Prophecy And The Coming Financial Collapse

Every day I log on and see where the news takes me. Occasionally this process is surprising, as in the midst of turmoil in the Middle East or other expected news, we'll come across a flurry of news stories that hit on another prophetic theme and today is one of those days. 

For anyone who follows the news closely - it is painfully obvious that the world's financial system is on the verge of collapse. The EU's problems have been well described and this situation is hanging by a thread despite what the MSM may be telling you.

The U.S. is arguably worse as the only thing keeping it alive is the constant printing of money "out of thin air" with no basis and no backing. This simply cannot be sustained. 

We know from Revelation 6 that there will be a collapse of epic proportions. It will take an entire day's worth of wages just to buy a meal. We also know that the entire world's economy will be run by the antichrist and the false prophet and the 'currency' will include mandatory receiving of the 'mark of the beast'. 

Is it possible that this scenario will be precipitated by a global economic collapse?

An 'Even Worse Catastrophe Is Coming'

Jim Rogers has a two-word message for U.S. investors: "Be careful."

"The U.S. is the largest debtor nation in the history of the world," Rogers told CNBC.com Wednesday night by phone from Singapore. "We may well have a big, big rally in the U.S. stock market, but it's not based on reality. I would encourage investors to know you're in a fool's paradise, be careful, and when people start singing praises, say, 'I've been to this party before, and I know know it's time to leave.'"

For Rogers, the author of "Street Smarts: Adventures on the Road and in the Markets," it is only a matter of time until the U.S. stock market runs into devastating problems due to the Fed's quantitative easing program and the prevalence of similar stimulative programs around the world.

"First of all, throughout American history, we've always had slowdowns every four to six years. That means that sometime in the next couple of years—three years, maximum—we are going to have problems again, caused by whatever reason," Rogers said. "For instance, there was 2001 and 2002, and then 2007 and 2009 was much worse. Well, the next time it's going to be worse still, because the level of debt is so, so, so much higher. Every country is increasing its debt at the same time."

"This is the first time in recorded history that we have every major central bank in the world printing money, so the world is floating on an artificial sea of liquidity. Well, the artificial sea is going to disappear someday, and when it does, the catastrophe will be even worse. Yes, it's coming," Rogers reiterated, adding: "If I was smart enough to tell you when it's going to happen, I would get rich."

First A Default, Then A Depression?

Indeed, dismissal of the government shutdown as a threat to markets has turned to dismay over the potential of a debt default that could have far worse consequences.

Damage from a U.S. credit default would be more than bad public relations—it could affect everyone from bankers to pensioners to holders of supposedly sacrosanct money market funds.

Consequently, stocks sold off sharply and the Treasury Department warned of the dire consequences that might result from a full-blown debt default.

Picking up on that message, Bove said the situation could be more dramatic: A Depression that would cause severe and lasting economic damage.

"The devastation to the United States would be so severe that it would take decades to recover from the Depression caused by a default and the attendant dumping of trillions of dollars of U.S. Treasury securities on the global financial markets," said Bove, vice president of equity research at Rafferty Capital Markets.

Though Bove is known for expressing strong and sometimes alarmist assertions, he is not alone in his default warnings.

In a public statement, the Treasury Department said default would be "unprecedented and has the potential to be catastrophic."

...with warnings that previous shutdowns may not serve as accurate templates for the current standoff.

U.S. Government Shutdown: Banks Stockpiling Cash

Tensions are now mounting that the faultlines exposed by the shutdown will also affect negotiations over America’s self-imposed $16.7 trillion borrowing limit.

Congress has until October 17 to agree a deal to extend the debt ceiling, or face an unprecented default on US sovereign debt, which could in turn trigger another global recession.

Banking sources told the Daily Telegraph that they had learned many lessons from a similar game of political brinkmanship in August 2011, when budget negotiations and concerns over the eurozone crisis triggered a sharp drop in stock prices around the world.

The market turmoil induced panic among customers, who made a run on banks to withdraw their cash.

“That was the fire drill, but that’s also what happens around ‘disasters’ such as hurricanes or earthquakes," one source said. "We all have that disaster playbook on the shelf.“

Dollar Sinks Further As U.S. Shutdown Passes 3rd Day

 The dollar fell again Thursday against the euro and the yen as the US government shutdown ground through its third day with no end in sight.

Worries mounted that the political paralysis in Washington would lead to the government being forced to default on its obligations.

