IBC For Business Owners

By Carlos Lara

 L M R O C T O B E R 2 0 1 2

(Author’s Note: This Chart is reprinted here in the Lara-Murphy Report with permission from Casey Research,


You are looking at a chart that makes an incredible statement. What it shows is that businesses are sitting on an enormous amount of cash. In fact, they are holding more cash (broadly defined to include MMMFs) than has been held since World War II, and even if we focus on cash in commercial banks proper, they are holding more as a share of the economy than at any time since the mid-1960s. A whopping $1.4 trillion worth of cash to be exact! The question is why?

If you are self-employed, or are a business owner, you can probably answer this inquiry rather quickly given a moment to consider it. In times of great financial uncertainty businesses intuitively know that first—you need cash to maneuver and second—you need to be able to access that cash immediately when you need it. Maintaining a liquid position in an economic environment such as what we have today is simply practical sense. Cash and cash flow are more important factors than having a strong balance sheet, especially if that balance sheet is weighed down with illiquid assets. However, it is well worth the time for us to seriously consider all sides of this unusual situation. It is the first time in my experience that anyone has developed and published such a graph telling the story that really makes you think.

 Let me be quick to point out that Dan Steinhart of Casey Research 1 made it very clear in the article he wrote associated with this chart that this cash pile did not include the cash holdings of financial institutions or banks. Only non-financial corporations are depicted here. By this he means that only corporations that actually produce and sell products and services make up the $1.4 trillion in this chart. That’s an important distinction.

 There are a few other significant details in the big picture we are seeing here that we do not want to overlook. By pointing them out I believe we can all benefit from the exercise. As we study this chart reflectively I would hope first of all that it would help reassure us that Privatized Banking is indeed the best possible financial strategy to use in our own businesses during unpredictable times such as these.

Secondly, I would hope that it would serve to impress on us how plentiful the “field of harvest” is for sharing this marvelous idea with business owners.

After all, our goal is to actually convert 10% of the people to implement privatized banking in their financial lives because of the good it can do for them and the overall economy. The point is, there is no more qualified sector of individuals and entities that can benefit from the use of it. Here they all are in plain sight with plenty of money to immediately capitalize their private system.

See the big picture correctly.

First, we must be certain that we understand our present circumstances as they really are and not the way we would wish them to be. Recall briefly that once the smoke had cleared from the recent 2008

financial crisis many businesses actually went broke and closed forever, millions of jobs were lost, and entire life savings vanished. The severity and rapidity of this particular financial crisis caught just about everyone by complete surprise, with the notable exception of Austrian-trained analysts. This event and the experiences that came with it were unusually harsh and detrimental. With the dramatic crash of the stock market and its erratic behavior the months following, coupled with the collapse of the housing market, Americans were left wondering how to protect whatever money they had left. No one, at that time, was confident in giving an adequate answer.

If you happened to be debt-free, owned your home outright and were not invested in the stock market, you were among the fortunate individuals.

Main Street business owners suffered the effects of this crisis in other ways. Most experienced a sharp drop in their revenues, a dramatic rise in expenses, and plummeting profits. Like a string of falling dominoes, economic disaster went around the entire country. What was worse, banks began calling loans from many business owners and their lines of credit were cut off. Under those circumstances the only survival remedy was to immediately cut expenses by laying off employees and conserving cash. It worked for some, but not all businesses were able to survive.

 This event was a defining point in American history that we should mark well and never forget. So many things changed that may forever be irreversible. Keep always in mind that the catalyst for the crisis began with government-mandated banking institutions.The reality today is that our economy has not improved since 2008. To see reality, we must volitionally ignore what the  mainstream media is telling us.

In fact, things have worsened. Of the few positives in the last four years, our ability to see the severities of the problems more clearly provides us an opportunity to evaluate our next moves more carefully, whatever those moves may be. What we now realize with great frustration is that the economy is being artificially propped up by excessive money printing and government stimulus rather than private sector production and manufacturing. The country is drowning in debt and government spending is out of control. The future obligations and promises the government has made to the American people are positively unsustainable, and instead will increase everybody’s taxes. More money will be printed to make up the shortfalls. This will surely create even greater stress on the economy. The pressure on the system is already so severe that U.S. Treasuries and

the U.S. dollar are poised for a sharp collapse. In the immediate interim, no matter what the Fed Chairman’s promises, interest rates could suddenly spike and inflation run rampant. We all intuitively sense this, but no one understands this capricious scenario better than the business owner, hence the dramatic hoarding of cash demonstrated in this graph.


The gulf between cash and gold is still very wide.

