Servias Ministries Blog

Throughout Economic History, there has been a battle between indigenous and surrogate power.  Each of us has indigenous power- native, innate, and before intrusion.  On the other hand, surrogate power appoints another as a replacement for one’s own power and authority.  Each of us has rights given by our Creator.  When governments (surrogate power) are formed, we assign or give up some of our rights (indigenous power).  As long as the government represents our will everything works well.  However, when the government attempts to operate as an indigenous power, society begins to suffer.  As this illusion grows, so do the problems and repercussions.  Since true indigenous power is native to each of us, it has no attached liability whereas surrogate power has a liability to those who assigned the power.

When you borrow money, you assign power to the lender.  In turn, the lender becomes a surrogate power towards you.  Proverbs 22:7 states "The rich ruleth over the poor, and the borrower [is] servant to the lender."  Money is at the center of surrogate power.  Debt promotes surrogate power and as we leverage up our balance sheet, we continue to assign power to the creditors.  When you move to debt-free living, you take back that power and you begin to operate with indigenous power again.  You are free to bless others without the surrogate powers limiting your actions.  Bondage is removed and you are set free.

U.S. Currency (or Federal Reserve Notes) is a surrogate power to gold.  Gold has no liability attached to it though the U.S. Dollar has tremendous levels of debt attached to it.  Over the last 37 years, the U.S. Dollar has enjoyed surrogate power and the power of perception.  The U.S. had productivity and growth to support the debt it issued just as we as individuals could support debt as long as we had a job to service that debt.

In 1776, the framers of the Constitution were tired of the surrogate power of England controlling their destiny.  They began a historical journey of recapturing indigenous power.  This quest would cost many lives but there was a corporate revelation that this surrogate power could no longer subvert their unalienable rights.

The children of Israel were given indigenous power by Our Heavenly Father.  He created a Theocracy and they lived by His Commandments and had no surrogate power extracting their rights and wealth from them.  But that did not last long:

1Samuel 8:7-8

7  And the LORD said to Samuel, "Heed the voice of the people in all that they say to you; for they have not rejected you, but they have rejected Me, that I should not reign over them.

8  "According to all the works which they have done since the day that I brought them up out of Egypt, even to this day–with which they have forsaken Me and served other gods–so they are doing to you also.

As the people served other gods, they rejected Our Heavenly Father and asked Samuel for a king (1 Samuel 8:6) to judge them as other nations.  They were assigning their power to a king which turned out to be King Saul, the Pentecostal King.  They wanted to sin and have a man judge them rather than GOD.  This path never turns out well.  Surrogate power ultimately puts us into bondage, extracts our resources, and exploits our gifts.  When this happens, we only have a limited ability to be a blessing to others.  We ultimately move into survival mode.

Each of us is one revelation away from a return to indigenous power.  The bondage of debt can be broken with one idea.  Sickness and disease are subject to The Creator’s power of healing.  Revelation comes from above and to tap into this power, we must repent or turn away from the earthly wisdom and pursue our relationship with the Heavenly Father.  We must spend time in our closet (or booth):

Matthew 6:6
But thou, when thou prayest, enter into thy closet, and when thou hast shut thy door, pray to thy Father which is in secret; and thy Father which seeth in secret shall reward thee openly.

Our rewards will include recapturing the power we assigned to others.

Update on Gold:

SPOT MARKET
Dec 11, 2008 17:13 NY Time

Bid/Ask
819.70 – 820.50

Low/High
804.00 – 835.90

1 year change
+8.10  +1.00% Increase

Gold is up 1% versus this day last year.

Update on Stock Market:

Dow Jones Industrial Average 12/11/07: 13,432.77

                                                12/11/08:  8,565.09     1 year change: -36% Decline

Update on U.S Government Commitment to stave off a Great Depression:

Commercial paper – the Fed has committed to 1.8 trillion dollars.  (Commercial paper are short term notes issued by companies which use the proceeds to pay their bills from payroll to inventory.)  ($271 billion exercised)

The Term Auction Facility- (Banks borrow from the Fed)  commitment $900 billion (415 billion has been issued)

Finance company debt purchases-  $600 billion (buy debt issued by government-chartered housing companies such as Fannie and Freddie)

Money market facilities- up to $540 billion.

