The Recession is Over…or is it?
by Dene McGriff
This
morning the Federal Reserve Chairman, Ben
Bernanke said, “From a technical standpoint, the recession
is very likely over at this point!” Well hooray!!! I’ve been sitting on the
sidelines waiting for this grand pronouncement! Pardon me for a moment while I
lose my lunch – it was leftovers anyway. I’m sorry but this just screamed for
a response. How on earth could a Princeton professor with his doctorate in
economics and his specialty in the Great Depression be so incredibly clueless
while we ordinary folk say, “what”? “From a technical standpoint?” That’s
like going to a doctor who tells you “your cancer has stabilized but
technically you’re healthy…” Wow! What does that mean?
I’ve been mulling this over in my head for months, and even though I have written a lot on the economy over the past few years (found on our website), yet recently I’ve just been waiting to see what happens. Bernanke’s statement was based on the fact that there was an increase in retail sales in August (of course, the government is pumping billions into the economy in stimulus, “cash for clunkers”, house loan incentives, not to mention back to school shopping may have had a little to do with it). One would expect that trillions of dollars pumped into the economy would have some effect. The idea that experts, pundits and politicians are counting on the American consumer to consume more to lift up the economy is sooooo totally “American” and so illogical. We’ll get to all that in a moment. Things are looking good, right? Housing starts are up. The DOW is just a few points away from the 10,000 mark. Manufacturing is up. Unemployment is down (relatively speaking – not as many new claims each month). Banks are paying the government back. And, although the FHA (Federal Housing Authority is falling less than 2% on their reserves and 14% of their homes are severely behind in payments – all the while they’re looking for a federal bailout themselves), things are really looking up, right? Repeat after me: The recession is over – long live the government bailouts!
So what is it, recovery or more bust? We need to view economic trends with a broader time horizon. It takes many years for things to change. We will look at this recession in terms of a historical comparison with the Great Depression. The market “recovered” and fell back many times. Then we will look at Japan, a more modern example of a country in depression – a devaluation that has lasted nearly 20 years and has no end in sight. We will look at unemployment, production, banking to include housing, commercial, credit and government debt and their effects on the economy. And finally we will examine the reasons why recessions (contractions) occur and the valuable function they perform. The fact that the government is doing the wrong thing, more of the same and not allowing this readjustment will not only slow any recovery, but may in all probability lead to the complete destruction of the current world economic system opening the way for something far more sinister as we see in the prophetic Scriptures.
From Sound Bites to Trends
Most people are hopeful and trusting. They want to believe they are being told the truth. They live in the here and now and don’t think much about the past or the future. We live in the present even though there are waves of change sweeping over us. We’ve moved from hand written letters, to typed letters, to email, chat rooms and message boards, to face book to texting, to twitter; from talking on the porch, to telephones, to Skype, to I-phones, 3G and Bluetooth. We live in the moment. We react in the moment. We collect sound bites and form opinions. As long as we have a roof over our heads, a job, a car, we don’t seem to realize things are changing around us and we’re working longer and harder and are a little more stressed each day about our future. But it is just a nagging feeling, not something we can put into words enough to alarm us.
The world changes slowly and our time here passes quickly. It took nearly 200 years for America to achieve the zenith of her wealth and power and it may take another hundred more years for her to lose it. If we look at the history of empires, we see them following a life cycle of growth, domination, over extension and decline. Empires have risen all over the world – from the Aztecs and Mayans, to the Huns and great dynasties of China, the Greek, Persian, Roman up to the Spanish, Russian, British and American empires. One of the longest lasting was the Roman Empire which lasted 1,000 years and took hundreds of years to “fall.”
Typically, empires extend their political, military and economic power to bring peace and stability to the outlying areas that pay tribute to the central government. Meanwhile the seat of the empire stops producing and starts living off of the tribute from their territories, eventually relying on local mercenaries to maintain control. There is a life cycle associated with empires. Eventually they lose control and are bankrupted by their success (as in the case of Spain) or by the cost of holding it together.
But a single person living for 50 years in the middle of the Roman Empire doesn’t see the big picture. He just wants to survive and raise a family. And the fact is, things don’t change that much. What matters are the people we see and things we do each day. The average person just lives in his little corner of the world and gets by the best he can. Few learn from history and even fewer give much thought about the future. This gives rise to leaders who interpret the past for us and give us a vision of the future. The sheep follow their leaders who seem to instill confidence because of their certainty and apparent understanding of trends. Leaders manage the trend.
