A Coming Storm Update

by Wes Bridel on March 3, 2015

in Economic Updates

The following is a reprint of the March 2015 Coming Storm newsletter…

A Coming Storm Update

Good news.  The work of the Lord is progressing.  I haven’t written much in the past couple years in part because I didn’t have anything different to say than what I’ve already said.  I would write from time to time to say that I felt we probably had a couple more years before the economy turned down again.  Today I have a different opinion.

I believe this is the year that we begin to see the economy begin to crack apart.  My guess is that if I’m correct and these things begin in 2015, this year will not be the worst of years but will be a beginning of changes which drastically alter life as we’ve been accustomed.  I do not have any certainty on the timing, so perhaps I am a year early, but I think the events I’ve been describing the past 5 years begin this year.

The beautiful and important part is that for those who have trained themselves up on depending on the Lord and not on worldly comforts or distractions, this will be a great year of increase in the Lord. He is pouring out His Spirit in unprecedented ways.  For many other Christians the years ahead will be a crash course that is graded Pass or Fail.  Faith will be tested which will often lead to tremendous growth or a falling away.  It will be difficult to stay lukewarm.

I will tell you that recently the Lord has severely warned and admonished me to turn away from the ways of the world and to lead my family into what He has for us in order to be counted amongst those He sets apart for His purposes in these days.  I hope and pray that I am willing to fully die to myself in order to receive everything He has for me in this time, both grace and cleansing fire.  I pray the same for you!

So how do things look economically today?

The world economies are almost all hemorrhaging badly.  The US is the bright spot today.  Unfortunately, the US economy is barely getting by.  A good economic data point comes out followed by a bad one.  Although we have a record long stock market streak and economic upswing, we’ve never really gotten the rip roaring economic growth that one would think comes with such a long market run.

At Christmas time, I was asked by family when I thought the economy would turn down and responded it would probably happen after April because people and thus the stock market usually start the year out cheery and so things usually don’t turn down till May at the earliest.  While I still think that would be the most likely earliest beginning, this data might contradict that theory.

I don’t know what will turn the tide negative.  It could be that the bad economic data overpowers the good and the stock market crashes as it’s bound to do at some point.  It could be that a flight from US Dollars begins perhaps because of a move by China or someone else away from the Dollar.  It could be an escalation with Russia over Ukraine that spooks markets.  The economy slowing which leads to a stock market tumble seems like a likely first step, but we’ll see.

Let’s look at a few of the issues that are out there right now in no particular order (and this is far from an exclusive list of the serious problems that politicians and bankers have allowed to continue to accumulate because they don’t want to deal with them on their watch)…

