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[Gailon Arthur Joy]

International experts foresee collapse of U.S. economy
By Hielema, Bert

And you thought that I had a gloomy outlook on the economy. Now the bad news pops up everywhere.

Harry Koza in the Globe and Mail quotes Bernard Connelly, the global strategist at Banque AIG in London, who claims that the likelihood of a Great Depression is growing by the day.

Martin Wolf, celebrated columnist of the U.K.-based Financial Times, cites Dr. Nouriel Roubini of the New York University's Stern School of Business, who, in 12 steps, outlines how the losses of the American financial system will grow to more than $1 trillion - that's one million times $1 million. That amount is equal to all the assets of all American banks.

Every day now, thousands of people all over the U.S. and Great Britain are walking away from their homes - simply mailing their house keys to the banks - as housing bailout plans fail.
With unemployment growing, the next phase will hit commercial real estate making the financial institutions the unwilling owners not only of quickly depreciating houses, but also of empty strip malls and even larger shopping centres.

The next domino to fall will be credit card defaults, and after that... who knows? There are so many exotic funds out there, with trillions of dollars in paper - or rather computer-screen money - all carrying assorted acronyms, and all about to disintegrate into nothingness. Over the next couple of years, scores of banks that have thrived on these devices, based on quickly disappearing equities, will fail.

The most frightening forecast so far comes from the Global Europe Anticipation Bulletin (GEAB), available for 200 euros - about $300 - for 16 issues annually. Its prediction is quite specific.

Where my warnings never spelled out an exact date, this think tank has it pegged precisely. Here are its very words:
"The end of the third quarter of 2008 (thus late September, a mere seven months from now) will be marked by a new tipping point in the unfolding of the global systemic crisis.
"At that time indeed, the cumulated impact of the various sequences of the crisis will reach its maximum strength and affect decisively the very heart of the systems concerned, on the front line of which (is) the United States, epicentre of the current crisis.
"In the United States, this new tipping point will translate into - get this - a collapse of the real economy, (the) final socio-economic stage of the serial bursting of the housing and financial bubbles and of the pursuance of the U.S. dollar fall. The collapse of U.S. real economy means the virtual freeze of the American economic machinery: private and public bankruptcies in large numbers, companies and public services closing down."

The report goes on to say that we are entering a period for which there is no historic precedent. Any comparisons with previous situations in our modern economy are invalid.
We are not experiencing a "remake" of the 1929 crisis nor a repetition of the 1970s oil crises or 1987 stock market crisis.

What we will have, instead, is truly a global momentous threat - a true turning point affecting the entire planet and questioning the very foundations of the international system upon which the world was organized in the last decades.

The report emphasizes that it is, first and foremost, in the United States where this historic happening is taking an unprecedented shape (the authors call it "Very Great U.S. Depression").
It continues to predict that, although this crucial event is global, it will be the beginning of an economic 'decoupling' between the U.S. and the rest of the world. However, non 'decoupled' economies will be dragged down the U.S. negative spiral.

Concerning stock markets, the GEAB anticipates that international stocks would plummet by 40 to 80 per cent depending where in the world they are located, all affected in the course of the year 2008 by the collapse of the real economy in the U.S. by the end of summer.
The European authors of this report - it appears simultaneously in French, German and English - state that they simply and without prejudice try to describe in advance the consequences of the ominous trends at play in this 21st-century world, and to share these with their readers, so that they can take the proper means to protect themselves from the most negative effects.

So there you have it. Three reports from three different sources, all well regarded, and all pointing to a disastrous fall-out from our monetary moves.

[Johann]

It seems terrible to read about it, that now the major economists of the world are predicting the collapse of the structure on which our lives seem to be based on. But this is really what a number of sincere readers of Biblical prophecy have foreseen, that the world security will collapse, and political leaders will finally give up and let the religious guru take over. He might introduce religious legislation the world has never heard of, judging all those who will not adhere to what the system requires of them in worship.

When the world collapses, then our Lord will come and redeem His people. So there  is hope, not in ourselves nor in the ability of our best financial experts. Our hope is based on our Lord and Saviour Jesus Christ.