Why does the market keep going up day after day? The people who control banking, big business and government want it to. There is still tons of money sloshing around the world, plenty of governments printing money, creating money. This is part of the problem – a huge bubble of cash and debt that needs to be worked out of the system. And the leaders will do all they can to whitewash the news and try and make people feel better just to keep the game going. Since we live in the moment, every little tick up is treated as a major victory.
How Long will it Last?
People who read about
the Great Depression have the impression that the stock market fell like a rock
in October of 1929 and never came back until after the war. The fact is, there
were many ups and downs and many cheer leaders declaring a recovery. Here are
some headlines from Joliett,
Illinois:
· “Business Depression is light says Irving Fisher” (May 21, 1930)
· “Business on Uptrend Now says Henry Ford” (June 6, 1930)
· “Business Ill but Recovery is Under Way” (June 20, 1930)
· “Recovery from Depression is Seen for US” (October 26, 1930)
· “Bright Hope for Future is Seen in Prediction” (December 21, 1930)
· “Business on Mend, Hoover Survey Shows” (March 2, 1931)
· “Business Tide is Coming In Now Schwab says” (May 22, 1931)
· “Auto Sales Will Be Better This Year than Last” (January 30, 1931)
· “Price Advance to Mark Return to Prosperity” (January 2, 1932)
· “Track Clearing for Return of Better Times” (March 18, 1932)
We could go on and on with hundreds of examples as politicians and business tried to project hope. Here are some more familiar headlines:
· “City Reduces Force to Meet Crisis” (June 1, 1930)
· “City Employees Have not Been Paid in Months” (October 8, 1931)
· “Cut Teachers Pay 10 Percent in City Schools” (May 20, 1932)
· “Extend High School Vacation three Weeks” (November 30, 1932)
· “Forced to Leave Nation’s Capital Following Riot” (June 29, 1932)
· “Roosevelt Drafts Plan to Restore Financial Order” (March 6, 1933)
In the first three years of the Great Depression, there were six rallies and declines in the Dow. After the crash in October, the market rebounded by almost 48% (just as it has since last March) only to continue bouncing around until it finally bottomed out nearly three years later. But optimism remained as Wall Street and the government continued to hype the imminent recovery.
For those who think this will be over soon, remember a depression or recession is a reaction to a credit expansion. We have experienced the greatest credit expansion in history. This shows the total credit market debt as a percent of GDP. Notice the peak in the early 30’s and what it is today. It is very interesting to note that the economic cycles have averaged about 18 years. Eighteen years of boom or expansion and another 18 years of contraction.
18 YEAR CYCLES
Expansion 1911—1929 Through WWI and the “roaring 20’s”
Contraction 1929—1947 The crash, the Great Depression and WWII
Expansion 1947—1965 The boom rebuilding years following WWII
Contraction 1965—1983 Contraction, recession and high interest rates
Expansion 1983—2001 Beginning of the bubble era, S&L ending with dotcoms
Contraction 2001—2019 Mass credit infusions - more bubbles begin to burst leading to housing, banking and debt crisis
The eighteen year cycle shows that it takes a long time to reestablish equilibrium in the economy, especially when the government is trying to prevent the pain, making matters only worse. It takes time to cause a mess and time to clean it up. Don’t expect things to improve any time soon. So how do we get out of this mess?
Is There Recovery?
How do the experts see the US coming out of this recession? They argue that seventy percent of our economy is based on consuming so consumers must begin consuming again! Saving takes money out of circulation. The key is to prime the pump and getting people spending again. But wait a minute? What got us into this mess in the first place? We stopped producing. Lacking real income, we used credit cards and home equity to buy more stuff until we ran out of money. The question is do you create wealth by producing or consuming? Where do consumers who are already in debt, losing their jobs and underwater in their mortgages, maxed out on their credit cards, find money to spend?
As Eric Fry said in the Daily Reckoning,
“Only in mythology can a snake sustain itself by swallowing its own tail. Only in the logic of central banking can a nation sustain itself by purchasing its own bonds with a currency that the nation prints for itself. This process is utterly asinine, utterly ridiculous and utterly doomed to failure. The world simply does not work this way, no matter how many Harvard MBAs and Wall Street strategists argue the contrary. …All that debt is a big fat drag on growth.
