Servias Ministries Blog

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.

It appears that the European Union (EU) is using Cyprus as a test case.  Can they eliminate the sovereignty of the nation of Cyprus by strong-arming them to bail out the banks with the private money of the people?  I have long been opposed to the elimination of check writing and cash by replacing them with debit cards and/or credit cards.  A checkless society makes it easy for a few power hungry people to control the system.  Cyprus is a perfect example. Yes, checks must clear the bank but they are mini-contracts with signatures.  Cash needs no bank to clear.  Now, the Cypriot economy is at a virtual standstill because the heavy credit/debit card usage is concentrated among the large banks, not the small community banks. In the past, community banks could clear checks among themselves without going through the larger banks.  Centralized power makes it easier to control the financial system.

Notice that Cyprus is not the lead story on network news.  Why?  If Americans were to think this event through to its logical conclusion, they would begin taking money out of their banks now.  Not all of it, but certainly enough to survive a bank holiday or two.  They would look at alternative stores of value such as gold and silver where there is zero control when it is resting in your hand.

Food pantries would be stocked to handle an unexpected run on groceries.  The just-in-time distribution of American grocery stores has left the system vulnerable to the spread of fear over the population in the midst of a financial crisis.  Nobody wants to be at risk of hunger.

Gun control happens to be the hot topic in the midst of this financial crisis.  Do you think those in power have a hint of the potential explosiveness of a fragile banking system?  Gun fatalities are a much smaller percentage of the total than that of automobile accidents.  There is no suggested ban of cars however.

We are in the midst of a currency war with other countries.  Currency wars tend to precede major wars.  China, Russia, and Iran are on one side.  The U.S., E.U., and Arab countries are on the other side.  Newly elected Chinese President Xi Jinping left Beijing Friday morning for state visits to Russia, Tanzania, South Africa and the Republic of Congo.  His first stop, Russia.

Market risks are higher than ever before.  Looking back at the FED minutes, “Wrong Again Ben” was not worried about a recession while we were in one.  He is not worried about inflation while true inflation is running over 8%.  How long are we going to pay attention to the smoke and mirrors and live in denial?  It is of the utmost importance that we posture our families in a highly defensive mode now.  They Cyprus event is a clear warning signal of what those in power will do if given an opportunity.  They will throw the population under the bus in order to save themselves.  Do you think there is any difference in the mindset in other geographical locations?  Absolutely not!  I am not an alarmist but history tells us that a small event like Cyprus can trigger a much larger tsunami.  I would rather be prepared and wrong than the alternative.  “Gee whiz Wally”, I will just eat at home more to lower the pantry levels if I am wrong.  I will simply redeposit the excess cash once the danger passes.

The global events make it imperative that our spiritual man be strengthened each and every day.  As turmoil continues, our peaceful state will be a light to others.  Many will not be able to hear Our Heavenly Father and will look to those who do.  Our Heavenly Father’s Wisdom will guide us through the coming uncertainty and suffering, no matter how it develops.  The current banking system has left us seriously exposed to what happens across the water.  If you don’t pay attention, you will certainly experience regret.

The banking crisis in Cyprus is worsening.   The banks were supposed to re-open this past Tuesday after a 3-day weekend from a national holiday.   Now the authorities say they will open on Tuesday of next week. Who knows?

German Chancellor Angela Merkel wants to be reelected and thus she was a part of this Black Swan event.  Germans are not keen on the idea of bailing out Cyprus, because unlike with Greece, Italy or Spain, there is little sympathy for a country seen as a haven for tax evasion and the ill-gotten gains of shady Russian oligarchs.  However, those shady guys hold a grudge and make good on their threats.

At least 2 banks are insolvent: http://www.bloomberg.com/news/2013-03-21/euro-area-said-to-weigh-closing-two-cyprus-banks-asset-freeze.html

I doubt the number is that small, especially after the citizens jump at the opportunity to pull their money out.  Merchants in Cyprus have moved to a cash-only basis.  They no longer accept credit or debit cards because they do not know when or if ever they wil get paid by their bank.

