Special Bulletin 06-2011

 

     The Middle East has erupted like a chain of volcanoes with dissent pouring forth in nearly every Muslim country in the region. Mubarak’s regime in Egypt fell faster than seemed possible, encouraged by the regime change that protestors were able to accomplish in Tunisia. Other regimes will likely fall in coming weeks, if not days.

     For months now, we have lingered on the edge of either a government shutdown or another stopgap measure to keep the government going for another few weeks of indecision on the part of our leaders. They are haggling over somewhere between $10 and $30 billion in cuts. The higher number is what our government runs up in deficits about every five days! This is even worse than trying to use an aspirin to cure brain cancer.

     The basic responsibility of Congress is to provide the Federal government a budget. For the last two years, Congress passed just about every kind of bill but a budget. Now the Democrats are trying to pin the needed cuts on Republicans, and the Republicans are trying to avoid the political fallout from it. While they box so as to beat the air, a far more devastating problem is creeping up that none of our leaders seem to see coming.

     With the way all of our leaders are behaving, it is understandable that the sentiment around the world is that America is not just going into decline but will collapse. It is understandable that more American people are starting to believe that neither of our present political parties is capable of leading us into the future. More are starting to wonder if we can even make it to the 2012 elections, and still others are wondering if there is any hope that the 2012 elections will make any difference if we do make it to them.

     There are some bright spots. It is a remarkable testimony to the fundamental strength and resilience of the American economy that it could take all of the blows that it has over the last three years and still be as strong as it is. Corporate profits are at all-time highs, and they have more cash stockpiled than ever before. The stock market is also getting close to all-time highs. We may even be inching out of the mire of unemployment.

     There are some bright spots, but there are not many, and they are not that bright. America is in decline, and no doubt we remain dangerously close to the cliff over which we could fall into a total collapse. Even though our present leadership is not doing anything to nudge us away from this cliff, and the dangers are very real that America as we have known it could cease to exist, it does not have to end that way. Our best days can yet be ahead of us.

     With sound leadership, America could very quickly be many times wealthier and stronger than we have ever been. We could return to being a creditor nation instead of a debtor nation. We can again be the engine of the whole world’s economy and help to elevate the whole world economically. The infrastructure still exists for just such a run, but it is being threatened more every day.

The Three Great Questions

     The three great questions to ask in any crisis are:

     1) What is happening?
     2) What is not happening?
     3) What can we do about it?

     We will attempt to answer these, laying a foundation in this Bulletin that can be built upon over the next few weeks.

 

What Is Happening?

 

     One of the most successful investing strategies has always been to figure out those who know the most about what is happening and then just do what they do. This is called “following the smart money.” So what is “the smart money” doing now that might reveal to us what is happening?

     Over the last couple of weeks news has begun to circulate that some of the most successful and in-touch business leaders have started to divest their dollars and cash in their U.S. Treasuries. In essence, they are abandoning the dollar. Why would they do this right when we are having near record corporate profits, and there is at least some movement toward other parts of the economy recovering?

     #1) They are losing their faith in America to pay its debt and at some point will have to default, or

     #2) they see inflation, and even hyperinflation being inevitable, which would destroy the value of their debt holdings.

     Can we actually be at the point where it is inevitable that we face one of these? The smart money is now starting to answer “yes” to this question. As the saying goes, “If you do not change your direction, you will end up where you are headed.” That is where we are headed now, and there does not seem to be any leadership on the radar screen to change it. We are headed for a devastating crash, and one that may now be inevitable, but even then it does not have to be our doom. We can recover.

     We are on the verge of witnessing the unthinkable—the mighty dollar, the strongest currency in history that represented the strongest nation in history, is very likely to soon collapse. This would be an unprecedented economic tragedy, but with our present leadership, it now seems inevitable. Even so, this may really be the only way we will get out of our present delusion and force the necessary changes to restore sound economic leadership. We will no doubt go through upheaval and even chaos for a time. There will be much pain and great danger. Even so, we can recover from this.

