Servias Ministries Blog

Let’s face it, we live in the here and now.  Anyone who only focuses on the future is missing a blessing of the present.  In the Book of James, we are called to be a “doer of the Word”, not a hearer only in James 1:22- But be ye doers of the word, and not hearers only, deceiving your own selves.

James 1:25  But he who looks into the perfect law of liberty and continues in it , and is not a forgetful hearer but a doer of the work, this one will be blessed in what he does.

We all should want to be blessed in what we do.  Our actions directly impact our ability to be blessed by Our Heavenly Father.  Are you known as a giver or a taker?  Do you attempt to manipulate others into “blessing” you?  We are warned in the 2nd chapter of James about catering to the wealthy, exalting them above the poor.  The wealthy have often been masters of manipulation in obtaining their wealth and have often used their wealth to gain greater favor.  Oh how deceptive are the riches of this world!  We must guard against manipulation as we seek to be a blessing to others.

People tend to be hard of hearing when it comes to giving.  James calls it a “forgetful hearer”.  Our Heavenly  Father created this earth with plenty of resources to sustain the population.  Man creates shortages or scarcity in order to manipulate wealth from the people.  As you become convinced of scarcity, then you start hoarding your existing resources in fear of further scarcity.  It becomes a vicious circle.  Contrary to human reasoning, Our Lord Jesus Christ spoke the following:

Luke 6:37 “Judge not, and you shall not be judged. Condemn not, and you shall not be condemned. Forgive, and you will be forgiven. 38 Give, and it will be given to you: good measure, pressed down, shaken together, and running over will be put into your bosom. For with the same measure that you use, it will be measured back to you.”

The prerequisite to receiving is giving into the Kingdom.  Receiving fruit only occurs after planting seed.  The Law of seedtime and harvest was established well before the Law of Moses was given and continues to this very day.  Are you consuming your seed?  It is no wonder that you are living in scarcity.

Everybody wants to see the Kingdom established but few really sow seed into the Kingdom.  Instead they want others to do all of the sowing but they in turn want to reap the benefits.  I know this is sensitive subject among many.  Any topic close to your wallet always is.  However we cannot omit this topic when we are focusing on bringing forth the Kingdom.  The very first place in the Promised Land to be taken by the Israelites was Jericho.  The wealth of Jericho was to be reserved for the Treasury of THE LORD:

Joshua 6:19  But all the silver and gold, and vessels of bronze and iron, are consecrated to the LORD; they shall come into the treasury of the LORD.”

The Treasury should be filled first.  Do you think the Kingdom will be established without a treasury?  Our Heavenly Father evoked the truth found in Luke 6:38 as the children entered the Promised Land.  The greed of Achan destroyed his entire house.  Clearly, Achan was a “taker”.

The following article describes currency debasement in Iran.  You can substitute just about any other country and the article would read the same.  Think about it.

http://finance.yahoo.com/news/irans-currency-plunges-investors-warned-093641510.html

“In my view, the Euro is a grand experiment by the Banksters. It is a system devised to determine how a single currency can work for many different and diverse countries. As such, failure of the Euro model experiment would make a difficult case for the idea of a single world currency project.

A single world currency may be a proposed reset solution after the current fiat currency system defaults or is printed into oblivion.

The Euro will not fail. It is in the interests of all Central Banks that it not fail.

The Euro is indirectly supported by the world’s largest gold reserves.

As you say,” QE works and it will continue to work”, in order to, I believe, save the single currency experiment.”

Mystery Babylon’s endgame!  They just don’t realize that Our Heavenly Father will do an “end around” and then the game will be over.

Charles Evans, the Chicago Fed President, effectively announced QE4ever.  He is Bernanke’s right-hand man.  Not only $40 Billion per month is to be committed for purchases, but an additional $45 Billion per month will be committed.  $540 Billion will be committed by printing new money and this translates to a currency war in order to depreciate the US Dollar.  Interest rates are at zero, the inflation rate is above 8%, and pension funds are seriously underfunded.  This is an all out assault on the US currency.  Bernanke is destroying the senior citizens and savers of this country.

The biggest challenge savers have now is how to move cash to assets that will not depreciate with the US Dollar.  Gold and silver are the obvious alternatives.  Related stocks are not far behind.  Retirement funds locked into bonds are at high risk.  If and when the bond vigilantes show up to challenge the bond rates, epic losses in bond portfolios will occur.  Pension funds will suffer great losses and pensioners will curb their spending further thus exacerbating the problem further.