  1. The world economy is already in recession and continues to slow.  This has to impact the US no matter what the media might be saying.
  2. US corporate profit margins are at record highs of around 10% and when margins come back to normal (as they always do) this will cause downward pressure on the stock market.  It’s not possible for companies to continually increase profit margin as a way to boost profits (and therefore the stock market).  Margins always revert to the mean.
  3. Greece has elected a political party who has promised its people it will not pay Europe what it owes them.  Europe cannot allow this to happen or all the other countries with giant debt problems will want the same deal.  In round one, Greek politicians backed down and the can got kicked down the road four months, but then they went back on TV in Greece and said they won’t back down.  So round two will be this summer.  One side or the other has to win, and the result will be bad either way.  This problem is highly unlikely to go away until the Euro is obliterated one way or another.  It is the root problem with the Euro that was pointed out by the skeptics at the time, but ignored by the New World Order types that always believe they can create a Utopian society by fiat.  When this breakdown happens, it will most likely cause serious economic damage to the US since the US debt problems get highlighted and debt markets will seize up everywhere.
  4. The US stock market is at record nominal highs, but that doesn’t really mean anything.  It’s almost always at a record high right before it makes a new record high.  If that weren’t true, it would never get anywhere.  What matters is the value of the numbers.  In other words, how much profit or cash flow is being made for the price?  The most commonly used method to look at this is P/E ratio.  The US market is about at a P/E of 18.5 and the long term average is 16.  So it’s expensive, but not incredibly so.  I’ve seen an analysis looking at a time adjusted (CAPE) 5 year number that shows stocks actually being cheap.  I’ve also seen that if you look at median P/E’s (instead of average), the market is at an all-time high (this values all companies more equally instead of letting the biggest companies tilt the average in their direction.)  So, you can see what you want to see here depending on how you cook the numbers.  But just looking at the P/E ratio, stocks are a bit expensive, but not extremely so.  If you believe that the market is going to be rosy going forward, then perhaps it has a good ways to run higher before a crash.  If you believe that the headwinds have become too strong, then it’s easy to come to the conclusion that a setback is coming.
  5. The US Dollar has made an extreme move higher over the last 9 months or so.  This is not because the fundamentals of US fiscal or monetary policy are so strong obviously, but because the rest of the world is having problems.  However, the eye of the world will swing back towards the problems of the US Dollar at some point.  I would guess that we’re near the high now, but it’s hard to know because so many factors with so many countries are involved.  What’s important to understand is that the US problems have not gone away and still must have their consequences.  That time is closer.  It would seem likely that other economic events would begin to harm the environment before this issue would come to the fore, but who knows, maybe our President’s lone wolf, lawless actions could outrage a large Dollar holder and a Dollar sell off would commence.
  6. The problems in the world are so severe right now that investors are paying 9 major countries interest to lend them money!  So instead of receiving interest to lend money as is the norm.  People are paying these countries money because they feel that at least they won’t lose more than what they agree to lose upfront.  That is fear! [click to continue…]

{ 0 comments }

A Couple Updates

by Wes Bridel on March 25, 2014

in Random Musings

It’s been too long since our last post and as you’ll read below, we hope to get this blog a little more active.  I wanted to make this quick post just to point out a couple things going on with:

1) The newest addition to our team here at Kingdom Calling

2) A friend’s blog and business who helps writers get published as New York Times Best Sellers

& 3)  A short word on geopolitical & macroeconomic events

Welcome Robin Slaughter! [click to continue…]

{ 0 comments }

It appears as I write this that the government will come to a Debt Ceiling agreement just in the nick of time.  Of course, that has probably been their plan for months (and is exactly what I would have told you months ago if you had asked what they will do).  This appears to be a favorite strategy of Pres. Obama’s although he provides no leadership in these matters, so it’s hard to say it’s his strategy.

Do you believe that crises as been averted?  Or do you see this as more along the lines of the politicians creating a crises so that they can avert one for their own political advantage.  Each can scream about what bad people the other side is and nothing of substance will actually get done.

The government is still massively overspending & printing with no real efforts to control this bleeding.  The Senate passed a bill that is now sent to the House as I write this that has a token reduction in spending, but it makes zero difference.

I’m interesting in your opinion on this, does this make you feel like Republicans are the fiscally conservative party?  I mean they did push for a spending reduction, right?  This is what they will go home and brag to their constituents about.  But it is utterly meaningless.  How can the Republicans claim to be any better than the Democrats at spending?

Would you prefer to die by gunshot or by stabbing?  I guess I would prefer to die by a fast acting gunshot then by a much slower stabbing death, but either way the end result is the same.  Republicans claim to be more conservative, but their ways are death to the economic survivability of this country every bit as much as the Democrats ways are.

Politicians are for their own power.  The details are just the show they put on to accumulate it.  At least that’s how I see it.  I heard a Republican on the radio a while back explaining that they just had to keep their heads down and make it to the next election so they could win more seats and then they would do something.  REALLY?!?  You feel the people of your district/state elected you to just sit there and wait for the next election?  Again, they are about their own power with very few exceptions.