[Gailon Arthur Joy]

Amen

GAJ

[Johann]

Everything seemed to collapse here in Iceland until the National Bank Director increased the interest rate suddenly to 15% and that changed the situation suddenly. Prices on the stock market soared and prices on fuel and other commodities fell immediately. But for how long? How long can we live with such a high interest rate that no property is sold?

[Gailon Arthur Joy]

Everything seemed to collapse here in Iceland until the National Bank Director increased the interest rate suddenly to 15% and that changed the situation suddenly. Prices on the stock market soared and prices on fuel and other commodities fell immediately. But for how long? How long can we live with such a high interest rate that no property is sold?

Actually, property will sell, but at a more moderate price that can handle the interest rates. This will fuel pent up demand and when the rates can justifiably
recede the economy will be the stronger. Paul Volcker did this in the United States in 1980 through 1981 and we had a discount rate of 17.5%. This brought inflation to a dead stop and we were well on our way to the Reagan Golden Years.

The economy is a bit like a pendulum and moves from extreme to extreme in cycles,
but one day, it will just collapse!!! The pendulum will stop and will simply leave us without any clarity and no real business confidence. The irony is that the consumers continue to spend as if there is no end, as long as they have the mark of the beast in their forehead.

The rest of us will be too busy giving the load cry to care!!!

Gailon Arthur Joy

[marcand]

This is an article I shared with a few people on my email list last month.  Some were offended that I was reading and using a non-adventist author, and one in particular questioned whether or not the Adventist end time events even called for an economic issue at all.  Anyway, I would welcome your feedback on this article, and the economic issues it addresses:

Dear Friends,

I'm re-reading an older book right now on financial issues that was published in 1991.  17 years ago a Christian financial adviser, Larry Burkett, published the book called, "The Coming Economic Earthquake" through Moody Press.  It was voted the book of the year for 1992 by the Evangelical Christian Publishers Association.  Larry Burkett was the founder of Crown Financial ministries, a financial counseling service that has helped many thousands around the world get out of debt and get on to a sound financial footing.

When Larry published this book, he felt like we would see this great crisis culminate by the end of the 1990s.  While we did see the tech bubble burst (aka the dot com collapse), it was nowhere near what he predicted in the book, and really wasn't based on the indicators that he gave.  Unfortunately for America, it has continued down the path of least resistance, and continues to plot toward an ever looming financial crisis that could destroy our country as we know it.

While Larry has passed away, his message lives on in this book.  I feel that this is of such vital importance that I wanted to share with you the indicators that he foresaw as signposts that we were heading toward an impending financial crisis of a magnitude that few can envision.  Here are the indicators that he gives, with page reference to the book, and my closing comments afterwards.

Early Indicators

   1. The deficit cannot be funded by additional borrowing.  - "Once the limit to which foreign investors will fund the U.S. debt is reached, a monetary crisis is not far off.  Two factors can create this crisis.  First, foreign investors may see the U.S. government as a bad risk ... that the value of the dollar is falling faster than the return on their investment." - pp 161-162
   2. Monetizing the debt. - "The printing of money with no equity banking is essentially counterfeiting by the government. ... The treasury notes now in circulation have no real collateral behind them other than the holder's confidence in our government.  ... It should be noted here that the printing of money to pay the government's bills will be one of the last, and certainly the most desperate measures, because of the severity of the consequences." - pp 164-167
   3. Taxes, taxes, taxes. - "When you see an increase in taxes, ... you know the politicians are desperate. ... The more visible the tax, ... the more desperate they are for money.  When they dip down into the pockets of the low-income groups through taxes on food, gasoline, and medicine, the end is nearing." - pp 170

The Final Warnings

   1. Banking Crisis - "Banks are private companies that make their money in the lending business. ... Once the number of bad loans exceeds the statistical number necessary to repay the depositors' interest, the banks will fail without government intervention.  This crack in the economy will be highly publicized because it will swallow up hundreds of banks, ... and will require ... more in additional government subsidies." - pp 177
   2. Business Failures and Departures - "When the additional factors of mandatory health insurance, workers compensation, liability insurance, property taxes, inventory taxes, and eventually value-added taxes are dumped on the small and medium sized businesses, we will see some massive failures." - pp 179
   3. The Denial Syndrome - "Even if the evidence indicates bank failures, business failures, and desperate efforts on the part of federal and state governments to raise funds, you can be sure the information coming out of Washington will be upbeat and positive. ... The more vehement the denials, the bigger the potential crisis." - pp 180

Well, it's not that hard to see where we're at, is it?  I would say that all three early indicators are well on their way ... and even # 3 on the final warnings list (of course, that will be on-going).  Let me explain what I mean.

