It's rare - but there are people out there who truly understand exponential growth and how it relates to our economic system. Anyone who understands our monetary system - and how it is required to grow forever - typically come to the same conclusion. Our lives in the next few years are going to be radically different than they are today.
What happens when exponential growth reverses (Debt, money, energy, population, etc.)?
Nothing good.
The attached paper (below) by Dr. Tim Morgan (tullett prebon) is an excellent review of exponential growth - how it relates to our monetary system and energy - and what it means for our future. Dr. Morgan mentions Chris Martenson's work multiple times.
If you want to understand what is happening to our economy - there is no better place to start than watching Dr. Martenson's Crash Course.
This article contains a lot of good economic information that everyone should know.
We all need to take it one step further – and not assume that the governments and banks of the world are trying to prevent a collapse.
As I’ve said many times – a global economic collapse is part of a plan for world government and world domination. There’s no way to sugar-coat this truth.
If you don’t think it’s possible - it’s time to learn how the world’s economy really operates. It’s all about debt – and control of the world’s population.
No, there will be no double dip. It will be a lot worse. The world economy will soon go into an accelerated and precipitous decline which will make the 2007 to early 2009 downturn seem like a walk in the park. The world financial system has temporarily been on life support by trillions of printed dollars that governments call money. But the effect of this massive money printing is ephemeral since it is not possible to save a world economy built on worthless paper by creating more of the same. Nevertheless, governments will continue to print since this is the only remedy they know. Therefore, we are soon likely to enter a phase of money printing of a magnitude that the world has never experienced. But his will not save the Western World which is likely to go in to a decline lasting at least 20 years but most probably a lot longer.
The End of an Era
The hyperinflationary depression that many western countries, including the US and the UK, will experience is likely to mark the end of an era that has lasted over 200 years since the industrial revolution. A major part of the growth in the last 100 years and especially in the last 40 years has been built on an unsustainable build-up of debt levels. These debt levels will continue to swell for another few years until the coming hyperinflation in the West leads to a destruction of real asset values and a debt implosion.
In the last 100 years the Western world has experienced a historically unprecedented growth in production, in inventions and technical developments leading to a major increase in the standard of living. During the same period government debt, as well as private debt have grown exponentially leading to a major increase in inflation compared to previous centuries.
Until the early 1970s the growth in credit to GDP had been going up gradually since the creation of the Fed in 1913.. But from 1971 when Nixon abolished gold backing of the dollar, virtually all of the growth in the Western world has come from the massive increase in credit rather than from real growth of the economy. The US consumer price index was stable for 200 years until the early 1900s. From 1971 to 2010 CPI went up by almost 500%. The reason for this is uncontrolled credit creation and money printing. Total US debt went from $9 trillion in 1971 to $59 trillion today and this excludes unfunded liabilities of anywhere from $70 to $110 trillion. US nominal GDP went from $1.1 trillion to $14.5 trillion between 1971 and 2010. So it has taken an increase in borrowings of $50 trillion to produce an increase in annual GDP of $13 trillion over a 40 year period. Without this massive increase in debt, the US would probably have had negative growth for most of the last 39 years.
Total US debt to GDP is now 380% and is likely to escalate substantially.
The coming hyperinflationary depression and the credit and asset implosion that is likely to follow will most probably lead to the end of a 200 year era of growth for the Western world. If only the excesses from the 1970s were corrected we might have a circa 20 year decline. But more likely we will correct the era all the way back from the industrial revolution in the 18th century and this could take 100 years or more.
So after the tumultuous and very painful times that we are likely to experience in the next few years, the West will have a sustained period of decline. All the excesses in the economy and in society must be unwound. These abnormal and unreal excesses are not just corporate executives, bankers, hedge fund managers or sportsmen earning $10s to $100s of millions but also a total collapse of ethical and moral values as well as a breakdown of the family as the kernel of society.
Most people believe and hope that this major trend change could not happen today with all the measures that governments have at their disposal. But very few people comprehend that it is precisely the government interference, controls and regulations as well as money printing that have created the problems in the first place. Power corrupts, and the more pressure a government is under the more they intervene. Because they believe that their interference in the economy will save the country – read Obama, or the world – read Gordon Brown. Little do they understand that each interference, each regulation or each dollar or pound or Euro printed will exacerbate the problems of the economy manifold.