With it appearing that the issue of raising the country's borrowing limit would be rolled into the fight over the budget, the Treasury warned that not raising the debt limit by October 17 would force it to default on its obligations.

That "could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth," the Treasury said

The euro rose to $1.3618 at 2100 GMT, compared with $1.3580 late Wednesday.

The dollar fell to 97.27 yen from 97.34 yen, while the euro rose to 132.49 yen from 132.21 yen.

5 Red Flags Of Imminent Economic Collapse

These 5 red flags will give you anywhere from a few days to a few months ofwarning that things are about to change drastically…and well before those around you grasp the full extent of what is going on. This is hopefully a scenario that never happens as this will truly be the end of the world as you knew it.

So writes Marjory Wildcraft (disasterandemergencysurvival.com) in edited excerpts from her original article* entitled 5 Red Flags of Imminent Collapse: Be Aware of the Warning Signs.

The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com andwww.munKNEE.com and the FREE Market Intelligence Report newsletter (sample here – register here). The excerpts may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.

Wildcraft goes on to say in further edited, and perhaps paraphrased in some places, excerpts:

The indicators below will give you anywhere from a few days to a few months of warning that things are about to change drastically.

1) Interest rates on US Treasuries go up steeply, and/or suddenly

The definition of ‘defaulting’ on it’s debt means the U.S. Gov’t isn’t able to pay the interest on the almost $16 trillion it owes. Currently interest rates are at all-time lows…but, as interest rates rise, the interest expense will get bigger – and this will be very difficult for a Gov’t that is already deficit spending way beyond its means.

You want to keep an eye on the current rates on Treasuries for two reasons:

1. Increasing rates will require a debt laden Gov’t to borrow more and will accelerate inflation and the date of collapse. This is a 6-12 month red flag. As of today, rates are slowly rising although they are still very low.
2. A sudden and sustained spike in the interest rates indicates that there are fewer buyers of US debt. Without the ability to borrow more money or rollover the existing debt the US Gov’t will have to shut down or do desperate things like stealing from retirement plans or citizens bank accounts. [If, and when, this happens] get your money out of the banks or markets immediately. This is a very severe red flag indicating only weeks before major financial crisis and economic collapse.

Here and here are sites for monitoring Treasury interest rates. Also read Rapid Rise In Interest Rates Will Collapse U.S. Financial System – Here’s Why

2) Price of oil goes above $120/barrel

 Essentially everything on this planet depends on oil; food, transportation, heating & cooling, and basically every consumer item you can think of. The world economy cannot sustain high prices of oil without collapsing. We saw that very clearly in 2008 when the price of oil hit a high of $146/barrel in June, and by September of that year we were in a full blown financial crisis…

If the price of light sweet crude oil [rises to, and] stays above $120/barrel, then you have only a few months before a major financial crisis unfolds. The financial crisis of 2008 was ‘solved’ by atrocious US Gov’t spending of more than a trillion dollars/year. That particular solution won’t be available to use in the next crisis. Does ‘the powers that be’ have another card up their sleeve for the next financial crisis? I don’t know, but I assume the answer is “no”.

Go here for prices on crude oil. Look on the left sidebar a bit lower on the page.

3) Food Prices Predict Rioting And Civil Breakdown

There is a direct correlation between rioting and the cost of food. It is a very simple principle – when people can’t afford to eat, they revolt [as was the case] in 2010 when food prices soared and Mohamed Bouazizi set himself on fire in Tunisia in December of that….sparking a series of revolutions throughout the Arab world…[Such] revolutions are predictable as detailed in this article…

The level of hunger and desperation in the Untied States has increased in recent years indicated by the increasing numbers of people on food stamps and increasing strain on local food banks.  According to www.FeedingAmerica.org 1 in 6 Americans are dealing with hunger…. We are approaching conditions for civil unrest and revolt here in the Untied States…

The UN FAO Food Price Index (see here) has climbed recently to within 10% of the February 2011 high of 237 and should have you on alert right now. Were the index to cross into the 240s and then stay above that level then the probability is very high you only have weeks or possibly months before widespread violence will break out world-wide.

4) Category 5 hurricane hits Texas City/ Houston area.

