Tag Archives: Capitalism.

0301 2012 Crowdfunding – Capitalism for the 99%

We have recently started a new venture as an idea spin-off from our past venture www.reidex.com at REIDeX, Inc. and the current www.farjho.com at InvestorsAlly, Inc. The way both reidex.com and farjho.com have been trying to deliver the economic benefits of SwapRent and FARJHO to consumers are based on the power of Internet by eliminating the financial service middlemen and offer a service that is better, faster and cheaper than the conventional brick and mortar financial services businesses. This concept used to be called simply C2C e-commerce or later, peer-to-peer Internet matching service. Now, it is called crowdfunding.

Therefore it appears that we have been trying to provide the Internet-based crowdfunding services for real estate through both SwapRent and FARJHO as early as 2006 before the term of crowdfunding even emerged in the cyberspace. The reason why that InvestorsAlly has been offering crowdfunding service for home equity sharing is that FARJHO simply corporatizes single family homes and hence make it feasible to use this peer-to-peer matching concept for home owners to raise non-debt but equity based financing.

The use of C2C and peer-to-peer concepts could even be traced way back to the REIFO Exchange venture ( http://www.box.com/s/mnm7xhel0uhp9hkehad7 ) started in 2002 as chronicled in the Los Angeles Times article in 2003 ( http://www.box.com/s/qh42krrm2biiv55rkloj ). The ideas of the REIFO Exchange venture were later taken by CME (Chicago Mercantile Exchange) to let consumers trade futures and options contracts on a different real estate index. Details of this would not be released until 2014 when the 10-year NDA we had with CME expires.

The later over 10 year’s journey of transforming these sophisticated concepts to simpler new consumer-oriented products and services while keeping the similar economic benefits has not been an easy one. The new cash flow sharing concept and method of the SwapRent service through REIDeX seemed to be a bit complicated to the average consumers and the commercialization effort of SwapRent was perhaps a bit ahead of its time, no matter how powerful and useful the service could become to consumers and for our national economy.

To use an analogy again, it was almost like trying to convince people for a test drive by handing over the key of a new Hybrid SUV to people who are only used to riding horses. The shock and resistance to the new way of transportation were severe. Some people say that there is no traffic rules and if you launch it would create a lot of liability. Other people say that it is way too difficult for consumers ever to learn how to use it. Although the consumer acceptance may eventually take place but we could not wait that long to make a business venture commercially viable. So in 2010 we have pulled back the SUV and created a much simpler bicycle to offer to consumers through a new company InvestorsAlly, Inc. The bicycle analogy is the new FARJHO service. The FARJHO matching service is neither a derivative contract nor does it have anything to do with mortgages like what a SwapRent transaction would be, but rather a very simple new home ownership structure.

Through our marketing and educational effort the FARJHO idea seemed to have taken off and become viral in the Realtor community in Southern California since early 2010. Home owners and Realtors have begun to beat a path to our door for helping aspiring home owners with this new equity sharing FARJHO service to own homes since then but there is only one problem left – there have not been enough joint property investors in the current market to satisfy the demand from the aspiring home owners for the FARJHO transactions. Much more effort would be necessary to conduct more educational training under the current regulatory environment for potential investors. In the regard, I am glad to report that we have recently launched our first $20 million FARJHO Reg D private placement fund. More info is available upon request for qualified accredited investors in the US.

Nonetheless, we have yet again temporarily put aside the bicycle for more sophisticated users only and created another much simpler tricycle for the vast consumers for an even easier commercialization. Hence the Crowdfunders Choice (CFC) was born in January, 2012.

CFC simply focuses on introducing the peer-to-peer technology platform to help entrepreneurs raise equity financing. It is not a proprietary concept that we will need to sell again, which has always made launching new businesses much more difficult. It therefore seemed to be much easier to introduce these crowdfunding concept and method as there have already been many tried-and-true web sites offering similar platforms to conduct peer-to-peer micro-lending or to raise donations for creative projects or for political purposes.

