Servias Ministries Blog

The Biblical Law of Weights and Measures requires that you don’t change a “measure” to allow you to take further value from a contract than the original agreement.  If you don’t like the inflation number, then redefine it downward.  That will save the government money since the CPI determines raises for Social Security recipients.  No official inflation, no cost of living increase.

See:  http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201106211841dowjonesdjonline000414&title=change-to-inflation-measurement-on-table-as-part-of-budget-talksaides

In a few days QE2 (Quantitative Easing 2 by the Federal Reserve) will end.  This situation is likened to a high wire act over Niagara Falls on a windy day with gusts up to 40mph.  With Greece in meltdown and other European countries not far behind, the U.S. is also running close to the edge.  In a recent OpEd piece, Larry Summers (former economic advisor to Obama) wrote that we need more spending and stimulus to get us out of this second dip of the “recession”.  It seems to me that giving a drunken sailor another fifth of bourbon would not sober him up.

401K’s may be the target of the government.  The Federal Government needs buyers of its debt and who better to buy it than its own citizens, whether voluntary or by force.  There is substantial value in those 401K’s and the government has its eyes on them.  In one stroke of the pen, your 401K could be comprised solely of U.S. Treasury Bonds probably named “Patriot Bonds”.  Be sure to salute the flag if and when that day comes.

The eyes of Americans have been blinded by Our Heavenly Father.  As a nation we have been lulled into believing that the Federal Reserve can bail us out of our macroeconomic crises.  Our greed and arrogance as a nation has brought us to this threshold.  Only the mind of Christ can pull us out of the fire.  Being led by the Spirit of GOD is the solution to our problems but only those who willingly embrace HIS Love will be qualified to take on this mantle.  Let me explain.  What is the one quality a treasurer for the Kingdom of GOD must have in order to properly manage and distribute funds?  Love.  Why?  Love overcomes fear and greed.  Those twin sisters manage to corrupt the process of ministering to mankind.  You can have 30 years’ experience in financial management, a PhD in finance and accounting, but if you do not have Love as your primary motivator you will fail at the position.  The current system has plenty of bright people running things.  However fear and greed are the prime motivators and have brought us to this threshold without any solution other than severe pain.  The middle class is in the crosshairs and it doesn’t look good.  We don’t need another revival, we need an awakening!   

For those who have followed this blog over the years, you know that I believe gold & silver to be your best “insurance” against economic calamity.  We saw the parabolic rise in silver this year only to see it retreat to the $35 range, a normal market response.  The underlying gold and silver stocks took a beating due to what I believe is a focused effort to shake people out of their positions.  The bull will buck you off because that is what he does.

Last night’s network news finally reported on the meltdown happening in Greece.  The unrest is not new but the average American is not exposed to ongoing economic calamities occurring around the world.  Therefore his investments do not reflect the volatile realities of this interconnected planet.  In the past, we have relied on the government to protect us from uncertainties just as a shepherd protects his flock.  A shepherd will sacrifice himself for his sheep but that is not the case of those in power.  Self interest prevails.

What are we to do?  We must focus on what will have value after the smoke clears.  If one looks at monetary history, the only monetary units that have survived men’s cunning devices are gold and silver because they cannot tinker with their value.  Greed and fear have no power over those metals since they do not have any inherent liability attached to them.  Gold and silver as well as land are primary assets.  Gold and silver ETF’s (Exchange-traded funds) are secondary assets with claims against the actual metal.  Gold & silver stocks are tertiary claims against the metal.

Owning gold and silver bullion is the safest of the three and you don’t have to worry about man’s performance.  The other two have performance requirements attached to them so you must consider management’s track record and trust that they will continue to do the right thing.  Gold and silver stocks provide the investor leverage for higher returns to offset this risk.  Owning some of all three may not be a bad idea.

As long as gold & silver prices are at these levels, those companies who mine the metals are making money.  As quarterly and annual reports come out, investors will get interested in the moneymakers and will push the price up.  As the turmoil increases around the globe, the price of gold has the potential to go up to $12,500 in USD and silver has the potential in the $600 range.  Those mining shares would rocket up with them.  If we enter into a global depression that might reduce the price of these metals, would you rather own gold & silver or hold pieces of paper manipulated by man?

These are interesting times!