Governments now have two options; continue to spend and print money like the US or introduce austerity programmes like Europe. Whichever way they chose will not matter since they have reached the point of no return. The economy of the West cannot be saved by any means. But governments both in the US and in Europe will still apply the only method they know which is to print money.
Government is Stealing from the People
Very few people understand that money printing is a form of robbing the citizens of their money and their work. Money is supposed to be a medium of exchange for goods and services equalling the value of the good or the service produced. For example, an individual works extremely hard to earn an annual wage of say $40,000 which he receives in the form of paper money. The government, due to its mismanagement and incompetence simultaneously prints $40,000 in order to cover its deficits. So the government has by pressing a button produced the same amount of money that a man had to work a year for. This is what is currently taking place all over the world and which will accelerate in coming months and years leading to a total destruction of paper money. Paper money has completely lost its function as a medium of exchange or a store of value. This is why gold is gaining and will continue to gain value against perishable paper that is called money.
Deflation Inflation or Hyperinflation
The only reason that the US could build up such a major debt is that the US dollar has been the reserve currency of the world and therefore the US has been able to finance its debts and deficits internationally. The US has now reached a point when debts have to increase dramatically for the country just to standstill. Like all Ponzi schemes this one will also come to an end – and this very soon. The US dollar will decline dramatically and lose its reserve status and the US government will be unable to finance its deficit in any market. This process will lead to endless money printing, collapsing treasury bonds (substantially higher interest rates) and the dollar becoming worthless in a hyperinflationary black hole.
Let us just reiterate that hyperinflation arises as a result of money printing leading to a currency collapse and not from demand pull. The slight deflation that we are experiencing currently is a prerequisite for hyperinflation. The fear of a deflationary implosion forces governments to print money, leading to a collapsing currency which historically has always been the cause of hyperinflation.
Real M3 (source: Shadow Government Statistics) is falling at an unprecedented rate. This is the precursor to economic decline, quantitative easing and inflation (see early 1970s in the chart).
Many “experts” make the analogy between the deflationary period in Japan since the 1990s and the US today. In our view the US is in a totally different situation for the following reasons:
In the early 1990s Japan could still export their production to the rest of the world.
In the current downturn all countries (even China and India) will suffer and there will be no one to export the problems to.
The ability to export made Japan a creditor nation with major payment surpluses. US are a major debtor and have been for 25 years.
Japan had a very high personal savings ratio at the time (which has now disappeared). US has had a declining savings rate for years (the US savings rate is now going up which it always does in a downturn).
The balance of payments and the personal savings surpluses made it possible for Japan to finance their budget deficit without resorting to QE. Very soon he US will only be able to finance their deficits with QE and so will most of the rest of the Western world.
Japanese unemployment in 1992 was 2% and went slowly up to 5% by 2000 where it is now. Real US unemployment is 22% and increasing.
Many major sovereign states are now virtually bankrupt and the financial system is on life support. This was not the case in the 1990s.
The above are some of the reasons why the current US situation is totally different to Japan. QE will accelerate in the US and worldwide.
What will make this process so much more complex than the world has ever experienced is that the same development is likely to take place in many countries around the world simultaneously. It will most probably happen in the UK, the rest of the EU and most other European nations. Due to the total interdependence of the world financial system, it will be difficult to forecast which countries can withstand the coming worldwide tsunami of money printing but many Asian countries probably stand a good chance.
Can we be wrong in our forecast of a hyperinflationary depression? Yes, of course we can. But the alternative can only be a deflationary collapse which would be unacceptable to (dropping money from) helicopter Bernanke and deficit demagogue Obama as well as most other governments.
Conventional wisdom and most experts say that we will not have inflation but deflation. The problem with most conventional wisdom is that it is only conventional without an ounce of wisdom. When have the world’s so called experts, politicians etc ever been right on the current crisis? They will be wrong this time again.
The “conventional wisdom experts” also say that it will be years before we can see inflation or hyperinflation. In our view it can happen a lot faster. The world economy is resting on a foundation of matchsticks. All that is needed is a change in confidence or psychology for this fragile foundation to crumble.Falling currencies, rising bond yields and falling stock markets could very quickly result in a vicious and fast spinning hyperinflationary circle. The frailty of the financial system could make this happen like a flash fire.
