Servias Ministries Blog

As you can see by this graph, the 100 year history of the Federal Reserve has not proven to be successful.  Instead, it has caused more uncertainty especially after the elimination of the gold standard in 1971.

By the numbers:

Who is hurt the most by inflation?

I guess President Lyndon B. Johnson’s war on poverty was another loss on the list of defeats for America.

Over the last few years, we have endeavored to bring forth Scriptural Truth in application of our everyday lives.  One of those truths is “Greed is the root of all evil”.  King James uses the term “love of money”.  Our Heavenly Father very specifically directed my to my first professional job: The largest bank in our state.  My particular job allowed me to study virtually every department in the bank and fully understand how a bank operated.  This was preceded by getting a college degree in Economics.  Neither of these paths were part of my plan.  I was going to be a Navy pilot for six years, then an airline pilot until retirement.  In the fall of 1971 at the Open Door (Christian gathering place aka coffee house), my plan was discarded by HIM and HE the directed my path ever since.  Twelve months later, I was working at the bank. Four years later, I was teaching Money & Banking at a local college at night to earn extra money while still working at the bank.  This video explains how money & banking work under a central bank scenario.  This scenario isn’t exclusive to the Federal Reserve, but provides clarity to how all central banks operate under a fiat currency system.  This writing is not focused on any political party or nation.  The central banks around the world are all using some form of fractional banking to manage their economies.  At some point, there will be a collapse similar to all of the previous historical attempts to use fiat currency.

  Note: we do not endorse any particular source of precious metals acquisition.  You must do your own research if you are led to purchase bullion as a result of this video.  The $220 Trillion in U.S. Liabilities I mentioned in a previous writing emphasizes the need to be vigilant in these times.

This may be the most important economics blog I have written.  This video summarizes how the entire system works for all to understand.  The video will surely promote understanding about the intent of bailouts, bail-in’s, and Quantitative Easing.  Who are the beneficiaries?

Sir Joshua Stamp, former Director of the Bank of England: 

"Banking was conceived in iniquity and was born in sin. The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again. However, take away from them the power to create money and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money." (Said to be from an informal talk at the University of Texas in the 1920s, but as yet unverified.)^[12]

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Will it be 2014, 2015, or 2016?  I don’t believe it can be delayed beyond 2016.  At most,that is just 36 months away.  The actual U.S. Liability level stands at $220 Trillion and is growing.  It IS the elephant in the room that nobody is talking about.  In the meantime, gold, silver, and related stocks are relatively cheap… especially the stocks.  For those with cash on hand, they may be able to pickup some real bargains now.  Gold is hated by the mainstream media.  When you look back at past financial media orientations, they tend to be an indicator of when to focus on the next stock category to appreciate in value.  Oil stocks were hated when Chevron was selling for $55 per share.  Today it is at $122.84.  Now it is loved by all.

Various governments around the globe are changing the banking laws to use the “bail-in” strategy.  This means that depositors will take on risk of bank failure instead of the governments.  This would lead us to believe that those looking behind the curtain, expect major failures soon.  The only question is “when”.

The price of gold was reset in the past in terms of the U.S. Dollar:

In 1934, Roosevelt reset the price of gold from $20.67 per ounce to $35.

In 1971, the price was reset from $35 to $38.

In 1973 the price was again reset from $38 dollars $42.22.

Right now, the price is just under $1,200.  I expect to see another overnight revaluation and expect it to be epic in proportion to these past resets.  How else can you deal with the $220 Trillion in liabilities that are demanding a reconciliation?

Will Congress tax the windfall profits of those preparing for the reset?  Most likely.  With all the suffering expected due to the epic decline of the Dollar, they will want to show those in pain that they will go after those who profited from the pain.  It seems a little perverse to be the one who caused the problem, then point at someone else who figured out how to protect himself from the problem and the guilty.  Oh well, the innocent will once again suffer the consequences for the guilty.  Thankfully, Our Heavenly Father’s scales of equal weights and measure will insure a proper accounting in the end.

No matter what year the great reset occurs, it will be a wild ride.  “Cowboy up” as they say at the rodeo.

Having been in banking, finance, and information technology (IT) for nearly 42 years, I am not surprised by the hacking of 40 million debit/credit holders in the Target story.  I was on the team that installed the first ATM in Oklahoma back in the 1970’s.  I was able to “hack” the code back then during a test and drain all the cash out of the machine.  I alerted NCR about the weakness in their software and they fixed it.

Your digital financial security is only as good as the weakest link in the information flow and hackers spend all their time looking for that weak link.  Chase Bank has taken protective action to limit affected cardholders to $100 cash withdrawals and $300 in charges until they “fix” the problem.  Oops!  I can’t get my money out of my account.  Well, it is “sort of” your money, but not really.  You are actually an unsecured creditor of the bank.  When you deposit your money, it becomes their money and a liability to pay you at some future point in time.  They now owe you money, not holding your cash as most believe.  Their contract with you, the fine print on the signature card you signed, spells all of this out.  It is in their favor, of course.  You will notice that they did not recommend you have a contract attorney review it.  In their contract, they specify that they do not have to pay you on demand but have a certain amount of time to respond.  This assumes that they are still in business.  Are you catching on to the way this system works now?

Recently, my wife and I went to the shopping mall to purchase some items.  We presented a young store clerk with a check.  She was rather new and did not know how to process a check.  The supervisor commented, “We just don’t get checks anymore.”  She helped her take down our information and complete the transaction.  Yes, it’s a hassle, but our checking account has not been “hacked”.  Further, my check acts as a contract and the bank is obligated to verify my signature.  Else, they suffer the loss.

Banks no longer want checks, it costs them money to process these pieces of paper.  They prefer to process digital signals and distribute the work to the merchants… and the liability, if possible.

I will not use my debit card to purchase anything for the very reason stated above.  I know how unsecure the overall system is.  As a matter of fact, I do not utilize internet banking.  Why?  A hacker can place a “keyboard ghosting” script on your PC and obtain your user-id and password, then send it to himself.  You will none the wiser.  I prefer to have a firewall between our bank account and the hackers.  It is called a paper check.  It is a written contract.  It is not worth the time or effort to try to illegally access our account.  Yes, we are a “pain” to merchants and those in line behind us but I don’t let peer pressure cause me to compromise what I know is a legitimate exposure to financial ugliness.  Currently, the financial institutions and merchants are liable for fraud, but for how much longer?  They would love to find some loophole to remove their exposure and shift it to the consumer.  It is obvious, they are not their brother’s keeper.  It’s every man for himself out there in the digital jungle.   0100 1000   0110 0101   0110 1100   0111 0000   (Binary or digital representation for “Help”)

Yes, I may write the last check in the U.S. before they take my pen away.

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.