The reason it is a much simpler tricycle vs. the bicycle of the equity crowdfunding business model of FARJHO is that the real estate component has been removed from the crowdfunding business model and therefore the new peer-to-peer matching services offered through CFC could be offered to a much broader audience, i.e. people would not have to have prior knowledge or experience with the real estate industry. In addition, people who would like to use the service no longer have to learn some new economic innovative concepts or methodologies any more. Sales calls would not turn into another economic lesson or a heated debate anymore!

As explained in the introduction at its web site ( http://www.CrowdfundersChoice.com ), our goal at CFC is to become the Crowdfunder’s Choice for helping entrepreneurs raise start-up equity financing with a special twist – we would like to make this new venture, crowd-sourced, crowd-funded and crowd-owned whenever permissible under securities regulation in order to act as a living proof that this new crowdsourcing business model would work under an unfettered free market capitalism.

Our target is to get the 99% of our population to have access to entrepreneurial start-up financing on Main Street in order to keep our free enterprise capitalism alive through promoting and maintaining a more democratic version of capitalism vs. the crony capitalism being practiced and abused by the privileged economic elites on Wall Street. The political image also seems to be a perfect match to the values of PeoplesAlly Foundation.

Hopefully through our new alternative funding services some of these entrepreneurs may get to rise up to become a member of the 1% one day. If not, even the top 10% or even top 30% will do, in the true spirit of capitalism. That indeed is our intention – wealth creation for the 99%. It is quite all right to take risk and work hard to become a member of the 1%, as long as they do not transform into a 1%’er or a member of the 10%’ers at the expense of the rest of the 99% or the 90%.

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1028 2011 Don’t let the 1% left wing opportunists ruin the good cause of the Occupy WS protesters supported by us 99% Main Street capitalists

One thing that has been very hard for many people to figure out is that what the Occupy Wall Street protesters want. The answer could be very simple as nobody really knows what they want and the reason why nobody really knows what they want is that nobody really knows who could be the legitimate voice to represent the entire OWS protesters. You would get a very different answer every time you bump into one of them.

Squeaky wheels either get some oil or they get ear plug treatments. Without knowing exactly where the squeaky sound comes from, it seems most people just put on their ear plugs. I wonder why this could be an advantage for the OWS protestors that some of the OWS protestors have been trying to tout.

Without some specific goals and/or executable methods, the movement could potentially render itself to the exploitation by the extreme opportunists for a short cut ideological change. Somebody may have to come up with a way to organize them soon in order to rid the movement of these potential harmful abuses by the destructive extremists. Otherwise squeaky wheels may soon become flat tires that could paralyze our country’s economy.

Other economic pundits have predicted that this Occupy Wall Street movement might run out of steam before it gets to achieve anything significant. Personally I am not sure about it as most likely these people who made those comments did so right after they returned back from a shopping trip or from a business lunch in an expensive restaurant. While they got their living necessity fulfilled on schedule, the protestors’ situation has not change and would not change in the foreseeable future. It does not seem that the protestors would stop until they get what they need, let alone what they want, when they figure out what it is later. That sounds like a perfect hot bed for the left wing extremists.

The OWS protestors could have started out with a good cause to fight against the inequality from the abuses and abusers in our capitalistic society but if nothing drastic is done to fix the incompetent government leadership in DC and the crony establishments on Wall Street soon to correct the situations, something bad to our country would very likely evolve from here.

What PeoplesAlly Foundation’s efforts aim for is trying to provide the disadvantaged working class people in our capitalistic economic society some additional free market based choices specifically created for them to stand up and unite to fix the faulty and abused system before they get to resort to toggling between the conventional ideological switches.

There could indeed be many other new free market based alternatives brought about from new innovations such as the new equity sharing based home ownership structure of FARJHO, the new peer-to-peer cash flow sharing based housing finance system of SwapRent and the new foreign exchange rate pegging system of TARELV which could bring the economic and political power from the crony hands of Wall Street back to the common people on Main Street. Innovations on our economic policy management systems that is, not the conventional technological gadget inventions that people would normally associate the word “innovation” with.

With these new innovations on economic systems and policy management tools, disadvantaged working class people could finally get to try some new free market alternatives designed for them for the first time in order to fight for and gain equality against the privileged minorities on Wall Street and DC rather than simply giving up on capitalism and resorting to doing the futile historical toggling between capitalism and socialism/communism again.