Wealth Creation
Banks and the financial industry have throughout history existed in order to finance production and trading of goods. But in the last 100 years and especially in the last 20-30 years it has become a major industry in its own right and an important but unproductive part of the economy in many countries. Today, the financial industry is too a great extent involved in trading for its own and clients’ accounts, creating a raft of obscure instruments that only benefit the banks and as well as financing consumption rather than investment. All of these areas are totally non-productive and the only beneficiaries are the participants in the financial industry. And the rewards have been absolutely astronomical. In investment banking, hedge funds and private equity in particular, the most massive wealth has been created. Many players have become billionaires or created fortunes of tens to hundreds of millions of dollars in the last 10-15 years just by shuffling money around. In the past fortunes were created by building factories and industries. But today any normal employee working in Wall Street or the City in London will, by just showing up to work, make hundreds of thousands to millions of dollars. This is the proof of a world totally out of balance when people dealing in money become the richest segment of society. Since this activity contributes very little to the prosperity of a nation (but very much to its participants) it is not sustainable. The biggest reason why it exists is the massive amount of money that governments have created or printed and the fact that the financial industry has developed into a fractal wealth creation machine for the benefit of its participants.
For the last 40 years in particular the rich are getting richer and the average person has seen very little increase in real income. In the US, the real annual income of the bottom 90% of US families has increased by only 10% since 1970. And in the expansion between 2002 and 2007, median US household income dropped $2,000. The perceived increase in wealth for the majority of Americans derives from an increase in their debt level not from an increase in real earnings. So the improvement in living standards that the average American and many other Western countries have enjoyed in the last 40 odd years is primarily based on debt – debt that can never be and will never be repaid with normal money.
On the other hand, management has achieved a major increase in income and wealth. In 1973, chief executives in the US earned 26 times the median income. Today they earn 300 times. This enormous widening of the gap between the top few percent in society and the masses is morally and socially unacceptable. When the bad times start in earnest, this is likely to lead to major social unrest and violence directed against the privileged.
The Focus will Shift
For a major part of 2010 the focus has been on the problems within the EU starting with Greece, then Spain, Portugal, Italy etc. The problems in Europe are major and many European countries as well as the European financial system will lead to massive money printing. Although the problems in Europe are very serious, the US economy is in a much worse state. The diversion of the focus away from the problems in the US economy onto Europe has suited the US Administration perfectly. It can hardly be a coincidence, for example, that US rating agencies downgrade the Sovereign debt of Greece and Spain on the same days as Treasury auctions are held. But the problems in the US economy are deteriorating at a rapid rate; factory orders, consumer confidence, existing home sales, retail sales, the ECRI index (Economic Cycle Research Institute) are all falling more than expected and real unemployment, personal bankruptcies (will exceed 1.6 million in 2010), trade deficit, state and federal deficits are all increasing.
The ECRI index is an important leading indicator. It has now fallen for 10 straight weeks.
There are three insurmountable problems in the US economy that are of a magnitude and gravity which can only be remedied by money printing:
Federal and state deficits will soon escalate at an exponential rate. The US Federal debt has increased from $ 8 trillion in 2006 when Bernanke took office to soon $ 14 trillion. Many forecasts expect this debt to go up to nearer $ 20 trillion in the next 5 years. In our view it will be substantially higher. Add to that interest rates of 15% or higher and the American people will work just to pay taxes that don’t even cover the interest payments on the federal debt. This is why the US will either default or more likely print unlimited amounts of money.
The real unemployment rate is now 22%. Since 2007 over 8 million Americans have lost their jobs and it will get a lot worse. Non-farm unemployment in the 1930s reached 35% and we would expect this level to be reached in the next few years.
The financial system is bankrupt. Banks are failing at a much faster rate than last year. To date circa 110 banks have failed. More seriously the assets of the failed banks are only worth an estimated 30-50% of their balance sheet value. Banks are valuing their toxic debt at phoney values with the blessing of the government. But even debt that today is considered safe will soon turn toxic with the consumer coming under enormous financial pressure. Add to that the OTC derivatives held by US banks of at least $ 400 trillion. A big percentage of these are worthless and there are virtually no reserves to cover potential losses.
Within the next few years, the three areas above are likely to result in the biggest money printing programme in world history and simultaneously lead the US (and many other countries) into the abyss.
