This is the short version. You can find the full interview here.

We recently caught up with Thomas Woods the author of the best selling book Meltdown. Learn what he has to say about auditing the Federal Reserve (FED).

Currently, over 300 Congressmen Republicans and Democrats in the House Of Representatives have co-sponsored a Bill HR 1207 – dubbed Ron Paul’s Audit the FED Bill, which would allow Congress to audit the FED.

With the national debt spiraling out of control and fiscal policy seemingly unmanageable, many taxpayers want to see the FED audited. The proposed bill will force the FED open their books to the US taxpayers and their Representatives.

FED Chairman, Ben Bernanke and US Treasury Secretary, Tim Geithner, according to Thomas Woods, are deeply concerned about the possibility of the FED being audited. What is even more suspicious to Woods is that Tim Geithner has publicly expressed concerns although he is not part of the FED.

You can learn more about Thomas Woods here

http://www.thomasewoods.com/books/mel…

Today my opinion of our banking system dropped a couple of notches from its already-low point on the respectability scale.

About an hour ago I needed to go to the ATM. I was on foot several blocks away from my bank, but there were two other banks within one block. To avoid ridiculous ATM charges, I decided to do a cash advance off my debit card. Exact same result as an ATM withdrawal, but without the unexplainable fees.

I had actually done this a few times over the past year at this particular bank. I walked in, handed my driver’s license and my debit card to the teller and said, “I need a cash advance for $500 please.”

Everything proceeded as normal. She came back about 2 minutes later, handed me the debit card and said, “I’ll be right back. I have to make a copy of your license.” Then she returned, gave me my license, and asked how I wanted the bills. “Four big bills and the rest in 20s please,” I replied. She counted out four 100s, two 20s, and then searched all over her workstation for 20s.

“I only have two 20s,” she told me.

I just looked at her. I wanted to ask the question most would ask: “Am I in a bank?” But I didn’t want to be facetious. Instead I just stared at her and let her words echo in her own head.

How silly is it for a bank to not have more than two 20 dollar bills in it? Obviously this wasn’t the case, but it’s still silly for a teller to be so lazy that she doesn’t automatically get more 20s. This part of the visit isn’t what lowered banks on my respectability scale. Eventually, she found the needed 20s in another drawer.

She handed my the money and then said, “Now all I need is your fingerprint on this receipt here.”

[insert buzzer sound]

Wrong. Sorry, the transaction is over. The opportunity to have a real chance at invading my privacy has surely passed. The money is already in my pocket and the signature ink has already dried on the receipt.

“I refuse,” I replied.

“What?”

“Can you tell me why you need my fingerprint?”

“We just need to get it for the cash advance.” Hmm… this brought back childhood memories of “Just because!”

I explained, “There is no legal requirement, so I refuse your request. You can write that on the receipt. Thank you.” And I left.

On my walk back to my office, I was thinking about whether I would have refused if she had asked before giving me the money. I know that in the past I had given my fingerprint for cashing a check at a bank. I admitted to myself that I may have given my fingerprint to the bank just then if the teller wasn’t so unprofessional about the order in which she processed my cash advance request.

We are traveling light years away from the liberty our country was founded on… one millimeter at a time in the name of convenience, safety, and security. Next time that a banker asks me for a fingerprint, regardless of the circumstances, I will refuse.

To illustrate, albeit in a different scenario, why our privacy is so important I’ll draw your attention to something that should surprise you as much as it did me. Here’s a law school professor giving a lecture on why you should never talk to the police:

Just a bad apple at the ACORN office in Brooklyn? Not exactly. The videos below show similar assistance with setting up a child prostitution ring from the ACORN office in Washington, D.C.

This becomes extra troubling when you see Obama committing that ACORN and other related organizations will be shaping the agenda of his presidency even before it starts!

Hmmm…. these are the same guys who Obama used to represent in court and train on community activism. They might have also rigged the election in Obama’s favor:

This is just the tip of the iceberg on how our current administration is no less corrupt than the previous. You should also check out the book Culture of Corruption by Michelle Malkin to dig deeper into Obama’s dubious circle of friends and colleagues.

Do you pay for your groceries? Well have I got a product for you. With grocery insurance you’ll never have to pay the grocery bill again. Don’t let those greedy grocery stores take all your money!

What Can I Do?

Demand that your employer include grocery insurance as part of your employment benefits. Groceries are getting expensive! Insure yourself against rising prices and pay only a $1 co-pay each time you shop at the grocery store.

Coming soon…

Electricity insurance – Stop paying for your electric bill like a fool. Instead just present your electricity insurance card. Don’t let the power companies take you for a ride. Demand that your employer provide you with electricity insurance like any decent human should have. Stop being denied your rights to free electricity.