1009 2011 Weekly Round-up of discussions and debates from other social networking sites on ideologies

I had some interesting encounters with a few left wing opportunities among the Occupy Wall Street protesters this week. Although in no way they represent the group’s voice, it is nonetheless a good experience to get to sample what these people have been thinking. They seem to know more about what they don’t want as a destructive force but have no concrete ideas on how they might make some contributions for their own lives or for our country. It may grow to be a kind of destructive force that our country may need to eradicate the crony establishments on Wall Street and Washington, DC, but they seem to have nothing to offer, at least as of this writing, to help reconstruct our country in a new direction after their intended target destructions.

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Excerpts from the debate on socialism and capitalism with left wing opportunists among the Occupy Wall Street protesters:

First of all. I’d like to let you know that I am on your side against the crony and incompetent establishment on Wall Street and in DC that have brought our country’s economy down to its knees. That is right, the crony establishment. Not capitalism. Don’t tell me you were born an egalitarian socialist and you always wanted to fight for your noble causes since you were little boy. That kind of story could only be made up afterwards for those people who did miraculously succeed and become a revolutionary hero one day. Neither Castro nor Mao cared the slightest about the ideological ideas between communism and capitalism. They just wanted their power and to win the wars.

They were all opportunists just like you are, trying to take advantage of the situation to enrich themselves with fame and power. When it is convenient for them to get people to support them they leaned towards the people’s psychological needs to win support in their power struggle. So it is really fruitless for us to go into a huge debate about capitalism and communism. I am not Adam Smith and you are no Karl Marx either.

All I know is that they both could be good individually and they both have their own disadvantages. On balance capitalism outweighs socialism and last longer because it is associated with more freedom and democracy. What is more interesting is that they both could coexist. Singapore is a good example of social capitalism and the modern day China is a good example of a totalitarian communism/capitalism by chance. It is only the extremist revolutionaries who wanted to have mutually exclusive monopolistic communism, socialism or capitalism system so that they could drive people’s naive ideological support like the power of a religion.

What I have observed in history is that socialism (communism) and capitalism come in cycles. For example, the Soviet Union in the 50’s was the strong and powerful country on earth. Due to the evil nature of people, whoever enjoyed the power for a long time, especially during a prosperity period, they started to abuse the system and enrich themselves with money and power. So it was always the abuses and the abusers of the systems that have brought the existing system down, no matter the existing system was communism or capitalism, and hence the revolution opportunity for the opportunists.

What you guys are doing was exactly what I expected when I set up PeoplesAlly Foundation earlier in the year. That was in fact the reason I had set it up because I believe in the free market system and wanted to offer an alternative to empower common people on Main Street by providing them with the necessary intellectual know-hows so that they could stand up and beat Wall Street in their own game. I could understand that when the system had been abused to the extreme the first knee jerk reaction of the disadvantaged class in the system is to ask for a change but they have not the slightest ideas what is the best change for them or for the country. So during that time it is easy to fan the disadvantaged people’s emotions and sell socialism or even communism if things really get worse to the people. That is what we wanted to help these people to avoid.

During the transitional periods in history, the revolutionaries might have succeeded through brutal forces, but after the regime changed hands, when they were bestowed the responsibility to rebuild the country, the ideological dogma could continue to hurt the people for quite a long time. Look at how long the Chinese people had suffered before they finally embraced a variation of capitalism system to bring up the prosperity. Yes the old capitalistic regime that they had toppled before was corrupt to the teeth and yes China’s class distinctions will continue to become polarized again when people get rich and start to abuse the system for personal benefits again, but at least there will be a period of prosperity for the people and many achievements for the human race. A Utopian socialism system would never be able to do that on the same scale.

In history nobody has ever tried to fix the capitalism system by toppling the crony establishment and keeping the good part of the capitalism in place when the abuse problems like what we are facing happened before. Why not give it a chance? Why do the revolutionaries always have to drag the whole system down?