Is ignorance bliss?  Unfortunately, I think not.  During the last recession I wrote on the “W” type recession that called for a double-dip recession.  As always, the government did not acknowledge the severity of the recession until it was over thus keeping the populace ignorant of the facts.  That downturn was called the “Great Recession”.  The Fed pumped hundreds of billions of dollar into the economy to bring it out of the downturn only to find that it was not enough.  True inflation is running at 10% and we are making .1% on our savings causing us to lose money as savers.  Where else can you put your money at zero risk?  The safe havens are gone and inflation has an insatiable appetite to eat up life savings.  The stock market has inherent risks and if there is a meltdown, it will take the price of the good stocks down with the bad.  Why?  When leveraged investors start losing money, they have to sell some of their good positions to raise cash to offset those losses.  Thus we have a roller coaster ride.  Additionally, large investment banks short gold and silver stocks to push down their price then buy them back at a cheaper price.  They have been playing that game for decades.  Gold and silver stock prices will be lifted by their ongoing profits at the current underlying metal prices.  They are making money hand over fist and the market will wake up to that fact and send their prices higher.

The United States has been the world’s unpaid policeman.  We are now involved in four war fronts.  As a member of NATO, we are spending a higher percentage of our GDP than the other member countries according to the retiring Defense Secretary Robert Gates.  The rest of the developed world has had a free ride for this “police” protection and I expect that to stop before long.  I am sure that this topic has been discussed behind closed doors and that may be one reason why other countries have not yet dumped the U.S. Dollar.

When adding in all of the money owed to cover future liabilities in entitlement programs the US is actually in worse financial shape than Greece and other debt-laden European countries, Pimco’s Bill Gross told CNBC Monday. See: http://www.cnbc.com/id/43378973  The mainstream press is finally starting to report what we have been yelling from the rooftops:  America’s got a serious debt problem.  We cannot continue on this path and must change immediately.  Pain will come, the question is “How much?”.  Personal resources require management and expenditure.  The bigger the house, the bigger the resource requirement to maintain that house.  Each of us starts out life not needing much then we go through the phase of wanting everything and ultimately we return to not needing much.  It is that second phase that is disastrous.  My next door neighbor, a widow of a doctor, just had an estate sale.  What a lot of stuff!  She lived in that house for over 10 years by herself and had more “stuff” than a household of eight.  Simplify now while there is demand for your excesses.  “Get lean and mean” as the saying goes.

The next 10 years will be the most interesting time of America’s history, let alone the world’s history.  The culmination of greed and fear will bring forth a decision from mankind.  I trust that the blindness to the revelation of Love will come to an end.  Men will no longer attempt to control the masses but will work together to solve the problems created by centuries of greed and entitlement.  May Our Heavenly Father help us all.

Disinformation is false or inaccurate information that is spread deliberately with intentions of turning genuine information useless.  On one of the morning shows, the reporter interviewed a representative with U.S. News and World Report who just completed a study to rank the top 20 diets in effectiveness.  In the interview, the word that jumped out at me was “disinformation”.  Notice that the media does not want to use the word “Lie”.  Once again, the media is deceiving the populace with deceiving words.  I discussed the use of this word with my wife and we both agreed that Americans were clueless of what was happening to them.

Politicians have become masters of disinformation.  Businesses run a close second.  Truth in advertising was once a cornerstone in Federal regulation.  Except for the ingredients list on packaged foods, truth is hard to find.  Even those lists don’t tell the real story of what we are consuming.  Do you think that the current system really wants to win the war on cancer or just perpetuate the current infrastructure?  The signing of the National Cancer Act of 1971 by then U.S. President Richard Nixon is generally viewed as the beginning of the war on cancer.  Forty years later and the war rages on!

I recently hired a subcontractor to do some exterior work at the house.  His first commitment was “two weeks”.  During the target week, he could not be reached.  Finally the next Monday he answered his phone.  “I’ll be there on Wednesday.”  On Wednesday, “I’ll be there on Friday.”  Had he not been the expert for this particular work, I would have cut my losses and sought other avenues.  Once he completes the job, he won’t be back.  Lies, deception, manipulation, and innuendo promote an illusion that all is okay.

Federal Reserve Chairman Ben Bernanke told us this week that the economy was improving.  Using manipulated numbers, the economy can be made to look wonderful… unless you are unemployed or trying to buy food with the same budgeted amount as last year.  You will notice how OPEC is now committing to produce more oil at the same time of Bernanke’s remarks.  What a coincidence.  This economy continues to show structural cracks and Our Heavenly Father only knows how long those in power can sustain the deception.  We must continue to listen to Our Heavenly Father for guidance.  The media would have you believe that a pig with lipstick is no longer a pig.  Oh by the way, disregard the “oink” sound.

Hyperinflation is monetary inflation occurring at a very high rate and the result is much higher prices for food, shelter, energy, and clothing.  When a country has a very large debt load as is the case of the U.S., there are three ways to deal with this burden:

1.  Grow your way out which would reduce the debt as a percentage of Gross Domestic Product (GDP).  Thus additional tax revenue from the growth would help pay off debt.  The U.S. is not in a position to grow its way out of a paper sack.