But I heard an interesting theory about the debt ceiling debates and I want to get it out there before it’s proven wrong.  As shown above, I don’t believe this will happen, but it’s actually plausible in a crazy sort of way and so even though it appears that this is not happening, I think it’s interesting to quickly discuss.  Here’s the idea…

Is a Debt Ceiling Default Planned? [click to continue…]

{ 1 comment }

QE to Infinity

by Wes Bridel on October 11, 2013

in Economic Updates

Could QE go on forever?  I think Jim Sinclair coined the term “QE to Infinity” to mean that the US Fed’s printing of money will never stop.  They can’t possibly stop it based on their current thinking and objectives.  What they are doing is an incredibly stupid idea, but their choice is basically to have crises soon, or keep printing and hope that the crises comes on the next guy’s watch…even though that means the crises will be bigger than it had to be.

Well, when we put out the August newsletter, we told you all of this.  At that time, just about everyone on Wall Street belived that the Fed would taper QE in September.  We’re not privy to the inner chamber conversations to know in advance what they will do.  (And certainly they could have done some token “tapering”.)  But what we do know is the cold hard economic and political facts of the situation.  And knowing this helped us to give you the truth when no one in the media or on Wall Street seemed to be able to.  We’re reprinting that newsletter for our blog readers here so you can see what we said and how it has played out so far.  We’ll have some pretty interesting and far out there thoughts for you in this space next week!  (This theory is hopefully not true but a theory of what could be coming with the debt ceiling debate that has some merit even if it’s preposterous.)  Here’s the most recent newsletter.  If you’d like to receive these yourself sign up in the upper right hand corner of this website where it talks about “The Coming Storm.”

Your August 2013 Kingdom Calling Newsletter

The last two months of Fed commentary & market reaction should have your full attention!

About two months ago the Federal Reserve came out and said that they would continue quantitative easing (money printing) to the tune of one trillion freshly printed out of thin air US Dollars each year by a 10 to 2 vote.  However, they also said that…just maybe… they might cut back on their competition with Monopoly for who can print the most bills.  And possibly, if the economy is good enough, they could quit this at some point next year.

Now there were a whole lot of qualifiers in that announcement which should have been a big yawner for the market.   Instead the markets crashed!  Stocks down, bonds down, gold & silver down.

This is very telling. It tells us that the markets are so hooked on the fairy tale of free and easy money, that it is in fact the only thing from keeping the markets from crashing. The Fed reacted very quickly by rushing out and telling the markets not to worry because they’re not really going to stop the printing.

The stock market proceeded to rebound strongly, but the bond market never recovered.  I bet the Fed didn’t see that coming.  They have far less control of the bond market than they did (or at least apparently did) and that should concern everyone. Because the biggest bubble of all is closer to popping and it’s the one that brings everything down with it.  The bond market.  (There’s a rumor in financial circles that Alan Greenspan privately said that he wanted to retire so that he wasn’t at the helm when the bond bubble popped.  It’s probably also why Bernanke is stepping down after a much shorter tenure.  They all know what is coming (they have to, right?) and don’t want to be seen as the one who caused the chaos.

Of course, they both very much are to blame…along with the politicians from both parties who have always pushed on the Fed to “make the economy good”.  The Fed has had short term power to do just this, but each time they press the lever, the positive economic results are smaller and the inevitable bounce back down to equilibrium is that much closer and more frightening.

The Fed is in a dangerous place because they might actually believe that this money printing tactic that has never worked before in the history of Man, will work this time to bring the US out of its economic troubles.   Or at least, they secretly hope it will work (knowing that it probably won’t) and are desperately trying to convince the markets that it will. It’s a grand confidence scheme. If they can convince everyone it will work, then perhaps it will.

But what we have seen these past two months is that no one is buying that the economy has any health at all without the printing. The market has begun falling again the last two weeks in large part because it is rumored that QE will be “tapered” (lessened) starting in September.

Of course, we’ve told you for some time that it’s impossible for the Fed to stop printing, so anytime they say they will, it should be ignored as foolishness.  Since the Fed is by far the largest buyers of US Treasury debt, how can they possibly stop buying it?  Interest rates would shoot up dramatically and make the existing debt impossible to roll over at anywhere near the rates we’re used to seeing in recent years. And if this shoots the deficit much higher than the TRILLION it already is, how will that be paid?  By the Fed printing money of course!

