The world is moving to two global currencies: Gold and SDR’s. The value of SDR’s (Special Drawing Rights) is determined by a weighted basket of currencies and is accounted for by the International Monetary Fund (IMF). The U.S. Dollar is expected to become more of a regional currency like the Euro and Yen. Gold has an absolute value whereas the SDR has a relative value, sort of like Divine Nature versus human nature.
The crisis is deepening:
1. PIIGS (Portugal, Italy, Ireland, Greece, Spain)
These countries have serious economic problems and will cause a drain on the rest of the Euroland countries. See: http://online.wsj.com/article/SB10001424052748704182004575055292744721172.html
2. States
“The mire facing California, for example, makes Greece’s woes look somewhat manageable. California, staring at a $20 billion budget gap over the next 17 months, accounts for about 13 percent of the U.S. economy. Greece accounts for just 3 percent of the economy of countries that use the euro.” See: http://www.businessweek.com/news/2010-02-08/u-s-losing-aaa-is-way-to-rein-in-pelosi-reid-david-reilly.html
California, New York, Michigan, and 37 other states are all facing serious fiscal shortfalls. They are trying to increase taxes in an election year so you can imagine how this will turn out. Municipal bonds of many municipalities will be downgraded, possibly forcing bankruptcy at the municipal level. Once a few take the path and dilute the stigma of bankruptcy, many will follow.
3. Federal Deficit
The U.S. is on an unsustainable course with deficits rising, the national debt soaring, and Social Security and Medicare preparing to go bust. At 10 percent of gross domestic product, the $1.6 trillion budget deficit for 2010 forecast by the Obama administration ranks as the highest such ratio since World War II. The administration predicts that this ratio will fall to about 4 percent by 2015. Who are they kidding? Debt is expected to climb to 77 percent of gross domestic product by 2019, according to Moody’s. I wonder what the worst case scenario might be?
3. Unemployment
There were 6.1 unemployed workers in December, on average, for every available position, according to Labor Department data released Tuesday. That’s a sharp increase from 3.4 jobless workers per opening in December of 2008, and much worse than the 1.7 unemployed people per opening in December 2007, when the recession began. This number does not count the students who are looking for a job but unable to find one since older, more mature unemployed workers are snatching up those positions normally filled by students. Is this a better job picture?
4. Home Equity
More than a fifth of U.S. homeowners owed more than their properties were worth in the fourth quarter as the number of houses and condominiums lost to foreclosure climbed to a record, according to Zillow.com. Bank sales of foreclosed properties accounted for a fifth of all U.S. home sales in December, Zillow said. Such transactions made up 68 percent of sales in Merced, California; 64 percent in the Las Vegas area; and 62 percent in Modesto, California, the company said. When you see your largest asset dwindle in value, what makes the government think that you are going to go on a shopping spree and initiate a recovery? See: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=at6VKvccpCzs
5. Iran
Iran continues to keep the nuclear stakes in the forefront of the Middle East dilemma. Their threats may provoke an Israeli response soon. See: http://www.telegraph.co.uk/news/worldnews/middleeast/iran/7193935/Iran-warns-it-will-punch-the-West-on-Islamic-revolution-anniversary.html
With the complexities of the issues around the world and the growing globalization that eliminates the protective economic walls around countries, Our Heavenly Father is the only one who can truly get us out of this mess. World leaders would have to be in one accord as well as their citizens to navigate out of this monetary and fiscal crisis that just won’t go away. The banksters have finally crossed the rubicon and have no way to undo the damage they caused over the last few decades. The average citizen does not want to pay for what the wealthy and privileged have done. Most of the population operates on the assumption of “entitlement” even if they are only entitled to water at the local stream. Who is personally willing to give up any hard earned assets or access so that the wealthy can escape this crisis?
The only true solution is for Our Heavenly Father raise up HIS elect to solve these problems by hearing HIS voice and only acting according to HIS Word. Otherwise, we’re toast!