Servias Ministries Blog

The Federal Reserve is at the doorstep of its 100th anniversary.  As most everyone by now knows, it is a private institution, not a government entity.  Yes, it maintains some charade of being accountable, but in the end, it is independent and serves a small group of financiers.  Its goal is to perpetuate the illusion of prosperity while keeping markets stable and orderly, and the populace passive.  Who benefits the most from this?  Those with tremendous financial resources.

Many Americans still think the U.S. Constitution is the guiding document.  Nope!  It has slowly been replaced by all the thousands of laws and statutes passed by Congress.  Don’t forget the thousands of Executive Orders signed by the various presidents.  The recent NSA expanded surveillance was based on a 1979 ruling by the Supreme Court.  See: http://www.bloomberg.com/news/2013-12-18/nsa-phone-plan-could-land-in-supreme-court-over-1979-precedent.html  The use of a secret court has allowed circumvention around the constitutional rights of citizens.  Once you open Pandora’s box, there is no closing it.  You then must tell lie upon lie until the illusion is so massive, it will pop.  Back then, the only cell phones were found in wealthy peoples’ automobiles.  They cost about $300 per month plus a healthy per minute charge.  You and I did not have the privilege to ride around and talk on the phone.  Back then, most communication was face-to-face and the court case focused on the recording of the phone numbers, not the content, and that we should not expect privacy.  Huh?  I thought they called our phone lines “private lines” back then… versus “party lines”.  For those younger among us, “party lines” were phone lines back in the 1950’s where several customers were connected to the same phone line service.  If you wanted to use the phone, you picked it up to see if anyone was talking.  If so, hang up and wait a few minutes.  It was cheaper than a “private line”.  Those were the telephone company’s nomenclature for the two types of service.  I guess the private line was not so private after all.  It was simply an illusion of privacy.

Gold and silver continue to be suppressed.  This is another reality most everyone knows about in the financial arena.  The only real question one should ask is how much longer can those in power suppress the price.  For those of you who bought gold at $850 per ounce, the current price of $1,194.50 isn’t a bad return on investment.  Those who bought above $1,200 should just be patient and know that the perpetual printing of money will ultimate cause a Great Reset and you will wake up one morning to a notable appreciation of your investment.  China knows it, Russia knows it, and the Fed knows it.  It is simply a matter of time.

The Interest Rate market continues its illusion as well.  The multi-trillion dollar derivatives market is the ultimate digital casino.  It is unregulated by an outside entity.  They regulate themselves thus if an issue arises, they simply rework the rules to maintain orderliness while the destructive power keeps building.

The Federal Reserve has begun its tapering by only printing $75 Billion versus $85 Billion.  However what they don’t tell you is their other means of stimulating the market may offset this reduction.  They have the ability to loan anybody any amount of money at any interest rate they want.  If you are on the “inside”, you could borrow money at 10 basis points below the market and buy government securities and use them as collateral without any other recourse.  You make 10 basis points without any risk.  The U.S. Treasury completes its auction without issue.  Since the Fed has no requirement for transparency, no one is the wiser.  Pass the popcorn, this NFL game is getting more interesting!  Who cares about all of these shenanigans?  Just keep my TV cable streaming more entertainment and we will all be happy.

Reported November Annual Inflation:

1.2% (CPI-U Government)

1.1% (CPI-W Government)

8.8% (ShadowStats.com)

We are experiencing the 3rd number consistently.  When you see a new menu for your favorite local restaurant, you can be assured that the prices increased.  I guess everyone needs to move to D.C. to experience lower prices.

The latest idea to be considered is to retroactively change the tax law.  This could get ugly quick!  In essence, if a business depreciated an asset according to the best depreciation method at the time, it would reduce the tax liability for that year and increase cash.  However, there would be less depreciation deducted in later years and would make up for the lower tax revenue.  What happens if you change the tax code and negate the accelerated depreciation and force business to retroactively go back and take less deductions?  You immediately remove cash from the checking account.  Fundamental business decisions are based first on cash flow.  If you have an unexpected reduction in cash, you will table expansion plans and cut costs… immediately.  On a broad scale, you basically start a recession and increase unemployment.

