Archive for March, 2010

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Expect More Mortgage Defaults

Thursday, March 18th, 2010

You are a 62 year old baby boomer and buy a home in 2006 for $385,000 and today it is worth $200,000.  Your payments are now $2,333 per month (principal & interest) and probably $500 per month in taxes and insurance or a $2,833 house payment.  The following table shows the disparity:

Year Home Value Homeowner Age
2007 385,000 62
2008 300,000 63
2009 225,000 64
2010 200,000 65
2011 210,000 66
2012 220,500 67
2013 231,525 68
2014 243,101 69
2015 255,256 70
2016 268,019 71
2017 281,420 72
2018 295,491 73
2019 310,266 74
2020 325,779 75
2021 342,068 76
2022 359,171 77
2023 377,130 78
2024 395,986 79
2025 415,786 80
2026 436,575 81
2027 458,404 82
2028 481,324 83
2029 505,390 84
2030 530,660 85

(Assume a 5% annual increase in house value from 2010)

You will be 79 years old before your house is possibly back to its original value… if all goes well.  On the other hand, if someone else bought your house at its current value, their mortgage loan would be almost $900 per month less than your payment.  With rising healthcare cost for a baby boomer and the stress of a house payment of this size, expect defaults to continue to rise.  You are 14 years from a breakeven on the original cost of the house.

See: http://www.latimes.com/business/la-fi-walkaway17-2010mar17,0,2149033,full.story

The ego is a dangerous thing.  So is mass delusion.  We all saw it happening but greed prevailed at all levels.  People who thought they were “entitled” to a higher standard of living without the resources to pay for it were duped by Wall Street into thinking they could afford this new standard of living.  Wall Street bonuses were more important than understanding the underlying worthlessness of the instruments they were peddling.  What a tangled web!

Our Heavenly Father knows best.  If you are going to purchase sizeable assets such as houses and cars, ask Our Heavenly Father and don’t buy until you hear from HIM.  If you can’t hear him, it’s simple… don’t buy.  Isn’t it more important that you buy the right house or car than to buy the wrong one and live with the consequences?

“I can’t hear THE LORD.”  Well, seek and ye shall find.  Don’t think that a 30 minute quiet time is the essence of seeking.  Study, meditate, ponder, immerse yourself in the Word of GOD and be “baptized” in HIS Word.  HE created you and will honor your intent.  Your ego will fight you on this, expect it.  Your mind is suppose to be your servant, put it where it belongs.  Let your spirit take the lead for once and for all.  When this happens, you won’t be one of those in the “default” category.

Posted in Biblical Economics & Money | Comments Closed

The Great War of 2012 (A Micro-Novel)

Wednesday, March 17th, 2010

In looking back to the spring of 2010, politicians promised us that blue skies were ahead.  Little did we realized “blue” meant doom and gloom.  The economy improved in the 2nd quarter of ‘10 but the increase gasoline prices proved to be a bigger drag on consumers than economists had predicted.  China and other countries continued their increased demand for oil and other commodities to satisfy their population’s increasing demand for middle class status.  After all, who doesn’t want a car and drive it to new places!

The U.S. stimulus package failed to sustain a “V” shaped recovery and the vigilante bond market put the U.S. financial attitude in its cross hairs.  The $1.7 Trillion evaporated by Wall Street was too much for the country to recover from.  The mass delusion of the subprime mortgage bubble had run its course and all the king’s men could not sustain the U.S. economy.  The few who had figured out that Wall Street was going to lose a boatload of money took advantage of the coming bust by purchasing credit default swaps.

Chinese planners were implementing their 50 year growth plan.  In their classic silence, the Chinese continued to buy up hard asset businesses worldwide.  They took advantage of the American arrogant behavior around the world and scooped up prime energy resources at favorable prices with their accumulated U.S Dollars.  They accommodated the U.S. avarice by supplying the American consumers with all the gadgets that could fill a house.  In turn, America’s wealth was transferred to China’s treasury and funded infrastructure projects to propel China’s economic stability.

