2012 will see extreme volatility in the stock markets again.  Actually, we think they’ll be even more volatile than last year, but such a thing is really in the eye of the beholder.  If you were exposed to the huge losses and recoveries of last year, then you might feel like you just finished running a marathon and find yourself gasping for breath.  If you’re not exposed this year, you might barely notice the news mentioning upticks and downticks.

2012 has begun with a bang, up about 6%.  That right there would normally be enough for us to predict a big up year in the market since most years tend to follow after the January start.  And perhaps it will be, but I’m expecting those gains to be erased sometime fairly soon.  And then…Who knows?

But we can’t call this, The Year of the Black Swan, and not expect volatility, right?  In our next post, we’ll explain why we tend to think the stock market will end below where it began the year, but we’re not nearly as confident in that prediction as we are that the year will see huge moves in multiple directions.

Here’s some of the reasons why…

The trouble in Europe will surely come to a head this year.  This could be good for the stock market (if somehow the troubled debtor countries are bailed out in a way that seems sustainable to the markets.

Or it could be very, very bad for the stock markets if the European sovereign debt crisis goes up in flames through default and the onslaught of contagion.

In the meantime, it’s also possible that the game that’s been played out over the past 6 months continues on.  The European powers continue to kick the can down the road by providing enough bailout money to solve the problem this week/month, but not enough to do much past that.  This results in the market being very happy for a week or so, followed by depression…until the next short term solution is announced.  This means volatility.  We don’t think they can play that game too much longer, but who knows?  And that’s just Europe.

War in Iran could send oil prices into the stratosphere.  We’ll talk about this in a later post, but the US certainly seems to be gearing up for war.  This could seriously hurt the economy and scare the markets if it were to happen.

A hard landing in China would devastate the world economy.  Right now the world believes that China has escaped having to pay for all its mal-investment.  Markets would tumble if China’s economy was seen as weak.

Japan’s 20 year depression could come to a head.  Japan has been able to borrow money at super cheap rates to amass the largest debt/GDP ratio in the world.  They could do this because they saved money every year and bought Japanese government bonds AND because the country exported more than the imported, so the world had a need for the Yen.  Neither of these is true anymore.

The Fed could announce QE3.  This could make the stock markets take off to the upside in excitement because the mighty Fed is back in charge…because that’s worked so well the first two times??? Well, even if it’s without reason, so far that has been the market reaction and could certainly happen this year.  (And don’t forget the Central Banks of Europe, UK, Japan, & China doing the same.)  So these could cause big up moves in the market.

It’s a wild world out there and we expect that to be clear in the stock markets this year.  Those are just a few of the top of mind reasons why.

This is the fifth post in a series.  You should read the initial thoughts on these forecasts here. and the Overall Prediction Page here.  Here are the rest of the posts:  1) Ben Bernanke’s Dollar Devaluation Plan, & 2) The Coming US Dollar Devaluation.  You can also watch the most recent series of Economic Update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

One of our predictions was that holding USD cash would be a losing proposition in 2012 in real terms.  On Friday, we shared with you in detail Ben Bernanke’s plan if deflationary forces become too strong for him.

Today we’ll share this video for some second hand evidence that this is indeed the plan.

Why would the US Government and Ben Bernanke want to destroy the value of the savings of every American?

It’s because there’s no way that the US government can ever repay their debts.  These debts have become far too large to ever be paid back in today’s dollars.  However, if we make the $15 Trillion Plus Debt & the $50-100 Trillion promises to Social Security & Medicare small numbers because the value of each Dollar is so small, well then the debts can be paid back.  (Be prepared if you’re expecting one of those government checks in the future.  They are actively working to kill the value of their promise to you.)

Now, this theory above goes against what’s currently happening in the world.  Europe is dominating the news.  As the Euro comes under pressure, it gives new strength to the Dollar.  So it’s a very bold call to predict that the Dollar will lose value.  (And we’re certainly not predicting that it will lose value vis a vis the Euro because those are two falling knives and we don’t want to stick our hand under either.)

It is certainly possible that the problems in Europe, the UK, Japan, etc are so big that the USD strengthens in 2012 against most currencies and products and thus even though you’re not receiving any interest by holding it, it’s still one of the best places to be.

We definitely believe that the Dollar’s day of crash is coming.  But it might not be in 2012.  However, there’s a currency war going on and a giant debt to devalue and we’ve got our money on Helicopter Ben!

The other possible reason the USD could (will eventually) fall is that the rest of the world is tired of the US stewardship of its value.  More and more countries every day are announcing bilateral currency swap agreements.

What this means is that when Japan & China trade, they will no longer be using US dollars for their trade, but will instead use each other’s currencies.  Think about that for a moment.  The second and their largest countries in the world have announced that they’ve abandoned the use of the USD in their trade with each other!

If the trillions of USD that are floating around the world as sovereign holdings become as unnecessary as they already have become undesirable…they will all come flooding home where people will still take them.  How valuable do you think the USD that you hold will be if trillions of new ones show up in the USA sometime soon?