The Citigroup bail out, $301 billion, ($291 billion issued)

Term security lending for collateral- $250 billion

Term asset-backed loan facilities on credit cards and business loans- $200 billion

Loans to AIG- $123 billion

Discount window borrowing- $92 billion

Commercial program number 2- $62 billion(lends to banks so they can buy commercial paper from mutual funds)

Discount window number 2- $50 billion

Bear Stearns bailout- $29 billion

Overnight loans- $10 billion

Secondary credit- $118 billion

FDIC commitment loan guarantees- $1.4 trillion

Guarantees on GE Capital- $139 billion

Troubled Asset Relief Program or TARP passed by Congress- $700 billion

Stimulus package earlier in the year- $168 billion

Treasury exchange stabilization fund- $50 billion

Tax breaks for banks- $29 billion

"Hope for Homeowners" (the July bill)- $300 billion

Total:  $8 ½ trillion dollars

Total does not include next year’s stimulus program, which preliminary talks mentioned in the Journal or press conferences can range anywhere from $500 billion to $2,000 billion.

Below is a stock chart of the Great Depression. The chart begins in 1920 and ends in 1939.  The Dow peaked at 381.17 in 1929 and dropped to 41.22 in 1932, an 89% decline.  It wasn’t until 1954 that the market recovered to its previous high.  This is what Washington is afraid of- a destruction of wealth and the nation.

Hyper-inflation is on the horizon and hard assets will be the store of value.  In order to recover, the U.S. Dollar needs to decline in value.

Wealth destruction has been occurring in cycles for centuries.  Businessmen have made and lost fortunes.  Regions have suffered from depression-like cycles while others enjoyed expansion.  However this time looks to be different.  Nobody likes a personal economic compression (or depression).  Compression is valuable in that it functions to remove unproductive actions, ventures, assets, and thoughts.  During these times is when we find out that we are "void of GOD’S Word".  When times are good we tend to coast through life and become lax in our relationship with Our Heavenly Father.  It seems that there is no need to enter into our prayer closet and seek His Holy Face.

I was taken through the financial wilderness for 18 months from March ’95 to September ’96.  During that time I could not seem to generate revenue for my family.  Fear gripped my heart.  Each day I would spend at least one hour in prayer prior to beginning that day’s activities.  Peace would come as well as reassurance that HE was still on the Throne.  Some days I would weep, other days I would dance before the Throne, and some days I would just be still and wait for a Word.  What a roller coaster of emotion!  At the end of the 18 months, Our Heavenly Father gave me the revelation of The Feast of Tabernacles and its implications to my life.  After our darkest hour comes the morning light.

The prodigal son in Luke 15 parallels what is happening today:

Luke 15:13-17

13 "And not many days after, the younger son gathered all together, journeyed to a far country, and there wasted his possessions with prodigal living.

14 "But when he had spent all, there arose a severe famine in that land, and he began to be in want.

15 "Then he went and joined himself to a citizen of that country, and he sent him into his fields to feed swine.

16 "And he would gladly have filled his stomach with the pods that the swine ate, and no one gave him anything.

17 "But when he came to himself, he said, ‘How many of my father’s hired servants have bread enough and to spare, and I perish with hunger!

Prodigal living is functioning in a "wastefulness and riotous excess"; lawless, reckless, and extravagant expenditure, chiefly for the gratification of one’s sensual desires.  Doesn’t this reflect the American culture of the past three decades?  Didn’t Wall Street capitalize on this type of living by providing excessive credit to satisfy those wasteful, reckless, and extravagant expenditures?

Notice the compression cycle that occurred in verse 14.  Just as he was totally "strung out" (on leverage), the severe famine came and he began to be "in want".  His standard of living took a nose dive and became a servant to swine.  After he hit bottom, he came to his senses (or revelation) and knew that if he returned to his father, at least he could eat as well as the hired servants.  Upon his return, The Father rejoiced with a party and the son enjoyed a steak dinner.

