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

Dec 6, 2010

The Debt Dominoes Are All Lined Up

There is every indication that Europe is entering a more severe phase of its sovereign debt woes. A new crisis is unfolding despite Herculean efforts by the European Union, the International Monetary Fund, and the U.S. Federal Reserve.

In May, Eurozone members and the IMF gave Greece a $143 billion bailout. Last month, Ireland was given a $113 lifeline to mostly cover losses from its two largest banks. The market now fears that Portugal, Spain, Italy, Belgium, and the UK will need rescue packages to cover their debts.

The EU has already created a $700 billion rescue fund for all debt problems, so a bailout of Portugal can be managed. Spain is the nation that has analysts and investors worried. It has the fourth-largest economy in the EU, and it would need at least a $500 billion bailout. Of course, this would require Europeans to revise their rescue fund.

The lockup of the debt market may force the EU to act. Spanish banks will need to refinance about $111 billion in debt next year, and money managers have suddenly lost their appetite for bank debt. In November, Spain’s financial companies sold $390 million of bonds in Europe. This compares with $3.08 billion in the same period a year earlier.

Bailing out an EU member is no guarantee that it won’t later get back in line for another handout. Greece, which the authorities thought was largely cured, has suffered a relapse. Its economy is in freefall, and the debt-to-GDP ratio was increased from 11 to 13 percent. The default swaps--insurance-like contracts for bonds--are now double what they were before the nation's first bailout.

All these bailouts may eventually put Germany at risk of default. The Germans are the most industrialized members of the EU, and they are rapidly growing tired of having to help finance a rescue plan for another one of their deadbeat neighbors every few months.

Last week, a new law forced the Federal Reserve to admit that it had loaned out a vast amount of money to European Banks. In total, the Fed had promised that equaled a staging $9 trillion. Many on Wall Street were impressed that the Fed was able to write hot checks for such a large amount, but it meant that the Fed was forced to make a life-or-death gamble with the world’s financial system. If we suffer round two, Fed chief will Ben Bernanke will probably make another all-or-nothing gamble.

One of the best barometers of our ability to contain the sovereign debt bubble is the performance of U.S. ten-year bond. Because the dollar is the world reserve currency, international traders run to the ten-year note during times of trouble. They typically bid up the price and drive down the yield.

In the past few weeks, the ten-year has lost some of its safe haven role. Despite the Federal Reserve continuing plan to buy $100 billion of bonds each month, rates have still been rising. When word slipped out that Uncle Sam might be asked to chip into a larger IMF bailout fund for Europe, the ten-year plunged in value.

The rate on the ten-year is now above 3 percent, and economists are very worried about it going any higher. Because the U.S. has such a massive debt, we need to maintain low interest rates. If rates rose to 5 percent, it would double the size of our interest payment, which would result in a $2 trillion annual deficit. If rates went to 8 percent, we would have a $3-trillion-dollar shortfall.

The debt-domino nations will certainly continue to fall. The question here is what impact they will have on Bible prophecy. As the situation becomes unmanageable, we may see several nations get kicked out of or leave the EU. Since there are currently twenty-seven member states, a major realignment would need to occur to reach the ten members predicted by Daniel and John the revelator.

"And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast. These have one mind, and shall give their power and strength unto the beast" (Revelation 17:12-13).

-- Todd

Scanning a Fearful Future: Part 3

The Federal Emergency Management Agency (FEMA) has internment compounds placed strategically around the United States. These will be used as concentration camps when anarchy reaches a critical point in America and the world. This sort of warning has been at the heart of fear-filled emails I’ve been receiving for the past seven years, at least.

Today, the trepidation concerning the likelihood of the collapse of America and the world issues daily from a populist mouthpiece. There are others, but Glenn Beck fills the role as chief forecaster of impending doom. He says frequently that we will awaken one morning and find that America has changed. We won’t recognize the nation. It will happen just that swiftly, and the transformation will involve, among other things, probable hyper-inflation that will make money valueless for most people in America. This means that the entire world will follow suit. Global depression, we infer, will be the plight of all but the ultra rich of the world–the George Soroses, etc.

