The Great Retirement Con

Authored by Adam Taggart via PeakProsperity.com,

Frankly put: retirement is now a myth for the majority...

 

The Origins Of The Retirement Plan

Back during the Revolutionary War, the Continental Congress promised a monthly lifetime income to soldiers who fought and survived the conflict. This guaranteed income stream, called a "pension", was again offered to soldiers in the Civil War and every American war since.

Since then, similar pension promises funded from public coffers expanded to cover retirees from other branches of government. States and cities followed suit -- extending pensions to all sorts of municipal workers ranging from policemen to politicians, teachers to trash collectors.

A pension is what"s referred to as a defined benefit plan. The payout promised a worker upon retirement is guaranteed up front according to a formula, typically dependent on salary size and years of employment.

Understandably, workers appreciated the security and dependability offered by pensions. So, as a means to attract skilled talent, the private sector started offering them, too. 

The first corporate pension was offered by the American Express Company in 1875. By the 1960s, half of all employees in the private sector were covered by a pension plan.

Off-loading Of Retirement Risk By Corporations

Once pensions had become commonplace, they were much less effective as an incentive to lure top talent. They started to feel like burdensome cost centers to companies.

As America"s corporations grew and their veteran employees started hitting retirement age, the amount of funding required to meet current and future pension funding obligations became huge. And it kept growing. Remember, the Baby Boomer generation, the largest ever by far in US history, was just entering the workforce by the 1960s.

Companies were eager to get this expanding liability off of their backs. And the more poorly-capitalized firms started defaulting on their pensions, stiffing those who had loyally worked for them.

So, it"s little surprise that the 1970s and "80s saw the introduction of personal retirement savings plans. The Individual Retirement Arrangement (IRA) was formed by the Employee Retirement Income Security Act (ERISA) in 1974. And the first 401k plan was created in 1980.

These savings vehicles are defined contribution plans. The future payout of the plan is variable (i.e., unknown today), and will be largely a function of how much of their income the worker directs into the fund over their career, as well as the market return on the fund"s investments.

Touted as a revolutionary improvement for the worker, these plans promised to give the individual power over his/her own financial destiny. No longer would it be dictated by their employer.

Your company doesn"t offer a pension? No worries: open an IRA and create your own personal pension fund.

Afraid your employer might mismanage your pension fund? A 401k removes that risk. You decide how your retirement money is invested.

Want to retire sooner? Just increase the percent of your annual income contributions.

All this sounded pretty good to workers. But it sounded GREAT to their employers.

Why? Because it transferred the burden of retirement funding away from the company and onto its employees. It allowed for the removal of a massive and fast-growing liability off of the corporate balance sheet, and materially improved the outlook for future earnings and cash flow.

As you would expect given this, corporate America moved swiftly over the next several decades to cap pension participation and transition to defined contribution plans.

The table below shows how vigorously pensions (green) have disappeared since the introduction of IRAs and 401ks (red):

(Source)

So, to recap: 40 years ago, a grand experiment was embarked upon. One that promised US workers: Using these new defined contribution vehicles, you"ll be better off when you reach retirement age.

Which raises a simple but very important question: How have things worked out?

The Ugly Aftermath

America The Broke

Well, things haven"t worked out too well.

Three decades later, what we"re realizing is that this shift from dedicated-contribution pension plans to voluntary private savings was a grand experiment with no assurances. Corporations definitely benefited, as they could redeploy capital to expansion or bottom line profits. But employees? The data certainly seems to show that the experiment did not take human nature into account enough – specifically, the fact that just because people have the option to save money for later use doesn"t mean that they actually will.

First off, not every American worker (by far) is offered a 401k or similar retirement plan through work. But of those that are, 21% choose not to participate (source).

As a result, 1 in 4 of those aged 45-64 and 22% of those 65+ have $0 in retirement savings (source). Forty-nine percent of American adults of all ages aren"t saving anything for retirement.

In 2016, the Economic Policy Institute published an excellent chartbook titled The State Of American Retirement (for those inclined to review the full set of charts on their website, it"s well worth the time). The EPI"s main conclusion from their analysis is that the switchover of the US workforce from defined-benefit pension plans to self-directed retirement savings vehicles (e..g, 401Ks and IRAs) has resulted in a sizeable drop in retirement preparedness. Retirement wealth has not grown fast enough to keep pace with our aging population.

The stats illustrated by the EPI"s charts are frightening on a mean, or average, level. For instance, for all workers 32-61, the average amount saved for retirement is less than $100,000. That"s not much to live on in the last decades of your twilight years. And that average savings is actually lower than it was back in 2007, showing that households have still yet to fully recover the wealth lost during the Great Recession.

But mean numbers are skewed by the outliers. In this case, the multi-$million households are bringing up the average pretty dramatically, making things look better than they really are. It"s when we look at the median figures that things get truly scary:

Nearly half of families have no retirement account savings at all. That makes median (50th percentile) values low for all age groups, ranging from $480 for families in their mid-30s to $17,000 for families approaching retirement in 2013. For most age groups, median account balances in 2013 were less than half their pre-recession peak and lower than at the start of the new millennium.