“Do the math. Over the last three decades, we've taken the greatest industrial nation in history... and traded it off piece by piece. In its place, we became the world's #1 shopping nation. Not producers but consumers/shoppers!
“A quick recovery is impossible. The law of personal and financial responsibility is as irreversible as the law of gravity. And it's a problem that no bureaucrat — no matter how popular — and no multi-billion dollar bailout — no matter how large — can fix.”
It took us years to accumulate this debt and it won’t get better until it is paid down. Unfortunately, the government way is to print money and pump it into the economy, inflate us out of the problem and pay debt off with cheap dollars. Inflation is the most deleterious, insidious tax we ever pay. Is the house where I grew up in Southern California really worth a half million more than the $10,000 my parents originally paid for it or has the dollar lost that much in value?
How does the economy naturally adjust these imbalances? We have produced too much, gone deep into debt. Businesses need to go broke. Consumers need to save and have real money to spend (not more credit). Government’s willingness to print money and provide cheap credit has been the engine that grew the whole world economy. Today, consumers have started saving. Banks are not lending. Prices are going down. The game is over. Recovery cannot come with a shrinking economy, increasing unemployment and mounting deficits.
We saw that in spite of the efforts of the Hoover and Roosevelt administrations (deficits, low interest rates, government spending, etc.) the Great Depression got progressively worse and did not return to pre-crash levels for 25 years. The distortion of the economy is far worse today than it was then. These are long cycles and you don’t get through them in a few months. It takes many years for these adjustments to be made and even more so when the distortion is great. We are carelessly running deficits never seen in the history of mankind. But there “is no free lunch.” The books have to balance. And hyperinflation of currency is a dangerous and destructive way out.
Prime the Pump – Stimulate the Economy – Sucker Rallies
Governments around the world have embraced the formula: lower interest rates, deficit spend and create more currency. They genuinely believe that this formula works. Bernanke believes that a quicker, more robust response during the Great Depression would have dampened its effect. Examine the figures yourself. All the stimulus of the world did not get the US out of the Great Depression. Only the war did.
A depression is always preceded by an expansion followed by a contraction in the money supply. The Fed probably did head off a crash for the time being with a $12 trillion injection into the economy and banking system but at what cost long term? Does the stimulus such as “cash for clunkers” work? Sure it does in the short run. Part of the problem goes back to what I said in the beginning. We live in the moment. Less bad news has become good news. Artificial bumps in the economy are perceived as real improvement and people flood back into the market – called “sucker rallies”. Insiders are selling.
Any improvements today in the US economy can be directly attributed to the massive amounts of money creation and stimulus. Nearly $800 billion is being released in stimulus funds. There is an $8,000 tax incentive to buy a house. This fall there will be a $200 incentive to trade in older appliances. The “cash for clunkers” only moved automotive inventory but saddled people with more debt for the next 5 to 7 years—a short term injection with long term consequences.
There is a difference between private and public spending. The public sector is adding $150 billion in debt per month that has to be paid back. Government spending is not real prosperity. It may look like recovery but it doesn’t produce any lasting value. It sucks the life out of the economy. It is money borrowed just like consumers borrowed from their houses to spend – money they didn’t have and now has to be paid back. How can this be sustained? Government and private debt can’t go on forever, and eventually has to be paid back with interest.
Over the past 20 years, Japan has tried to spend its way out of recession and each time there was a bounce, but then it settled even lower each time. The chart on the immediate right shows Japanese stimulus. The chart to its right shows gains in the market followed by more downward movement. See the 20 years of false hopes as the Nikkei would sometimes regain over 62%, only to lose again. This coincides with government bailouts, public works programs, zero percent prime interest rates (free money) and the bailout of banks that should have failed. In spite of bond issues and government stimulus spending, the economy faltered and today is lower than ever. The Japanese passed 11 separate stimulus measures totaling some $30 trillion yen. Every time they introduced more stimulus, there was a temporary spike in the economy and then it fell back. It would have been better to just let the adjustments happen.
The Daily Reckoning observes,
“So, the Japanese
government put out money...and it was taken up by speculators, not by the real
economy. The speculators borrowed yen, at very low interest rates, and then
reinvested the money in go-go sectors elsewhere - such as the US dotcom bubble.
