Servias Ministries Blog

Yesterday, the central planners orchestrated a coordinated takedown of gold, silver, and related shares.  Why?  It is my belief that they are extremely concerned that the current system is crumbling and they must first and foremost manage “social order”.

If the current system was strong, would the Federal Reserve need to inject $85 Billion per month into the system?  No.

If the current system was strong, would the central banks of China, Russia, and others be stockpiling gold?  No.

If the current system was strong, would the $222 Trillion of unfunded liabilities in U.S. be of a concern?  No.

If the current system was strong, would overall unemployment in the U.S. be at 22%?  No.

If the current system was strong, would savings rates be at epic lows for this long?  No.

If the current system was strong, would the velocity of money be at a 50 year low?  No.

If it is this bad, why aren’t people outraged?  One of the primary reasons is that the world is so complex it is hard for the average person to comprehend an underlying weakness in a complex system.  I see this all the time in the world of Information Technology (IT).  Inexperienced decision-makers promote their theory without any history to back them up.  When the unexpected occurs, their decisions will typically cause their system to crash or at least slow way down.  If you can dumb down the population and have them focus on entertainment, then they will be unaware as the system around them crashes.

Independent reporting by the major networks has gone astray.  In the 1950’s and 1960’s you could be assured that the 6PM newshour would report relevant topics uncensored by “big money”.  Now the “big money” owns the media outlets and sanitizes the news to fit their agenda.

One aspect of the “love of money” or greed is the fear of financial loss.  If you own silver and gold and you purchased them at higher prices, your emotions kick in and convince you that the investment was not wise.  This is where courage must kick in.  In spite of everything your being told, is the system really that solid?  We only have to look back at history and see that those in power misled the masses in order to carry out their agenda.  How many financial bubbles must pop before you finally conclude that you must think for yourself and understand that the motives expressed in the mainstream media are only a facade?

Gold is the primary financial barometer of what lies ahead and the central planners know it.  They have a nearly unlimited checkbook to push down the price of gold.  On the other side are all of those people who have similar concerns in the fragility of the current financial system.  Russia and China are among them.  The U.S. Dollar continues to depreciate and sink similar to that of the Titanic.  Instead of taking action to survive the coming pain, most people are moving their deck chairs closer to the band.  What song would you like to hear next?

Heavenly Father, we need help!

This article summarizes the hundreds of blogs that I have written over the last few years and demands ten minutes of your time:

http://www.nytimes.com/2013/03/31/opinion/sunday/sundown-in-america.html?pagewanted=all&_r=0

I wish I had better news but it is better not to live in denial.  At least you can do something in preparation of what is ahead.

What is counterparty risk?  It is the risk to each party of a contract that the counterparty will not live up to its contractual obligations. Counterparty risk is a risk to both parties and should be considered when evaluating a contract.

Are you involved in a counterparty risk contract?  If you have a bank account you are.  When you signed your signature card, you entered a contract with the bank.  When you deposit money in the bank, it becomes a liability of the bank, they owe you money.  Until you have all the money from the bank in your hand, there is counterparty risk.  But wait, I have FDIC insurance to protect me from the insolvency of my bank.  For those with less than $250,000 in the bank (that is most of us), this statement is true.  However, the FDIC is grossly underfunded and if there were a major banking solvency event, you are at risk just like the big boys.

The powers that be have moved us away from currency in our pockets to digital forms of money they can control.  The convenience of credit and debit cards has lulled us into a position of greater risk… and control.  As things get dicey with the greed running rampant through the financial system over the last few decades, we will find out who really trusts Our Heavenly Father when the fragility of the current banking system is fully exposed.  Corporations and other large depositors are at notable risk.  We are living at a time where there is no past example of deliverance of such a system.  Those in charge are more interested in their personal survival than the good of the people.

The only long-term solution to problem of this size and complexity lies with Our Heavenly Father.  No man walking the earth has enough wisdom, understanding, knowledge, and skill to bring forth a successful conclusion to the epic events that lie ahead.  It would appear the Love has exposed and initiated this sequence of events.  Cyprus means Love in Scripture.  How appropriate that the counterparty risks of simple bank deposits would be exposed in such a fashion!

