US Fed Causing International Concern

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

Here are two financial news items of interest:

Barclays warns of a financial storm as Federal Reserve’s credibility crumbles

US central bank accused of unleashing an inflation shock that will rock financial markets, reports Ambrose Evans-Pritchard

Telegraph, London – June 27, 2008

Barclays Capital has advised clients to batten down the hatches for a worldwide financial storm, warning that the US Federal Reserve has allowed the inflation genie out of the bottle and let its credibility fall “below zero”.

“We’re in a nasty environment,” said Tim Bond, the bank’s chief equity strategist. “There is an inflation shock underway. This is going to be very negative for financial assets. We are going into tortoise mood and are retreating into our shell. Investors will do well if they can preserve their wealth.”

Barclays Capital said in its closely-watched Global Outlook that US headline inflation would hit 5.5pc by August and the Fed will have to raise interest rates six times by the end of next year to prevent a wage-spiral.

If it hesitates, the bond markets will take matters into their own hands. “This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that’s possible. It has lost all credibility,” said Mr Bond.

The grim verdict on Ben Bernanke’s Fed was underscored by the markets yesterday as the dollar fell against the euro following the bank’s dovish policy statement on Wednesday.

Traders said the Fed seemed to be rowing back from rate rises. The effect was to propel oil to $138 a barrel, confirming its role as a sort of “anti-dollar” and as a market reproach to Washington’s easy-money policies. http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/27/cnbarclays127.xml

The Shrinking Influence of the US Federal Reserve

Spiegel – June 26, 2008

By Gabor Steingart in Washington

Humiliation for Mr. Dollar: Ben Bernanke, the chairman of the United States Federal Reserve Bank, faces a general investigation by the International Monetary Fund. Just one more example of the Fed losing its power.

The United States Federal Reserve Bank, or Fed, seems as much a part of America as Coca-Cola or Pizza Hut. But at least one difference has become apparent in recent days. While the pizza chain and soft-drink maker are likely to expand their scope of influence in the age of globalization, the US central bank is finding that its power is shrinking.

No Fed chief in US history has been forced to submit to the kind of humiliation that Ben Bernanke is facing.

This is partly down to circumstances. Inflation is going up and up, and this year’s average will likely top 4 percent. But this time Mr. Dollar is also Mr. Powerless. He can raise interest rates in the fall, or he can pray, which would probably be the better choice. At least prayer would not prevent the US economy from growing, a highly likely outcome if interest rates go up. http://www.spiegel.de/international/world/0,1518,562291,00.html

The truth is that the USA is starting to learn what happens when one tries to borrow too much. As the Bible teaches:

43 The alien who is among you shall rise higher and higher above you, and you shall come down lower and lower. 44 He shall lend to you, but you shall not lend to him; he shall be the head, and you shall be the tail. 45 Moreover all these curses shall come upon you and pursue and overtake you, until you are destroyed, because you did not obey the voice of the LORD your God, to keep His commandments and His statutes which He commanded you (Deuteronomy 28:43-45).

And, I should add here that other biblical prophecies show that much worse is in store for the largest debtor nation of all time (for details, see The King of the North).

The USA dollar and the US economy will struggle for a while, but without nation-wide repentance, ultimately both will collapse.

The good news is that Jesus will return and establish His Kingdom. The bad news is that there will be a lot of bad news before then.

Some articles of possibly related interest may include:

The Gospel of the Kingdom of God was the Emphasis of Jesus and the Early Church Did you know that? Do you even know what the gospel of the kingdom is all about? True religion should be based upon the true gospel.
Are You Saved? Do You Love Jesus? What is a True Christian? What is the Gospel? Evangelist Richard Ames answers those important questions.
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?
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? When does the six thousand years of human rule end?
Were the Ten Commandments in Effect Before Mount Sinai? Some have said not. This article provides biblical quotes to answer this important question.
Job and the Ten Commandments Was Job written prior to Mount Sinai? Did Job know about the ten commandments? This article provides biblical answers to those questions.
What Did Jesus Teach About the Ten Commandments? This article quotes what Jesus actually said about them (His words are in red).
Were the Ten Commandments Nailed to the Cross? Some have said so. This article provides some biblical quotes to answer this important question.
What Did Paul Actually Teach About the Ten Commandments? Many say Paul taught against the ten commandments. Is this true? This article quotes Paul with his words in green.
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.