(Source)

The 50th percentile household aged 56-61 has only $17,000 to retire on. That"s dangerously close to the Federal poverty level income for a family of two for just a single year.

Most planners advise saving enough before retirement to maintain annual living expenses at about 70-80% of what they were during one"s income-earning years. Medicare out-of-pocket costs alone are expected to be between $240,000 and $430,000 over retirement for a 65-year-old couple retiring today.

The gap between retirement savings and living costs in one"s later years is pretty staggering:

• Nearly 83% of retired households have less saved than Medicare costs alone will consume.


• One-third of retired households are entirely dependent on Social Security. On average, that"s only $1,230 per month – a hard income to live on. (source)


• 34 percent of older Americans depend on credit cards to pay for basic living expenses such as mortgage payments, groceries, and utilities. (source) 

As for Medicare, the out-of-pocket costs could easily soar over retirement. The Wall Street Journal reports that the current estimate of Medicare"s unfunded liability now tops $42 Trillion. Such a mind-boggling gap makes it highly likely that current retirees will not receive all of the entitlements they are being promised.

And the denial being shown by baby boomers entering retirement is frightening. Many simply plan to work longer before retiring, with a growing percentage saying they plan to work "forever". 

But the data shows that declining health gives older Americans no choice but to leave the work force eventually, whether they want to or not. Years of surveys by the Employment Benefit Research Institute show that fully half of current retirees had to leave the work force sooner than desired due to health problems, disability, or layoffs.

Add to this the nefarious impact of the Federal Reserve"s prolonged 0% interest rate policy, which has made it extremely hard for retirees with fixed-income investments to generate a meaningful income from them.

The number of Americans aged 65 years and older is projected to more than double in the next 40 years:

Will the remaining body of active workers be able to support this tsunami of underfunded seniors? Don"t bet on it.

Especially since their retirement savings prospects are even more dim. With long-stagnant real wages and punishing price inflation in the cost of living, Generation X and Millennials are hard-pressed to put money away for their twilight years:

(Source)

Public Pensions: Broken Promises

And for those "lucky" folks expecting to enjoy a public pension, there"s a lot of uncertainty as to whether they"re going to receive all they"ve been promised.

Due to underfunded contributions, years of portfolio under-performance due to the Federal Reserve"s 0% interest rate policy, poor fund management, and other reasons, many of the federal and state pensions are woefully under-captialized. The below chart from former Dallas Fed advisor Danielle DiMartino-Booth shows how the total sum of unfunded public pension obligations exploded from $292 billion in 2007 to $1.9 trillion by the end of 2016:

(Source)

And the daily headlines of failing state and local pension funds (Illinois, Kentucky, New Jersey, Dallas, Providence -- to name but a few) show that the problem is metastasizing across the nation at an accelerating rate.

Affording Your Future

The bottom line when it comes to retirement is that you"re on your own. The vehicles and the promises you"ve been given are proving woefully insufficient to fund the "retirement" dream you"ve been sold your whole life.

That"s the bad news.

But the good news is that the dream is still attainable. There are strategies and behaviors that, if adopted now, will make it much more likely for you to be able to afford to retire -- and in a way you can enjoy.

In Part 2: Success Strategies For Retirement, we detail out these best practices for a solvent retirement, including providing 14 specific action steps you can start taking right now in your life that will materially improve your odds of enjoying your later years with grace. For far too many Americans, "retirement" will remain a perpetual myth. Don"t let that happen to you. Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

 

Chicago Politician Pushes Ban On Businesses Banning Cash

In July, Visa officially entered the global "war on cash", adding to a long list of academics, elites, and bankers urging the removal of one of the last freedoms "for the good of the rest of us". However, if Alderman Edward Burke has his way, that "war on cash" will end in Chicago after he submitted an ordinance at last week"s City Council meeting to ban businesses from banning cash.

According to the ordinance, "credit card giant Visa announced it is "launching a major effort to encourage businesses to go cashless," through a campaign called the Visa Cashless Challenge offering $500,000 for 50 businesses to go cash-free.

As DNAInfo.com reports, the ordinance cites Argo Tea, SweetGreen, Epic Burger and Goddess and the Baker as Chicago businesses that have already gone cashless, but the stores themselves don"t seem to have had any issues...

Xuan Tea, a shop at 1816 N. Milwaukee Ave. in Bucktown, opened in September and is credit card-only.

"It"s been working out fine. Some are taken aback initially, but we haven"t had any problems with it," manager Will Quanstrom said.

"Mostly everyone has a credit card in their pocket, even if they"re just out for a jog. It"s easier and it"s simpler for us. We don"t have to go to the bank, or count drawers out." The tea shop has a sign at the front counter that says it only takes credit cards.

