Servias Ministries Blog

The Bond Market Bubble is being propped up with negative real interest rates promoted by the Fed Reserve Bank (Fed).  The Bond Market is rigged.

The Stock Market Bubble is being inflated with artificial liquidity provided by the Fed.  New highs are not a result of greater economic output.  Banks are being given access to huge funds from the Fed and they are investing in the Stock Market thus pushing the market up.

The Dollar Bubble, the reserve currency of the world, is being propped up with printing and monetizing of debt by the Fed.  This is occurring to the tune of $1 Trillion per year now.

What happens when these three bubbles pop?  The wealth of stock and bondholders will evaporate.  At the same time we will see dramatic inflation across the board.  I expect to see a notable rise in import prices which will fuel the inflation.  Since the U.S. has sent its manufacturing offshore, it is now an importer of physical goods.  I have long suggested that the pursuit of a “service” economy was a mistake.  As a former CFO, when profits got squeezed, I always looked at cutting services, never physical inventory.  You can’t live without food but you can forego premium cable.

In my opinion, there is no known solution to the current monetary policy other than from Above.  Other countries know that the U.S. Dollar is in dire straits and are wanting to depart from its use as a reserve currency.  Smaller countries have realized sudden adverse upheavals after vocalizing plans to accept other means of payments other than the U.S. Dollar.  It was hazardous to their health.  This fiat currency experiment may be on its last leg.

The BRICS countries (Brazil, Russia, India, China, and South Africa) are developing means to settle their own trade among themselves bypassing the U.S. Dollar.

The Fed is price-fixing the Bond price in full view of everyone.  However, I believe they are fixing the gold price below $1,750 by using the large banks as agents and allowing them to invest in “naked shorts”, a means to push the price down without any collateral to support the risk of loss.  The evidence is hidden in the numbers published by the gold paper market.  Those who publicize these actions are demonized by the media as kooks, crazies, and/or extremists.  A simple question must be asked however.  Look at the following chart:

Who in their right mind would bet against the bull market in gold where the rising prices have consistently outperformed the Dow Jones Industrial Average?  Private investors would get wiped out.  Institutional money managers would be fired for failing in their fiduciary responsibility.  Only someone with an unlimited money supply would bet against this market.  I wonder who that could be?

The price of gold stocks have been decimated by short sellers in their stocks.  Their price does not equate to the rise in price of gold.  Newmont Mining, a senior gold producer, is near its 52 week low and is paying a 4.3% dividend.  Go figure!  On the other hand, Chevron is at a 52 week high.

The same banks who are being given virtually unlimited funding to suppress the price of gold were the same banks that participated in the LIBOR rate scandal.  There is no requirement for transparency at the highest levels.  Regulators for whatever reason are not forcing compliance in these markets.  Fines are too small to dissuade the lawless to refrain from their acts.  It is simply a cost of doing business.

How long can the Fed contain the price of gold?  Definitely not forever.  What is my best protection when the Perfect Storm of these three bubbles pop?

– Low or no debt

– Lower my monthly obligations

– Simplify my living

– Buy gold as “insurance” against the decline of the U.S. Dollar (if possible)

– Buy silver but note it is intrinsically more volatile than gold and is not for the feint of heart ( I happen to be more of a risk taker)  A safe deposit box in a community bank may be sufficiently safe to store physical silver.  However, if you have nothing, they can’t take it away.

– Most of all, focus on hearing Our Heavenly Father’s Voice.  HE will guide us all through the coming calamity.

– Focus on Our Heavenly Father’s most fundamental characteristic: Love.  Whatever economic pain comes, we will need to be ready to minister Love to those who lose their perceived wealth and future.  What they placed their faith and trust in will be lost.  The illusion created by the current economic environment will be the ultimate bubble to pop.

The Dow Jones has been reaching new highs and is reflecting the excessive money printing by the central banks.  Is the average guy on the street living better?  Not on main street.  True unemployment is still around 23%.  The gap between the rich and the poor is growing dramatically.  Central banks have increased their balance sheets by $10 Trillion in the last ten years.  Corporate debt is at 80% of GDP and that is a record high.  Unlimited money printing is the current paradigm.  This will come back to haunt the economies.  The rich feel better right now but this may soon change.  The U.S. has $220 Trillion of total debt including unfunded liabilities.  How will the U.S. pay for this debt?  By unlimited money printing.  You better hug that tree now before the central banks need it to print more money.  But wait, they can now print using a stroke of a computer key.  How efficient!  It is so easy to “print” money, it is like a drug addict working inside the pharmaceutical manufacturing facility of Loritab.