The Global Leaders are attempting to sustain the party.  The amount of debt created over the last 30 years is unsustainable and some type of compression will take place.  In previous recessions, the Federal Reserve and other central banks used interest rates to stimulate the economy as well as fiscal spending programs.  With interest rates approaching zero, what worked in the past is not working now.  The Central Banks will do whatever is necessary to prevent a severe depression.  Compression is coming!  Hearing GOD’S Word will determine what we will be eating for dinner- pig slop or steak.

Eight new acronyms to remember:

• TARP: Troubled Asset Relief Program. This is the Treasury’s big $700 billion ($850B including pork) program that has been used to prop up financial institutions.
• TAF: Term Auction Facility (or TAFfy). Program by which the Fed auctions funds to financial institutions — allowing them to use their toxic assets for collateral.
• TALF: Term Asset-Backed Lending Facility (or "son of Taffy"). Recently announced Fed program designed to help the market for student, auto and other consumer loans.
• CPFF: Commercial Paper Funding Facility. Buys commercial paper directly from corporations.
• AMLF: Asset-Backed Money Fund Lending Facility. Fed program designed to buy short-term paper (including commercial paper) to prevent money market funds from "breaking the buck."
• TSLF: Term Securities Lending Facility. Fed program that lets banks swap bad mortgage and other debt from their books in exchange for Treasuries. 
• SLF: Special Lending Facilities. Originally designed to loan money to fund JPMorgan’s purchase of Bear Stearns in March. Also used to back AIG’s balance sheet to avoid total collapse.
• PDCF: Primary Dealer Credit Facility. This is the Fed program that allowed broker/dealers and other non-banks to tap the Fed’s discount window (back when there were independent broker/dealers).

At warp speed, legislators approved a $700 Billion bailout for Wall Street with the total now standing at $8.5 Trillion.  Wall Street Executives single handedly have wiped out trillions of dollars of wealth while receiving exorbitant bonuses in the process.  Hank Paulson was a recipient of some of this bonus money as well while at Goldman Sachs.  AIG has received over $100 Billion in spite of their luxurious getaway.  Major banks were handed billions of dollars even if they did not want it.

The U.S. automakers are asking for $35 Billion and are being burned at the stake.  I know there is much criticism of the U.S Big Three.  However, the market has voted with its dollars to keep these guys in business.  The Big Three simply gave the American people what they wanted- Hummers, luxury SUV’S, etc.  The U.S. Congress breezed through $8.5 Trillion for the banks with very little criticism.  The ratings agencies who were supposed to protect the global community from toxic investments have had no public hangings.  Yet for a request of 4/10ths of 1% (35/8500), the U.S. Automakers are being sliced and diced.

C’mon people! Let’s keep these things in perspective.  The blue collar worker will be the one to suffer if the automaker bailout does not come, not Wall Street.  Where is the support for Main Street when it really needs it?  Have you forgotten about all of those extravagant bonuses paid to all levels of Wall Street employees?  Do you think a line worker in a GM plant gets anything close?

The U.S. is the largest debtor nation in history.  Our leader flies on the most expensive corporate jet in existence, Air Force One.  It’s cost per mile to operate is unbelievable yet we do not want our leader taking a junket to China or the Middle East when we have our hand out for more of their wealth to support our debt or way of live, now do we?

This arrogance directed toward three CEO’s underlines the fundamental mess we are in.  Pride and ego have taken center stage.  Let’s find some whipping boys to take the heat while the real culprits are found on Wall Street, not Main Street.

"The U.S. credit-card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form of credit-card lines to decline by 45 percent."

Bank of America Corp, Citigroup Inc, and JPMorgan Chase & Co represent over half of the estimated U.S. cards outstandingsas of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

Closing millions of accounts, cutting credit lines and raising interest rates are just some of the moves credit card issuers are using to try to inoculate themselves from a tsunami of expected consumer defaults."

See: http://biz.yahoo.com/rb/081201/business_us_finance_research_oppenheimer.html

The credit card crisis is running 18 months behind the mortgage crisis.  Those who have been on cash flow life support by using the credit cards will have the plug yanked out of the wall.  This will exacerbate the mortgage crisis as well as the dismal retail numbers being reported.  If the consumer represents 70% of the Gross Domestic Product (GDP), a 10% decline in consumer spending yields a 7% decline in GDP, and that is a serious problem.

