Category: Markets

Black Swans are in Flight

Doug Tjaden | April 4, 2011 | 1 Comment

It’s been quite a month.  Heads down for 70+ hrs a week to launch a web site aimed at helping people understand and engage in the effort to return to honest money.  The Honest Money Center is formed with the prayer that over time, it will have the same impact as the 10th Amendment Center is having.

With Utah passing their sound money bill into law, the first shot across the Federal Reserve’s bow has been fired.  It very well could be looked at as a historical event in the decades to come.

Outside of that, the 2014 Outlook continues to unfold as scripted.  I must say that some events are progressing faster than I had thought, mainly due to the flock of black swans that have been let loose.  Japan’s nuclear problems, post earthquake/tsunami, the unrest/war in the Middle East….  Right now its too early to declare the Outlook has accelerated.  Economic statistics are improving, which will counter some of the other issues for a short time.

Over the next few years,  there will be an ebb and flow that will at times make it seem as though we are heading for a collapse in weeks/months.  Then we may enter a period that makes it appear as though it may be many years.  Keep your eye on the overall trend. It is still in motion.  In my opinion there is nothing short of an act of God that will stop us from experiencing a form of what was written in the paper.

The precious metals markets are near all time highs again.  Silver is on fire.  It seems to want $40/oz before correcting.  I still fully hold to my prediction that we will see a very sharp pullback in all markets, including commodities and precious metals sometime this year.  The 2011 deflationary scare will likely begin  when QE2 comes to an end or shortly before.    That assumes it will end.

The unknown factor now in that equation is the shock that Japan’s woes will bring to the world economy.  If it manifests itself prior to QE2 ending, we could see an extension or a roll right into QE3.  This could possibly a) place the beginning of the correction in the May time frame and b) make it a very brief one, as it becomes evident that the Fed (and most of the world’s central banks) will print, print, print.

Should the Fed end QE2 in the face of a new global economic downturn, we will see a very ugly sell off again.  Maybe not as bad as 2008, but breathtaking none-the-less.  The result would be, there would only be a few weeks/months between the end of QE2 and a QE3, and QE3 would be a doozy.

Oh, and just a quickey on the Police State front.  This from Republican Senator Lindsay Graham:

Sen. Lindsey Graham (R-S.C.), a military lawyer, is the first member of Congress to say the legislature needs to explore the possibility, however unlikely, of limiting some kinds of free speech – like Terry Jones’ Quran burning – that help America’s enemies.  “I  wish we could find a way to hold people accountable. Free speech is a great idea, but we’re in a war,” he told CBS’s Bob Schieffer on “Face the Nation.”

A great idea?  But….. we are at war!  Really?  When was war declared?  When does war predicate suspension of 1st Amendment rights?  It is happening people. Help your friends remove their rose colored glasses before it is too late.

And I haven’t even spoken of the dire finances of the states and large municipalities….

As I said in the Outlook paper.  Lots of variables.  None can be perfectly predicted.  Stay alert.

Now that the big push for the web site release is over, I plan to give weekly or bi-weekly updates.  That’s the plan. We’ll see how it goes.

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What (nearly) killed the markets today?

Doug Tjaden | May 6, 2010 | 0 Comments

A nearly 1000 point drop in the DOW.  Gold up nearly $30.  What does is all mean? Well, that depends on who you ask at this hour.  MSM news outlets are claiming a computer glitch or a mistake made when entering a trade.  Others claim the markets are simply catching wind of just how serious of a problem exists in the currency markets with the sovereign debt problems in Greece and the Euro zone.  Still others blame HFT - High Frequency Trading – that simply got caught without a negative feedback loop, ala the 1987 crash.

Whatever the reason, one thing is certain.  Market sentiment is sure to have changed.  All the spin that has been engineered by the MSM and PTB over the last year was undone in one, 60 minute roller coaster ride on Wall St. If nothing else was evident today, it is clear that someone – be it millions of individual someones – or a few computer programmers in the glass houses of the big investment banks – has a hair trigger when it comes to exiting the markets.  That was on display for all investors to see today, and now people know that they can lose thousands of dollars in the blink of an eye.  Investors now will have their finger hovering over the mouse clicker or on the speed dial number of their broker.  “Sell NOW!” is on their minds.