Meanwhile, true U.S. unemployment which had leveled out at 16% with the huge stimulus packages granted by a Congress who wanted to be reelected in November of 2010.  Once the elections were over so were the stimulus dollars.  The ratings agencies had vowed to lower the sovereign debt rating of the United States which would impact borrowing rates on the Treasury debt.  The Fed was between a rock and a hard place.  It needed low rates because of the astronomical debt levels but the economy needed additional stimulus.  The consumer had failed to ramp up consumption after being burned with excessive borrowing offered by Wall Street just a few years earlier.  Wall Street’s delusion was only exceeded by the consumer’s delusion.

The government’s think tanks were working overtime.  How do we get out of this predicament?  The leaders were looking for answers at the same time bashing China for its trade practices that in earlier years were applauded by Corporate America.  Washington’s control of the American people was disintegrating.  The Tea Party’s name was changed to the Constitutionalist Party.  The ground swell could no longer be disregarded by the media.  The elections of 2012 would signal the end of the two party system that had worked so well for the power brokers.  They needed a scapegoat.  China became the enemy of the U.S.

Though China had more English speaking citizens than the U.S., the Chinese were demonized by Washington by way of the American media.  If the American people could be convinced to purchase houses and gadgets with loans that could not be repaid, why not convince them that China is now part of the axis of evil?  It must be the Chinese who caused all of the economic problems of the U.S.!  Washington struck a deal with Taiwan to provide it with nuclear capability and that was the straw that broke the camel’s back.  In retaliation, China dumped its U.S. bond holdings and caused the Dollar’s value to drop like a rock.  Within a week gold went from  $1,650 per ounce to $3,000 in terms of U.S. Dollars.  $3.50 gasoline jumped to $6.  The lethargic American public awakened in an outrage.  The NFL Sunday sofa gang turned off the TV and was ready to lynch someone in Washington.  A small think tank five miles west of Annapolis, 40 minutes from the nation’s Capitol, submitted a plan to pull the country out of the W-shaped recession.  War!

In an effort to save their positions of power, the leaders began to implement the plan.  Confident that the U.S. military technology was superior to China’s army and Western Europe would side with the U.S. since their economies were in a similar state, the leaders’ plan to force China into war by arming Taiwan worked.  Immediately China aligned with Russia, North Vietnam, the Afghan tribes, and Venezuela.  The Russian and Venezuelan oil exports were cut off.  The price of gasoline jumped to $9 per gallon.  Americans were enraged and were ready to do what it took to retain their former standard of living.  The Great War was on!

(Could this scenario happen?  The current system is ready to come to an end.  With the potential of 9 billion inhabitants by 2020, change is on the horizon.  Our Heavenly Father is bringing forth a new revelation to replace the delusion currently in place.   The only thing that can change the current course of the planet is Love.  All other revelations of the past have failed to bring forth sustainable peace.)

Posted in Biblical Economics & Money, Love | Comments Closed

Inflation versus Deflation- The Battle continues

Saturday, March 13th, 2010

Debt deflation is occurring in the residential and commercial real estate sector.  For most, the house is their largest asset AND their largest liability.  In the U.S., the residential market is dismal.  In our neighborhood, houses typically sell in weeks but there are a couple of listings in immaculate shape that are not moving.  The mood of borrowers as shifted from reckless expansion to fearful contraction.  The days of “flipping” a real estate property are over.  Those that did not get out before the summer of ‘08 are watching their gains wither away.

On the other hand, monetary inflation is alive and well.  Since there are no forced restrictions on monetary expansion, the Fed is using its one tool to slow the economic slide in the U.S.  The one disrupter is time.  Over 700 banks are on the FDIC watch list and more failures are on the way.  The FDIC itself will be bailed out by the U.S. Treasury.  Time allows banks to invest their cheap money and make a spread that flows to net income and ultimately capital.  The Financial Accounting Standards Board (FASB) has been accommodating and relaxed its requirement to properly value the loans on the balance sheets of banks to their realistic lower value.  In the strictest sense, this is fraud.  Allowing this misrepresentation to occur in publicly traded entities puts the investing public at risk.