In the 1930’s deflation was a major issue.  To fight deflation, Franklin Roosevelt’s took action which resulted in a 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation.  This action proved to be successful in dealing with the Great Depression.  Ben Bernanke is the expert on monetary policy of the Great Depression.  I expect the U.S. Dollar devaluation to begin sooner than later.

A $2 Trillion reduction in credit limits by the major credit card companies accompanied by an increase in credit card interest rates will place further drag on any recovery.  A forced cleansing cycle for the credit card abusers is ahead.

The underlying issue of the financial crisis is the handling of OTC derivatives.  Over-the-counter (OTC) derivatives are contracts that are traded (and privately negotiated) directly between two parties, without going through an exchange or other intermediary. Products such as swaps, forward rate agreements, and exotic options are almost always traded in this way. The OTC derivative market is the largest market for derivatives, and is unregulated. 

The financial community securitized every debt imaginable- mortgage loans, credit cards, car loans, student loans, etc.  The size of the problem is somewhere between 200 and 900+ trillion dollars depending on who you talk to.  There is no public market for these instruments and nobody is talking about creating one.   This financial crisis will not be solved without creating a financial market for these securities.

Why is there no financial market for OTC derivatives?  Those in power know that a "market" would cause ‘price discovery" to occur and then we would find out how worthless or near worthless these instruments were.  Once the cat is out of the bag, we would find many institutions to be insolvent.  So much for transparency.  The powers that be are just throwing good money after bad.  The longer it takes to come to a day of reckoning, the more severe the cleansing will be.  Those who profited from this OTC derivative scam are not innocent… and they know it!

Pro 28:20  A faithful man shall abound with blessings: but he that maketh haste to be rich shall not be innocent.

There continues a pattern of economic turmoil throughout the earth.  A multi-decade abuse of credit is heading toward the "day of reconciliation".  The books must be reconciled.  Man’s blind eye to the mess that Wall Street facilitated will have its consequences.  The blindness of mankind is nothing new.  The Pharisees in New Testament were blinded to the arrival of the Messiah.  Throughout history kings have used and abused power only to be replaced.  Mankind is reaching a crescendo in human history.  Knowledge is truly circling the earth via the Internet.  What happens in one country is immediately reported around the world.  The expansion of knowledge is not the solution to peace on earth.

Cycles are fundamental to living.  The earth has cycles, people have cycles, and economies have cycles.  Expansion and compression are simply a fact of life.  The Bible speaks of cycles in detail.  The lunar cycle determines the feast dates.  Our Heavenly Father established a 3 feast cycle: Passover, Pentecost, and Tabernacles.  Economic Theory has 4 cycles: expansion, contraction, compression, recovery.  These cycles are similar to the four seasons.

Everyone agrees that we are now in a "contraction" or recession and the only question will be how severe and how long.  Everyone is seeking an oracle to tell them what to do, where to go, and how to retain the wealth they have accumulated- real or perceived.  People crowd around Warren Buffett hoping to glean a piece of investment advise to make them rich.  Prosperity by association is nothing new.  Close associates to the Google founders are now millionaires.  This is also true for close associates in Microsoft’s early days.  Everyone cannot be financial millionaires but everyone can be wealthy.

There are plenty of resources to go around.  Potable water is in short supply and is thought to be next "big thing" in commodity investing in spite of the fact that 80% is covered with water.  Now there’s an irony!  We are in short supply of a resource that covers most of the earth!  The only issue is the salt.  There are desalination plants that provide fresh drinking water from salt water but they are expensive to operate due to the amount of energy they use to complete the process.

There is an abundant supply of free energy to fuel the energy need of the entire globe.  The only issue is extraction from its current state.

