Servias Ministries Blog

The banks are holding assets that are in a declining valuation and they have been given a deferral on reconciling their assets values.  Instead of valuing this inventory at market value, they have maintained the value at these houses at their original cost.  If they were to immediately sell off these non-earning assets, the banks would be insolvent.

Unlike the 1980’s when the S&L crisis forced a cleansing of the banking system, the current central planners want to keep the status quo.  They are repressing interest rates to keep the current banking system in place.  The rigging of these rates help the banks, not the soon-to-retire baby boomers.

This excess inventory would normally force prices down in the real estate industry but the central planners know that if prices drop, the economy will suffer even more than it currently is.  The economy is teetering on the second half of the “Great Recession”.  If the numbers were being reported properly, the public would realize that we are already in the 2nd dip.  The “perception” game is in full swing.

The current system will ultimately be replaced with a “righteous” system designed by Our Heavenly Father.  It will be one of equal weights and measures.  Wisdom from Above will be used to build the infrastructure.  Anointed men and women will be called to oversee the system and defend its viability.  They are being prepared now.  They will understand and embrace Divine Intent and walk in Love.  They will be motivated by Love to insure fairness and equity in the system.  The current lawlessness will be exposed and removed.  No longer will mankind be enslaved by Mystery Babylon.  The system will be cleansed of the fraud that has been perpetuated by those who are currently in control.  This will be one aspect of Thy Kingdom Come!

Earthly power will always pursue war to sustain its lust for more power.  The European Union will ultimately look to war in order to maintain its rise to power.  “We will do whatever it takes to maintain the European Union.” is the rallying cry of the head of the EU Central Bank.  Economic data is getting worse among some of the countries and the worse is yet to come.

The U.S. has been in Afghanistan longer than both World Wars together.  Have we accomplished anything noteworthy?  The cost of lives, the wounded families, the tremendous resources, and the path of righteousness have all been major hits to America.  Our economy continues to spiral into deeper debt.  John Williams of shadowstats.com is convinced we will move into hyper-inflation soon.  He begins:

“U.S. Fiscal Circumstances Simply Are Not Sustainable

The 2012 fiscal condition of the United States suffered its worst annual deterioration in the history of the Republic.  Based on generally accepted accounting principles (GAAP-based accounting), the actual federal deficit hit a record $6.6 trillion in the year ended September 30, 2012, a level that was fully 42% of the nation’s annual GDP.”

It is imperative that we focus our attention of Our Heavenly Father, not the earthly wisdom that got us to this point.  HE will redeem us, not a bigger government handing out: a welfare check, a free cell phone with 300 monthly minutes, free internet, cash for clunkers, food stamps, section 8 housing, free contraceptives, Medicaid, ninety-nine weeks of unemployment, free medicine.

Man uses war to fix the symptoms of the problems when all he needs to do is look into the mirror.

The value of your Dollars continue to decline.  Retailers are repackaging their products into smaller sizes or contents and charge the same amount for less.  That equates to inflation.

Gold is money.  Dollars are “notes” or derivatives of money.  Gold holds value and preserves purchasing power whereas Dollars are not retaining value.  Central planners know this and they continue their attempts to manipulate the price of gold using the paper market, a derivative market of hard assets.

When the price of gold rises, it is a warning sign to the market.  Planners know this and continue their intervention to moderate the rise of gold in terms of Dollars.  When the broad market finally responds to the manipulation and intervention, the price of gold will shoot up quickly.  Will it happen in 2013, 2014, 2015…?  Only Our Heavenly  Father knows.

Wealth is being created in Asia and thus gold is moving in the direction of wealth creation.  The Netherlands and Austria are now talking about bringing back their gold.  People want the physical asset, not just a claim.  This demand will continue to grow and accelerate as the debt of nations becomes larger and unsustainable.

The Bank of Japan has joined in to the notion of depreciating their fiat currency.  This is increasing “counterparty” risk of fiat currency.  Japan’s aging economy has been in negative territory for some time and they want to reinvigorate it.  Printing more money seems to be the easiest way to appear prosperous.  This is just another aspect of the currency war now in full swing.  Who can depreciate their currency faster?  They are doing this at great risk.

Given the fact that the average person cannot assess the risk of paper investments, gold appears to be the best protection against the coming volatility.