This is the fourth post in a series.  You should read the initial thoughts on these forecasts here. and the Overall Prediction Page here.  Here are the rest of the posts:  1) Ben Bernanke’s Dollar Devaluation Plan.  You can also watch the most recent series of Economic Update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

There’s actually a speech that several people have brought to my attention over the last couple months from 2002 where Ben Bernanke laid out his entire playbook for battling deflation.  It’s thought by some that this very speech is what got Bernanke the job of Federal Reserve Chairmen (who some would argue is the most powerful position in the world with its ability to manipulate the quantity and thus value of the world’s reserve currency, the US Dollar.

One of the things that’s striking about this speech is that most of his solutions are unprecedented.  He even admits that the consequences of these actions are unknown because they haven’t been used before.  He clearly states that he doesn’t believe these actions will be necessary, but lays them out anyways to show that the Fed has “big guns” left even if it gets interest rates all the way to zero and still hasn’t kick started the economy.  (Which is exactly what Austrian economists have long predicted would happen, but the Keynesians & Monetarists would have no part of listening to the Common Sense Kooks).

Before laying out all the points Bernanke made with commentary.  Let me give you the bottom line.  He laid out a ton of extreme measures that could potentially be used.  As of now, 11 years later, he’s used every one of them except the very last one…to destroy the value of the US Dollar.  So you can bet that this is exactly what his plan is if he feels like the US economy is getting worse.  And again, just last week he stated that that’s certainly a possibility.

So What is Ben Bernanke’s Step by Step Plan to Kill the US Dollar?

First of all, I want to point out that he sounds silly when you read the speech, which I highly suggest you do.  He starts out by saying that there’s some great debate over what causes inflation.  This ignores the fact that the Federal Reserve’s own education/information marketing used to clearly define inflation as the increase in the money supply (this was before they became massive devotees to that increase).  So after reading this first paragraph I began to ask myself, “Is he really stupid?”  I always assumed he was just a liar.  (Sorry if that word is harsh, I’m sure in his mind he has an excellent reason for “managing public perception with his not exactly true words” or some such, but that’s just a fancy way of saying lying.

But towards the end of the article, he explained how to stop deflation in no uncertain terms.  Since the opposite of deflation is pretty much inflation (you have to have one or the other in a fiat money world), then he told us in the same speech exactly how to cause the inflation necessary to break inflation.  So he’s not stupid and he knew the answer to the question he said economists are debating in his opening paragraph.  (His answer is in the 3^rd Paragraph under the heading “Curing Deflation” if you want to check it out in the link above.  But that’s not really the point of this article.

So we move on to the scary part…

Ok, I’m just going to list out his points and comment on them below each.  Remember, these may seem like no big deal now because he’s done them all already, but most of these things had never been done and were really out there and “speculative” as he called them.  We’ve gone way beyond normal Central Bank policy or economic theory in just a few short years.  Here we go…

“First, the Fed should try to preserve a buffer zone for the inflation rate, that is, during normal times it should not try to push inflation down all the way to zero.”

Check, they’ve been doing this for a very long time.

“Second, the Fed should take most seriously–as of course it does–its responsibility to ensure financial stability in the economy.  And at times of extreme threat to financial stability, the Federal Reserve stands ready to use the discount window and other tools to protect the financial system, as it did during the 1987 stock market crash and the September 11, 2001, terrorist attacks.”

Ok, we’re a little more out there now, but as he says, they’ve done this before.

“Third, … when inflation is already low and the fundamentals of the economy suddenly deteriorate, the central bank should act more preemptively and more aggressively than usual in cutting rates.”

They’ve certainly done that haven’t they?

At this point in the speech, he begins to talk about his big guns.  He basically says, well, if we’ve done all that and we have zero interest rates, and we still don’t have the growth and inflation that we want, we’ve got to get a bit more “speculative”, which is all very unlikely to happen anyways, of course!  Let’s see what he recommended back then and if he’s followed through with his mad hatter plan…

“The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities up to two years from maturity at prices consistent with the targeted yields.”

This was called Quantitative Easing or QE1 & QE2, which your undoubtedly familiar with!  Remember this in itself was unprecedented and unwise, but it gets worse…

“Of course, if operating in relatively short-dated Treasury debt proved insufficient, the Fed could also attempt to cap yields of Treasury securities at still longer maturities, say three to six years.”

This was called Operation Twist and is what the Fed began doing in the Fall of 2011.

“Yet another option would be for the Fed to use its existing authority to operate in the markets for agency debt (for example, mortgage-backed securities issued by Ginnie Mae, the Government National Mortgage Association).”

This was also part of QE and has again been codified in this past week’s Fed plans.  It’s now standard practice for the Fed to be buying Mortgage debt which have a high risk of never been paid back to them/us.

