Servias Ministries Blog

The recent drop in the price of gold was called a “six sigma event”.  A six sigma event is characterized by a price drop of six times the volatility (or standard deviations) of the asset , thus the name six-sigma, sigma being the Greek letter representing volatility.

This event has at its roots desperation.  At some point we will reach a climax in the currency wars and all of those currently in power will promote extreme measures.  What will those measures be?  Most statements will start out “For the greater good” which translates “We want to stay in power and in order to do that…”.  The decision of the population will be made as a result of the Spiritual Warfare that has been conducted on behalf of mankind.  In the end, Love will prevail.

We must look at the biggest of pictures to keep our perspective.  The latest attempt at a pure fiat currency system began 42 years ago by Richard Nixon.  At that time, he was desperately attempting to withstand the forces causing the U.S. to lose economic power.  The International balance of payments were in disequilibrium and France wanted to settle in gold, not U.S. Dollars.  Ever since then, any attempt by a Sovereign to force settlement in gold has been met with extreme resistance, even war.  Once you lose your economic dominance, you must rely on your military until there is such a global resistance, your military becomes spread to thin or you simply run out of money to fund such an outreach.

Richard Nixon’s closing of the gold window was an unrighteous act.  As the leader of a nation, his unrighteous act had a negative impact on the Spiritual condition of the U.S.  Of course he is not the only leader to bring forth judgment.  He is joined by a long list.  None of those unrighteous acts are overlooked by the Heavenly Court.  The day of reckoning will occur and we should not be caught unaware of the national judgment.  Indeed, all the nations will be judged for their unrighteous acts.  Our Heavenly Father will grant mercy of those within the borders of the country being judged, but nonetheless judgment must come.  When it does, it may be called a “Seven” sigma event, one of Spiritual Perfection.

Japan is a disaster: astronomical debt and zero interest rates.  They may not survive  in the current system. 

Europe:  Spain, Portugal, Italy, Greece, France, the UK are all virtually bankrupt economies.

USA:  The biggest debtor in the world and can never repay its debt.  The Fed’s balance sheet has gone from $800 billion in 2008 when the crisis started, to $3.2 trillion now.  The Fed’s balance sheet is growing exponentially.  They are now buying 75% of all new Treasury issuances.  The purchases may go to 100%. 

Globally:  Liquidity injections (since 2008) are roughly $20 trillion with no effect whatsoever on the real economy.  These injections have only helped banks and created bubbles in stocks, bonds, and property markets.  Total world debt (excluding unfunded liabilities) is about $250 trillion with at least 1/3 is possibly bad debt, roughly equivalent to the world GDP ($70 Trillion).

Can the world repay $70 trillion of bad debt with real money? 

Global Derivatives: more than one quadrillion dollars, much is worthless. 

The month of May:  15 central banks lowered interest rates thus competing to debase their currencies.  James Rickards wrote on this in his book “Currency Wars: The Making of the Next Global Crisis”.

Collapsing currencies worldwide will bring forth hyperinflation. 

Gold will ultimately respond and maintain its purchasing power.  Relative to paper money, the gold price is likely to have several zeros after it in coming years.

The Physical Gold Market.  The LBMA (London Bullion Market Association) reported record gold transactions in April, of +25%, the highest level since gold peaked in September of 2011. Physical trading is at the same level where it was when gold was at its peak at $1,900. 

And this is just a simple review.

As a former Chief Financial Officer (CFO), I can tell you that corporate spending decisions are highly effected by the cost of money.  Decisions to build, expand, etc. are all about return on investment.  Why do you think Corporate America has moved all of its manufacturing offshore?  It’s all about the bottom line.  The average worker or the future of American infrastructure does not matter.  It is every man for himself and that is the crux of the problem of the current macroeconomic model.

The current system is based on greed and self-interest and is identified historically by its boom and bust cycles.  Fear and greed play their role in moving up and down the economic cycle.  The stock market reflects this reality.  Central planners play with the cycle, sometimes extending some aspect of it, but in the end the cycle continues its roller coaster ride.

