Briefing
Facts, Thoughts and Predictions About the U.S. Economy
Jim Rohr
20100714
This briefing provides key information about the near term U.S. Economy. It allows for informed decisions and possible preparations for the coming “Greater Depression” predicted since 1990. It is not a complete treatise on the subject, but it should provide sufficient information to motivate the reader to think, do, or act differently as a result. It also provides a copy of God's Word unchanged so that people shall see not only the what...but the why.
Executive Summary:
God has given direction (See Deuteronomy 28: 1-3, 12-14) and a very stern warning (Deuteronomy 28: 15, 43-45) about our conditions. (See the end for the reference.)
The economic events since 2008 are serious indicators of a problem and cause for better economic planning. Evidence on several fronts points to a drastic and continued general decline of the U.S Economy for the 2010 decade. The U. S. Government, under the leadership of President Obama, have chosen to follow and apply Keynesian Economic Theory to solve the current economic problem of the United States. The U.S. Government is spending to compensate for the natural cyclic decline of the Economy, most notably in the consumer and industrial sectors. The only problem is this spending is “debt based” and is counter to sound financial debt management. Debt is at an all time high at 13.4 Trillion Dollars and counting. In the first 19 months of office, our President has spent more tax payer exposed money than all prior Government administrations COMBINED. What was needed instead of spending was a substantial decrease in the size of Government and a decrease in our national debt which was long overdue.
Due to the size of the National Debt, repayment is now nearly impossible without sweeping cuts in Government spending, rising taxes and a devaluation of the currency - some or all are expected to occur with the devaluation causing a further loss of confidence in the dollar as a “reserve currency”. Servicing the existing debt is problematic as the interest it bears is compounded...meaning the national debt will double in 9 years at an 8% interest rate. To deal with this problem it is likely that the Government will need to be shown the way to reduce entitlements for all U.S. Citizens...including Social Security.
To date, this incredible spending level has not achieved the desired results. It is not working in the private sector and is counter productive in the public sector, meaning larger Government. In spite of the added Government employees on the payroll of the taxpayer, Employment is still at 9.6 (E1) and climbing. Actually, if we use the true value of unemployment, (named E6 in Government language), the United States is at 16% unemployment with some sectors and geographic locations reaching 35%. Long range, “unfunded liabilities” (predominately Medicare and Social Security liabilities) are estimated by the CBO to be over 150 Trillion and counting...all due before 2030. Life extension will continue to add to this liability.
In National Defense, we are fighting two wars largely over the control of oil and to keep Pakistan's nuclear weapons from the Taliban/Al qaeda. Unlike other wars with a defined and identifiable enemy, we are fighting “a war of collective individuals”. I believe we have little chance of success long term...if even success can be adequately defined. To date the U.S. has spent $38,500 per Iraq citizen and $9,300 per Afghanistan citizen on these two wars. I feel it would have been far cheaper to use a different incentive with the money and save the lives of soldiers. Unlike others, these people see U.S. aggression and occupation as just another battle since the Crusades. Fifty years from now we will be defending our country from a son of Islam. It is “fiscally impossible” for our country to continue a 10+ year war footing using borrowed money. It is my opinion that the population will not continue to support war efforts without defined objectives that ring in the hearts of Americans and a clear plan for success. Once soldiers come home, unemployment will rise from the current levels. Our Navy and Air Force have lived through drastic reductions since the fall of Russia. One thing remains clear: that in the minds of war planners, the cost of 100 dead U.S. soldiers is far less than the cost of even one lost combat helicopter. War machinery has become exponentially expensive and will be out of fiscal reach in coming years.
Both the short and long term economic outlooks for the U.S. Economy appear to be grim. All money used as economic stimulus was borrowed from foreign sources, namely Saudi Arabia and China. Given the current debt level and the inability for Government to reduce its size without mass demonstration of the people, a deep depression is eminent. This one will be long lasting - perhaps exceeding a decade in duration. More troubling is that unlike the Great Depression of 1929, this “Greater Depression” will be more intense as few people are ready for anything more than a few months of social and financial instability. Food, shelter and security for 364 Million U.S. Citizens will cause significant challenges for this and the next administration. In contrast, after Katrina, FEMA served 300,000 people. However, FEMA has been charged internment of up to 20 million Americans if necessary during a civil unrest. The infrastructure to house and feed these people are already in place. Concentration camps in the USA?
Historically speaking, some economists say this coming “Greater Depression” is a direct result of FDR's “New Deal” which was entered into law in 1932. This reverberation appears after 80 plus years. I tend to agree with this opinion as this “Greater Depression” will be the summation of several collapsing bubbles including:
a 50 year real estate cycle boom in both residential and commercial,
the end of the 30 year “baby boomer peak spending cycle”,
some 18 years of unrestricted derivative banking investments,
lax credit management and
an over leveraged “fractional banking system”.