18 months is not long enough for investors to have forgotten the pain that the market dive in late 08 and early 09 brought them.  They saw their financial life pass before their eyes.  Many were late to “get back in” and have recovered only a fraction of their losses.  They will not stand by this time and watch the rest of it slip away.  The question is, where will they go? If today’s market action did nothing else, it served to reveal in a 3 hour period where money will flow when the next down leg gains momentum (tomorrow and Monday will tell us if that is now).  Places to be:  US Treasuries, the US dollar, gold and silver and their equities.  Nearly everything else got thrashed today.

Let’s look at these one by one. US Treasuries will be a safe haven only for a short period of time.  That period could be days or months, depending on how quickly things unravel.  Eventually, they too will join the list of asset classes doomed to fall.  Ditto for the US dollar.  In the game of cascading currency defaults, even the last man standing (which will NOT be the US dollar) will fall.

Now to gold and silver.  Today they showed their metal (no pun intended).  Gold was firm all day long, steadily catching a bid in the face of major market turmoil.  Silver was noteworthy due to its lack of volatility.  This is the opposite of what happened in late 08/09′ when they both got crushed with the markets.  Why?  I have given this some thought, and in 08/09, the markets were under pressure because the financial system was failing.  Now, however the actual “money” itself is failing.  Big, big, big (did I say big?) difference.  This is a trend that will continue throughout the remainder of this crisis, until our current fiat empire is replaced by something else.

And what about energy and other “hard” assets?  Well, you saw that they will likely receive the same treatment – at least in the short term – as most other asset classes.  The fear of “demand destruction” will outweigh the flight to tangible assets in the early stages.  That simply means that energy and other hard assets will be great investment opportunities after the first wave of selling subsides.  It will take some wisdom to know when to enter those markets.

If the markets somehow gather themselves tomorrow and are able to put this horror show behind them.  It will only be temporary.  Gold may pull back slightly, however people now know what to expect.  More and more people will begin to accumulate precious metals and their shares.  Even Larry Kudlow remarked today “Gold is now the world’s reserve currency. Amazing.”  Not for those who have been watching this unfold for the past 3 to 5 years.  Not for the Austrian economists.  Not for those who read and study history.  And last but not least, not for those who read and study their Bible.

Buckle up everyone.  The next few days will be very telling.  Let’s see how the overseas markets view today’s action.

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Is is going to get serious again

Doug Tjaden | February 11, 2010 | 0 Comments

This week has been an eye opener regarding the real state of the financial/currency markets.  It seems as though reality is beginning to grip people by the throat – even those who are steadfastly holding on to hope that the worst is behind us.

Today’s 30 year auction did not go well.  That is an understatement.  CNBC’s Rick Santelli had the guts to call it what it was – a failed auction.  You won’t hear this in the main stream financial press.  No, they are still either in denial or clamoring to keep the sheeple on board their stock train.  However, Rick was correct.  If it were not for a record amount of treasuries purchased through “direct bidders” – those who are anonymous at times to even the primary dealers who execute their purchases – the bid to cover ratio could have fallen below 1 to 1.  These direct bidders have become increasingly active in treasury auctions, in particular in the short term treasuries.  However they are increasingly moving to the long end of the maturity scale and in increasing quantity.

It has been speculated that the direct bidders include the Federal Reserve and other agencies working on their behalf.  This in order to prop up the bond market and keep interest rates down.  Why do they need to be so active?  Because simultaneously, demand for US treasuries from indirect bidders such as central banks and private agencies is in a free fall.

What this means to you and I is that evidence is growing that the Fed is – as many have said for over a year now – the buyer of last resort for US treasuries.  They are monetizing the US debt in record numbers.  Once this “truth” (assuming it is) becomes evident to and accepted by the markets, there could be a rout in the bond markets as they get pitched overboard and en mass.   A spike in interest rates would result, a falling dollar, and a broad and major disruption in all markets world wide.

This is what you need to prepare for.  The bloom is coming off the rose of the spin machine.  Reality is about to bite hard.  It is time to start moving back to a safe position – cash on hand, physical bullion, and a close monitoring of the situation.

Putting Today’s Record 30 Year Direct Take Down in Perspective

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Dr. Paul speaks of the future

Doug Tjaden | February 4, 2010 | 0 Comments

This man has been very accurate in speaking out against the ills of our government and their consequences. This is about as strong of language as I have seen come from him regarding what will happen if we do not turn from our ways – and soon. The politicians will not change their ways however without a fight.