“However, the Fed does have broad powers to lend to the private sector indirectly via banks, through the discount window.  Therefore a second policy option, complementary to operating in the markets for Treasury and agency debt, would be for the Fed to offer fixed-term loans to banks at low or zero interest, with a wide range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral.”

Again, the Fed has been doing this thus increasing the probability of a system wide collapse caused when the debt bubble bursts.

Bernanke then goes on to say that it’s a big world out there and the Fed could also be active in foreign markets.

“For example, the Fed has the authority to buy foreign government debt, as well as domestic government debt.”

Ok, so now we have the government Swaps that the Fed announced 3 months ago.  Only it gets a lot worse than what he surmised back in 2002. These swaps were put into place so that Europe could flow that newly printed US Dollars straight to the bankrupt banks of Europe (which are in far worse shape than the US banks with four times as much debt (and much of it to countries like Greece who will never be able to repay them.)) So the Fed just printed a bunch of US Dollars that will never be repaid that went directly outside the US.

We’ve Reached the End Where Ben says it’s a Good thing to Devalue Your Money!

Although at first he does admit it’s not a good idea…

“Moreover, since the United States is a large, relatively closed economy, manipulating the exchange value of the dollar would not be a particularly desirable way to fight domestic deflation, particularly given the range of other options available.”

Woops, those options are all used up!

“Although a policy of intervening to affect the exchange value of the dollar is nowhere on the horizon today, it’s worth noting that there have been times when exchange rate policy has been an effective weapon against deflation”.

Ok, he starts this most important paragraph by saying that even though he said devaluation is bad, it can still be good.  Remember, this is your money that he would be making 40% less valuable (meaning your food & gas bill among others would skyrocket overnight although surely your paycheck would NOT skyrocket!

A striking example from U.S. history is Franklin Roosevelt’s 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934. The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market.”

Notice a couple things here.  First, the devaluation didn’t come until the beginning of 1934, so the deflation was already fixing itself (from -10 to -5%) before they devalued.  But they had to meddle and be the hero by “doing something”. Thus devaluation caused ONE incredible year in the stock market!  Remember this always gets Bernanke excited.  But did it last?

No!  The late 30’s depression was worse than the early 30’s depression.  So what’s so spectacular about one good year of stock market returns?  Does anyone really care after suffering through many more years of depression and bad stock markets that for one year their stock portfolio went up while they meanwhile became overall much poorer by the actions of the government’s devaluation?  But Bernanke can’t see the big overall effect, he only sees the immediate consequence of a good stock market that year.  Forget the fact that it didn’t really solve anything and caused tremendous pain.  Although the pain of a 1934 devaluation would pale in comparison to the pain of a 2012 devaluation! In 1934 most people grew and raised their own food.  They were self sufficient.  Are you self sufficient today?  How long would you last if you couldn’t get food from the grocery store?  You might be fine, but how long do you think society as a whole would stay “normal” if a large percentage of the population was having trouble eating?

If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt’s devaluation.”

So there you have it, Ben Bernanke believes that devaluing the US Dollar would be a great way to solve a US deflationary crises.  And again, just last week he said this is a possibility.

We hope you’re ready for this.

This is the third post in a series.  You should read the initial thoughts on these forecasts here. and the Overall Prediction Page here.  You can also watch the most recent series of Economic Update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

Some of these predictions will be pretty basic.  We’ll guess things like…Which direction will the stock market move over the course of 2012?  Other predictions will be of much larger things.  These are what we’re calling “Black Swan” events.  These are unlikely, and we do NOT believe that all of these things will happen.

Yet we do have reason to believe that there’s a fairly strong chance that at least some of these Black Swan events could happen.  And the economic ramifications would be far greater to each of us than knowing how many iPads Apple sold last quarter.

We have no particular reason to believe that most of these events will happen in the year 2012.  One or more of them certainly could (some will and some won’t).  But these are all events that it would be good for you to think through and ask yourself what ramifications the event would have and if you’re prepared for each.  Seek the Lord for guidance on how you should prepare yourself for this season in all ways (we happen to focus on the two main areas of your spiritual and financial life here.)

Caveats to come, let’s get straight to the predictions for markets in the coming year…

1)      Stock Markets will again be extremely volatile

2)      The US stock market will end in the year down (this is a bold guess, out on a limb)

3)      Most commodities will be lower, but will also be volatile

4)      Gold will be significantly higher in USD terms

5)      Silver will have even larger gains, but with far more volatility (riskier bet than gold)

6)      Oil will hit incredible highs during 2012 (see Iran prediction), although could end much lower based on the economy

7)      US Bond investors will see losses

8)      USD Cash will see losses (in real inflation adjusted terms, see Bernanke piece)

9)      Europe will have severe recession

10)  Sovereign Default in Europe (although US could bail out & become the bullseye?)

11)  Japan will see recession

12)  Japan will have to finally face the problem of their massive debt

13)  China will see much slower growth than they need

14)  The US will have real recession (although depending on money printing, they might get a positive GDP number.)

