Why the U.S. Economy Will Not Recover Long
Term
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WHY THE US ECONOMY WILL NOT RECOVER? For some years I have been writing about the
impending economic collapse of the USA and the Anglo-Saxon nations. This
economic collapse is now unfolding. What will be the impact on the
global economy, and can it be saved? The key reason why the world is facing this economic
crisis is that some nations have been spending far more than they earn, while
others have been accumulating large surpluses that can be invested in
productive enterprises providing a genuine return on capital. These
imbalances have created major distortions in the global economy with which
the world is now coming to terms. While thousands of words have been
written by economic analysts, this is the bottom line: The fundamental cause of the current global economic
crisis is that for many years the Anglo-Saxon nations have been living way
beyond their income, relying on borrowing money from their creditor nations
to cover their trade and current account deficits. Our leaders have
failed to warn their people that we could not live on borrowed currency
indefinitely, and eventually we would be required to pay back the borrowed
currency. Yet still they fail to face
up to facts and tell the people that the Anglo-Saxon nations cannot continue
maintaining their extravagant lifestyle financed by borrowing from the rest
of the world. Our political leaders seldom mention the reality of
having to earn export income to service their international balance of trade
deficits. They have convinced
themselves that our trading partners will continue to accept their printed
money in return for their goods and services purchased. With the global
economy now slipping into a deeper recession, the prospects of the
Anglo-Saxon economies being able to trade their way out of their current
economic morass grow bleaker by the day, as the export markets for goods and
services from the Anglo-Saxon world disappear, making it impossible to repay
their foreign creditors with anything but depreciating paper money. Recently, Britain, the USA, Australia and New
Zealand governments have gambled by guaranteeing bank deposits to prevent a
run on their banking systems…and partly to maintain confidence with their
overseas creditors. They have created currency though the banking system to
maintain adequate liquidity for the financial markets to remain operating,
and have been willing to advance capital to the private sector to finance loss-making
companies and financial institutions. What is not mentioned is that
creating fiat currency to solve their immediate economic problems will not
solve the long-term financial problems their nations face – it is like
throwing fat on the fire, and will only lead to a more serious collapse of
their currencies and economies. These governments approach the current crisis by
encouraging the consumer to spend more to create demand for goods and
services. Yet already many people are already struggling with the cost
of servicing debt, and the only way out is to increase real incomes –
something that is difficult in a contracting market, with rising costs. For governments to encourage their people
to borrow and spend is like taking an alcoholic to the bar, and paying for
his drinks, telling him to get drunk. As a result, they now run the
risk of national bankruptcy, defaulting on their international debt
obligations. Why has the world gotten itself into this economic
crisis? Can the Anglo-Saxon nations recover from this financial train
wreck? The media is filled with countless reports on the current
economic crisis, what has caused it, and what the solutions could be.
Yet none of these modern-day seers have been able to accurately answer the
following questions: What are the
causes of this economic crisis, what are the solutions, and what will happen? Many are hoping that there will be a recovery in the
markets that will save us from a global economic collapse. Nearly all
nations are desperately trying to stimulate economic activity through a
mixture of government spending, borrowing, printing money and creating bank
credit. Yet nothing appears to be working as the economic news around
the world continues to worsen. Meanwhile several nations, especially Japan and
China have put in place measures in an effort to stimulate their domestic
economies. Those countries, which have the reserves to do this, may
need to withdraw their investments from their Anglo-Saxon debtor nations to
prop up their domestic economies. This will greatly affect the
English-speaking nation’s ability to revive their economies, which have
become dependent on the inflow of capital from Asia to finance their banking
systems. This would result in the collapse of the Anglo-Saxon banking
system, unless they are nationalized by the governments who have guaranteed
the deposits. The Western Governments themselves run the risk of
becoming insolvent, and will be dependent on their Central Banks to create more
credit for their banking institutions, resulting in debasing the value of the
currencies. Many governments around the world have increased the
supply of their currencies in a desperate attempt to save their economies
from unraveling, resulting in massive unemployment, corporate collapses,
government insolvencies, and personal bankruptcies. Will these measures
work? While to date there is little sign that this government intervention
has had any success, the amount of currency injected into the banking system
is expected to have some short-term impact in the New Year. This will
inflate paper asset values to prop up the collateral for the banking system.
However, the biggest impact will be on the value of currency.
Increasing the money supply without a corresponding increase in goods and
services will result in debasing the value of that currency.
