Servias Ministries Blog

The CBS series “Sixty Minutes” aired an investigative report on members of Congress using their offices to gain information for personal financial gain, aka insider trading.  Once again, it appears that there are two sets of rules: one set for those in power (the 1%) and for the rest of us (99%).  Public servants are suppose to serve the “Public”, not themselves at the expense of the Public.  The apparent corruption at the Federal level continues to be exposed thus evoking responses such as Occupy Wall Street, the Tea Party, and other expressions of frustration.  There appears to be no reversal of abuse in sight.  The attitude of entitlement continues to prevail among the elite.  It has become so ingrained, Our Heavenly Father may utilize a severe, corrective procedure to cut out the corruption and lawlessness that is prevailing in the U.S., for lawlessness demands judgment.  This country has had plenty of opportunity to repent but continues on the path of self destruction to the point of being out of control.  The lawlessness is not isolated but has become widespread.  This attitude parallels the fall of the Roman Empire in its last days.

The issue is not political, it is all about sin and lawlessness.  We promote Love and all its attributes, not sacrificing others for the benefit of “self”.  The leaders of a country reflect the hearts of the people.  I share these videos and links to inform the reader of lawless state which is global in nature.  Judgment is based on the need for correction of lawlessness.  We must be aware of the overall condition of mankind in order that we can understand the Divine events that will surely follow.

This issue may not go away, see:

http://finance.yahoo.com/blogs/daily-ticker/outrage-day-insider-trading-congress-170308910.html

Economic chaos is on its way and we should not be surprised or unaware but should continue to prepare for this eventuality.  By focusing on Love and building relationships, we will be ready to minister to the unprepared, their lives and wellbeing may depend on our preparation.

During our recent holiday in Australia, we were beat up severely with the exchange rate from US Dollars to Aussie Dollars.  Arrrgh!  We give them $100 for about $90,,, so much for the published rate.  On top of that, prices reflect rates of yesteryear, a double whammy.  $21 breakfast anybody?  No refills on coffee. 

The decline of the U.S. dollar has been substantial without most Americans realizing the impact.  In the end, gold IS the barometer and this is why there is so much energy and resources spent attempting to manipulate its price.  August 15th, 2011, was the 40 year anniversary of being off the gold standard.  For one generation, governments decided what money was worth, a dangerous reality.  How can a small group of men have the wisdom to determine how global economics ought to work?  How can they set aside self-interest motives for the benefit of mankind?  They haven’t.

Economic cycles require ebb and flow.  Any attempt to interfere only makes the next aspect of the cycle more severe in its correction.  Man’s attempt to control these natural cycles will backfire with unintended consequences.  History has shown there is no escape from this reality for various empires have attempted this only to see the same outcome.  Each generation thinks they are smarter than the previous assuming that more information yields greater wisdom.  Not!

I expect gold to hit $10,000-$12,000.  Silver will rise proportionately with gold.  This does not bode well for those who maintain a trust in currency but there does not appear to be any way out unless Our Heavenly Father intervenes utilizing some other method of monetary reality yet to be revealed.  We could easily see a rise to $4,500 with extreme gut-wrenching volatility accompanying the move.  $1,000 dips could be in the cards as we move to new highs.

A well respected retired investor put it in these terms:

THE BRUTAL TRUTHS

1. The slate needs to be wiped clean and a new sound monetary system introduced.
2. That will require the elimination of all debt, deficits, unfunded social entitlements, the US Dollar as Reserve currency, and the big one, the $600 trillion of derivatives.
3. To eliminate these problems by default and deflation will cause a banking collapse and untold economic pain, leading to riots and political change.
4. Politicians are appointed for relatively short terms and opt for the easy solutions.
5. While politicians continue to have the ability to create new money at will, they will do so in order to prevent a melt down on their watch.
6. Consequently the odds point to governments wiping the slate clean by generating enough new money to eventually destroy their currencies.
7. The new international monetary system is likely to involve precious metals. It will have to be money that people trust and that governments cannot create at will.

I agree.  Cinch the saddle up tight, It’s going to be a wild ride!

As of the writing, in the last 168 hours Oklahoma has had 26 earthquakes out of 89 earthquakes listed for the U.S. and territories.  In one day, we had 4 tornadoes and a 4.7 earthquake.