Ben Bernanke will do everything in his power to keep deflation from occurring.  This sets the stage for higher commodity prices thus I have included the following for informational purposes only.

Gold has been in a trading range of consolidation.  I believe this is good for this will provide a good base for the next leg up.

image

As you can see by the chart, the long term trend is up.  Gold and silver are the only investments without an attached liability.  China continues on the prowl to increase its gold reserves and will ultimately become the largest government holder of gold.  Stability is best achieved by having substantial gold reserves backing a country’s currency as history has shown us time and time again.

Gold producers are booking substantial profits whereas many other sectors are in the red.  The general investing public will figure this out soon and will cause the gold stock to achieve new highs.  Overall gold production is down thus the senior producers will focus on quality junior producers’ reserves and will open the checkbook to acquire them.  For those with patience, the reward will be substantial.

image

The silver chart shows more volatility but tracks well with gold.  The silver producers are also producing notable profits and time IS on their side.

I’m asked “I don’t have much money so how can I protect myself if the financial crisis worsens?”  I’m not a financial advisor but I will share with you what I did for my kids.

1. I opened up an Internet trading account with Scottrade. (There are others out there as well)

2. As our budget allowed, we put a $100-$150 in the account on a periodic basis. (50 Bucks will do as well)

3. We bought gold and/or silver stocks with whatever money we had in the account.  We did not worry about the price of the stock on the day of the purchase, this is “dollar cost” averaging.

4. If the stock pays dividends, we included that cash in our next purchase

What stocks did I consider?  (See Disclaimer below)

Goldcorp (Symbol: GG) has been a favorite of mine for some time.  It is a senior producer and pays a dividend.  I like dividends, they beat the 0% the bank pays for your money.

Silvercorp (Symbol: SVM)  They pay a dividend as well.  These means their cashflow is sufficient to distribute money back to the stockholder.  Their cost per ounce of silver: Total cash cost for silver adjusted for by-product credits 2009: ($2.77)    2008: ($10.99)  2007: ($7.25)   Their byproducts pay for the cost of mining.  It is my understanding that they are the lowest cost silver producer in the world.  Gimme some of that lovin’!

Minefinders (Symbol: MFN) just announced their first profitable quarter in the company’s history.  See: http://finance.yahoo.com/news/Minefinders-Announces-2009-iw-1972541723.html?x=0&.v=1

U.S. Gold (Symbol: UXG)  I like Rob McEwen (CEO) who has put a sizeable portion of his wealth in the company: See: http://www.usgold.com/presentation/20100309_pdac/

Mag Silver (Symbol: MVG)  They have a lot of potential and are higher risk because they are mainly in the exploration phase.  See: http://www.magsilver.com/s/Home.asp 

Since gold and silver have been in a trading range, the stocks are priced accordingly.  I don’t worry about being unable to buy 100 shares at a time.  U.S. Gold closed at  $2.88.  30 shares plus the $7 commission puts the cost just less than $100.

Energy stocks with dividends include Chevron (CVX) and Penn West Energy (PWE).  These are higher priced stocks so one would need a little more cash to begin accumulating them.

Do I believe my kids should place all their savings in stocks?  NO!  You still need a savings account to handle unexpected circumstances that arise.  Investing in stock should be in addition to a saving plan not a replacement.  Stock investing will be emotionally challenging for most people.  Often, the day after I buy a stock, its price goes down.  However, I am investing for the long term, not the next day.  Are these stock guaranteed winners?  No, any investment has risk as well as reward.  Invest at your own risk. Caveat emptor!

 

Disclaimer:

The materials on this website have no regard to the specific investment objectives, financial situation, or particular needs of any visitor. This site is published solely for informational purposes and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments.

References made to third parties are based on information obtained from sources believed to be reliable, but are not guaranteed as being accurate. Visitors should not regard it as a substitute for the exercise of their own judgment. Any opinions expressed in this site are subject to change without notice and Servias Ministries, Inc. is not under any obligation to update or keep current the information contained herein.