Hyperinflation will quickly set in. There may well be a sharp but short recovery in the
New Year as this flood of newly-created fiat currency finds its way into the
consumer’s pockets. Sadly, this recovery will only be short-lived as
inflation takes hold and these paper notes depreciate in value. The
American dollar as the world’s major reserve currency will no longer be accepted in that role once inflation gains
momentum and international creditors lose confidence in the US economy. The
dollar will quickly spiral downwards in value to rival that of the Zimbabwe
currency. The collapse of the dollar will result in the disintegration of the
American society. There has been a failure on the part of the
Anglo-Saxon nations (with the exception of Canada) in regard to addressing
the cost of servicing their large and growing external debt and current
account deficits. Inflating their currency supply will make it easier
for those with dollar debts to repay them, but in the process it will destroy
the confidence of their creditors who will suspend lending credits to cover
their deficits. This will see the collapse of the US dollar along with
several other currencies which run parallel to the USD in the global economy. What is occurring globally is a realignment of the
major world economies with a shift in wealth away from the crumbling
Anglo-Saxon economies to the Eurozone and the emerging Asian nations.
What will this new economic order mean to the world? The Eurozone will be the region that will recover
quickest. This region is the world’s largest economy, and is able to create
sufficient volume of trade internally enabling it to recover more quickly
from the current recession than other economies. While most of the EU
members are creating stimulus packages, Germany is adopting a more
conservative approach, reluctant to inflate their money supply without an
increase in productivity, having lived through the consequences of
hyper-inflation in the past. It is Germany, the largest exporting
nation in the world and the largest economy in the EU, which is sitting on
generous foreign reserves. By taking a
cautious approach, it will be in better position to provide the pillars for a
strong Euro. There is no doubt that the export driven Asian
economies will be severely affected by the collapse of the US economy and
will take some-time to readjust by shifting to greater emphasis on trade
within Asia and developing their domestic infrastructure. Increasing
expenditure on the military is one option for those countries which have the
resources to do so. In particular Japan, Germany and China may well
decide to expand their defense budgets to create employment in their
manufacturing sector to replace income from their declining export markets,
to enable them to maintain their manufacturing base. The outcome will be a new world economic order,
dominated by the Eurozone, lead by Germany. The new European power
block will replace the dominance the Anglo-Saxon nations have held on the
global economy for the last 200 years. The Euro is the only currency large
enough to replace the $US as the world’s reserve currency. Modern-day economists who believed that they could
defy natural economic cycles through central bank and government intervention
will be shown that their theories have failed. The Bible has given us specific economic laws that
will ensure prosperous, sustained communities where the wealth is shared with
equity and prosperity and can be in the reach of all mankind. In brief, these laws require debts to be
written off every 7 years, interest not to be charged within domestic
economies, investors to take equity investments rather than lend money, and
if land is used as collateral it is to be returned to the original land
owners after 50 years. Government and welfare to be funded with a flat
tax not exceeding 14% of income. These economic laws have been provided to ensure we
would have prosperity and equal distribution of wealth. It would mean
that the parasitical banking system we have today would not be
necessary. Institutions that have
emerged such as hedge funds, future trading, derivates, and currency speculation
would not have been able to develop under such laws. There will emerge a new world economic order from
this crisis. There will emerge a new EU based World Central Bank
(modeled along the lines of the ECB), which will restore global economic
prosperity and order. This new institution will replace the World Bank,
the Bank of International Settlements (BIS) and the IMF with the authority to
regulate the global economy and direct capital into productive infrastructure
ventures, rather than the Anglo-Saxon market-driven model that allowed capital
to have the freedom to speculate rather than produce. This will mean a much more regulated economy than
that with which we have become familiar, and many of the personal freedoms we
now take for granted will be denied.
In particular the debt-ridden Anglo-Saxon nations will be subjected to
many regulations which will mean that the people will be subject to virtual
slavery. The suffering of the people of Britain and the USA
following their economic collapse will be sudden and far worse than many can imagine.
Our people, who have had so much in the past, will find it very difficult
living in third-world poverty, where they do not know where their next meal
will come from, where there is a total break-down in law and order, and there
is a complete social anarchy. The curse being bought upon the
Anglo-Saxon people is a direct result of their rejection of the Law of God. The events now unfolding have historic
significance. We are seeing the emergence of a new world order that
will enforce the promulgation of a global economy, with one reserve
currency. It will mean the end of many of the freedoms we now take for
granted. It will be a time of great suffering for the Anglo-Saxon
people as their economies collapse, and they face starvation, poverty and
wide-spread disease. It will be the precursor for the time the Bible
describes as the Great Tribulation. Bruce Porteous 1 Jan, 2009 Dear Reader, Ellen White said that there are going to be many marytyrs at the end-time. Why are SDA’s not being warned by their leaders of the things taking place in the world involving threats to Christians? (Click on the following link): http://campaign.constantcontact.com/render?v=001zhxIANf2OP4KNrc-H8q1BkEn9pQeZBOcby_qnM3xQcvv0V9g9M6MbLFpHRTwID1E1l6ZICarVyQJ-dwgRgtzw_XzlbdmsMDyKiNh7PuGOPTEfU0IR1mHT1M2CcH9T7kaDjHtd8PSbwI-ofJyScCvchVtf7MbmZDi Ron |