Given our current situation is it time to take all that cash and plunk it into gold? By the size of the stash it seems obvious that business owners could pull that trigger if necessary at any moment, but they haven’t. Why not?

This is a common and piercing question. We have all thought about it. Could it be that the flight to gold has not fully happened simply because businesses are not fully convinced it is quite that time just yet? Use yourself as an example. What are your reasons for not fully converting to gold? If the very foundations of our entire financial system (Treasuries and the U.S. dollar) actually crash, even privatized banking will be undermined, then everything collapses. If and when that happens, yes, at that point we will all wish we had something of real value to rely on and that something has historically been proven to be gold.

Most likely, the reason you have not fully converted to gold yet is because you are evaluating the economic situation much like everyone else. You are aware that the country is limping along badly, but you see that it is still running. Even you are still operating your own business and no matter how tight you have had to pull on the expense belt these last few years, you are in fact still operating. You may have actually made a little money. Many businesses have. Plus, you can’t just stop. You have to eat! What you do know most assuredly is that in order to keep operating your business you absolutely need cash and credit to do it. You can’t produce, buy and sell goods using only gold. Gold is not the currency of exchange here in the United States. It’s only an investment.You can’t eat an investment unless you sell it in order to buy food.

 Even assuming this was not exactly your problem and you could convert to gold right now— where would you store it? How comfortable are you converting to gold knowing that the government has confiscated the people’s gold before? Everyone has become keenly aware of the increase of government intrusion into our lives, certainly not its decrease.

So, is the answer simply to buy gold and then send it abroad under someone else’s care? Actually, I believe that because of the seriousness of our current economic environment more people would not only convert to gold and send it abroad, but would also leave the country all together if they felt confident  that they had enough money to last them the rest of their lives. In fact, those that are that confident  have quite likely left already. Most of us, however, are not that confident, nor are we willing to cut our living standards that severely. (There are also people like Robert and me who are choosing to stay and fight it out to the bitter end—because we are convinced it is our duty to do so, and because we know that our material life on this earth is fleeting in the grand scheme.) But the point I am making is that living abroad without enough money simply is not feasible long term. How would we make a living?

We would have to go to work somewhere or start a business, but doing what? What country would we choose that is actually free from “banksters” and big government? It obviously requires a great deal of planning and the whole plan is rather iffy. The fact is that when it comes to the matter of converting all of our assets to gold the predicament for individuals as well as for businesses is much the same. What stops us is money. The gulf between cash and gold is still very wide. Most people are not ready to leap that far just yet.

 What we need, you see, is an interim strategy. This is exactly what we have and what we can show our fellow business owners. Privatized Banking, as best described by Nelson Nash’s Infinite Banking Concept (IBC), is the ideal strategy for turbulent times such as these. What is most revealing about the corporate cash chart is how so few businesses know anything about it; otherwise they would be utilizing it and these cash balances would not be sitting in banks. We need all of that $1.4 trillion deployed into Mutual Life Insurance Companies where these business owners can, through their banking policies, become actual owners of the mutual.

“Think about this, it’s important:

• If these businesses could conjure up even the most marginal of projects to earn a meager 1% return, they would generate a $14 billion profit.

Instead, they’re sitting on the cash (in the banks)and earning near zero for a guaranteed after inflation loss.”

Why? —Because they are scared! Business owners, like everyone else that genuinely cares about the state of the economy, are not really sure what is going to happen next. This is a legitimate and worldwide concern. For sure, their back-up money is presently not parked in the stock market. But there is no evidence that it won’t soon find its way there.

What we do know is that business owners typically are not as motivated like the masses by those types of investment returns, especially with recent stock market upheavals such as the record bankruptcy of MF Global and other such fiascos. Too many businessmen have already been burned to carelessly reenter the market under these economic conditions, unless there are no viable alternatives. (This should be our wake-up call to introduce them to the genius of “banking policies” as the temporary warehouse for their money).

Business owners know all too well that the highest rate of return can be best earned by reinvesting in their own businesses. Ironically, however, by their current judgment the risk of investing in new business projects seems to outweigh the rewards. Fear is an interesting phenomenon that can either motivate or paralyze. Right now business owners are paralyzed. Coincidently, this just so happens to be the identical stance commercial banks have taken these past four years with their lending practices even though they too are sitting with excess reserves of $2. 1 trillion and could make all kinds of business loans. Together, businesses and banks are currently producing the direct opposite conditions needed for a thriving economy, but for entirely different reasons.


Not all businesses and corporations are the same.

