1.  Some Indicators Show That The U.S. Economy Is         Much Worse Off Than Just Before The Financial             Crisis 2008   


1.1  The National Debt

The U.S. national debt is now sitting at 20 000 milliards dollars. During Obama’s eight years, a huge amount of 9300 milliards dollars was added to the national debt. Obama added almost as much to the national debt as all of the other presidents before him combined. The U.S. Government spends more money than it collects in taxes. Debt as a share of GDP has risen since the 2008 financial crisis from 76% to 105 %. Currently The US needs dept at least 1000 milliards dollars per year. The ultimate question is how long it could repay the rising interest payments to the foreign bond holders.


1.2  Total Debt

Over the past 40 years, the total amount of debt in the United States has increased to astronomical heights.  The U.S. People has become a “buy now, pay later” society with destructive consequences.  Back in 1975, the total debt level was sitting at about 2500 milliards dollars, and today it is rapidly closing in on 60 000 milliards dollars. 47 percent of all Americans could not pay an unexpected $ 400 emergency room bill without borrowing the money from somewhere or selling something. Total household debt in the U.S. has now reached a grand total of 13 000 milliards dollars. The total amount of corporate debt in the U.S. has nearly doubled since the end of 2007.


1.3  The Velocity of Money

When an economy is healthy, money tends to change hands and circulate through the system quite rapidly.  So it makes sense that the velocity of money fell dramatically during the last recession 2008. But why has it kept going down since then?


1.4  The Home Ownership Rate

Something is wrong with the US Society? Traditionally, owning a home has been a sign that you belong to the middle class.  And the last recession 2008 was really hard on the middle class, so naturally the rate of homeownership declined during that time frame.  But why has it continued to steadily decline ever since? The explanation is obvious: a) the labor force participation rate has fallen substantially since the end of the last 2008 recession, b) the decline of real median household income has continued. In America today, most Americans do not make enough to support a middle class lifestyle on a single salary. And we know that more and more people are working in part-time jobs because that is all they can find in this economy. 39 percent of American workers make less than $20 000 (19 000 €) a year.


1.5  Inflation

Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. Although income is not growing, the cost of living just continues to rise steadily. For example, the cost of food and beverages has gone up nearly 50 percent just since the year 2000.


1.6  Government Dependence

The middle class shrinks and the number of Americans that cannot take care of themselves is growing rapidly. So dependence on government’s social benefits is reaching heights never known before. For instance, the Federal Government is now spending about twice as much on food stamps as it was just prior to the last recession 2008. Approximately 60 percent of all US households get more in transfer payments  from the government than they pay in taxes. About 70 percent of all government spending now goes toward dependence-creating programs.


1.7  Price-to-earnings Ratio or CAPE Ratio

The market is in a bubble. And it is one of the largest bubbles in the last century, larger even than the 2007 bubble, which preceded the 2008 Crash. The single best predictor of stock market performance is the cyclically adjusted price-to-earnings ratio or CAPE ratio. CAPE adjusts for this by measuring the price of stocks against the average of ten years' worth of earnings. Corrected for inflation the CAPE is now at its 3rd highest reading going back to 1890. Only the 1929 bubble (Black Tuesday) and the Tech Bubble 2001 were more expensive relative to earnings. The ”funny” thing is that stocks have continued to rise even as corporate revenues have begun to fall. Right now, we are in the calm before the storm.  We are right at the door of the next great financial crisis, and most of the people that work in the industry know this. For example, consider what Hans-Jörg Vetter, the CEO of Landesbank Baden-Württemberg in Germany, had to say during one recent press conference: “Risk is no longer priced in. And investors aren’t paid for the risks they’re taking. This applies to all asset  classes: The stock and the bond markets are now both seeing ’the mother of all bubbles.’


1.8  GDP Growth Rate in the United States 

In spite of the massive national debt and the strengthening of the stock market the trend of Gross Domestic Product (GDP) growth rate is worrisome.


1.9  US Bond Appreciation

US Treasury notes or bonds are resold every day on the secondary market. During last years foreigners are dumping U.S. debt at a faster rate than we have ever seen before. This is potentially a problem, because the standard of living is dependent on foreigners lending money at ultra-low interest rates. Because the U.S. Government borrows the money to make interest payments, this could set off a chain reaction of paying interest on money borrowed to pay interest. At this rate it is leading to a national debt increase of the current $20 trillion (20 000 milliards) up to $95 trillion (95 000 milliards) in 20 years. So unless there are some huge tax increases, a 5% increase in interest rates (which would still be below the long-term average) would increase the national debt by $75 trillion (75 000 milliards) dollars. 