Servias Ministries, Inc. and its respective officers and associates may have an interest in the securities or derivatives of any entities referred to in this material. Servias Ministries, Inc. accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. Our comments are an expression of opinion. While we believe our statements to be true, they always depend on the reliability of our own credible sources. We recommend that you consult with a licensed, qualified professional before making any investment decisions.

Posted in Biblical Economics & Money | Comments Closed

Love: The next major move of The Spirit?

Wednesday, March 10th, 2010
Servias Ministries is publishing a new book on this topic.  We want to thank those who have already responded with early order requests.  We expect a “proof” next week to review before the final printing of the book.

“The Circumcised Heart of Love” is expected to be completed before March 31st.  The book will sell for $16 and each person purchasing the book through Servias Ministries will be credited with a $12 charitable contribution to the ministry.  This $12 will be directed to the electro-dermal screening (EDS) project (http://www.servias.org/?p=557) to continue the funding for phase 2.  Your effective cost of the book is four bucks.  You will receive an IRS approved gift letter at the end of the year for the contribution in excess of the $4 cost.

The author believes this to be the key to unlocking the next age of the Kingdom.

The EDS project is an act of Love directed toward the entire population of the globe.  We hope the proceeds of the book will be a source of funds for the project.  We encourage you to order copies for yourself and others and become a partner with us in ministering life and light to the world.  Once this project results in a new system of toxin, chemical, and signal removal, we expect to expand the ministry to third world countries where individuals are suffering with sickness and disease that can be addressed by this technology.  Your response of support will expedite this process.

To order your copy of the book, send your check or money order to:

Servias Ministries, Inc. (a charitable non-profit organization)

PO Box 1471

Bethany, OK  73008

We will cover the mailing cost in the Continental U.S.

Posted in Biblical Economics & Money, Electrodermal Screening EDS, Health and Healing, Love, Prophetic | Comments Closed

Rogue Events

Sunday, March 7th, 2010

Technical traders, economists, and politicians make decisions on probability and THAT can be a problem.  Man’s reasoning does not account for the unexpected or it would be “expected”.  Our Heavenly Father has the benefit of knowing all things including rogue events, black swans, or tsunamis.  The last several days has been a reminder that unexpected events must be considered.  The Chilean earthquake and more recently a rogue wave hitting a cruise ship are a reminder we must remain vigilant and keep our ears open to what Our Heavenly Father is saying.  See:  http://cnmnewsnetwork.com/11866/cruise-ship-rogue-wave-are-a-bad-addition-to-any-cruise/

On the economic front, there are several “rogue waves” that could affect our financial well being:

Oil Price Spikes- The debate has just about ceased about peak oil.  Most agree that May of 2005 was the peak for conventional oil production.  The only question is how decline in oil production impact the daily price.  Expect price volatility.

Geo-political event- Iran and others are continuing to create a confrontational stance to keep the West from its aggressiveness.  As these countries grow in nuclear capability, they will be less likely to succumb to the pressure of Western leaders.

Ultra high deficit numbers- What happens when we wake up one day and the lenders decide to pull the plug on the borrowers?  Creditor nations will always choose what is in their best interest, not the other party’s.

Terrorist attacks- Terrorists feed on hate and anger.  As long as the Western countries continue to exploit the resources of third world countries, terrorists will seek ways to attack their enemies.  Until Love dissipates the rage and anger, you can be assured that terrorists will plan attacks hoping to cripple Western interests.

Once the rogue wave hit the cruise ship, the vacation was ended and passengers were sent home.  No matter how much analysis is done, there are events the human mind cannot anticipate.  Fortunately, Our Heavenly Father has the complete picture.  Jesus was able to calm the raging storm by revelation.  His ministry was based on Love.  Every action, every word, and every response were done out of Love.  It was not man’s idea of “love” but the real Love emanating out of Our Heavenly Father’s heart.