     The main reason why the dollar has not already collapsed is that there is no real alternative. This may soon change because the world’s financial leaders are all scrambling now to put together alternatives. Some no doubt have evil intentions. This could lead to the feared “one world currency,” but it is more likely that we are yet a few steps away from that and will next go to a basket of currencies. That is when we can expect the slide of the dollar to accelerate. Even so, if the worst happens and the dollar becomes worthless, do not give up—we can still recover.

 

Immediate Impact

 

When the dollar collapses, it is not likely to happen overnight. It has been in a slide for ten years, and the slide has accelerated over the last two. Many believe this is intentional, especially since George Soros has stated publicly that this would be the best way to change our world, orchestrating what he called “an orderly collapse” of the dollar. That would remove the United States from being the impediment to his vision of what the world should be like.

     This man is not to be taken lightly as he may well be the most astute man in the world at manipulating currencies, and he is driven by a very specific goal of where he is trying to drive the world. That’s a powerful combination. There is overwhelming evidence that Soros has President Obama in lockstep with him. It seemed that Obama would be put in check by the new Congress, but he has moved skillfully to put Congress in check and is getting his way.

     Russia and China have already formed an agreement to use their own currencies for trade rather than the U.S. dollar. It was greatly feared that China would do this alone, but for Russia and China to have united to do this almost certainly spells ultimate doom for the dollar to remain the base trading currency for the world. Next we can expect OPEC to no longer accept the dollar for the purchase of oil. The immediate impact of this will be prices rising dramatically in America for virtually everything—inflation is inevitable, and hyperinflation is a real possibility.

     What do we do? It is time to move from trying to keep this from happening to now expecting and preparing for it to happen.

     Some have recently started using the unthinkable word—stagflation, which is when we have a shrinking economy coupled with hyperinflation. We can have an immediate 50% inflation if all of a sudden the world thinks the dollar is only worth half of what it was before. Just a few years ago when you traveled, everyone wanted dollars, now more and more merchants will not even take dollars.  In just the last decade, the dollar has lost about 30% of its value against other major currencies. This drop is now accelerating as the madness of our budget process is paraded before the world.

     The biggest question some are asking is why did it take the “smart money” so long to grasp what is happening? We can be sure they did understand the conditions, but like so many, the 2010 elections gave some hope. There was almost euphoria that a new Congress with courage and resolve to address the fundamental issues that are leading us into such rapidly increasing dangers were coming to the rescue. Instead, this Congress has fallen into an incomprehensible mire of haggling over such small cuts that they represent less than 1% of the budget! 

     We are already experiencing the biggest rate of inflation since the Carter Administration, and it is trending toward very quickly setting new records for America. The present government figures don’t reflect this because they removed both fuel and food from the inflation equation—the two main factors! That was either one of the dumbest things our government has done yet, or one of the most intentionally deceptive—either of which is very scary.

     Japan was in such crises that many had expected it to have to start cashing in its U.S. debt very soon, even before the tragic quake, tsunami, and nuclear catastrophe. Japan is the second largest holder of U.S. debt after China. There was great fear that this could begin a worldwide economic unraveling. Again, this was before the quake and tsunami.

 

What Is Not Happening?

 

     It’s not the end of the world, and it does not have to be the end of America as we know it. Even if there is a complete collapse of the dollar with wise, proactive leadership, we can come out of it better and stronger than ever, reestablished on a sound foundation that will not continue to be rocked by the chaos we’re now experiencing. It was in the lowest depravity of Israel and during the time of her worst calamity that the Lord spoke through His prophet recorded in Jeremiah 29:11-14:

“For I know the plans that I have for you,” declares the Lord, “plans for welfare and not for calamity to give you a future and a hope.

“Then you will call upon Me and come and pray to Me, and I will listen to you.

“And you will seek Me and find Me, when you search for Me with all your heart.

“And I will be found by you," declares the Lord, "and I will restore your fortunes.”

     The source of every human problem is found at the place of departure from the Lord, and the answer to every human problem is to return to Him. Even if the dollar completely collapses, and chaos and anarchy break out for a period of time, which is likely now, if through these crises America will turn to the Lord again, then our best days will be in our future, not in our past. This will not be our destruction, but a reset, a biblical Jubilee, a chance to return to our true foundations.