Mankind is moving toward the "compression" cycle in Economics, otherwise known as "Depression".  Compression is necessary to cleanse the system of its illusions.  An illusion of wealth from home equity caused American consumers to go on a buying binge over the last several years.  An illusion of wealth in the stock portfolio added to this excess consumption.  Corporate America accommodated this illusion.  This compression may be severe.  Will the system be fully cleansed of the excesses?  Will this be the time where mankind turns (repents) to Our Heavenly Father?

Revelation of free energy and potable water would change the world.  Our Heavenly Father has withheld those two revelations from man.  Why?  Mankind has sought wealth and power rather than the Face of God!  Mankind’s arrogance and defiance have placed us in this critical juncture.  In the Parable of the rich landowner, Jesus revealed the perverted focus of priorities that mankind suffers from.  His perceived value of wealth was great one day but became worthless to him within 24 hours.  Had he focused on the "wealth" or treasures in the Kingdom of God, he would not have been destitute at death.  Jesus provides us the key to wealth and prosperity.  The promise includes sustenance while living on earth:

Luke 12:16-34

Then He spoke a parable to them, saying: "The ground of a certain rich man yielded plentifully.

"And he thought within himself, saying, ‘What shall I do, since I have no room to store my crops?’

"So he said, ‘I will do this: I will pull down my barns and build greater, and there I will store all my crops and my goods.

‘And I will say to my soul, "Soul, you have many goods laid up for many years; take your ease; eat, drink, and be merry."’

"But God said to him, ‘Fool! This night your soul will be required of you; then whose will those things be which you have provided?’

"So is he who lays up treasure for himself, and is not rich toward God."

Then He said to His disciples, "Therefore I say to you, do not worry about your life, what you will eat; nor about the body, what you will put on.

"Life is more than food, and the body is more than clothing.

"Consider the ravens, for they neither sow nor reap, which have neither storehouse nor barn; and God feeds them. Of how much more value are you than the birds?

"And which of you by worrying can add one cubit to his stature?

"If you then are not able to do the least, why are you anxious for the rest?

"Consider the lilies, how they grow: they neither toil nor spin; and yet I say to you, even Solomon in all his glory was not arrayed like one of these.

"If then God so clothes the grass, which today is in the field and tomorrow is thrown into the oven, how much more will He clothe you, O you of little faith?

"And do not seek what you should eat or what you should drink, nor have an anxious mind.

"For all these things the nations of the world seek after, and your Father knows that you need these things.

"But seek the kingdom of God, and all these things shall be added to you.

"Do not fear, little flock, for it is your Father’s good pleasure to give you the kingdom.

"Sell what you have and give alms; provide yourselves money bags which do not grow old, a treasure in the heavens that does not fail, where no thief approaches nor moth destroys.

"For where your treasure is, there your heart will be also.

There is a wealth that is locked up in the Kingdom of God waiting to be release to mankind.  There is a corporate need to repent or turn away from the current direction of force based economics.  This form of economics thrives on scarcity and a quest for power.  Attraction based economics thrives on Love.  Men were attracted or drawn to Jesus, similar to a magnetic pull.  The earth is held in orbit by magnetism, not force.  Love serves and attracts.  Lust takes by force.  The Key of David is Love for David was a man after GOD’S own heart.  For mankind to be transformed, Love must and will take center stage.  The doors of revelation and mysteries will open with this key.

During the Christmas season, people proclaim "Peace on Earth".  The only way you can have peace on earth is for Love to arrive first.  There will be no lasting peace until Love is the primary motivator of men, not lust.

U.S Treasury Bonds maturing in 3 months have a yield of .01%, effectively 0% interest.  The U.S. Government needs to raise trillions of dollars but the cost of borrowing is nearly zero… for now.  The Bond Market is being duped.  The market perceives the environment to be deflationary and that perception will cost them much wealth in the near term.  The monetary system is creating trillions of new money which is true inflation.  There is always a lag of inflationary prices after the monetary system is stimulated so you should expect hyper-inflationary prices to arrive soon.

