Jan 30, 2012
Japan Faces the Moment of Truth
In the ongoing saga of the financial crisis, Greece has been grabbing the lion's share of the headlines. If it doesn't received a bailout by mid March, it will be forced to default. Since Greece's $400 billion debt is small potatoes compared to the total world GDP of $100 trillion, I'm not losing any sleep over a Greek default. I think Japan is a far greater risk to the global economy.
It is already well known that Japan has the highest national debt of any industrialized nation on earth. Its debt now stands at 220 percent of GDP. The U.S. has a GDP debt of 100 percent.
In the current fiscal year, Japan's public debt will finance 50 percent of the federal budget. That means for every yen that the Japanese government takes in from taxes, it has to print another yen to cover its expenses.
Japan’s Finance Ministry said the nation’s public debt now stands at 985.4 trillion yen ($12.7 trillion) for the year ending March 2012. In about three months, the debt will reach the 1 quadrillion yen mark.
There is no end to the sea of red ink. The official government forecast calls for the country to have a deficit of 3.3 percent of GDP in fiscal 2015 and 3 percent in fiscal 2020.
For the past two decades, the Japanese government has been able to keep piling up debt because of a high national savings rate. The Japanese people just love to buy government bonds. That era has now come to an end.
In 2011, Japan had its first trade deficit in thirty-one years. A prolonged European recession, coupled with stubbornly high oil prices and a slowdown in China, is the disaster scenario for Japan. The new trend is expected to last until at least 2014. The shortfall will erode the country's ability to fund its huge public debt with domestic savings.
The rapidly aging population is starting to drag on the economy. Currently, the ratio of retirees to working-age Japanese is 38 percent. In just eight years, retirees will make up 49 percent. Japan is now at the point where the average citizen is running down his or her savings.
The Japanese government has been unable to come up with a plan to combat the debt load. The government did announce a draft proposal to hike the consumption tax rate from the present 5 percent to 8 percent in 2014 and to 10 percent in 2015. When you're on the brink of collapse, it's ridiculous to wait two years for any action.
Europe's recent spike in interest rates poses a huge risk to Japan's ability to manage its debt load. As nations like Greece and Portugal play "Let's Make a Deal" with it bond holders, the higher risk will cause investors around the world to demand better rates. Japan would be wiped out if its bond yields were to rise. By just going from the current 1 percent to 3 percent on government bonds, it would require 100 percent of all taxes to pay the interest.
The Japanese economy now has a new risk to worry about. The earthquake research institute at Tokyo University has warned that the chances of a powerful earthquake striking Tokyo in the next four years could be as high as 70 percent, an alarming scenario for the city's 13 million people. According to the government, a magnitude-7.3 earthquake would kill about 5,600 people, injure 159,000, and destroy 850,000 buildings. Last year's massive earthquake in the north may have already doomed Japan to an early financial meltdown. An earthquake in the capital would signal instant bankruptcy.
Some people are trying argue that Japan is not in as bad shape because it owns a trillion dollars of U.S. bonds. The question is what would happen to the value of those bonds if they ever tried to sell them. Since America doesn't have any assets to give in exchange for the money we owe other nations, the bonds would become worthless in any large-scale redemption.
The longer the global financial system holds together, the more convinced Terry and I have become that the delay is part of God's plan. The Lord may intend to use the Rapture as a pin to pop the debt bubble.
End-time Christians already have a good reason not to be fixated on the cares of this world. The hopeless state of our financial system should add to the urgency of being focused on promoting the kingdom of God.
"Watch ye therefore, and pray always, that ye may be accounted worthy to escape all these things that shall come to pass, and to stand before the Son of man" (Luke 21:36).
Big Brother’s Noose Tightens: Part 2
A cursory glance would seem to indicate that the decision last week by Congress to flush the anti-piracy legislation into the sewer reserved for liberty-robbing legislation accomplished the preservation of Internet freedom. The following excerpt from one news story sets the seeming defeat of the threatening legislation.
Lawmakers stopped anti-piracy legislation in its tracks on Friday, delivering a stunning win for Internet companies that staged an unprecedented online protest this week to kill the previously fast-moving bills. Senate Democratic leader Harry Reid said he would postpone a critical vote that had been scheduled for January 24 "in light of recent events."
Lamar Smith, the Republican chairman of the House of Representatives Judiciary Committee, followed suit, saying his panel would delay action on similar legislation until there is wider agreement on the issue. (Thomas Ferraro, Jasmin Melvin, "Congress Puts Brakes on Anti-Piracy Bills," Reuters, 1/21/12)
The Obama Administration displayed a moment of atypical behavior, quickly jumping on the bandwagon against the very legislation to govern Internet they had been championing.
