PCG: USA on Road to Inflation

The Strength of Dollars Have Long Been Part of the “Pride of the Power” of the USA (which will be broken per Leviticus 26:19)

COGwriter

Yesterday, PCG posted the following by its Robert Morley titled Road to an Inflation Nation:

The world is going through an economic power shift not experienced since America defeated the ussr in the Cold War to become the globe’s only superpower. Only this time, America is on the losing end. Fareed Zakaria, writing for Newsweek, called this power shift the “Rise of the Rest.” In biblical terminology, it is called “the times of the Gentiles.”

The evidence is becoming apparent in many areas. For example:

The dollar is on its way to becoming the most disliked currency in the world. Since the U.S. Dollar Index’s peak in 1985, its value has plunged by over 57 percent, hitting the lowest level in its history last March. And since the late 1990s, the ratio of dollars held by foreign nations as reserves has also been declining. As the dollar’s value continues to erode, so does its status as the global reserve currency.

America’s banking system has a stained reputation and, if truth be told, might be largely insolvent. If it wasn’t for the massive multi-billion-dollar bailouts over the past year by Singapore, Dubai, the United Arab Emirates and Saudi Arabia, some of America’s biggest banks including Citi Group, Merrill Lynch, and Morgan Stanley may have already died. Bear Stearns is already dead.

Government debts are out of control. The federal government has not balanced a budget since Dwight D. Eisenhower was president, it relies on foreigners to fund current expenditures, and if Social Security and Medicare commitments were accounted for using generally accepted accounting principles, the government would be insolvent too. USA Today says federal liabilities exceed $59 trillion—and the total federal budget for 2008 was only 2.9 trillion. U.S. government debt levels are proportional to a family with an annual income of $50,000 owing over $1 million.

Economic growth in America compared to the rest of the world is anemic. For example, in 2006 and 2007, 124 countries grew their economies at over 4 percent a year—including more than 30 African nations. China and India grew at over 10 percent a year. Meanwhile, the U.S. grew at 2.2 percent in 2007 and at 0.6 percent last quarter. Even stodgy old Europe is now growing faster than America.

But perhaps the most compelling evidence is the deterioration of the U.S. government’s credit rating.

“On the basis of credit default swaps, which are used to speculate on a government’s ability to repay debt, the 10-year note reached a record high of 16 basis points on March 12,” reports Daily Reckoning economist Bill Bonner. “German bonds traded at 15 basis points, also a record” (emphasis mine throughout). What that means is that the market thinks there is greater risk of America defaulting on its bonds than Germany.

What does it tell you about America’s financial condition when the cost to insure its debt is pricier than insuring Germany’s—a nation about a quarter of the size of the U.S. that has instigated and lost two world wars and has resorted to indiscriminately printing money to pay its creditors in the past?

It means that America is in far worse economic condition than is generally perceived—and that is quite significant considering the well-publicized housing market bust and banking turmoil…

When home prices were rising, cities raked in piles of cash as property taxes soared. But now, according to the Globe and Mail, “With housing values plummeting—down 19 percent in January, year over year—so are tax assessments, and thus, revenues.” But even though revenues are falling, the expanded programs and the borrowing initiated during the housing boom years still need to be paid for. Coupled with lost construction, lending, and real-estate jobs, and rising wage pressures, councils are feeling the pinch. And for many states, this is really only year one of the housing bust.

Over the next couple of years, many cities could easily face default. Large centers such as Detroit and Cleveland, where half of all subprime mortgages are ending in foreclosure, could also come under pressure to drastically cut services and jobs to balance budgets in the years ahead.

State budgets are being punished too. California has already declared a state of fiscal emergency due to an expected deficit of around $20 billion over the next 12 to 15 months. And on the East Coast, Rhode Island is experiencing its worst budget crisis in years. Rhode Island is terminating welfare benefits to families of 3,400 children; it has released nonviolent criminals out of prison early; it has slashed health care benefits for state employees—and next year’s budget deficit is projected to be more than twice as severe.

Other housing bubble epicenters like Florida, Arizona and New Mexico could be next. Unfortunately, they may not be alone. Twenty-four other states are facing budget shortfalls for the 2009 fiscal year, according to the Center on Budget and Policy Priorities, a liberal research group in Washington…

“[F]or the first time in modern history there are grave doubts about the very viability of our money,” says economic analyst Richard Russel. “Even during the Great Depression, nobody doubted the value of a dollar. The dollar was ‘as good as gold.’ The only problem was—nobody had dollars.”

“Today it’s a different story,” he says. “Today there are too many dollars around—but the world is questioning the viability of the U.S. dollar. … The wonder is that the dollar is viable at all.”

And the announcement that the Federal Reserve Bank injected another $200 billion into the banking system on March 11 is not providing the confidence that it was intended to either…

The road to inflation nation ends in food riots, wheelbarrows of paper notes, and billion-dollar postage stamps. Unfortunately, that’s the road America is choosing to travel.

The fact is that the USA is in decline. And while it DOES need change, the type of changes I heard in a speech from one of the major presidential candidates (who is probably the most likely one to become the USA president) will NOT fix this decline. I believe that no matter which of the three wins, the decline will continue (though the decline may happen faster or slower depending upon who wins).

Americans need to repent, accept the true Christ of the Bible, and begin to produce more than they spend (or as Herbert W. Armstrong basically put it, live the way of give as opposed the way of get).

As this does not seem likely, massive inflation, future economic upheavels, weather disasters, disease epidemics, terrors, and the destruction of the USA followed by the slavery of surviving its peoples is what it has in store.

But this does NOT have to happen to YOU. YOU can repent and if God determines that you are Philadelphian, He has a plan that will allow your protection.

Several articles of possibly related interest may include:

There is a Place of Safety for the Philadelphians. Why it May Be Petra This article discusses a biblical ‘place of safety’ and includes quotes from the Bible and Herbert W. Armstrong on this subject–thus, there is a biblically supported alternative to the rapture theory.
Who is the King of the North? Is there one? Do biblical and Roman Catholic prophecies point to the same leader? Should he be followed? Who will be the King of the North discussed in Daniel 11? Is a nuclear attack prophesied to happen to the English-speaking peoples of the United States, Great Britain, Canada, Australia, and New Zealand? When do the 1335 days, 1290 days, and 1260 days (the time, times, and half a time) of Daniel 12 begin?
What is the Meaning of Life? Who does God say is happy? What is your ultimate destiny? Do you really know? Does God actually have a plan for YOU personally?
The Bible: Fact or Fiction? This is a booklet written by Douglas Winnail that answers if the Bible is just a collection of myths and legends or the inspired word of God.
Read the Bible Christians should read the Bible. This article gives some rationale for regular bible reading.
Were the Pharisees Condemned for Keeping the Law or Reasoning Around it? Many believe that the Pharisees were condemned for keeping the law, but what does your Bible say? If they were not condemned for that, what were they condemned for?
The Ten Commandments Reflect Love, Breaking them is Evil Some feel that the ten commandments are a burden. Is that what Jesus, Paul, Peter, James, and John taught?
Was the Commandment to Love the Only Command? Some have stated that John’s writings teach this, but is that what the Bible really says?
The Ten Commandments and the Early Church Did Jesus and the Early Church keep the ten commandments? What order were they in? Here are quotes from the Bible and early writings.