Commentary on world events that relate to Bible prophecy and on Rapture Ready issues world events.

Oct 4, 2010

Inflation Raises Its Ugly Head

For nearly thirty years, the U.S. has been blessed with low inflation. There are now signs that our luck is about to run out. The U.S. monetary base has more than tripled over the last couple of years, and all that money is starting to filter into the hands of consumers. Commodity prices are absolutely skyrocketing, and it is inevitable that those price increases will show up at the grocery store.

In his recent article entitled "An Inflationary Cocktail in the Making," Richard Benson lists sixteen key commodities that have seen huge price increases over the past year:

Agricultural Raw Materials: 24%

Industrial Inputs Index: 25%

Metals Price Index: 26%

Coffee: 45%

Barley: 32%

Oranges: 35%

Beef: 23%

Pork: 68%

Salmon: 30%

Sugar: 24%

Wool: 20%

Cotton: 40%

Palm Oil: 26%

Hides: 25%

Rubber: 62%

Iron Ore: 103%

The Dow Jones Industrials average has just had its best September in seventy-one years, rising 7.7 percent. Just in the past month, cotton, sugar, wheat, oil, and rice have risen more than 12 percent. The motor oil in your garage and the Uncle Ben's in your kitchen cupboard outperformed the best traders on Wall Street.

Some of the increases are due to a string of adverse weather conditions. Russia had a severe drought that cut its wheat crop by 30 percent; India is suffering from low monsoon rainfall, which has hit sugar cane yields; and the U.S. has seen growing conditions that were both too wet and too dry. And calamity keeps coming. One report said that Australia faces the worst locust plague in twenty-five years for the 2011 crop.

Years of environmental restrictions on mining are adding to inflation pressure. Even though the demand for metals has been rising, supply is tight: No new mines have been opened in twenty years. The last iron ore smelter to be built in the United States dates back to 1969.

There is a growing problem with rare earth metals, which are used in a wide number of industrial and electronic products. China controls 97 percent of the rare earth market, and it has recently stated that it will no longer export these metals. American firms are now scrambling to find alternative sources before their supply runs out.

The uptick in commodity prices has failed to get the attention of the Federal Reserve. One of the duties of this body is to be on guard for inflation.

Amazingly, the Fed wants to print lots more money because it thinks we are in greater danger of seeing falling prices. The president of the Federal Reserve Bank of New York, William Dudley, stated that the high unemployment and the low inflation the United States is experiencing right now are "wholly unacceptable.... Further action is likely to be warranted unless the economic outlook evolves in such a way that makes me more confident that we will see better outcomes for both employment and inflation before long."

The government has been reporting low inflation because it uses crazy methodology in figuring its numbers. Food substitution is one example of this chicanery. If Kraft Macaroni and Cheese goes up 5 percent in price, the government may still see this component as unchanged because it concludes that people will switch to a no-name brand.

The Federal Reserve might be smoking those left-headed cigarettes, but many savvy investors understand what is going on. The fear of future inflation is the main reason gold and silver has risen more than 500 percent in the past decade. Even the U.S. Mint is adding to inflation. It has officially raised the wholesale pricing above spot on American Silver Eagles from $1.50 to $2.00.

The Bible warns of ramped-up inflation in the last days. The book of Revelation says a person will need to work for a whole day just to earn enough to buy a measure of grain equal to a loaf of bread. To go from fat and happy to a starvation diet would seem to require a transition period. Any movement towards high inflation may indicate we are headed in that direction.

“When he opened the third seal, I heard the third living creature say, ‘Come!’ And I looked, and behold, a black horse! And its rider had a pair of scales in his hand. And I heard what seemed to be a voice in the midst of the four living creatures, saying, ‘A quart of wheat for a denarius, and three quarts of barley for a denarius, and do not harm the oil and wine!’” (Rev 6:5-6).

-- Todd

Israeli Leaders’ Lethal Liability

Bible prophecy’s most profound current issue simmers on the Jerusalem horizon, but there seems little notice even by the usually observant prophecy ministries. It is the peace process to which I refer.

Israeli leadership at the very top is as in conflict internally, as it is with the Palestinian leadership. Controversy rages over exactly how to formulate a process that might have a chance at securing peace between Israel and its enemy-laden neighbors.

The following frames the internal Israeli struggle.

