Additional Titles








The Difference Between Wealth and Profit








PART 1 of 2


By Marilyn M. Barnewall
October 23, 2011

This series of two articles deals with tidbits of information. I usually focus on one subject… today is different. Things are happening so fast (and furious).


Did you know that the White House has notified all military funeral service departments to immediately remove the words “the President” and insert the words “Secretary of Defense” from the funeral services of veterans? The sentence has traditionally been: “On behalf of the President of the United States and a grateful nation, I wish to present you with this flag in appreciation for your husband’s (or son’s or daughter’s) service…” With these words, the American flag, so carefully folded for this moment, is given to the appropriate family member.

An officer who gave the flag to a family member after using the words “The Secretary of Defense and a grateful nation…” was approached by the recipient’s nephew. This information was brought to my attention via an email. I checked it out with Snopes. The nephew asked the flag presenter why the words “Secretary of Defense” were used rather than the traditional “President of the United States.” His answer: “The White House notified all military funeral detachments to immediately remove ‘the President’ and insert ‘the Secretary of Defense’. Though Snopes is a bastion of liberal thought and gives a long rationalization as to why it was done, it is true.

Why is this important? It shows the total lack of respect America’s President has for us, our military, and their families.

AYN RAND QUOTE FROM ATLAS SHRUGGED: "When you see that in order to produce, you need to obtain permission from men who produce nothing; when you see that money is flowing to those who deal, not in goods, but in favors; when you see that men get rich more easily by graft than by work, and your laws no longer protect you against them, but protect them against you. . .you may know that your society is doomed."


Everyone, regardless of political party, should watch this very short video (click here). This is a fabulous show of Herman Cain doing his own rendition of John Lennon’s song, “Imagine.” What a great sense of humor and what singing talent Cain has! If the guy wasn’t the former Chairman of the Board of Governors at the Kansas City Federal Reserve, I’d support him. He was at the KC Fed for four years… a member of that Board for two years, and Chairman for two years. If not for that, Herman Cain would have my vote in a heart beat. I love the guy… but I don’t trust former Federal Reserve Board Chairmen.

During the CNN broadcast of the most recent Republican debates, Cain took a beating from other candidates over his 9-9-9 plan. He’s a self confident adult male and we will hear no suggestions of racism from him. This is a strong man who will never be anyone’s victim. Everyone is after Cain because he’s pulling ahead of the field and leaders are always attacked by the pack of dogs behind them. As it happens, 9-9-9 is vulnerable.

Perhaps you’re not as suspicious as I am, but when an obvious question that should be asked by the mainstream media is not asked, there is a reason. No one is asking Herman Cain about his four years of service with the Fed. Why? Since the economy is the number one issue of this political campaign season, it’s one of the most significant questions that could be asked. Among conservatives, no institution is more distrusted than the Federal Reserve System. None is more disliked. Since conservatives see the Fed as the greatest villain in American history, and since no Republican candidate can be elected without conservative support (especially since the Tea Parties and Liberty Action Groups came into being), this is a key issue. It makes the reason the mainstream media and O’Reilly and Hannity are ignoring it – questionable.

Is Cain a Trojan Horse? Is he being walked into the middle of what will appear to be a primary victory only to have this disclosure upset the apple cart – and will we get stuck with Newt Gingrich? Newt is the best-qualified candidate on the debate stage. He is also the most ethically challenged. Lacking an evident moral compass, he is also the most “buyable.” Newt showed his true colors when he had a Republican Congress and prostituted the Contract With America. Many of us haven’t forgotten.

Michelle Bachman is right about Cain’s 9-9-9 Plan. It is a VAT (Value Added Tax – see definition below). After watching Cain’s video, consider this:

“Imagine... there’s no bread;
Just because of the Fed;
Imagine... you can’t dine;
Because of 9-9-9.”

To explain why 9-9-9 equates to a value added tax, look at the creation of a loaf of bread.

The farmer delivers whole-wheat flour to the mill... he must pay a Herman Cain 9 percent tax on farm profits (and passes the 9 percent cost on to the miller). The miller delivers the flour to the wholesaler and must pay a 9 percent Herman Cain profit tax on the transaction (and passes the 9 percent cost on to the wholesaler). The wholesaler delivers the flour to the baker... the wholesaler must pay a Herman Cain 9 percent tax on the flour sale (and passes the cost on to the baker). Imagine... every item that goes into a loaf of bread (from yeast to eggs to whatever...) will go through the same profit taxing process. The baker has to pay that 9 percent increased cost on every item that goes into a loaf of bread. Who do you think will pay the additional cost? If you said the consumer, go to the head of the class!

That is what a VAT is... accumulated taxes on a product as it goes through the process of being created. The above example is just about a loaf of bread. Picture that same process in the building of cars, airplanes, digital cameras and phones, computers... more complex instruments with hundreds or thousands of parts and chips. Each company that sells one of those parts to build that more complex instrument will have to pay Herman Cain’s 9 percent profit tax on that part. How do you think that will impact airfares? Automobile costs? Food costs?


Does 9-9-9 still sound good to you? If so, you might want to contemplate the 16th Amendment, which hasn’t been repealed. The 16th Amendment allows the Congress to levy an income tax without apportioning it among the states or basing it on Census results. Why is it whenever anyone talks about the Flat Tax or a National Sales Tax, they don’t talk about getting rid of the 16th Amendment – which, until it is repealed, gives the Congress the right to charge both a flat or sales tax and an income tax? Think it through.

Too, Herman Cain says there is no need for an audit of the Federal Reserve. He says if you have a question about what the Fed is doing, call them and ask. They’ll give you an answer.

