The Closing Act
The prophet Ezekiel wrote so much that we now see as prophecy but nowhere in his writing is the outlook so frightening as the one he describes in Chapter 7. Several times he echoes “the end is come.” In Verse 7, he describes the same thing in slightly different terms, “…. the time is come and the day of trouble is near.” Then in verse 12 he warns, “The time is come, the day draweth near…” In his scenario, the Israel lands will all be under the rod. The lands will be full of bloody crimes, the cities full of violence, the worst of the heathen will possess our houses, our holy places will be defiled and destruction will come upon us.
This is a scary picture but could it be the reality in the years just before the fall of Babylon. Remember God said through Ezekiel (Verse 3) “I will recompense upon thee all thine abominations.” Are we in those years now, in fact, are we arriving at the pinnacle? Let’s look at a few of the symptoms of a very sick world and as we do, think particularly of what has come upon us since 911.
Sadly, the world is like two super charged planes headed for one another at top speed and a crash is inevitable. Don’t pay attention to the spin politicians place on events; they invariably interpret truth in the most convenient light. The fact is, the economic world is broke and like Humpty Dumpty, all the king’s horses and all the king’s men cannot put it together again.
In August 2001 I wrote an article (published in September that year just before 911) warning of the excesses of money supply and the dangers of derivatives. I had said we were in a no-win situation and that the day of reckoning was just round the corner. I also wrote, “As America, the world’s greatest economy, goes, so goes the world.” And America is clearly in trouble today. The painful cost of shipping millions of jobs and thousands of plants to third world countries, along with wars, illegal immigration, excessive money supply growth are only some of the ills coming home to roost. America has spent its way to poverty. As an aside, one has to wonder why America became the spender of last resort. Yet, they did, particularly since the Asian meltdown of 1997 and now every American is paying the price. Don’t think the other Israel nations are immune; they all played the same game but with fewer chips.
Who could have guessed that 2001 would have been such a disastrous crossroad for Israelites? In a future article I will speculate how the harvest period began for the Esau Dominion. But suffice to say, it was the beginning of true sorrows for the Israel nations. We all lived through the years since so I will look at the cancerous results in just one area.
Space prevents a full analysis but let’s at least look at the world of no reality, the little known dark cloud lurking over the entire world economy. It goes by a number of names, like hedge funds, off balance sheet products or derivatives. Perhaps the best way to describe the derivatives to which I am referring is to relate them to an insurance scheme where one party underwrites another party’s risk. The great danger, of course, is that the party who assumed the risk will not be able to fulfill the obligation. Let me give you an example, “Why was Lehman Brothers sent to bankruptcy whereas other financial biggies were saved by taxpayers through rescue plans.” Well, according to a local economist I talk to often, one reason is that Lehman held only 10 billion oz of silver but had issued 120 billion in derivatives and as the party who assumed the risk, they were unable to fulfill their obligations.
Relating derivatives globally, think on this! The world economy is somewhere around 60 trillion dollars whereas the issued derivatives are somewhere in the neighbourhood of 900 trillion. Scary isn’t it when you think of the potential risk? But something even scarier, there is approximately 10 billion oz of silver produced annually, 9 billion is used for commercial purposes so 1 billion is available. But, some suggest that in the past six months or so, 100 billion of derivatives have been issued. That’s a lot of “based on nothing.” My economist acquaintance mentioned that another major bank with 1.5 trillion in assets and 1.2 trillion in debt has 97 trillion in derivatives outstanding. It reminds me of what I wrote in 2001, “As the majority of derivatives pass as off-balance sheet products, the risk factor cannot be spotted through financial statement analysis. There is simply no central clearing system to measure the overall risk. One analyst put it this way, “If all the houses in New York burnt down, the insurance companies wouldn’t have the money to cover the insurance. Yet, every financial house in America is potentially burning because of the risk of derivatives, yet no one is keeping track of the risk factor.” We do know that 136 banks in the United States went broke so far in 2010, worse than the depression days of 1929.
I wish I could go into a myriad of other ills, like the fragility of pension plans the world over, why at least one state is either issuing or considering issuing I.O.U.’s for tax refunds, why England is in even worse condition that America, what’s in store for real estate and on and on. Still, what has been written, particularly on derivatives, may help us understand the staggering equity market correction of 2008, the recent 1,000 drop written off as a trader error and why more of the same is on the horizon.
Remember, the system is broke and there is not enough fingers to plug every hole in the dam. It must ultimately collapse. As Revelation tells us, “Alas, alas, the great city Babylon, that mighty city! For in one hour is thy judgment come.”