The yen became the world's "financing currency." If you wanted to
build a factory in China or speculate on Argentine bonds, you could begin by borrowing
cheap money from Japan. Thus, Japan contributed to a huge boom all over the
world. But not in Japan. The land of the rising sun never seemed to get up in
the morning. Property investors lost 80% of their money. Stock market investors
lost as much. Even now, nearly 20 years later, they're still 75% down.
“And now, along comes the United States of America with super-low lending
rates. But who's borrowing? Not the moms and pops of Middle America. They don't
have anything to borrow against. And the banks won't lend to them. The banks
need money for themselves. Besides, everybody knows the average household in
America is losing income.
“After losing 80 percent in its stock and housing markets, the economy is still shrinking 14 percent. The Japanese are caught between a rock and a hard place. Historically, their high personal savings have helped the government fund deficits but now their savings are shrinking down to nothing. One of the unintended consequences is that the Japanese population is aging with fewer workers to support the retirees. The older people have had to dip into savings. Now, the government will have to go to the world markets to fund their deficits and the interest rates on the borrowing will further crush their economy.”
The Loan Gambit (but watch out for the sharks!)
The US is playing a high stakes game. They are counting on other countries supporting the dollar because it is the world reserve currency. Recently some nations began calling for a new reserve currency other than the dollar. They see clearly that the US policy is a weaker dollar – the old game of borrow, inflate and pay back on the cheap. The Obama government is planning on nearly a trillion dollars of debt each year for the next 10 years, doubling the national debt. The trade deficit increased more last month than since 1999. This mainly is due to higher oil prices. All of these deficits need to be funded by loans, but what happens if the interest on those loans goes from two to four or even eight percent? This is not sustainable.
Our approach is to print dollars, cause inflation and cheaper dollars. But are the world’s lenders really that stupid and naive? The more we devalue the dollar, the greater return they are going to want. We need $150 billion a month just for the government deficit. All our creditors have to do is stop buying our bonds and we either have to pay higher interest or monetize it (print the money and buy it ourselves). The latter is a very high risk way of causing hyperinflation which is the beginning of the end for a currency. Welcome to Zimbabwe.
The United States has to sell trillions in bonds to
finance military actions, d
ebt and bailouts. The question is, is this
sustainable? How long can the US spend twice as much as it receives in tax
revenues? How long will other countries support a losing investment? As long
as the Fed is involved in “quantitative easing” – better known as monetizing
debt, printing money out of whole cloth and deflating the value of the dollar,
inflation threatens the bond market and our borrowing capacity.
The bottom line is you don’t pull yourself out of the worst recession since the Great Depression that was caused by reckless spending and borrowing with more reckless spending and borrowing. A nation creates wealth by producing, not by consuming. The irony of Revelation 18 should not be lost. In that chapter, it describes a great end time’s consumer nation that the world trades with by sea and all the merchants get wealthy by trading with her. She is the consumer nation. You make it and she buys it. Wow! If that isn’t the biggest prophetic elephant filling up the room, yet the prophetic pundits either don’t see it or refuse to see it.
Are There Any More Dominoes About to Fall?
Is the housing/banking crisis over? Just in case you think maybe we have hit bottom, let me disabuse you of that thought. The event that started this crisis was the subprime mortgage meltdown, but it is not over. There is much more to come. If we go back for the past 120 years, you see the inflation adjusted value of a home stays in the $100,000 range following the axiom that statistics revert to the mean. Some experts see another drop of 25 percent. The subprime mortgage was the tip of the iceberg.
There is another wave coming and it won’t even hit until next year, 2010. Alt-A loans are a little more credit worthy, but there are more of them as there are of the Option ARM. Both of these reset to a much higher interest rate. Now the government is trying to force mortgage companies to renegotiate these lows and either reduce the principle or the interest. According to one Fed Study, only 3 % of loans have been reworked.
With nearly one in five Americans out of a job (actual unemployment rate is nearing 17%), even prime loans are being foreclosed so that number is increasing as well. And just in case you hadn’t noticed the closed restaurants and stores and vacancies in strip and shopping malls, they are in trouble as well. The vacancy rate for office space is rising. Housing developments and office and industrial complexes were halted half way through or never even started.
