Servias Ministries Blog

Yesterday was a day of investment banks attempting to scare the holders of gold, silver, and related stocks into submission.  Why would the Federal Reserve target such a small aspect of the financial system?  It is simple.  The price of gold determines the health of the U.S. Dollar.  In the short term the Fed can manipulate the price in hope of the public giving up on holding it as insurance against future chaos.  The problem is that gold is a global market and the Fed is not infinitely powerful though they seem to act like it at times.

What do David Stockman and Paul Craig Roberts have in common?  Both are former government officials in the area of Federal finance and both see a dollar collapse coming.  Neither are on the payroll of some institution paying them to keep quiet.  Both are concerned about our children’s and grandchildren’s future.  As the watchmen on the wall continue to cry out the Fed will continue to pull out all stops in attempting to keep the Titanic from sinking.  They will continue to fund investment banks for the purpose of pushing down gold, silver, and related stocks in the paper market by selling short.  This will only serve to cause the greatest short squeeze in financial history.  When this happens, the fat lady will be hitting the highest of notes and it will be deafening.

I have been putting my money where my mouth is.  Yesterday, I added to one of my stock positions with what little extra cash I had.  This stock was a screaming buy.  You must remember that when someone is selling in a down market, someone else is buying.  I am sure China and Russia are giddy about the price of gold dipping under $1,600 so they can add to their stockpiles with the devaluing dollars they are holding.  The Fed’s “Hail Mary” pass will be seen as the last great act of desperation before a new currency comes on the scene, whether it be backed by man or Our Heavenly Father.

Yesterday, the central planners orchestrated a coordinated takedown of gold, silver, and related shares.  Why?  It is my belief that they are extremely concerned that the current system is crumbling and they must first and foremost manage “social order”.

If the current system was strong, would the Federal Reserve need to inject $85 Billion per month into the system?  No.

If the current system was strong, would the central banks of China, Russia, and others be stockpiling gold?  No.

If the current system was strong, would the $222 Trillion of unfunded liabilities in U.S. be of a concern?  No.

If the current system was strong, would overall unemployment in the U.S. be at 22%?  No.

If the current system was strong, would savings rates be at epic lows for this long?  No.

If the current system was strong, would the velocity of money be at a 50 year low?  No.

If it is this bad, why aren’t people outraged?  One of the primary reasons is that the world is so complex it is hard for the average person to comprehend an underlying weakness in a complex system.  I see this all the time in the world of Information Technology (IT).  Inexperienced decision-makers promote their theory without any history to back them up.  When the unexpected occurs, their decisions will typically cause their system to crash or at least slow way down.  If you can dumb down the population and have them focus on entertainment, then they will be unaware as the system around them crashes.

Independent reporting by the major networks has gone astray.  In the 1950’s and 1960’s you could be assured that the 6PM newshour would report relevant topics uncensored by “big money”.  Now the “big money” owns the media outlets and sanitizes the news to fit their agenda.

One aspect of the “love of money” or greed is the fear of financial loss.  If you own silver and gold and you purchased them at higher prices, your emotions kick in and convince you that the investment was not wise.  This is where courage must kick in.  In spite of everything your being told, is the system really that solid?  We only have to look back at history and see that those in power misled the masses in order to carry out their agenda.  How many financial bubbles must pop before you finally conclude that you must think for yourself and understand that the motives expressed in the mainstream media are only a facade?

Gold is the primary financial barometer of what lies ahead and the central planners know it.  They have a nearly unlimited checkbook to push down the price of gold.  On the other side are all of those people who have similar concerns in the fragility of the current financial system.  Russia and China are among them.  The U.S. Dollar continues to depreciate and sink similar to that of the Titanic.  Instead of taking action to survive the coming pain, most people are moving their deck chairs closer to the band.  What song would you like to hear next?

Heavenly Father, we need help!

This article summarizes the hundreds of blogs that I have written over the last few years and demands ten minutes of your time:

http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all&_r=0

I wish I had better news but it is better not to live in denial.  At least you can do something in preparation of what is ahead.

What is counterparty risk?  It is the risk to each party of a contract that the counterparty will not live up to its contractual obligations. Counterparty risk is a risk to both parties and should be considered when evaluating a contract.

Are you involved in a counterparty risk contract?  If you have a bank account you are.  When you signed your signature card, you entered a contract with the bank.  When you deposit money in the bank, it becomes a liability of the bank, they owe you money.  Until you have all the money from the bank in your hand, there is counterparty risk.  But wait, I have FDIC insurance to protect me from the insolvency of my bank.  For those with less than $250,000 in the bank (that is most of us), this statement is true.  However, the FDIC is grossly underfunded and if there were a major banking solvency event, you are at risk just like the big boys.