Once the investing public realizes that the money printing is fueling the new highs in the bull market and not corporate profits, they will head to the exits.  Don’t get trampled.

The Libor Scandal  affected $500 Trillion in derivatives and it created over $2.5 Trillion in fraudulent profits.  Lawyers understand the size of potential damages and will aggressively pursue the bank involved.

Banks continue to be extremely fragile, probably insolvent.

Europeans are no longer blindly supporting the current politicians.

China and Russia continue to buy gold at the manipulated lower prices.  They are thanking the Fed Reserve under their breath.

Quantitative Easing continues to support the ailing US economy and there is no end in sight.  Furloughed Federal workers will spend less money since they are receiving about 80% of their normal paycheck.  That decline in demand ought to show up soon in the economic numbers… ought is the key word.

Many of the experts I pay close attention to project the following:

Price Targets for gold: $2,000 on or before 12/31/13.  Long-term: $11,000

Price Targets for silver: $50 on or before 12/31/13.  Long-term: $200

This time reminds me of 1998 when I would have lunch with a friend of mine and we would marvel that the the .com bubble had not burst.  How much longer could it go?  We now have a Bond bubble and a currency bubble simultaneously.  Only Our Heavenly Father knows when this reconciliation of the books will occur.

This video expresses a concern of mine.  The current system promotes wealth inequality, exploitation of the masses, and poverty.  If the revelation of Love were operating and prevailing in the top 1%, what a different landscape would we have.  If you had the power to establish the value of jobs in your organization, what multiple would the CEO be paid versus the average employee?  How about the lowest paid employee?

Lawlessness is rampant!!!

You can tell who wants to have a job opportunity in the financial industry after they leave public service.

I believe that a tsunami is coming in the financial markets.  Central bank interference has generated currency wars and the Dow Jones Industrial Average (DJIA) has responded with new highs.  Unfortunately those new highs are more of result of higher inflation rather than sound economic fundamentals.  The DJIA has created an expectation that smooth waters are ahead.  I believe the opposite to be true.  Creating the illusion of economic recovery by misleading statistical reporting will only sustain perception until the public looks around and realize that they are worse off than ever before.

To create a housing recovery, keep foreclosed houses off the market.

To create a retail recovery, relax borrowing requirements.

To create consumer debt expansion, generate more student loans.

To create a perception of sound fiat currency, manipulate the gold and silver paper markets.

Central banks in other parts of the world are buyers of gold.  They know the endgame of the U.S. dominated economic system.  The Russians and Chinese are the major buyers of gold.  That puts in a price bottom.  I now expect $4,800 to be the next plateau for gold.  This will drag silver up above $60-$100.  Related stocks will skyrocket.  I do not give financial advice but I personally buy gold and silver stocks based on my views, a little each month as I can afford.

Global interest have been rigged.  Do you think the Fed did not know this was happening?

Global derivatives continue to be high risk.  Do you think the Fed does not know this?

Laws are being changed to deal with civil unrest.  Do you think those in power don’t see major turmoil coming?

Gun laws are being targeted when more people die on the highway everyday than by guns (by a wide margin).  Why?

Use of the Military for domestic policing is moving toward reality.  Why?

Use of drones for domestic spying is now gaining exposure.  What are they expecting soon?

Bankruptcy laws were gutted to eliminate the jubilee for individuals thus favoring the financial institutions.  This form of enslavement was a precursor to expectations of greater turmoil causing borrowers to default on their payments.

Whether you increase tax rates or remove tax deductions, the result is the same- greater tax revenue and less money to sustain life.  The economic landscape has never been so convoluted as it is now.  Do you really think that there is some silver bullet that will fix all of this?  Only Our Heavenly Father has the capacity to deal with the coming economic tsunami.  We should all draw nigh unto HIM.