“Rogue events” will continue to confound mankind.  Man’s ego will continue to be exposed as a poor substitute for revelation from Above.  Instead of walking around as though we are entitled, we should have a humble heart of gratitude.  “Pride goes before destruction, And a haughty spirit before a fall.” Proverbs 16:18

Posted in Love | Comments Closed

The Essence of Love

Friday, March 5th, 2010

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The Collapse of Complexity

Thursday, March 4th, 2010

“Complex societies in the ancient world could collapse when the marginal costs of complexity got to the point where the returns on that complexity had vanished: basically, the cost of civilization got too high.” J. Tainter

Having been in the finance and technology arena for 37 years, I am convinced that we are moving toward a tipping point of diminishing returns on investment in complexity.  The output will be worth less than the input.  Our Heavenly Father imparted the word “simplify” to me a few years ago.  That tends to conflict with my expertise in technology… but Father knows best.

The average American has been in an accumulation phase for the last 60 years.  We have built bigger houses, rented offsite storage, added vacation homes, etc.  If each of us were to clean out all items we haven’t used in the last five years, we could probably outfit the population of Mexico with a complete “home” makeover.  Americans have been seeking happiness with “things” and have failed to fill the void with all the toys, trips, and events.  True peace only comes in the presence of Our Heavenly Father.  The Holy of Holies is a great example of simplicity for it was not a cluttered room filled with artifacts gathering dust.  Can you image moving all of your household goods 42 times in 40 years?  Less is more.

The U.S. Government has continued to grow to the point where the sheer weight of the infrastructure is sure to collapse.  The Bernie Madoff scheme was uncovered ten years ago but the SEC could not or would not understand the complexity of the scheme thus they did nothing to stop the scam.  The whistleblower approached them four times with the financial analysis proving Madoff to be a fraud.  The lawyers at the SEC did not understand the analysis and failed to act.  Complexity creates a mysterious and superior illusion that intimidates that average person.  This complexity makes the uneducated person reluctant to challenge the assumptions the complexity was built on.  Therefore, the complexity is perpetuated.  Who wants to read a 1,200 page healthcare bill?  If it’s 1,200 pages, it must be right!  Explain those credit default swaps to me again?

Technology and complexity have failed to win the war against terrorism.  Bin Laden is still out there.  The complex resources of the U.S. have not been able to locate this man for nearly a decade.  If he would just wear that shirt with a red bull’s eye, it would help.

Throwing technology  at the health problems of Americans has done little to improve the “quality” of life.  Ask any chemotherapy patient who lost her hair, vomited up blood after one treatment and spent the night in an emergency room.  Someone yell “Uncle”!  Introducing pharmaceutical toxins or radiation simply forces the body’s immune system to overload.  Technology to remove anything alien to a healthy body would be a better use of investment dollars.  The body is designed to heal itself.  Our Heavenly Father who loves us did not design our body to torture our souls.  Jesus did not become an expert on pharmaceuticals in His ministry.  Tell me again, what is Naproxen sodium?

Funding complexity ultimately forces the government to get creative with our money.  As complexity grows in an exponential fashion, the value of money declines in an inverse relationship.  When I was a kid, my parents owned a drive-in restaurant and we sold five hamburgers for $1.  Cokes were ten cents with the larger ones being twenty-five cents.  Now, those same Cokes are $2 at a restaurant.  We gave you an environmentally friendly paper cup whereas now it is plastic or Styrofoam.  The government can inflate faster than your wage can increase thus you always lose out on inflation.  Retaining value in your savings account is now most challenging.

The speed of collapse may be breathtaking.  The potential financial meltdown of 2008 proved that a “black swan” event can happen without notice, especially to the general public- you and me.  Our sole warning mechanism is our relationship with Our Heavenly Father who is the only one who fully and completely understands the risk of collapse as well as the day of catastrophe.  As we move closer in our relationship with Our Heavenly Father, we position our self to be prepared for anything life throws at us.  Time is short.