Now let’s predict the big events which will define the early 2010’s.  I believe economic events are absolutely coming to a head and thus we’ll primarily see what we’ll see in 2012 & 2013.  So this is more of a 2-3 year prediction than a one year guess.  Also, as I’ve said, I DO NOT believe that all these things will happen.  These are all things that I think have a realistic chance of happening and thus should be considered as you plan your asset allocation.

So here are the Black Swan Predictions…

1)      The USD is massively devalued (either by choice or because the world no longer wants the USD)… Pt 1 & Pt 2.

2)      Full Scale Currency Wars- (will certainly include massive money printing everywhere)

3)      Deflationary crash

4)      Hyperinflationary (could follow Bernanke’s decision in #1 above?)

5)      Barack Obama beats Mitt Romney in 2012 Election

6)      War with Iran

7)      Massive & Disruptive Act(s) of God (or Natural Disasters according to the new PC term…Could it be time for the big one in California?)

8)      Fed announces Nominal GDP Targeting (inflation + GDP growth)

9)      Derivative Implosion that takes down most of the banking system

10)  Euro Area collapses or is becomes something totally different (Defaults, etc)

11)  US Stock Market crashes below March 2009 lows

12)  Governments attack Gold (silver?) to devastate the value that many come to rely on.

13)  Governments conspiring to massively change world currencies

14)  The sons of God are filled with God’s Glory as His latter house (Haggai 2:1-9)

Well, that should keep me busy for a while!  As said previously, we have a nuanced position on each of these, so we wouldn’t run off and make any drastic moves based on what’s written here.  But now that we have established the position, we can spend some time on each prediction as we move forward.

Since it’s already written, we’ll probably address the #1 Black Swan first and share with you on Friday Ben Bernanke’s not so secret plan to destroy the value of your US Dollars!

This is the second post in a series.  You should read the initial thoughts on these forecasts here.  You can also watch the most recent series of Economic Update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

Your February 2012 Kingdom Calling Newsletter

2012: The Year of the Black Swan

Wikipedia defines the term coined by Nassim Taleb this way… “The black swan theory or theory of black swan events is a metaphor that encapsulates the concept that The event is a surprise (to the observer) and has a major impact. After the fact, the event is rationalized by hindsight.”

2012 appears to have some good investment opportunities.  Sure, a lot of people are negative on the economic outlook, but that’s always the case at the bottom of a cycle, right before/as the stock market booms.  Several of the people whom I admire for their abilities to speculate when to be in the market and when to be out of it, see great opportunity now to be in the stock market.

Lower than average stock prices mixed with Central Bank money printing as far as the eye can see should lead to big moves up in the market, right?

The sense that I have is that no matter how much that might seem to make sense, it’s just not going to work.  This is the year of the Black Swan…

I believe at least one and probably more than one event will occur this year that will shake this shaky economy to the core.  I believe that will lead to incredibly volatile markets.  And a year that we won’t forget.

This is not to say there are not sectors to be in that will not do incredibly well this year.  There are multiple areas that I believe will be anywhere from solid, to good, to great, to incredible. But you must have a careful strategy in place to whether all seasons.

Making predictions for what will happen between now and some certain point of time in the future is a silly endeavor no matter how entertaining it might be.  It gives me the chance to flex my muscles at my correct prognostications and wince at the incorrect guesses, but it doesn’t really have much correlation to successful investing.

A case in point.  I told you last month that I was only partially correct in saying that gold and silver would have strong years in 2011 because although gold ended up 10%, silver ended down 9%.  Well, silver’s up about 20% in just the first month of 2012.  So was I wrong?  Or did I just have bad luck on the turn of the calendar?

Again, it doesn’t really matter, but it does bring to mind that if I’m guessing anyways, I would prefer to make some bolder predictions that are much less likely to happen.  However remote the odds, these are predictions which I do consider more than just possible, and if correct would truly turn the economy upside down (not to mention all the affects it would surely have in the much more important areas of each one of our lives.)

So, I’m going to do that.  And I’ll go ahead and make some predictions for exactly what the markets will do by precisely the end of 2012.  But doing all this will take more words than I want to throw at you in one newsletter.

So I’m going to make use of the blog over the next month or more to make some predictions in bullet point fashion (tomorrow) and then to begin expounding on each of these ideas over every other day or so to give you a more full understanding of what I’m thinking.

You see, I don’t know exactly how things are going to go (stating the obvious here I know).  There are some very distinctly opposing possibilities that I see.  I have the advantage over many in knowing much of the general outcome of things.  And I do have some strong opinions based on strong reasoning of overall direction.  However, I don’t know specifically how we’re going to get there.  And to best steward our resources, these are very important questions to consider.  Gone are the days where you could be an old fashioned investor who simply buys solid stocks and bonds, hold plenty of cash, and do just fine.

