coming from?

Not one in a thousand Americans knows the true nature of our banking system, so they have no idea that what happened in 1929 is about to happen again. Nor do they know that it was done deliberately then, and is being done deliberately now.

We have in this country one of the most corrupt institutions known to Man, and I refer to the Federal Reserve. Since it's inception in 1913, every dollar created has interest being paid on it as if it were borrowed. This debt cannot be extinguished without destroying the currency itself, and has spawned a nightmare of debt that presently amounts to over $360 Billion in interest paid per year, accounting for half the personal income tax of the nation. Due to this, America is forced to create $7 Billion daily to cover the $1 Billion it pays in interest daily due to the Federal Reserve System. This is where the public comes in.

Federal Reserve bankers have to find a way to spend $6 Billion every day while masking the inflation it causes. Throughout the nineties it was done through real estate and the stock market. Now it is almost exclusively being put into real estate. How on Earth could so many mortgage companies be offering interest only, no money down, multi-hundred thousand or million dollar loans with high applicant debt ratios?

Here is a hypothetical example of what's going to happen: Your mortgage banker tells you that with a 56% debt ratio, you can afford a $300,000 home, no money down. You secure the loan at 4%, costing $1432 per month. A few years later, you're thrown out of work for three months. Back payments amount to $4296 plus late fees, legal fees, etc., and another $5k on cars, credit cards and everything else. Unable to catch up, you'll try to refinance, but interest rates have moved up to 7%. A $310,000 loan now costs $2062 per month—more than you can afford, but banks will have tightened lending policies back to 36% and you no longer qualify for the home you own anyway. Accounting for all other debt, you now qualify for a shocking $360 per month. You are trapped, and the new bankruptcy laws they pushed for will never let you walk away.

You owned this home in a perfect numbers scenario, but any complications—unemployment, salary reduction, interest rate increase, debt ratio change, bruised credit rating, depressed home values--and you're cooked. One mishap and every financial measure works against you. Your financial angel has suddenly become your greatest enemy. Welcome to the Federal Reserve System and their freshly engineered worldwide depression.

If you were to approach the housing market fresh, you would find that you only qualify for a $55k house now, along with the market of buyers you were hoping to unload your balloon-house on. The bank forecloses, auctions it off and you're personally responsible for the difference, which could be massive. Bankruptcy is right around the corner, and deplorably, you are the only one who will be held accountable. You will then be a debt slave as the Federal Reserve intends, and game over.

My advice is to get as financially stable as you can. Mathematically, our situation is much worse than that of the Great Depression. No matter how generous these bankers appear, pare down monthly outlays to 36% D/I or less. Set aside three to six months of mortgage payments in case you become unemployed. Make sure you can ride out the storm.

We are coming to a point in American society to where it's either them or us, and mass awareness is the key to our survival. Most believe the Federal Reserve is a part of the government, but it's just a name. The Fed is a private corporation set up for private gain, with a dark history of stock market crashes, financial panics, political manipulation and ultimately, mass poverty and hunger riots. Our struggle is not new: currency control has switched from public to private hands EIGHT times since our country's inception, and needs to be reclaimed by the people, one last time.

Don't think you can play helpless and expect our political leaders to protect you from financial calamity; they never have. You must become Morally Armed on your own. Don't be coaxed into believing the system is optimized for the good of all. The Federal Reserve System is not an equitable institution, and it was never intended to be. They believe if they have us strung out on debt, we are no threat to them. Let us prove otherwise.

Currency reform is the most important issue facing Americans today. How it plays out will determine whether you and your children eat or not, whether you have a place to live or even a future to look forward to. The major media will ridicule anyone speaking against the Fed, so to validate history's greatest moral dilemma for yourself, just google Jackson bank veto.”

America must abolish the Federal Reserve System to regain control over the economy and our government. For a concise history of world monetary policy and how it shapes world events, see Moral Armor. Then share this knowledge with your friends. Email this article to everyone in your address book and stay tuned for further developments. We'll change the system together and bring a brighter dawn to Mankind.

How Nov. 15, 2004 Deadline for Sarbanes Oxley 404 Compliance Affects You

Public companies have 90 days from the end of their fiscal year to comply. For those with market capitalization of $75 million or more, this clock starts on Nov. 15, 2004; while all others with less than $75 million market capitalization begin July 15, 2005.

Fast Relief for Sarbanes Oxley Section 404 Compliance

Section 404 of the Sarbanes-Oxley Act requires management to confirm the effectiveness of their IT and financial controls in an "internal control report", which is contained within the annual report (10-K) issued to the public. But what exactly is an internal control report, and why is it important to you?

The Section 404 Internal Control Report

First, the internal control report must affirm management's responsibility for controls and procedure, and second, it must contain an assessment of the effectiveness of the internal controls and procedures for financial reporting. Although both of these issues might at first appear difficult to solve, they are actually not as hard as you would think.

Management's Responsibility for Controls and Procedures

Affirming management's responsibility for controls and procedures means more than to simply say management believes in or trusts their system. The affirmation will also need to include a program for a code of ethics for senior financial officers. The program must include prompt disclosures of any changes to your ethics program. So how do you do this?