Nevertheless, as DNAInfo.com notes, the ordinance, however, points out that credit card companies typically tack on a 1 percent to 3 percent fee on transactions, "a business cost typically passed on to consumers via increased pricing."

 Burke called his ordinance a "fair and equal access" issue and calls out Visa"s repression of the poor and young...

"A "no cash" sign is a "not welcome" sign for many without ready access to credit, including those who are low- or fixed-income, homeless, undocumented, young or victims of identity theft," he said.

It adds that those under 18 can"t apply for credit cards, making a cash ban "de facto age discrimination," while many low-income families can"t even afford to open a bank account.

The ordinance would make it illegal to decline cash as payment at any business in retail sales or food and drink, under the penalty of fines starting at $1,000 and up to $2,500 a day.

*  *  *

As we noted previously, this ongoing push for a cashless society in Europe, Asia, and the Americas is about much more than just phasing out paper money - it’s about central planners solidifying control over the public’s wealth. This ongoing merger of corporate and government interests is the definition of crony capitalism. Regardless of the blatant collusion, the choices individuals make will still ultimately decide the direction for the future. Buying material goods on credit has become a lifestyle for millions, but the long-term costs of those decisions must be understood if there’s any chance for progress.

Americans have made a huge mistake by running up a staggering $1 trillion dollars in credit card debt with an average interest rate of over 16%. Thanks to the Federal Reserve system, companies like Mastercard, Discover, and American Express can issue bonds paying extremely low-interest rates to the investors while simultaneously lending that money out to credit card holders at sky high rates. Companies will always take advantage of opportunities to increase profits, but the people’s willingness to keep borrowing from them is at the core of the problem.

Access to cheap capital has been extended to the largest corporations for over a decade, but when it comes to small businesses or individuals there is a completely different set of standards. The pressure to consistently increase revenues and stock prices has led to an unnatural parasitic relationship between these companies and their customers. Cash is one of the last options that allows people a way to avoid dealing with this kind of shakedown.

More than 30% of all payments in the U.S. are still conducted in cash, but financial intermediaries that charge processing fees are joining with the State and central banks to ensure the public has no room to innovate.

If Amazon Takes Over The World...

Authored by Scott Galloway op-ed via The Wall Street Journal,

Four tech giants - Amazon, Apple, Facebook and Google - have added $2 trillion to their combined market capitalization since the 2007-09 recession, a sum that approaches the GDP of India. The concentrated wealth and power of these companies has alarmed many observers, who see their growth as a threat not just to consumers and other businesses but to American society itself.

After spending most of the past decade researching these companies, I’ve come to the conclusion that our fears are misplaced in focusing on what I call the Four. We should instead be worrying about the One: one firm that will come to dominate search, hardware and cloud computing, that will control a vast network of far-flung businesses, that can ravage entire sectors of the economy simply by announcing its interest in them.

That firm is Amazon. Jeff Bezos has been disciplined and single-minded in his vision of investing in the most enduring consumer wants—price, convenience and selection. Coupled with deft execution, it has made Amazon the most impressive and feared firm in business.

As for the other three, don’t be misled by their current successes. They are falling behind as the One marches ahead.

Google seems to have a commanding market position when it comes to search functions. As European Union regulators pointed out in their recent antitrust finding, Google has an astonishing 90% share in the category in Europe. Its share in the U.S. is 64%. But it’s a very different story in the narrower, and more lucrative, domain of product search. In 2015, more product searches in the U.S. began on Amazon than on search engines, including Google (44% vs. 34%), according to BloomReach. A year later, Amazon’s share grew to 55%. Amazon could reasonably be described as a search engine with a warehouse attached to it.

For years, Apple has been the undisputed king of hardware innovation. But the prize for the most disruptive recent device goes to the hands-free, voice-controlled Amazon Echo speaker and its buttery voice, Alexa. Research firm Gartner predicts that 30% of computing will be screenless by 2020. So far, Apple looks to have blown an early lead in the great voice race: With 700 million iPhones in use world-wide, Apple’s Siri still has the most share in voice overall. But Amazon’s share of voice on home devices—the next frontier—is 70%.

Today’s fastest-growing sector in tech is cloud computing. There are several big players in the field, including old and new tech: IBM , Microsoft , Google. The dominant player again is Amazon, with a business launched originally to support its internal computing needs. According to Synergy Research Group, Amazon’s cloud offering (called Amazon Web Services) enjoys more than 30% of the market, triple the share of the No. 2, Microsoft’s Azure, and will register $16 billion in revenue in 2017. Financial pundits, looking for something negative to say about Amazon’s recent quarterly earnings, highlighted that growth in the company’s cloud business had slowed to 43%. “Slowed to 43%” is not a phrase you read in any other equity analyst’s write-up of a large company in 2017.

Amazon’s consistent outperformance of the other three tech giants is distinct from its continued dominance of old-economy firms. With the acquisition of Whole Foods, Amazon will likely become the fastest-growing online and bricks-and-mortar retailer. The whole grocery sector—with $612 billion in U.S. sales in 2016—has been disrupted overnight by Amazon. In the months between the announcement and closing of Amazon’s acquisition of Whole Foods this year, the largest pure-play grocer, Kroger , lost nearly a third of its market value.

