Servias Ministries Blog

The physical gold market is extremely tight to the point where the cash price is greater than the future price reflected in the paper market.  This is called backwardation.  This may decouple the two markets from each other.  Cash gold exchanges are cropping up in other countries around the world.

Turmoil will continue as the Fed continues to delay the reckoning that must occur.  The “Mother of all bubbles (Moab)” in the bond market will burst before long.  Some observers believe that gold will soar to $50,000 per ounce.  It that indeed happens, silver could soar to its classic ratio with gold of 16 to 1 thereby ascending to a price of $3,125 per ounce.

Morgan Stanley has $75 Trillion of derivatives on their books.  How in the world do you unwind that position?  The financial markets are highly unstable and finding the right security that will remain unaffected by the bursting of the Moab will be impossible.  The markets are now so interconnected, all paper investments will be in harm’s way.  You must find an investment that Bernanke cannot control.  You must reduce your leverage so that you can weather the collapse of markets when that black swan event triggers the bursting.  The correction will be violent and fast, just like the 2008 event.  The unsustainable debt must be liquidated.  The coming event will be severe.  No one but Our Heavenly Father knows how this will all play out.

When Moab plays out, men and women in their desperation will be looking for answers.  This is when Love will speak and provide true solutions, not just temporary, carnal ideas to sustain a failed lifestyle.  The Kingdom Infrastructure continues to be prepared for this eventuality.  The matured Remnant will be equipped with the answers mankind will finally seek.

In an interview with the Mayor of Detroit, he commented that there were 100 more cities in the same shape as Detroit.  There are many counties in the same predicament.  Historic assumptions for pension funds are no longer valid.  Interest rate increases are sure to damage the bond market which is a notable portion of the pension fund strategy.  What option does the Fed have but to continue the Quantitative Easing unless they want to burst the “pension” bubble as well.  There is not a plausible alternative without damaging “value” whether it be the U.S. Dollar, real estate perceived equity, stock market, bond market, etc.  The Fed hopes to allow slow inflation i.e. depreciation of the Dollar to fix the problem.  Holders of the Dollar may not let that happen.  Just how much more can the Fed create out of thin air before the market finally says “no more”?

The following graph provides perspective on cities that have shrinking populations:

Cities and counties base their revenue projections on perpetual growth.  Oops!

Is Our Heavenly Father setting the globe up for a transition?

GlobalEurope Anticipation Bulletin believes and reported that the 2008 crisis as a warning before that of 2013. All of the world’s regions won’t be affected the same way but all will suffer. According to LEAP/ E2020 the stages of this second crisis  as follows:

-end 2013, financial impact: collapse of financial markets especially in the US and Japan. Banks can no longer be saved by the states and BAIL-Ins are put in place;

-end 2013 / 2014 spreading to the real economy: The financial impasse causes / reveals a major world recession and the reduction of international trade;

-2014, social impact: The economic deterioration causes unemployment to explode, in the United States the dollar’s decline lowers the standard of living, riots mushroom everywhere;

-2014 political crisis: the governments of the most affected countries are under fire for their handling of the crisis, forced resignations and early elections are expected, if not coups;

-2014-2015, international management of the crisis: together Euroland and the BRICS impose a new international monetary system and lay down the basis of new global governance;

-2015: The least affected regions have exited the crisis definitively;

-2018: It will take the United States, the United Kingdom and Japan five years to purge themselves of the crisis with, ultimately, a greatly reduced standard of living and a considerable loss of global influence (resulting from their refusal to participate in the re-casting of global governance on new bases).”

To subscribe to http://www.leap2020.eu/English_r25.html , go to:  http://www.europe2020.org/spip.php?article25&lang=en

Each of us needs to be personally prepared.