Foreign Minister Avigdor Lieberman on Tuesday presented the United Nations with his draft for a population and territory swap, as part of an eventual peace deal between Israel and the Palestinians. Under Lieberman's controversial scheme, part of Israel's Arab population would be moved to a newly created Palestinians state, in return for evacuation of Israeli settlements in the West Bank.… But his decision to place them before the General Assembly in his role as foreign minister will raise speculation over whether they are his private plan, or the official policy of the Israeli government, and Netanyahu is likely to face international calls for clarification. ("Lieberman Presents Plans for Population Exchange at UN," http://www.haaretz.com/news/diplomacy-defense/lieberman-presents-plans-for-population-exchange-at-un-1.316197).

Prime Minister Benjamin Netanyahu countered Lieberman’s stated preference for the way peace should be pursued. The prime minister rejected the foreign minister’s idea of a land swap and asserted that he felt peace might be achieved between Israel and the Palestinians within one year through talks with Palestinian Authority President Mahmoud Abbas.

Netanyahu reportedly said, "It is vital, and I wholeheartedly believe that it is within our power to reach a framework agreement within a year and change Middle East history."

I have noted with great interest that the current Israeli prime minister seems to be an adherent of the saying, “Fool me once, shame on you. Fool me twice, shame on me.” This, based on the way he conducted his first stint as the Jewish state’s top post, versus his present modus operandi.

Netanyahu, in the first go-around as prime minister, held firm at most every juncture in dealing with Israel’s enemies. At the same time, I believe he observed and took to heart a number of critically valuable lessons: 1)He saw that the international community as a whole turned ever more anti-Israel with each of his own hard-line stands; 2) He came to understand how the Arab-Islamist mind works; and 3) He formulated from his first run-in with his enemies’ intransigence how to deal with them when his next opportunities presented themselves. He had opportunity to analyze his predecessor prime ministers during his second ascension to that post. He is a quick learner, I’ve come to observe. This is what I mean.

The Palestinian thugs, from Yasser Arafat to present–as well as every Arab leader who has dealt with Israeli leaders—will agree to any number of proposals, so far as the process of agreement is concerned. That is, once they enter a negotiations process, they always present a surface reasonableness–a willingness to be part of the process, so long as they don’t have to make the iron-clad agreement that can be confirmed or ratified by the international powers that be. When this point is reached, they will find reasons to break off the negotiations. One such glaring instance of this was when Arafat broke off negotiations after achieving 98 percent or so of what the Palestinians wanted during the Oslo talks.

When Israel wouldn’t turn all control of the Temple Mount in Jerusalem over to Arafat, he got up and stormed out of the talks in a rage, despite the fact that he had been given everything else he had demanded--i.e., he didn’t want peace. He wanted the complete eradication of the Jewish nation, as do the leadership of Israel’s Islamist enemies today.

The process of feigned peacemaking is the weapon of choice of Israel’s Arab enemies when military action isn’t an option. They are masters at stringing out that process interminably.

Again, Benjamin Netanyahu is, if anything, a fast-track learner. I sense that he is playing the process of peace-making the same way the surreptitious Arabs have always played and now the Palestinian leaders play the process. While his own foreign minister is willing to give territory for the hope of peace, the prime minister just promises that he wants to negotiate peace. He is simply dragging out the process, thereby giving the international community Israel haters nothing in the way of negative diplomatic ammunition to hurl at him. He is holding out on any land swap for a peace he knows is not likely ever to be established with those blood-vowed to murder every Jew on the planet.

Tragically, however, Bible prophecy indicates that it is methodology akin to that of Foreign Minister Lieberman, not Mr. Netanyahu’s, that will be utilized by the Israeli leadership at the beginning of the Tribulation era (Daniel’s seventieth week).

God’s Word says that an end-times Israeli leadership will make a covenant with “the prince that shall come” (Daniel 9:26-27).

That covenant will almost certainly involve Israel’s leadership giving up land, based upon Joel 3:2: "I will also gather all nations, and will bring them down into the valley of Jehoshaphat, and will plead with them there for my people and for my heritage Israel, whom they have scattered among the nations, and parted my land.”

God will himself bring all nations to Armageddon, in part because they have divided the land He promised His chosen people. The land-for-peace deal that end-times Israeli leadership consummates with Antichrist and the nations of the world will make them liable for judgment. The peace will be a lethal transaction to be sure.

Wherefore hear the word of the LORD, ye scornful men, that rule this people which is in Jerusalem. Because ye have said, "We have made a covenant with death, and with hell are we at agreement; when the overflowing scourge shall pass through, it shall not come unto us: for we have made lies our refuge, and under falsehood have we hid ourselves…" And your covenant with death shall be disannulled, and your agreement with hell shall not stand; when the overflowing scourge shall pass through, then ye shall be trodden down by it. (Isa. 28: 14-15, 18)

I’m convinced we are witnessing the prophesied lethal peace process in the making.