The late business professor C.K. Prahalad of the University of Michigan famously argued that the most successful firms focus not on one market but on one “core competence.” Amazon has proved otherwise. What Amazon has accomplished across industries is unprecedented, even among the most successful businesses. Nike does not have a cloud business; Starbucks is not developing original TV content; Wal-Mart has not filed patents for warehouses in the sky. Amazon has recently been granted patents for a floating warehouse and small drones that can self-assemble into bigger drones capable of transporting larger packages, reflecting the ability, one day, to operate intricate networks of fulfillment by air. Other firms are punished for straying from their familiar areas of strength; Amazon sucks value from sectors in which it has had no previous involvement just by glancing at them.

At New York University’s business school, where I teach, I have for years kept a close watch on which firms are winning the competition for the most talented students. A decade ago, the top recruiter was American Express , with investment banks vying for second position. Now the clear winner is Amazon: 12 students from my most recent class have opted for a life of rain and overrated coffee in the Pacific Northwest.

Why does Amazon’s ascent matter? Aren’t lower prices and greater efficiencies better for everyone? They are, in all the obvious ways, but that’s not a complete picture. Amazon’s seemingly boundless growth forces us to wrestle with difficult questions about the reasons for its dominance.

For one, Amazon, unlike any other firm its size, has changed the basic compact with financial markets.

It has replaced the expectation for profits with a focus on vision and growth, managing its business to break even while investors bid up its stock price.

This radical approach has provided the company with a staggering advantage in free-flowing capital. Google, Facebook, Wal-Mart and most Fortune 500 companies are saddled with expectations of profits. Many firms would be much more innovative if they were given a license to operate without the nuisance of profitability. Amazon has thus had enormous capital on hand to invest in delivery networks, especially the crucial last link for getting goods to the doorsteps of consumers, without having to worry that they don’t yield immediate profits.

Amazon’s strategy of break-even operations also means that it has virtually no profits to tax. Since 2008, Wal-Mart has paid $64 billion in federal income taxes, while Amazon has paid just $1.4 billion. Yet, while paying low taxes, Amazon has added $220 billion in value to the stock held by its shareholders over the past 24 months—equivalent to the entire market capitalization of Wal-Mart.

Something is deeply amiss when a company can ascend to almost a half trillion dollars in market value—becoming the fifth most valuable firm in the world—without paying any meaningful income tax. Does Amazon really owe so little to support public revenue and public needs? If a giant firm pays less than the average 24% in income taxes that the companies of the S&P 500 pay, it logically means that less-successful firms pay more. In this way, Amazon further adds to the winner-take-all tendencies plaguing our economy.

Because Amazon is more efficient than other retailers, it is able to transact the same amount of business with half the employees. If Amazon continues to grow its business by $20 billion a year, the annual toll of lost jobs for merchants, buyers and cashiers will be in the tens of thousands by my calculations. Disruption in the U.S. labor force is nothing new—we have just never dealt with a company that is so ruthless and single-minded about it.

I recently spoke at a conference the day after Jeff Bezos. During his talk, he made the case for a universal guaranteed income for all Americans. It is tempting to admire his progressive values and concern for the public welfare, but there is a dark implication here too. It appears that the most insightful mind in the business world has given up on the notion that our economy, or his firm, can support that pillar of American identity: a well-paying job.

Amazon has brought us many benefits, but we all must recognize that the rise of the One brings with it much more than free two-day delivery. “Alexa, is this a good thing?”

Here's What Your Identity Sells For On The Dark Web

Millions of Americans who trusted Equifax with sensitive personal and financial data, including social security numbers and credit-card information, are now nervously wondering whether they will be among the unlucky minority of affected customers whose identities are successfully “repurposed” by online criminal groups.

One researcher from security firm SecureWorks shared some details about today’s burgeoning marketplace for stolen data with Bloomberg, and the conclusion is clear: It is now easier – and cheaper – for criminals to access and abuse illicit data than ever before. In fact, a high-limit American express card with a high chance of working can be purchased online for less than $20. Criminals can buy files with thousands of low-limit card numbers for pennies on the dollar.

According to Bloomberg, “verified” high-limit credit cards from developed countries like the US, Japan, and South Korea are selling on the dark web for the bitcoin equivalent of about $10 to $20.

“Verified” means the seller has tested out transactions on the card and found it hasn’t been canceled yet. For scammers on a budget, there’s unverified stolen credit card data, which comes out to pennies a card when bought in bulk.

Here’s a screengrab from one dark-web marketplace.

Luckily for criminals, cards generally aren’t selling any cheaper on the dark web these days, said Alex Tilley, a researcher at Secureworks. Today’s buyers are more likely to get higher-quality cards, ones with sizable limits that can be used fraudulently with ease. It isn’t as hit-or-miss as it used to be, a welcome change for criminals, chilling news for most of us.