The powers that be have moved us away from currency in our pockets to digital forms of money they can control.  The convenience of credit and debit cards has lulled us into a position of greater risk… and control.  As things get dicey with the greed running rampant through the financial system over the last few decades, we will find out who really trusts Our Heavenly Father when the fragility of the current banking system is fully exposed.  Corporations and other large depositors are at notable risk.  We are living at a time where there is no past example of deliverance of such a system.  Those in charge are more interested in their personal survival than the good of the people.

The only long-term solution to problem of this size and complexity lies with Our Heavenly Father.  No man walking the earth has enough wisdom, understanding, knowledge, and skill to bring forth a successful conclusion to the epic events that lie ahead.  It would appear the Love has exposed and initiated this sequence of events.  Cyprus means Love in Scripture.  How appropriate that the counterparty risks of simple bank deposits would be exposed in such a fashion!

On 16 March, everything changed. The European Central Bank (ECB), the International Monetary Fund (IMF), and the German government led by Angela Merkel forced the Cyprus leadership to cross a line that can never be forgotten: Unauthorized withdrawals from bank deposits. This amounts to confiscation, initially set at 6.75%  if your account was less than 100,000 Euros ($128,000 USD) or 9.90% if over the threshold.

Who should have taken a “haircut”?  Answer: Shareholders, Creditors, and Bondholders, not the holders of deposit accounts in debt-ridden banks. They thought it would be much easier to rob the depositors in Cyprus ( including Russian mobsters using the banks as a tax haven) than it is to extract money from the Germans and other Northern Members of the EU.

Angela Merkel, the IMF and the ECB  can never put the genie back in the bottle.  The 17 member states of the Eurogroup took the unforgivable action and they will do it again: all Europeans must realize they are the target of a financial policy determined to rob them of the fruits of their labors on the pretext of balancing the books.

Do you think they made this decision independent of the Federal Reserve Bank?  I doubt it.  Do you think this was a test case for future action?  Absolutely.  There is not enough “printed” money in the world to reconcile the books of all the technically insolvent banks around the globe.  Only additional money printing and confiscation could relieve the liability pressure of the current system.  Excessive money printing could destroy the confidence in the current system.  With the continued missteps by the powers that be, it seems that is exactly where we are heading.  This is not surprising to Our Heavenly Father.  HE will raise a remnant at the appropriate time to bring forth righteousness and expose the lawlessness with the Light of HIS Word.  It will be first death of the system, then resurrection of the saints and glorification of the remnant.  Yes my friends, the tomb IS empty!

The Cyprus Banking Crisis has opened the door to the willingness of central banks taking our money out of the our account and effectively putting it in the capital accounts of the banks, a pure confiscation of assets.  Think about it.  Where is your money safe if it isn’t protected in your bank account?

Consider this.  What if you are a chief financial officer (CFO) of a corporation with $1 Billon in the bank?  where do you put it to protect it from confiscation?  Large depositors could lose 30-40% of their cash if they pick the wrong bank to put their working capital in.  The “central planners” know the impact of the threat of confiscation on the CFO’s thinking.  Do you put excess funds in the stock market in blue chip, dividend-earning stocks?  Do you go out and buy some real estate and rely on rent payments to fund ongoing operations?

The big issue is velocity of money- how fast money moves through the economy.  The velocity impacts the gross domestic product (GDP) if it slows down.  People are just not buying anything, they are keeping the money in the bank, sitting on the sidelines.  Yes, the stock market is hitting all time highs but that is due to the Fed goosing the economy, not the natural state of a recovery.  The Fed is getting desperate.  They are taking a huge gamble.

Below is a graph of money velocity.  It is at 50 year lows.  An economic recovery is tough with the velocity at such low levels.  People are concerned.

What if real estate prices go down?  The CFO will lose working capital value.  What if the stock market goes down?  The result is the same.  Where can the CFO put his money until the risks subside?  This is a gamble by central banks of epic proportions.  We may have witnessed the beginning of the end of the current financial system.

We have $10.8 Trillion of deposits in the U.S. and the FDIC has $33 Billion in their fund. It equivalent to insuring $10,800 in risks with 33 bucks. Would you be comfortable with that ratio?  Can you see their dilemma?

Money of some type is currently necessary to facilitate the exchange of goods and services.  The size and complexity of today’s environment requires monetary exchange.  Stability of the money is critical to insure confidence in the system.  Gold and silver have been the stabilizing force for thousands of years.  Each time society has attempted to depart from the stabilizing characteristics of gold and silver, a system without counterparty risks, the attempt has ultimately crashed and burned causing severe pain to the population.  It appears we are on the cusp once again.  Many will be caught unaware at they have blindly followed the current system assuming those in power were somehow smarter than the rest of us.  Instead, deception and illusion played its role in moving us toward death and destruction.  It sounds a lot like the ego, the old man, the flesh, has been ruling the current economic system.  His death must precede the resurrection of the new man and… I suspect a new system.

This move clears the way for the East to take over the West by 2020.  The West may try to use a world war to prevent this from happening.  Greed is blinded by the bloodthirstiness for power and will do about anything to retain control.