How can I come to that conclusion with commodity prices is such decline?  There has been a 25 year cycle of leveraging that is in full reversal.  This reversal is on display in the COMEX (Commodity Exchange) market.  At the beginning of this year there were 593,953 gold contracts outstanding.  A gold contract represents 100 troy ounces of gold, currently worth about $80,000.  As of the end of the current reporting period, there are 289,700 contracts outstanding.  This is a classic case of de-leveraging out of an investment.  Speculators have closed out their short positions in gold with gold up $145 since these contract levels were last seen.  Gold is now poised to resume its upward momentum.

This 0% interest rate policy severely hurting the savers.  Retirees are being sliced and diced with the pathetic rates being offered by the banks.  Each day wealth is being transferred from the savers to the black hole of the financial system.  Clearly, the Federal Reserve is not the friend of those individuals that "did the right thing" in their lifelong financial planning.  Wealth destruction is in full force now and there seems to be no end in sight.

The challenge individuals face is the protection of wealth accumulated over a lifetime.  Inflation eats away at wealth.  In the past, interest rates generally exceeded the true inflation rate.  They were somewhat linked together and you could be assured that your wealth was protected if you placed your money in a bank and received interest.  Since WWII, this assumption was valid in the U.S.  Now we have a deterioration of the monetary system and the financial institutions are on life support.  The local community banks are functioning fine for now.  The major banks continue to reveal their poor management of assets and are placing the nation in a highly exposed position.  Where can one place his assets where they are protected and retain their value?

Mat 6:19-20  "Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal;

"but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal.

It appears that we are moving into perilous times.  The financial assumptions we have based our everyday lives on are being dismantled before our very eyes.  Very few of us have experienced this before.  People from other countries have lived through major upheavals but Americans have been buffered from those financial catastrophes.  The U.S. has been the beacon of hope for others around the world.  GOD’S protection stood as a testimony to other countries who were envious of the American Dream.  This Dream was replaced by arrogance.  The humility of being under GOD’S grace has been forgotten by most.

Are you rich toward GOD or have you attempted to lay up a treasure for yourself?  The following parable speaks to the problem faced by Wall Street and those who relied on Wall Street’s wisdom:

Luke 12:16-34

Then He spoke a parable to them, saying: "The ground of a certain rich man yielded plentifully.

"And he thought within himself, saying, ‘What shall I do, since I have no room to store my crops?’

"So he said, ‘I will do this: I will pull down my barns and build greater, and there I will store all my crops and my goods.

‘And I will say to my soul, "Soul, you have many goods laid up for many years; take your ease; eat, drink, and be merry."’

"But God said to him, ‘Fool! This night your soul will be required of you; then whose will those things be which you have provided?’

"So is he who lays up treasure for himself, and is not rich toward God."

Then He said to His disciples, "Therefore I say to you, do not worry about your life, what you will eat; nor about the body, what you will put on.

"Life is more than food, and the body is more than clothing.

"Consider the ravens, for they neither sow nor reap, which have neither storehouse nor barn; and God feeds them. Of how much more value are you than the birds?

"And which of you by worrying can add one cubit to his stature?

"If you then are not able to do the least, why are you anxious for the rest?

"Consider the lilies, how they grow: they neither toil nor spin; and yet I say to you, even Solomon in all his glory was not arrayed like one of these.

"If then God so clothes the grass, which today is in the field and tomorrow is thrown into the oven, how much more will He clothe you, O you of little faith?

"And do not seek what you should eat or what you should drink, nor have an anxious mind.

"For all these things the nations of the world seek after, and your Father knows that you need these things.

"But seek the kingdom of God, and all these things[fn3] shall be added to you.

"Do not fear, little flock, for it is your Father’s good pleasure to give you the kingdom.

"Sell what you have and give alms; provide yourselves money bags which do not grow old, a treasure in the heavens that does not fail, where no thief approaches nor moth destroys.

"For where your treasure is, there your heart will be also.

Wealth is disappearing at an alarming rate as the markets continue to take a beating.  All investments are down and none are immune.  Wealthy investors with all of their resources were unable to respond from this Black Swan event.

