Jim Rickards: World on Knife Edge of Debt Crisis
(Pixabay photo)
Jim Rickard posted the following at his Daily Reckoning site:
World on Knife Edge of Debt Crisis
Herbert Stein, a prominent economist and adviser to presidents Richard Nixon and Gerald Ford, once remarked, “If something cannot go on forever, it will stop.”
The fact that his remark is obvious makes it no less profound. Simple denial or wishful thinking tends to dominate economic debate.
Stein’s remark is like a bucket of ice water in the face of those denying the reality of nonsustainability. Stein was testifying about international trade deficits when he made his statement, but it applies broadly.
Current global debt levels are simply not sustainable. …
And developed economies are piling on debt faster than they are growing, so debt-to-GDP ratios are moving to levels where more debt stunts growth rather than helps.
It’s a catastrophic global debt crisis (worse than 2008) waiting to happen. What will trigger the crisis?
In a word — rates. Low interest rates facilitate unsustainable debt levels, at least in the short run. But with so much debt on the books, even modest rate increases will cause debt levels and deficits to explode as new borrowing is sought just to cover interest payments.
Real rates can skyrocket even as nominal rates fall if deflation takes hold. Real rates are nominal rates minus the inflation rate. If the inflation rate is negative, real rates can be significantly higher than the nominal rate. (A nominal rate of 1% with 2% deflation equals a real rate of 3%.)
The world is on the knife edge of a debt crisis not seen since the 1930s. It won’t take much to trigger the crisis. 12/16/19 https://dailyreckoning.com/rickards-world-on-knife-edge-of-debt-crisis/
And the debt for the USA keeps getting worse:
WASHINGTON—The government budget gap was 12% bigger in the first two months of the fiscal year, as higher spending on the military and health care pushed up government outlays. 12/11/19 https://www.wsj.com/articles/u-s-budget-deficit-widened-12-in-first-two-months-of-fiscal-year-treasury-says-11576091040
And yes, debt has increased under Donald Trump. According to the US Treasury, the day before his inauguration, the debt of the USA as of 01/19/2017 was 19,944,429,217,106.77 (https://treasurydirect.gov/NP/debt/current).
According to the US Treasury, the debt of the USA as of 12/13/2019 (the latest date listed when I checked today) was 23,050,442,180,309.76 (https://treasurydirect.gov/NP/debt/current).
Notice something the US House of Representatives did today:
The House of Representatives on Tuesday passed a $1.4 trillion spending package.
https://www.cnbc.com/2019/12/17/congress-poised-to-raise-minimum-age-to-buy-tobacco-to-21.html
The debt is rising and cannot continue like this forever.
Some believe that the ‘solution’ to the debt situation with the USA is a ‘financial reset.’ We put out a video on our Bible News Prophecy YouTube channel about that:
Financial Reset by 2022?
Euro Pacific Capital CEO says the US economy is about to crash because of debt. US National Security Adviser John Bolton declared debt as a threat to society. Forbes writer John Mauldin says that a financial reset is expected in the 2020s, as does Willem Middelkoop, who believes gold may be part of a reset. Morgan Stanley believes the end of the current economic cycle may be in 2021. MIT pointed to changes in the 2020s. How much debt does the USA add daily? Does any of this tie in with biblical prophecies? Does Habakkuk 2 have applicability to the USA? Is it wise to try to discount debt and not pay it back in full? Dr. Thiel addresses these issues in the light of scripture.
Here is a link to the sermonette video: Financial Reset by 2022?
The Bible also has an end time prophecy that those who read it may want to run:
2 Then the Lord answered me and said:
“Write the vision
And make it plain on tablets,
That he may run who reads it.
3 For the vision is yet for an appointed time;
But at the end it will speak, and it will not lie. (Habakkuk 2:2-3)
What is this end time prophecy about that should cause people to run? It is a prophecy about debt accumulation:
6 “Will not all these take up a proverb against him,
And a taunting riddle against him, and say,
‘Woe to him who increases
What is not his — how long?
And to him who loads himself with many pledges’?
7 Will not your creditors rise up suddenly?
Will they not awaken who oppress you?
And you will become their booty.
8 Because you have plundered many nations,
All the remnant of the people shall plunder you (Habakkuk 2:6-8)
The expression “how long” refers to the fact that the debt cannot continue forever. It is unsustainable and will end in disaster.
Some years back, James Dale Davidson of Strategic Investment put out a video that stated:
One day … maybe in a week from now, maybe in a few months from now … the full force of the financial hurricane will hit our shores.