Markets
There has probably never been a period in world history which has caused the amount of wealth destruction that we are likely to see in the next few years. If we are correct in our assumption that the West will see a correction of the excesses of the last circa 40 years but more probably of the last 200 years, since the start of the industrial revolution, we could see a total annihilation of the assets that have been fuelled by the credit bubbles. The spike in asset values in the last 100 years, which is unprecedented in history, is likely to be corrected by a waterfall which could start at any time. We will issue a separate report in the next 10 days covering our market predictions and the importance of physical gold for wealth preservation purposes.
If you are a Christian and have had discussions on the ‘mark of the beast’ and how only those with the ‘mark’ will be able to buy and sell at some point in the future, you have probably wondered how this could happen. How could anyone really gain financial control of the entire world? If you are not a Christian, chances are that you have heard about this ‘mark’ and its control over the world’s financial system and have rejected this as being completely ridiculous – how could anyone control the world’s financial system? If you throw in the popular Christian interpretations of end time prophecies – that one future ruler of the world will somehow unite the world’s government, the world’s religion and the world’s financial system – all within a period of 7 years – it becomes almost unbelievable. How could someone – anyone – do all of this within a 7 year time period? If I were not a Christian and had never heard about these things and someone told me that all of these things will happen within 7 years – I would find it very difficult to believe – if not impossible – the world simply does not cooperate this easily. As you’ve seen in previous posts, Satan’s control of the world’s government and religion is not taking place during 7 years – and financial control of the world is no different. What you will find as you read this post, is that a few men have already gained worldwide financial control – and they did it before you and I were born. It didn’t take 7 years – it took hundreds of years. You and I rely on an economic system that has placed us in financial bondage – and most of us don’t even know it. What you will find, once again, is that our spiritual enemy is much more cunning and deceptive than you have been led to believe.
Let’s start this with a simple question – do you know how our money is created? Whether you are wealthy or poor, highly educated or not – chances are this question causes you some concern – because you really don’t know the answer. Most people (and I was included) would say that the United States creates our own money through the U.S. Treasury – correct? No. It did until the early 20th Century. It is correct that the U.S. Mint and the Bureau of Engraving and Printing (agencies of the U.S. Government) create the hard currency we use, but the U.S. Treasury is not responsible for creating and managing our money supply. Who then, is responsible for creating and managing our money supply? A private corporation - The Federal Reserve Banking System.
If the U.S. Government needs $20 billion in hard currency (paper and coins), the Federal Reserve creates this $20 billion out of nothing (there is nothing of value that backs our currency), the U.S. Mint and the Bureau of Engraving and Printing creates the paper and coin currency and the U.S. Government gives the Federal Reserve an IOU for $20 billion in exchange. The U.S. Government then pays interest on this $20 billion. On the surface, it may seem to you that this is logical – what’s wrong with the U.S. Government paying a private bank/corporation to print our money? Actually, there is a whole lot wrong with it. This is what I’m going to explain in this post.
We’ve seen how physical currency is created and added to our economy, but physical currency – coins and paper – makes up less than 5% of the overall dollars in circulation in the world. The other 95% is made up of all of the electronic dollars in checking accounts, savings accounts, CD’s, money market accounts, etc. How is this money created? The majority of our money is created by private banks. This is where things get interesting.
If you have purchased a home, then you know that you apply for and receive a mortgage to pay for your home. The question then becomes – where does the bank get the money to pay for your home? If you are like most Americans (and I was certainly included in this group), you assume that this money somehow comes out of the bank’s profits or from deposits made at the bank. It seems logical, but this isn’t what happens. By authority of the bank’s charter, it has the ability to create the dollars needed for your home. In the same manner that the Federal Reserve creates money out of nothing, your bank once again creates money out of nothing and places the dollars needed into your account. The funds are then used to pay for your home. I know what you’re thinking – this is the most ridiculous thing you’ve ever heard, there’s no way this is what happens. You’d be wrong. In our current monetary system (commonly referred to as a Fractional Reserve System), your act of signing for debt - creates money. Every time someone signs for an auto loan, home loan, home equity loan, etc. – money is created. This is how money is created in our system. In our current monetary system, money is not created from value, money is created from debt. It doesn’t matter if our money is created because the U.S. Government needs hard currency or if it is created through bank loans, the only way money is created in our current system is through debt. Get ready - because this leads to some very interesting analysis.