Get involved in your precinct and help vote out the party leaders who have taken us down this path. Dr. Paul is right when he talks about the possibility of a “street fight” against the government. We don’t want that. Get involved and invest in your children’s future.

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The coming second wave…

Doug Tjaden | December 14, 2009 | 2 Comments

For those who believe the economic crisis is over, I have a reality check here.

  • Unemployment is above 17% according to government figures (see U6, not the touted U3 number) and nearly 22% if it were calculated using methodology used before 1994. Source Shadow Stats. Yes unemployment is generally a lagging indicator, however we are not in a normal business cycle here.  This is a deleveraging cycle, and the two are very different.
  • Social Security is due to go into the red in 2010 (meaning it will contribute to budget deficits, not lower them).  Source “Gary North/Lew Rockwell.
  • Commercial loan losses are just beginning to be felt in the financial sector. Source:  Seeking Alpha,  Wall St. Journal.
  • Christmas sales are running under last year’s dismal numbers.  The consumer (70% of GDP) is tapped out and pulling in the horns as they stave off personal bankruptcy and credit card default.  Source:  Gallup.
  • Dubai’s debt default (technically anyhow it was a default) shows continued stress in the system.
  • Then, there is this chart.

Mortgage Resets 12_09

We are moving headlong into the next wave of mortgage resets.  It took a full year into the first wave before the crisis hit the banks.  So far, interest rates are low and the resets  are hurting but not devastating.  This chart is a major reason that the Fed will keep rates low for at least another year.  At least they will try.  Contrary to popular opinion, the bond market controls mortgage rates, not the Fed.  What happens if the dollar continues to slide (it will) and the bond market demands higher rates for holding US treasuries (they will)?  You’ve got it.  Mortgage crisis II, only this time from an economic baseline much lower and more fragile than it was during the first wave.

If the economy were truly on the mend, the Fed would be talking about raising rates and a real exit strategy for all the liquidity they have pumped into the system.  Remember when we were told by the Fed that the taxpayer would make a profit on the Fed buying these assets and selling them back to the banks at a profit? Their exit strategy should be to sell those assets back to the banks and get them off the Fed’s books, in turn receiving back the cash they lent out. That is how money is drained from the system.

However, recently they announced their “exit strategy” is to perform a reverse repo.  What this means is that they will sell their toxic assets for cash, thus “draining” that cash from the banking system.  But wait.  That’s not all.  The reverse repo means they also agree to buy that asset back at a future date for more than they paid for it.  Say again?  Source:  Financial Times

Yep.  That’s right.  This is a shell game combined with a game of hot potato.  Follow the ‘taters.

1) Toxic assets (the ‘taters) are bought by the Fed for cash in late 2008 to stave off a banking system collapse.

2) Those assets are held on Fed’s books while banks supposedly repair their balance sheets.

3) Rather than the banks buying the ‘taters back at par or greater, making a profit for the taxpayer (who believed that?), they are being re-sold by the Fed back to the banks with an agreement for the Fed to buy them back later at a higher price, thus making a profit for the banks, and sticking the taxpayer with the ‘tatters once again.

Sick isn’t it.  If anyone thinks this financial crisis is over, they are not watching what the Fed is doing.  The toxic assets they bought are more toxic now than they were a year ago.  They will never return to a state of health and at some point the ‘taters will have to be dealt with.  IF this game can buy the Fed more time, then that is all it will buy them.  There is no way out of this bankrupt mess.  But the time bought will allow them to concoct a plan to further enrich the banking system while putting into place the follow up for whatever is left of our national currency.

Obama declared a few weeks ago that there is risk of a double dip recession.  Also, the Federal Reserve has recently began to increase the Fed’s monetary base  further, (despite their jawboning about an “exit strategy” – see above) following a pause following last fall and winter’s unprecedented doubling of the monetary base.  At the same time, they are saying that substantial downside risks remain and interest rates are going to be held low for a considerable period.  Why?  The answers are above.  We are moving headlong into the next financial crisis and this time it will include not just the financial markets, but the bond and currency markets as well.  Gold’s rise to well over $1,000/oz  is telling us the transition from a credit crisis to a currency crisis is well under way.

Do not be fooled.  Be prepared.  God, gold, grub and guns.  I never thought I’d post that, but that’s what I see.