Point # 1 - the U.S. dollar is at an all-time low against most foreign currencies.  The dollar has been passed by Canada's currency as well as the Euro.  In fact, it now takes over $1.50 to get $1Euro!!!  This is a complete reversal of the exchange rate of European currencies from 16 years ago when I was stationed in Germany.  Back then, we could buy $1.50 German marks for $1.00 - sometimes more!  Does this bother other countries?  The ones who fund our debt, you better believe it!  Even OPEC is considering the idea of changing the currency against which the price of oil is set - to the Euro.  This would help many countries, but would end up hurting the U.S. as China and other "funders" of our debt dump trillions of U.S. dollars into the market in exchange for Euros.  The deluge of dollars on the market would drive the value to a point that will make the "Amero" and a "North American Union" look great - even to those of us in the good ol' USA.

Point # 2 - We are printing money now to fund the debt of the U.S. government and to prevent insolvency of American banking institutions.  Just over two years ago the government stopped publishing a key economic indicator, known as the M3.  The M3 was a measurement of the amount of currency in circulation.  At the time, we had about $10 Trillion dollars of actual cash money in circulation world wide.  Since that time, for those of you who haven't been keeping track, we've "printed" out of thin air another $4 Trillion dollars in currency to prop up our ever-falling economy.  So, in essence, we've increased the cash flow over the past two years by a whopping 40%!!!  The scariest part of all is that the government purposely stopped publishing the exact number just prior to doing this - claiming that the circulation number never really meant anything anyway!!! Wake up folks - the time is NOW.

Point # 3 - While I haven't seen a large increase in taxes, the price of everything is going up in relation to soaring costs of fuel and transportation.  As a result, the actual revenues of taxes off of products goes up as well, since it is a % of the sales price.  If you see an increase across the board in prices, you just saw an increase across the board in tax revenues as well.  While I think there will be more real taxes to follow, this is another way of squeezing more money to fund a failing government system.

I sincerely hope that you've stuck with me through this whole email.  I know that alarm bells have been ringing for years, but I truly believe we are on the verge of a national, perhaps even global, economic crisis that will test the very mettle and fabric of our country.

As students of the Bible and Prophecy, we must believe that God is in control.  We are not to worry over these situations, but to proclaim the truth.  Brothers and sisters, these are signs of the times that we cannot, no, we must not ignore!  We have a duty as Christians to share the love and life of Jesus with as many people as we can before the close of Earth's history.  The time is now.  The crisis is upon us.  Don't wait until it is too late.  The time of preparation is now ... for personal consecration, as a family, and as a group of believers.  I hope you will take this message to heart and pray about what God would have you to do in order to be ready for this crisis.

In Christ,

Michael Arcand
Abundant Rest Ministries
www.abundantrest.org

[Bob Pickle]

Hi Michael.

Ed Reid I think thinks a lot of Larry Burkett. I thought I heard that he had some sort of Adventist tie.

"It will be declared that men are offending God by the violation of the Sunday sabbath; that this sin has brought calamities which will not cease until Sunday observance shall be strictly enforced; and that those who present the claims of the fourth commandment, thus destroying reverence for Sunday, are troublers of the people, preventing their restoration to divine favor and temporal prosperity" (GC 590).

We Adventists aren't as knowledgeable as we might think. Your being told that the Adventist scenario doesn't include an economic component illustrates that. The above was first written in 1884, with slightly different wording. Thus it has been part of our scenario for at least 124 years.

[Gailon Arthur Joy]

Hi Michael.

Ed Reid I think thinks a lot of Larry Burkett. I thought I heard that he had some sort of Adventist tie.