Apparently, if foreigners keep dumping bonds and the desire to own US bonds decreases, a major financial implosion of historic proportions is near within some years. We find below that a record $400 billion (400 milliards dollars) in Treasuries were sold in the last LTM period (Last Twelve Months). Could this seal the fate of U.S. Treasuries?

Among the biggest sellers not surprisingly is China. Chinese real behavior is still a mystery. There are at least four chances:

a) China has lost trust in the US Treasury to be able to continue to pay the interest rates due.

b) It needs the funds to prop up its financial system and the Central Bank of China.

c) It is undertaking an economic war with the US and this is the first shooting against America’s domination. China has noticed the US internal financial weaknesses.

d) China is considering a geopolitical action - for example in the South China Sea. The consequences could lead to a disruption between China and the United States — even war. In that case China would not wish to be holding Treasury-bills which the U.S. Government could make worthless.

In summary, all the 9 facts above may sound us: a new recession in the U.S. is coming. Unfortunately, once a new recession begins it may not play out like recessions normally do. Market confidence in The U.S. Government is weakening, investors are in the midst of one of the biggest stock market (and bond) bubbles in history, wasteful consumers lives under their personal dept burden, Europe with its banks and the Middle East is becoming more unstable with each passing day. Let there be no doubt that an economic crisis could literally erupt at any moment.

It is not difficult to forecast what will happen if the U.S. economy collapses. Firstly banks will close. Their customers will not have access to credit nor to withdraw money. That means high demand and low supply of food, gas and other necessities. If the collapse affects local governments and utilities, then water and electricity will no longer be available. The commerce and exchange may quickly revert to a traditional economy, where those who grow food barter for other services. It is also expected global panic. Demand for the dollar, and U.S. Treasuries, would plummet. Interest rates would skyrocket. Investors would rush to other currencies, such as the yuan, euro, or even gold. It would create not just inflation, but hyperinflation as the dollar became dirt cheap.

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     - Three steps to the New Economic System


Money is an early instrument of trade and payment of wages (1 GEN 23:16; 5 GEN 2: 6; 24:15). Its significance has been retained, although moneyprocessing has changed to invisible credit transfers. In all monetary affairs, the view of the Proverbs is still valid: "Why does a fool have money in his hand with no intention of buying wisdom?" (PRO 17:16)


We find in our Bible lots of advice on how to take up a wise attitude to the medium of exchange. As for our title e.g. the following principles are central:

1. The love of money is the root of all evil (1 TI 6:10). Whoever loves money never has enough;
    whoever loves wealth is never satisfied with their income (ECC 5:9).

2. Wealth gained hastily (with easy) will dwindle, but whoever gathers little by little (by labour) will increase it (PRO 13:11). Owe no one anything except to love one another (ROM 13:8).

3. Joseph said, “Indeed seven years of great plenty will come throughout all the land of Egypt; but after them seven years of famine will arise. Let officers collect one-fifth of the produce of the land of Egypt in the seven plentiful years. And let them store up grain and keep food in the cities. Then that food shall be as a reserve for the land for the seven years of famine, that the land may not perish during the famine. ” (1 GEN 41: 29-30,34-36)


The coronavirus is most obviously detonating a global debt bomb that has arisen from disregard for these great guidelines of housekeeping. The debt of the whole world (governments, companies, banks, communities, and private consumers) will reach a terrible level of EUR 250 000 billion in 2020. For example, the United States is both the largest debtor and most powerful economic engine. The U.S.  government debt has quadrupled in the last 20 years, currently standing at € 24 000 billion. The gross debt taken by the government is growing at an annual rate of about EUR 1 000 billion and has exceeded the value of GDP since 2011. More than half of the new debt is spent on paying interest alone. Without a change in the economic system (debt forgiveness), it is not possible to manage such a debt burden.