Today the “Federal Reserve” is the creditor of last resort. Unless fundamental changes are made to remove this antiquated “New Deal” reform (Federal Reserve Bank) and reduce Government spending, the Republic could implode from a lack of confidence in the dollar nationally or international and our inability to repay the debt. Reducing the debt and creating lasting jobs will become front and center in all politics. The “Government entitlement era” may be over and this is a good thing; however, higher taxes will not be tolerated by the people without a clear plan for economic recovery.
We will need divine assistance if we are going to recover. People need to pray. They also need to get off their couch, put down the TV remote and get involved in saving the Republic. Denial of these problems will not make them go away...denial only “delays the day of reckoning” resulting in far greater consequences. We have to ask God for divine wisdom and blessing. HE needs to be included in our decision making process.
Here are some accepted facts and offered opinions to consider:
Definition of Depression:
One Christian economist Larry Burkett writes that a depression occurs when over 9 percent unemployment (E1) for 4 quarters, standard of living drops for most people, economy stagnant or declining and inflation stable. I agree with this generic definition, however in today's spin,while we meet most criteria, we are not in a depression per se, we are in an “unstable market”.
The father of modern economics Ludwig Von Mises writes, “The depression is in fact the process of readjustment, of putting production activities anew in agreement with the given state of the market data; the available supply of factors of production, the valuations of the consumers, and particularly as the state of originary interest as manifested in the public valuation.” He is siting the bust following a credit expansion boom.
Douglas Casey a noted author on economics writes, “The function of a depression is to return wealth to its rightful owners”. I disagree with this statement on moral grounds, but not its outcome. Government market meddling (through grants, taxation and regulations cause long reaching market distortions which ultimately must be shaken out if the free market system is to function properly. The shakeout usually is at the expense of taxpayers. Case in point. Meddling is subsidiaries on goods and commodities for the expense of others and countervailing duties on certain imported products such as raw materials like steel.
Wikipedia states: 1) a decline in real GDP exceeding 10%, or 2) a recession lasting 2 or more years. It will take 2 years to determine if we are in a depression? Absurd. If everyone around you is feeling the effect of the economy and people are selling things they would not normally sell to make money...its a depression.
Current Unemployment: Our unemployment picture is very high at 9.6 (E1). If you use the BLS (E6) value which is a true representation of unemployment, we are at 16% and climbing. E6 includes people who are underemployed or have given up looking for work. It is clear that people are not in a position to be out of work for any extended period of time.
Taxation: If taxation is the expropriation of wealth by force, then inflation is its expropriation by fraud. The Government takes personal wealth from its citizens through taxation, expropriations and seizure. It then redistributes a large portion of the money received to others who did not pay into the coffers. As an example of outright theft, in January 2011 the death tax of a persons estate will go from 0% (up to $750,000) to 45%. There is simply no justification for the Government's confiscation of a persons life's work, except greed. Businesses of all types, (including church non-profits), will be included in new regulations and taxation as the Government seeks additional funds to pay down the overwhelming debt. Companies which were once immune to taxation, will now be taxed as with any other corporation. People will also be targets for additional regulation and taxes. U.S citizens cannot afford any higher taxes in any form, including VAT, Business “pass through”, or higher Social Security rates. People just do not have the reserve funds needed to survive the “Greater Depression”.
Federal Entitlement Programs: In 1993 there were 865 Federal assistance and entitlement programs funded by taxpayers. That number is far larger today. Grover Cleveland said, “It is the responsibility of the citizens to support their Government, not the Government to support its citizens.” Government is now the caretaker of the majority of the people. The flood gates of federal programs began with the radical agenda of the “New Deal” in the name of the “depression crisis”. It was truly “a government chicken in every pot”. Once institutionalized, Government programs are almost impossible to repeal. One in seven people in the United States are on food stamps. Seven out of ten people receive some form of Government assistance.
National Debt and Compound Interest: The Government does not make products or add to the productivity of the nation. It took 125 years for the Government to accumulate 1 Billion dollars in debt. The current national debt is a staggering 13.4 Trillion Dollars and rising. Debt has increased some 9 Trillion dollars since President Obama has taken office.