You will wake up to the reality that the dollar is no longer the “world reserve currency.”
A white paper distributed by Project Censored describes what that world will look like:
The impact on daily living for the U.S. population could be severe. In addition to increased costs, states and cities will see their pension funds drained. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. People will be increasingly charged for privatized utilities that were once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless.
Extreme?
Hardly. …
Day of Reckoning Fallout No. 1: The Collapse of the Dollar
The dollar will collapse, almost overnight. …
Day of Reckoning Fallout No. 2: Prices of Everything You Buy Will Double
Secondly, the price of everything we buy will double.
And not just because “when the dollar goes down, prices of every day goods go up.”
That is just the start. …
Day of Reckoning Fallout No. 3: Unemployment Triples
Right now the unemployment situation doesn’t look too bad. But once the dollar is no longer the “world reserve currency,” that financial sector will be blindsided. And while you might not be in that industry, those people make billions of dollars that they use to buy stuff — houses, cars, gadgets and more. My point is, there will be a ripple effect. I expect unemployment to triple.
Day of Reckoning Fallout No. 4: End of Social Security
Without the ability to print money, the 161 million Americans who have some form of government benefits will get hit hard. …
Day of Reckoning Fallout No. 5: Taxes Will Double
Tax breaks will be wiped off the books as Washington tries to stave off the carnage. This chart reflects how much money the U.S. government is collecting per year. It’s gone up nearly 50% in the last 5 years alone. Expect your overall taxes to increase from 30% to 40% to 50% and higher.
Day of Reckoning Fallout No. 6: Real Estate Will Plummet Home prices are going to fall by 50% in the next few years. …
Day of Reckoning Fallout No. 7: Stocks will Collapse by 60% (or More)
In the video transcript, James Dale Davidson, does not advocate the nation turning back to God, instead his survival plan is discussed:
Your Survival Plan …
It’s called The Day of Reckoning Survival Plan. …
When this next crisis hits, gold will again go up 300%, before going up even higher. …
I’m not the only one who believes this. In fact, in preparation for what’s to come, China secretly bought 604 TONS of gold since 2009, second only to … you guessed it, Russia.
The accumulation of gold by China has been covered here before (see China, Gold, and the AIIB). Various ones in Europe have been repatriating gold from the USA, like the Germans (see Germany is repatriating and accumulating gold–why?).
Here is something from my book Donald Trump and America’s Apocalypse:
A modern reality is that being the world’s de facto reserve currency has helped prolong the U.S.A.’s dominance.
When the U.S. dollar is no longer the world’s reserve currency, this will hurt the U.S.A. financially. Increasing debt, including “quantitative easing,” is a form of dishonest profits that is not something that God approves of and will punish the U.S.A. for (cf. Ezekiel 22:13-16).
Inflation will eventually hit the U.S.A. extremely hard. As the world becomes less attached to the American dollar, many financial jobs and opportunities will be in places other than the U.S.A. Eventually, but not yet, the U.S.A. dollar will become worthless.
Will it always be straight downhill for the economy of the U.S.A.?
No.
There are some reasons to have some temporary optimism. The longer there is some economic stagnation in parts of the economy, the more demand tends to build up, and an increase in demand may prolong the economy. In addition, technological and other developments may temporarily support the U.S. economy—as can reductions of regulatory burdens.
Some policies of Donald Trump may help. The stock market in the U.S.A. responded favorably in the weeks after the election of Donald Trump. Various ones see his policies and his cabinet selections as a refreshing pro-business change that will fuel economic growth, investment, and prosperity (Dalio R. Reflections on the Trump Presidency, One Month after the Election. December 19, 2016 https://www.linkedin.com/pulse/reflections-trump-presidency-one-month-after-election-ray-dalio).
For years, I have written that because of improvements in various aspects of energy and other technology (some of which Donald Trump seems to support), the U.S.A. may experience even more of an energy export boom, such as with oil and natural gas, etc. that may prolong its days of economic prosperity. But prolonging is likely all that is possible as its destruction is prophesied (Daniel 11:39; Habakkuk 2:6-8).
Notice what was told to a king whose was prophesied to lose his kingdom:
27 Therefore, O king, let my advice be acceptable to you; break off your sins by being righteous, and your iniquities by showing mercy to the poor. Perhaps there may be a lengthening of your prosperity. (cf. Daniel 4:27)
Repentance can prolong prosperity, but promotion of sin leads to destruction. …
Since many are now questioning the role of the US dollar as the world’s reserve currency, more are looking into other currencies as well as gold. Gold will set records in US dollar terms.
