Archive for November, 2008

The Precursor to Peace on Earth

Sunday, November 30th, 2008

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.

0% Interest Rate Monetary Policy

Tuesday, November 25th, 2008

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.

2011 is now on the radar by others!

Friday, November 21st, 2008

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!

Illusion, Delusion, and Confusion

Thursday, November 20th, 2008

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.

Currency Wobble, the FRGCR, and 49 months

Monday, November 17th, 2008

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?

Describing the "Kingdom of Heaven"

Sunday, November 16th, 2008

Mat 19:14 (Mark 10:14, Luke 18:16)   But Jesus said, Suffer little children, and forbid them not, to come unto me: for of such is the kingdom of heaven.

Mat 18:3   And said, Verily I say unto you, Except ye be converted, and become as little children, ye shall not enter into the kingdom of heaven.

A child is noted to be innocent, trusting, pure, loving, teachable, pliable, inquisitive, simple, and non-judgmental.  They have not entered into the cares of the world or the deceitfulness of riches.  They do not dwell on history or the future, their focus is "now".  Jesus revealed a subtle mystery in the above statements and it was recorded by three witnesses- Matthew, Mark, and Luke.

Everyone loves a young child.  They know when the child smiles at them, it is genuine and innocent without an ulterior motive.  Isn’t that what we all yearn for, innocent and genuine acts of love?  This is who will reside in the Kingdom of Heaven, those who will genuinely love, trust, and respond with pure hearts.  As Jesus said, "Blessed are the pure in heart, for they will see God."

Children are known for their simplicity, not complexity.  The world of complex structure is unimportant to them, they just want fellowship.  "Can you play with me?" is the cry of the young child.  Society teaches the child to focus on complex structure and strengthens the soul to deal with all of the complexities created by the developing social order.  What is the endgame of society?  Is it to create enough free time to have everyone vacation or play endless video games?  At our core we are called to be creators.  Building, gardening, producing, healing, etc. are all creative acts that cause us to be fulfilled.  Those acts done in love will cause that "void" in us to be filled. 

A child requires interaction.  He or she will play with anybody, independent of race, age, or gender.  The child expresses love without reservation and will embrace a stranger if allowed to by the parent.  A child’s playtime can be accomplished with as little as a ball and a stick or by playing a game of tag.  Big people need pricey toys to satisfy their playtime.  This world of structure has pulled us into its vortex making us think that we must have bigger, better, more expensive toys in order to fill that "void".

In order to enter the Kingdom of Heaven we must shed the world of structure and return to the simplicity known in childhood.  Jesus did not need a McMansion or a private jet to be fulfilled.  He led a simple life.  His followers wanted him to build an army and conquer the Romans.  He preferred to fellowship with Our Heavenly Father and those around him.  He preferred to focus on the eternal rather than the temporal.  We all know that once we acquire a house, car, or similar purchase, it will become less important with time.  The familiar is not as exciting as the unfamiliar.  All the energy spent acquiring "things" could be redirected to more enduring acts.

A simplified life as a child is the way into the Kingdom of Heaven.

Sowing and Reaping

Friday, November 14th, 2008

There should be no question that Wall Street with the aid of the last two Administrations (both political parties) and Congress have sowed seeds of financial mass destruction.  Bill Clinton promoted sub-prime lending and strong armed banks to comply, Congress wrote law omitting credit default swaps (CDS) from being classified as insurance thus promoting exorbitant leverage and reckless financial instruments to be distributed globally, and the Bush Administration kept the party alive.  The party is over and there is a mess to clean up.  The decision has been made to sacrifice the taxpayer rather than the corporations that were complicit in creating the problem.  Where were the independent thinkers?  Why did no one pay attention to Warren Buffet’s warning about the financial weapons of mass destruction when he bought a company and analyzed the problem on March 4th, 2003?

The U.S. Treasury and the Fed will create new money to deal with the evaporation of capital and it will create a tsunami of oncoming US Treasury debt. This will 1) crowd-out private sector funding of debt, 2) force the US Treasury yield curve to steepen, 3) put downward pressure on the real economy, 4) undermine the US’ AAA rating, 5) and weaken the US dollar.

Other countries really want out of a dollar denominated world.  They have been bamboozled by the U.S. and Wall Street.  We have seen the repercussions of a poor monetary policy in other countries never considering it could happen to the U.S.  The seeds of greed, power, and the love of money have been sown.