“Compound Interest” is a mechanism of calculating interest payments. It is the interest paid to a lender and is predominately based on a) the risk of the borrower and b), the sum of money borrowed. What makes compound interest important as it relates to national debt is that while the rate is normally fixed, the payment value is based on the remaining amount of principal owed...meaning interest declines in proportion to the principal reduced though payments of principal and interest. Specifically, if the United States borrows at 8%, the debt will double in 9 years. It is based on the “Law of 72”. Interest rate divided into 72 equals the number of years to double the base value which is in this case is the debt. The current debt of 13.4 Trillion at an estimated 8% interest will equal 26.8 Trillion in 9 years. At that time, the interest due per year will exceed the combined total GDP of the United States. Currently, it takes 26% of all taxes received by the Government to service the existing debt. Based on sound financial principals of net worth (what you owe less what you have), the U.S. Government is “fiscally bankrupt”. It's just that through foreign credit, (“deficit spending”), the Government continues to have the money it wants to spend...and it is growing in size because in addition to issuing Notes, the Government also has the ability to print money at a low cost and use them in the market at full value of the currency. This is “monetizing the currency”.
(In the CBO's own language) http://www.cbo.gov/ftpdocs/115xx/doc11579/06-30-LTBO.pdf
The federal government has recently been recording the largest budget deficits, relative to the size of the economy, since 1945. As a result, the amount of federal debt held by the public has surged. Debt is expected to equal 62 percent of the economy’s annual output, or gross domestic product (GDP), at the end of this fiscal year, up from 40 percent at the end of 2008. That sharp deterioration in the fiscal situation reflects several factors: (emphasis added) an imbalance between spending and revenues that predated the recent recession and the turmoil in financial markets; a decline in tax revenues and an increase in spending on benefit programs caused by those economic problems; and the costs of federal policies enacted in response to the problems. If current laws were to remain unchanged, the budget deficit would drop markedly as a percentage of GDP in the next few years, the Congressional Budget Office (CBO) projects, and federal debt held by the public would stabilize at about 67 percent of GDP for the next decade.1
Those baseline projections, however, understate the budget deficits that would arise if policies that are in effect now or have been in effect recently were extended, instead of implementing what current laws specify for future years. Specifically, if most provisions of the tax cuts enacted in 2001 and 2003 were extended rather than allowed to expire as scheduled, if provisions designed to limit the reach of the alternative minimum tax (AMT) were also extended, and if annual appropriations kept pace with the growth of GDP, by 2020 the budget deficit would be growing steadily. In that case, debt held by the public would reach almost 90 percent of GDP in 2020.
Monetizing the Currency: “Monetizing” the money is the printing of money. The growth in the money supply (M1) has increased over 600% since 1970. Currency devaluation is the reason why the French Revolution occurred, why Germany's Government failed in 1925 and became Nazi Germany, and the reason why Argentina's currency in 1954 lost 100% of its value in 2 weeks. There is an estimated 261 million ounces of gold owned by the citizens of the United States which are managed by the U.S. Treasury. Our currency went off the gold standard in 1933 with FDR's “New Deal”, making our currency only as strong as the “confidence in the mind of the holder”. That confidence is now unstable and countries are dumping the dollar as a their “reserve currency” in favor of gold reserves. Silver was withdrawn in 1967 from coins. Devaluation of the currency is a serious issue. As a comparison, in today's money, it takes $21.65 to equal the value of one 1910 U.S Dollar. Gold has increased in value from $36 in 1971 to today's price of $1200 over 40 years. The rise in gold prices are a direct reflection of the lack of confidence in the U.S. Dollar.
Defense: Defense cost is less than 18% of all national expenditures. What is not clear is the policies behind the wars we are fighting. If you ask common citizens why we are fighting two wars, they might likely respond with “National Pride”, “Beating up the 9/11 enemy”, “Projection of American Strength”, or “Protecting U.S. Interests Abroad”. None of these reflect a clear objective. The U.S. is more likely seen by the world as the aggressor and U.N. 's world police force. Our National Security continues to be jeopardized by questionable policies under this administration. Most notably, White House signals to the the CIA that “they are counter productive to National Intelligence”, FBI restrictions on handling foreign nationals, and failure to address known terrorists as combatants and not citizens. inside U.S. Law. The “rules of engagement” have weakened our soldiers ability to get the job done and put them in greater harms way. “Weakness is seen as opportunity” by our enemies and this administration either just does not get it, or more likely is because our President is a “Closet Muslim” and his decisions reflect his brotherhood with Muslims. As I write this, the cost of both wars is over $1 Trillion Dollars. Iraq to date is now about $731 Billion and counting at a rate of approximately $3000 a second. Afghanistan is about $231 Billion and counting at about the same $3000 a second rate.