Pension Funds attempt to look out 50 years in their investment horizon.  The problem is that they are just a group of men taking their best educated guess.  In the 1980’s I had a life insurance policy that assumed long term rates to average 9%… wrong!  This was after the Federal Reserve had pushed rates up to 15% and above.  Now long term rates are pathetic and have lasted for 5 years due to another action by the Fed.  Detroit can thank the Federal Reserve in part for its bankruptcy.  Pension Funds are suppose to be self-funding based on the contributions of those who are now receiving checks.  However if you have financial bubbles popping everywhere, how can you properly invest the principal?  Money Managers used to look at “return on investment”.  Now they look at “return OF investment”.  There are no safe paper assets anymore.  You can thank the American Politicians for allowing banks to become casino operations.  The only assets with no intrinsic liability attached are gold, silver, oil, gas, farm land, and other tangible assets.

“Muni Retirees Face 90% Loss Under Detroit’s Pending "Free-Fall" Bankruptcy”

Wouldn’t you hate to wake up to that headline after spending 20-40 years as a city employee?

This is the historical 10 Year U.S. Government Bond Yield.  Get the picture?

The Federal Reserve has painted itself into a corner.  Can you reduce interest rates to a negative level?  The 10 year bond yield has increased and that worries Bernanke and company.  There have been some resignations at the Fed and at the same time Harry Reid is trying to make it easier to get President Obama’s appointees approved through the Senate.  See: http://abcnews.go.com/blogs/politics/2013/07/harry-reid-vows-to-break-filibuster-rule-in-this-new-era/

I do agree with Reid, this is a new era coming but I have a different view of how it will look.  The U.S. is desperately trying to keep the Dollar in demand by initiating trade agreements that are dollar-based, mainly with Europe.  In the meantime, the Kings of the East are putting together a financial infrastructure that eliminates the Dollar as the world reserve currency.  They have had enough of the U.S. exporting devaluation to their shores.

I suspect that we may have one more attempt at a smackdown of gold and silver prices before the bottom of prices is in.  The problem in another smackdown is that most of the weak sellers of gold and silver have already exited the market.  The current buyers are longer term investors who are looking for bargains and are not scared by a price drop.  On the contrary, they hope they get another rock-bottom buying opportunity.  The current prices of gold and silver have put stress on the mining companies.  I am focusing on those companies with zero debt and cash in the bank.  Some of the senior producers will come out with ugly numbers this quarter as they cut away any excess and take the loss.  This should provide a stronger sector in coming quarters.

Bernanke publicly eluded to the fact that the unemployment numbers may be understated.  I wonder if he is now a subscriber to John Williams’ www.shadowstats.com?  We’ve been reporting this reality for some time.  What kind of shape is the economy in?  The following graph from Zero Hedge may tell the story:

How can a central bank manipulate the price of gold downward?  Let’s assume that you have 8,134 metric tons of gold in the depository.  Recently, a 50 ton sales order was issued.  The following table provides the latest estimates of official reserves (http://en.wikipedia.org/wiki/Gold_reserve):

As you can see, only a handful of countries could back a single sale of 50 tons.  From a practical matter, the U.S. is the only country that could put 50 tons on the market without a notable outcry.

Step 1:  Create a contract to lease 50 tons to an agent such as Morgan Stanley or Goldman Sachs.  With a lease in place, you can still claim ownership of the 50 tons of gold on your balance sheet.  The leasing price is set at 1% per annum.  The return of the metal is “indefinite” or on demand.  (Wink, Wink)

Step 2:  The agent bank sells 50 tons into the market causing the price to plummet.  The market is overwhelmed with such a large sell order thus the price goes down until more buyers enter in.

Step 3:  The agent bank allows the momentum of price decline to take hold as “momentum traders” jump on board to ride the price downward.  They sell short into the gold futures market and push the price down further.

Step 4:  Once a new price level becomes stable, the agent bank starts buying back the original gold (with the proceeds in Step 2) at a much slower pace, booking a profit and hoping to keep the price at the lower level.