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Banks in Big Trouble

Doug Tjaden | December 12, 2009 | 0 Comments

I am reprinting this nearly in its entirety because of the serious implications.  You must understand what this means.  It means even those banks that are solvent are in much worse shape than is being told the public.   It means that if the banks were to mark their loans to fair value that possibly 1000′s of banks would fall into traditional ratios of trouble that would cause the FDIC to come in and take them over. It means there is a denial of the problem at the highest levels and they are hoping beyond all hope to buy time enough to let these assets recover enough to keep the zombie banks solvent.  Finally, this has been happening now for several months – that is the FDIC waits this long to take a bank over.

Remember, the FDIC is a zombie institution itself – insolvent and dependent on bookkeeping tricks and under the table money to keep it solvent. Got gold and silver?

Jim Sinclair’s Commentary

Here is some continued evidence of the worrisome trends in this week’s bank closings. Courtesy of CIGA Richard B.

Dear Jim,

Yesterday’s bank closings (three total) evidence a continuation of the worrisome trends we have been seeing over the past several months. These are:

(1) It is costing the FDIC a great deal more than it has historically to protect depositors in the failed banks.

(2) In other words, these banks are in much worse shape financially than they have been historically by the time the FDIC gets around to closing them.

(3) The fair market value of the assets held by these banks is turning out to be dramatically lower than the value at which they are being carried on the banks’ balance sheets. This most likely reflects unrealistic valuations assigned by bank management in the wake of the Financial Accounting Standards Board (“FASB”) having suspended fair value accounting rules this year.

(4) The acquiring banks have so little confidence in the value of the assets they are purchasing that they are requiring the FDIC to enter into loss sharing agreements with respect to the vast majority of these assets. Another explanation for this may be that the FDIC prefers to share downside risk rather than accept the amounts the acquiring banks are willing to pay for these assets absent the loss sharing.

The largest of the banks closed this week, Solutions Bank of Overland Park, Kansas, is another example of a bank that on paper appeared to be very well capitalized. It claimed to have assets of $511.1 million against deposits of $421.3 million. Yet the FDIC’s estimate of the cost to close it is $122.1 million, about 29% of deposits. This implies the FDIC and the acquiring bank concluded the fair market value of Solution Bank’s assets was about $299.2 million, only 58.5% of the value claimed.

The acquiring bank purchased essentially all of the assets of Solutions Bank, but the FDIC had to enter into a loss sharing agreement with respect to $411.3 million of these assets. This implies the acquiring bank was only confident in the value of about $99.8 million – approximately 19.5%.

An emerging concern is that the magnitude of the loss sharing agreements the FDIC is entering into is substantially increasing the risk that its cost of closing these banks will be far more than originally projected. For example, there was an article posted on JSMineset yesterday reporting that the closing of Colonial Bankgroup, Inc., was likely going to cost the FDIC $5.8 billion – more than twice its original estimate of $2.8 billion. The FDIC is not specifying the precise terms of the loss sharing agreements it is entering into with acquiring banks. Depending on the terms, the FDIC’s downside risk may be significantly more than 50%.

The second largest of the banks closed this week, Republic Federal Bank of Miami, Florida, on paper had assets of $433 million against deposits of $352.7 million. Yet the estimated cost to the FDIC in this case is $122.6 million – about 34.8% of deposits. Percentage-wise, this is one of the costliest closings so far.

This implies that the FDIC and the acquiring bank valued Republic Federal’s assets at about $230.1 million – only about 53% of the value claimed. In this case the acquiring bank was only willing to purchase $267.1 million of Republic Federal’s claimed assets of $433 million, and it required that the FDIC enter into a loss-sharing agreement with respect to $210.4 million. This indicates the acquiring bank had confidence in the value of only $56.7 million of Republic Federal’s purported assets – about 13.1%.

The third bank, Valley Capital Bank, N.A. of Mesa, Arizona, was relatively small, and its closing illustrates a phenomenon seen several times recently. It is the only one of the three that appeared insolvent on paper. It had stated assets of $40.3 million against deposits of $41.3 million. Yet the FDIC’s estimated cost of closing it was only $7.4 million – about 17.9% of deposits. This is the least costly percentage-wise of the three.

This provides additional evidence that banks that appear on paper to be the healthiest may in fact be in far worse shape than banks that appear weaker. Once again, the problem appears to stem from the FASB’s suspension of fair value accounting requirements this year with respect to banks’ least liquid assets.

This gives bank management far too much leeway to value assets at levels far beyond what they could fetch in the open market, resulting in banks’ balance sheets becoming increasingly less reliable indicators of their true financial health.