What are these guys thinking?  Have none of them ever owned a business?  These ideas communicate the desperation of the times.

See: http://www.forbes.com/sites/realspin/2013/12/11/the-tax-draft-of-sen-max-baucus-amounts-to-legalized-wealth-confiscation/

The following provides a perspective of the former professions of those passing laws:

This week Congress passed a budget proposal to stave off another budget standoff.  I am sure they know the populace must start “forgetting” before the November elections of 2014.  Once again, self preservation is guiding the politician’s action, his continued employment depends on it.

Expect the Fed to taper their Quantitative Easing.  They will use some other means to achieve their goal of “cheap money”.  There will be an investigation of gold and silver price fixing just as there was an investigation of interest rate manipulation (LIBOR rate).  The FCA (Financial Conduct Authority) in the UK is now looking into the issue… finally.  The Germans are doing the same.  Hands will be spanked, fines assessed, and then the perpetrators will sail off in their yachts with a sinister smile.  It was simply the cost of doing business.  However, the cosmic Law of Equal Weights and Measures” will track and record this lawlessness.

Consumers will be encouraged to increase their debt levels even though their buying power continues to decline.  Interest rate pressure will increase and the value of hard assets will expand to the mainstream portfolio managers.  Those in debt will increase in their suffering.  The 3% decline in Black Friday retail sales is a clear indication that the consumers are in serious trouble.

Social unrest will increase because of the disparity between the “have’s” and the “have not’s”.  Spain, Italy, Portugal, and other countries have not resolved their economic issues.  Cheap money is the only answer as determined by those currently in power.  Inflate away the problem.  The American educational system is broken,  the Judicial system is broken, and the political system is broken.  These systems will not sustain themselves forever.  Disruption will evoke change.  I expect those who have endured the lackluster performance of hard assets should be rewarded in 2014.  Patience has been the key.

Gold and silver have been building strong technical bottoms.  Remember when gold was $275 per ounce?  $1,200 is the new support area.  $90 oil has held firm as the consumer looks at $2.79 as a good deal for a gallon of gasoline.  Remember hearing our parents complain about the increase in the price of food and drink?  We all are now sounding like our parents.  The McDonald $1 menu is being replace by the $2 menu.  $3 for a glass of Iced Tea?  In 1966, a larger burger was 35 cents.  Today, the same burger is over $3 and its contents look a little suspicious.  Inflation continues to provide the illusion of growth.

The bond market bubble will probably burst this coming year.  Pensioners will be hurt by this event whenever it occurs.  The courts are handing down decisions that hurt pension recipients.  There will be no guarantees for many of them who were loyal to those companies and municipalities all those years.  Bank bail-ins will gain popularity by those who create policy.  Even your money in the bank will have additional risks attached to it.  The risks will increase on several fronts and perpetuate the volatility.

Simplicity, conservation of wealth, and reduction of monthly cash outflow will be on the minds of the baby boomers in 2014.  There will senior networks developed to tap into this major group who hold a lot of wealth.  This is where many baby boomers will get their direction in transitioning out of the workforce.

This volatility can be offset by peace from Above.  It is imperative that your spiritual focus be aligned with Our Heavenly Father’s reality.  Illusion, deception, and lies are being perpetuated by the current system.  Those who build their house on sand will see it blown away as the volatility reaches to new heights.  Don’t be caught unaware.

The U.S. Government is on the hook for over $200 Trillion.  We either need 57% more tax receipts or 37% less expenditures going forward to have any chance of surviving this black hole of current and future committed liabilities.  The politicians have mortgaged our future, our children’s future, and our grandchildren’s future.  The country’s fiscal situation is worse than Detroit many times over.

The Federal Reserve is printing 29 cents of every dollar the government is spending.  Not good.