Last week, the morning after the election (November 5th), I started a blog titled "666" but kept delaying its completion.  Later I read a blog at http://www.gods-kingdom-ministries.org/weblog/WebPosting.cfm?LogID=1229 where the number popped up in Barak Obama’s home state of Illinois.  If you have been reading my earlier blogs you may remember that I am focused on 1/11/11 as being a "watch date" for an economic event, the culmination of the perfect storm, or the beginning of a new era.  We shall see.  We are 25 months away from this date and it currently appears that the perfect storm may happen then based on the actions being taken by world leaders.  It is time to get your house in order.

Consider and ponder the following words of Jesus:

Luke 6:35-38

"But love your enemies, do good, and lend, hoping for nothing in return; and your reward will be great, and you will be sons of the Most High. For He is kind to the unthankful and evil.

"Therefore be merciful, just as your Father also is merciful.

"Judge not, and you shall not be judged. Condemn not, and you shall not be condemned. Forgive, and you will be forgiven.

"Give, and it will be given to you: good measure, pressed down, shaken together, and running over will be put into your bosom. For with the same measure that you use, it will be measured back to you."

 

Our Heavenly Father created a global equilibrium.  The Spirit resides everywhere, there is no void or nothingness on earth.  Each of us prays to The Most High God without regard of time or space knowing that He hears our prayers.  Jesus commanded us to give and assured us that the giving would be fruitful.  If you sow judgment, you will reap judgment, if you so condemnation, you will reap condemnation.  However, if you sow love, you will reap love.

The funds my wife and I have represent our fruit of working, saving, giving, and discerning what and where to distribute.  There is a tendency to dwell on the bad news and hoard, an act of fear.  Our Heavenly Father promoted buying and selling of goods.  Jesus spoke of this in the Parable of the Talents.  Jesus also promoted giving motivated by love.  In recent decades the "church" has misused the Scriptures in order to extract and exploit the congregation.  Frankly, it left a bad taste in everyone’s mouth.  Further, it gave people an excuse not to give, due to the abuse.  It is time to shed that mentality.  There are people hurting and in need.

Servias Ministries was set up as a conduit for giving and receiving, often anonymously.  We have people and projects that need money.  We distribute 100% of all contributions received.  Our Officers and Directors pay for all administrative and operational costs.  We are not interested in exploiting the poor and hungry, we give to those in need.  We have a special heart for children as did Jesus.  If you are interested in sending your tithe and/or charitable contributions to us for distribution, we would welcome your participation.  Sowing in Love produces good fruit.  To send a contribution of any amount, mail it to:

Servias Ministries, Inc.

PO Box 1471

Bethany, OK 73008

At yearend we will send a summary contribution letter for tax purposes.

 

The coming era will be motivated by love, not lust.  The lust of the current era will be judged by Our Heavenly Father and be corrected in the appropriate fashion.  We will continue to give in love expecting love to grow and consume the earth.

Devaluation of the U.S. Dollar

Wednesday, November 12th, 2008

November 15th, 2008 may go down in history as the beginning of the end of the U.S. Dollar’s global supremacy.  The G20 nations will meet and discuss the global financial crisis.  Since the Bretton Woods Accord, the Dollar has operated as the global reserve currency, the currency of business.

In 1944, the Bretton Woods system of monetary management established the rules for commercial and financial relations among the world’s major industrial states. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern monetary relations among independent nation-states.  Preparing to rebuild the international economic system as World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference. The delegates deliberated upon and signed the Bretton Woods Agreements during the first three weeks of July 1944.  Setting up a system of rules, institutions, and procedures to regulate the international monetary system, the planners at Bretton Woods established the International Bank for Reconstruction and Development (IBRD) (now one of five institutions in the World Bank Group) and the International Monetary Fund (IMF). These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.

The Russian Rouble has depreciated in value and the Russian Central Bank has raised its key lending rate to 12% to strengthen the currency.  The U.S. cannot do that without thrusting the U.S. into a deep depression.  What is the alternative for the U.S.? A devaluation of the Dollar.  As the world’s reserve currency the Dollar needs to show stability.  This was accomplished by pegging the Dollar to gold for 25 years until Richard Nixon took us off the standard.  Without a firm relationship with gold, a fiat currency is destined to depreciate which causes the economy to hyper-inflate.  Your dollars will be worth less. 