Our world has been drowning in debt even before the coronavirus spread to humans, but the pandemic seems to have finally exposed the fragility of our economic system. Economists have not much opposition to the debt bubble that has developed. To illustrate the need for debt we often think the fact that achieving returns of € 1 000 requires taking out an average loan of more than € 3 000. In order to live beyond resources two parties is needed: a distributor of easy money and an operator dependent on growing debt, in whose perceptions of financial management there is no place for the sound fundamentals mentioned above. Valuing consumption, mammon and readily available (unsecured) money instead of disciplined (Joseph’s) economic thinking has led many states, businesses, and consumers to live recklessly in debt and bankers to lend money more and more easily. Even more relevant is the biblical question: "Why does a fool have money in his hand with no intention of buying wisdom?"


Throughout the history of market economy, the laws of supply and demand have determined the price of goods, services, loans and corporate shares. Naturally, they have directed consumption, risk pricing, and indebtedness. Economic growth has been based on real productivity growth and so poorly managed companies and MFIs have left the market. The time value of money, ie the interest rate, has been fallen place by the central banks with a small correction. The interest rate has regulated stability, the price of loans and the choice between fixed-income and equity investments. Thus, a free market economy has encouraged to labor, to save money, and to ”gather wealth little by little” in different ways.


For some reason, in the 2010s, the central banks ”forcibly” began to steer the market’s own mechanism. They have continued sustaining artificial economic growth in ways that are understandable only during an economic recession as temporary recovery. By constantly buying government and corporate debt securities (bonds) central banks have pumped billions of euros into financial markets. And by lowering their key interest rate to zero, they have attracted governments, businesses and individuals to excessive borrowing. In order to increase compulsive consumption they have, moreover, planned to distribute a direct income transfer, “helicopter money,” to households. In doing so central banks have taken on a role that does not belong to them. Sad to say, when performing as a bottomlessly rich distributor of money they are skewing the free market mechanism. This change in the behavior of central banks has been the first preparatory step towards a new kind of economic system.


The way central banks are manipulating the markets can be compared to printing money, as they do not have to raise funds for any of their purchases. Demand for bonds maintained by central banks artificially raises the price of debt securities and lowers their expected return (interest rate). As the interest rate on bonds falls, investors have sought more productive targets, e.g. listed shares and riskier corporate bonds. At the same time, as cheap money has accustomed market participants to the increasing use of debt leverage, stock market prices have risen above their real value and the number of companies standing up by reason of debt has risen sharply. Thus, the stock market bubble and the debt bubble is waiting to burst and the illusion of a central banking system as the omnipotent savior of the world to shatter. The rapid and massive money creation and keeping interest rates low during a period of economic growth have already undermined the effectiveness of central banks in supporting the economy in a financial market crisis.


According to an OECD report, at the end of 2019, the global stock of corporate finance loans was at the highest level of € 12 600 billion in its history. The debt level was then double what it was in the Financial Crisis 2008.  The most worrying thing about the development of corporate debt is the continuing deterioration in debt quality. More than half (51%) of all new bonds in 2019 belonged to the lowest (riskiest) BBB category. Although corporate stock prices have even quadrupled in the last 10 years (MSCI ACWI Index 4.3; S&P 500 Index 4.4), the fact is that more and more companies do not have enough cash flow to pay interests on their loans during an economic downturn. (Therefore, from the stock price index we cannot directly infer that the health of our corporative world is all right.)


The non-Josephian financial thinking of banks and companies has also gripped the financial management of the private consumer. Despite the “seven fat years”, ie a period of stable economic prosperity, for example, US household debt (housing, credit card, car and student loans) increased by EUR 560 billion to a record EUR 13 000 billion in 2019. Even in stable Finland the disposable income of households is only three-quarters of the debt burden borne by households. Easy loan money seems to have become the only tool for governments, businesses and individuals to solve challenges and problems. The extravagant consumption favored by central banks, alien to the traditional barter economy, has together with human materialism and the insatiable greediness for money trapped us within the greatest financial bubble ever. Our Bible predicted such a development a long time ago:

But know this, that in the last days perilous times will come: For men will be … lovers of money (2 TI 3:1-2).