Respectfully yours,
CIGA Richard B.

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Is the next wave upon us?

Doug Tjaden | November 27, 2009 | 0 Comments

Global markets were off Thursday 3%+ as Dubai debt problems come to light.  After a drubbing of the dollar Wednesday, it was in danger of breaking a critical support line (see last post on the $$).  Yesterday it caught a crisis bid with the US markets closed.

Regardless of this bid, gold held firm just below $1,200/oz.  What was interesting was the intra-day trading.  Gold sold off while the London market was open, likely in sympathy with the broader markets.  However the minute London closed, the NY market made a bee line up to wipe out all the day’s losses.  One would think that it would continue to fall in sympathy for what is likely to be a rough open in NY stock markets tomorrow.   While gold did get hit overnight last night, it is on the rise again from off of its lows so far this morning.  Look for today to be quite volitile in all markets.  Let’s see how the day ends.

I don’t have a conclusion on this, it is just interesting.  I suspect gold will have to take a pause at some point, and this could be that point. However, overall gold is acting very differently now than it has in the first 8 years of this bull market.  To me it means a very different game is unfolding in the global financial markets.

Many think gold has decoupled from the dollar.  I don’t believe it has.  What it is likely doing now is discounting the dollar’s direction 30 to 60 days from now, essentially front running it.  Gold at $1,200 projects a dollar in 30 to 60 days in the mid-60′s.  Any bounce the dollar gets as a crisis bid will likely be sold aggressively in short order.

We may finally have the catalyst to turn the DOW and S&P down, moving closer to reality.  At a minimum, it should spark a correction in the 10% to 15%  range.  We’ll see when it gets there what the situation looks like.

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India buys 200 tons of IMF gold.

Doug Tjaden | November 3, 2009 | 0 Comments

After India, China may buy IMF gold

The news today that India is going to buy 200 tons of IMF gold lit a fire under the gold market. I will say that this pretty much seals the debate on whether or not we will see a breakdown in the gold price.  We will not.  It is becoming more likely that $1,000 is in the rear view mirror for our life times.  If course some major stock market crash could change that, however even then I think you’ll see $1000 become the floor and looked at as a buying opportunity.

The news is so bullish because it take 200 tons of supposed supply overhang off of the market.  It also signals that central banks are moving back into the gold buying business instead of being in the gold selling business like they have for the last decade.  That is a HUGE change in the supply/demand picture.  Furthermore, it solidifies that a change in psychology toward gold is at hand.  India is not a minor player in gold.  In fact their retail market is a huge driver of physical gold buying.  If their central bank is buying gold at $1,000, what does that say to their citizens about what their government thinks of gold at this price?  Yes – it is still inexpensive. I look for Indian demand to surge over the coming months.

After all, do the math.  In a world where we no longer talk about “billions” or even “tens of billions of dollars” and instead talk about trillion dollar deficits and hundreds of trillions in derivatives, India just got 200 tons of gold, 6.4 million ounces (if my math is correct) of honest money for $6.7 billion dollars.  What an incredible bargain.

Lastly, it will have many other central banks (especially China) eying the remaining 200 tons of IMF gold and getting in line to scoop it up.  Wait until that announcement comes out.  If central bank psychology is changing, and 400 tons of supply are gone in a heartbeat, where will the gold be found to satisfy other central bank demand?

So here we are in a major week after which the dollar should come under pressure, yet gold is up over $20 to a new all time high on the India news even though the dollar is rising and the stock market is down.  This is the decoupling that many have looked for.  To be sure, one days’ trading does not a trend make.  But it has to start somewhere.

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A dose of reality?

Doug Tjaden | November 2, 2009 | 0 Comments

The fact is, government officials do not tell the truth or they are very incompetent (or both you might say).

Here is the propaganda put forth during the early 30′s regarding the aftermath of the credit collapse in 29′.  Sadly you are hearing the same things today.  Even more sad is the likely hood that we will see a repeat of 30-37′.  Only I firmly believe we will be looking at entering the depression from the other end of the spectrum – hyperinflation vs. hyperdeflation.

A lot of intervention in the dollar today. This is a big week.

Quotes from the great depression

September 1929

“There is no cause to worry. The high tide of prosperity will continue.” — Andrew W. Mellon, Secretary of the Treasury.

