Archive for the ‘Biblical Economics & Money’ Category

Two Types of Borrowing

Tuesday, January 20th, 2015

In the past, I have recommended to the readers to eliminate debt.  That still goes…   However if you borrow money for income producing purposes, it is a different type of borrowing.  For example, borrowing for a new car which is an asset of declining value puts you at risk if something negative happens.  On the other hand, borrowing money for viable inventory that produces sales is not as risky and becomes part of the cost of doing business.  As you sell the inventory, you retire debt and produce a profit which more than offsets the interest expense of the inventory carrying costs.

Lowering your leverage is a wise move especially now.  The Swiss National Bank removed its Swiss Franc “peg” against the Euro last week.  In 13 minutes, people who were leveraged in this area of the currency market suffered huge losses and some were wiped out.  The Swiss Franc increased 30% in about 780 seconds and no one could do anything about it.

See: http://www.goldcore.com/us/gold-blog/market-chaos-swiss-franc-surges-30-13-minutes-gold-rises-sharply/

This is serious!  The central banks are now in self-preservation mode and there is surely more volatility on the way.

In the U.S., I suspect dogs could now get a car loan based on the easy credit available.  A Honda Finance executive comments:

http://www.bloomberg.com/news/2015-01-20/honda-warns-against-stupid-auto-loans-driving-u-s-sales-gains.html

I have written several warnings about the economic challenges ahead.  It seems 2015 has started out with a “Swiss Chocolate” Black Swan.  Expect more black swans on the horizon.

Labor Participation Rate

Friday, January 9th, 2015

These two graphs are the more realistic of where the U.S. Economy stands:

 

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Gold/Oil Ratio

Tuesday, January 6th, 2015

Energy is a significant cost of mining.  When the ratio of the price of gold vs. the price of oil goes up, miners make more money and their stock values improve.

The following graph depicts the relative reduction of energy cost per ounce of gold mined.  The same holds true for silver.

King World News Gold:Oil Ratio

1st Quarter results will begin to reflect the lower cost of energy and Wall Street will hop on board early to ride the wave.  The only caveat is if the manipulators are able to further suppress the futures price of the metal.  Expect the unexpected.

$303 Trillion in Total Derivatives

Friday, December 26th, 2014

As of June 30th, 2014, U.S. Banks are reportedly holding $303 trillion in derivatives:

The latest spending bill puts the taxpayer on the hook for the above derivatives.  Of course Citibank helps Congress out by suggesting language for the Cromnibus Bill:

Screen Shot 2014-12-05 at 3.32.12 PM

2015 may be a year of Black Swans.  Keep the cupboard full so that if something ugly happens, you will be prepared.  The “just in time” distribution chain assumes no unexpected events will occur so if people panic, it will take some time to restock shelves.

PS It is not important that you fully understand derivatives.  I daresay many Congressman who voted for this bill have no idea either.  This idea of hiding behind the “letter” of the law does not affect the outcome of unintended consequences.  The banks may be the ultimate losers after all.

LIKE CLOCKWORK: Pension plans to be looted

Monday, December 22nd, 2014

This is an informative article that explains the current state of the global financial system dynamics:

http://www.naturalnews.com/047968_pension_plans_looting_retirement_funds.html#

A further indication that we all should simplify our lives, get out of debt, and minimize our ongoing monthly expenses.

Geopolitics versus Economics

Wednesday, December 17th, 2014

My business background is based on economics, finance, and information technology.  I did not plan this, FATHER simply navigated my path to end up with this experience.  In the last couple of years, the geopolitics has trumped historical economic assumptions, especially the most fundamental law of supply and demand.  The western central planners have used the markets for their motives of maintaining control over weaker players.  Both China and Russia are experiencing the results of markets being manipulated without regard to the applicable laws.  Agent banks are given “get out of jail free” cards and thus they lawlessly carry out the mandate in a secretive fashion.  The impact to the small independent investor is dramatic.

The large pension funds run with the herd thus they receive directives “twice removed” and tow the company line.  That is good for those who are subject to those funds in that they stay under the protective covering of the central planners without knowing it. The goal of the central planners is to maintain control over all economies around the globe and they will punish anyone who gets out of line with their objectives.  They are in strategic positions and are able to retain them because the population is lethargic when it comes to searching out the truth.  The population prefers to be entertained rather than be truth seekers.  It plays into the hands of those in power.

Saudi Arabia has gone after the American fracking industry because it frankly wants to control the oil price as long as possible.  ISIS threatens the House of Saud so they are willing to align themselves with a super power that will come to their aid.  The American planners want to show improvement in the economy so they are agreeable to cheaper oil even though it is well documented that peak oil occurred around 2005.  Fracking is just a bigger straw to extract what is there but faster.

Gold is the true barometer of the health of a nation’s currency.  It is also well documented that the manipulative intervention in that market is atrocious.  However, regulators are not interested in the ending the lawlessness.  Their motives are not clear but many would suppose they are biased on behalf of large financial institutions.  Where do you think they would like to work after leaving public service?

I expect the geopolitical intervention in the markets to increase and get worse.  Volatility will increase as well.  There are virtually no safe investments anymore.  Even your bank deposits are now on the target list.  What is the solution?  It can only be found in the third Heaven.  Our Heavenly Father is the only ONE who can fully understand the current highly complex financial mess we’re in.  My focus is ascending to the highest level of Spiritual maturity before it all breaks apart in the markets.  I have no idea when but every objective analyst I follow expects the wheels to fall off at some point.  When it does, the Spiritually mature will be called forth for the answers.  Until then, stay nimble, simplify, and if you must borrow, only borrow for revenue generating reasons.