See: http://finance.yahoo.com/news/brics-nations-plan-bank-bypass-133602688.html

Many of the brethren will be meeting in Gap, Pa. this weekend.  Sixteen (Love) years ago, our daughter got a job “standing in the Gap”, a prophetic sign.  She was a greeter in the Gap clothing store.  In the same year, the Promise Keepers went to Washington, D.C. for a rally titled “Standing in the Gap”.  In a recent interview, Economist Dr. Laurence Kotlikoff indicated that the fiscal “gap” of the U.S. is now a $222 Trillion deficit.  This is the culmination of a 30 year denial that the U.S. has a spending addiction problem.  This number is not Kotlikoff’s number, but a basic economic calculation accepted by all economists.  There is no way to get out of this hole.  The U.S. is technically insolvent.  19 out of 20 segments that make up the $222 Trillion are kept “off the books” by using language that conceals and misleads the American public.  All future spending must be covered by all future taxes.  The difference is the fiscal gap.  Social Security is 31% underfinanced by itself as indicated in the Social Security Trustee’s Report of 2012.

The Bond market will crash when the bondholders finally wake up to this economic reality.  Interest rates will rise.  Money printing will increase thus hyperinflation is the only alternative.  The system is extremely fragile.  The Fed’s actions confirm this fact.  12% of the U.S. Government’s spending is being printed by the Fed.  That will fuel inflation in a dramatic fashion.

We are moving quickly to a breaking point.  2015-2017 appears to be the current timeframe for a fiscal crisis to come to fruition in the U.S.  It could be earlier.  The price of gold and silver continue to be manipulated to cover up the brevity of the problem.  How wide can the gap grow before the crisis spreads?  Only Our Heavenly Father knows.  Gold will ultimately rise in terms of the U.S. Dollar.  $3,500, $4,800, to $6,000 and above.  We should think about Mandarin Chinese language skills by 2020 if Our Heavenly Father does not install the Theocracy by then.

Cyprus (Love) Update

Big depositors face cut of 40%, minister says.  See: http://www.bbc.co.uk/news/business-21936554

Banks to stay closed until Thursday.  See: http://www.bbc.co.uk/news/business-21933473

The one thing men cannot do is predict a change in the psychology of a population.  The Cyprus situation cannot bode well for the psyche of other countries in Southern Europe.  The “Rule of Law” was placed in jeopardy during the crisis and the average depositor knows that this revealing attitude of those in power cannot be forgotten.  Once the crisis is over, assuming it ends with minimum fallout in other countries, the average person should look at protecting his or her economic well-being from the unexpected.

Cyprus will suffer tremendously from this event.  Small businesses will close, unemployment will rise, and there will be a decade or more of economic pain as a result.

BRUSSELS, March 25 (Reuters) – Cyprus clinched a last-ditch deal with international lenders on Monday for a 10 billion euro ($13 billion) bailout that will shut down its second largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians.

“Let us all save the banks by imposing the cost of their mistake on the public.”

“Let us sell off public assets to raise money to save the banks.”

The people of Cyprus are being told of the dire consequences if they do not agree to those statements.  I seem to recall Iceland being in the same predicament.  They threw the bankers out of their country and they are doing fine… thank you very much!

Timothy F. Geithner, U.S. Treasury secretary, told Congress back in 2008 that if they didn’t authorize a $750 Billion bailout for the banks, there would be Marshal Law.  Since then the spigots have been wide open helping the banks and robbing the public with low interest rates of nearly zero while inflation continues its upward march.

Cyprus is the “line in the sand”.  Will the public give in to the strong-arm fear tactics or will they succumb to fear and enslave themselves to the whims of the financial industry?  The people of other EU countries are watching this closely.  Here in America there is very little news media attention given this situation, by design.  Instead, the media is commenting on Jessica Simpson’s latest pregnant photo… how cute!

Destruction of democracy is at hand.  The governments are aligned with the 1% wealthy and this very fact is being exposed in Cyprus.  Love is exposing the hearts of men.  Financial sovereignty of Cyprus and other countries is on the line.  Once financial sovereignty is removed, the rest of the sovereignty of the nation will fall and they will become a nation-state of the EU.  Ultimately, the wealthy want all nations as part of their “one-world government”.  Greed at its worst.

Will Brussels (EU) successfully increase the concentration of power and move it away from the people of Cyprus?  Or will the people of Cyprus stand firm against this attempt by Brussels to have them pay for the banks’ greed and reckless investing that incidentally increased the bonuses to the wealthy?  How blatant!

The EU wants to use this crisis to gain power over its members.  The borrower is subject to the lender.  This Biblical truth is in action.

This may be the week that sets the course for the Western World.

I have heard many interviews with Nigel Farage.  He clearly calls it like he sees it.  He has generally been accurate in his assessments.