Credit Markets: Federal Reserve Credit at one time was the “throttle” of risk in the market. Now that Derivatives have been created to protect risk, risk taking has increased (meaning credit has increase ) exponentially over past years. Under those conditions, credit was freely issued to both individuals and companies under conditions when neither would likely repay the loan. Now with added restrictions, new regulations and higher approval requirements, the likelihood of economic growth through expanding credit is almost impossible. In spite of the stimulus which was supposed to get the credit flowing again, the credit markets are dry and tightening. Rising Consumer Debt tells one part of the story. Business Debt might be the other part of the story.
Consumer Debt: Consumer debt has risen from a low of 12% of annual income before WW2 to now 97.8% of personal annual income. Most families MUST HAVE both Husband and Wife working just to meet the minimum obligations for repayment on this “pent up” higher standard of living. The average family debt is some $32,000 in revolving debt at an average 21% interest. Combined with a mortgage, total debt equals some 97% of income. Most families would not survive and would need to file bankruptcy if one or even both incomes became lost due to either sickness or loss of employment. It is in the interest of people who lend money to keep people borrowing money. The usury laws must be changed to allow for controlled exposure to U.S. Citizens and realistic interest rates. If there is an upside of a deep depression, this market would be very exposed and that exposure would grow as this debt is unsecured, but not forgiven in bankruptcy.
Business Debt: Business debt is at an all time high and most companies are highly leveraged. Most business debt is backed by the company's asset base. These two points say to me that in a depression condition:
It will not take much to push companies into bankruptcy.
Once loan defaults begin momentum, commercial banks will fold or require massive bail outs to survive.
One significant “tell” is the number of business closures taking place across the country. What you see is the empty store fronts in the strip malls. What you don't see is the service and manufacturers who are behind the scenes and are closing after a lifetime of work building up their business. The toll will be high for those businesses who were not prepared.
Ethics: America has removed God from the decision making process. Few can argue that the ethics of the average American today is far different than the culture exemplified in earlier times. Moral decline continues in spite of the long efforts of church and Government to refresh and renew the values of men and women. Troubling to all “God Fearing People” is the assault on Christian beliefs by the New Class of liberal progressives. No where has “Trust in God” been a benchmark of the current Administration. “Gang values” have replaced “family values” for a large portion of today's youth, likely stemming from the freedom and living standards of the post WW2 era. Many “biological fathers” decline to be “fathers” in the child's home place. Unwed mothers are now an accepted social norm and are creating a class of children who have yet to be put to trial in society. The overall decline in ethics points to a possible negative consequence when this “Greater Depression” takes place. The consequence is a shift from “lawful actions” to “unlawful actions”, far greater than occurred during previous economic corrections. I feel a greater percentage of the population will take what they want, (or need), from innocent and unwilling people. Martial Law, curfews and self protection will surely be employed. Hardened security then is essential to protect life and property. On the longer view, what is needed is a return to condemnation and rebuke of socially sensitive agendas and unacceptable moral actions. If not a rebirth of moral values, laws will be passed by liberals that nibble away at God's word and presence until it becomes either irrelevant in a social context, or perhaps even unlawful. On the side, Argentina passed a law this week making gay marriage lawful.
Agrarianism: Before the Great Depression of 1929, some 94% of U.S. citizens were involved in farming, farming support and the basic creation and distribution of food. Most people lived on “subsistence farms”. Large cities were much smaller because the overall population was far smaller. Today, through advancements in technology and consolidation of farm assets, less than 4% of the population are involved with the creation of food and farming. This means that the bulk of today's population, now much larger and dedicated to information, manufacturing, and service sectors, do not have the skills or resources to grow their own food...nor the time to wait out a crop harvest. This last point then is key to a critical issue. Once a “trigger event” occurs, whether from hyperinflation, collapse of the dollar, nuclear or biological release, oil embargo or other world trigger event, grocery shelves will empty in less then 2 days and food shortages will occur. Stockpiling of food is essential in order to have capacity for at least one year.
Government Regulation: Government is in the business of self perpetuation, growth of power and the creation of additional legislation (regulations), often with little regard to the citizens they might affect. Lately, there is a growing drive to legislate Constitutionality even though there are calls for accountability to the founding principals. There is an existing law requiring every Bill to define its agreement to Constitutionality. The current “socialist agenda” of this administration is to pass Bills which act to centrally control every aspect of our lives; from our health, to how much we earn, to how much we can keep of those earnings. I agree that the door was opened driving power away from the People through the “New Deal” in 1932. What's more, regulations and Government control has been increasing ever sense. Not all regulations are bad, but some regulations are a direct frontal assault on the basic liberty of the people. Case in point is the move off the gold standard for the currency.