What is the solution?  The U.S. Dollar should be pegged against gold again.  The equilibrium price is currently between $3,000 and $5,000 per ounce.  However, that will change as the Federal Reserve continues to create money out of thin air… mighty thin air!  The Gold Ratio would then create stability and other currencies would begin to reach an exchange rate equilibrium.  I don’t see any other acceptable solution for all parties holding U.S. Dollars.  Other alternatives are failing thus the need for a "G20" meeting.  The following graph provides a perspective of the Fed’s actions:

image

 

What do the following have in common:

Freddie Mac, Fannie Mae, AIG, GM, Ford, Chrysler, American Express, Wall Street Investment Banks?

They all need cash and are going to the Fed’s begging bowl.  The following graph provides a look at Greenspan’s crisis vs. Bernanke’s.  What a difference in the magnitude.

 

image

Gold and silver are both depressed from the de-leveraging and selling of assets to raise cash.  Let us not forget the continued manipulation efforts to keep the true barometers of financial health from skyrocketing.  Once the general public has figured out that the only solution left for the leaders is to devalue the U.S. Dollar, there will be a buying tsunami of gold and related gold stocks.  The manipulation, illusion, and deception will cease.

Addiction to complexity

Sunday, November 2nd, 2008

The term "addiction" is used in many contexts to describe an obsession, compulsion, or excessive physical dependence or psychological dependence, such as: drug addiction, alcoholism, compulsive overeating, problem gambling, computer addiction, etc.

The global economy led by the Americans are pursuing an addiction to complexity and the end game of complexity is total collapse.  With over 35 years of technology expertise I have seen many aspects of the technology revolution: mainframes, 80 column card readers, 96 column card readers, mini-computers, Apple II and IBM DOS systems, 8" floppy disks, 2.5 MB removable hard drives, etc.  Each advancement was seen with excitement.  Miniaturization of components added to an expectation of improving our lives, reducing the work week, and providing for a more stable environment.  The problem with that expectation is an increase in technology breeds and increase in complexity resulting in an exponential increase in energy to support this type of ecosystem.

An increase in complexity moved to the balance sheets of global financial institutions.  Computer models have replaced rational thinking.  The IRS code is so complex that there is no one person who could claim full understanding of the tax law.  Current tax returns must be done by "tax software" if they contain any sophisticated investments at all.  Stock trading can be done by a click of a mouse now.  This eliminates "dwelling" on an investment prior to the act of investment and that is why that 90-95% of day traders lose money.

Don’t get me wrong, proper use of technology is beneficial just as a glass of wine is in line with Scripture.  Excess is where the problem lies.  Who determines excess?  The one in authority.  How should the determination be made?  By seeking revelation from above.  I met a man who was a CEO of a Minneapolis manufacturing company.  At lunch, he shared that all of his major decisions came in the early morning as he was seeking the Lord’s perfect will for the company.  He was highly successful and retired at the top of his game.

Wall Street is preparing to hand out bonuses.  Those bonuses are based on performance, creativity, and impact to the bottom line.  Everybody is looking for an edge and they think additional technology is the answer served up as new financial models, faster computers, more monitors, and quicker communications lines.  It has been shown that an investor could have made 3 or 4 major investments in minutes at critical points in the last 40 years, and would have outperformed all of the major investment strategies publicized today which utilizes computer modeling trading strategies scrutinized hourly for years.

At various times throughout history Our Heavenly Father has placed society into an intervention program.  Withdrawal can be tough.  People have become "addicted" to idols, power, conquests, quail, murmuring to name a few.  Judgment became necessary as the children of Israel continually looked away from their relationship with Jehovah and pursued other avenues.  The Book of Judges provides a great example of this recurring problem.

Addiction requires intervention to break the cycle.  The enablers must be removed from the equation for an interruption to occur.  Frequently the addicted person (or society) must hit bottom in order to come to the realization of exactly what got them to the place they are at.  Up cycles are balanced out by down cycles both in length and severity.  Seven years of plenty are followed by seven years of famine.

It appears that most economic thinking about the current crisis assumes we want to retain the current status quo or way of life.  I believe a paradigm shift must occur to rid ourselves of this system destined to fail.  People think they are entitled to things and services without working for them in an honest manner utilizing the gifts they have been given by our Creator.  A reduction in complexity and an increase in revelation will solve the problem!