On 16 March, everything changed. The European Central Bank (ECB), the International Monetary Fund (IMF), and the German government led by Angela Merkel forced the Cyprus leadership to cross a line that can never be forgotten: Unauthorized withdrawals from bank deposits. This amounts to confiscation, initially set at 6.75%  if your account was less than 100,000 Euros ($128,000 USD) or 9.90% if over the threshold.

Who should have taken a “haircut”?  Answer: Shareholders, Creditors, and Bondholders, not the holders of deposit accounts in debt-ridden banks. They thought it would be much easier to rob the depositors in Cyprus ( including Russian mobsters using the banks as a tax haven) than it is to extract money from the Germans and other Northern Members of the EU.

Angela Merkel, the IMF and the ECB  can never put the genie back in the bottle.  The 17 member states of the Eurogroup took the unforgivable action and they will do it again: all Europeans must realize they are the target of a financial policy determined to rob them of the fruits of their labors on the pretext of balancing the books.

Do you think they made this decision independent of the Federal Reserve Bank?  I doubt it.  Do you think this was a test case for future action?  Absolutely.  There is not enough “printed” money in the world to reconcile the books of all the technically insolvent banks around the globe.  Only additional money printing and confiscation could relieve the liability pressure of the current system.  Excessive money printing could destroy the confidence in the current system.  With the continued missteps by the powers that be, it seems that is exactly where we are heading.  This is not surprising to Our Heavenly Father.  HE will raise a remnant at the appropriate time to bring forth righteousness and expose the lawlessness with the Light of HIS Word.  It will be first death of the system, then resurrection of the saints and glorification of the remnant.  Yes my friends, the tomb IS empty!

The Cyprus Banking Crisis has opened the door to the willingness of central banks taking our money out of the our account and effectively putting it in the capital accounts of the banks, a pure confiscation of assets.  Think about it.  Where is your money safe if it isn’t protected in your bank account?

Consider this.  What if you are a chief financial officer (CFO) of a corporation with $1 Billon in the bank?  where do you put it to protect it from confiscation?  Large depositors could lose 30-40% of their cash if they pick the wrong bank to put their working capital in.  The “central planners” know the impact of the threat of confiscation on the CFO’s thinking.  Do you put excess funds in the stock market in blue chip, dividend-earning stocks?  Do you go out and buy some real estate and rely on rent payments to fund ongoing operations?

The big issue is velocity of money- how fast money moves through the economy.  The velocity impacts the gross domestic product (GDP) if it slows down.  People are just not buying anything, they are keeping the money in the bank, sitting on the sidelines.  Yes, the stock market is hitting all time highs but that is due to the Fed goosing the economy, not the natural state of a recovery.  The Fed is getting desperate.  They are taking a huge gamble.

Below is a graph of money velocity.  It is at 50 year lows.  An economic recovery is tough with the velocity at such low levels.  People are concerned.

What if real estate prices go down?  The CFO will lose working capital value.  What if the stock market goes down?  The result is the same.  Where can the CFO put his money until the risks subside?  This is a gamble by central banks of epic proportions.  We may have witnessed the beginning of the end of the current financial system.

We have $10.8 Trillion of deposits in the U.S. and the FDIC has $33 Billion in their fund. It equivalent to insuring $10,800 in risks with 33 bucks. Would you be comfortable with that ratio?  Can you see their dilemma?

Money of some type is currently necessary to facilitate the exchange of goods and services.  The size and complexity of today’s environment requires monetary exchange.  Stability of the money is critical to insure confidence in the system.  Gold and silver have been the stabilizing force for thousands of years.  Each time society has attempted to depart from the stabilizing characteristics of gold and silver, a system without counterparty risks, the attempt has ultimately crashed and burned causing severe pain to the population.  It appears we are on the cusp once again.  Many will be caught unaware at they have blindly followed the current system assuming those in power were somehow smarter than the rest of us.  Instead, deception and illusion played its role in moving us toward death and destruction.  It sounds a lot like the ego, the old man, the flesh, has been ruling the current economic system.  His death must precede the resurrection of the new man and… I suspect a new system.

This move clears the way for the East to take over the West by 2020.  The West may try to use a world war to prevent this from happening.  Greed is blinded by the bloodthirstiness for power and will do about anything to retain control.

See: http://finance.yahoo.com/news/brics-nations-plan-bank-bypass-133602688.html