Criminals have even set up sophisticated “rating systems” to help value the data. Business cards are preferred, Tilley said, because they don’t have a limit. Those and high-end personal cards—say, a Platinum American Express that has been verified and has an 85 percent rating (judged by the seller to have an 85 percent chance of being successfully used in a fraud)—will go for $15 to $20. A regular Mastercard that doesn’t have a high limit might go for $9.

One underground hacker market inexplicably called Trump’s Dumps is selling full identities of individuals just like you for as little as $10 apiece. They’re called fullz, “dossiers that provide enough financial, geographic and biographical information on a victim to facilitate identity theft or other impersonation-based fraud.” Fullz can help a criminal get past those irritating “secret questions” that sites ask to verify your identity.

Recently, Secureworks’ researchers have seen more offers of bulk pre-verified card details, along with more identifying information about the owners. In some cases, offers even include the cardholder’s mother’s maiden name. Still, they cost just $10 to $12. Below is a fullz offer with a lot of personal identification on a Korean consumer.

In a massive breach like Equifax, hackers can easily walk away with hundreds of millions of dollars in profits from selling the data. Meanwhile, the identity thieves who purchased it can reap their own fortune running their scams.

Congress, the FTC and Equifax customers – enraged by both the company’s reluctance to initially disclose the breach and its carelessness (some would say tight-fistedness) concerning its cybersecurity defenses – have buried the company in lawsuits and official inquiries.

As USA Today revealed yesterday, hackers took advantage of an Equifax security vulnerability two months after an industry group discovered the coding flaw and shared a fix for it, raising questions about why Equifax didn"t update its software successfully when the danger became known.

We’re looking forward to hearing the whole story from CEO Rick Smith when he testifies before Congress early next month. Whether Smith manages to hang on to his job remains to be seen - calls for his resignation after a 12-year-long scandal-free tenure are mounting. CNBC"s Jim Cramer said last night that Smith "should be fired today."

But perhaps more worrying for Smith and his C-Suite companions are calls from North Dakota Sen. Heidi Heitkamp, who has demanded a criminal investigation into whether the company"s executives - several of whom sold stock during the period between when the company first learned about the hack and when it disclosed it to the public - commited securities fraud.

"If that happened, then somebody needs to go to jail," she said.

Visualizing 5,000 Years Of Consumer Credit Growth

Consumer credit may seem like a fairly new invention – but, as Visual Capitalist"s Jeff Desjardins details below, it’s actually been around for more than 5,000 years!

In fact, many millennia before the credit score became ubiquitous, there is historical evidence that cultures around the world were borrowing for various reasons. From the writings in Hammurabi’s Code to the exchanges documented by the Ancient Romans, we know that credit was used for purposes such as getting enough silver to buy a property or for agricultural loans made to farmers.

CONSUMER CREDIT: 3,500 B.C. TO TODAY

In today’s infographic from Equifax, we look at the long history of consumer credit – everything from the earliest writings of antiquity to the modern credit boom that started in the 20th century.

Consumer credit has evolved considerably from the early days.

Over the course of several millennia, there have been credit booms, game-changing innovations, and even periods such as the Dark Ages when the practice of charging interest (also known as “usury”) was considered immoral by some people.

A TIMELINE OF CONSUMER CREDIT

Below is a timeline of the significant events that have helped lead to the modern consumer credit boom, in which Americans now have over $12.4 trillion borrowed through mortgages, credit cards, student loans, auto loans, and other types of credit.

THE ANCIENTS AND CREDIT

3,500 BC – Sumer
Sumer was the first urban civilization – with about 89% of its population living in cities. It is thought that here consumer loans, used for agricultural purposes, were first used.

1,800 BC – Babylon
The Code of Hammurabi was written, formalizing the first known laws around credit. Hammurabi established the maximum interest rates that could be used legally: 33.3% per year on loans of grain, and 20% per year on loans of silver. To be valid, loans had to be witnessed by a public official and recorded as a contract.

50 BC – The Roman Republic
Around this time, Cicero noted that his neighbor bought 625 acres of land for 11.5 million sesterces.

Did this person literally carry 11.5 tons of coins through the streets of Rome? No, it was done through credit and paper. Cicero writes “nomina facit, negotium conficit” – or, “he uses credit to complete the purchase”.

MORAL CONCERNS ABOUT LENDING

800 – The Dark Ages in Europe
After the collapse of the Western Roman Empire, economic activity grinded to a halt. The Church even banned usury, the practice of charging interest on loans, for all laymen under Charlemagne’s rule (768-814 AD).

1500 – The Age of Discovery
As European explorers and merchants begin trade missions to faraway lands, the need for capital and credit increases.

1545 – England
After the Reformation, the first country to establish a legal rate of interest was England in 1545 during the reign of Henry VIII. The rate was set at 10%.