1,000 economists including 15 Nobel Prize winners want the public to know how dire the circumstances are.  They are supporting a Congressional Bill to expose this liability.  It is called “The Inform Act”.  See: www.theinformact.org

The Chinese Yuan has now surpassed the Euro as a trade currency, and the U.S. Dollar is in its sights.  China is methodically implementing its long-term strategy to replace the U.S. Dollar.  It is no longer buying U.S. Treasuries.  The current ratio of Dollar to Yuan trade transactions is 10 to 1.  The global oil sales in Dollars keeps the demand for USD so high.  Once Saudi Arabia firmly decides to accept other currencies, the ratio will move rapidly.

“The escalation of military tensions between Washington and Beijing in the East China Sea is superficially over China’s unilateral declaration of an air defense zone. But the real reason for Washington’s ire is the recent Chinese announcement that it is planning to reduce its holdings of the US dollar.”   See: http://www.presstv.ir/detail/2013/12/01/337686/china-plan-to-quit-dollar-infuriates-us/

Central Planners like to use military intimidation to keep countries in line.  What war has the U.S. truly won since WWII?  Trillions of dollars have been spent and the world is not safer, more peaceful, and the U.S. is less popular than ever before.  Americans have exported their debt overseas and have allowed the major banks to effectively bet the future generations’ money in the derivative market.  Former and “future” bankers have been placed in strategic political positions to promote their agenda of greed.  Meanwhile, many Americans look forward to the next episode of “Duck Dynasty” or “Storage Wars” on cable TV.

Gold, silver, and related stocks have been beat up in recent weeks and months, simply providing additional buying opportunities for those who believe that the illusion of fiat currency cannot last forever.  Based on world history, it is not a question of “IF’, but “When”.  As usual, men will not know the day or the hour that the Black Swan event arrives, but it will.

The Bubbles in the financial arena continue.  The 3% decline in sales on Black Monday are an indicator that can’t be easily manipulated by the government… yet.  This suggests that the economy is moving quickly into the second dip of the recession I spoke about in past blogs.  Based on raw government numbers, we never really experienced a true recovery, only an orchestrated one by the use of massaged statistics.  Government assistance of the unemployed continues to run at record levels.  The Federal Reserve has vastly expanded its balance sheet but failed to positively impact the economy.  Since the spring of 2010, our national debt has increased 46%, from $8.4 trillion to $12.3 trillion today.  Also, the inflationary increase in the money supply, which is based on the Fed’s balance sheet, has increased from $2.3 trillion to $3.9 trillion today, a 70% increase.  Let’s face it, their monetary policy isn’t working, and there is a lot of debt to be paid back.  Someone is going to be on the losing end of this huge problem.  China knows it, the U.S. knows it.  Ultimately, the bully goes home with a black eye.

The following chart represents the spread between the Brent (World) Crude Oil price and the West Texas Intermediate (Domestic U.S.) price:

Matt Simmons, the investment banker who specialized in the energy sector, explained that the WTI oil was a higher quality product versus the Brent crude oil supplies,  yet the WTI price has been lower since 2010.  Why?  Price manipulation to prop up the U.S. economy.  Don’t get me wrong, I like paying less at the pump for my gasoline.  However, any price manipulation has a long term negative effect on conservation of existing supply.  By suppressing prices, you expose the consumer to much higher prices in the future.

The price of a product impacts the consumer of the product.  Since oil is truly a global commodity, manipulation of price can and will cause shifts in the well being of all mankind.  The only question is “When?”.

Another example of economic manipulation is the current Quantitative Easing by the Federal Reserve.  A similar philosophy of loose money was adopted in “Roaring 20’s” by the Fed.  The following chart compares the two periods:

The third graph depicts the “tinkering” with the definition of Consumer Price Index (CPI).  This index determines how much Social Security recipients receive in cost of living raises:

Over the last 30 years, the average person is making less money in real terms.  Now you know why that coffee costs $2 at IHOP and we are told inflation is in check.