Germany has thrown in the austerity towel and is now in the money printing business as well.  They see no other way but to join in with the other countries.  Their self-interest necessitates the change in policy.  Why make their citizens suffer when other countries won’t go down the road of austerity to correct the overall problem.

Ben Bernanke’s bet on low interest rates will ultimately backfire.  Do you really think that a handful of intellectuals can accurately assess the complexity of the global economic system?  Only Our Heavenly Father has the capacity to properly guide people through a righteous and equitable path to prosperity.  Time and time again, history proves this to be correct.

Zero interest rates do work in a righteous economy.  Scripture tells us to not charge usury to our brothers and sisters but the current motivation isn’t Biblical-based economics.  The unrighteousness in the current system only serves to further the problem.  Greed perpetuates the current direction and the central planners will throw anyone under the bus who gets in their way.  They use terms such as “greater good” and “you don’t understand” as they rationalize their new economic theories.

Gold and silver will ultimately migrate their way to new highs.  The dam of resistance will at some point give way to the true market price of these two precious metals.  You can’t use one Biblical principle (zero interest rate) and expect unrighteous acts to sustain themselves indefinitely.  Our Heavenly Father does not look the other way simply ignoring the bigger issue of greed.  The Heavenly Court will ultimately rule in favor of righteousness.  Those who are called to Spiritual Warfare will lead the way for a Heavenly ruling to come down in favor of the righteous.  Judgment will be assessed on the current system and the day of reckoning will come forth.  Until this day comes forth, we must remain vigilant and continue pressing in and aligning ourselves with the righteousness and character of Our Heavenly Father.  Yes, we will  have some setbacks but overall we will move toward full maturity.  We must not become complacent and accept the current system as being permanent.  The problems are there no matter how much the central planners try to cover them up with half truths, manipulated rates, or managed reports of false recovery.  Our Heavenly Father will give us plenty of time to reach maturity but when the day of reckoning arrives, judgment will come in full force on the current system and there will be no refuge for the lies anymore.

Saudi Arabia’s King Abdullah clinically dead: Report says

See:  http://www.presstv.ir/detail/2013/05/26/305584/saudi-arabias-king-clinically-dead/

The Federal Reserve has added yet another bubble to the current list of bubbles:  the Current Assumption Bubble.  This one is based on several other bubbles staying inflated.  Let me explain.  Historically, a corporate financial officer needed about a 15% return on investment (ROI) to agree to a capital expenditure.  This ROI had underlying assumptions of revenue flows, cost of money (interest rates), future cost of materials, etc.  Now enters the Fed who manipulates the cost of money, props up the revenue flows, and inflates the cost of materials.  The CFO is now basing his decision on assumptions that have been manipulated by the Fed.  Once the Fed quits stimulating the economy, the current decision is no longer valid.  If the assumptions change rapidly then the CFO not only scraps the project but then moves into a full defensive posture and shrinks all cash outflow to cover the costs of the bad decision.  By extending the Quantitative Easing (in its fifth year), the business cycle has been totally distorted.

This is true for individuals as well.  As we are lulled into believing all is okay, there awaits a day of reckoning.  My goal is not to induce fear but to warn of potential harm that may come to the brethren if we do not remain vigilant.  The financial institutions managed to virtually eliminate the jubilee of bankruptcy of individuals in the U.S.  Why did they do this?  The saw what was coming and wanted to protect their interests by changing the laws to hurt the average borrower.  This change in the law resulted in further enslavement of the masses to the financial institutions.  Could this be one of the reasons for an overall increase in the suicide rate versus the Great Depression?

People continue to feel the pinch of the current economic environment while being told that the nation is in a recovery.  The numbers don’t confirm the recovery.  Live simpler, be careful of additional debt, and ask Our Heavenly Father for guidance in your expenditures.