"It will be declared that men are offending God by the violation of the Sunday sabbath; that this sin has brought calamities which will not cease until Sunday observance shall be strictly enforced; and that those who present the claims of the fourth commandment, thus destroying reverence for Sunday, are troublers of the people, preventing their restoration to divine favor and temporal prosperity" (GC 590).

We Adventists aren't as knowledgeable as we might think. Your being told that the Adventist scenario doesn't include an economic component illustrates that. The above was first written in 1884, with slightly different wording. Thus it has been part of our scenario for at least 124 years.

Burkett was not as wrong as you would think. I lived through the Asian contagion which was an in miniature for the fiancial messes we face today. THe Asian Contagion became a serious problem beginning in August 1998 and was not abated until the Fed opened the Window to Hedge Fund Tiger International and another that werre unraveling at such a fast rate that it nearly tipped into worldwide economic collapse in October 1998.

Hedge funds are best described as legitimate Pyramid Schemes. You put together a capital group that raises a billion dollars. You invest that Billion in any guaranteed interest bearing instrument at say a 7% plus interest. You then take the that Billion Dollars worth of, say Mortgage Backed Securities, and place it as collateral at a depositiory bank that will lend 90% of value with an interest rate that is at least 2% below the the MBS tranches, in Japan in 1998 you could borrow at 2%. You borrow 90% or $900MM at below 5% and then buy $900MM more securities, take them back to a bank, borrow 90% (another $810MM) at less than 5% and buy more securities at 7% plus, leverage 90% or %720MM...ad infinitum until you get to a level where you are leveraged 20 to one. Now, understand that since each level increases the 1Billion capital fund base return on investment by 2% or better until it is fully pyramid invested. The base 7% goes up at least 2% for each level and you can reach what would appear to be 20 to 30% returns on investment.

Now for the problem: The pyramid is built on the Value of MBS which must be marked to market and if the security grade collapses from defaults or other issues, the pyramid can unravel very quickly and be come worthless, ie: Bear Stearns, et al. As more loans unravel, the more the hedge funds unravel and the more they must sell to save themselves from virtual collapse.

Now, in 1998 there were two major hedge funds that came apart and swamped the market with billions in treasury notes (yes, they bought us treasuries at 7% and leveraged them in Japan with 2% money. The Fed simply stepped to the windo, reluctantly, and bought $180Billion in US Treasuries and mopped up the surplus treasuries.

Go forward to 2006 and now you have hundreds of hedge funds and the pyramids are built on a load of alternative hybrid loans and sub-prime loans that included terms and conditions that trip-wired huge increases in interest rates and in come cases negatively amortized (added deferred interest, which the bank took as earned interest, and put it the back end of you loan adding to the balance of your loan so that in many cases you would be "Upside down" or owed more than your property was worth). As mortgage defaults built momentum, the pillars of those hedge funds began to collapse and finally no-one want to buy the problem which meant they were illiquid and collapsed as banks tried to protect their hedged loans. Add to this the repeal of the Glass Segal Act that seperated the Investment Banks from mortgage banking and depository banks, add the greed of Invetsment banks that wanted a bigger peice of the profit pie and bought subprime lenders by the dozens to get economies of scale and you have a perfect storm.

Now you know why so many depository banks are taking hits as well as the investment banks and the GSE"s.   

Now, what we do not know is whether the Fed coming in has really permanently resolved the market crash (illiquidity) as we still have billions in adjustables that are upside down, billions more that are in default, the Feb has exchanged $280BB US Treasuries for investment grade mortgages but will ultimately need to be repaid or we, the taxpayers, will end up responsible for this loan(yes, we pay the interest and principal of US Treasuries). And if liquidity is not available, then just how many other Billions will have to be exchanged to keep the market liquid? And what can be done to stop the bleed of defaulting and foreclosing mortgages with there being little if any real estate equity for the banking community to help borrowers? And what will happen with all those households that have defaulted as rates adjust upward and crush the family budget between inflationary fuel and food costs and increasing monthly mortgage payments?

The point is Burkett was right, just a little ahead of his time!!!

