The Fed’s Failure

In last week’s blog, I listed many of the economic issues plaguing the U.S.  It was evident then that the Federal Reserve would continue its stimulus of Quantitative Easing at the rate of $85 Billion per month and they would not taper their purchases of government securities.  What does this tell you?  All of the rosy projections by the media were hogwash.  The truth continues to elude the public.

The market continues to be rigged, allowing the Kings of the East to replace their Dollars with gold.  This is the precursor to a new monetary system.  When will it take place?  Only Our Heavenly Father knows for sure.  How will it be structured?  It will surely be backed by “truth in the transaction”.  Gold and silver will accommodate that requirement.  In the past, the government called their manipulations of the market- interventions.  A continual intervention is manipulation.  There will come a climax of intervention and all the currencies will revalue against gold and silver.  I believe those who have been able to acquire physical assets without liability will experience a jubilee of sorts.

The Federal Reserve is not all-powerful because the U.S. Dollar is not all-powerful.  That is its main weapon.  For decades, its power originated from the gold that was backing it.  In 1971, the power transferred to the U.S. Military.  Two or three wars later, the power is waning.  Other countries are increasing in their overall power, revealing the structural weakness of U.S. policy and the Fed.

Former US Treasury Official, Dr. Paul Craig Roberts has been warning of an economic collapse.  “Here’s the situation for the Fed:  All of the markets, and the solvency of the big banks, are totally dependent on the Fed buying the bonds.  If they don’t buy the bonds, then the interest rates are going to rise, the prices of all debt-related instruments are going to go down, the insolvency of the banks again reappears, the bond market collapses, and the stock market collapses….”.

The US cannot pay off its debts, it simply prints more bonds and the Fed buys them with newly created money.  The official US Government debt is at $17 trillion.  Additionally, unfunded liabilities such as Social Security and Medicare place the total debt closer to $100 trillion and higher.  The Fed knows this, the central planners know this, you and I know this.  How can we protect ourselves?  Like a broken record, we must simplify, reduce/eliminate debt, and buy hard assets that retain value.  I believe Our Heavenly Father is giving us ample warning of the ugliness to come.  The volatility of prices will test your emotions.  Apparent losses in value of hard assets will test your belief in the overall picture.  A drop in the price of gold or silver can be viewed two different ways:  as a loss, or as an opportunity to buy.  I see it as the latter.

A day of reckoning will arrive for the current system.  Denying this reality will only lead to greater pain and sorrow.  We must deal with the truth and lack of fruit of the current direction.  Finland is now wanting its gold back: “Finland recently became the latest nation to initiate action to pull its physical gold reserves back within its national borders.”  I guess I’m not the only one who sees chaos down the road.  If you don’t have possession of your gold when the chaos hits, you probably will not get it back… ever!  Finland knows this, China, Venezuela, and Germany know this, and the rest of the countries will soon admit this.  They are all beginning to prepare.  As Our Heavenly Father told Joshua, “Be of good courage!”

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