2008 Year to date performance of notable investors:

• Warren Buffett (Berkshire Hathaway): -43%
• Ken Hebner (CMG Focus Fund) -56%
• Harry Lange (Fidelity Magellan): -59%
• Bill Miller (Legg Mason Value Trust) -50%
• Ken Griffin (Citadel): -44%
• Carl Icahn (Icahn Enterprises): -81%
• T. Boone Pickens: Down $2 billion since July
• Kirk Kerkorian: Down $693 million on his Ford shares alone

The crisis continues to gain momentum and there appears to be no real leadership.  This vacuum will be filled by somebody or "something".  As we race to my target date of 1/11/11, articles are beginning to appear with the "2011" year as the focus.  The following article lists 30 reasons for the Great Depression II:

http://www.marketwatch.com/news/story/well-great-depression-2-2011/story.aspx?guid={B28B49B5-EFD1-4941-B57E-A2BA1545BA09}&dist=TNMostRead

These 30 reasons are all plausible.  The arrogance of America is coming home to roost.  We have no fans in foreign countries to bail us out.  It will be a humbling experience to face the reality once the curtains of illusion are drawn back.  The perceived bully who has invoked its national interests above the sovereignty of other countries will receive little or no mercy from its enemies.  Were we right to pursue this foreign policy?  I am not qualified or adequately informed to make an educated guess.  However, I am qualified as a fruit inspector to view the fruit to determine whether it be "good or bad".  We can and should judge the fruits.  We are not equipped to judge the hearts of men, only Our Heavenly Father is.  9/11 should have been a time of repentance, not defiance.  Our covering was lifted then.  The very place where the U.S. was attacked turns out to be the same place where the weapons of financial mass destruction were created.  What an irony!

I expect Prayer Vigils will spring up around the world.  As the U.S. gets deeper into the crisis, all countries will feel the effects and many will suffer its consequences.  Just as Israel turned away from GOD in the Book of Judges, catastrophe brought them back on their knees… over and over.  I suspect a good investment would be in the manufacture of knee pads!

The practice of judgment restricts your perception of life.  There are only two mistakes of knowledge, and both of them are activated by judgment.  The first mistake is knowing "wrongly".  The second mistake is assuming that reality is limited to what you know.  Man’s judgment is flawed. 

An illusion is a distortion of the senses, revealing how the brain normally organizes and interprets sensory stimulation. While illusions distort reality, they are generally shared by most people, a situation of "knowing wrongly".  Those is currently are in power understand the ease by which you can convince the public of any illusion.  Starting in childhood we are convinced the written word is truth and news reporting is accurate.  In the movie "Wagging the dog", this phenomenon is exposed.  Robert DeNiro starred as a Washington spinmaster who needed a war to distract public’s attention from a sex scandal involving the President.  In Alan Greenspan’s tenure at the Fed, he distracted the consumer to raise private debt levels to 300% of the Gross Domestic Product (GDP).  Remember when Alan Greenspan voiced his support of ARM mortgages?  Did you know that Bill Clinton strong armed banks into sub-prime lending back in 1999?  As government leaders (on both sides of the aisle) assured the public "all is well" with the economy, the private sector’s debt levels were growing astronomically.  Risk takers became gamblers as they entered the housing market to flip their investments.  News media reported the successes, never the losses.  The illusion of wealth permeated all walks of life.  Those who could not qualify for a mortgage suddenly bought houses they could only dream about a decade earlier.  ARM mortgages set the trap for future bankruptcy.

The illusion turned into delusion- an erroneous belief that is held in the face of evidence to the contrary.  People hold to a belief that history is not relevant to their situation hence "experience is the best teacher".  I would suggest that someone else’s history is the best teacher.  My older brother received many corrective interviews by my dad when I was young.  Those interviews were followed by the "board of education".  I learned from his pain.  "Mama didn’t raise no dummy".  The evidence of a disastrous end to the credit bubble surfaced years ago.  It was no different during the Tech bubble.  Technology companies that did not generate profits were going to fail, period!  The investing public operated under an illusion until the bubble busted.  Revelation from Our Heavenly Father provides the evidence to bust our illusions.  We must not be delusional when that revelation comes.  We must seek The Father’s perfect plan, will, and purpose rather than the idols of our hearts.  If we pursue His Heart in love, we will be spared from the trappings of illusion and delusion.