Anyway, I hope you could understand, I am simply trying to offer an alternative for the change. Since it is no longer in the 30’s or 50’s, those old time communist style revolutions would have no chance to work in modern day America, nor should it. Arab Springs would not turn out to be what people had hoped it to be either since chaos simply does not produce prosperity.

All we need to do is to create a new type of capitalism to let working class people be able to stand up to compete with the corrupted Wall Street under the free market system without being held hostage by Wall Street through their superior intellectual power. That is exactly what our Foundation’s missions are. https://peoplesally.wordpress.com/foundation-missions/

One simple example, if you rally all your people to campaign and call for all American people on Main Street to stop doing business with the corrupt big banks on Wall Street and only do business with the independent community banks or local credit unions, wouldn’t that be a non-violent first step to let the corrupt big banks on Wall Street to die on their own? If the Federal Reserve Board and the Treasury Department are the crony forces that misdirected our country’s economic policies then vote them out and indict them for the sufferings they have caused us American people. All these could be done through proper channels without hurting the innocent majority of American people in a revolutionary change of a system.

Let’s be honest, these easy fixes for a revolution may be easier to accomplish but they may not make you a Che Guevara. This could be your chance in a life time to shine and you won’t let it go until something spectacular happens. The something spectacular may just hurt the millions on Main Street. So that is the choice you will have to make on whether what you are doing is for yourself or for our country.

My point is, capitalism has been abused by the economic elite exploiters on Wall Street and the crony forces in Washington DC, go fix them. We will all support you. Help shift the power and our country’s destiny back to people on Main Street. If you want to understand the blueprint of a new decentralized peer-to-peer financial system that is how we could help, beginning with bringing everybody’s housing finance back to common people on Main Street without the unnecessary participation of banks, Wall Street firms or even the federal government.

Please read the explanations and the academic papers on FARJHO and SwapRent at http://www.PeoplesAlly.org and feel free to ask me any technical questions on them. Housing is the first issue we will all need to fix for our country to have an economic future. I have repeated over and over again in other postings, it is very important that these new housing finance system inventions should not land in the wrong hands of the Wall Street exploiters or they would be totally ruined again. Let Main Street have a chance to develop a new housing finance system on its own.

After that, the capitalism system on Main Street will be back working well again without the intervention by those crooks on Wall Street. So please continue to occupy Wall Street and DC only. There is really no need for you to try to come occupy our Main Street and change our system. We love our small business capitalism here.

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On PeoplesAlly Foundation’s role:

You don’t have to be on the left or on the right to help working class people left and right.

Let’s help Main Street beat Wall Street in their own game. Escaping from capitalism will never be the ultimate solution. We simply need to help the working class people avoid exploitation by the privileged few and help them obtain their fair shares of the economic benefits of the capitalistic system in an intellectual way.

Singling out the abuses and the abusers of our system and fix them would be a much better way than blindly trying to topple our capitalistic system. Come up with viable constructive alternative solutions before you seek destructions.

Make innovations, not wars.

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Excerpts from the debate on whether to socialize the banking system:

To continue our discussions, you guys will need to read (at http://www.PeoplesAlly.org ) what academic research outcome and inventions that I have produced over the past 10 years for a new home ownership structure called FARJHO and a new housing finance system called SwapRent that could eliminate the involvements by the big banks and the Federal Reserve System to understand why I see the world differently and why there is no need to throw the baby out with the water. Mind you, big banks and the Fed are not the baby, they are the dirty water. Capitalism will always be America’s baby.

Without understanding the value brought about by new innovations, people would end up arguing the same old things over and over again and likely to repeat the same mistakes over and over again. Try to imagine, when a horse rider and a donkey rider argues against each other on who can ride faster but neither has ever seen a car before, it is hard for them to understand that we don’t need either if only you have the availability of the new invention called a car.

So why bother keeping arguing on whether to socialize the big banks vs. the free wheeling status quo of Wall Street if only you could understand that housing finance could easily be done through new inventions like FARJHO and SwapRent delivered via the new peer-to-peer method without any profiteering financial middlemen? We won’t even need the big banks and the Fed anymore. That is what I meant by saying to bring the destiny of our country’s economic future from the dirty hands of Wall Street back to the people on Main Street.