Financial Comments

Sunday, December 14th, 2014

A friend wrote the following in an email:

And right to the point… do you have any new thoughts on investments or silver? Looks like we took a pretty good beating in 2014, huh?

My reply:

I view the current environment is providing me with an excellent opportunity to acquire additional metal and quality stocks.  I have been a buyer over the last couple of weeks.  The best time to buy is when everyone hates the targeted investment.  I am not selling any metal.  I only have to look at the growing debt, the growing fiat currency base and I know that when the day of reckoning occurs those with physical, un-leveraged assets will be in superior economic shape.  I bought additional TRX shares this past week as it hit multi-year lows.  I believe in the company and its management.  If I am wrong, such is life.  If I am right, then 70 cents could easily turn into $7 or more.  My exposure is capped at 70 cents per share. (PS I placed an order at 64 cents hoping the “boys” would push it down, but it didn’t happen.)  You never invest money you need to pay bills with.  You always must consider stocks as having inherent risks associated with them.  A silver coin has no external risk associated with it and there are no “claims” against it. (PSS: I bought more Silvercorp at a buck just before they announced their latest quarterly earnings reports)

How much longer can the boys around the gateway keep the ruse going?  I hope to acquire more before Humpty Dumpty goes splat!  It is clear they are in the market suppressing gold, silver, and the related stocks hoping to shake out the investors.  Not me.  I am not moved by their tactics.  History supports my position.

Emotions are the enemy of cheap quality stocks as my buddy Mike in Hawaii and I have discussed.

On 12/21 the metals exchange will implement "circuit breakers" on gold moving $400 during a trading session.  Which way would the price be moving in such a manner?  Since they have been intervening to move it downward, I can only conclude that it is the upward movement they are concerned about and that makes me happy!

Source: http://www.zerohedge.com/news/2014-12-11/what-do-they-know-cme-implements-gold-precious-metals-circuit-breakers-400-wide

 

So that I make sure we are all adults accepting responsibility for our own investment decisions:

Disclaimer: 

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How to wipe out the competition in banking

Thursday, December 11th, 2014

If you were one of five "to big to fail" banks, how could you gain more market share?  Simply figure out a way to get rid of the local and community banks.  How would you accomplish that?  By using the current laws in place and create a catastrophe to force a managed response that would bankrupt those smaller banks.

"Never let a crisis go to waste" is the current view and attitude of the central planners. 

Each of us must seek Our Heavenly Father’s direction for our lives including the resources we have been given to steward.

The following discussion presents a compelling case for the growing concerns I have for the coming year and the next few years.  The 2008 near meltdown was not resolved and the same banks involved are now only bigger and with greater risks.

This interview spells it all out:

Official U.S. Debt surpasses $18 Trillion

Sunday, December 7th, 2014

Total U.S. Liabilities: $115.8 Trillion  http://www.usdebtclock.org/

Do you think U.S. Dollars will pay off these amounts at current levels of value?

Default or hyper-inflate, those are the two choices and based on the consistent attacks against gold and silver… hyper-inflate is the intended method.  Gold price exposes hyper-inflation to the masses.

The Saudi’s want lower oil prices to bankrupt the oil shale industry thus hurting oil-producing states.

The western central planners want lower oil prices to bankrupt Russia.

China does not want to lose any more value of their Dollar assets so they are buying gold, as is Russia.

The Security and Exchange Commission’s definition of manipulation:

Manipulation is intentional conduct designed to deceive investors by controlling or artificially affecting the market for a security…[this includes] rigging quotes, prices or trades to create a false or deceptive picture of the demand for a security. Those who engage in manipulation are subject to various civil and criminal sanctions.

Investing in this environment of sustained zero percent savings rates is more challenging than in the last 40 years.  The small investor would love for the SEC to enforce their definition.  It could wipe out the majority of Wall Street players.

Be cautious.  The only true solution is from Above!

Global Focus on Physical Gold

Sunday, November 23rd, 2014

At the end of this month, the Swiss will be voting on a referendum to move back toward a gold standard.  There have been many roadblocks by the elite to keep the facts from being presented to the public because they don’t want to lose control of the financial system.  You cannot manipulate the physical gold asset.  However, once you move to a fiat currency, lies and deceit are assured and it is only a matter of time before the masses lose value of their hard earned life savings.

The Germans want to repatriate their gold back from the U.S. and have encountered much resistance.  Now the Dutch want their gold back and it is reported that 122 tons of gold are in process of transfer.  The Russians and the Chinese have been in a major acquisition mode month after month.  Physical gold is the one asset a country must have when its currency must be revamped.  This has been true throughout history and is expected to be realized again, and soon.  Over the last 100 years, the U.S. Dollar has lost 95% of its purchasing power when compared to gold and the other countries see the writing on the wall.

I view the focus on gold and silver to be a “bridge” until a major Spiritual event occurs.  The problems throughout the world go beyond currency problems.  The thoughts and intents of men continue to cause the wars, famines, lawlessness, etc.  I must conclude that a major change is on the horizon and it will be Spiritual in nature.  Until then, we are to occupy and do business.  If we can’t feed our families, then it is tough to focus on deeper matters.  My family continues to invest in gold & silver assets (as funds allow), mostly undervalued stocks at this point.  Two weeks ago, the stocks were so depressed, I was able to modestly add to positions with some of the companies I believe in.  Stocks are riskier than possessing the the metal.  Each of us must decide what is best for sustaining us through the coming months and years if necessary.

As I have said in the past: simplify, reduce and eliminate unproductive debt, and most of all focus on hearing FATHER.  HE will guide you through the challenging financial times ahead.  HE will also lead you in what assets to invest in.  When you submit to HIM, you don’t sweat the ups and downs of prices, knowing that HE has perfect knowledge of your future needs.