     We will learn some hard lessons, but we will come through the storms with greater wisdom and greater resolve to never try to build upon any other foundation again. Even so, we must be wise and prepare for some very dangerous times ahead. How do we do this?

     First, as Germany experienced in the 1930s, and many other nations have also done, economic struggles of the kind we are now facing is a wide open door for tyranny. There are exceptions, and we need to be prepared to seize the opportunity for good, or evil certainly will. We have an advantage—light is more powerful than darkness. When you open your shades at night, does darkness flood the room? Of course not, but the light shines out into the darkness because light will always prevail over darkness. It will in America too.

     Even so, to counter the potential for tyranny in what is unfolding we must understand what is happening, be willing to see them, and become proactive now in countering them by shinning as much light on them as possible. Light is illumination, education, and light casts out darkness.

 

What Can We Do About It?

 

     We are entering in a transition of the ages. What biblical prophecy calls the “great tribulation,” or the “time of trouble,” is the end of this age. This time is also called “the harvest,” because it is the time of reaping everything that was sown in man, both the good and the evil. This leads to what is spoken of in Isaiah 60:1-3, which is a time of darkness covering the earth, and deep darkness the people, but at the same time, the Lord’s glory appears on His people. As we see in verse 3, the people turn to the light. The light is going to win!

     The eschatology that sees the end of the age being the doom of the world is not biblical. No doubt we are entering into the ultimate conflict between light and darkness, but it is not the end of the world, rather a new beginning. Evil may prevail for a time, or over some places, but its doom is sure, and its time is running out. We are coming to the time of the restoration of the earth—to the paradise it was originally intended to be. This is the sure testimony of biblical prophecy in such places as Isaiah 11.

     The trumpets in the Book of Revelation represent messages. The last trumpet, or the last message, sounds the greatest encouragement the world will ever hear will go forth:

And the seventh angel sounded; and there arose loud voices in heaven, saying, “The kingdom of the world has become the kingdom of our Lord, and of His Christ; and He will reign forever and ever” (Revelation 11:15-16).

     As we see here, a transition takes place—a change from the kingdom of this world to the kingdom of Christ. That is the last message of this age. This is why when Jesus was asked by His disciples what the signs of the end of this age were, He said to them: “And this gospel of the kingdom shall be preached in the whole world for a witness to all the nations, and then the end shall come” (Matthew 24:14).

     The end of this age cannot come until the gospel of the kingdom is preached throughout the world. The gospel is good news, not bad news. We have been given the greatest news the world will ever hear, and it will be far more willing to hear it than ever in the dark and confusing times that are now unfolding. Again, as stated in such Scriptures as Isaiah 60:3, we can be certain that the nations will come to the light, not the darkness. The darkness that is now covering the earth, and the deep darkness that is now over the people, only make the light that much brighter.

     We have accurately predicted the troubles. As watchmen, we had to sound the alarm. Now that the troubles are unfolding, it is time to start preparing for them, not just to endure them, but to prevail over them. We will make it through what is coming, and we will be much better for it. Never forget that the light wins. It is inevitable, so whatever unfolds we have this sure hope, and we must boldly proclaim it.

     In future Bulletins, much more attention will be given to what we need to do practically to prepare for these times. As we see in Daniel 2, when the statue that represents the empires of men starts to collapse, the little stone that represents the Lord grows into a mountain, or a government, and then it keeps on growing until it covers the whole earth.

     To whatever degree the present governments are established on biblical or kingdom truth, they will not be shaken. The American government was based more on this truth than possibly any nation since ancient Israel. All of the troubles America is now experiencing is the result of departing from those foundations. The answer to our problems is to return to our foundations. Preaching the gospel of the kingdom will help illuminate the kingdom truth that will help us to return to foundations that cannot be shaken again.

     The body of Christ is a holy nation within the nations. We must now consider a kingdom economy and other very practical ways to function through the times to come, and to prepare the way for the Lord the way that we are told in Isaiah 40—by building a highway that brings the high places down, raises up the low places, and makes the crooked straight.

 

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