Monday, October 14, 2013

The words "USA" and "default" beginning to appear in news headlines: big changes ahead?

The words "USA" and "debt" and the dreaded word "default" are starting to be used in the same headline. The Congressional-Presidential standoff on the budget and the Federal government shutdown has rattled the world. As the dollar is currently the world's reserve currency this is making everyone else very nervous. The problem is, as USA Today explains,

Source
"Treasury Secretary Jacob Lew, who shuttled between the global finance talks and negotiations with Congress over the debt ceiling, has warned that he will exhaust his borrowing authority Thursday and the government will face the prospect of defaulting on its debt unless Congress raises the current $16.7 trillion borrowing limit."

CNBC explains "Debt is not the only method to finance overspending"
"When our government spends more money than it takes in, as it has been doing both consistently and at an accelerating pace for the past 30 years, it has to find a way to pay for that overspending. As any individual or business knows, there are choices you face when you need more money than you have at hand. You have to find a way to bring in more capital through making more money, selling some assets or securing financing."

With the current climate of government strangulation of the entrepreneurial spirit and small business death, it's not likely we will make more money. On a larger scale, we have no assets to sell, except land. Would Russia like Alaska back? The scenario for raising money is unlikely. And as for securing financing, China has already gone to their limit for us in buying our debt and has warned us they are loathe to buy ore. They are also making moves to remove the US dollar as global currency reserve. So that scenario is unlikely too.

CNBC says, "Debt cannot be used as a continual financing solution without dire consequences."

One dire consequence that is likely with the US and the Chinese is this: invasion. Don't laugh. Wikipedia explains sovereign default:

"Since a sovereign government, by definition, controls its own affairs, it cannot be obliged to pay back its debt. Nonetheless, governments may face severe pressure from lending countries. In the most extreme cases, a creditor nation may declare war on a debtor nation for failing to pay back debt, in order to enforce creditor's rights. For example, Britain routinely invaded countries that failed to repay foreign debts, invading Egypt in 1882."
Members of a Chinese Military Honor Guard. Source Wikipedia

If we can't pay China back, do you think they will hesitate to come get what is owed them? Something to think about. Even if they do not invade our mainland, they may seize overseas assets.

"Other examples include the United States' "gunboat diplomacy" in Venezuela in the mid-1890s and the United States occupation of Haiti beginning in 1915. A government which defaults may also be excluded from further credit and some of its overseas assets may be seized"

I think that we think the world is civilized and that finances and war are further apart than they really are. And remember, the second horse of the apocalypse if the fiery red horse of war. "Peace will be taken from the earth." (Rev 6:4).

Here are three snippets of current news headlines remarking on the US potential for default.
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World top bankers warn of dire consequences if U.S. defaults
Three of the world's most powerful bankers warned of terrible consequences if the United States defaults on its debt, with Deutsche Bank chief executive Anshu Jain claiming default would be "utterly catastrophic. This would be a very rapidly spreading, fatal disease," Jain said on Saturday at a conference hosted by the Institute of International Finance in Washington. "I have no recommendations for this audience...about putting band aids on a gaping wound," he said.

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Get your fiscal house in order: China warns US as Asia expresses concern for $1.3tn of investments
"China, the biggest foreign creditor of the United States, has waded into the American budget crisis, warning Congress that it must resolve the political impasse over the debt ceiling without further delay. The Chinese Vice Foreign Minister, Zhu Guangyao, told America’s deadlocked politicians on Monday that “the clock is ticking” and called on them to approve an extension of the national borrowing limit before the federal government is projected to run out of cash on 17 October. We ask that the United States earnestly takes steps to resolve in a timely way the political issues around the debt ceiling and prevent a US debt default to ensure the safety of Chinese investments in the United States,” Mr Zhu told reporters in Beijing. “This is the United States’ responsibility,” he added."

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Finance officials press U.S. on default risk
"World finance officials pledged on Saturday to deal with new risks to the global recovery while they kept up pressure on the United States to address the biggest threat of all — a market-rattling default on U.S. debt."

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CNBC further explains,
UK Telegraph

"However, a default is hardly the only threat to our credit standing. We lost our AAA credit rating for the first time ever from S&P in 2011 based not on a default (which was threatened but never happened), but instead on our overall accumulation of debt, lack of a credible plan to reduce it and overall problematic policymaking governance. All of those issues have gotten worse. We have more debt than two years ago and there has been no improvement in our political discord, the financial savvy of our lawmakers, or in our governance in general."

The economy plays a major role in the Tribulation. As a matter of fact, an entire chapter of Revelation is devoted to the Lord's destruction of the global economy. (Revelation 18).

Revelation's third horseman, the Black Horse of the Apocalypse, is unleashed by Jesus to wreak economic havoc on the world (Revelation 6:5-6). This happens at the beginning of the Tribulation. The world economy fails, and is restructured as seen in Revelation 13 into a one world economy with one currency. (Revelation 13:16-18)

The world economy picks up and reforms and apparently successfully too, given the luxuries that the merchants lament when it collapses for the final time in Revelation 18. This last, restructured economy is the worst one of all, given that satan has been allowed to thoroughly pollute it to its final length of sin.

Source
"Come out of her, my people,
lest you take part in her sins,
lest you share in her plagues;
for her sins are heaped high as heaven,
and God has remembered her iniquities." (Revelation 18:4-5)

What I am saying is that there are several characters who play a major role in the final days. There's the antichrist, the false prophet, satan, his unholy angels, the holy angels and of course Jesus. The final religion and the final economy are major players too. Those last two become judgments upon the people of the earth, vehicles for the pursuing of the length of sin and two of the means by which Jesus judges humanity. Remember, the participating in the economy or not participating in the economy is tied to whether you will worship the beast or not worship the beast. The economy is the tempting fruit and the ultimate dividing line. Those who wish to participate in the final economy will accept the mark of the Beast which is a mark of worship and allegiance to him. Christians who refuse will die of starvation or be hunted down and martyred. (Revelation 13:16).

Drastic, catastrophic changes for the global economy are ahead. You know, it seems that we have always had an economy like this one, but there have always been eras in finance as well. In Mesopotamia archaeologists discovered 5,500 year old clay balls that indicate a record keeping for a thriving economy. This is amazing because they predate the time before writing was invented. (source).

For a long time, bartering was the means by which men traded. Then modern banking was invented in 14th century Florence, Italy. Then we invented bar codes and checks were born and then credit cards and ATMs all the rest we know in this generation. And all along, countries default and hyperinflation comes and goes.

Unveiling of the Statue of Liberty
Enlightening the World
(1886) by Edward Moran.
Museum of the City of New York.
Since 1800, 91 countries have defaulted or had major debt restructuring. The United Kingdom defaulted four times. Twenty have defaulted in this century, since 2000. It's not an unknown thing and is actually more common than we think. That it can't happen to the US is ridiculous to even entertain. Of course it can. We are not above the laws of finance and the rules of sound economy. That is is likely to happen to the US is more logical to entertain.

Such huge changes are ahead for us. Keep looking for Jesus, since we are not appointed to wrath (1 Thess 5:9) and will not be present here for any of these devastating earthly changes. I'm looking forward to the wonderful changes in the plan Jesus has for those who love Him: rapture, (1 Cor 15:52) glorification, (1 Cor 15:53) and eternal rest and dwelling in heaven with Him. (1 Thess 4:17). Even so, come soon, Lord Jesus!

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