Supreme Court: The “New Deal” of 1932 was in direct violation of the Constitution. Such forced authority was only possible through “favorable legislation” passed by liberal Supreme Court Majority. FDR waited three years following the beginning of the Depression in 1929 to pass the four agendas granted. This progressive action is no different from the current administration's actions. Most disturbing is that the bench is “drifting away from adjudication and into legislation”...meaning the bench is defining social issues instead of interpreting their basis in the Constitution. The recent appointment of liberal judges will allow a President to accomplish long range “socialist objectives” without regard to public sentiment, the right of vote, or congressional restriction. Based on decisions issued, the courts could be said to be slightly in favor of conservatism. This bias will not last, as another liberal judge will be appointed to the bench this year.
Technology: WW2 and Technology were the primary reasons we came out of the Great Depression of 1929. It was not the “New Deal” as history has erroneously recorded. Currently, we have no “frontier technologies” in a position of “Growth” in the “S curve life cycle”. Most cutting edge frontiers like solar, wind, nanotechnology, are still in the infancy stage. Some are proving to be marginally effective. The Internet is now in its maturity stage.
Growth of Islam Worldwide: The growth of Muhammad-ism worldwide and the attack on Israel and the West should be an alarming bell to all Christians. The Qur'an requires conversion to Islam or death for all infidels. Europe has fallen to Islam and Islam is making large headway in Africa and even the Catholic stronghold of Latin America. The weakness in this county to stop the spread of Islam will result in death to Christians in the name of their God. While Jesus teaches we are to love all people and embrace them as brothers, Christians cannot stand divided towards Islamic agendas which include: infiltration into our schools, our society, and our Government. The media is largely helping Islam and denying Christianity.
OTC Derivatives: Derivatives are not recorded or controlled by the SEC. Derivatives are basically a contract between two parties covering some form of financial risk...an insurance policy against financial risk. To put this issue in perspective, our GDP is some 1.8 Trillion dollars while Derivatives are estimated to be 645 Trillion. These policies can be resold and can be cascaded. The market for these derivatives cascade may times with five being the norm. If a default exists in one policy it will trigger five layers of insurance policies to come due. As an example, the absorption of toxic “sub-prime loans” was estimated to be a 1.2 Trillion dollar problem. This in turn triggered 64 Trillion in Derivative policies to come due. Lehman Brothers and Bear Sterns both were heavily invested in derivatives covering sub-prime loans. Since these financial instruments are currently outside the control of the SEC, they are not regulated as to amount, cascade or financial risk leverage. They are also systemic across the financial world. This is why the rest of the financial world (Europe and Asia) also suffered from the U.S. sub-prime issue.
Property Seizures (Forfeitures): The EPA and IRS are the strongest arms of force in the Government. In addition, property (personal or real), can also be seized by Home Owner Associations or local tax authorities for non-payment of dues or taxes respectively. In the near term to create revenue, the EPA and IRS will use questionable forfeiture laws created under the Comprehensive Crime Control Act of 1984 to seize real and personal property under the guise of violation of this ambiguous law. Further, in these cases the Government circumvents “due process of law” by declaring people in this class “guilty” until proven innocent. It places the “burden of proof” of innocence on the individual, not the Government.
Fractional Banking: Few know what “fractional banking” is, even though it is the basis of our banking system. Under the Federal Reserve System established in 1932 under the “New Deal”, banks can lend money (issue lines of credit) based on a fractional percentage of their financial assets. This is leverage of deposits in the highest order. The banking system exposure compounds as one bank sells loan paper to another bank who then uses that paper to issue more credit. One dollar on deposit at a local bank can result in up to $1700 of issued credit across a series of banks. Who will stand for the money should these loans default? The Federal Reserve backs all issued credit under the “member bank” rule. This high degree of leverage is the “house of cards” within the financial market. When a run on deposits is made due to a loss of confidence in the dollar representing the value of those holdings, the financial system can and will collapse. FDIC created under the “New Deal” is near bankrupt. Fanny Mae and Freddy Mac, the largest final consolidation bank of home loans are also certifiably bankrupt and will require over One Trillion to bring liquid.
IRA's: The Government supports Wall Street in many ways few common men can fathom. One notable area was the creation and tax deferment of IRA's as a means to move individual wealth out of local bank held deposits and into the stock market though managed funds. Note that the first stimulus issued on the backs of tax payers in 2008 bailed out Wall Street, under the guise of an impending financial collapse which remained unproven. It is a general consensus that the market would have been better to let these toxic assets collapse and pick up the pieces and move on. Costs would have been far lower than the debt still remaining on the books of firms like Fanny Mae and Freddy Mac. It bears warning that should a significant correction or collapse of the stock market occur, your IRA lifetime earnings are at great risk of substantial loss without recourse. Most are aware that the 2008 stock market correction caused most retirement portfolios to devalue some 30 percent of prior trade value. Gold investment would have protected those assets and even showed a sizable profit.