It has been proposed that various nations around the world are already in the process of accumulating gold to one day overthrow the U.S. dollar—and that the “U.S. is unprepared for this strategic alternative to dollar dominance” (Rickards J. Axis of Gold. The Daily Reckoning, December 20, 2016).
When the U.S. dollar totally collapses people all around the world will consider that even if the Euro (or something similar) is strong, having a more gold-backed currency would be safer.
The collapse of the USA dollar will shake a lot of the world’s confidence in non-gold backed currencies.
The Europeans do not have to have a perfect currency, only one that is perceived to be in better shape than the USA dollar.
Having the European power acquiring more gold to back the Euro or possibly another future European currency (that might potentially replace the Euro or even a basket of currencies) may greatly increase European credibility, prosperity, and influence around the globe, even if the backing is only implied.
The debt accumulation policies of the Obama Administration, which are a massive acceleration of the previous policies of the Bush Administration, look like they will be continued by Donald Trump.
The increases in America’s debt are heading the world into the time when something other than the U.S. dollar will be valued as its reserve currency.
A Donald Trump Administration would need to make massive changes to possibly prevent this.
The USA and its dollar are at serious risk. (Thiel B. Donald Trump and America’s Apocalypse. Nazarene Books, 2017)
The Bible shows that a powerful international economic leader will arise (cf. Revelation 18) and it will NOT be the USA.
The USA, after having financial and other troubles (Mark 13:6-8) will finally be taken over. Not just financially, but according to the Bible militarily. Normally I would just quote Daniel 11:39, but this time let’s first look at an earlier verse:
23 And after the league is made with him he shall act deceitfully, for he shall come up and become strong with a small number of people. 24 He shall enter peaceably, even into the richest places of the province; and he shall do what his fathers have not done, nor his forefathers: he shall disperse among them the plunder, spoil, and riches; and he shall devise his plans against the strongholds, but only for a time. (Daniel 11:23-24)
The ‘he’ is the final European King of the North power, called the Beast of the Sea in Revelation 13:1-10. Notice that he gets in deceitfully and makes plans against “the strongholds.” Notice what Daniel says this leader will later do:
39 Thus he shall act against the strongest fortresses with a foreign god, which he shall acknowledge, and advance its glory; and he shall cause them to rule over many, and divide the land for gain. (Daniel 11:39)
In the 21st century, the strongest fortresses belong to the USA and to a much lessor extent, its Anglo-Saxon descended allies. And while some do not believe that America’s European friends could betray it, the Bible teaches otherwise:
1 How lonely sits the city
That was full of people!
How like a widow is she,
Who was great among the nations!
The princess among the provinces
Has become a slave!2 She weeps bitterly in the night,
Her tears are on her cheeks;
Among all her lovers
She has none to comfort her.
All her friends have dealt treacherously with her;
They have become her enemies. (Lamentations 1:1-2)
The USA and Great Britain (including its Anglo-Commonwealth members, like Australia and Canada) were “great among the nations.” And the Bible is clear that betrayal is coming from national FRIENDS!
That betrayal will result in the complete end of USA dominance in the world.
Politicians will NOT be able to save the USA, nor its Anglo-Saxon descended allies (UK, Canada, Australia, and New Zealand).
The total end of the USA dollar will happen.
The USA needs national repentance and the Kingdom of God.
Some items of possibly related interest may include:
Financial Reset by 2022? Euro Pacific Capital CEO says the US economy is about to crash because of debt. US National Security Adviser John Bolton declared debt as a threat to society. Forbes writer John Mauldin says that a financial reset is expected in the 2020s, as does Willem Middelkoop, who believes gold may be part of a reset. Morgan Stanley believes the end of the current economic cycle may be in 2021. MIT pointed to changes in the 2020s. How debt does the USA add daily? Does any of this tie in with biblical prophecies? Does Habakkuk 2 have applicability to the USA? Is it wise to try to discount debt and not pay it back in full? Dr. Thiel addresses these issues in the light of scripture. This is a video.
The End of US Dollar Dominance Is the USA losing its economic status? What about the petro-gold-yuan? A related video is also available: US Dollar being challenged by Gold-Petro-Yuan.
USA in Prophecy: The Strongest Fortresses Can you point to scriptures, like Daniel 11:39, that point to the USA in the 21st century? This article does. A related sermon is titled: Do these 7 prophesies point to the end of the USA?