Now notice, the problem is that central banks will no longer be able to get out of the monetary stimulus (financial recovery, quantitative easing) without damage, even though they recognize the € 250 trillion bubble they have created. If they decide to return to the healthy market economy and slow down the false economic growth they maintain, the consequences will be catastrophical. If they are intending to reduce the amount of money in the market and sell the bonds they have acquired, the interest rate would start to rise rapidly. "Creative destruction" would then bring down the economies of the most indebted states, companies and private homes. Apparently it would lead our entire humanity to chaos. However, our Bible makes clear predictions from which we can deduce that an inexperienced economic distress will fall over our entire planet in the future. It will be the second stage in the development of a completely new economic system. Let’s read a few clarifying Bible passages:

1. When the Lamb opened the third seal, … I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand.  Then I heard like a voice … saying, “Two pounds of wheat for a day’s wages, and six pounds of barley for a day’s wages.” (REV 6:5-6 is an obvious description of the regulation caused by hyperinflation, in which wage income - the so-called basic income - is sufficient only to purchase a daily ration.)

2. Now listen, you rich people, weep and wail because of the misery that is coming on you. Your wealth has rotted.  Your gold and silver are corroded. You have hoarded wealth in the last days. (JAS 5:1-3 seems to speak about the depreciation of assets).

3. Your riches, your wares, your merchandise, your mariners, your caulkers, your dealers in merchandise sink into the heart of the seas on the day of your fall. When your wares came from the seas, you satisfied many peoples; with your abundant wealth and merchandise you enriched the kings of the earth. Now you are wrecked by the seas, in the depths of the waters; your merchandise and all your crew have sunk with you. (EZK 27: 27,33-34 presumably exemplifies figuratively the shipwreck of our market economy system. The central banks have acted there as caulkers for financial leaks.)


Can the coronavirus epidemic be a trigger for a deep financial crisis? Does the Coronavirus Recession begin the descent to the “black horse” economic distress described in the Bible? Only our Heavenly Father knows precisely this timetable. Previous economic recessions (Great Depression 1929, Black Monday 1987, Early 1990s Recession, and the Financial Crisis 2008) were primarily due to economic disturbances. The Coronavirus Recession is different from the previous ones in that it intertwines with the global epidemic. The more plagues (pandemics, economic crises, environmental catastrophes, or wars) will bother mankind at the same time the more severe the eschatological birth pains will be. Using the metaphor that contains in Jesus’ prophecy in the Mount of Olives (MAT 24: 6-8; LUK 21: 9-11), it appears that mankind is now experiencing the anticipating birth pains before the return of Jesus and the restoration of all things. They will thicken and strengthen, culminating in the relief brought by the Kingdom of Christ.


Against this background, 

the sad viral attack is a serious wake-up call for us to turn whole-heartedly to the grace of God in Jesus and to detach ourselves from building our future on money.

Money will lose its value. The latest "black horse" hyperinflation, the collapse of the banking system, or the collapse of the U.S. economy cannot be stopped by means of a planned economy. Political leaders of states, bankers and macroeconomists will then have only one solution to get out of the global distress. They are forced to abandon the current economic system and take a third step to implement a new system as one part of the New World Order (NWO).


Most obviously it will happen in a turbulent (maybe violent) world situation, which requires totalitarian action. The major key states will then negotiate a debt forgiveness mechanism and a way to distribute the remaining assets. These have one mind, and shall give their power and strength unto one man (REV 17:13). For the chief and engine they will choose a qualified and strong-willed person. The Bible calls this man the Antichrist. Under his leadership they will set up a very precise trading control

so that no one may buy or sell except one who has the mark or the name of the beast, or the number of his name (i.e. the name of the Antichrist; ILM 13:17).


How far into the darkening night will our Heavenly Father allow His children to stay in the world?  How long may the church be present at the end-time rise of antichristian values ​​and lawlessness? (MAT 24:12; 2 TH 2:7-8) How long will the affliction of the church last before the second coming of Jesus Christ(MAT 24:21-22,29-31; JHN 16:33) Only God has an exact answer to these questios. However, in the midst of the tribulation His children are comforted by the heartening words of Jesus:

Do not let your hearts be troubled. You believe in God; believe also in me. My Father’s house has many rooms; if that were not so, would I have told you that I am going there to prepare a place for you? And if I go and prepare a place for you, I will come back and take you to be with me that you also may be where I am (JHN 14:1-3). And surely I am with you always, to the very end of the age (MAT 28:20).