If you’re thinking this through, then you’re beginning to feel very uncomfortable – and you should. Even though it may seem strange to you that our money is created by debt, it might initially seem like this could work – that our economy has – and will continue to – function under this system. There’s one very big problem inherent in this system. If you’ve seen the movie ‘The Matrix’, then you remember that the massive computer simulation in the movie had a flaw in the program – an anomaly that over a long period of time would eventually crash the system. We have the same type of ‘anomaly’ in our current economic system that over time – will have the same result. What is the ‘anomaly’ in our system? Interest. When you take out a loan for $200,000 to pay for your home, is this all you need to pay back? Of course not. You must pay the $200,000 plus interest. The total amount of money you will pay back with interest will be more than $400,000 if you have a 30 year fixed rate (around 6%) and don’t pay it off early. Remember, our money is created from the principle, not the principle plus interest. So, you bought a house for $200,000, and as a result, added $200,000 to our total money supply of dollars. Do you see the problem? If our money is only created from the principle payment, where do we get the money to pay interest? This is where things really start to get interesting.
Let’s look at another example. Let’s say that the total debt (new debt – retired debt) created in a given year in the United States is $1 trillion dollars. Based on our current system, $1 trillion dollars would then be added to our money supply. As I mentioned above, because this is debt, the total actually owed is much higher – let’s say the total debt actually owed is $2 trillion. So, we have created $2 trillion in liabilities that must be repaid, but we’ve only created $1 trillion dollars in the system to pay this debt. Do you see the problem? We never add enough money into our economy to pay for the debt.Our debt continues to rise and our money supply continues to rise – but the money supply can never equal the total amount owed. What this means is that we can never pay off our debt under our current monetary system.
Let’s make it really simple. If you and I each owe $100 and there’s only $150 in currency available to us – one of us isn’t going to have enough to pay our debts. It’s a catch-22 that we cannot get out of. In our current system, there will always be a certain percentage of people and businesses that cannot get enough money to pay their bills, debts, etc. It’s mathematically impossible for everyone to have enough money to pay what they owe. We can talk all day about why certain businesses fail (poor management, supply and demand, changing markets, etc), why businesses and people go bankrupt, but the bottom line is this - if there’s not enough money in our economy to pay for all outstanding debts, it doesn’t matter what we do, how we manage our budgets, we will never pay off our debts as a nation – never. Of course I’m talking about our nation as a whole. Individually, we can make good financial decisions and manage our money in a prudent manner, but on a national level, we are in a never ending cycle of ever increasing debt – personal debt, corporate debt, government debt, etc. If our system never changes, it is mathematically impossible for us to ever pay off our national debt.
I now find it interesting when I hear our President or members of Congress debating ‘fiscal irresponsibility’ or when I hear our leaders talking about reducing our national debt. The truth is that all of us – our Government included – must continue to create debt in order to keep our economy from crashing. The meter is always running on the current interest (which is now enormous). In order to keep creating additional money to pay for our ever increasing debt, we must create more debt to create more money. I know what you’re thinking – this has to be the most ridiculous economic system ever devised. It’s actually quite ingenious – when you realize why it exists. We’ll examine this more later.
Since our money is created from debt, as our debts increase – our money supply increases. The only thing that has prevented this system from collapsing years ago is due to the lag time we have to pay back the interest on our loans. We are not required to immediately pay back the principle plus interest. Although this system seems to have worked for a very long time, we’re going to see that it cannot continue forever. You will see that it’s mathematically impossible for our economic system to continue without eventually collapsing.
If this hasn’t blown your mind yet, consider what would happen if we paid off all of our debt – personal debt (home loans, auto loans, etc), corporate debt and Government debt. Since debt equals money in our system, if there is no debt, there would be no money! I know – it keeps getting more ridiculous. Your mind wants to reject this outright. This is crazy! Unfortunately, it’s the truth. Our entire economy is based on the creation of debt. Without debt, our economy would crash completely. You now know the real reasons why we are all always fighting to get enough money to pay our bills and debts (there’s not enough money in the system for all of us). You now know why we consistently have a steady stream of people and businesses that file for bankruptcy (there’s never enough money in our economy), why inflation has dramatically reduced the buying power of the dollar in the past few decades (our money supply is always increasing – it never stabilizes), why the total volume of dollars in the world economy has sky-rocketed in recent decades (leading to a decline in the value of the dollar – worldwide) and why we’re always being bombarded with loan offers (home, auto, home equity, etc), credit cards, etc. Without debt, we have no economy. How is this possible you ask? Why would anyone allow this to happen? How did this happen? The most important question that you should be asking yourself is this – if we are creating so much debt, who are we indebted to? What you will find later in this post is that this is all very deliberate – it’s not by chance. There is a plan at work here – and it’s evil. The honest truth is that every person in the United States has been placed in financial bondage since 1913 – and most don’t even know it. Have I mentioned how deceptive our spiritual enemy is? Keep reading.