We have written much about the importance of gold & silver as stores of value.  Now, officials in the G20 have figured out that Germany’s gold reserves could help the European crisis but Germany says “No Deal”.  What this reply tells us is that gold reserves are now in the official discussions to resolve the sovereign debt crisis.  It looks like fiat currency is taking a back seat to the real store of value.  This is bullish for gold and silver prices as more people realize that the issuance of paper money will not fix anything but will only make commodity prices go higher.  See: http://globaleconomicanalysis.blogspot.com/2011/11/in-act-of-desperation-g20-asks-germany.html

Those in power will attempt to keep the price of gold and silver at bay in the short term.  However, I expect extreme volatility and a general move upward.  Don’t let the wild swings scare you.

We just returned from over two weeks Down Under and lived among the Aussies.  People are fundamentally the same everywhere.  Families love their kids and watch over them.  People are friendly and helpful.  The prices in Australia were notably higher than the U.S.  They pay about $6 per gallon for gasoline and $3.80 for a cup of “flat white” (coffee with crème).  The land is beautiful but I failed to see one dingo except at the zoo (dang it).

The U.S. news is well integrated into their daily coverage but they are more internationally oriented whereas the American coverage is U.S. concentric.  Gold & silver continue their volatile rise and oil is being pulled to $100 per barrel.  The statistics continue to misrepresent what is truly happening in our great country.  Europe’s problems will have an adverse effect here in the U.S.  They will be forced to print more money as the Fed has to deal with our problems.  Unfortunately, that is not a good long term solution.

While I was away, Oklahoma had a record earthquake of 5.6 with a couple of others of less magnitude before and after.  Could I end up with beachfront property after all?   On the USGS’ “Latest Earthquakes M3.0+ in the USA – Past 7 days”, Oklahoma is well represented.  That is not a reputation that I want to see connected to this state.  Since a major fault line does not run underneath the area, I suspect the experts are scratching their heads.  In the past I have seen pictures from visions of an “island based” U.S.  Only Our Heavenly Father knows!

Banks hold government securities as part of their portfolio.  Historically, these investments were viewed as zero risk instruments, similar to cash.  That has changed.  Sovereign debt now has a risk factor associated with it.  Greece is now the poster child for risk.  European leaders have figured out that a bank’s capital could get wiped out with a default by Greece.  Generally a bank’s capital structure accounts for no more than 10% of its deposits.  This is 2008 all over again.

The U.S. is in a serious recession.  Banks have kept families in houses without paying their mortgage payment so they could at least take care of the property and keep the loss off the books for now.  China is entering a recession and will create a serious financial tsunami around the world.  Manufacturers are unable to get bank loans because credit has dried up and are now being subjected to the loan sharks.  Companies are shutting their doors and causing a drop in the Gross Domestic Product (GDP).  Inflation is understated thus China’s GDP looks better than it actually is.

The interconnectedness of countries has created a domino effect as mentioned in a previous blog.  Rather than financial instruments staying inside the borders, they are sold to investors around the world.  Wall Street has enticed investors with higher returns but without the understanding of the fragility of the issuing country.  The counterparty risks of all of these financial instruments are now being exposed and the holders will soon have a “come to Jesus” meeting.

The U.S Dollar is currently the safe haven of funds from around the world.  It is the least ugly of the ugly sisters.  Where will value be stored if the U.S. Dollar tanks?  I believe it to be Gold & Silver.

It is interesting to note that Herman Cain was a member of the Federal Reserve in Kansas City:

http://www.kansascityfed.org/publicat/newsroom/2011pdf/press.release.05.26.11.pdf

At this website, we have been sharing with our readers the problem of the unregulated credit default swaps (CDS), aka financial instruments of mass destruction.  As of December, 2010, the total of CDS stood at $29.9 Trillion according to the Bank of International Settlements (BIS).  See: http://www.bis.org/publ/otc_hy1105.pdf   These unregulated instruments are embedded in bank balance sheets around the world and politicians have no idea what the impact would be if institutions started defaulting on their debt.  It’s like flying a B-1 bomber fully loaded with live nuclear bombs blindfolded and without an autopilot.  Man’s greed has brought us to the edge of the financial cliff.  As always, American Network television fails to report the impending financial disaster so we must go to Europe to get some details.  The Fed will only tell us of the disaster after the crash occurs so nobody will be prepared and protected.

Britain needs everyone to play nice and buy exports from them even though there is no mention of a currency war raging.  Self interest rules the day and in the end everybody will through the other guy under the bus:

This crisis is worse than 2008 and those (who think they are) in power are trying their best to maintain status quo.

Our Heavenly Father is the only source of true stability.