Federal Reserve Interest Rates: Interest rate adjustments are the throttle the Fed's use to control the velocity of money (credit). It raises rates to cool the economy and decreases rates to stimulate the economy. Here is a key issue. Funds borrowed by Federal Reserve Banks at zero interest are re-lent back to the Government at a 3% premium....all on the backs of the taxpayer. We have been at almost zero Fed rate for some 18 months and the economy is still idle as credit is contracting. It's like a rubber band that must over come friction before it will move an object. This fact tells of a greater problem, namely, the economy is not responding to the stimulation of low interest rates because credit is not flowing down to business and personal investment. “Trickle down economics” is a myth of Keynesian economics when there is no incentive to take higher risks in the lower financial markets. Why would one take higher risk with member bank credit funds when you can fund the Government at “almost” no risk. Unless the Government defaults on it T-Bills and Bonds, lending money back to the Government is a fairly safe bet.
Taxation: In America, the Government has set up for the people an “Ability-To-Pay tax system. The only logical conclusion for the ability-to-pay system is the complete equalization of incomes and wealth. “Taxation for suppression” is another word for “tariffs” and an example where the Government taxes goods to restrict their production or suppress their existence. At one time the Government was funded totally by “Tariffs”. Import duties are a good example of this suppression. One should wonder about and investigate the incredible rise in taxation since the end of the Civil War when taxation rates were about 10 percent and universally applied. The government will need to increase revenues some 265 Billion next year. This is going to come on the backs of tax payers. Case in point. If your going to die, die before January 1, 2011 because your kids will have an extra 55% of your estate after $1MM. You work all your life, you scrimp, you save, you pay all your taxes...after Jan 1 they lose 55% for everything in your estate over 1MM. It's your money, not the Government's. Better get it into a safe place.
Who will bail out America in case we default? On the larger front, the IMF, (clearing house for Government debt swaps), will not extend credit to a falling dollar without directing changes and receiving hard gold or other acceptable currency. I believe the IMF will likely demand gold for credit when a dollar is falling. This fact gives the IMF significant power over the U.S. Federal Reserve. They would likely demand sweeping changes for additional credit. They have done this with other countries they issued credit to. The action might place our currency back on an indexed gold standard. Let's hope so, however most personal wealth will be wiped out. It should also be understood that the IMF is in itself under funded and strained financially. It holds less than 5% of the liquid assets of the 165 Trillion world economy and is already extended to Greece, Spain, Africa, Russia and Latin America.
The Government is not ready for the coming “Economic Crisis”: One does not have to look to far back in time to see how FEMA handled Katrina and Rita. Late in response, insufficient resources, wrong resources and writing checks to phoney entities are prime examples of our tax dollars at work. I estimate Government food reserves could possibly feed about one million people for a period of one year. Our current population is 364 Million. Further, the American Red Cross is tapped out from Katrina, Rita, Nashville and Haiti.
Churches are not ready for the coming “Economic Crisis”: After eighty some odd years, churches will once again be called upon to provide for basic human needs including food, shelter, hope and God's message. The Government will not be able to provide these basic needs. I believe most churches are not ready for this demand and are waiting for visible signs that the “Greater Depression” is eminent. I feel churches need to educate themselves in what threats are present and rethink long range strategies. Unfortunately, by the time churches wake up to the coming issue, it might be too late. Once the financial problem becomes visible, the ability to acquire basic materials and food required to meet the growing demand will be difficult. Based on past similar conditions, prices will be so high for common food stuffs that even if they were available, the price will be prohibitively out of reach except to a small population. This reduces the potential of assistance. Churches should be addressing this coming wave now if they wish to meet a larger need. (See Acts 4:34-35)
People are not ready for the coming “Economic Crisis”: Most people, (except a small segment), are not ready for the coming crisis. Over-leveraged, over-worked and over-stressed by job conditions, people need Christ more than ever. They also need to wake up and stop believing that when it all fails, the Government will be there to catch and save them. Maybe the Government will or maybe it won't, but to be sure, the Church will be on the front lines of the next imminent Economic Crisis...storehouse full or storehouse empty.
Jim Rohr
God's Word:
(Deuteronomy 28: 1-68)
And it shall come to pass, if thou shalt hearken diligently unto the voice of the LORD thy God, to observe and to do all his commandments which I command thee this day, that the LORD thy God will set thee on high above all nations of the earth:
2 And all these blessings shall come on thee, and overtake thee, if thou shalt hearken unto the voice of the LORD thy God.