I mentioned earlier that our current banking system is referred to as a Fractional Reserve System. Basically, this means that banks can issue loans for much more money than they have on hand. It depends on the type of account, but as an example, let’s say that the Federal Reserve sets the reserve requirement at 9:1 (or a 10% reserve ratio). The Federal Reserve Board of Governors also has the power to change this ratio within limits set by law. This means that for every dollar that a bank has held in ‘reserve’ at the Federal Reserve, it can lend out 9 times that amount. Let’s say that a new bank holds approximately $1,111 dollars at the Federal Reserve. It can then lend up to $10,000 dollars (9 x $1111 = $10,000). Money on reserve at the Fed is sometimes referred to as ‘super’ money – since the banks get to multiply its volume. The bank then loans this $10,000 to you for a new car. You pay the car seller who then deposits the money in their checking account. Their bank (this is a closed loop system – it doesn’t matter which bank receives the deposit) then takes the $10,000 – adds $1,000 of it to their reserves (the same 9:1 reserve ratio – reversed) – and loans out $9,000 to someone else who then deposits the money in their checking account. Their bank takes the $9,000 – adds $900 to their reserves (9:1 reserve ratio) – and loans out $8,100 to someone else. At this point, the original reserve of $1,111 has generated $27,100 in new money ($10,000 + $9,000 + $8,100). If we do the math and continue to carry this through (and everyone deposits their money in a bank – not in a mattress), then this original reserve of $1,111 generates just under $100,000 of currency in our economy. It’s like a huge game of musical chairs – as long as we’re creating money from debt, the music doesn’t stop playing. Also remember – the original reserve deposit at the Fed ($1,111) was money created by debt – it has no value. Some types of accounts in this system only require a 20:1 or 30:1 reserve ratio and some accounts do not require a reserve at all. Should anyone be surprised that we always have inflation?
What happens when the Federal Reserve changes the reserve ratio? Is this significant? Absolutely. Let’s examine this more closely. If the current ratio is 9:1 and the Fed changes this to 5:1 – what impact does this have? If you’re a bank that has loaned millions of dollars at a ratio of 9:1, and have planned future loans around this ratio, what happens to you if the ratio changes to 5:1 (the reserve requirement increases)? If you don’t have additional reserves to meet the new requirement - you instantly become under-capitalized. Here’s a simple example: if a bank has a reserve of $1,000 and plans to make a loan of $9,000 – it can no longer make the loan if the reserve ratio is reduced to 5:1. At 5:1, the reserve requirement on $9,000 would be $1800. The real world result is – the bank must generate significantly more capital to increase its reserves or stop lending in order to meet the new reserve requirement.
What should we learn from this? Most of us know that the Federal Reserve has the power to raise and lower interest rates and therefore, has the power to raise and lower overall prices within our economy. What most people don’t realize is that they also have the power to raise and lower the total volume of dollars in our economy. If they raise the reserve requirement (requiring banks to have more reserves at the Fed), banks will lend less money and since our money is based on the creation of debt, less money is created. If this happens, the gap between the amount owed within our economy (interest never stops accumulating) and the amount of money to pay the debt – widens. We are often told that this is used to fight inflation – inflation that is caused by this system of money creation through debt. The truth is that an increase in the reserve requirement results in even less money in the overall economy to pay back debt – which could easily lead to a recession or depression. This is the continual game central banks around the world play every day – more money in the economy means economic growth, but higher inflation – reducing the money supply reduces inflation, but will also cause economic growth to slow or contract.