October 14, 1929

“Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board.” — New York Times

December 5, 1929

“The Government’s business is in sound condition.” — Andrew W. Mellon, Secretary of the Treasury

December 28, 1929

“Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression.” — Associated Press dispatch.

January 13, 1930

“Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today.” – News item.

January 21, 1930

“Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction.” – News dispatch from Washington.

January 24, 1930

“Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast.” – New York Herald Tribune.

March 8, 1930

“President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days.” – Washington Dispatch.

May 1, 1930

“While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States – that is, prosperity.” – President Hoover

June 29, 1930

“The worst is over without a doubt.” – James J. Davis, Secretary of Labor.

August 29, 1930

“American labor may now look to the future with confidence.” – James J. Davis, Secretary of Labor.

September 12, 1930

“We have hit bottom and are on the upswing.” – James J. Davis, Secretary of Labor.

October 16, 1930

“Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment.” – Charles M. Schwab.

October 20, 1930

“President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President’s special committee on unemployment.” – Washington dispatch.

October 21, 1930

“President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter.” - Washington Dispatch

November 1930

“I see no reason why 1931 should not be an extremely good year.” – Alfred P. Sloan, Jr., General Motors Co.

January 20, 1931

“The country is not in good condition.” – Calvin Coolidge.

June 9, 1931

“The depression has ended.” – Dr. Julius Klein, Assistant Secretary of Commerce.

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Walking with calm through the coming storm.

Doug Tjaden | October 12, 2009 | 1 Comment

It is a comfort to many to see the DOW stretching for the 10,000 mark.  To be sure, in normal economic times the stock market is the barometer of the overall health of the economy and this milestone would mark a significant milestone in our recovery.

We do not live in normal times.

The article referenced in my last post entitled “The Demise of the Dollar” has caused quite a stir internationally.  It is one of the most widely analyzed articles on the topic of the dollar that has been written in many months if not years.  Granted, it is thinly sourced, however that is the nature of how early dissemination of information of this sort works.  If this information were highly and tightly sourced, it would have literally brought the dollar down by 10% or more within days.

With the U.S. economic problems, our government’s looming bankruptcy and the Fed’s policy of free money, the rest of the world (ROW) is getting fed up with playing the game of “all is well.”  It is becoming obvious to the citizens of most other nations (except ourselves) that the U.S. is in irreversible decline.  It has gotten to the point that the PTB must defend the “common stock” of the United States – the U.S. dollar by attempting to manage its decent.  Releasing an article that touches a very tender spot in the U.S. dollar market (it’s petro dollar status) with a measure of “plausible deny ability,” allows the PTB to use spin to  somewhat control what is now a forgone conclusion – the decent of the dollar is going to gain speed. Right now, it is in all nation’s best interests to see that the dollar does not collapse.  Thus they are stepping up their efforts to control the rate of descent.

I suggest that everyone read about England’s transition from global superpower to second tier status.  That is where the United States is heading over the next several years.  This will be a time of unequaled turmoil in this nation.  The realization by “we the people” that the policies of our government and “independent” Fed will cause our standard of living to decline sharply will not be met with cheers.  However, as Christians, we should be well down the path of having already taken our eyes off of mammon, worldly possessions and the government as the provider of our security.  Those who truly open God’s word and understand the times we are in will be among the first to see the changes coming – and to accept them with open arms.

Life in the United States will not be easy in the coming years.  Yet the earlier we voluntarily lower our standard of living and adjust to the “new normal” the better position we will be in to lead others to do the same.  The majority of the population will not embrace this change.  They will fight it.  And that is one variable that will make the coming years more challenging.  Challenge however presents opportunities.

I find it interesting that we are likely to be presented with some of the same opportunities and challenges the colonists and our Founding Fathers faced.  During the birth of this nation, she was not an economic super power.  The citizens were under tyranny from King George III.  Yet they found the courage to work to put into place a foundation that would allow for their posterity to have an opportunity to build a great nation.

As man’s institutions fail there will be an opportunity to build a new foundation for our posterity.  And while it may seem that because of the sad moral state of this nation, our challenges will be greater than those faced by those who gave birth to this nation, I simply see them as different.  Just as then, today it will require wisdom from God to help guide us through the coming storm.  It will take patience and perseverance that we have not exercised in generations.  But it can be done.  It would serve us all to begin right now to prayerfully and intentionally engage in the process of preparing to lay the foundation that will allow this nation to be rebuilt once again – because it is going to need rebuilding.  The dollar is telling us that fact loud and clear.

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