While the media and the American public were all caught up in the firestorm of the confirmation hearings for Supreme Court Justice Brett Kavanaugh, the Federal Accounting Standards Advisory Board announced FASAB 56, a resolution that allows companies to alter and misrepresent their financial statements if it is deemed to be in the best interest of national security. In addition, the resolution allows companies to maintain secrecy to the general public about ever having misrepresented their financial statements, too.
It’s very interesting to note that this announcement came just months after former U.S. Cabinet Member Catherine Austin Fitts, along with Michigan State University Professor Mark Skidmore, discovered that more than $21 trillion had gone missing and unaccounted for between both the Department of Defense and the Department of Housing and Urban Development, with a very high percentage of the money having gone missing from within the Defense Department. Taking this even further, when Professor Skidmore announced that he had determined through published online government financial statements that the $21 trillion had gone missing and unaccounted for, the financial statements then suddenly disappeared from the internet.
So what this now means is that the financial statements of companies that are doing business with the government cannot really be relied upon, because if they are deemed to be falling within the provisions of FASAB 56, the companies can now legally misrepresent their financial statements to the public. But in keeping this in mind, what does this now mean a company can do to alter their financial statements in order to bolster the value of their company stock? In a world where corporate greed seems to be running rampant, and executive bonuses are oftentimes tied to company performance, how far might some top executives go in knowing that the truth now must always remain secret?
This is truly mind-boggling to come to terms with! But what this now does in many ways is it makes commercial real estate an even better, safer investment when compared to many stocks. As long as you have tenants in place who cannot claim secrecy for their financial statements under FASAB 56, which will represent the vast majority of companies, you should be OK as long as you always do your due diligence. But with this in mind, how confident do you now feel about investing in companies that can utilize this secrecy without you even knowing about it?
Putting all of this together, real estate, when purchased at the right time, at the right price, and with good tenants in place, will always be a great long-term investment for you.