2.  Default on the outstanding debt thus causing a crisis in the bond market which would spread globally and cause the global economy to crash.

3.  You can print your way out of this debt with the monetary printing presses.  Historically, this has been the preferred option for many countries.

Politicians know these three options and have chosen #3.  Unless they pull a rabbit out of the hat, hyperinflation is on its way.  Believe me, they are looking for that rabbit.

The voters do not want their benefits touched but the politicians have schemed throughout the decades to bankrupt programs like social security by replacing the cash with IOU’s.  In the private sector these actions would come under the heading of fraud and theft, both felonies.  The current system shields politicians from accountability for their actions.  Only blatant, reported crimes put the politicians’ future at risk.

What is needed is a group of statesmen who are willing to be “one term” politicians and would be willing to do what’s right for the people.  The media wouldl attack those politicians who are willing to sacrifice themselves and do the right thing thus self interest prevails.

The 600 lb. gorilla in the room is our foreign creditors, they own half of our total debt.  Do you think that they will allow their holdings to be eaten up by the Fed  hyper-inflating those dollars they are holding?  The continued issuance of U.S. Debt requires someone to buy it.  In walks the Fed.  They are buying U.S. Treasury debt with newly created dollars that have absolutely no backing of any kind other than the future promise to pay.  The Fed is the lender of last resort.  The foreign creditors hold our future in their hands.  That’s not good.

Where are the baby boomers putting their money now?  In the bond market.  This is the current bubble that is expanding and will burst soon only to leave many baby boomers with even less wealth to sustain them through the retirement years.  Their house value is down, the lost money in the tech bubble, and soon they will suffer more losses in the bond market.  It is ugly out there.

The current “official” inflation rate is around 3.2%.  If the investor is buying a 10 year Treasury at 3.05% and pays a 30% tax rate on the interest and nets a little over 2%, how much money would the investor need to live on to receive an annual cashflow of $75,000?  He would need to have $3,750,000.  Most of us will suffer in the foreseeable future.

How can we respond?  Reduce complexity.  The less we have to manage, the less money we have to spend to support the complexity.  Improve energy efficiency on a personal basis.  Most of all, seek the Face of Our Heavenly Father!

The most important unemployment rate is that of the politicians.  With the election cycle upon us, you can be sure all financial issues will be pushed into 2013 if possible for their purpose in life is to be re-elected.  The question remains: How far can they kick the economic crisis can down the road?  There are more issues around the globe than any one person can deal with.  The banks have been quietly writing off toxic debt as a percentage of their earnings but still have too much on the books.  The true unemployment rate continues to hold in the double digits.  “Financial Repression” is the means by which the Fed keeps low interest rates in place thus helping the Federal Government’s borrowing at the expense of its population.  Once again I have the question, “Who determines the greater good?”  We know it is good for politicians but not for most of us who earn a living in the private sector.

How can we protect ourselves from the excessive spending and deficits that are not at epic proportions?  By revelation from Our Heavenly Father.  If information was all we needed, we could all surf the Internet and be in great shape.  Technology enables but does not create a thing.  Technology will not increase the amount of oil left in the ground.  It may facilitate its extraction but will not expand it.

Our Heavenly Father is the only source of information about the future of us individually or mankind as a whole.  HIS revelations often appears to challenge our human logic.  Human logic has the greed/fear attribute embedded in it as a survival instinct.  The ego would not go to the cross to save mankind.  It would devise another strategy and throw the success point out in the future and force us to constantly perform in pursuit of the end result, almost like leading a horse around with a carrot.  The mind is all about control.  Politicians want to control the masses in order to carry out their agendas.  Our Heavenly Father operates by Love and does not need to control us, simply guide us into all truth.

Truth in the political arena has been obscured by the cunning manipulation of the primary support systems of the political machinery.  The support systems are funded by wealthy interests who are intent on perpetuating their agendas in order to expand their power base and increase their wealth.  The ego would tell you that you never have enough money and you must pursue more at all cost.  On the other hand, money is simply a commodity to Our Heavenly Father.  Jesus acquired money as needed but never focused on its acquisition for the sake of accumulating more.  When you can multiply bread and fishes, why do you need a lot of money?

As we continue to seek Our Heavenly Father’s Face, our resources will expand in order that we may become part of the blessing to others.  Most people focus on “me and my four and no more” rather than the needs of those they encounter.  There is plenty of productive capacity on earth even though it appears that we are running out of resources.  The current paradigm of energy, food production, and growth are based on a hydrocarbon supported infrastructure.  Yes, there is a limit of hydrocarbons on earth but there is a lot of untapped energy from other sources.  The current Babylonian system will not be blessed with the revelation of tapping into the other energy resources.  In the meantime, hearing the voice of Our Heavenly Father is your defense against management by deferral.