This could be a very dangerous way to go because the reality is that the government & Fed have manipulated money and markets to the point that to survive you must be more than an old fashioned investor, but also a prudent speculator.  Not to try and hit a home run with amazingly lucky stock picks, but to protect what you have from the wrath of markets rebounding from unnatural influence.  If I’m correct in what I believe is most likely to happen, then you absolutely must allocate your capital outside of the traditionally “safe” areas of cash, fixed, bond, or equity indexed products.  Those have always been considered safe even though the interest earned on them now is small.  But if those holdings are not counter weighted by assets which behave differently in certain conditions, it’s conceivable that you could lose a substantial portion of your assets rather quickly.

Again, the ideas we’ll be discussing in these posts are not meant to help you place all your chips on a hand of poker and hope you pull the right cards.  But are instead meant to show you potential outcomes to consider assuring that you have a winning card or two in every hand no matter which way things go.

You can’t escape risk today.  Ben Bernanke and the Fed are making sure of this.  They have stated quite clearly that they will increase risk in the market (by increasing inflation) so that the citizens of the USA (and thus most of the world) will have to take risks they are uncomfortable with to try and keep up).  They’re creating negative real interest rates on purpose to force you to do things that you don’t otherwise want to do.  This is the grand plan to save our economy.  If this sounds incredibly reckless to you, you’re right, but you’re not in charge.  And they’re desperate.  You simply get to decide how to react.

Thus, in many of my predictions, I don’t have a strong conviction of what will happen over the next year.  Sometimes, I feel much more certain that something will happen, but putting a specific date on a particular result is crazy.  So although I’ll make predictions, they’ll be nuanced to show how outcomes could be different.

And I want to throw out some Black Swans that I think are very distinct possibilities over the next couple of years.  These are the things which you must really be alert to because they will have a much bigger impact on your life than whether or not the stock market goes up or down next year.

We’ll start posting these blog posts tomorrow.  If you would like these messages emailed to you or sent by RSS, you can sign up here if you don’t already receive the blog posts.  (FYI… It seems like Feedburner’s email service & some RSS feed readers get to you 24 hours after they’re posted to the blog.)  Or you can show up several times a week to the blog here and read them on the site.

Why is this the time of the Black Swan?

This year will see an increase in the economic difficulties, but this is not bad news!  We are blessed to be able to live in this time!  Whether or not we are able to steward our financial assets wisely by avoiding the many traps and taking advantage of the warped markets… This is the time the Lord has made.

I’ve often quoted these verses over the last few years…

“See to it that you do not refuse him who speaks. If they did not escape when they refused him who warned them on earth, how much less will we, if we turn away from him who warns us from heaven?  At that time his voice shook the earth, but now he has promised, “Once more I will shake not only the earth but also the heavens.”The words “once more” indicate the removing of what can be shaken—that is, created things—so that what cannot be shaken may remain.

Therefore, since we are receiving a kingdom that cannot be shaken, let us be thankful, and so worship God acceptably with reverence and awe,  for our “God is a consuming fire.” (Hebrews 12:25-29)

This is such a powerful truth for our day and should bring great comfort.  That indeed the Lord is shaking away those things from our life that we have grown accustomed to even though they might be holding us back from all that He has for us in His Abundant Life.

Yes, the earth and the heavens, the economy & the things of our very lives will be shaken.  But if we receive all this as the discipline of the Lord, He can bring us closer to Him than we’ve ever been!  And isn’t that worth everything?

Here’s a similar verse from Acts 2:25 which I came across this morning from Peter’s big Pentecost morning speech…

“For David says of Him, ‘I SAW THE LORD ALWAYS IN MY PRESENCE; FOR HE IS AT MY RIGHT HAND, SO THAT I WILL NOT BE SHAKEN.”

The Lord is our Rock.  He cannot be shaken.  What a beautiful time to press into Him!

One last note…I did get the Shepherd of the North post written (mentioned last month) as well as a commentary if you missed them.

The Fed also seemingly left the door wide open to more QE (money printing) as they don’t seem to be able to find the inflation that the rest of the world is experiencing.  We’ll talk more about that soon as we’re about to make numerous predictions for the coming year.  Most markets got a shot in the arm at this additional confirmation that the Fed will print as much as it takes to keep nominal prices higher (particularly gold and silver).

Let’s look at a few other stories…Ever wonder why the US is becoming less and less competitive on the world economic stage?  If you think it’s because wages are too high here compared to other countries, you’re wrong.  Government intrustion into every facet of business is what’s really killing the American economy.  Take a look.

Here’s a story that even better illustrates the insanity of those running the US. Oil companies (who provide the life blood of the economy on very small profit margins (If you’re unaware of this truth you probably don’t believe it because of the media/politician spin, but look it up yourself)…Anyways, these oil companies are being fined for not doing the impossible.  The US government says they must do a certain thing that no one on the planet has ever done…or they will pay fines.  So they pay fines…which means you pay higher costs for everything you buy.

The IMF just put out a very gloomy chart for where they see the world economy heading.  This is in part to try and manipulate European leaders to do what they want them to do, but none the less, they have finally caught up to what we’ve been saying for years.