According to the Rude Awakening, “The next shoe to drop of course is commercial real estate,” Lotsvin predicts. “There’s no doubt about it. It’s happening rapidly and furiously. What we see there is much more alarming than subprime. The size of the commercial real estate market in the United States is $3.5 trillion, versus $1.5 trillion of subprime. The banks hold on their balance sheets $1.7 trillion of the commercial real estate debt. And I want to draw your attention to one particular sub-segment of the commercial real estate market, that’s construction loans…”
It goes without saying that a person who is unemployed will have a hard time holding on to his house. We know that the unemployment rate (which means those drawing unemployment) is 9.7% nationwide (hitting a 26-yr. high). The government has another measurement called the “U6” Unemployment rate which includes the underemployed and “discouraged workers.” The only ones that are technically “unemployed” are those drawing unemployment. Those whose unemployment has run out or who have given up looking fall into this category. True unemployment may be over 20% and it is increasing by the day. (Great Depression unemployment rose to nearly 25% - check out the charts below and the real photos of “the depressed.”)
All you have to do is look at your local paper or read about the workers being laid off from the state, county, city, police, fire, teachers. Here in California State workers are furloughed three days a month (a 14 percent cut in pay). Over 100 state parks are being closed in California. Local parks and attractions are being shut down and yes, tent cities are sprouting (or trying to) here in Sacramento. “Loaves and Fishes” – a private charity – is serving more meals than ever. Homeless are being given citations for illegal camping (even when they have the owner’s permission to stay on their property).
The establishment wants the charade to continue at any cost, so they hype even the bad news and get the market up. But the fact of the matter is the fundamentals are terrible. There isn’t enough money in the world to fix the banks, undo the derivatives or get the public to consume.
“Total world derivatives are $1000 trillion or 19 times the total world GDP of $54 trillion. Over-the-counter derivatives total $684 trillion of which 67 percent are interest rate swaps. Exchange-traded derivatives total $344 trillion. Interest rate swaps are the largest derivative powder keg waiting to blow the world financial markets to supernova.” (Derivatives Powder Keg Threatens Economy, by Chuck Burr, Feb. 20, 2009 @ Culturechange.com)
The Phony Housing Recovery, cir. 2009
Of course, you’ve heard of late that the housing market is beginning to recover – well, I’ve got news for you…what you’re seeing out there are large and small mom and pop-type investor groups who are buying large bulk inventories; their hope: Make a killing in the market, give or take four or five years from now.
According to Housing Predictor the mini-boom now going on in housing is nothing more than a buying frenzy created by lower interest rates. This little “financial ditty” was discovered by a brief study which determined that hedge funds operated by the same Wall Street bandits of yesteryear were found amassing millions of dollars and going out onto the foreclosed marketplace picking up on wholesale prices – pennies on the dollar in some cases.
Here, under the guidance of the same characters who stole our money fair and square during the “banking bubble” (which bubble is still popping) you’ve got groups of so-called “sophisticated investors” with big bucks being hustled by clever Wall Street thugs dressed in pinstripe suits playing a game called “If you Snooze you Lose!” It’s like the old sales game when “Venture Capital” was big business. I used to know such a firm – the logo was quite revealing: Two buzzards sitting on an old fence overlooking a piece of fresh meat on the ground – a rather sterling example of what they were about!
Now we have these investor groups wagering their sophisticated funds via their trained Wall Street banditos (known as hedge fund managers) going out and about to auction houses and picking off the depressed market – from banks, our beloved Wells Fargo and, of course, from the friendly folks at Fannie Mae – all more than pleased to accommodate the sophisticates. Listen to what Kevin Chiu’s investigative reporting has turned up over on Housing Predictor:
“Dozens of bulk sales under $5-million have closed with buyers, most of whom make the purchases before even seeing the property in person. Homes are selling for as little as $1,000 each. However, there's a catch for investors that few seem to realize. An Oakland, California group is in the midst of a buying frenzy in Contra Costa County in the Bay Area's East Bay, picking up single family homes for roughly $100,000 each. They're putting their trust in the belief that the housing market will somehow bounce back in five years, doubling their investment.” (Groups Buying up Foreclosures, by Kevin Chiu, Housing Predictor, Sept. 19, 2009)
Chui Concludes: In these
times of economic uncertainly when Wall Street and the bankers messed up
the entire world's financial system is it really a good time to put your money
on a gamble like this? (Ibid.)