It is the Joseph Schumpeter’s creative destruction under free market that I am talking about. That is how the society improves itself, through new innovations, not by revisiting old ideologies. And the innovations that I am referring to are on social systems and financial systems, not just on tech gadgets as people usually refer to. FARJHO and SwapRent are exactly such social innovations that I had started to work on over 10 years ago.

The despair you described is a lack of understanding of the availability of new innovations to improve our society. Thanks for trying to recruit me in your guys’ efforts. In fact you will need me if you succeed. Here is why.

I wouldn’t care much if the big banks, Wall Street firms and the Federal Reserve System have a natural demise through creative destruction under a free market system or by a brutal force of a revolution, I only know that going forward for the benefits of the American people on Main Street we won’t even need them if FARJHO could become an overwhelmingly new method to own homes and SwapRent will be a new alternative way to obtain financing for people on Main Street. I hope it could be the latter because it may make it happen sooner. However, after the destruction you will need an alternative to rebuild the country’s economy, rather letting another version of Wall Street and Fed rise from the ashes again.

That is why I stated over and over again that we would need people’s help in preventing Wall Street’s crooks from laying their dirty fingers on these new inventions for them to reincarnate themselves in a the future revised capitalism. Let’s hope the transparency of the Internet could do that for us.

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On Anti-Usury:

You may like this due to your expressed Muslim background but first you have to learn to understand free market enterprise and usury are by no means the same thing. Please do not try to confuse people on that. We could ban usury but that has nothing to do with a free market enterprise capitalism system. The lending abuses of Wall Street and the debt oriented culture that have led our country into so far need to go. That is what we both have agreed on. So we are really on the same side.

FARJHO and SwapRent are both pure equity based financial methods and systems. You can’t find any more anti-usury financial methods in this modern world, not even in the Muslim world. It is ironic that you call FARJHO “another old usury laden xxxx”. You should always try to read before you open your mouth or you appear uneducated.

With that ideological coincidence, I felt the Muslim people must love the new all equity based home ownership structure and housing finance methods that I had invented since that is what their God told them to have, i.e. the Riba restriction. So I devoted the whole year of 2009 studying and researching the Islamic finance principles and the current practices of Islamic mortgages in each country. I have also marketed FARJHO and SwapRent to the academic institutions and central banks in the Muslim world. I have received great feedback and support from Islamic Development Bank, Asian Development Bank, many central banks in the Gulf Region and academically from many Islamic finance scholars from Pakistan.

Although many Western academics that I had corresponded with at the time back in 2009 expressed the feeling that even the Muslim people themselves do not appreciate how valuable a concept that the Riba thing (burden people with debt) is to the society, what I had found out unfortunately is that the currently called Islamic mortgage as practiced by the Muslim people is nothing but a sham. They simply copied the same Western mortgage structure and simply called the interest payments by different names. These Islamic mortgages still contain all the evils and trappings of usury, e.g. people could still get foreclosed.

That started my interest to further extend the new all equity based FARJHO structure and SwapRent services to the Muslim world as well because these are the genuinely new methods that could coincidentally comply with the spirit of the Shariah laws. The home occupier in a new FARJHO home ownership structure will never get foreclosed, no matter they are Chinese, Muslim, Jews, Christians or Eskimos.

It is only in the US version of the FARJHO LLC that we plan to launch here for the primarily Christian-Judaic US population, we have relaxed the structure to allow borrowing but only at the member level so that the social stability value could still be maintained. As long as no FARJHO LLC borrows money or using the property as collateral to borrow money, there would still be no more foreclosure possibility.

So if you genuinely want promote Riba and defeat usury for people’s benefits, FARJHO and SwapRent are what you will need to learn. Destructively ranting about what is bad will not change the system. Constructively promoting what may work better probably makes more sense. I hope you could start behave like a respectable educated person and devote your time to more constructive causes. Thanks.

Reposting – 03/30/2011 Mr. Obama, Tear down this Wall … Street! – A Matrix movie fan’s interpretation of the Bailout of Wall Street.