3 Blessed shalt thou be in the city, and blessed shalt thou be in the field.
4 Blessed shall be the fruit of thy body, and the fruit of thy ground, and the fruit of thy cattle, the increase of thy kine, and the flocks of thy sheep.
5 Blessed shall be thy basket and thy store.
6 Blessed shalt thou be when thou comest in, and blessed shalt thou be when thou goest out.
7 The LORD shall cause thine enemies that rise up against thee to be smitten before thy face: they shall come out against thee one way, and flee before thee seven ways.
8 The LORD shall command the blessing upon thee in thy storehouses, and in all that thou settest thine hand unto; and he shall bless thee in the land which the LORD thy God giveth thee.
9 The LORD shall establish thee an holy people unto himself, as he hath sworn unto thee, if thou shalt keep the commandments of the LORD thy God, and walk in his ways.
10 And all people of the earth shall see that thou art called by the name of the LORD; and they shall be afraid of thee.
11 And the LORD shall make thee plenteous in goods, in the fruit of thy body, and in the fruit of thy cattle, and in the fruit of thy ground, in the land which the LORD sware unto thy fathers to give thee.
12 The LORD shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.
13 And the LORD shall make thee the head, and not the tail; and thou shalt be above only, and thou shalt not be beneath; if that thou hearken unto the commandments of the LORD thy God, which I command thee this day, to observe and to do them:
14 And thou shalt not go aside from any of the words which I command thee this day, to the right hand, or to the left, to go after other gods to serve them.
15 But it shall come to pass, if thou wilt not hearken unto the voice of the LORD thy God, to observe to do all his commandments and his statutes which I command thee this day; that all these curses shall come upon thee, and overtake thee:
16 Cursed shalt thou be in the city, and cursed shalt thou be in the field.
17 Cursed shall be thy basket and thy store.
18 Cursed shall be the fruit of thy body, and the fruit of thy land, the increase of thy kine, and the flocks of thy sheep.
19 Cursed shalt thou be when thou comest in, and cursed shalt thou be when thou goest out.
20 The LORD shall send upon thee cursing, vexation, and rebuke, in all that thou settest thine hand unto for to do, until thou be destroyed, and until thou perish quickly; because of the wickedness of thy doings, whereby thou hast forsaken me.
21 The LORD shall make the pestilence cleave unto thee, until he have consumed thee from off the land, whither thou goest to possess it.
22 The LORD shall smite thee with a consumption, and with a fever, and with an inflammation, and with an extreme burning, and with the sword, and with blasting, and with mildew; and they shall pursue thee until thou perish.
23 And thy heaven that is over thy head shall be brass, and the earth that is under thee shall be iron.
24 The LORD shall make the rain of thy land powder and dust: from heaven shall it come down upon thee, until thou be destroyed.
25 The LORD shall cause thee to be smitten before thine enemies: thou shalt go out one way against them, and flee seven ways before them: and shalt be removed into all the kingdoms of the earth.
26 And thy carcase shall be meat unto all fowls of the air, and unto the beasts of the earth, and no man shall fray them away.
27 The LORD will smite thee with the botch of Egypt, and with the emerods, and with the scab, and with the itch, whereof thou canst not be healed.
28 The LORD shall smite thee with madness, and blindness, and astonishment of heart:
29 And thou shalt grope at noonday, as the blind gropeth in darkness, and thou shalt not prosper in thy ways: and thou shalt be only oppressed and spoiled evermore, and no man shall save thee.
30 Thou shalt betroth a wife, and another man shall lie with her: thou shalt build an house, and thou shalt not dwell therein: thou shalt plant a vineyard, and shalt not gather the grapes thereof.
31 Thine ox shall be slain before thine eyes, and thou shalt not eat thereof: thine ass shall be violently taken away from before thy face, and shall not be restored to thee: thy sheep shall be given unto thine enemies, and thou shalt have none to rescue them.
32 Thy sons and thy daughters shall be given unto another people, and thine eyes shall look, and fail with longing for them all the day long: and there shall be no might in thine hand.
33 The fruit of thy land, and all thy labours, shall a nation which thou knowest not eat up; and thou shalt be only oppressed and crushed alway:
34 So that thou shalt be mad for the sight of thine eyes which thou shalt see.
35 The LORD shall smite thee in the knees, and in the legs, with a sore botch that cannot be healed, from the sole of thy foot unto the top of thy head.
36 The LORD shall bring thee, and thy king which thou shalt set over thee, unto a nation which neither thou nor thy fathers have known; and there shalt thou serve other gods, wood and stone.