The EU threats on both Greece and the creditor banks is getting severe.  I was stunned at the boldness of the comment (not so much at the terminal reality of the situation).  Here’s the core of it from the Telegraph…

The circumstances in our life are always arranged by God for our benefit.  And thus they are always good even when our flesh might find them to be horrific.

Paul said, “And we know that in all things God works for the good of those who love him, who have been called according to his purpose.” (Romans 8:28)

When we are young in the Lord, we can easily get caught up in the external, carnal circumstances of our life.  We can get carried away with happiness because we had a very successful day at work or because our favorite football team wins or for many other things which are purely products of this carnal world.

Or we might be filled with depression & despair because we’re out of work or because the person we would like to begin a relationship with has just begun one with another.  These things seem so overwhelmingly horrible that they can crowd out the Truth.

The Truth that is if one is truly working to give every area of his/her life over to the Lord, then the Lord is bringing every circumstance into your life to help you and grow you.  Your circumstances right now might be truly horrible from a natural point of view, but it will pass.  The Lord desires to be with you in this moment.  He desires to teach and grow you in the circumstances that have come to your life.

He desires that you look to Him in all things, knowing that more joy, more peace, & more love await you both in the here and now and in your very bright future.  As time passes, He might bring you the exact thing that you desire.  Or He might grow you past desires of the flesh to find a greater joy in Him and the things He has for you.  He is truly everything that you need and that your eternal spirit truly desires!  And He knows what you need, and will not forget those needs as you are a precious son of His (Luke 12:24)

As we gain more maturity in the Lord, we are able to see this process that the Lord is working out in our lives.  We begin to have a greater measure of peace in the trials and sufferings that He brings us through.

“For just as we share abundantly in the sufferings of Christ, so also our comfort abounds through Christ.” (2 Corinthians 1:5)  (see also 1 Peter 5:1 & many other places in the epistles)

Christ was made perfect through suffering (Hebrews 2:10) and in doing so made a way for us to know God.  But the ways of the flesh must be done away with and so the Lord brings judgment to our flesh.  This is a process that is certainly always painful as long as we still count ourselves as citizens of the world together with our citizenship in His Kingdom.

But as we grow, we more and more, see that the Lord is killing off those parts of us that are of the world.  This is important so that He can make us into a new wineskin that can receive the glory that is His new wine!

We know that we have experienced hardship before in our growing process towards the Lord and although we would never have chosen to go through what we did at the time.  Looking back, we can see that we have grown mightily in the Lord.  That we know Him more intimately than we ever could have imagined before.  And that we are not just glad, but joyful for the sufferings we have endured.  Peter said it like this…

“Dear friends, do not be surprised at the fiery ordeal that has come on you to test you, as though something strange were happening to you.  But rejoice inasmuch as you participate in the sufferings of Christ, so that you may be overjoyed when his glory is revealed.” (1 Peter 4:12-13)

Thus as we grow, we are able to see & examine everything that happens to us in a new light.  Did something wonderful “in the natural” happen?

We are able to take a step back and like the wise man say, “Hmmm, this seems good Lord, what are you doing by bringing this into my life?  My joy in complete in you, but I say Thanks for bringing this because it seems good.”  We are not carried away in the ecstasy of the flesh because the true joy in life is of the Lord and He never waivers.

Did something which seems terrible happen “in the natural”?

We are able to step back and say, “Hmmm, this is not what I would have chosen for today!  Lord, what is your purpose for bringing this into my life?”

We count it as a blessing that we could suffer for the Lord.  If we have given over our entire lives to Him, then isn’t He welcome to bring any discomfort if it will bring about a purified you who becomes closer than ever to Him?

It is true that sometimes the Lord brings a situation in order for you to grow in &/or assert your Kingdom authority and pray against the situation.  Certainly, He has power over all and can and does use his children in such a way.  It’s important to not only believe this is theoretically possible, but to so know your place in Him that you can step into the moment and command as a son of the Most Holy.

But there is a large portion of the church that has gotten carried away with the idea of “Authority” and look to administer that authority in every possible situation when in fact, the Lord has given them none.  He will not grant every desire of the flesh to those who say they love Him even if that desire might seem righteous to the person involved.  He desires to bring about His Glory in those who do love Him.  And He brings about circumstances in the lives of such as these to enact this change.

Even now He is raising up Sons who willingly hand over every aspect of their lives to Him.  That He can bring the fullness of His Glory into these which brings the fullness of His Kingdom to earth!

“Therefore, I urge you, brothers and sisters, in view of God’s mercy, to offer your bodies as a living sacrifice, holy and pleasing to God—this is your true and proper worship. ² Do not conform to the pattern of this world, but be transformed by the renewing of your mind. Then you will be able to test and approve what God’s will is—his good, pleasing and perfect will.” (Romans 12:1-2)

You can watch the most recent series of Economic Update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

One day, the best of his few horses ran away. His neighbors came by and tried to console him. He replied, “Who knows this might be a blessing?”