Entertainment insurance – Armed with your new entertainment card, you’ll be able to watch a movie at nearly any theater and have a beer at any decent bar in the entire country. Included in coverage is one flat screen TV purchase per year,  up to 70 inches. You can also use your entertainment insurance for cable packages of up to 400 channels, excluding pornography and Ben Affleck movies.

[insert sound of record scratching]

What the heck?! That’s not insurance!

Really? Let’s consult wikipedia.org:

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss.

A hedge against the risk of loss. Let’s visit the oldest form of insurance: property insurance. If you own a house or car, you should be familiar. Let’s examine what a “full coverage” car insurance policy actually covers:

• Liability – In the case of an accident, if you get sued the insurance covers the payout and cost of the law suit
• Collision – In the case of an accident, this covers the repair or replacement of your car
• Comprehensive – This covers the repair or replacement of your car in the event of fire, theft, vandalism, and severe weather
• Uninsured/Underinsured Motorist – In the case of an accident where the other driver is a fault and does not have adequate insurance, this feature still covers the damage or loss
• Loss of Use – While your car is being repaired or replaced after an accident or claim, this feature covers the cost of temporarily renting a car
• Gap Coverage – This covers any negative equity in the event of a total loss on a car that was worth less than balance owed on the loan against it
• Towing – This covers the cost of towing your car after an accident

Do you see any common thread interwoven into each of the items covered by car insurance? They all involve an undesirable or unexpected incident to occur. Notice that the following is not covered by any car insurance policy:

• Gasoline
• Windshield Wiper Fluid
• Brake Pad Replacements
• Tire Replacements
• Belt Replacements
• Spark Plug Replacements
• [other component] Replacements

But Seriously…

When you started reading about grocery insurance and electricity insurance it probably seemed silly to you, as it should. Because insurance is supposed to cover damage or loss. I eat food from the grocery store not as a result of damage to my body, but because of a regular need. It takes no catastrophe for me to use electricity. I want electricity. Accidents and catastrophes are undesirable and unexpected. Groceries and electricity are desirable and expected.

While grocery insurance and electricity insurance sound silly, the same principles applied to health insurance sound “normal.” Getting a cold every now and then is expected. Getting periodic exams at the doctor’s office is not only expected, but desirable. So why does insuring the expected and desirable seem sensible with health insurance and ludicrous with grocery insurance? No good reason.

Remember, cigarettes used to be viewed as good for our health. Heroine and cocaine used to be medical treatments. We used to have leaches suck out our blood to treat illnesses. We used to do a lot of stupid things. And insuring expected and desirable medical treatments will eventually join the ranks of the stupid past.

Remember, low-deductible insurance is a scam. Even a stupid 20 year-old can see that, as we discussed last week.

A scam, really?

The insurance company simply can’t collect less from you than they pay out to you over the course of regular, expected events. That’s just not how the world of money and business works. They have to make a profit. They have to collect more from you than they pay out to you over the course of regular, expected events. In some circles, this is known as “getting screwed.” So stop doing it.

Contrary to the tongue-in-cheek introduction, I now have an earnest request: Demand that your employer allow you to opt-out of its insurance plan and raise your pay by exactly the amount of the insurance premium eliminated. Then get a policy with a deductible of at least $2,500 and save the savings in a special “I’m a grown up, I swear” jar or savings account.

See you at the grocery store  

Let’s just get right to the bottom of what people want: inflation in their income and deflation in their expenses. (Allow me to diverge from the proper definition of inflation in this post; Here I’m talking about price inflation.)

Why do people want inflation? Because they think it symbolizes economic growth and progress. Yeah, that sounds warm and fuzzy. But what is being sought by the individual really? A better job. Almost there, keep going. More income. Bingo!

We think inflation is good because it will result in a bunch of stuff that, when reduced to the effect it will have on our individual lives, is manifested through more income. Great! Who doesn’t like more income? (Forget for the moment that incomes have not exactly been systematically rising over the past decade of inflation.)

Personally, I always prefer more income. Don’t you?

Just when these central economic planners seem to have it all figured out, in comes the other side inflation. What the @#$%! My expenses are going up too! And then the finger-pointing moves to the greed demons of capitalism:

• Healthcare is getting too expensive. We need the government to save us from the greedy health insurance companies.
• Gas is getting too expensive. We need the government to save us from the greedy oil companies.
• Food is getting too expensive. We need the government to save us from the…. errr… uh… greedy farmers? Yeah, the greedy farmers. That’s it.