Who is the King of the West? Why is there no Final End-Time King of the West in Bible Prophecy? Is the United States the King of the West? Here is a version in the Spanish language: ¿Quién es el Rey del Occidente? ¿Por qué no hay un Rey del Occidente en la profecía del tiempo del fin?
Collapse of the Euro and Dollar? War in 2020? Larry Edelson of Money and Markets described aspects of current economic difficulties and explained why he felt matters would get a lot worse. He said war, like World War III, could break out as early as 2020. What did he call the ‘granddaddy of all cycles”? Will matters go as he said? What does the Bible teach? Dr. Thiel provides biblical insights that secular sources often miss. This is a video.
Preparing for the ‘Short Work’ and The Famine of the Word What is the ‘short work’ of Romans 9:28? Who is preparing for it? Here is a link to a related video sermon titled: The Short Work.
The Final Phase of the Work What is the final phase of the work? Who will lead it? Do you have the courage to support it? Here is a related YouTube video titled The Final Phase of the Work. The written article has been translated into Spanish La Fase Final de la Obra.
Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe? Here is a link to a video titled: Can You Prove that the Beast to Come is European?
European Technology and the Beast of Revelation Will the coming European Beast power would use and develop technology that will result in the taking over of the USA and its Anglo-Saxon allies? Is this possible? What does the Bible teach? Here is a related YouTube video: Military Technology and the Beast of Revelation.
Two Horned Beast of Revelation and 666 Who is 666? This article explains how the COG views this, and compares this to Ellen White. Here is a link to a prophetic video Six Financial Steps Leading to 666?
The Mark of Antichrist What is the mark of Antichrist? What have various ones claimed? Here is a link to a related sermon What is the ‘Mark of Antichrist’?
Mark of the Beast What is the mark of the Beast? Who is the Beast? What have various ones claimed the mark is? What is the ‘Mark of the Beast’?
Must the Ten Kings of Revelation 17:12 Rule over Ten Currently Existing Nations? Some claim that these passages refer to a gathering of 10 currently existing nations together, while one group teaches that this is referring to 11 nations getting together. Is that what Revelation 17:12-13 refers to? The ramifications of misunderstanding this are enormous. A related sermon is titled Ten Kings of Revelation and the Great Tribulation.
World War III: Steps in Progress Are there surprising actions going on now that are leading to WWIII? Might a nuclear attack be expected? What about WWIV? Does the Bible promise protection to all or only some Christians? How can you be part of those that will be protected? A related video would be Is World War III About to Begin? Can You Escape?
Does God Have a 6,000 Year Plan? What Year Does the 6,000 Years End? Was a 6000 year time allowed for humans to rule followed by a literal thousand year reign of Christ on Earth taught by the early Christians? Does God have 7,000 year plan? What year may the six thousand years of human rule end? When will Jesus return? 2027 or 20xx? There is also a video titled 6000 Years: When will God’s Kingdom Come? Here is a link to the article in Spanish: ¿Tiene Dios un plan de 6,000 años?
When Will the Great Tribulation Begin? 2020, 2021, or 2022? Can the Great Tribulation begin today? What happens before the Great Tribulation in the “beginning of sorrows”? What happens in the Great Tribulation and the Day of the Lord? Is this the time of the Gentiles? When is the earliest that the Great Tribulation can begin? What is the Day of the Lord? Who are the 144,000? Here is a version of the article in the Spanish language: ¿Puede comenzar la Gran Tribulación en 2018 o 2019? ¿Es el Tiempo de los Gentiles? You can also see the English language sermon videos: The Great Tribulation from the Mount of Olives and Can the Great Tribulation begin before 2020? A shorter and newer video is: Could the Great Tribulation Begin in 2020?
The Times of the Gentiles Has there been more than one time of the Gentiles? Are we in it now or in the time of Anglo-America? What will the final time of the Gentiles be like? A related sermon is available and is titled: The Times of the Gentiles.
Armageddon Who is involved and when will this gathering happen? Here is also a video from Dr. Thiel, from Tel Megiddo in Israel: Armageddon. Other videos include: Armageddon Will it come on Trump’s watch?, Iraq, Armageddon, & Prophecy, Freemasonry, Armageddon, and Rome, Is China paving roads to Armageddon?, and Jordan, Petra, and Armageddon.