A “Short Squeeze” is a rapid increase in the price of a stock, bond, or commodity asset that occurs when there is a lack of supply and an excess of demand for the asset.  Speculators “sell short” the asset using a derivative of that asset hoping to buy it back in the future at a lower price.  They are required to close out their position with an equal quantity of the asset they “short”.

The Germans are now demanding their physical gold in lieu of holding a paper claim provided by the U.S.  A problem occurs when the central banks lease out their gold into the market.  That gold is removed from storage and a piece of paper is put in its place, a claim.  Germany could physically reclaim all their gold in seven weeks but instead plans to take seven years.  Why?  I suspect their gold is not sitting in storage and the U.S. must buy it back from the market.  Oops!

Venezuelan President Hugo Chavez demanded Venezuela’s gold back and got it.  Other countries are doing the same.  China and Russia are quickly and quietly adding to their gold reserves.  In the meantime, the U.S. is expanding its money supply at breakneck speed.  Thus whatever gold we have left will ultimately be unable to sustain the value of the U.S. Dollar if the global financial system were to return to some form of a gold standard.  Other countries are moving toward a gold standard after having been given devaluing dollars as payment for their resources.

The paper claims against gold on a worldwide basis greatly exceed the actual known supply of gold.  The same holds true for silver.  Once holders of those paper claims demand the physical metal, the price will skyrocket and somebody will be left out in the cold.

You must ask yourself these two questions:

1.  Why does Germany want their gold back?

2.  Why does it take seven years to get their gold back?

The answers are obvious.

There is life after Mystery Babylon:

The following list is from http://theeconomiccollapseblog.com/archives/do-you-want-to-scare-a-baby-boomer

I have seen many of these statistics from other sources.  What amazes me is the slack attitude of many baby boomers.  Self-indulgence is at the center of their attitudes.  These are the same people who allowed “government sanctioned” lawlessness to become part of the American culture on their watch.  The Supreme Law comes from Our Heavenly Father.  Any law that is contrary is lawlessness, pure and simple.  The weight of the subsidies needed to support them is greater than the ability of the rest of the working population to generate income.  Something has to give.

1. Right now, there are somewhere around 40 million senior citizens in the United States.  By 2050 that number is projected to skyrocket to 89 million.

2. According to one recent poll, 25 percent of all Americans in the 46 to 64-year-old age bracket have no retirement savings at all.

3. 26 percent of all Americans in the 46 to 64-year-old age bracket have no personal savings whatsoever.

4. One survey that covered all American workers found that 46 percent of them have less than $10,000 saved for retirement.

5. According to a survey conducted by the Employee Benefit Research Institute, "60 percent of American workers said the total value of their savings and investments is less than $25,000".

6. A Pew Research survey found that half of all Baby Boomers say that their household financial situations have deteriorated over the past year.

7. 67 percent of all American workers believe that they "are a little or a lot behind schedule on saving for retirement".

8. Today, one out of every six elderly Americans lives below the federal poverty line.

9. More elderly Americans than ever are finding that they must continue working once they reach their retirement years.  Between 1985 and 2010, the percentage of Americans in the 65 to 69-year-old age bracket that were still working increased from 18 percent to 32 percent.

10. Back in 1991, half of all American workers planned to retire before they reached the age of 65.  Today, that number has declined to 23 percent.

11. According to one recent survey, 70 percent of all American workers expect to continue working once they are "retired".

12. According to a poll conducted by AARP, 40 percent of all Baby Boomers plan to work "until they drop".

13. A poll conducted by CESI Debt Solutions found that 56 percent of American retirees still had outstanding debts when they retired.

14. Elderly Americans tend to carry much higher balances on their credit cards than younger Americans do.  The following is from a recent CNBC article…

New research from the AARP also shows that those ages 50 and over are carrying higher balances on their credit cards — $8,278 in 2012 compared to $6,258 for the under-50 population.

15. A study by a law professor at the University of Michigan found that Americans that are 55 years of age or older now account for 20 percent of all bankruptcies in the United States.  Back in 2001, they only accounted for 12 percent of all bankruptcies.

16. Between 1991 and 2007 the number of Americans between the ages of 65 and 74 that filed for bankruptcy rose by a staggering 178 percent.