So, what is the problem?  Gold has been rising in price for over a decade and the agent bank cannot recoup the gold sold into the market.  The central bank may not be able to get the gold back into its physical possession.  The gold reserves then only represent what is on paper versus what is physically in inventory.  Some observers believe that there are virtually no reserves left in some countries.  The Germans want their gold back from the New York Federal Reserve Vault but have been told it will take years to get it back on their soil.

China is ranked #6 with 1054 tons but there are sources who claim that China has at least 4,000 tons, possibly up to 8,000 tons.  Add India to the mix and you can see how the Kings of the East could move the world’s reserve currency to their control.  Both countries continue to aggressively accumulate gold, especially at these low prices.

If the U.S. Dollar loses reserve currency status, the price of gold will skyrocket in terms of the U.S. Dollar.  Paper wealth will substantially decline for those who hold the Dollar.  The only thing keeping the Dollar from tanking is the perceived safety of holding Dollars.  If that perception changes, volatility would occur overnight.  Why do you think that the media is so focused on managing the perception of the populace?  Why do you think that there are so many Executive Orders in place to handle a widespread upheaval?  What reason did the authorities put in place capital controls so wealth could not flee the borders?  Why do you think the military is now being used for domestic police assistance?  The central planners are concerned that they will lose control.  If they only realized that Our Heavenly Father is really in control, they could rest easier at night.  Love will prevail.  Yes, it is counterintuitive to what a person thinks is needed.  However, Love framed the universe.  I think it can resolve a few economic issues.

P.S.  If gold is such an ancient relic, why do countries keep their reserves?

Deconfliction is a military and engineering term that refers to the process of avoiding mutual interference, or outright hazards, among systems under the control of one’s own sides. It is most often used in the context of preventing fratricide, or having weapons hit one’s own troops, but it has broader implications.

This clip provides a perspective of the long reach of the various agencies.  Wouldn’t it be nice to have some revelation from Above?  We wouldn’t need all this infrastructure and its associated costs thus we would not be the largest debtor nation in the world.

This clip appears to be from the CBS TV series NCIS starring Mark Harmon.  Mark supports the Children’s Center in Bethany Oklahoma.  This center focuses on treatment of children with severe illnesses.  Thanks Mark!

I recommend a subscription to www.shadowstats.com to the Finance/Economics-oriented readers for all the detail of what the true economy is doing.  John Williams does the work there and he saves the rest of us a lot of time by tracking the trends of the U.S. macroeconomic picture using the government’s own raw data.  The following graph says it all:

How long can this country live in denial?  Clearly longer than a passenger on the Titanic.  The 2008 crisis continues to erode the country’s ability to recover economically.  The bubbles created since 9/11 continue to prop up the markets but at a cost to the middle and lower classes.  What unemployment rate must we hit before the stage of denial moves to the stage of anger?  The prisons are full but there will be a greater surge as the unemployment rate increases and the frustration and desperation of the population grows.  The number of baby boomers without any form of retirement is substantial.  Those unemployed with retirement are dipping into their nest egg to make ends meet now.  The financial infrastructure has mortgaged the future of millions in order to conduct a monetary experiment that is sure to backfire.

Our Heavenly Father is the Master Economist.  HE created a productive planet to handle the population.  Seedtime and harvest are fundamental to the planet’s ongoing economy.  Energy is locked up for the Remnant to access at the appropriate time.  Sons are being matured to handle the next phase to occur on this earth.  Will this be the culmination of time?  The unrighteous are playing out their parts in a robust fashion.  Lawlessness will continue to grow but grace will abound also.  Don’t be concerned about the circumstances becoming extreme.  It only shows us that the level of maturity of the Remnant will also be “extreme” when it is all said and done.  In the meantime, focus on hearing and meditating HIS Word.  Let it be written not only on your heart but on your mind as well.

To subscribe to ShadowStats.com CLICK HERE.