Business Ethics and Compliance Program

You can easily implement a business ethics program using a step-by-step guide for developing your firm's business ethics and compliance program. This manual will save you time researching, writing and editing your program. It provides sample policies, surveys, forms and training session outlines that are fully editable using MS Word. And it is also fully endorsed by The National Association of Corporate Directors (NACD) as a tool to maintain a culture of integrity.

Internal Controls

Your internal control report must also contain an assessment of the effectiveness of your internal controls and procedures for financial reporting. In practical terms, control is equivalent to predictability. Everyday management creates forecasts and budgets to predict the future. And the further into the future you can accurately predict, then the more control you have.

Achieve More Control Over Your Forecasts And Budgets

A training class for creating well defined processes shows you how to attain more control. Real world exercises and examples explain how to increase management effectiveness, achieve process control, communicate clear procedures, and verify if your processes are working. So what about procedures?

Procedures Effectiveness

For dealing with Section 404 of the Sarbanes-Oxley Act, you can look at products like the Management CFO Value Series that includes Accounting, Human Resources, as well as policies, procedures and forms for other departments. Such procedures will save you time researching best practices, creating a standard format, and thinking of clear and concise paragraphs to write.

Easier Section 404 Compliance

Your internal control report is the key to your Sarbanes-Oxley Section 404 compliance. You should also look at a business ethics and compliance program, attend a training class for creating well-defined processes to learn more about management effectiveness, and use a CFO Management Value Series to speed the development of your procedures. You want to achieve fast, easy, and effective relief for your Sarbanes-Oxley Section 404 compliance.

Issuing Warrants to Investors

When raising capital for a business venture, warrants are a common form of equity that is given to investors. A warrant is like an option – it gives the holder the right to buy a security at a fixed or formulaic price, which is known as the "exercise" or "strike" price.

Warrants are often confused with options. Options, as used in the venture capital space, are typically long term (up to 10 years). They are also typically issued to employees versus investors. Conversely, warrants act like short-term options and, unlike employee options, can be traded as an independent security.

In general, neither the issuance of warrants nor their exercise (at least by non-employees) is a taxable event. In fact, in 1984, Congress reversed the earlier position of the IRS that the expiration of a warrant is a taxable event for the issuer. However, whenever a debt security with warrants attached is issued as a package, original issue discount problems are invited.

One type of warrant that once popular as a financing mechanism for emerging ventures is contingent warrants. These warrants become exercisable if and when the holder does something for the issuer, for example buys a certain level of product. Contingent warrants are no longer used often since the SEC ruled in favor of current and periodic recognition of expense to the issuer.

Like an option, a warrant is considered a "common-stock equivalent” for accounting purposes. And, if the warrant has been "in the money" (i.e., the exercise price is below the market price) for three consecutive months, it is deemed to impact earnings per share under the so-called treasury-stock method. That is, the warrants are considered exercised, new stock is issued at the exercise price, and the proceeds to the issuer are used to buy in stock at the market price.

Warrants are a common financing mechanism and companies seeking venture capital should consider and become knowledgeable about this type of equity device.

Small Business Loan Basics

Many people who wish to start their own business need an injection of financial capital at the beginning of a business; the main source of funding for entrepreneurs is business loans.

Let's take a look at what you should expect if you plan to apply for one.

First of all, you should know that most lenders have their doubts when it comes to lending money to a first-time business owner. You're considered a high business risk at this point, and you should go in to your loan negotiations armed with a few advantages. Of course, the ideal option is to run your business for a few years, even just out of your home, and turn a good profit before approaching a bank for a loan.

That shows that you have the ability to make money and that your business won't flop before the Open sign shows up on the door. But if this isn't possible, if you need the cash before you can begin at all, then chances are you will need to offer some type of collateral. Collateral can be anything from your car to your home and everything in between. Depending on the size of the loan, you may require some pretty hard assets for collateral. The lender is not interested in whether or not your business will make money, aside from the extent that will allow you to pay them back on time. They simply don't want to lose out on the loan, and so you'll have to find some way to back yourself up.

Backing up your loan with assets, if you have them, is a good route - provided you have enough confidence in your financial situation to ensure you are not going to lose your collateral. If you don't have enough assets to stand in for your loan, another option is to find a cosigner. Chances are you won't get as much cash as you would if you had the assets. But having someone with good credit who is willing to sign onto your loan and promise to pay if you don't can be the factor that gets you through the door. This is a good way for friends and family who believe in your business to help you get it off the ground, even if they don't have the money to loan you up front.

When it's time to borrow, do some comparison-shopping among banks and credit associations, and don't stop until you find the lowest interest rate possible. You're already gambling a lot here- minimize the amount you will have to pay back by doing your homework and choosing the company that offers you the best deal. If you can't get enough to cover your beginning business expenses, consider borrowing part of the cash from a friend or relative if you can, or even asking for investors, such as customers who believe in your business, to help out. Don't accept a high-rate, high-risk business loan just because it offers you the biggest amount.

The small business loan: The first step in a long chain of financial events. If you take the right step, it could be your leap into the business world.