As I have said in the past, cash is king… and it still is.  I have recommended keeping 30 days of cash on hand for years.  Do you think you will be the first to know if a “bank holiday” is proclaimed?  It would be done on the weekend after all banks are closed.  Those in the know would have sufficient means to buy necessities.  Are you heavily dependent on credit cards?  In a crisis, plastic goes by the wayside.

Do I think this crisis will happen in the U.S.?  I would rather be prepared and it not happen than to be unprepared and see it happen here.  The 2008 Financial Crisis was not announced beforehand.  Do you think those in power would provide the populous with an early warning signal?

See: http://finance.yahoo.com/blogs/daily-ticker/texas-may-start-hoarding-gold-secession-next-192407075.html

Jim Rickards is a credible spokesman and author of Currency Wars.

Be sure to watch the 2nd video.  Jim makes some very critical comments about Bernanke and his method of confiscation.  I believe Jim’s comments are “spot on”.

First of all,

Cyprus means love, blossom!
http://www.blueletterbible.org/lang/lexicon/Lexicon.cfm?Strongs=G2954&t=KJV

There have been many comments about Cyprus outside the mainstream press.  Cyprus may impact you and me on a personal basis.  Why?  The IMF has now shown that it will cross the line of the Rule of Law and confiscate your money to bail out the banking system.  The banks took profits and paid its primary players huge bonuses on poor banking practices.  When I was in banking, there was absolutely no way we would have considered the actions they took over and over again.  The regulators would have put an immediate stop to any reckless practice of investment or lending.  The banking schools taught conservative lending and investment practices, period!

Then came the greed.  The 1980’s brought Wall Street greed into the light.  Washington, D.C. obliged by relaxing long-held standards of conduct.  The result?  Confiscation attempts by the IMF, the EU, and politicians.  Their commitment to depositor money being sacred and secure went out the window.  The issue is not whether they succeed in getting Cyprus depositor money now but instead the issue is that they attempted!

I find it interesting this event happens on the island of Love just as we wrapped up our Bible study on Ascending to Love.  What a coincidence.  No one in their right mind would attempt to confiscate KGB money from Russians in power.  Talk about blindness!

Cyprus May Become Europe’s Lehman, Billionaire Potanin Says according to a Bloomberg article: http://www.bloomberg.com/news/2013-03-21/cyprus-may-become-europe-s-lehman-billionaire-potanin-says.html

This “Black Swan” event will be looked back as the event to change the financial system.  Cyprus is a member of the European Union.  Do you think that the citizens of Spain, Italy, Greece, or Portugal are resting easy today?  What would you do if your life savings was at risk of confiscation?  Government numbers have been massaged to make things look better than they really are.  Do you think the banks are as sound here in the U.S. as we have been led to believe?  Do you think we are really in a recovery when shadowstats.com who uses the same raw government numbers tells us that we are in the second dip of the Great Recession?  Would Ben Bernanke continue to shovel in $85 Billion per month of liquidity into the system if the system was in good shape?  Do you think that interest rates would be kept at zero with true inflation exceeding 8%?  Last night I was on a return flight from NY and sat next to a chemical distributor salesman.  His prices are constantly increasing to his customers, just like the early 1980’s.  As a note, he was unaware of Cyprus.  How many Americans are being kept in the dark about this global-changing event?

Here is the reality:

Depositor money is at risk.

Retirement money is at risk, even if only forced to buy government bonds at low rates, the rates float upward, the value of the bonds decline.  The same net effect of confiscation.

The current level of sovereign debt is unsustainable and something has to give.

The FDIC does not have enough reserve to handle a massive depositor withdrawal from the system.

The Chinese and the Russians continue to add to the gold reserves.

Calls of an audit of the U.S. gold reserves have fallen on deaf ears.  Some credible experts say that the gold was leased out and is gone.  Why not let an external audit settle the issue?

Trust in the current fiat currency system is heading south and may not be reversed.

I have been issuing warnings since October of 2007.  Those of you with money should protect yourselves for you may be called upon to help others.  Those of you without money should simplify your living standards, fast!  All of us, no matter what financial condition we are in, should be seeking the Voice of Our Heavenly Father to guide us through the turmoil ahead.  I trust that Our Heavenly Father will empower HIS remnant to guide mankind through any and all economic collapses in the future.  It started with Love and it will end with Love.