By far the spookiest and most revealing information coming from the corporate cash chart is how much cash is sitting in commercial banks, apparently safe and sound—ready to be accessed. Can you believe your eyes? To me, this appears as the riskiest position for one’s liquid capital to be housed in.

Have we not learned anything from our own past experiences? In the past four years sound thinking individuals have repeatedly witnessed how the Federal Reserve’s controlled commercial banking system—extending to Wall Street investment banks through the use of re-hypothecation—practically gutted the country. Billions were syphoned into their own pockets with impunity and America basically stood by and gave it to them. No president, no Congress, no Supreme Court, that I know of, even as much tried to stop them. They fined them in pocket change. That’s because what big bankers do is legalized.

Unfortunately, here is where we spot humanity’s ultimate weakness in forgetting history all too soon.

The truism “history repeats itself ” reverberates today as I stare at this graph and see where all this money is sitting. Still, I cannot help but to sound the alarm bells. I hope you feel the same way too.

Remember: Today’s commercial banks are not real business and corporations like yours and mine.

They are unique enterprises that have over the centuries confiscated, through government-mandated monetary policies, the sound institution of “banking” for their own private use. They operate in another sphere within our capitalistic system utilizing a money monopoly. Our money, which is never fully under our control since it is fiat money, is also never safe, especially when it is placed directly in bankers’ hands.



If by chance the message in this article finds itself in the hands of a fellow business owner, here is what I would most want that individual to know about Privatized Banking.

First: Privatized Banking, in the strictest sense, means the return of money and banking back to the private sector where it once belonged. It is encapsulated in the three-steps of the Sound Money Solution.

Only true IBC Practitioners can explain the intimate connection between IBC and the Sound Money Solution because they are students of Austrian Economics, the only true economic science of the free market economy. They are not Keynesians. Keynesian Economics, which is the foundation of our current monetary policy, is the reason our country is in such terrible shape.


Second: Privatized Banking, in its metaphorical sense, is best described in the book Becoming Your Own Banker by Austrian R. Nelson Nash, founder of the Infinite Banking Concept (IBC). You must read this 100-page pamphlet as your very first step to pick up the idea of Privatized Banking.


Next, you will want to read the more extensive book, How Privatized Banking Really Works, by L.

Carlos Lara and Robert P. Murphy, PhD, which will explain in more detail the nuances of Austrian Economics, the Sound Money Solution, and Privatized Banking. Together they are the official textbooks of the Infinite Banking Concept (IBC).


Next, you will want to meet or speak with an IBC Practitioner. Once you do, think carefully on what the IBC Practitioner is explaining. His efforts are genuinely noble and your experience with him or her is sure to be unlike that you may have with any other financial professional you will ever meet. This is because he has been educated to see the U.S. financial system the way it really is.

The IBC Practitioner can help insulate you from the chaotic economic environment we are all experiencing, as no one else can. His ultimate goal reaches beyond you to the outer rims of the economy. His aim is to help you, himself and, with the help of other IBC Practitioners, actually help change monetary policy. All this he is equipped to do by using the most creative, legal and peaceful financial strategy ever conceived—Privatized Banking.


Third: Many financial professionals claim to be IBC Practitioners, please practice due diligence.

The true IBC Practitioner will be able to easily verify his credentials, or you can check directly with the Infinite Banking Institute at www.infinitebanking.org. All Certified IBC Practitioners will be listed for the benefit of the general public this Spring 2013.More importantly, when using Privatized Banking make sure you understand that you are not really opening up a bank like the one in your neighborhood.

Instead you are using a centuries-old financial instrument, a life insurance policy, from a Mutual Life Insurance Company (not a stock company), not so much for insurance purposes, but as a warehouse for your money. Ownership of a policy with a mutual company means ownership in the mutual company itself. The policy itself must be specially designed for it to work as a banking policy and be of a certain kind. Your IBC Practitioner will know exactly how to do all of this and will be able to explain the enormous benefits this banking policy will provide you. These benefits are numerous and can range, from the flexibility of having ready access to your money when you need it, to providing an inflation hedge and tax free advantages all while being able to use it as a financing system for all your big ticket purchases for yourself and your business.


I wish you the very best as you encounter the IBC experience. My only request is that once you implement this action plan and begin to benefit from the results that you share IBC with others.



1.1.Are Businesses Quietly Preparing for a Financial Apocalypse?, Article, by Dan Steinhart, October 9, 2012,http://www.caseyresearch.com/articles/are-businesses-quietly-preparing-financial-apocalypse

2.Are Business Quietly Preparing For A Financial Apocalypse?

L M R Oct 2012 IBC+for+the+Business+Owner


April 3, 2014 · Jennifer · No Comments
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