About a month later, his horse came back with a flock of wilder horses.   His friends came by and exclaimed, “Wow, you are so blessed to have this happen out of nowhere to make you a rich man!”

The wise man said, “Maybe, who knows?”

Years later, he had a son, who enjoyed riding horses as he grew up. One day, as he mounted a fine horse, the stallion took off running and with a quick burst bucked the young man wildly off him.  He flew through the air and crashed to the ground badly breaking his leg.

Now the old man needed his son’s help shepherding and this was certainly a dramatic and unexpected setback.  How would they get the work done needed to tend their sheep and other affairs without the young man’s help?

The wise man’s friends again came by, but this time they said, “You were right!  It wasn’t a blessing that you found all those horses, it was a curse!  What will you now do without the help of your son?”

The wise man said, “We will see, who knows, maybe it’s a blessing that he broke his leg?”

Only a few weeks later, the army came through and was conscripting every young man to service.  All the young men of the village had to go with them.  There was great sadness and weeping amongst the villagers because everyone knew that it was a bloody and senseless war being put on by the rich and powerful.  Few young men would survive.  And yet, because the old man’s son had a broken leg, the army had no use for him.  They left him behind with the old man where he was no in danger of losing his life as so many of the village’s other young men surely would!

Again, the old man’s friends came by and said, “You were right, it was a great blessing that your son broke his leg!”

Again the wise old man said, “Maybe, let’s wait and see!”

This is an ancient parable out of China that probably pre-dates the Kingdom of God’s advancement into that land (as goes on in amazing ways today).  But it’s an amazing parable that has often come to mind when sharing with others that teaches an important lesson.  On Wednesday, we’ll share a few thoughts on how this relates to your life and mine as a believer in this broken world.  You can find that post here.

You can watch the most recent series of economic update videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.

Year in Review

Today, we’ll review our predictions from a year ago.  But first, I wanted to give you a peak behind the curtain of my writings here at Kingdom Calling.

I’ve had difficulty deciding what to put in this month’s newsletter mostly because I have 7 – 10 topics I want to write about right now.  We’ve got a newsletter and blog and I don’t have a clear delineation between the types of content for each.  It seems most companies on the web use a free blog in order to entice you into buying their newsletter.  Our model is different.  It’s all free.  I try to pass on as much of my thoughts on stewardship and the economy as well as occasionally including writings on what the Lord is showing &/or teaching me.

Of course, we save the best ideas and specific strategies for those who are actually going through either the Your Fruitful Tree or The Steward’s Calling processes.  I will say that the time to prepare for great changes is running short, and recommend you email me back for a free consultation if you haven’t done so.

We’re approaching a thousand of you who receive this, but experience has taught me that most of you will choose to do nothing (it is after all a bit bothersome to send an email and couldn’t it wait till tomorrow?)  And so, even though the information is useless without action, I hope to help the majority of you who won’t respond the best that I can with free information whether through these newsletters or our blog posts.

For instance, I saw an urgent need to warn as many as possible about the increasing economic troubles coming in August and thus sent a newsletter to warn you of what was coming (later reprinted in this blog post.) The Lord’s timing was perfect as the sovereign debt crises and markets have gone absolutely nuts ever since.  As I write this, we’re in a bit of a holiday calm as we get every year, but make no mistake, that warning is just as real now as it was then.

So let me get on with reviewing last year’s predictions and then give some ideas of pieces I hope to get onto the blog soon and maybe link a few recent pieces you might have missed.

REVIEWING MY 2011 PREDICTIONS

Looking back over last year’s predictions, I see that I was as uncomfortable predicting 2011 as I am now predicting 2012.  I spent 2 pages (on the word doc used to create the newsletter) basically saying a number of things could go in different directions before finally stepping out there and taking some stabs at what would happen.  Looks like I guessed pretty well overall with 4 correct, 2 wrong & 2 that I’m calling a push.  So here are the predictions made with commentary on how I did…

Prediction: “I will predict that we will end the year with much higher interest rates.”

Result:  WRONG… Interest rates fell in the US.  However, I was somewhat correct in that interest rates did dramatically rise in many countries around the world.  I did say it was an open questions whether the world markets would focus on the European debt implosion or the US state, city, & county debt implosion.  While there were a few headline defaults in the US (Harrisburg, PA; Jefferson County, AL; & the Detroit situation come to mind), the really big dominos haven’t fallen yet.  Meanwhile, the Problem in Europe dominated headlines at the end of 2012 and interest rates rose to unsupportable levels in those countries.  This should probably be a PUSH because the spirit of it was correct and the markets are showing that they will not let debt problems stand much longer without a reckoning.  Still, the focus hasn’t yet come to the US where most readers reside.  Keep in mind, when the focus gets here, you’ll be financially behind the eight ball.  Things will move very quickly then.