The stated reason for QE4 is to get unemployment down.  The problem is that it is structural, not cyclical.  The excesses of the the boomer generation over the last thirty years created a non-cyclical sustained growth that could not be further promoted by the X generation.  The 25-40 million abortions assured us that the X generation would not have enough population to continue the growth.  The sins of the people are now coming home to roost.  The economic famine is upon us and the Fed will throw everyone under the bus in order to perpetuate its agenda.  My… it will get crowded under there.

Silver is currently 50:1 ratio to gold.  As people flee to metals, I expect this ratio to move back to the historic 16:1 ratio.  $3,600 gold would translate to $225 silver.  Will it reach these numbers?  Only Our Heavenly Father knows!

The price of something is suppose to be a reflection of the balance of supply and demand… that is until manipulation enters the equation.  Gold is hovering around $1,775 and silver has been staying in the $35 range for awhile.  This is clearly not reflecting the physical demand.  These prices are the manipulated paper market price levels.  The paper market is a derivative of the physical market.  The paper market will ultimately be pulled up to the true demand like a rubber band relieving tension.  The manipulators want the weak investors to jump out of the market from frustration.  Once this occurs, they will change their short positions to long positions and ride the price up to the next plateau.  They assume that the weak players will provide enough supply at current levels for them to close their positions with a profit.  However when there is a paradigm shift, the manipulators can get wacked by their own greediness.  When their plan fails, they must go into the market and cover their short positions at a substantial loss.  This causes the price to go up even quicker.

For those of us who believe the shadowstats.com statistics of inflation and GDP, hard assets are the primary vehicle to protect existing value.  As more fiat money is printed, the gold price will ultimately reflect the depreciation of the currencies.  As central banks get more desperate to keep the current system afloat, the price of gold and silver will shoot up higher.  When Joe Sixpack figures out he is losing value in his pension (assuming he still has one), he will begin to focus on hard assets as well.  This is when the price will go parabolic.

Housing is not recovering and has another 20% decline in sight.  This is a perfect example of Mainstream Media reporting encouraging news when the facts just don’t support a housing recovery.  These charts tell the story:

From John Williams’ Shadowstats.com:

John does not see this as a recovery nor do I.  People are not confident enough to buy a new house these days.  What they are being told is not the same as what they are experiencing.  Builders are risk takers and they will start new houses hoping to see the economy return back to pre-2006 levels.  Mr. Bernanke sees this as well hence QE3, 4, 5, etc.

From all indications we are nearing the end of the Debt Supercycle.  Since the Federal Reserve Bank began it’s initial operations in 1914, the managed leveraging of banking has grown to the point of no return.  Over time the banking industry has been able to compromise the reserve requirements from the original intent.  Reserve requirements were intended to keep a reasonable amount of cash in reserve to assure depositors you could meet their normal withdrawal demands.  This allowed banks to make loans to companies and individuals who satisfied the bank’s lending criteria. 

In 1976 I took the Dunn & Bradstreet Credit course for banking institution loan officers.  It taught the fundamentals of lending, the three “C’s”:  Credit, Cash, Character.  Did the borrower have good credit?  Could he cash flow the loan?  Did he have good character (was he reputable)?  Your loan application was thoroughly reviewed and all previous loans were verified.  Your income was verified as well as past income representations.  Personal references were called.  Banks were in business to protect the depositor’s money.  That has changed especially in the larger banks.

There is now a shadow banking system.  Banks participate in unregulated financial derivatives.  These are contracts between two parties somehow insuring performance of a particular investment.  They are only as good as the insurer’s ability to pay if an adverse event occurs.  The “insurer” is not regulated by anyone.  It would be no different than if you or I set up our own home insurance company and collected premiums without any oversight by a governing authority.  If a home burned down, the insured could not collect if I did not maintain adequate reserves to pay his claim.  Imagine this scenario with an industry who has written over one quadrillion dollars in contracts.  Once the fiat currency system took over, it opened the door to such creative financial engineering.