In support of some selective part of the Occupy Wall Street protesters (at this stage they are not all the same within the diverse group of 99%’ers), I would like to republish an old post that was originally published almost 7 months ago back on 0330 2011. The messages seem to have only become more and more relevant.

As Ron Paul was once considered nutty or even crazy with the idea to abolish the Fed, as was my blog post below at the time but now it seems the ideas are on their way to become a part of the mainstream thinking.

I have always wondered how children and grandchildren of Bernanke and his cohorts at the Federal Reserve Board would think of them in the future. After they have totally destroyed the previously vibrant middle class in America, opened the door of the opportunity to let the left wing opportunists to mislead the working poor and the mob on the streets to throw capitalism out of America and let America decay and fall into oblivion in the world stage, do you really think that their children and grand children would still view them as heroes as how the current 1%’ers on Wall Street do today?

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So Barack, or Barry rather, please allow me to be casual with you. I am no Ronald and you are definitely much more handsome then Mikhail Gorbachev without a piece of salami hanging on the forehead. I’d just like to have a frank talk with you about our country’s economic policies and Matrix the movie. Perhaps you wouldn’t mind if I call you Mr. Anderson? Neo?

First I’d like to apologize for calling you a puppet subprime President in my earlier blog dated 5/23/2009. I understand what it could be like to be the only Hussein among the establishments and I feel for you.

The frustration came from the expectation we had of you, the One would not reinsert the Prime Program back into Matrix at the Source one more time again back when we voted for you to be the President. But the opposite seems to be exactly what you have been doing. You started to look more like Agent Smith now. I hope you are a Matrix movie fan as I am and you know what I meant. If so, you may find the following analogies of our country’s Wall Street culture, your economic policies and the movie story lines interesting.

You see, Wall Street is the Matrix that has been controlling us the working class (the Humans). Out here on Main Street (Zion City) in the local communities our home ownership structure has been dominated and dictated by the exclusively debt-based mortgage industry (Zero One) created by Wall Street, Fannie, Freddie and their big bank buddies (the Machines). They have in the past been placing in their local branches those docile captured humans while keeping their minds in the Matrix in order to help the Machines disseminate the credit abuse culture and ensure their control of the Earth.

The Federal Reserve, the Treasury Department and their buddies (the Architects) has been engineering the bailouts of the crony riches, printing and pumping more money into the Matrix system to maintain its vitality and crony establishments the same way the Architects have been trying to bring you, the One, together with the Source in order to reboot the Matrix and destroy the Zion yet one more cycle, the same way all your five predecessors did.

From the Berlin Wall coming down to the recent Arab unrests in the Middle East (the Prophecy), we all have witnessed the unprecedented triumph of the people power (the Oracle) in our modern history. Despite the techie’s claims that technological developments of newer tools such as CNN in the early days to the Twitter and Facebook have made the information dissemination faster and more wide-spread, it is really the underlying force of this democratic movements driven by the people’s desire for Free Will seems to be on its way to unbalance the Matrix. You Neo are the One who has been led to the Source by the Keymaker, should not be swayed by the Architects’ assertion to reboot the Matrix again. Let me tell you why.

In our modern history, the Fed (member of the Architects) has been manipulating interest rates and the supply of money in our economy by using repos/reverse repos to implement their monetary policies and the unique Quantitative Easing programs through Wall Street dealers (the Martix) in a pattern of creations and destructions of Main Street (Zion) over and over again while rebooting Wall Street (the Matrix) with revitalized new life to maintain its status quo of the continuously enriched establishments. In particular, Bernanke’s QE and QE2 seemed to have made “Greenspan Put” a child play. Although the Matrix system does have many obvious fundamental serous problems and weaknesses but it somehow kept rebooting itself at the expense of our remaining Human Race who reside at Zion.

Whipsawing the economy is really what their monetary policy doctrine or the much worshipped Monetarism is all about. Inflating bubbles, deflating bubbles, jerking our domestic Main Street economy in the past seems to be not enough, now with the free flow of dollar-based capital, they have the entire global markets to jerk around with in the world and keep playing those same bubble blowing, popping, blowing, popping games all over again, under the disguise or the much worshipped theory called “Monetarism”. In these processes, the Wall Street insiders (the Matrix) get to reap obscene profits and revitalize itself at the expense of exploiting the Main Street (the Humans) over and over again.