White House officials weighed in on Saturday, saying in a blog post that they had concerns about legislation that could make businesses on the Internet vulnerable to litigation and harm legal activity and free speech.
Then on Wednesday, protests blanketed the Internet, turning Wikipedia and other popular websites dark for 24 hours. Google, Facebook, Twitter and others protested the proposed legislation but did not shut down.
The protest had quick results: several sponsors of the legislation, including senators Roy Blunt, Chuck Grassley, Orrin Hatch, John Boozman and Marco Rubio [withdrew their support]. (Ibid.)
To put it bluntly, so many people within cyberspace communities went into fits of rage that it threw Big Brother into shock. The Harry Reeds who are bent on controlling every aspect of our lives from cradle to grave instantly pulled back their meddling fingers that had just been bitten by the entities government was intent on collaring.
But, notice the phraseology of Reed's and Smith’s decisions to take the legislation off the table. Reed, the Democrat, said he would “postpone” a vote on the matters involved. Smith, the Republican, said he would “delay” action on such legislation until there was agreement--i.e., the hounds of Big Brotherism haven’t given up on ways to get into governing Internet. They are merely backing off for the time being to figure new ways to come at that area of freedom from other angles.
And, they are indeed continuing to come at our freedoms from every angle.
Their intrusion is always in the guise of wanting to benevolently secure one area or the other of our lives. In the case of the Internet legislation, PIPA (PROTECT IP Act) in the Senate and SOPA (Stop Online Piracy Act) in the House, solutions were promised to piracy and copyright infringement in America and around the world. Now, the forces are marshaling to come up with new versions that the enforcers are promising will not chill free expression or threaten the economic growth and innovation the Internet provides.
When reading about the backtracking of the would-be Internet masters, I can’t help but think on what Bible prophecy tells us will be the cry of the end times' New World Order builders. It is a mantra we have heard time and time again in the Middle East land-for-peace deals these same types have been striving to knit together for a decade or more. They want to build an era of peace and security, with the land God gave Israel as the price for such an arrangement. Even Benjamin Netanyahu, Israel’s prime minister, uses the phrase "peace and security."
We know what God’s Word says about that humanistic process: “For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape" (1 Thessalonians 5:3).
We have been witness to the results of demand for security. Since September 11, 2001, developments within the U.S. government and other governments of the world have been stunning in terms of prophetic import.The Transportation Security Administration (TSA) has, by itself, demonstrated how easy the taking of liberty from the American citizen really is. The pat-downs, body scans, and other violations of basic personal rights simply stagger the mind of one who still believes in the U.S. Constitution as a viable, governing document.
More and more federal government intrusion into daily life should cause even the most ardent anti-conspiracy skeptics to wonder…
For one example, Tuesday, January 17, 2012, residents of Leesburg, Florida had their tranquility disrupted when their local Social Security office suddenly became a random Homeland Security checkpoint. Department of Homeland Security (DHS) officers armed with semiautomatic rifles and accompanied by sniffer dogs forced locals to present identifications. At least one DHS officer was stationed at a door to the building with his automatic weapon at the ready, it was reported.
The action was apparently part of something called “Operation Shield,” an unannounced drill conducted by the DHS’ Federal Protective Service centered around “detecting the presence of unauthorized persons and potentially disruptive or dangerous activities.” –This, according to the local newspaper, the Daily Commercial.
One report gave the following account: "Thomas Milligan, district manager for the Social Security Administration office, said staff were not informed their offices were about to be stormed by armed FPS officers. DHS officials refused to answer questions asked by local media and left with no explanation at noon," (Paul Joseph Watson, "Staff of Florida Social Security Office Not Informed of Drill, Homeland Security Officials Refused to Talk to Media," www.infowars.com).
The fact that we are seeing our rights eroded at a frightening pace is bad enough. But, it is the staggering implications of what the present ground-laying assaults on our freedoms will likely mean in terms of the fulfillment of Bible prophecy that is especially troubling, but at the same time, quite fascinating. Big Brotherism, in its contemporary stage of metamorphosis, makes the lie that our lives will be more secure if we will just acquiesce to governing by those who know best the centerpiece of their enslaving master plan. The noose that is tightening day by day is the incrementalism being employed in every facet of our lives.
Take heart. God is in control. Although Antichrist’s forces can be sensed forming, and his noose tightening, the final page of man’s long, brutal history will be written by the finger of Jesus Christ: “And then shall that wicked be revealed, whom the Lord shall consume with the spirit of his mouth, and shall destroy with the brightness of his coming” (2 Thessalonians 2:8).