Well, with all the Federal bailout monies flowing into the banks (to keep them solvent, of course) banks can now unload their toxic paper to these, shall we say, really smart investors, who like the Kennedys and my own uncle, hit it rich during the Depression doing the very same thing (dear old uncle bought up downtown Corpus Christi, TX and made a killing) – check out this “uncle” and you can see what’s going on here:
“James O. Barnes of South Carolina is one happy investor, who paid $1.2-million to take 800 homes off the hands of troubled Fannie Mae. The homes were located in five states, including Michigan, Indiana, Tennessee and Ohio in some of the markets that have been savaged by the real estate downturn. He's making sizable profits on re-sales already selling the properties to new homeowners.” (Ibid.)
Now, today’s Kennedys, my dear uncle and the likes of James O. Barnes of South Carolina, akin to the firm known as Vulture Capital await their morsels – and believe me, there’s PLENTY MORE where that came from! You see, “the merchants of the earth” as the Bible says, “are made rich off her!”
We have the perfect storm. The huge public debt, deficits, weakening dollar, unemployment, the housing crisis and the monster “derivative bubble” – all feeding on one another. The fact is after 40 years of excess, the economic system needs to be cleaned up and rebooted. The question is, will the powers that be allow this to happen or will they continue to throw more money and credit only making matters worse? Will they ever tell us the truth?
Banks are paying back the TARP funds. Their stock is rising again. Beware of the locust who, when banding together change their colors for the assault! This is sleight of hand. They changed the accounting rules. Loans used to be “marked to market.” If the loan on a piece of property was $500,000 and the value dropped to $200,000, they had to use the market price. Now they can keep it on their books at the full loan amount (So where’s the $300,000 in our example? Still on the books to make the banks look fat.). We see foreclosed properties all over town being held off the market. Why? Once they sell them, they have to take the hit on their bottom line and write the loan down to its actual value. This is but one example of the dishonest practice that goes on in the world of finance, but it has the effect of making things appear better than they are, and slowing the inevitable reckoning. The banking crisis has not been solved—just covered up with accounting smoke and mirrors. So, if you’re wondering why in your American, or for that matter, international market, fewer homes are making it appear that there is “less inventory” from which to buy (artificially attempting to prop up prices)…now you know why!
Conclusion
The population is aging. Wages are decreasing. Taxes are increasing. People are losing jobs. They are afraid. They are paying down their debt and beginning to save. The government is trying to entice them to spend (automobiles this month, appliances next month). Cheap money is available if you don’t need it (banks are being very stingy with credit). Oh, and we mustn’t forget we are still the cop of the world (spending nearly as much as all the nations of the world combined on “defense”). We failed to spend ourselves to prosperity. Now the government is trying. But every dollar spent by the government is mostly debt and for things we don’t really want or need. It takes money away from private investment and real production. Today, the government is over 25 percent of the economy and growing as it takes over banks, automobile companies, insurance companies and gets more involved in health care. Oh, there’s always the Obama copout: “I’m not in the banking business – this is a temporary stopgap measure until everything gets back to normal – I inherited this mess and mean to clean it up!” We are doing everything but producing something of value and spending ourselves into the deepest debt hole ever imagined. Notwithstanding all the tea parties and the conservative talking heads or radio mouths – let’s ramp it up one more notch and spend another $1-Trillion on health reform – that’ll do her.
Does
this mean America is going to fall apart tomorrow? Hardly. It took hundreds
of years for Rome to fall. Great Britain took a few decades, and surely
America will decline in time but it will take many years for this to all
unwind. Our economy is still many times the size of China and India. Our
accumulated wealth is still impressive but we are certainly doing everything we
can to shoot ourselves in the foot.
We are still the biggest economy, military and worldwide presence of any nation. But an empire as powerful as ours can do some strange things as it sees its wealth and power slipping away. We may establish vast military outposts in oil producing states south of Russia, establish ourselves in Iraq, Afghanistan even as we maintain a huge presence in Germany and Japan, and now South America, Australasia and Eastern Europe. We can try our best to control the wealth of the world (oil and other resources) and try and present ourselves as the defenders of truth, justice and the American way. But remember, cornered, hungry animals can do strange things…and there’s nothing like hunger after a full tummy.
Through all of this we need to keep a prophetic perspective. Things don’t just happen by accident. It is no accident that Israel is in the land and has become the lightning rod in an epic struggle between two great civilizations (viz. the West vs. Islam). Maybe you noticed that at the end of Ramadan, now known as Quds Day or Jerusalem Day, Islamic states around the globe held pro-Palestinian rallies while damning Israel and her Western allies, especially the USA. And, of course, Ahmadinejad, Iran’s illegal president (at least Hitler got in there legally), announced the FACT that the Holocaust never happened (thanks for the reminder)!
