Servias Ministries Blog

The following bullets summarize the state of our financial system. Egon von Greyerz is a respected advisor and provides a summarization of the global situation below:

1. Worldwide money printing continues unabated

2. Just In 10 years $120 trillion have been printed making global debt $200 trillion

3. World GDP has gone from $32 trillion to $70 trillion 2001-2011

4. Thus $120 trillion debt is required to produce a $38 trillion annual increase in GDP

5. The marginal return on printed money is negative in real terms

6. Thus the world is living on an illusion of paper that people believe is money

7. This illusionary paper wealth will implode in the next few years

8. The initial trigger will be the collapse of the world’s reserve currency – the US dollar

9. The dollar is backed by $120 trillion of US government debt and probably NO gold

10. All currencies will continue their race to the bottom and lose 100% in real terms against gold

11. This will create a worldwide hyperinflationary depression

12. All assets financed by the credit bubble will go down in real terms

13. This includes stocks, bonds, property and paper money of course

14. The financial system is unlikely to survive in its present form

15. The banking system including derivatives has total liabilities of around $1.2 quadrillion

16. With world GDP of $70 trillion, the world is too small to save a financial system which is 17x greater

17. This is why there will be unlimited money printing and hyperinflation

18. The only asset that will maintain its purchasing power is gold:

19. Gold has been money for 5,000 years and will continue to be the only currency with integrity

20. Western countries’ 23,000 tons of gold is probably gone. See recent article by Eric Sprott: http://www.sprott.com/markets-at-a-glance/do-western-central-banks-have-any-gold-left/

21. The consequence is that most of the gold in the banking system is likely to be encumbered

22. This means that Central Banks one day will claim it back against worthless paper gold IOUs

23. Thus gold and all other assets within the banking system involve an unacceptable counterparty risk

24. Gold should be held in physical form and stored outside the banking system

Let’s face it, we live in the here and now.  Anyone who only focuses on the future is missing a blessing of the present.  In the Book of James, we are called to be a “doer of the Word”, not a hearer only in James 1:22- But be ye doers of the word, and not hearers only, deceiving your own selves.

James 1:25  But he who looks into the perfect law of liberty and continues in it , and is not a forgetful hearer but a doer of the work, this one will be blessed in what he does.

We all should want to be blessed in what we do.  Our actions directly impact our ability to be blessed by Our Heavenly Father.  Are you known as a giver or a taker?  Do you attempt to manipulate others into “blessing” you?  We are warned in the 2nd chapter of James about catering to the wealthy, exalting them above the poor.  The wealthy have often been masters of manipulation in obtaining their wealth and have often used their wealth to gain greater favor.  Oh how deceptive are the riches of this world!  We must guard against manipulation as we seek to be a blessing to others.

People tend to be hard of hearing when it comes to giving.  James calls it a “forgetful hearer”.  Our Heavenly  Father created this earth with plenty of resources to sustain the population.  Man creates shortages or scarcity in order to manipulate wealth from the people.  As you become convinced of scarcity, then you start hoarding your existing resources in fear of further scarcity.  It becomes a vicious circle.  Contrary to human reasoning, Our Lord Jesus Christ spoke the following:

Luke 6:37 “Judge not, and you shall not be judged. Condemn not, and you shall not be condemned. Forgive, and you will be forgiven. 38 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.”

The prerequisite to receiving is giving into the Kingdom.  Receiving fruit only occurs after planting seed.  The Law of seedtime and harvest was established well before the Law of Moses was given and continues to this very day.  Are you consuming your seed?  It is no wonder that you are living in scarcity.

Everybody wants to see the Kingdom established but few really sow seed into the Kingdom.  Instead they want others to do all of the sowing but they in turn want to reap the benefits.  I know this is sensitive subject among many.  Any topic close to your wallet always is.  However we cannot omit this topic when we are focusing on bringing forth the Kingdom.  The very first place in the Promised Land to be taken by the Israelites was Jericho.  The wealth of Jericho was to be reserved for the Treasury of THE LORD:

Joshua 6:19  But all the silver and gold, and vessels of bronze and iron, are consecrated to the LORD; they shall come into the treasury of the LORD.”