Based upon Beck’s dire suppositions, we consider things to come. Just how far into the future all of this evil lurks, Beck doesn’t know. However, based upon the rapid movement in economic uncertainties, it is likely, he implies, that it will happen sooner rather than later. That new dawning–or perhaps “nightfall” is the more apropos term--will be bleak, he predicts. The dollar will have fallen as the reserve currency for most of the world’s economies. Entire bank accounts will be wiped out, in that their contents likely won't be sufficient to feed a family for a day, much less for longer. Governments will be forced to cut social programs of every sort–completely eliminating them in most cases. Rioting will explode while those on welfare roll and others used to government largess will turn violent. The big inner cities will be particularly hard hit.

If the lessons learned from Hurricane Katrina in New Orleans can serve as example, looting and violence might well be the order of such changed way of life on that terrible day after the transformation forecast by Glenn Beck occurs. The sorts who looted during the devastating hurricane will almost certainly spill into the suburbs, then into the countryside, pillaging for food and anything else that strikes their fancy.

Riots in the streets of Greece, Spain, and most recently in London, brought about by governments imposing austerity measures on money spent on social programs, present a foreboding picture of how things in the U.S. might look within twenty-four hours of an economic collapse such as Beck and others fear. In the United States, the very thought of what might take place when government handouts are cut off caused Indianapolis, Indiana, city officials to bring in greatly increased law enforcement when officials were about to announce that unemployment payments would not be extended.

So daunting are the prospects that even Beck stops short of delving too deeply into what such a changed world--catastrophically lacking in food, electricity, appropriate sewage treatment, and clean drinking water--would mean to Americans. But such change, he forewarns, is coming...and soon. It is coming, he says, because of the internationalist elitists who want that transformed world through which to rule over the rest of us–a "New World Order," as George Soros, Henry Kissinger, Zbigniew Brzezinski, and even George H. W. Bush and other champions of globalism have termed it.

Presidents have for decades been leading America into the globalist economic arena. No chief executive has observably been more determined to meld the U.S. economy with the rest of the world than Barack Obama. He said in a speech in Mumbai, India, regarding his desire to take America into the global economic model, "This will keep America on its toes. America is going to have to compete. There is going to be a tug-of-war within the US between those who see globalization as a threat and those who accept we live in an open, integrated world, which has challenges and opportunities."

Obama stated further that unemployment within the U.S. that might result from global economic integration is going to be the “new normal.” It is just something we are all going to have to get used to.

Most every proponent of this move into globalism comprehends that the process of merging the American economy into the one-world configuration they desire will be painful for U.S. citizens. Wages will go down. America’s living standard will fall, according to the globalists. Americans will face a struggle in the course that must be taken to reach parity for all of the world community. This is just a fact of life, according to those who know best. President Obama himself says that the nation’s economy might “not be fixed for quite some time.”

Again, if I hear him right, Glenn Beck believes this change will be, for Americans, an instantaneous fall into an abyss of economic depression, not a slow slide into the poor house. He presents an almost fatalistic scenario, concerning our not being able to stop it from happening overnight. He urges all who will listen to prepare for the coming, contrived collapse of the American and world economies.

He says, at the same time, that he believes Americans have what it takes to thwart this drive toward New World Order–this effort to return to Babel. He indicates that he believes fervor for patriotism at the level of that of the founding fathers can reignite a foundational movement to restore sanity to government, economy, and culture/society.

At a rally in Washington DC, he threw some spiritual/religious verbiage into the mix of his exhortation to take back America: "Something that is beyond man is happening. America today begins to turn back to God. For too long, this country has wandered in darkness."

Sounds like Beck is onto something there, doesn’t it? Let’s look more deeply into where that might be leading next time.