There is a great end time’s nation prophetically called “Babylon the Great.” It seems that many Christians are eager to find an excuse to discount America as having any role to play on the end time’s stage either because they can’t conceive of it or they are too attached to their country to even consider the possibility. They either see America as irrelevant, ready to give way to an Antichrist coming up out of the nations of the ancient Roman Empire as a result of Bible-believing Christians carted off in a Secret Rapture, or as “God’s Chosen Savior Nation” to bring His kingdom to earth come “hell or high water.”
The
main distinctive of the last days is deception. We have all been socialized or
more cynically speaking, programmed, to believe what we believe. The media and
all of society are geared to mold our opinion and reinforce its messages. You
will notice that, in spite of everything, the stock market keeps climbing. The
markets keep climbing and real estate seems to have bottomed. I watch the
pundits on CNBC and Fox Business News and am appalled as one “expert” economist
after another tells the public that things are improving – it’s mind over
matter, baby, and what matters is for the media to change your mind. We are
dealing with a stacked deck of cards and not to be conspiratorial, all I can
say is that they are all so clueless and eager to collect their pay checks;
they turn their brains off and spout the party line and the globalist,
corporate drivel incessantly flows as the gift that keeps on giving.
But above all, I caution readers. Don’t panic but get prepared – actually, I take that back – some of you out there need to panic if that’s what it takes to get real about what’s coming down here. Don’t expect the financial system to fall apart any time soon. The establishment will do everything they can to keep the game going and it may take years to unravel. Or, worse yet (prophets are never really celebrated for telling the truth out there), this whole economic fiasco appears headed for its American New World Order System rendezvous – “no one may buy or sell except one who has the mark, the name of the Beast” (Revelation 13:17).
Meanwhile, other things are happening in this three ring circus. Watch Israel come under even more pressure – and don’t be surprised if she unilaterally takes out Iran’s nuclear ambitions, and I mean real soon – she might wait until President Obama’s efforts to ply the Russians for more sanctions on Iran fall flat. Watch the church continue to fall away into contemplative prayer and other doctrinal hogwash. Watch America make desperate attempts to maintain its empire. Watch the merchants of the earth, under their leader, the King of Tyre, amass its wealth in the cleverest manner…and above all, get outside the box, think critically and ask God to reveal the truth to you.
And of Babylon’s ultimate judgment in Revelation 18 – we have the same with the King of Tyre and the city he built:
‘What city is like Tyre,
Destroyed in the midst of the sea?
33 ‘When your wares went out by
sea,
You satisfied many people;
You enriched the kings of the earth
With your many luxury goods and your
merchandise.
34 But you are broken by the
seas in the depths of the waters;
Your merchandise and the entire company
will fall in your midst.
35 All the inhabitants of the
isles will be astonished at you;
Their kings will be greatly afraid,
And their countenance will be
troubled.
36 The merchants among the
peoples will hiss at you;
You will become a horror, and be no
more forever.’”’”
Ezekiel 27:32-36
1-5 God's Message came to me, "Son of man, tell the prince of Tyre, 'This is what God, the Master, says:
"'Your
heart is proud, going around saying, "I'm a god.
I sit on God's divine throne, ruling the sea"—
You, a mere mortal, not even close to being a god,
A mere mortal trying to be a god.
Look, you think you're smarter than Daniel.
No enigmas can stump you.
Your sharp intelligence made you world-wealthy.
You piled up gold and silver in your banks.
You used your head well,
worked good deals, made a lot of money.
But the money has gone to your head,
swelled your head—what a big head!
6-11"'Therefore, God, the Master, says:
"'Because
you're acting like a god, pretending to be a god,
I'm giving fair warning: I'm bringing strangers down on you, the most vicious
of all nations.
They'll pull their swords and make hash of your reputation for knowing it all.
They'll puncture the balloon of your god-pretensions.
They'll bring you down from your self-made pedestal and bury you in the deep
blue sea.
Will you protest to your assassins,
"You can't do that! I'm a god"?
To them you're a mere mortal.
They're killing a man, not a god.
You'll die like a stray dog, killed by strangers—
Because I said so.
Decree of God, the Master.'"
In
much buying and selling
you turned violent, you sinned!
(Portions of Ezekiel 28 from “The Message” Version)
Dene McGriff, Sacramento
September, 2009