1787 – England
Philosopher Jeremy Bentham writes a treatise called “A Defense of Usury”, arguing that restrictions on interest rates harm the ability to raise capital for innovation. If risky, new ventures cannot be funded, then growth becomes limited.

THE BIRTH OF MODERN CONSUMER CREDIT

1803 – England
Credit reporting itself originated in England in the early 19th century. The earliest available account is that of a group of English tailors that came together to swap information on customers who failed to settle their debts.

1826 – England
The Manchester Guardian Society is formed, and later begins issuing a monthly newsletter with information about people who fail to pay their debts.

1841 – New York
The Mercantile Agency is founded, and starts systemizing rumors about the character and assets held by debtors through a network of correspondents. Massive ledgers in New York City are made, though these reports were heavily subjective and biased.

1864 – New York
The Mercantile Agency is renamed the R. G. Dun and Company on the eve of the Civil War, and finalizes an alphanumeric system for tracking creditworthiness of companies that would remain in use until the twentieth century.

1899 – Atlanta
The Retail Credit Company was founded, and begins compiling an extensive list of creditworthy customers. Later on, the company would change its name to Equifax. Today, it is the oldest of the three major credit agencies today in the United States.

THE CONSUMER CREDIT BOOM

1908 – Detroit
Henry Ford’s Model T makes automobiles accessible to the “great multitude” of people, but they were still too expensive to buy with cash for most families.

1919 – Detroit
GM solves this problem by loaning consumers the money they need to buy a new car. General Motors Acceptance Corporation (GMAC) is founded and popularizes the idea of installment plan financing. Consumers can now get a new car with just a 35% downpayment at time of financing.

1930 – United States
By this time, efficient U.S. factories are pumping out cheaper consumer products and appliances. Following the lead of GM, now washing machines, furniture, refrigerators, phonographs, and radios can be bought on installment plans. It’s also worth noting that in this period, 2/3 of all autos are bought on installment plans.

THE FIRST IN BIG DATA

1950 – United States
By 1950, typical middle-class Americans already had revolving credit accounts at different merchants. Maintaining several different cards and monthly payments was inconvenient, and created a new opportunity.

At the same time, Diners Club introduces their charge card, which helps open the floodgates for other consumer credit products.

1955 – United States
Early credit reporters use millions of index cards, sorted in a massive filing system, to keep track of consumers around the country. To get the latest information, agencies would scour local newspapers for notices of arrests, promotions, marriages, and deaths, attaching this information to individual credit files.

1958 – United States
BankAmericard (now Visa) is “dropped” in Fresno, California. American Express and Mastercard soon follow, offering Americans general credit for a wide range of purchases.

1960 – United States
At a time when the technology was limited to filing cabinets, the postage meter, and the telephone, American credit bureaus issued 60 million credit reports in a single year.

1964– United States
The Association of Credit Bureaus in the U.S. conducts the first studies into the application of computer technologies to credit reporting. Accuracy of data is also improved around this time by standardizing credit application forms.

1970 – United States
The first Fair Credit Reporting Act is passed in the United States. It establishes a standard legal framework for credit reporting agencies.

1980s – United States
The three biggest credit bureaus attain universal coverage across the country.

1989 – United States
The FICO score is introduced, and quickly becomes a standard system to measure credit scores based on objective factors and data.

2006 – United States
VantageScore is created through a joint-venture between the top three credit scoring agencies. This new consumer credit-scoring model is used by 10% of the market, and 6 of the 10 largest banks use VantageScore.

MODERN CREDIT

The Information Age has enabled a new era in consumer credit and assessing risk – and today, credit reports are used to inform decisions about housing, employment, insurance, and the cost of utilities.

Learn more about how data, the internet, and modern computing is changing credit in Part 2 of this series.

“We are declaring war on cash,” Visa's Andy Gerlt

Introduction by Vince Lanci

Originally posted on marketslant.com

Here is yet more proof of what happens when slow, methodical planning, manufactured consent, and corporate influence combine their forces. The result is an unholy union between academic ideologists, political puppets, and corporate greed manifested in what can only be described as a juggernaut; A slow, relentlessly moving object that will crush anything in its path. Note juggernauts are also prone to crushing their devotees as well. 

Per Wikipedia

A juggernaut  in current English usage, is a literal or metaphorical force regarded as mercilessly destructive and unstoppable. This usage originated in the mid-nineteenth century[2] as an allegorical reference to the Hindu temple cars of Jagannath Temple in Puri, which apocryphally were reputed to crush devotees under their wheels.

When you have political, capitalistic, and ideological forces aligned; you get economic, political, and technological forces almost religiously agreeing on a course  of action. In this case, Multiculturalist Ideology, Government Shills, and New Tech can now make their play on creating an even more captive consumer / sheeple. 

Visa"s Pitch to India

And among the people championing the convenience of a cashless society are those who use  iphones to buy Starbucks coffee. These devotees who will sacrifice freedom for convenience will not be spared. They will be crushed under the juggernaut when alternate choices of transacted commerce are eliminated.