Simply take a look at the recent history since Bernanke and Geithner took office. Ben has been a Member of the Board of Governors of the Federal Reserve System since September 2002 to June 2005 during the bubble building years. He became the Chairman of the Council of Economic Advisors from June 2005 to January 2006 and then became Chairman of the Federal Reserve on February 1st, 2006. Timothy on the other hand was holding the key influential role to Wall Street as the President of the Federal Reserve Bank of New York from November 17, 2003 to January 26, 2009 until he became the Secretary of Treasury Department on January 26th of 2009. Together they had been a crucial part of the front men of the Architects of the Matrix to reboot the Matrix when Matrix should have been totally destroyed should there had been no crony forces at work.

Knowing there was a housing market bubble, instead of finding viable soft landing policy alternatives, from June 30th of 2004 until June 29th of 2006 they raised the Fed Fund Rates from 1% all the way to 5.25% in order to throwing darts randomly to “pop the bubble” under the doctrines of “Monetarism”. Facing a crisis in 2007, they decided that they could build more bubbles than Greenspan ever did. From September 8th of 2007 through December 16th of 2008 until today they brought down the Fed Fund Rate from 5.25% to .025% again, under the doctrines of “Monetarism” and presumed prudent “Central Banking Policies”. Furthermore with the newly invented Quantitative Easing Programs, they have started to flood the whole world with dollar liquidity to build even more asset bubbles across the board and induce further global social instability. Until today nobody could really find out what the Architects’ true motives are.

Do they really know what they are doing or have they simply been making it up along the way? If they are so smart and love asset bubble building so much then Greenspan had ever been able to, why did they even bother to “pop Greenspan’s housing bubble” back in 2004 to 2006 to begin with? Wouldn’t it be just as convenient to leave the Fed Fund Rates unchanged and find other housing equity sharing based soft landing policies to cool down the economy instead? That would have led to a Paradise Matrix rather than the Nightmare Matrix they are turning us into now.

It is really funny to observe how the Architects have been busy congratulating and promoting themselves for a presumed job well done in preserving the Wall Street (the Matrix) to avoid a depression and dodging the fact that they were actually the very one who had created the Global Crisis of 2008 to begin with by blindly popping the Greenspan’s housing bubble through their hawkish policies between 2004 to 2006.

What they have really preserved was merely the previous Wall Street crony establishments. A depression it was not. The public certainly needs to know better that there would not have been a depression and that we would all have been better off now had the Architects not done the rescuing of the privileged few at our taxpayers’ expenses in 2008. Cronyism simply means there is an artificial human intervention of the natural selection process for the benefits of the privileged few at the expense of others. We all could live just fine without Goldman Sachs, really.

Given the current economic policies and an unknown and dangerous future for both the US and the world, have any academics been paying attention to analyze how the Architects’ economic policies to date have grossly polarized the American economy between the haves and have-nots while creating the biggest destruction of the middle class in America that have shaken the working class’s faith in Capitalism? The Matrix seems to be getting more and more unbalanced from its own exploitation.

Anyway Neo, for now you seem to have been cloned to just another Agent Smith. Until the next time we talk again, I await your next act.

0704 2011 Confusion on Various Equity Sharing Schemes – Why FARJHO and SwapRent are more social innovations than simply financial innovations.

As I once commented before, if a person is new to the French language or the Greek language, he/she probably would not be able to tell the difference between a baby gibberish vs. a poetic recital as both are “new and foreign” to him/her. It is all Greek to him/her so to speak. That seems to be the current situation with many people when they started to learn about the property equity sharing concepts and methods for the first time. Since both the concepts and the methods are all new to them, many people find it hard to tell a good method from the not-so-good or not-so-smart methods.