Gosh, I guess this is the burden of living in a capitalistic society. These greedy bastards are making all our expenses go up!

What a tremendous coincidence, though. In capitalism, the existence of greedy price gougers encourages other entrepreneurs to begin offering competing goods and services. Where are all the competing oil companies, health insurance companies, doctors, and farmers who can take all of the business out from under the greedy pigs? An odd absence, perhaps.

Now let’s return to what we really want: inflation in our incomes and deflation in our expenses.

We want our food, energy, healthcare and [insert any other expenses here] to be cheap! The government can do that right? Can’t they just make a law that caps the price of all the stuff we buy? Let’s assume so and follow its effects all the way through.

We wake up tomorrow and gas is $1.00 per gallon. Everyone has health insurance with a $5 per visit co-pay. Feeding a person each month only costs $100 in groceries. Alas, a move towards a utopia! Okay, settle down, we have to finish following the effects of those new laws.

Let’s not forget that some people work in oil businesses, the food business, and the healthcare business. As mandated by law, we are all paying them less for their products and services. Guess what? The people who work in those businesses necessarily must now earn less. Well, everyone else is better off at large. It’s a small cost to create such a huge benefit of affordability to society. Maybe that’s what you think because you work in the computer businesses.

Let’s take a closer look at those people in the food/healthcare/oil business who make less money. Those people now have less money to buy computers. They also have less money to buy cars. And now the people in the car business are earning less and have less money to buy computers. Uh oh… less money is being spent on computers; Now you must take a pay cut or lose your job.  And now you see it all come right back to bite you in the rear. Deflation of your expenses was legislated through government onto some other people, but it’s indirect effects eventually led back to deflation of your income as well.

You see, we can’t systematically inflate everyone’s income and deflate everyone’s expenses. Why not? Because one person’s expense is another person’s income. Your income is someone else’s expense. If you are an employee, your income is the expense of your employer. But, even further, it originates as the expense of someone who bought products or services from your company. Additionally, your expense is someone else’s income. When you buy a product or service, the money you spend goes to paying the people involved in making, marketing, and delivering it to you.

Think of this as you observe the debate on healthcare, cap-and-trade, and any other government intervention into our freeish market…

The only way anyone can enjoy inflation of income and deflation of expenses as a result of a government action or policy is if the opposite effects are borne by someone else. Nonetheless, the government tinkers with our economy because those on the pleasurable side of the effects of the tinkering are made very happy. They vote for the tinkering politicians again and again. Heck, with the piles of cash coming in they can use some of that money to make sure their favorite politician is re-elected.

And what about those on the painful side of the effects of government tinkering? Further government tinkering is proposed as a way to solve their problems, and they flat out lack the economic education to realize they are being shafted. Well, why don’t we just get the government-run schools to educate them on econo——ohhh, I see what’s going on here.

So I followed his guidance. I got health insurance with a $5,000 deductible. It cost $34 per month. It was an insurance policy. Not a huge cost or a huge item of debate… but just something that would take care of things if anything freakish ever happened to me.

A year later I got a job working for a bank. After signing multiple pages of a huge employment package that I could not have possibly read, I was informed that I was now covered by their health insurance. Hallelujah!

Over the course of working there for two years, I used it once for a doctor visit when I was sick. I had to pay only $20. Awesome. At that point I was really appreciative to have such cheap health care. That is, until my head was pulled out of my rectum in the course of quitting my job.

A few weeks after I quit that job, I got an offer in the mail for a “COBRA” health insurance plan. If I signed up for it, my health insurance through my bank employment would continue covering me. All I had to do was pay the portion of the insurance premium that the bank had been paying for me previously. What a nice offer. I scanned through the letter to the bottom line: $400 per month!!!!

I know you may be asking yourself whether that fourth exclamation mark was needed. Indeed, it was. You see… I was 20 years old at that point. Had I not had low-deductible insurance during that two year period, the financial impact would have been as follows:

• The single doctors visit would have cost about $150 out of my pocket, instead of the $20 co-pay. Total effect: -$130
• The money the bank was paying for insurance premiums on my behalf would have instead gone to me. Total effect: +$9,600.
• Bottom line: $9,600 – $130 = $9,470.

I lost out on getting an extra $9,470. Do you have any idea what that means to a 20-year-old? To a spendthrift 20-year-old it means a motorcycle. A very fast motorcycle. Or a boat. Or a 2nd car. To a financially-saavy 20-year-old, it means an investment that would grow to $40,644 by the time I was 45 (assuming a 6% annualized return). Or if I were to continue working a similar job without low-deductible insurance and invest the entire would-be insurance premium, it would turn out to be $319,795 by the time I hit 45. Or $1.2 million by the time I hit 65!