Look, if there is one thing that the US government is good at, it’s racking up debt.  They have the all time record and are adding huge amounts to that record each day.

THIS IS SUCH AN IMPORTANT ECONOMIC FACT, LET ME REPEAT IT….If the Fed stopped buying the debt, then interest rates would spike much higher.  This in turn would make the cost of supporting the debt much more unbearable. The interest rates don’t have to reach early 1980’s rates before it’s impossible for the US government to pay its debt service with tax revenue, even if it stopped every other expense.  The Fed could maybe stop buying for a little while because the short term affect would be to raise confidence in the world that the US dollar is safer and more people might want to take up the slack in the short term.  But in the long term, there’s just not enough money to buy that much debt.

The best, most honest way out would probably be for the US government to declare that they can’t pay their debts & renegotiate those down to something sustainable.  They would then have to run a balanced budget because no one would lend to them anymore.  The dollar would crash and everyone would have to pull their shirtsleeves up and work hard to crawl out of the hole and in 5 years or so, everything would be much better (admittedly after a whole lot of pain.)  However, they will never do this because every politician would get thrown out of office.  And so, they will continue to choose option B which is ignore the problem until it is so big that the collapse cannot be ignored and it will be much worse.

We’ve been talking for years about the best ways to protect yourselves, so hopefully you’ve been paying attention.  These problems are very real… and very basic economics.  The reason everyone is not aware of them is not because it’s complicated but because people have a tendency to believe that we are somehow special and the old rules don’t apply to us.  That is how the people of every fallen empire have felt.

The good news is that all this is coming about for great purpose (Romans 8:28).  If we love the Lord, we will grow closer to Him than ever before through this season. And many people today who do not know the Lord will come to love Him.  It will be hardest for those who do not really love Him because they will indeed have the rug pulled out from under them, but they will get a wonderful opportunity to make a clear choice!

I’m starting a new blog series where I update and perhaps forecast a little on some of the major areas in the economy, market, and politics.  Watch http://www.kingdomcalling.com/blog/ starting next week for that series.

As a preview to the stock market post, I will say this…I told you last November that I expected the markets to be up for a while and we have certainly seen that.  Going forward, I wouldn’t be surprised if we have a couple more  years of overall positive stock market appreciation (I don’t think the end of QE is at all likely.  At most they would “taper” for a little while and then probably start printing more than before).  That said, there will be some crazy times within that period.  We are entering a time of year that is seasonally tumultuous in the stock markets.  And we were recently at all time highs.  It wouldn’t be surprising if the market had a rough next month or two.

I have no idea where the stock markets will be going in the short to intermediate term.  I believe an epic crash is coming and maybe it has already started.  But I tend to believe we might have a couple years before we see that.  But I also believe that the markets are built on a house of cards and that from time to time between now and the big crash, some crazy winds will knock the cards over.  Basically, you’re gambling right now if you’re in the stock market. Hopefully you’ve picked up on some of the ways that we’ve been teaching people to take the risk out of their portfolios.

I look forward to running through the different markets with you on the blog in the coming weeks!  God bless you and yours.

Wes Bridel

We have begun the series described above.  You can read the first few posts at: 1) Gold & Silver Market Update , 2) Gold & Silver Price Management , & 3) Gold & Silver: Backwardization & Conclusion

{ 0 comments }

Gold & Silver: Backwardization & Conclusion

by Wes Bridel on September 9, 2013

in Economic Updates

The gold and silver markets have had a crazy year with big drops in US dollar prices and a big bounce from the lows.  We’ve been discussing these markets here and here.  Today we’ll look at another big issue and conclude the focus on silver and gold before moving on to other topics…

Backwardization

This is why the gold futures prices have been in backwardization for months now.  This is unprecedented.  As it stands now, the market will pay you to hand over your gold bars today and collect new ones in the future.   (We’re talking big bars here, this isn’t something you do with an ounce of gold).   Typically, you have to pay to lend out your gold for the use of cash.