Humpty Dumpty fell off the wall...all the kings men and all the kings horses couldn't put Humpty Dumpty Back together again... Are we there??? Time will tell and that is why European Economists have suggested that the true value of our efforts will be known as we get to the end of the third quarter and begin the fourth quarter. If we are still seeing illiquidity in October it is likely we will go into another great depression but at a magnitude that is more problematic as we are so bloody spoiled. Better have a friend with a farm or some rural location that can survive as we do not know what the mass of deprived population will be willing to do to solve fundemental questions but you will definitely be better off with a rural location and a nice big garden.

In fact, I would plant a garden this very spring or it could be a very long winter!!! Include a lot of less parishable foods such as corn, squash, turnips, carrots and other root plants. And I would plant far more than normal as you are not planning for a picnic...this is about survival.

Gailon Arthur Joy

[roxe]

I have a serious question on this topic. I'm not trying to be silly; but would like serious discussion.

Just before Thanksgiving 1999, I was led to the texts in Luke 17 where Jesus states that as it was in the days of Noah and Lot, so shall it be in the days of the coming of the Son of man.(my words)

Reading in Patriarchs and Prophets about Noah's days and Lot's days, I find that the people outside the ark were eating, drinking, marrying, giving in marriage, building, planting, etc. It is also stated that when the angels were hurrying Lot, Mrs. Lot and the two girls outside the city, the dwellers on the plain were planning their financial etc., day.

The economy didn't collapse in Noah's day until the 8th day when the rain began to fall. In Lot's day it didn't collapse until the fire fell.

Isn't there texts in Isaiah where it is talking about the second coming, and it states something to the effect that when Jesus is on the cloud above the earth, then the gold and silver will be thrown to the bats and moles??

Doesn't Jesus also say someplace that seedtime and harvest will remain until the end??

I'm confused about all this... please help me out.

I would appreciate Bible texts, SOP texts, etc... not just off the top of your heads, but serious thinking. OK??



roxe

[roxe]

At the end of 1999, I "accidently" became a member of a private forum set up for IT people and programmers who were working around the world trying to get all the code fixed. After realizing that somehow I was a member there who should not be, I kept my mouth shut and just read!

They were telling about their camps in the woods, guns, ammo, food etc., that they were going to use cuz the code would not be fixed and their testing showed that it would be total chaos.

I even tested my own computer BIOS with two different programs, plus manually. All three testings showed my BIOS date would go back to 1970. But that I would be able to go in and change it and then everything would work.

That was when I was led to the texts above and reading in PP about Noah's and Lot's days.

I stayed home on the 31st of December, watching on the 'net as midnight came around Australia, Japan, HongKong, Singapore, Berlin, Paris, and London. And NOTHING was happening!!

I was into the private forum also, and the programmers just couldn't understand what was happening!! They were freaking out as to what was going on!!

I shut my computer off before sunset; went to church the next day; got home around 3:30pm. I went into my BIOS just to see what had happened with it; and what date do you think it said??

roxe

corrected misspelling.

[scratsmom]

International experts foresee collapse of U.S. economy
By Hielema, Bert

etc, etc, etc...

OK. I am sure I am in the minority here--maybe even the only one, but after hearing that everything that happens is "a sign of the time of the end" for my entire life, after my grandparents didn't think time would last long enough to have children of their own, (I am 4th generation Adventist) after every economic downturn, every papal visit, every politician who has far right or Catholic ties is "going to bring about the end..." does anyone besides me become weary of the doomsday predictions? If I counted up all the dire warnings I have heard and read and got $1 for each one of them, I would be rich.

I am not saying that "the end" is not going to happen someday, but do we need to keep up a certain level of adrenalin to motivate us to be Christians? If you absolutely knew that the end would not come in your lifetime, would that affect your motivation to have a relationship with God? Does the groom have to scare the bride into getting ready? I have known people who needed their frequent dose of "end time scenarios" in order to stay on track.

I am not assuming that anyone here is like that--just can't help but wonder if I am the only one who is not motivated spiritually by another negative financial prediction or another meeting between a political and a religious leader.

scratsmom

[Maxey]

International experts foresee collapse of U.S. economy
By Hielema, Bert

etc, etc, etc...