If the Fed’s answers can be trusted, why did it take Ron Paul years to get a partial audit of that private corporation? Did Cain miss the result of the partial Fed audit (to which Bernanke strongly objected) proving the Fed made $16 trillion in very low-cost secret loans to major investment banks on Wall Street in 2010? The Fed also made trillions of dollars of secret low-interest rate loans to numerous foreign banks in Germany, France, and Japan. They also loaned to major international corporations. This is not Internet gossip. Go to Senator Bernie Saunders’ Web page and read this result from the audit yourself. There is little (if any) doubt that America’s economic woes result from the policies of the Federal Reserve System – of which Herman Cain was a very active member for four years. If the Federal Reserve System had given honest answers to questions asked of it, we wouldn’t be in this mess, Herman. Surely by now the American people understand that taxpayers pay for Fed debt… look at your cancelled income tax checks each year. Who cashed them? If you think it’s the Treasury Department, think again.


These topics “go together.”

When you borrow money for a major home improvement, what asset is used for bank collateral? When you borrow to help put your kid through school so he/she won’t be paying federal student loans off for 20 years after graduation, or when you borrow for a long vacation or apply for a personal line of credit, what asset do you use for bank collateral? If you’re like most people, it’s your home.

Commercial banks, generally speaking, do not write a lot of first mortgage loans. Savings banks and mortgage companies write most first mortgages. Commercial banks have, until the current banking crisis, taken a lot of second mortgages on homes for other long-term credit needs. Since property values have fallen so drastically, there is no longer sufficient equity in most homes to serve as collateral on the first trust deed (the mortgage), let alone collateralize a second loan. A home that was worth $200,000 may now be worth $150,000 – or less. When the first mortgage is factored in, a large percentage of homes have nothing called equity remaining. If you’ve wondered why there is a “credit freeze,” you might want to keep this in mind. Add to that the always-escalating unemployment and failing businesses statistics. Both cause severe limitations in gaining access to credit.

Enter bank auditors (from the FDIC or the Office of the Comptroller of the Currency). Banks still have a large number of long-term loans collateralized by second trust deeds on their books from pre-2008 when the real estate market crashed. Most of the loans secured by a second trust deed represent houses with too little (or no) equity. Thus, the house is no longer a valid form of collateral. The bank often calls people with such loans and demands additional collateral… even though the borrowers haven’t been a day late with a payment. Most people have gone into savings to pay for things; most don’t have additional collateral to offer (especially since the car isn’t paid for and since it serves as collateral for the car loan, it has no equity value, either). The bank has, for all practical purposes, an unsecured loan. It may have a second trust deed on your home to collateralize your loan, but your home has no equity beyond the first mortgage which it also collateralizes.

As a result, when bank auditors look at the bank’s loan portfolio, they see a bunch of unsecured loans…, which are far more likely to represent a loan loss to the bank than do collateralized loans. The auditor grades the loans because without equity in the home as collateral, the bank’s risk quotient has increased substantially. A time frame for collection is imposed on the bank by the auditors and the borrowers (who are shocked because of the changed terms in their loan agreement because they are not behind in any payments) cannot meet the new terms. A loan loss has been created. The credit rating of the bank is lowered; it is a likely target for an FDIC takeover – and the bank will likely be sold to one of the too big to jail guys. Remember, that’s how J.P. Morgan made his fortune… create an environment that causes your competition to fail, then buy them. Would I suggest that Daddy Government would aid and abet in the failure of one bank so another, bigger one could buy it? Please!

Subscribe to the NewsWithViews Daily News Alerts!

Enter Your E-Mail Address:

Be careful not to listen to all of the “banks aren’t lending… we’re the 99 percent who aren’t getting anything… redistribute the wealth” psychobabble commentary coming from the Occupy America crowd. When people talk about “social justice,” the word social is used for a reason. I have a hard time believing the stories about Tea Party members joining this group. I understand their frustration, but not their willingness to join with a bunch of socialists so they can get it off their chests. Good grief! Wake up!

For information about the dangers of buying foreclosed homes, the $53 trillion the Fed and Bank of America just added to FDIC potential liabilities, and the legitimate reason behind “too big to fail,” read Part II of this Series Wednesday.

Click here for part -----> 1, 2,

� 2011 Marilyn M. Barnewall - All Rights Reserved

Share This Article

Click Here For Mass E-mailing

Sign Up For Free E-Mail Alerts

Marilyn MacGruder Barnewall began her career in 1956 as a journalist with the Wyoming Eagle in Cheyenne. During her 20 years (plus) as a banker and bank consultant, she wrote extensively for The American Banker, Bank Marketing Magazine, Trust Marketing Magazine, was U.S. Consulting Editor for Private Banker International (London/Dublin), and other major banking industry publications. She has written seven non-fiction books about banking and taught private banking at Colorado University for the American Bankers Association. She has authored seven banking books, one dog book, and two works of fiction (about banking, of course). She has served on numerous Boards in her community.

Barnewall is the former editor of The National Peace Officer Magazine and as a journalist has written guest editorials for the Denver Post, Rocky Mountain News and Newsweek, among others. On the Internet, she has written for News With Views, World Net Daily, Canada Free Press, Christian Business Daily, Business Reform, and others. She has been quoted in Time, Forbes, Wall Street Journal and other national and international publications. She can be found in Who's Who in America, Who's Who of American Women, Who's Who in Finance and Business, and Who's Who in the World.

Web site:

E-Mail: [email protected]









Is Cain a Trojan Horse? Is he being walked into the middle of what will appear to be a primary victory only to have this disclosure upset the apple cart – and will we get stuck with Newt Gingrich?