For some time now, the market will pay you a premium, give you this use of cash (again, with interest), if you will wait to have your gold delivered in the future.  So this seems to clearly indicate that a lot of people are not comfortable with the idea that they will actually get that gold back in the future.  Anyone would take this deal if they were certain they would get the gold back.  But a small premium is not worth it if you expect your gold to go up dramatically in value and you’re not sure you’ll actually get the gold back when the deal is supposed to complete.

To be fair, it might also be because people the premium in Asia is high enough that people are sending their gold their instead.  But either way, it’s not a good sign for the health of the West.  And is a sign of looming issues in the gold market.

So where do we stand today? [click to continue…]

{ 1 comment }

Silver & Gold: This year’s smash on prices

by Wes Bridel on September 5, 2013

in Economic Updates

What can be said about Silver & Gold prices this year?  We started a new blog series Tuesday by discussing today’s price action with that of the 1970’s and How to know when prices will start falling for good.  Today’s post is the second of three posts on gold and silver.

We’ve talked ad nauseum about the western central bank’s desire to control the price of silver and gold so that the general public is not spooked out of holding their pretty paper.  (The Federal Reserve of the US specializes in pretty green paper, but the UK & Europe like to make multicolored paper called pounds and euros.)  You see, when governments start printing too much paper, history shows that gold and silver prices in those currencies rise to balance the value.  Knowing this, the governments and central bankers have been controlling the price to the best of their abilities for decades.  (The denied manipulating the price in the 1960’s, but LBJ’s unclassified papers show the great extent they did go to in order to accomplish this.)

The problem is that they are running out of gold with which to do this. It’s all being shipped to China and other places where they are all too happy to take advantage of our idiocy.  So our politicians sell out our intermediate and long term futures to protect their short term power.  Because if the price of silver and gold were shooting through the roof, their jig would be up as people would panic out of the Dollar (or Pound, Euro, Yen, etc).  So this is why they do it.

It’s easy to prove to yourself that they do this when you consider that [click to continue…]

{ 0 comments }

Gold & Silver Market Update

by Wes Bridel on September 3, 2013

in Economic Updates

Gold & Silver prices in US dollars have had a wild ride this year.  Both fell dramatically earlier in the year and have had a strong bounce back up over the last two months.  Gold is up about $200 since the bottom while still being down about $300 for the year.  Likewise, silver is up about $6 in the last two months while still being down about $8 for the year.

If you value your silver & gold by the US Dollar price of the day, then it has been a tumultuous time to won them!  Of course, if you value them in the number of ounces that you own, you still have the exact same wealth that you started with.  In other words, if you value your money the way it has always been valued throughout thousands of years of history (instead of valuing it the way the US government has convinced the world to value it for the last 42 years), then you are completely comfortable with the fact that you hold real money.  You also probably know that given enough years, paper currency always falls in value while real money (gold, silver) maintain their value.  That said, it’s understandable that the crash from earlier this year in USD terms can be disconcerting (and this was most definitely the reason for it).  So in today’s post we’ll be talking about what’s been going on in the gold and silver markets and what we see ahead.

First, let’s take a look at the price action (in USD) of gold during the 1970’s.  It can be constructive during periods such as we encountered earlier this year.  Richard Nixon completely disconnected the US Dollar from the price of gold or silver without regard to the constitution.  So it then went up from $35/ounce up to about $200 an ounce.  So if you were measuring your gold in USD terms,  it was worth 6 times what it had been worth 4 years earlier.  That’s a nice return!

What happened next was a bit disheartening for most gold owners.  They saw the price drop from $200 to around $100 fairly quickly.  So again, you were measuring you’re the value of your money in US Dollars, you lost half your value.  So of course, many people sold their gold around this bottom.  What they missed next was spectacular.

Gold proceeded to run up to $800/ounce in 1980.  So if you sold your gold at $100, you missed the opportunity to see it rise eight-fold in USD terms.  If you just held on when it was at $200 and survived the dip, you saw your gold rise another four fold in USD terms.