Kind of like the middle class thinking Trump was going to help them. Or the bitter left that thought Hillary was actually liberal. There are only degrees of authoritarianism now. And those in power are the elitists who state they know what is best for you. It also happens to be what is best for them. And cash - or more correctly control of how cash is spent - is an obstacle to that

There is nowhere to hide. The cashless society is coming, and with it, your freedom to spend where and when you see fit. Your ability to get fair prices from open trade borders will be closed. And when you convert your paper to Gold, that will be attacked next. 

And those  people using Bitcoin to transfer wealth out of countries to retain their economic freedom we say  this; What are you going to transfer your wealth into? Are you going to leave it in Bitcoins? Then enjoy 100% volatility.

Risk cannot be created or destroyed, it can only be  exchanged for different risk. The wall is being built alright. It is being built around your economic freedom. Then the cries of BUY AMERICAN will sound out,  as you will not be able to buy anywhere  else. And American corporations will own your spending habits. Do you think supermarkets want to make less money when they ask for your "Club Card"?

You should be very scared when a bank spokesperson feels confident enough to actually say what he did. That means he thinks its a done deal. That headline is an actual quote. 

- VBL

Banks Are Scheming to Dominate a Future Cashless Society

Written by Shaun Bradley for theantimedia.org

Visa recently announced its new Cashless Challenge program, which offers $10,000 to restaurants willing to transition into accepting only digital payments.  As the largest credit card processor in the U.S., it’s no surprise Visa is spearheading this campaign. Under the guise of increasing transparency and efficiency, they’ve partnered with governments around the world to help convert financial systems into cashless models, but their real incentive is the billions of dollars in extra transaction fees it would generate.

“We are declaring war on cash,” Visa spokesman Andy Gerlt proudly proclaimed after the program was announced.

The food-based small businesses Visa is targeting are among those that benefit most from accepting cash from customers. When transactions are for amounts less than $10, the fees charged cut significantly into profits. Only 28% of food trucks currently accept credit card payments because of the huge losses they incur from them. The bribe from Visa may seem appealing up front but will be mostly paid back to them over the next few years in fees alone.

Liz Garner, Vice President of the Merchant Advisory Group, which represents over 100 of the largest businesses in the U.S., explained some of the hurdles faced when dealing with card networks:

“For many businesses – both large and small – the cost of accepting plastic cards and other forms of electronic payments is one of their highest operating costs. Most business owners have no qualms about paying reasonable fees for business services, and they do so every day for items such as cleaning services, security systems, Wi-Fi, and other basic needs. However, they have the ability to negotiate for those services in a fair and transparent marketplace, which they do not with the two major credit and debit card networks….Credit card and debit card fees are dictated directly by Visa and MasterCard and are imposed on the majority of merchants in a take-it-or-leave-it fashion. Most businesses feel that failing to accept these major card brands is not a competitive option so they continue accepting electronic payments even though the costs are squeezing their business, and the inflexible acceptance rules fly in the face of free market enterprise,”

This ongoing push for a cashless society in Europe, Asia, and the Americas is about much more than just phasing out paper money — it’s about central planners solidifying control over the public’s wealth. This ongoing merger of corporate and government interests is the definition of crony capitalism. Regardless of the blatant collusion, the choices individuals make will still ultimately decide the direction for the future. Buying material goods on credit has become a lifestyle for millions, but the long-term costs of those decisions must be understood if there’s any chance for progress.

Americans have made a huge mistake by running up a staggering $1 trillion dollars in credit card debt with an average interest rate of over 16%. Thanks to the Federal Reserve system, companies like Mastercard, Discover, and American Express can issue bonds paying extremely low-interest rates to the investors while simultaneously lending that money out to credit card holders at sky high rates. Companies will always take advantage of opportunities to increase profits, but the people’s willingness to keep borrowing from them is at the core of the problem.

Access to cheap capital has been extended to the largest corporations for over a decade, but when it comes to small businesses or individuals there is a completely different set of standards. The pressure to consistently increase revenues and stock prices has led to an unnatural parasitic relationship between these companies and their customers. Cash is one of the last options that allows people a way to avoid dealing with this kind of shakedown.

More than 

30% of all payments

 in the U.S. are still conducted in cash, but 

financial intermediaries

 that charge processing fees are 

joining

 with the State and central banks to ensure the public has no room to innovate. Credit and debit cards have been the most convenient way to make purchases for over a decade, but emerging competition is slowly making them irrelevant.

Bitcoin and smart contract platforms have introduced an entirely new marketplace for businesses and individuals outside the dominion of the old financial vanguard. Dozens of large corporations have founded the Enterprise Ethereum Alliance to build support for other developing alternative blockchain technologies aside from Bitcoin. This ongoing evolution towards peer-to-peer payments will eventually doom companies like Visa to the same fate as Blockbuster. Those in power may champion the benefits of going cashless, but going bankless may be the only way out of this extortion matrix.