The Treasury should be filled first.  Do you think the Kingdom will be established without a treasury?  Our Heavenly Father evoked the truth found in Luke 6:38 as the children entered the Promised Land.  The greed of Achan destroyed his entire house.  Clearly, Achan was a “taker”.

The following article describes currency debasement in Iran.  You can substitute just about any other country and the article would read the same.  Think about it.

http://finance.yahoo.com/news/irans-currency-plunges-investors-warned-093641510.html

“In my view, the Euro is a grand experiment by the Banksters. It is a system devised to determine how a single currency can work for many different and diverse countries. As such, failure of the Euro model experiment would make a difficult case for the idea of a single world currency project.

A single world currency may be a proposed reset solution after the current fiat currency system defaults or is printed into oblivion.

The Euro will not fail. It is in the interests of all Central Banks that it not fail.

The Euro is indirectly supported by the world’s largest gold reserves.

As you say,” QE works and it will continue to work”, in order to, I believe, save the single currency experiment.”

Mystery Babylon’s endgame!  They just don’t realize that Our Heavenly Father will do an “end around” and then the game will be over.

Charles Evans, the Chicago Fed President, effectively announced QE4ever.  He is Bernanke’s right-hand man.  Not only $40 Billion per month is to be committed for purchases, but an additional $45 Billion per month will be committed.  $540 Billion will be committed by printing new money and this translates to a currency war in order to depreciate the US Dollar.  Interest rates are at zero, the inflation rate is above 8%, and pension funds are seriously underfunded.  This is an all out assault on the US currency.  Bernanke is destroying the senior citizens and savers of this country.

The biggest challenge savers have now is how to move cash to assets that will not depreciate with the US Dollar.  Gold and silver are the obvious alternatives.  Related stocks are not far behind.  Retirement funds locked into bonds are at high risk.  If and when the bond vigilantes show up to challenge the bond rates, epic losses in bond portfolios will occur.  Pension funds will suffer great losses and pensioners will curb their spending further thus exacerbating the problem further.

The stated reason for QE4 is to get unemployment down.  The problem is that it is structural, not cyclical.  The excesses of the the boomer generation over the last thirty years created a non-cyclical sustained growth that could not be further promoted by the X generation.  The 25-40 million abortions assured us that the X generation would not have enough population to continue the growth.  The sins of the people are now coming home to roost.  The economic famine is upon us and the Fed will throw everyone under the bus in order to perpetuate its agenda.  My… it will get crowded under there.

Silver is currently 50:1 ratio to gold.  As people flee to metals, I expect this ratio to move back to the historic 16:1 ratio.  $3,600 gold would translate to $225 silver.  Will it reach these numbers?  Only Our Heavenly Father knows!

The price of something is suppose to be a reflection of the balance of supply and demand… that is until manipulation enters the equation.  Gold is hovering around $1,775 and silver has been staying in the $35 range for awhile.  This is clearly not reflecting the physical demand.  These prices are the manipulated paper market price levels.  The paper market is a derivative of the physical market.  The paper market will ultimately be pulled up to the true demand like a rubber band relieving tension.  The manipulators want the weak investors to jump out of the market from frustration.  Once this occurs, they will change their short positions to long positions and ride the price up to the next plateau.  They assume that the weak players will provide enough supply at current levels for them to close their positions with a profit.  However when there is a paradigm shift, the manipulators can get wacked by their own greediness.  When their plan fails, they must go into the market and cover their short positions at a substantial loss.  This causes the price to go up even quicker.

For those of us who believe the shadowstats.com statistics of inflation and GDP, hard assets are the primary vehicle to protect existing value.  As more fiat money is printed, the gold price will ultimately reflect the depreciation of the currencies.  As central banks get more desperate to keep the current system afloat, the price of gold and silver will shoot up higher.  When Joe Sixpack figures out he is losing value in his pension (assuming he still has one), he will begin to focus on hard assets as well.  This is when the price will go parabolic.