Not only did I realize that my dad was right—low-deductible health insurance is a ripoff—I realized that working for any company that provides low-deductible health insurance is a ripoff. At the bank, I didn’t have a choice. I couldn’t opt-out and get a $9,400 raise. Because of laws and status quo, my employment at the bank required that part of my income be taken from me and given to an insurance company… but it’s not normally seen like that because I didn’t even know it should have been part of my income until I re-examined the situation after quitting and receiving the COBRA notice.

In fact, all low-deductible insurance is always a ripoff. How can you know? Just do the math! Get a quote for a high deductible car insurance policy and one for a low-deductible policy. Take the difference in deductible and divide it by the difference in monthly premium payments. That’s how many months you have to go without a catastrophe before the high-deductible policy saves you money. Worried about having to come up with the higher deductible in the case of an accident? Take that money you are saving with a lower deductible and put it somewhere! The math and probabilities are now on your side. Unless you are psychic or planning for insurance fraud, you are better off keeping your money in your own pocket by foregoing the high premiums that come along with a low-deductible insurance policy.

Take a step back for a moment and realize that insurance companies have to collect money from premiums and then payout money for claims. And then they have to have profit leftover. For catastrophic events that don’t happen often, they can afford to pay the claims because they don’t happen often. For ordinary and expected events, you have to pay them more than they pay you back. That’s how they stay in business. You are financing your own claims, but you are paying in more than you are getting out.

Another problem with health insurance is that when a person feels as if they aren’t paying for their own health care, they tend to try to get more of it, even if or when they don’t need it. This drives up health care demand and thus health care costs and thus health insurance premiums. And now Americans are arguing with each other about how to solve the problem of health care being too expensive. Just as more debt isn’t the cure to an economic recession cause by too much debt, more health insurance coverage isn’t a cure to health care costs that are rising due largely to health insurance coverage.

The bottom line is that anyone with a calculator and some geniune curiosity can call up any type of insurance company, get some quotes, and conclude that low-deductible insurance is a scam. It just costs the consumer more money, plain and simple.

There is no shortage of calculators, but there is a severe shortage of genuine curiosity.

In constant stupendous surprise to the government’s unfamiliarity with the law of supply and demand I endeavor to remind you, rational person. You aren’t so busy running the free world and you certainly have to foot your own bills, so I assume you are very interested in the real outcome of government-run healthcare. There are only two possibilities:

#1 – Higher Healthcare Costs

Part of the idea of the proposed healthcare bill is that it will result in more healthcare services being delivered to more people. The healthcare business likes this. Should you like this?

First, why would this happen? It’s because the people receiving the healthcare wouldn’t be directly paying for it. That results in them getting more of it. Do you eat more at a buffet than you do when ordering from an a la carte menu? Yes, because there is no direct cost to you deciding to get a few more servings of food. Removing the direct cost to healthcare will mean Americans getting a few more servings of healthcare. Inevitably, this would include unnecessary servings of healthcare.

Ask a doctor who works in the emergency room how often he or she sees patients that did not have a bona fide emergency or even a need for medical care at all, and the response will be “a lot.” This will only increase when the financial cost of medical care is even further removed from the parties to the actual care.

In short, demand for healthcare would rise, leading to a rise in costs. The last thing the government needs now is more costs. Also, Obama’s promotion of  this bill by saying it will “reduce the cost of healthcare for Americans” should raise a lot of suspicion when it’ impact is more likely to raise the cost of healthcare for Americans.

#2 – Reduced Availability of Healthcare

A cap (or reduction) of healthcare costs or spending would result in a cap (or reduction) of health care availability.

For this, we can easily look to Canada and England. Seeing a dentist in England is a later step of a bureaucratic process that starts with waiting in line behinds hundreds of people just to register for a dentist. The waits are so long that some people are pulling their own teeth at home!

Canadians who are allowed admission into hospitals are forced to wait an average of 23 hours. Over 1.7 million Canadians say they can’t even get a family doctor. Some towns hold lotteries where a couple of names are drawn out of a box each month to decide who gets to have a family doctor.

Back on the capitalism side of things, businesses have emerged that provide a much needed service for Canadians—arranging for treatment in the United States where they won’t have to wait. Such services have saved the lives of many Canadians who needed emergency treatment and would have been forced to otherwise wait to death in Canada. Perhaps the best eye opener for the state of healthcare in Canada is the superiority in some respects of healthcare for animals. A CT scan at a vet can be done tomorrow, but a CT scan for a person will take a month of waiting.

The basic law of supply and demand says that the only way to make something more readily available and cheaper is to reduce the demand for it.