On this the first Monday in October, 2008 we’ve come to point where the American Sub Prime Crisis has metastasized throughout the global economy and bank failures and frozen credit markets have infected Europe, and to a lesser extent, Asia as well. Europe has been forced to nationalize banks and open the spigots of their central banks just as the United States has done; and there’s no end in sight. The Probability of a Global Depression is high and higher still is the probability that in the United States of America, life as we knew it is over. The United States is going to, rightly, get the blame for this mess and when the depression hits here it’s going to be bad enough but we’re going to be treated to a massive economic event beyond a depression and that’s going to be the destruction or restructuring of the dollar as a viable currency. Right about now you’re seeing oil down below $90 a barrel and flight into the dollar as people take customary escape routes amid a growing economic panic. We’re going to be dealing with the beginning of a depression and then we’re going to be dealing with the collapse of the dollar and that will really be the finish of the United States for some time to come.
In the last economic depression, the so called Great Depression of the 1930’s our country was the leading creditor nation in the world and the Government, under Hover, reluctantly began what became the New Deal. Under FDR the government jumped in with great gusto and great exuberance and prolonged the crisis past the duration that Europe experienced by many years. While we were still struggling in the thirties, Adolph Hitler was busy building his war machine in violation of the treaty of Versailles. Today our government is in debt to the tune of tens of TRILLIONS of what is likely to become increasingly worthless dollars. The government has no credibility, no ability to take strong decisive long term action that we will all find very painful but it’s necessary if our kids are going to have any chance at all. This is just the beginning and by the end of the week lots of people on “Main Street” will begin to feel the effects as payrolls are not met and even as the possibility of bank runs effecting even sound banks.
In an environment like this, cash is king, and those that have it, and that have defeated debt, will be in position to ride this out while others who have no access to cash and or who are deeply in debt could lose the whole kit and caboodle. Too many people, for far too long have defined their worth by their credit score rather than the money they have in the bank. In the initial period of the financial event we’re entering into, cash will still have some value, but in the later stages, if this meltdown continues we may see a situation where basic staples are the best currency of all. Either way it’s going to take time for the governments of the world to put the system back together again, if this indeed is the event that sinks the world markets and drives us into a planetary depression. Unemployment may occur at any time because of the freezing up of credit and the reluctance of banks to loan anyone anything as everyone fights for liquidity.
Make no mistake: This day is looking like the beginnings of a true global panic and until the panic is alleviated the panic is going to be far more destructive than Hurricane Katrina and it won’t be limited to just one continent. Imagine a Category 5 hurricane hitting the entire planet all at once. Many systems may break down temporarily or for an extended period. I have no doubt that the powers that be will get a handle on this mess at some point but I also have no doubt that the world will be a very different place in the months and years ahead. The America we knew is already gone.
I suspect that the likely outcomes are as follows:
· We could see short term unemployment as high as 30% – 40% in the coming days if this trend continues. Without a functioning banking system companies can’t make payroll.
· While commodity prices are now dropping as the “event” ends and we see the damage we’re going to have to live with and try and repair prices are going to go way up for the essentials.
· We’re going to see a massive growth in government and the beginnings of a new form of global governance starting in the financial sector so that this sort of thing can never happen again. Look for world banking systems and even the push for a global currency.
· We’re going to see a debt repayment plan, like a bankruptcy schedule worked out between the United States and countries like china, Japan, the Saudis and others who are holding our worthless dollars if I’m right and the currency crashes down the line. It’s going to be like a payroll tax.
· We’re going to see Medicare and Social Security default within this crisis as the government is forced to shift priorities to clean up the economic mess. I would guess that we’ll also see an attendant rise in suicide among the elderly and a rise in the acceptance of Euthanasia.
· We’re going to see the recall of American Troops around the world as we can no longer afford to keep them in place as the world’s policeman. The Geopolitical System will be severely stressed and instability will become the norm as the regional centers of power vie for advantage over the others.
· We’re going to see power struggles emerge between China, Europe and Russia and a fearful competition for recourses and military and space based power as the world becomes a much more dangerous place in the years to come.
· We’re a post Christian Country and in hard times the people are far more likely to turn to lawless behavior to survive than was the case in the thirties.
· We’re going to be conditioned to abandon all rational principles to make the crisis go away and follow any crazy leader or ideology if it solves the problem. We must resist this temptation at all costs and emphasize getting a good solution over a quick solution.
· We’re going to be conditioned to believe that ultimately we all need the governments help and that “Capitalism” doesn’t work anymore than communism did. We’re going to see the triumph of socialism and corporatism to form a new or neo fascism for the 21’st century that’s regional and ideological instead of merely national.
· We’re going to see far more open hostility toward religion as people adopt and place their faith in government to save them instead of adopting a Christian view and placing our faith in God. I think Christian resistance to global solutions and insistence on personal responsibility will be received with ever grater hostility in the months and years to come. People will believe in big government as they once believed in God.
· Political Correctness and Socialism and Environmentalism may well meld into a new quasi-religious system that will become the basis for the first true global religion. We’re all going to be “Citizens of the World” and lots of new social structures will emerge to reinforce this view.
These are the most dangerous times I’ve ever seen in my life and the United States is beset with intractable problems on many fronts. If these are indeed the last days we need to beware the New FDR to come, who’ll make all the problems we’re about to experience go away, as if by magic. We need to be sober and clear eyed and honest about the possibility that this new economic system that will not be a good thing no matter how well it gets packaged. If we get roughed up as bad as I think we’re about to be; than people will do anything to stop the problems; and that’s when we’re at our most vulnerable. Bad times can create bad leaders and we need to be wary, even in a massive economic crisis, that we place our faith in God and his message above the fear generated by the economic and world conditions. This is a time to stay strong with God and with one another because if I’m right things are going to get a lot worse from here.
If you’re looking for some spiritual guidance and comfort and some excellent teaching churches I have some links on this page. New Hope Christian Fellowship is the best teaching church I’ve ever encountered and right up there would be New Venture Christian Fellowship in Oceanside Ca in addition to Skyline in San Diego with Jim Gerlach. Grace Church in Eden Prairie in Minnesota is excellent and Davisville Baptist Church in Southampton PA is likewise good. Billy Graham Ministries is always a good place to start but having a Christian Community in times of great fear can be a true lifeline.
This is not a time to go it alone; it’s a time to return to the values and discipline that built this country and a time to regain a Christian community. Putting our faith in the dollar and in credit markets is not the answer: but putting our faith in God and each other is the way out of this mess that actually will work. Rediscover a community of faith in these disillusioning and dangerous times because it’s the one thing you can always count on no matter the convulsions on Wall Street or other unsavory world events. Faith in god will save you while faith in extended unemployment benefits and a 700 billion bailout will only serve to control you: Government is not God.
Stout hearts, folks. I sure hope I’m wrong about the stuff that coming but if we hang in there and do the right thing, we’ll be very glad we did.