The efforts by governments and the financial industry to eliminate cash are only going to intensify. Those who adapt to the new paradigm of peer-to-peer payments will thrive, while those who don’t will have their hard earned money extracted to support a failing system. The illusion of banks being safe should have been shattered after the 2008 crisis, but eventually, the reality of how unstable the current institutions are will become apparent. Educating entrepreneurs and businesses on the benefits of Bitcoin and other decentralized options is the only way to shift this economy away from the control of central planners and towards a free and voluntary market.

Political Disorder Syndrome - "Refusal To Reason Is The New Normal"

Authored by Daniel Henninger, op-ed via The Wall Street Journal,

Public Theater should cancel its Trump assassination play... But it won’t.

James T. Hodgkinson, who on Wednesday shot Republican Rep. Steve Scalise and four others, posted this on his Facebook page March 22: “Trump is a Traitor. Trump Has Destroyed Our Democracy. It’s Time to Destroy Trump & Co.”

Sitting in the dying light of World War I, the poet T.S. Eliot wrote, “I had not thought death had undone so many.” What’s our excuse? Displays of political or social excess seem to be everywhere. Whatever once fastened the doors of people’s minds to something secure and stable has become unhinged.

Some thought the apotheosis of political derangement had been reached when celebrity Kathy Griffin posted a video of herself holding the bloody, severed head of Donald Trump.

But that wasn’t the end of it. We may assume that as Ms. Griffin was creating her video, the artists at New York’s Public Theater were rehearsing their production of “ Julius Caesar, ” the one in which Central Park audiences watch Caesar as a blond-haired Donald Trump, who is pulled down from a podium by men in suits and assassinated with plunging knives.

The news site Axios runs stories regularly about journalists who have been suspended or fired because of their unhinged postings on Twitter . After Donald Trump used a tweet to revive his long-running feud with the mayor of London amid the June 3 killings, CNN personality Reza Aslan tweeted that Mr. Trump was a “piece of s—.”

Some take comfort that these displays did not go unpunished. CNN wrist-slapped Ms. Griffin by dropping her as co-host of its New Year’s Eve show with Anderson Cooper. Delta Air Lines , American Express and Bank of America withdrew their sponsorship of “Julius Caesar,” though New York City’s Democratic Comptroller Scott Stringer said their pullout “sends the wrong message.”

Advertisers must wake up every morning wondering what political meteorite will hit them next. J.P. Morgan Chase pulled its ads this week from NBC News rather than be associated with Megyn Kelly’s prime-time interview with Alex Jones to discuss “controversies and conspiracies,” such as his notion that the Sandy Hook murders were a hoax. Ms. Kelly justified the interview in part on Twitter because Donald Trump appeared on Mr. Jones’s show and “our job is 2 shine a light.”

Donald Trump’s election has caused psychological unhingement in much of the population. But the Trump phenomenon only accelerated forces that were plummeting in this direction before the 2016 election.

Social media—a permanent marinade for the human brain—is causing a vast, mysterious transformation of how people process experience, and maybe someday a future B.F. Skinner will explain what it has done to us.

Impossible to miss, though, is how jacked up emotional intensity has become in American politics. The campaign rallies of both Mr. Trump and Bernie Sanders often sat on the edge of violence. Reporters describe political town hall meetings as full of “angry” voters. Shouting down the opposition in these forums or on campus has been virtually internalized as standard behavior. Refusal to reason is the new normal. And then the unreason is euphemized as free speech.

Explaining away these impulses as a routine turn of the populist political cycle is insufficient. Something more permanent is happening.

I remain fascinated with the case of the 10 incoming Harvard freshmen who celebrated their achievement by posting a series of remarkably repulsive, violent photographic memes on Facebook. One said abusing children was sexually arousing; another described the hanging of a Mexican child as “piñata time.”

What those no-longer Harvard students had done was create a “private” Facebook messaging board, where they somehow felt free to mock and subvert current social convention. They aren’t alone. The website Reddit, which has about 500 million monthly visitors, became known for similar “anonymous” bulletin boards on which men, for example, exchange outrageous sexual postings.

We negotiate much of daily life now in tense, parallel universes: One is overflowing with individual political and social behavior that is deviant—flights from the norm—at a time when broader norms of political and social behavior are enforced with a vengeance. Today you can get shamed, sued or fired for almost any conceivable offense.

In reaction, millions of people—including the president—seem to regard social media as a kind of wildlife refuge, where they can run naked against society’s dammed-up personal and political opinions.

The possibilities for psychological dislocation are limitless. Kathy Griffin justified her beheaded-Trump stunt by arguing, “I’ve dealt with older white guys trying to keep me down my whole life. . . . This is a woman thing.”

We know that political anger and violence can become mystical in its attraction, especially at the margin for people like political shooter James Hodgkinson. This is a good moment to dial it back. The Public Theater’s management could cancel their staged Trump assassination in Central Park. But they won’t. Like so many others with political disorder syndrome, they no longer can.