Approximately 30% of all US oil refining is done in a small area called Texas City near Houston.  A category 5 hurricane… hitting these refineries would cripple diesel production and, without diesel, the vast just-in-time trucking system would come to a crawl.  Food, fuel, and medicine are the three most crucial items trucked around in this county and all of those deliveries would be dramatically reduced drastically limiting their supply. Food inventoried in the grocery stores, for example, would only last about 4 days while delivery of everything else we commonly depend on would also come to a crawl. Prices would skyrocket…

Red Flag: if a category 5 hurricane hits the Houston area, you’ve only got days before rampant price increases and martial law breaks out.

5) EMP Disaster

EMP stands for electro-magnetic pulse and is a strong burst of energy that would have the net effect of destroying the electrical power grid. An EMP pulse would either be man made (i.e. terrorist induced) by exploding nuclear device(s) in the atmosphere above the U.S. or as the result of an intense solar flare from the sun. The net result would be the same -  the loss of human life as high as 90% within a six month period according to U.S. Gov’t studies.

Should your electrical power be disrupted, the first thing to do is determine the extent of the outage. Hopefully it is simply a neighborhood, or perhaps city-wide, outage that is a temporary inconvenience.

• Try using your phone…and if it works the entire system has not been destroyed, although there is a small possibility the phone system might work for a while with the backup power they have.
• Turn on a radio and if you are getting radios stations with normal programming, then the disturbance is only minor and you can relax. If your radio doesn’t work at all, or you can’t get any radio stations across the dial, the condition is very grave.
• Keep an AM radio with charged batteries in a ‘Faraday cage’ that protects the electronics from EMP pulse. AM radio signals can travel extremely far and checking transmission from AM radio stations at night is a way of determining the range of destruction. This protocol will give you awareness of the situation hours and days before those around you grasp the full extent of what is going on. This is hopefully a scenario that never happens as this would truly be the end of the world as we knew it.

The Crisis Is Imminent

“I think we are heading for a worse economic crisis than we had in 2007,” Schiff said.  “You’re going to have a collapse in the dollar…a huge spike in interest rates… and our whole economy, which is built on the foundation of cheap money, is going to topple when you pull the rug out from under it.”

Schiff says that, despite “phony” signs of an economic recovery, the cancer destroying America stems from a lethal concoction of our $16 trillion federal debt and the Fed’s never ending money printing.

According to Schiff, these numbers are unsustainable. And the Fed has no credible “exit strategy.”

Eventually interest rates will rise… and when they do, Schiff says, stocks will tank and bonds dip to nothing. Massive new tax hikes will be imposed and programs and entitlements will be cut to the bone.

“The crisis is imminent,” Schiff said.  ”I don’t think Obama is going to finish his second term without the bottom dropping out. And stock market investors are oblivious to the problems.”

“We’re broke, Schiff added.  ”We owe trillions. Look at our budget deficit; look at the debt to GDP ratio, the unfunded liabilities. If we were in the Eurozone, they would kick us out.”

“The Fed knows that the U.S. economy is not recovering,” he noted. “It simply is being kept from collapse by artificially low interest rates and quantitative easing. As that support goes, the economy will implode.”

A noted economist, Schiff has been a fierce critic of the Fed and its policies for years. And his warnings have proven to be prophetic.

His recent warnings, however, have been even more alarming.  Will they also prove to be true?

In his most recent book, “The Real Crash” How to Save Yourself and Your Country“, Schiff writes that
when the “real crash” comes,” it will be worse than the Great Depression.

Unemployment will skyrocket, credit will dry up, and worse, the dollar will collapse completely, “wiping out all savings and sending consumer prices into the stratosphere.”

…

“All we can do now is prepare for the crash,” Schiff said. “If we brace ourselves properly and control the impact, we will survive it.”

Indeed.

We must understand that none of the fundamental problems leading up to the 2007/2008 financial crisis have been resolved.

If anything, it’s gotten worse.

Our politicians will not change, and therefore, will change nothing in Washington. Wall Street is as corrupt as ever. Our central bank continues to devalue our currency. There is no end in sight for these people. They will continue on this unsustainable path until we as a country finally hit the proverbial brick wall.

As Peter Schiff notes, the destruction to life as we know it in America and the world is imminent. It’s going to be severe.

So much so that the government has been simulating the collapse of our financial system, the collapse of our society and the potential for widespread violence.

Also see:

Economically: That Ain't The Way To Have Fun

Don't Worry America, We're Already In Default

What Will Happen To The U.S. Credit Rating?

America's Budget Problem In One Chart

Picturing The Dangers Of An All-Powerful Federal Reserve

Jim Rogers Warns U.S. Stock Investors: 'Be Careful...You're In A Fools Paradise