Once illusion and delusion have run the course, confusion sets in.  "How could I have been so stupid?" is frequently asked.  "What was I thinking?’  "How did I let my guard down?"  When our blindness is removed the realities become obvious.  Without revelation, confusion takes the stage.  When confused, people tend to do nothing and make no decisions because they become fearful of the consequences.  This is were the public is today.  They have lost confidence in the current financial system.  It duped them.  They trusted the leadership to look out for their best interest.  Their reality was limited to what they thought they knew.  Their judgment was flawed in their decision making efforts.  This is exactly why you must seek wisdom from above rather than earthly wisdom.  Our Heavenly Father has perfect knowledge of reality.  He knows men’s hearts, we do not.

This credit bubble has burst and we must now deal with the consequences.  By interrupting the natural cycle of expansion, recession, depression, and recovery, the system must be cleansed of non-productive services, products, and assets.  By deferring the pain, it will be more severe.  How severe? Only GOD knows!  You might want to ask HIM.

The Federal Reserve Gold Certificate Ratio (FRGCR) appears to be the only real solution to the mother of all crises.  Currency and financial stability will only come by placing a "stake in the ground".  The FRGCR provides the stability needed.  Businesses will not make long term investments without some stabilization in the financial system.  Trust is eroding on a daily basis and world leaders have not come to an agreement on the solution.  The U.S. Dollar was backed by gold for nearly 30 years which provided global stability of currency markets.  Dollars were accepted around the world as payment for goods and services.  The current destabilization is aggravated by the fact that all global currencies are fiat currencies without any backing by gold.

The "Currency Wobble" is like a spinning top and as its velocity slows down, the equilibrium is replaced by a wobble ultimately resulting in failure.  We may not be at the edge, but I can see if from here.  Stability is what is needed.  By devaluing the U.S. Dollar to a specific supported price per ounce of gold, the globe could then begin stabilization.  China and Russia have been increasing their gold reserves.  Iran has been trading paper assets for gold as well.

The Federal Reserve is already devaluing the U.S. currency by printing excessive amounts of U.S. Dollars in response to the bailout requirements.  The line for the Fed’s begging bowl is increasing.  Credit card companies are becoming "banks" to get their number for the line.  The "little 3" automakers want $50 billion without strings attached.  Their management is playing Russian roulette with 3 million jobs.  Toyota began its Prius project in the 90’s but GM was so short-sided in its world view of energy demands, it was busy investing in gas guzzlers.  America’s dominance in business appears to be dying a slow death.  We are losing our "edge".

The G20 met this last weekend to solve the global financial crisis.  It appears that nothing much happened at the summit.  I imagine the competing super egos at the meeting were busy attempting to control the outcome with little or no consensus.  This crisis will not be solved without pain.  The opiate of gain promoted this addiction to a quick and easy buck.  The very people who are attempting to solve the crisis benefited from the profits made in the crisis.  You don’t expect them to clean house do you?

There was an article making its way through the Internet concerning a new gold standard.  It suggested that a currency devaluation of 10 to 1 take place and if you had $1,000 of the old currency, you would be given $10,000 of the new currency.  This would immediately cause everyone to have more money to spend.  All creditors would take a 90% writedown on their loan portfolio.  I’m sure they would lobby against this plan.  If their loans did not depreciate in value then the revaluation would be of no consequence.  On the other hand if the Federal Reserve marked the U.S. Dollar to gold at a ratio of $3,000 per ounce, global stabilization would begin to occur.  Why $3,000?  That is a rough estimate of gold held by the U.S. relative to its current balance sheet.  If the Fed continues to print money in reckless abandon, the stabilization price could hit $5,000.  This would be a windfall for those holding gold but that is a small percentage of the population of the world.

In about 49 months we will be at December 21st, 2012.  The Long Count Calendar of the Ancient Mayans ends on December 21st 2012. There isn’t much information regarding what the Mayans thought would occur in 2012, but the consensus of opinion is that there will be great change. To some people this means a positive, spiritual change.  Could this be tied to the "mother of all crises" we are currently dealing with?  Could this be the culmination point of man’s current view of control and exploitation being replaced by Love?