Servias Ministries Blog

The events in the Middle East are not due to a sudden desire for democracy. It would seem to have a concerted effort behind it.  The uprisings in the Middle East appear to have planning and organization behind them.  Since Iran is the obvious benefactor behind destabilization, one would have to consider a connection.  The quick deployment of mercenaries and protester armies defy a “growing” revolution evolution curve.

What will result in destabilization of the area?  Higher oil prices and higher gold & silver prices.  Western civilization requires cheap oil to thrive.  2008 has already shown what $147 oil can do to Western economies.  From Iran’s point of view, $200 oil would benefit them and destroy the U.S. and Europe economies and their ability to sustain war in the region.  U.S. Forces are stretched thin already and our 1.6 Trillion Dollar deficit cannot be permanently sustained.  Man is it ugly out there!

$1,600 gold is now well in striking distance and if silver is drawn to its historic 16:1 ratio with gold, $35 silver may be looking cheap.  Solid mining companies may provide the savvy investor with a windfall of profits.  Hopefully, those with windfall profits will help those in need rather than “rathole” the profits under the mattress.  We will soon see who is committed to walk in Love.

The Federal Reserve is injecting $7 to $8 billion into the financial markets on a daily basis.  This is scheduled to end in June.  Right now, everything is starting to feel good.  Even though unemployment is subsiding to whatever level you believe to be the real number to be, the second half of the year is what we must pay close attention to.  Look for QE3 to be implemented.  QE or “quantitative easing” or “printing a bunch of money out of thin air” will put further inflationary pressures on hard assets.  How much longer can the Fed inflate the U.S. Dollar without the markets and other countries retaliating?  Only Our Heavenly Father knows.

Referenced is an interesting video clip concerning the expected rise in silver (silver is money):  http://watch.bnn.ca/the-street/march-2011/the-street-march-1-2011/#clip425669

Also mentioned is the historic 16:1 ratio of the silver price to gold’s price.  In Scripture the number 16 represents Love.  Sounds like a ratio made in Heaven to me.  I have been projecting a $1,600 gold price for some time now.  Ben Bernanke and Congress almost assure us of this level with the continuing efforts to inflate the U.S. Dollar thus making it easier to pay off debt with debased currency.  The price volatility of the precious metals will certainly scare the feint of heart.  Until there is a serious outbreak of Love and peace, I don’t expect price volatility to subside.

See: http://www.telegraph.co.uk/finance/financetopics/oilprices/8344133/Oil-could-hit-220-a-barrel-on-Libya-and-Algeria-fears-warns-Nomura.html

Are you prepared for such an event?  If oil hit this level, food prices would soar at the same time the American economy would take a nose dive.  I continue to recommend increasing food purchases to have some food stored in case of unexpected shortages.  Hopefully, this will never happen but if you simply rotate your food supply you will have “insurance” against disruption.

Gas guzzlers will get pretty cheap if oil shoots up to these levels.  Who really needs a 400 HP motor under the hood?

As I have written in the past, predictors of economic direction fail to account for “black swan” events.  In the Scripture the term “then suddenly” represents a black swan event.  We make our plans according to our paradigm of “normal” but then something unexpected happens that screws everything up.  In 18 short days, Egyptian citizens ousted their ruler.  Nobody saw it coming.  The U.S. spends billions of Dollars funding agencies such as the CIA and was unprepared for the Black Swan event.  The U.S. funded Mubarak’s regime with over $30 Billion and now has lost his influence in the Middle East.

The following countries in red provide us a perspective of civil unrest:

Wisconsin is not included because we are all in denial that our citizens are unhappy with their state governments, etc.  The European countries are also left out because their pain isn’t as great as those in the “developing” countries.  Other Middle Eastern countries are watching closely because they could be next as targets of civil unrest.  If those in power had not taken such an “entitled” view of the world but instead acted as servants to the people, their countries would not have been affected.  Leaders around the world should repent of their past actions and seek to understand Love and its fruit.  Neglected and abused people have no loyalty to their masters.  Is there one world leader currently known as “beloved”?  Think about it.

Google, Facebook, Apple, Twitter, and many companies that supply the Internet, especially the mobile Internet, with software and hardware have facilitated the global revolution.  This is why governments want to control the Internet.  If you can restrict information and revelation then you can control the public.  To reverse this information revolution would incite even greater unrest and quicker change.

It is my understanding that Libya has already declared force majeure with respect to its oil delivery obligations.  With true production being tight, any further disturbance could shoot the price of oil another $10 -$50 per barrel.  In turn, the Western economies would suffer and move back into recessionary territory.  Those with non-commodity stock portfolios might want to consider hedging their investments against a market drop.  There may be more black swans out there.

The current path of global direction is unsustainable on multiple fronts.  The U.S. Dollar is the current world reserve currency and is backed by America’s ability to produce and manage itself.  In the past decades, you could go to just about any country and they would welcome your dollars.  That is now changing.  Economic mismanagement is taking its toll on the Dollar.

The predicted level of oil consumption is unsustainable.  According to a Wikileaks published cable: “The US fears that Saudi Arabia, the world’s largest crude oil exporter, may not have enough reserves to prevent oil prices escalating, confidential cables from its embassy in Riyadh show.”  I have been preaching “peak oil” for the last 5 years and conventional oil production has not exceeded the 2005 level, even in 2008 when oil hit $147.  Why?  Because the producers can’t open the spigots wider.  Oil production is limited by well depletion, cost of oil extraction, and lack of new oil discovery.  See:  http://www.guardian.co.uk/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks  Even though I do not endorse lawlessness, the leaking of “the facts” being withheld from the public appears to be a sovereign act.  Is it lawful to withhold the truth and the facts from the citizens you serve?   Don’t we have unalienable rights to know the facts that ultimately affected us all?  The political double standard will come back to bite those who have been complicit in the lawlessness of withholding the truth from the citizenry.  Have you noticed that there have been no criminal convictions of the financiers who got us into the recent financial crisis that threatens the economic stability of the world?  I am amazed at the passiveness of the average American citizen as their world is in the midst of crumbling.  I guess we just need to play another song on the deck of the Titanic and enjoy another drink.

Speaking of “unsustainable”:

Inflation is alive and well in the commodities market and is now hitting the shelves at the local food market.   Have you begun storing up six months’ of food supplies to be rotated as used?  We are moving towards chaos and thus toward WWIII unless Our Heavenly Father intervenes.