37 And thou shalt become an astonishment, a proverb, and a byword, among all nations whither the LORD shall lead thee.
38 Thou shalt carry much seed out into the field, and shalt gather but little in; for the locust shall consume it.
39 Thou shalt plant vineyards, and dress them, but shalt neither drink of the wine, nor gather the grapes; for the worms shall eat them.
40 Thou shalt have olive trees throughout all thy coasts, but thou shalt not anoint thyself with the oil; for thine olive shall cast his fruit.
41 Thou shalt beget sons and daughters, but thou shalt not enjoy them; for they shall go into captivity.
42 All thy trees and fruit of thy land shall the locust consume.
43 The stranger that is within thee shall get up above thee very high; and thou shalt come down very low.
44 He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.
45 Moreover all these curses shall come upon thee, and shall pursue thee, and overtake thee, till thou be destroyed; because thou hearkenedst not unto the voice of the LORD thy God, to keep his commandments and his statutes which he commanded thee:
46 And they shall be upon thee for a sign and for a wonder, and upon thy seed for ever.
47 Because thou servedst not the LORD thy God with joyfulness, and with gladness of heart, for the abundance of all things;
48 Therefore shalt thou serve thine enemies which the LORD shall send against thee, in hunger, and in thirst, and in nakedness, and in want of all things: and he shall put a yoke of iron upon thy neck, until he have destroyed thee.
49 The LORD shall bring a nation against thee from far, from the end of the earth, as swift as the eagle flieth; a nation whose tongue thou shalt not understand;
50 A nation of fierce countenance, which shall not regard the person of the old, nor show favour to the young:
51 And he shall eat the fruit of thy cattle, and the fruit of thy land, until thou be destroyed: which also shall not leave thee either corn, wine, or oil, or the increase of thy kine, or flocks of thy sheep, until he have destroyed thee.
52 And he shall besiege thee in all thy gates, until thy high and fenced walls come down, wherein thou trustedst, throughout all thy land: and he shall besiege thee in all thy gates throughout all thy land, which the LORD thy God hath given thee.
53 And thou shalt eat the fruit of thine own body, the flesh of thy sons and of thy daughters, which the LORD thy God hath given thee, in the siege, and in the straitness, wherewith thine enemies shall distress thee:
54 So that the man that is tender among you, and very delicate, his eye shall be evil toward his brother, and toward the wife of his bosom, and toward the remnant of his children which he shall leave:
55 So that he will not give to any of them of the flesh of his children whom he shall eat: because he hath nothing left him in the siege, and in the straitness, wherewith thine enemies shall distress thee in all thy gates.
56 The tender and delicate woman among you, which would not adventure to set the sole of her foot upon the ground for delicateness and tenderness, her eye shall be evil toward the husband of her bosom, and toward her son, and toward her daughter,
57 And toward her young one that cometh out from between her feet, and toward her children which she shall bear: for she shall eat them for want of all things secretly in the siege and straitness, wherewith thine enemy shall distress thee in thy gates.
58 If thou wilt not observe to do all the words of this law that are written in this book, that thou mayest fear this glorious and fearful name, THE LORD THY GOD;
59 Then the LORD will make thy plagues wonderful, and the plagues of thy seed, even great plagues, and of long continuance, and sore sicknesses, and of long continuance.
60 Moreover he will bring upon thee all the diseases of Egypt, which thou wast afraid of; and they shall cleave unto thee.
61 Also every sickness, and every plague, which is not written in the book of this law, them will the LORD bring upon thee, until thou be destroyed.
62 And ye shall be left few in number, whereas ye were as the stars of heaven for multitude; because thou wouldest not obey the voice of the LORD thy God.
63 And it shall come to pass, that as the LORD rejoiced over you to do you good, and to multiply you; so the LORD will rejoice over you to destroy you, and to bring you to nought; and ye shall be plucked from off the land whither thou goest to possess it.
64 And the LORD shall scatter thee among all people, from the one end of the earth even unto the other; and there thou shalt serve other gods, which neither thou nor thy fathers have known, even wood and stone.
65 And among these nations shalt thou find no ease, neither shall the sole of thy foot have rest: but the LORD shall give thee there a trembling heart, and failing of eyes, and sorrow of mind:
66 And thy life shall hang in doubt before thee; and thou shalt fear day and night, and shalt have none assurance of thy life:
67 In the morning thou shalt say, Would God it were even! and at even thou shalt say, Would God it were morning! for the fear of thine heart wherewith thou shalt fear, and for the sight of thine eyes which thou shalt see.
68 And the LORD shall bring thee into Egypt again with ships, by the way whereof I spake unto thee, Thou shalt see it no more again: and there ye shall be sold unto your enemies for bondmen and bondwomen, and no man shall buy you.