Of course, if you kept holding on [click to continue…]

{ 2 comments }

The Multi-Faceted Glory of God

by Wes Bridel on February 19, 2013

in Stewardship

The Lord has given me a couple small pictures recently that depict what He is doing as He raises many sons to Glory.  We shared one yesterday about how God’s Glory will be experienced through His Sons.  If you’re not familiar with this concept, you should read the portion on Sonship in The Seed (and perhaps all of The Seed!)  But for now, here’s one verse…

“For it was fitting for Him, for whom are all things, and through whom are all things, in bringing many sons to glory, to perfect the author of their salvation through sufferings.” (Hebrews 2:10)

I saw a gemstone and noticed that it is beautiful in large part because of its many facets.  Originally, gemstones were probably all displayed in cabochon (smoothed and rounded) form.  Stonecutters eventually learned to cut facets into the stones so that the beauty of the stone could shine forth through each of the facts.  Each one adding it’s one sparkle and dimension.

God could have chosen to be the lone shining star in all of Creation.  He certainly is the all in all.  But this is not what He wanted.  He wanted to raise a family.  A family of sons who are like Him.  Who radiate His Glory to all Creation.  Sons who have His wisdom and can rule His creation as He would.  Sons who know His goodness, righteousness, and holiness and can share this as priests of His Order and Way. [click to continue…]

{ 0 comments }

The Radiance of God’s Glory through His Sons

by Wes Bridel on February 18, 2013

in Calling

Yesterday, I sat on my couch and was becoming more and more uncomfortable as the heat of the sun came in the window/door.  One side of our home is all glass doors going out onto a patio.  For years, the view out was into a small forest.  However, they’ve recently torn all that down and built a giant condo complex.

All this to say, that I’m still a little disoriented as to what light source might be shining on me through this window.  But due to the time of day, and the heat, there was no question in my mind without looking that I was feeling the heat of the sun.

So I was very surprised to discover, that I could not see the sun at all from where I was.  What I saw instead was the reflection of the sun off of the window!

Isn’t that amazing that I could feel the heat of the sun off a reflection when the sun itself was actually on the other side of my building?  I couldn’t feel the direct heat of the sun, nor could I see its light.  But I could both see and feel the sun off of the reflection from the window on the building next door to us!

I’m sure no one is surprised that I could see a reflection off of a window.  But did you know that you could even feel the heat from a reflection?  The window was acting like the sun itself as far as I could experience it, even though it was just a window.

The Lord showed me that in the same way, His Glory was meant to shine through His Sons and in the Age ahead this is coming to pass more and more. [click to continue…]

{ 0 comments }

Fiscal Cliff Update

by Wes Bridel on January 15, 2013

in Stewardship

I’m sure you’ve all heard a basic summary of the Fiscal Cliff negotiations.  Many Bush era tax cuts that were always provisional were made permanent.  At the same time, everyone will see an increase in taxes.  Those with higher incomes will see the biggest hit to their incomes.  We introduced this Fiscal Cliff topic here.

Allianz put together a short “Fiscal Cliff Summary” that I thought might be convenient for you to read about the biggest changes all in one place.  You can find that here.

As you’ll read in the piece, the major tax increases come from:

1) Obamacare tax increases finally taking affect (Remember that the law was originally passed in a way that the people would not see the most direct costs until after they had been able to vote him in again.)

2) Increases in social security withholding that everyone in America who works will pay.  (Social Security needs a major overhaul in order to survive and an honest politician would address that now because the longer we go, the more impossible the situation becomes.  That may have been the greatest attempted deed of George W Bush who tried to tackle the problem, but just about everyone else in Washington ran from him like he had the plague.)  So you won’t find us complaining about them addressing the massive underfunding of Social Security promises in some small way….until we remember that the politicians just blow the money on other projects and don’t actually save it for future Social Security needs that is!

3)  Increases in capital gains and dividend tax rates for everyone. [click to continue…]

{ 0 comments }