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3. Central banks and






3.1  US federal debt makes difficult to tame inflation


John H. Cochrane: Chigago Booth Review 3.11.2021

Monetary policy lives in the shadow of debt. US federal debt held by the public was about 25 percent of GDP in 1980, when Federal Reserve chair Paul Volcker started raising rates to tame inflation. Now, it is 100 percent of GDP and rising quickly, with no end in sight. When the Fed raises interest rates 1 percentage point, it raises the interest costs on debt by 1 percentage point, and, at 100 percent debt to GDP, 1 percent of GDP is about $227 billion. A 7.5 percent interest rate therefore creates interest costs of 7.5 percent of GDP, or $1.7 trillion.
Where will those trillions of dollars come from? Congress could drastically cut spending or find ways to increase tax revenues. Alternatively, the US Treasury could try to borrow additional trillions. But for that option to work, bond buyers must be convinced that a future Congress will cut spending or raise tax revenues by the same trillions of dollars, plus interest. Even if investors seem confident at the moment, we cannot assume that they will remain so indefinitely, especially if additional borrowing serves only to pay higher interest on existing debt. Even for the United States, there is a point at which bond investors see the end coming and demand even higher interest rates as a risk premium, thereby raising debt costs even more, in a spiral that leads to a debt crisis or to a sharp and uncontrollable surge of inflation. If the US government could borrow arbitrary amounts and never worry about repayment, it could send its citizens checks forever and nobody would have to work or pay taxes again. Alas, we do not live in that fanciful world.
The US experienced a two-decade economic boom. A larger GDP boosted tax revenues, enabling debt repayment despite high real-interest rates. By the late 1990s Even if the economic boom that produced fiscal surpluses was coincidental with tax and regulatory reform, the fact remains that the US government successfully paid off its debt, including debt incurred from the high interest costs of the early 1980s. But would that kind of successful stabilization happen now, with the US national debt four times larger and still rising. Would Congress really abandon its ambitious spending plans, or raise tax revenues by trillions, all to pay a windfall of interest payments to largely wealthy and foreign bondholders?
Arguably, it would not. If interest costs on the debt were to spiral upward, Congress would likely demand a reversal of the high interest-rate policy. The last time the US debt-to-GDP ratio was 100 percent, at the end of World War II, the Fed was explicitly instructed to hold down interest costs on US debt, until inflation erupted in the 1950s.The unraveling can be slow or fast. It takes time for higher interest rates to raise interest costs, as debt is rolled over. The government can borrow as long as people believe that the fiscal reckoning will come in the future. But when people lose that faith, things can unravel quickly and unpredictably.

3.2  Central banks will fail to tame inflation without better fiscal policy

Federal Reserve's Jackson Hole Economic Symposium: Reuters 28.8.2022

Central banks will fail to control inflation and could even push price growth higher unless governments start playing their part with more prudent budget policies.


Governments around the world opened their coffers during the COVID-19 pandemic to prop up economies, but those efforts have helped push inflation ratesto their highest levels in nearly half a century, raising the risk that rapid price growth will become entrenched.


Central banks are now raising interest rates, but the new study, presented on the 27th of August at the Kansas City Federal Reserve's Jackson Hole Economic Symposium argued that a central bank's inflation-fighting reputation is not decisive in such a scenario.


"If the monetary tightening is not supported by the expectation of appropriate fiscal adjustments, the deterioration of fiscal imbalances leads to even higher inflationary pressure. As a result, a vicious circle of rising nominal interest rates, rising inflation, economic stagnation, and increasing debt would arise. In this pathological situation, monetary tightening would actually spur higher inflation and would spark a pernicious fiscal stagflation." said Francesco Bianchi of Johns Hopkins University and Leonardo Melosi of the Chicago Fed.


On track this fiscal year to come in at just over $1 trillion, the U.S. budget deficit is set to be far smaller than earlier projected, but at 3.9% of GDP, it remains historically high and is seen declining only marginally next year.


The euro zone, which is also struggling with high inflation, is likely to follow a similar path, with its deficit hitting 3.8% this year and staying elevated for years, particularly as the bloc is likely to suffer a recession starting in the fourth quarter.


The study argued that around half of the recent surge in U.S. inflation was due to fiscal policy and an erosion in beliefs that the government would run prudent fiscal policies.