Ben Bernanke has in essence signaled us that the crisis is intensifying.  He has extending the zero percent cheap money policy into 2015.  Inflation based on the 1980 government formulas and calculations is 9.3% according to shadowstats.com.  If you invest in a 5 year CD at 3% then you are losing 6.3% in purchasing power each year.  Pension funds and insurance companies have made financial assumptions in meeting their future outflows at higher rates of return than 3%.  This means they will have a shortfall and must somehow make it up soon.  Otherwise, they will be bankrupted.  Insurance annuities may not be as safe as once thought.  Pensions are at risk as well.

Ben has also signaled that his cheap money policy has not worked since the 2008 financial crisis.  Cheap money is not adding jobs to the economy.  Instead, it is simply protecting the banking system from mass insolvency.

The end of the Debt Supercycle is often accompanied by hyper-inflation.  In our case, the demise of the U.S. Dollar as we currently know it may occur.  Only by austere measures could any administration prevent this eminent event.  Assets without liability are the best protection from financial disaster.  Bernanke is “all in”.  His commitment to the current system is clear.  Will the large money stay with him?  Only if they have as much to lose as him.  If and when confidence leaves the U.S. Dollar, the Supercycle will reach a crescendo then it will painfully end.  It will be no different than previous attempts of the past.

Yesterday the Federal Reserve led by Bazooka Ben set the course through 2015:

1) The creation of $40 billion a month out of thin air to purchase agency mortgage-backed securities at artificially low interest rates;

2) The continuation of Twist 2, and the shifting of Federal Reserve holdings of US Treasury Bonds into longer-term bonds;

3) Combined purchases of long-term securities between QE3 & Twist 2 of approximately $85 billion per month through the end of the year;

4) Quantitative easing without any pre-defined limit, meaning an open-ended commitment to keep purchasing securities at whatever level is judged necessary until the labor market improves "substantially";

5) The potential purchase of additional assets and the deployment of other policy tools as needed;

6) An extension of the 0.0% to 0.25% target range for the Fed Funds rate until at least mid 2015.

What does this tell us?  There is ugliness ahead.  Bazooka Ben and his squad had determined that the so called recovery has not truly materialized as “expected”.  We are now in the 2nd dip of that double-dip recession I wrote about during the 1st phase a couple of years ago.  Europe and China are stimulating their economies as well.  We are in a major global slowdown with no turnaround in sight.

The retirees and baby boomers are now funding this attempt to recover the economy… without their agreement.  Ben has affectively said that your savings rate will stay at near 0% through 2015.  Retirees are toast.  Baby boomers in their desperation will begin to place their savings in higher risk assets such as stocks and bonds.  Those who keep their money in savings will see their purchasing value decline.  As the long-running Christian TV cartoon show “David and Goliath” dog says:  We’ve been hosed Davey!

Now the risk of hyperinflation is even higher than before.  John Williams at Shadowstats.com is convinced that the event is close at hand.  The following details his view:

Only Our Heavenly Father knows the details of the ugliness ahead.  As we listen to HIM, we will know the Truth and the Truth shall set us free.

Disclaimer:

This website contains the ideas and opinions of the author. It is a conceptual exploration of financial and general economic principles. As with any financial discussion of the future, there cannot be any absolute certainty. What this article does not contain is specific investment, legal, tax or any other form of professional advice. If specific advice is needed, it should be sought from an appropriate professional. Any liability, responsibility or warranty for the results of the application of principles contained in the article, website, readings, videos,  books and related materials, either directly or indirectly, are expressly disclaimed by the author.

Ben Bernanke has effectively announced QE to infinity.  This means that he will print as much money as needed to grow the economy.  Gold, silver, and related stocks responded:

Gold up $36.80

Silver up $1.37

SVM up 7.36%

MUX up 7.48%

Open-ended Quantitative Easing is an indication that the Fed sees major issues ahead.  Further, the average person should stock up on groceries now since they will cost more in the future.  A two month supply is not unreasonable.  You should rotate your supplies to keep goods fresh.  If you have a freezer, you might want to load it up with protein based foods.  The price of gasoline will increase and you should prepare for the $4-5 per gallon gasoline range.  Some areas are already there.  As I have said countless times in the past- simplify.  Get rid of “stuff’” that weights you down.  Focus on your health.

Bazooka Ben may have just created the next manmade disaster.  It would not be surprising for a flock of Black Swans to fly be soon.  Look up, your redemption draweth nigh!