17. What is causing most of these bankruptcies among the elderly?  The number one cause is medical bills.  According to a report published in The American Journal of Medicine, medical bills are a major factor in more than 60 percent of the personal bankruptcies in the United States.  Of those bankruptcies that were caused by medical bills, approximately 75 percent of them involved individuals that actually did have health insurance.

18. In 1945, there were 42 workers for every retiree receiving Social Security benefits.  Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.

19. Millions of elderly Americans these days are finding it very difficult to survive on just a Social Security check.  The truth is that most Social Security checks simply are not that large.  The following comes directly from the Social Security Administration website…

The average monthly Social Security benefit for a retired worker was about $1,230 at the beginning of 2012. This amount changes monthly based upon the total amount of all benefits paid and the total number of people receiving benefits.

Could you live on about 300 dollars a week?

20. Social Security benefits are not going to stretch as far in future years.  The following is from an article on the AARP website…

Social Security benefits won’t go as far, either. In 2002, benefits replaced 39 percent of the average retirees salary, and that will decline to 28 percent in 2030, when the youngest boomers reach full retirement age, according to the Center for Retirement Research at Boston College.

21. In the United States today, more than 61 million Americans receive some form of Social Security benefits.  By 2035, that number is projected to soar to a whopping 91 million.

22. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

23. As I wrote about in a previous article, the number of Americans on Medicare is expected to grow from 50.7 million in 2012 to 73.2 million in 2025.

24. Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for each and every household in the United States.

25. Today, only 10 percent of private companies in the U.S. provide guaranteed lifelong pensions for their employees.

26. Verizon’s pension plan is underfunded by 3.4 billion dollars.

27. In California, the Orange County Employees Retirement System is estimated to have a 10 billion dollar unfunded pension liability.

28. The state of Illinois has accumulated unfunded pension liabilities of more than 77 billion dollars.

29. Pension consultant Girard Miller told California’s Little Hoover Commission that state and local government bodies in the state of California have 325 billion dollars in combined unfunded pension liabilities.

30. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.

31. In 2010, 28 percent of all American workers with a 401(k) had taken money out of it at some point.

32. Back in 2004, American workers were taking about 30 billion dollars in early withdrawals out of their 401(k) accounts every single year. Right now, American workers are pulling about 70 billion dollars in early withdrawals out of their 401(k) accounts every single year.

33. Today, 49 percent of all American workers are not covered by an employment-based pension plan at all.

34. According to a recent survey conducted by Americans for Secure Retirement, 88 percent of all Americans are worried about "maintaining a comfortable standard of living in retirement".

35. A study conducted by Boston College’s Center for Retirement Research found that American workers are $6.6 trillion short of what they need to retire comfortably.

The Chinese are developing a gold-backed currency using the Yuan.  They continue to purchase gold as quietly as possible.  They are using some of their U.S. Dollars to convert to gold, a store of value without any attached liability.  Last year China imported at least 1,000 tons of gold and they are not divulging size of their stockpile… yet.

They are quickly developing their financial market to handle world-class transactions, circumventing the U.S. Dollar.  The U.S. Dollar as the world’s reserve currency is soon to be challenged.  The unfunded liabilities of the U.S. assure us that the U.S. Dollar will continue its decline in value.  America no longer has the resolve to deal with huge problems in its financial house.

Once the market responds to this plan, I expect gold and silver to respond accordingly based on the basic economic law of supply and demand, and enter their next phase of the bull market.  The central banks have intervened in the paper market to suppress the rise of these metals.  However, the market is larger than the central banks and their manipulation has an end in sight.

Not with shale oil.  I have been discussing the economics of shale drilling with a friend of mine who is a geologist.  We both agreed that the cost of drilling those horizontal wells versus the expected output and decline did not make sense.  Just as the Internet bubble could not last, just as the housing bubble could not last, the shale play will not last either.

To better understand the reality, read the following article:  http://www.businessinsider.com/arthur-berman-shale-is-magical-thinking-2013-1?op=1

John Williams’ Shadowstats.com reports today:

“Based on generally-accepted-accounting principles—or GAAP-based accounting—the 2012 consolidated financial statements of the United States Government showed a $6.9 trillion deficit for fiscal 2012, up from $4.6 trillion in 2011.”

I recommend a subscription to his service.  It saves the rest of us time in wading through government statistics and their interpretation.  You won’t find the mainstream media (MSM) making an issue of this.