The purpose of profit is to support expansion.  There are two general types of profit (or gain): just and unjust.  The moment you spend money, you are supporting one of these two types of profit and in today’s world you are most likely supporting a lot of unjust gain.

I find it interesting how quickly Christians want other Christians to forego profit which is needed for expansion in order that they receive free benefit from their calling. Let me explain.  Most of us have no problem in buying gasoline from any of the major oil producers around the world.  The moment we pull up to the pump and pay for gasoline, we support the further expansion of Exxon, Chevron, BP, or some other commercial entity.  We take no thought that we have just supported the further expansion of their motives throughout the earth.  We provided them with profit for expanding their agenda whether it be for righteous or unrighteous intent.  However, when the entity is tagged as being “Christian”, many set a different standard and expect a special concession which is most often a lower price, preferably “free”.  This creates a subtle form of unrighteous judgment by the buyer of goods and services.

What would happen if righteous companies were rewarded for their motive of furthering the Kingdom on earth?  What would happen if “unity” among the brethren began to spread and allow the economic power to be focused to companies with righteousness as a focus rather than the prevailing unrighteous activities of many of the large corporations of today?  Everyday we support unrighteous activities when we spend our hard earned wages and we think nothing about it.  At some point that will change.

Jesus promoted profit in the parable of the talents.  He would not have promoted growth and expansion if it were lawless.  Instead, the parable made a point that unfruitfulness was the issue.  The Kingdom is geared toward expansion, not contraction, yet we have failed to place any emphasis on the economic side of the Kingdom.  I expect that to change soon.

When the Kingdom comes and overtakes the world’s systems, do you think that business will cease?  Will farmers abandon their tractors and quit producing grain for consumption?  Do you think all the current tangible callings will be retired and we will simply sit on a cloud playing a harp all day?  Not a bad “gig”!

I have a business calling.  My job is to make a profit.  With part of that profit, I support the Ministry of spreading The Gospel.  Is it better to support a business like mine or support a business where the profit helps pay for a butler on a private jet and all the profit is consumed on the lust of the flesh, the lust of the eyes, and the pride of life?  Do you think that my gifts are substandard to that of the heathen?  Our thinking must change.  The teaching that we are just biding our time until a whole new system replaces the current environment has caused us to do nothing except expand unrighteous companies around the world.  Our job is to “occupy” until HIS return.  We are to be profitable, not unprofitable.  We should be promoting profit among those who pursue righteousness.  We should be less concerned about saving a buck or two while we are effectively promoting unrighteousness.  Hello?  Are you there?

When we returned home last night, we settled in for the evening and watched a couple of recorded episodes of “Zero Hour”.  This TV series is centered around 12 clocks representing the 12 Disciples and the storyline focuses on the “end of time” and the Cross of Jesus Christ.  While watching the first episode, I checked the time.  Next to my chair is a world clock which runs on a battery.  Evidently the battery finally lost its charge during our week long trip and the clock had stopped at 11:53 and 51 seconds, after years of running on that battery.  With the number 153 embedded in the time as well as 51 which means Divine Revelation, I believe that this was meant as a double witness of “Now is the time”.  On our trip I reread Kemper Ditzler’s book on Raising a Remnant (www.unity153.net) and had been pondering the theme that the job of the vessels of honor are to play their part in converting the vessels of dishonor.  The vessels of honor must increase in the earth.  Profit will play a part.  More to come!

Friday saw another smash of gold and silver by the not-so-secret agents of the Fed. The employment numbers were spun to present the illusion that all is well. Not so.
The Germans want their gold. The Chinese are acquiring tons of gold. Nobody wants to accumulate Dollars or U.S. Bonds, except for the Federal Reserve. The Dollar as a reserve currency is disintegrating at a rapid pace.
In 2008, gold was the best performing asset but in 2013 the central planners are trying to keep investors from gold. They are desperate. The big question now is when gold goes to 5 digits. The smash looked like this:
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