Posted in Biblical Economics & Money | Comments Closed

Servias Ministries is publishing a new book

Tuesday, March 2nd, 2010

“The Circumcised Heart of Love” is now at the printing press and is expected to be completed before March 31st.  This is the first book of the Servias Ministries Press.  The book will sell for $16 and each person purchasing the book through Servias Ministries will be credited with a $12 charitable contribution to the ministry.  This $12 will be directed to the electro-dermal screening (EDS) project (http://www.servias.org/?p=557) to continue the funding for phase 2.  Your effective cost of the book is four bucks.

The author will receive 10% of the price as did the priest for his service to the Kingdom.  The intent of the book is to focus the reader on the third and final corporate anointing: Love.  The author believes this to be the key to unlocking the next age of the Kingdom.

The EDS project is an act of Love directed toward the entire population of the globe.  We hope the proceeds of the book will be a source of funds for the project.  We encourage you to order copies for yourself and others and become a partner with us in ministering life and light to the world.  Once this project results in a new system of toxin, chemical, and signal removal, we expect to expand the ministry to third world countries where individuals are suffering with sickness and disease that can be addressed by this technology.  Your response of support will expedite this process.

To order your copy of the book, send your check or money order to:

Servias Ministries, Inc.

PO Box 1471

Bethany, OK  73008

Book cover Final copyJPG

Posted in Biblical Economics & Money, Electrodermal Screening EDS, Health and Healing, Love, Prophetic | Comments Closed

Egocentric Living

Tuesday, March 2nd, 2010

Three aspects of egocentric living are: requirement of a “comfort zone”, constant affirmation, and a bubble of support.

The comfort zone is intended to protect the individual from any outside influence that might weaken the ego or the illusion the person is living under.  This illusion may be a religious doctrine, a philosophy, or protection from emotional pain suffered in the past.

How many times have we anchored our doctrine based on what man said concerning Scripture rather that studying the Scripture for ourselves?  We often think that successful people have all the revelation about Our Heavenly Father.  It is as though their success is attributed to a special anointing therefore every word that proceeds out of their mouth must be true.  We need no intermediary between us and Our Heavenly Father other than Jesus.  Yes, the fivefold ministry is to build us up but it was not put in place as a substitute for our relationship and fellowship with Our Heavenly Father.

Man’s philosophy usually contains some truth or no one would listen.  Often, philosophy is meant to provide answers to mysteries that have not yet been revealed by Our Heavenly Father.  Impatience to know and understand often cause a person to seek out a philosophy to fill the void.  Why not seek out the Creator of Heaven and earth rather than live with a philosophy of another person.

The comfort zone is sometimes surrounded with a wall of protection.  Some extreme emotional pain in the past is often the source of the wall.  Abuse of some type by a loved one can scar a person for life unless that person seeks Our Heavenly Father’s Love to mend the scar and forgive the culprit.  This wall supports the illusion that you will be protected from anyone wishing to hurt you.  However, it only serves to cover up your gifts and calling that are needed by others.  Jesus went to the Cross rather than build a wall of protection.  Paul and other apostles suffered much to bring forth the Gospel yet an isolated case of misuse or abuse can place a calling under a “basket” where no man can see.

A person requiring constant affirmation is filled with fear and uncertainty.  Love has not yet taken root or has been plucked up by some event that has shaken the foundational understanding of the person.  If a person is truly rooted and grounded in Love, fear departs.  There is nothing that can separate that person from Our Heavenly Father’s Love and he or she will not need reassurance from man.  When that Love is deep seated, peace prevails.

The ego builds a bubble of support.  As it develops, time, money, and resources all contribute to support the illusion that the ego wants to project.  It may be a title or an expensive car.  It may be clothes or massive amounts of cosmetic surgery.  On the other hand, it could be deprivation that brings attention to oneself.  The ego will perpetuate whatever illusion that will bring attention to the person and is known by the amount of energy it consumes.  The ego will do whatever is necessary to bring attention to itself.  Love gives, the ego consumes.  You can be around a person for a short time and determine whether they are a “giver” or a “taker”.  The ego will suck the life out of a person at all times.  On the other hand, the universe is waiting to empower the person who guides his life by Love and will provide the resources to perpetuate this reality.

Posted in Love | Comments Closed

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