Anglo – America in Prophecy & the Lost Tribes of Israel Are the Americans, Canadians, English, Scottish, Welsh, Australians, Anglo-Saxon (non-Dutch) Southern Africans, and New Zealanders descendants of Joseph? Where are the lost ten-tribes of Israel? Who are the lost tribes of Israel? What will happen to Jerusalem and the Jews in Israel? Will God punish the U.S.A., Canada, United Kingdom, and other Anglo-Saxon nations? Why might God allow them to be punished first? Here is a link to the Spanish version of this article: Anglo-América & las Tribus Perdidas de Israel. Information is also in the YouTube sermons titled Where are the Ten Lost Tribes? Why does it matter? and British are the Covenant People. A short YouTube of prophetic interest may be: Are Chinese threats against Australia for real?
Will the Anglo-Saxon Nations be Divided and Have People Taken as Slaves? Will the lands of the United States, United Kingdom, Canada, Australia, and New Zealand be divided? What about Jerusalem? What does Bible prophecy teach? Are there non-biblical prophecies that support this idea? Who will divide those lands? Who will end up with the lands and the people? Here is a link to a video titled Will the USA and other Anglo-nations be Divided and Their People Made Slaves? Here is a related item in the Spanish language ¿Serán divididas las naciones anglosajonas?
British are the Covenant People What do ‘British’ and ‘Britain’ mean in Hebrew? Are the descendants of the Anglo-Saxons people of the covenant? Does the British royal family connect to the throne of David? What does the Bible teach? What does history show us? Is there any DNA evidence related to British-Israelism? When did Christianity make it to the British Isles? Could Jeremiah have made it to the British Isles? What type of Christians made it to the British Isles? Did the last King of England believe in British Israelism?
Is God Calling You? This booklet discusses topics including calling, election, and selection. If God is calling you, how will you respond? Here is a link to a related sermon: Could God be Calling You? A short animation is also available: Is God Calling You?
Christian Repentance Do you know what repentance is? Is it really necessary for salvation? A related sermon is also available titled: Real Christian Repentance.
Just What Do You Mean — Repentance? Do you know what repentance is? Have you truly repented? Repented of what? Herbert W. Armstrong wrote this as a booklet on this important subject.
When You Sin: Do You Really Repent? This is an article by Charles F. Hunting. A related sermon is Confess to God and truly repent.
The Gospel of the Kingdom of God This free online pdf booklet has answers many questions people have about the Gospel of the Kingdom of God and explains why it is the solution to the issues the world is facing. Here are links to three related sermons: The World’s False Gospel, The Gospel of the Kingdom: From the New and Old Testaments, and The Kingdom of God is the Solution.
Did The Early Church Teach Millenarianism? Was the millennium (sometimes called chiliasm) taught by early Christians? Who condemned it? Will Jesus literally reign for 1000 years on the earth? Is this time near? A related sermon is titled The Millennium.
Donald Trump in Prophecy Prophecy, Donald Trump? Are there prophecies that Donald Trump may fulfill? Are there any prophecies that he has already helped fulfill? Is a Donald Trump presidency proving to be apocalyptic? Two related videos are available: Donald: ‘Trump of God’ or Apocalyptic? and Donald Trump’s Prophetic Presidency.
Trump Presidency Magic 8 Ball or Bible Prophecy? BBC reported that one might as well use a ‘Magic Eight-Ball’ to try to predict what will happen in the remaining time of Donald Trump’s presidency. What is a ‘Magic Eight-Ball’? Dr. Thiel not only explains that, but also briefly goes over 10 biblically-based warnings he wrote would happen if Donald Trump were elected that have already began to come to pass. He also goes over something he wrote back in 2008 that the Trump presidency is also helping lead to fulfillment. Should you trust Bible prophecy or not? Dr. Thiel says that Bible prophecy can be trusted, despite the view of skeptics and others that either overlook or despise the Bible. This is a video.
Donald Trump and America’s Apocalypse This 188 page book is for people truly interested in prophecies related to Donald Trump and the United States, including learning about several that have already been fulfilled and those that will be fulfilled in the future. The physical book can be purchased at Amazon for $12.99 from the following link: Donald Trump and America’s Apocalypse.
Donald Trump and America’s Apocalypse-Kindle Edition This electronic version of the 188 page print edition is available for only US$3.99. And you do not need an actual Kindle device to read it. Why? Amazon will allow you to download it to almost any device: Please click HERE to download one of Amazon s Free Reader Apps. After you go to for your free Kindle reader and then go to Donald Trump and America’s Apocalypse-Kindle Edition.
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