Amidst the language in the first link below about rising volatility in the European and American stock exchanges is a most important observation by Jean-Claude Trichet, the head of the European Central Bank. Mr. Trichet, who is in a sensitive position to know the truth of such matters, stated concerning the current global financial crisis that “It is the worst crisis since World War II…” Let that sink in for a moment. Indeed, read it again and then consider the information below. Trichet’s observation was so important and sensitive that it was all but censored from major American press reports. The first link comes from the BBC.
As readers no doubt know, the Eurozone is under tremendous pressure due to growing worries that there will be sovereign debt defaults by Greece, Portugal, Spain, Italy and other Eurozone nations. Germans, who have a habit of fiscal stability, are becoming incensed at the German government’s endless bailouts of their less-responsible Eurozone partners. The party of German Prime Minister Angela Merkel has just lost big-time in German regional elections due to growing German anger at her government’s rather libertine willingness to bail out other nations from their fiscal problems. A European Court ruled that the German actions were legal (temporarily boosting world markets), but the political handwriting is on the wall. The German regional elections have shown Merkel’s party is headed for an electoral drubbing in the next German election if she continues her bailouts of other Eurozone nations. I’m sure Merkel realizes this. There are even reports the German citizenry want to dump or restructure the Euro. Riots have broken out in European nations as austerity plans are implemented by governments so bankers can be paid the full value of their loans to those sovereign nations. It is my opinion that the European governments will soon be compelled by their citizenry to require banks to take a “haircut” where they receive only a certain percentage of their loans back and have to write off a portion of the debts due to them. The second link offers a layman’s guide to a simple discussion of what is going wrong in Europe’s fiscal/monetary markets.
The fiscal crisis in Europe is closely intertwined with the growing fiscal crisis in the USA. The third link and fourth link detail a development in the financial markets which could potentially topple or discredit some big US (and European) money center banks. Amazingly, a branch of the US government, the Federal Housing Finance Agency, has actually sued 17 of the biggest banks in the USA and Europe for selling to US government agencies $196 billion in toxic (and misrepresented) mortgages. The lawsuits wants the mortgage securities “cancelled” and further damages are sought. In a classic understatement, the third link reports that “The government action is a big blow to the banks.” Bank of America is reported to be the bank most at risk due to the lawsuits, followed closely by JP Morgan Chase and the Royal Bank of Scotland (see the fourth link for a more European perspective on this crisis). This action will involve a lengthy and detailed “discovery” process, as lawyers call the investigative actions that will pry extensively into the internal affairs, emails and actions of the 17 sued banks. While the banks, as usual, deny wrongdoing, the information that will be revealed about their internal actions could lead to future indictments of top bank officials (as has already happened in Iceland’s investigation of its big banks—see my recent 2011-08-31 post on this very under-reported story).
All this is happening as there are increased worries that the global economy is sliding into a “double-dip recession” or something worse. Indeed, many on “Main Street” feel the recession never ended, and that only the big banks and Wall Street financial firms were benefited by all the bailouts coordinated by the US Federal Reserve Board and the US Treasury Department (currently being managed by Tim Geithner, a former top official of the US Federal Reserve Board). Isn’t that a most convenient arrangement!
The US housing market is still in a deep recession or worse, and no real recovery is possible until the housing market is healthy. The fifth link reports that the US housing market is in a state of continuing decline, with home prices continuing to fall by significant percentages in all major US metro areas on a year-to-year basis from 2010 to 2011. This is extremely bad news for banks as the collateral value of all those millions of mortgaged homes steadily continues to drop, impacting the banks’ fiscal stability. The sixth link reports that new home sales are now so bad that they have sunk to the worst annual level since 1963. This further devastates the US economy as new homes are a generator for all kinds of consumer spending…which is now not happening. US consumers are rapidly becoming aware that the real status of the US economy is bad and getting steadily worse. The last link documents that US consumer sentiment deteriorated rapidly between July and August, 2011. The Conference Board’s consumer sentiment survey dropped precipitously from a 59.2 level in July to a 44.5 level in August. In a grim indicator of things to come, a shopper’s survey fell from 74.9 in July to 51.9 in August, which indicates widespread pessimism among US consumers is rapidly spreading in the USA. Half of Americans now believe US jobs are “hard to get.” No wonder Obama and Congress are feeling the heat to stimulate some job growth in the USA.
All the above indicate that the fiscal/monetary situation of the western world is steadily deteriorating. Indeed, the rapid decline in some of the indicators may be warning us that a major crisis is drawing near. Revelation 17-18 prophesy that the latter-day global political/financial system (which is underpinned by the global central banks and especially the US Federal Reserve Board because the US dollar is the global reserve currency) is certain to experience a sudden collapse near the end of the latter days of our age. As I’ve noted in many blog posts (and my in-depth article on the modern banking system crisis, Is Babylon the Great about to Fall…Ushering in a New Beast System), Revelation 18:3 identifies “Babylon the Great” as a corrupt alliance of the political leaders of the world’s governments (“the kings of the earth”) and the big multinational corporations and global banks of the earth (“the merchants of the earth”) who have essentially enslaved the people of the earth in a rigged financial game in order to aggrandize themselves. I’d say this prophecy describes pretty well the modern political/financial system. As the famous axiom goes, “If the shoe fits, wear it.” The current modern system is absolutely destined to experience a hard fall. God has prophesied it and he always makes sure he implements his prophecies (Isaiah 41:21-26). Revelation 17:16 and 18:8 prophesy the collapse of the current global system will be violent. Wars and revolutions may occur as part of the process. The Bible sets no date for its collapse (and neither do I), but the cracks in Babylon the Great’s control of the world system are steadily growing greater before our eyes. It is particularly interesting that even the US government is now investigating the big money-center banks to see what self-serving shenanigans and outright crimes were committed by them during the on-going housing collapse and the ongoing subsequent global fiscal crisis.
When Babylon the Great collapses, it will be followed by a new global system called the “beast” (Revelation 17:9-12) which will be allowed by the Creator God to reign for a mere 42 months (Revelation 13:1-5), after which it will be destroyed utterly by the returning Divine army led by Jesus Christ who, with his saints, will rule the earth and all nations for 1000 years (Revelation 19:11-20:6). When you witness the collapse of our current Babylon the Great system, you will know the end of our current age is very near. It almost collapsed in September, 2008 so it is surviving on borrowed time already. Its collapse will have a major effect on your life and the well-being of your family. I hope you have read my article, Should Christians Prepare for Future Hard Times?, because it stresses clear biblical guidance that God expects you to be preparing for bad times about which he has given believers advanced warning. As this article shows, it is sheer folly (indeed, outright disbelief in God’s warnings) if you fail to make essential preparations for this inevitable event.
I think there is another possible reason why Trichet, the head of the European Central Bank, warned the world is facing the worst crisis since World War II. That story will be discussed in a blog post in the near future, and it may leave you rather breathless when you learn what may be going on behind the scenes in major global events. It will not only indicate that the fall of Babylon the Great is drawing near, but that its fall may result in global violence as it tries futilely to cling to power.