Prediction: “I think we’ll see dramatic swings in the stock market.  (it’s hard to say whether the money printing can make it higher a year from now, but it’s bound to be bumpy ride.)”

Result:  CORRECT… The stock market was extremely volatile, but ended flat on the year.

Prediction: “Real estate will be much lower.”

Result:  WRONG… There were certainly portions of the extremely large and diverse US real estate market that were significantly down, but others were slightly up and over all, the real estate market was flat.

Prediction: “Commodities will be higher a year from now, but again, a wild ride could be in store.”

Result:  PARTIALLY CORRECT… Commodity prices were higher most of the year, but swooned at the end (wild ride was dead on) to end up flat.

Prediction: “Gold and silver will be much higher (they benefit whether attention is on the US or Europe).”

Result:  PARTIALLY CORRECT… Both metals were up by large margins over the course of the year and fell back at the end.  Gold prices had their 11^th straight year of increase (which is unprecedented in any market in history).  The 10% gain was smaller than the average gain of the last decades, but still one of the best holdings you could have owned in 2011.  Silver ended down 9% on the year after having experienced a massive gain through the first half of the year (going from $30 to $50 and back down below $30).  Silver has already recouped the small loss of 2011 in the first two weeks of 2012.  Both metals did much better during the year if measured in most other currencies.

Prediction: “Emerging markets will experience a crash.”

Result:  CORRECT… Emerging markets around the world crashed decisively in 2011.  Although the US stock market went nowhere in 2011 while causing mild heart attacks the whole way, it was one of the best stock markets to be in during 2011.

Prediction: “Oil will be higher.”

Result:  CORRECT… The cost of oil ended up for the year, although not nearly as far up as it was for most of 2011.

Prediction: “Food costs will be considerably higher.”

Result:  CORRECT… The cost of food rose and I have no doubt that your family noticed this at the grocery store and perhaps at your favorite restaurant.

Looking back, I feel pretty good about these predictions since trying to guess where a market will be at some exact point in time in the future is really just gambling.  No one can predict such things with any degree of accuracy, so I feel this was a pretty successful effort.

In February, I’ll probably try to see how well I can do for 2012.  I do feel certain that this year will be incredibly tumultuous in the markets.

ON THE BLOG

I’m hoping that if I give you some ideas on some things I’d like to write, it will force me to actually put them to paper, so here’s few ideas that have been rattling around in my head and could end up on the blog in the coming weeks and months…

1)      The Families of God

2)      Sheppard of the North Parable

3)      The Value in Celebrating Christmas vs The 3 Main Feasts Established by God

4)      Is Ben Bernanke Planning to Devalue the US Dollar by 40%?

5)      Standing Exposed before God

6)      Hearing God

7)      What is the Lord Doing in our Day?

There is also a plan to come back to The Seed writings, so those will probably be hitting the blog in some form or fashion as the details and changes are worked out.

If you’re not receiving the blog posts by email or RSS, you can sign up for them free HERE.

Recently, we’ve been running a huge series of Economic Update Videos as we do periodically.  I believe there are 3 still to arrive on the blog over the next week.  (We typically post on a M, W, F schedule.)

I also wanted to point out a couple Spiritual writings recently added…

1)      The Lord is Building His Temple

2)      Spend Thanksgiving with Your Father – This really had nothing to do with Thanksgiving, and is about something my 15 month old son taught me.

I hope you enjoyed this newsletter.  I do really appreciate your reading it.  As always, you can reach out and say Hi by replying to this email.

Have a great 2012!

Wes Bridel

Again, if you would like to receive this FREE newsletter each month, you can go here to sign up to receive it and you will immediately be sent a link to watch The Coming Storm Video for Free.

Today, we’ll look at factors affecting the US economy such as:  1)  Where did this 1% tax on financial transactions come from and who is supporting it?,  2)  Two admitted government spying programs discussed,  3)  A 60 minutes program got people stirred up for a day or two about all the insider trading Washington congressmen do, was this a surprise to you?,  4)  We discuss the US pipeline controversy and whether or not it’s a good idea to add an important new pipeline from Canada to the Gulf Coast,  & 5)  James Madison foretold one of the biggest problems eating the US from the inside out today.  All that and more in the video below…

We hope you enjoy this video.  If you have not seen The Coming Storm video, you should do so immediately to have a fuller understanding of what lies ahead.  You can do so for free by going here.  Please let us know what you think of this presentation or if you have any questions, leave them in the comment section below.

This is the thirteenth in a new series of Economic Update Videos. You can watch the entire series of videos at:  1) European Debt Crises, 2) European Debt Crises 2, 3) MF Global,  4)  Gold & Silver Pt 1,  5)  Gold & Silver Pt 2,  6) Gold & Silver Pt 3, 7)  World Economic Update., World Economic Update 2, 9) The Chinese Economy, 10) Inflation or Deflation Concerns?, 11) Inflation Concerns Pt 2, 12) US Economic Update, &  13) US Economic Update 2.