Shared equity “concepts” as applied to real estate property is not new. As mentioned before, the Brits have been applying them for over three decades but since the “methods” such as “shared equity mortgage” or SEM and “shared appreciation mortgage” or SAM had not been developed so well, they remain a government led socialism oriented facility so far to assist the poor in their country. Few, if any, free market based investors or participants have been interested in participating. Some British banks got black and blue bruises all over their face when they tried those primitive methods in the 80’s. There have also been some copycats of those exactly the same ideas and methods but re-bottled and promoted in the US and Australia with little success within the past few years.

What makes FARJHO stand out? Well, here is a short recap as a patriotic 4th of July message.

Three unique features make FARJHO different from all the other “equity-sharing methods” or various other “shared equity schemes” ever proposed or practiced so far.

First, the FARJHO/LLC owns one home at a time as “a single family solution”. So the goal of FARJHO is to ensure the sanctity of individual home ownership for individual citizens one home at a time under pure capitalism principles, not a defunct or hippy-ish multi-family commune, land trust, kibbutz or socialist compound concept. We do not have to turn our country into a socialism or communism society to help the poor!

Second, unlike SEM, SAM or all other shared equity schemes proposed by other academics or practiced by other private companies so far, FARJHO does not allow, or does not encourage at least (remember it is a free market democracy and no dictator allowed), any borrowing at the property level to use the entire home property as collateral. All other equity sharing methods are schemes developed to make Wall Street loan sharks even happier so that home owners and investors who gang up together can go crazy leveraging and punt again. Do some simple research through Google searches and you will quickly know what I meant. Those shared equity properties that borrow again at property level may still get foreclosed. They may make the elite minorities on Wall Street happy again but there are few, if any, social benefits in those schemes to mom and pop families on Main Street.

With FARJHO, going forward in the future, borrowing will no longer be the only way for people to own homes. There is no reason why the home property purchase could not be done using all pooled-together cash. The term “foreclosure” may even become obsolete when people started to apply borrowing only under the FARJHO proposed concepts, i.e. borrowing at the member level instead of at the property level. AHO (Aspiring Home Owners) and JPIs (Joint Property Investors) could decide to use prudent leveraging individually before they come to the table to form a FARJHO LLC to own the home. Once the FARJHO LLC is formed there is no more borrowing allowed at the property level so that banks or anybody else in the world would never be able to seize the property from the tenant/partial home owner in a FARJHO structure.

Therefore if and when any of the leverage-loving FARJHO/LLC members ever loses his or her own debt servicing capability in the future, he/she could drop off quietly individually without jeopardizing the stability and occupancy rights of the home property for AHO or the investment security any other JPI investment members who own the rest of the interests in the property. This defaulting member could simply sell the percentage member interests in the property that he/she owns to any other people in a free market or turn them over to the lenders if he/she had financed the purchase of these member interests in the beginning.

Thirdly, it provides an enhanced stability for the home occupier through a voluntary feature offered by the Aspiring Home Owners (AHOs) to the other Joint Property Investors (JPIs) to use the AHO’s equity stake in the FARJHO LLC as a buffer for JPIs to deduct the missed monthly rental payments by the AHO so that the AHO would not be evicted so easily until the buffer runs out. It therefore offers much more home occupier stability than any other rental arrangements.

In a bigger picture for the society, when lesser credit-worthy aspiring home owners have resorted to these new socially beneficial equity financing methods, what is left for the banks to lend to, using conventional mortgages, will be much better credit quality home buyers/borrowers. More free market based consumer choices will always be a win-win situation for everyone under the uninhibited capitalism. So there is no reason for those good banks or good capitalists on Wall Street to fear or feel threatened by these socially oriented new inventions.

More summaries on the social benefits of SwapRent will be described again later. Many of them could of course already be found at the SwapRent.com web site.

So today’s message on the 4th of July, 2011 is really – you can still be a capitalist to provide social benefits to the working class people in America. For doing that we may need the American people to acknowledge and accept these new social innovations under capitalism operating principles rather than keeping asking for bail-outs or hand-outs. In addition, we will need the ultimate transparency in their implementations so that the new innovations would not be stolen, hj-jacked and abused to benefit the privileged few when landed in the wrong hands by the dark forces of the elite minorities in our society again.

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