Servias Ministries Blog

I agree.

See: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/10001937/Fed-and-Bank-of-Japan-caused-gold-crash.html

They will do whatever they can to save their fiat currencies.

By my best reckoning, we are in the midst of a Dollar Bubble.  It is difficult to be inside a bubble and comprehend the magnitude of the problem for everything looks rather calm from the inside looking out.  Once the bubble bursts, chaos ensues.

Financial repression has become a way of life here.  My parents earned 5% at a minimum on their passbook savings for decades.  Now, you must take notable risks to get the same return on your money.  My parents’ generation were born in the 1920’s and 30’s when people had virtually nothing.  They had one pair of shoes for special occasions and often walked barefooted the rest of the time.  Today, our closets are loaded with shoes and we think nothing of it.  They were savers, my generation has a pathetic track record of saving.  We are a generation known by excess consumption.  My generation will expect the government to sustain the quality of life we have grown accustomed to.  The baby boomers elected officials who knew how to schmooze us by tickling our ears with promises that can never be fulfilled. 

Our economy is based on a lie.  When Nixon closed the gold window in 1971, we began the lie.  Our currency, once supreme, was now on a road of depreciation.  Our manufacturing prowess was second to none.  CEO’s figured out how to slide greed into the corporate way of thinking by moving manufacturing out of the U.S. and pumping up profits… and their bonuses.  Globalization was promoted and the disparity would soon pull values downward.  The era of consumption will end abruptly.

Long-term energy supply will not sustain the current global growth rate even with intermittent slowdowns.  People want to travel, stay warm, stay cool, and have nicer houses.  It all takes energy.  Long-term demand exceeds long-term supply yet the price of oil slides.  This is based on manipulation in the futures market.  High prices encourage conservation but greed could care less.  I wonder who will cut down the last tree?

Banks are run by “felons” who are too important to the system to prosecute.  They have effectively been given amnesty for any acts of fraud as they continue to run global bank operations.  The banking system is currently in power.  Yes, they are too big to fail.

In the past week, the banks have obliged the central planners by attacking the canary in the cage- gold.  Why would the focus be on such a small market relative to other sectors of the economy?  This is the one sector tied to money,  the medium of exchange.  They are trying to manipulate the reality that gold reflects value.  For centuries, gold has done its job against all odds.  Men have tried to replace it with their own creations but it has continued its job as time marches on.  This time will be no different.  Gold and silver will once again survive man’s attempt to eliminate its function.  The canary will survive and alert us that the bubble is on the verge of bursting.  When it does, we will need to be grounded in Love.  Maybe that is why Our Heavenly Father had a guy with a financial calling to focus on this subject.   Hmmm!

All is well, don’t worry, by happy!

The Agents of the “current powers that be” continue to pound away at the price of gold, silver, and the related stocks.  If one did not buy on margin, then the losses only occur if you sell out, and that is the hope of those who are pushing down the price.

Has the macroeconomic picture improved to cause a flight from gold & silver?  No, each day moves us closer to an epic negative economic event.

In the early 80’s, we purchase a property on the Gulf of Mexico.  The late 80’s cause property prices to lose 65% of their value.  However, in 1996 we sold the property for 2.8 times of our original purchase price.  Was it a good deal?  Yes.  Did it look ugly in the late 80’s?  Absolutely.  If you have never experienced a swing in prices, it can be unnerving.  A little gray hair with some experience behind it helps when major events are unfolding.  Some look fearful, I am looking at my next purchase (as soon as I get some more cash).

In a recent interview, Richard Russell, a well-known investment newsletter writer said:

“What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don’t know?  I don’t have the answer, but I do know what these billionaires are doing.  They, all three, are selling consumer-oriented stocks.  Buffett has been a cheerleader for US stocks all along. “

Shares of Johnson and Johnson, Kraft, Procter and Gamble, Intel. GM, IBM, Sara Lee, JP Morgan, Citigroup and Goldman Sachs were all listed as being sold by one or more of these billionaires.  It the future was bright, these guys would be adding to their positions, not reducing or eliminating them.

This would indicate that these three are not optimistic about the recovery in the U.S.  They have been right more often than most.

No, I am not talking about Denny’s breakfast.  Gold, silver, and related stocks continued their “slam” today as margin investors had to liquidate holdings, even grandma’s jewelry.  It was a good day to add a few shares of stocks you believe in.  The macroeconomic picture has not improved but only worsens day by day.  The volatility is as predicted.  Once the margin investors are out of the picture, prices will firm up.  I hope they stay low until I get some more cash to buy at these levels.  I do not recommend you follow suit unless your licensed professional investment advisor recommends any purchases.

Is the Federal Reserve increasing the quantity of dollars every month by $85 billion  Yes, they are further debasing the dollar by transforming debt into currency.

Is the unemployment higher today than it was 7 years ago?  Yes, the economy is not in recovery.

Is the euro strong?  No, It goes from one crisis to another.  The Dutch Finance Minister to the EU wants to confiscate depositor money in banks in Cyprus and use it as a template for future bailouts.

Is the yen going to strengthen?  No, the Japanese government and central bank are debasing the yen even more rapidly than than the speed at which currencies of other industrialized countries are being debased.  The population will look to precious metals as an alternative.

Today’s action will help remove the feint of heart from the market.

This last week, a major market veteran indicated that there were 50 buyers for every one seller of gold & silver bullion.  Friday was intense.  People were looking for this opportunity to trade in their fiat currency for “real” money.

What is the intent behind this “smash”?  Those in power are not telling us.  Their actions are transmitting to us that there is something major lurking below the surface.  Their desperate attempt to save the U.S. Dollar from further depreciation appears to be the focus.  Further decline would bring a demand for higher interest rates.  In turn that would cause an explosion of deficit costs to pay for interest against the current outstanding bonds.  Ultimately the Federal Reserve would lose control.

On the technical side, gold could retrace to $1,250 before roaring back up.  If it were to do that, physical supply would probably be nonexistent or premiums would make up for the shortage.  Either way, this is the epic battle between the West and the East.  Volatility will remain high.  For those who invest in anything, do not borrow to invest.  These are perilous times.  For the rest of us, hang on and watch history in the making.

The paper market intervention in the gold and silver markets are acts of desperation.  The cascading downward on the charts are clear indications of government intervention.  Ninety tons of gold were reportedly purchased by central banks once the price dropped below $1,550.  Thank you very much.

Goldman Sachs heavily promoted selling short gold this week.  They herded their followers into the slaughter house.  500 tons of “paper” gold were sold during this takedown.  About 800 tons of physical gold have been delivered in the last 45 days and have been taken out of the market.  A friend of mine tried to buy Canadian Maple Leaf gold coins and his supplier was out.  Expect to see short supply moving forward.

I believe that the buyers and holders of precious metals and their related stocks have just about figured out the game that the central banks have been playing and are no longer “thrown off the bull” during corrections in price, whether market or government generated.  The market’s volatility will definitely increase going forward.  If you believe that gold and silver are heading up, then you won’t worry about paying $1,600 versus $1,500 for gold.  Keep you Maalox on hand, there is turbulence ahead