OK. I am sure I am in the minority here--maybe even the only one, but after hearing that everything that happens is "a sign of the time of the end" for my entire life, after my grandparents didn't think time would last long enough to have children of their own, (I am 4th generation Adventist) after every economic downturn, every papal visit, every politician who has far right or Catholic ties is "going to bring about the end..." does anyone besides me become weary of the doomsday predictions? If I counted up all the dire warnings I have heard and read and got $1 for each one of them, I would be rich.

I am not saying that "the end" is not going to happen someday, but do we need to keep up a certain level of adrenalin to motivate us to be Christians? If you absolutely knew that the end would not come in your lifetime, would that affect your motivation to have a relationship with God? Does the groom have to scare the bride into getting ready? I have known people who needed their frequent dose of "end time scenarios" in order to stay on track.

I am not assuming that anyone here is like that--just can't help but wonder if I am the only one who is not motivated spiritually by another negative financial prediction or another meeting between a political and a religious leader.

scratsmom

I would have to agree with your assessment sratsmom.  I've found my time is best spent on working on my personal relationship with the Lord.  Bad stuff is for sure going to continue to happen and there isn't much I can do about it.  What I can do is be at peace.

Maxey

[Fair Havens]

am not saying that "the end" is not going to happen someday, but do we need to keep up a certain level of adrenalin to motivate us to be Christians? If you absolutely knew that the end would not come in your lifetime, would that affect your motivation to have a relationship with God? Does the groom have to scare the bride into getting ready? I have known people who needed their frequent dose of "end time scenarios" in order to stay on track

This thought has often occupied my mind in the time since I became a SDA. I have come to the conclusion that I must love the Lord and occupy myself with demonstrating that love in my relationships with people - those whom I love and who love me but especially with those whom I find difficult to love.  This harks back of course, to Jesus' command to love the Lord with OUR ALL and our neighbor as ourself.  The rest - Sunday Laws, persecutions that may arise therefrom, etc., I leave to Jesus' promise that His Spirit will be with us to give us the words, the strength to endure. What I need to do is to Study the Word and not merely what others say about Him. (John 5:39)  The Apostle Paul wrote to his protege Timothy (1Tim.4:13) "Give attendance to reading ..." Let us have close connection with our God and He will take care if the rest.

[scratsmom]

[/quote]

I would have to agree with your assessment sratsmom.  I've found my time is best spent on working on my personal relationship with the Lord.  Bad stuff is for sure going to continue to happen and there isn't much I can do about it.  What I can do is be at peace.

Maxey
[/quote]

I find it interesting that each generation reaches a point where they think that "This is the worst it has ever been!" Or "The worst it has ever been is about to happen!". Yes, I know that at some point the ToT "such as never was" will arrive, but we here really don't know "worst". I interview senior citizens in my job, and the "good ole' days" weren't, for the most part. They worked like dogs, had tragedy and hardship like most of us will never know, and lived to tell about it. World Wars, hostile working conditions, etc. We have had it so good that we don't even know what hardship is.
scratsmom

[scratsmom]

am not saying that "the end" is not going to happen someday, but do we need to keep up a certain level of adrenalin to motivate us to be Christians? If you absolutely knew that the end would not come in your lifetime, would that affect your motivation to have a relationship with God? Does the groom have to scare the bride into getting ready? I have known people who needed their frequent dose of "end time scenarios" in order to stay on track

This thought has often occupied my mind in the time since I became a SDA. I have come to the conclusion that I must love the Lord and occupy myself with demonstrating that love in my relationships with people - those whom I love and who love me but especially with those whom I find difficult to love.  This harks back of course, to Jesus' command to love the Lord with OUR ALL and our neighbor as ourself.  The rest - Sunday Laws, persecutions that may arise therefrom, etc., I leave to Jesus' promise that His Spirit will be with us to give us the words, the strength to endure. What I need to do is to Study the Word and not merely what others say about Him. (John 5:39)  The Apostle Paul wrote to his protege Timothy (1Tim.4:13) "Give attendance to reading ..." Let us have close connection with our God and He will take care if the rest.

I like your perspective...

scratsmom