These disparities simply represent the perpetuating illusions that those in power use to manipulate the populace and keep them at bay.  This will not continue forever.  There will be a Great Reset and you need not be caught unaware.  As we discussed in yesterday’s online Bible study, you will need wisdom and understanding to guide you through the coming economic challenges.  In order to embrace wisdom and understanding, you must change, you must make decisions to protect your heart and not entertain sin and lawlessness.  Obviously from the above graphs, lawlessness abounds.  However, Love trumps lawlessness and will prevail.  These blogs are all about individual preparation for what is coming down the pike.  Don’t be caught unprepared by any perceived delays.  Use this time for personal growth and maturity in your walk.

China continues its march to U.S. Dollar independence:

It is in anticipation of the Great Leveling, then the Great Reset of all currencies.

The unemployment numbers continue to be fabricated in order to prop up the financial markets.  Why?  If investors were to switch from greed to fear, the stock market would take a dive.  At this time, it represents discretionary wealth more so than any other investing arena.  Bonds continue to represent a mine field once interest rates begin to rise.  The housing market is consumer-driven and the consumers are still unwilling or unable to part with their cash.  Only the large funds, backed by Fed lending, are keeping the equity market up and surpassing new highs.

If you were to consider the “employed” labor force rather than focusing on the unemployment numbers, you would find that true mainline unemployment based on these numbers would be 11%.  When you add in discouraged and long-term unemployed, you arrive at John Williams’ 23.5% number.  John’s charting of the real Gross Domestic Product (GDP):

Does that look like a healthy economy to you?  How much lipstick can the pig handle?  No wonder the unemployment numbers continue to reflect the underlying weakness on a month to month basis.  The consumer isn’t spending:

(For a subscription to shadowstats.com, go to: http://www.shadowstats.com/subscriptions )

59% of America’s working population are working.  Before the last recession, it was 63%.  It has never recovered yet the mainline unemployment reporting would have you believe it has recovered.  It is the first time this situation has occurred since WWII.

In 2000, the number of people on food stamps was 17 million.  When Obama was elected, it was 32 million.  Now, it stands at at 47 million.

In the last five years, the top six (too big to fail) banks have increased 37% in size compared to 2008.  At the same time, 1,400 smaller banks have disappeared from the system.  Do you think the exposure of a collapse has decreased?  Concentration of financial exposure has only increased.  Their “casino” operations have become more reckless, not less.  Four of them have derivatives exposure of over $40 Trillion.  If (actually when) a Black Swan event occurs, they will collapse and depositor money will evaporate. 

40 years’ ago, the total debt was about $2 Trillion.  Today, total debt stands at over $56 Trillion in the U.S.  This has promoted an illusion of prosperity while 76% of all Americans live paycheck to paycheck.  The middle class is shrinking in a rapid fashion and we will soon look like a third world country.

Prepare, become more self-sufficient, and insulate yourself from any economic calamity.  Moreover, focus on listening to the Words of Our Heavenly Father!

Mea culpa is a Latin phrase that translates into English as "through my fault". It is repeated three times in the prayer of confession at the Catholic Mass: mea culpa, mea culpa, mea maxima culpa — "through my fault, through my fault, through my most grievous fault". 

JPMorgan agrees $13 billion settlement with U.S. over bad mortgages

NEW YORK/WASHINGTON (Reuters) – In late September, JPMorgan Chief Executive Jamie Dimon walked into the office of U.S. Attorney General Eric Holder.

"We’re willing to take our lumps," he said, according to a person briefed on the matter.

"We don’t think there were serious mistakes made," he added, in a meeting he had requested with Holder.

Jamie Dimon has no problem in making huge sums of money and giving up only a portion to pay the U.S. Government as a “settlement” of misdeeds.  It is just another line item of expense on JP Morgan’s financial statements.  In the meantime, he has been given and retained his performance bonuses while millions of homeowners have suffered a gross injustice.  His Board and major investors are all culpable for this lawlessness.  This article is timely as it is a witness to my earlier post about the Truth.  The homeowners settle for a pittance while Dimon boasts about his savvy business practices.  No jail time for the bankers!  Anyway, not yet.

See: http://finance.yahoo.com/news/jpmorgan-says-mea-culpa-13-002829603.html