The following chart shows the impact of the reserve ratio on our money supply. It’s easy to see that as the reserve amount required is lowered, the amount of money generated increases significantly. The reverse is also true – as the reserve required by the Fed is raised, the amount of money generated decreases. (Source: wikipedia.org)
What really happens when our money supply contracts? Periods of recession or depression. What we’re consistently told is that periods of economic growth and periods of economic contraction are unavoidable, when the truth tells us something different. The Federal Reserve has the power to create periods of growth (increased money supply coupled with low interest rates) and periods of contraction (reduced money supply coupled with higher interest rates). How are we told to categorize these periods of growth and contraction? This is the ‘business cycle’. While everyday business transactions certainly affect our overall economy – there is nothing that private business or individuals can do that will overcome the debt based economic system we’ve been placed under.
You have also learned why the current credit ‘crunch’ is being referred to as a ‘crisis’. What happens if banks reduce lending and consumers reduce taking on more debt? Less money is created in the system – and a vicious cycle starts. Wall Street refers to this as ‘de-leveraging’. We’re going to explore the real reasons this happens. Before we look closely at what is going on today, let’s examine another problem with our current economic system. We have discussed how our economy must continue to grow in order for debt creation to continue in order to create additional money in order to pay the debt – a never-ending cycle of debt creation. The question becomes – can this continue forever?
If you were to ask people about economic growth, some will know that our economic (GDP – Gross Domestic Product) growth rate typically averages about 3% (annually) in recent years. Most of us assume this is a linear growth rate. A linear growth rate looks like this:
The problem is that our economic growth is not linear. As an example, let’s assume that the current overall value of our economy is $100. If our economy grows 3% this year, then the overall value at the end of this year is $103. If our economy grows an additional 3% next year, will the overall value of our economy be $106 at the end of next year? No. Since we grew our economy 3% this year, next year’s growth will be 3% of $103 and the total value of our economy at the end of next year will be $106.09 ($103*.03 + $103). Our economy does not grow linearly, it grows exponentially. What this means is that 3% growth this year is actually more growth than 3% last year since our growth is compounded annually. This is what exponential growth looks like:
You are probably starting to feel uncomfortable, because you are beginning to see where this is going. In theory, exponential growth remains relatively low for a given period of time – but as you can see, as each year’s growth compounds on the previous year, overall growth begins to accelerate rapidly at a given point in time. A simple example of this phenomenon can be seen in the growth of a company. A company that plans to grow 10% with annual revenues of $10 million only needs to grow $1 million. A company that plans to grow 10% with annual revenues of $10 billion needs to grow $1 billion. As growth compounds upon itself, the system requires ever more resources to grow the same amount (%).
In our current economic system that relies on continual growth to stave off a collapse, we must continually burn through more and more natural resources to keep the system going. In a theoretical world, this exponential curve continues on to infinity. Is this possible in a finite world with finite resources? Of course not. If we take a logical look at our economic system, mathematics tells us one of two things must happen to our current system. The first scenario is that we burn through all of our resources and the system collapses. We can certainly see the beginning of this from a global perspective. As more economies around the world have instituted the same economic system as ours, we are seeing more and more concern that natural resources (oil, forests, water, etc.) are being depleted at an alarming rate – demand is outstripping supply – adding to inflationary pressures. Although this is certainly possible in our distant future, since we are much farther along the exponential curve than other economies in the world, there is a much more likely scenario for the United States.
The second scenario is that our current system collapses under the weight of the debt it has created. If the rate of debt increases much more quickly than the rate of the supply of money in the system, eventually the amount of money in the system will not be able to support the increased debt. There will not be enough money to make interest payments, pay utilities, buy consumer goods and create additional money. As the exponential curve gets steeper and steeper – it will be more and more difficult to grow our economy, while supporting the existing debt in the system. At some point, since we live in the real world, our monetary system will collapse under the weight of its debt – long before we burn through all of our resources.
Before we get too far into this – let’s ask a question. Where are we on this exponential curve? If we look at trends of some of the most widely used economic indicators, can we determine if we should be worried about imminent collapse? As you will see, we have reason to be concerned.
Let’s start by looking at our debt. The following is a graph of our nation’s federal debt:
Does this look linear or exponential? You don’t have to be a mathematician to see the answer.
The following is a different look at our national debt that calculates the debt as a percentage of GDP:
(Source: U.S. White House)
We hear politicians and economists talk about how there’s nothing to worry about since our debt remains in line with past years - as a percentage of GDP. The problem is that they are only focusing on the amount of debt as a % of GDP in a given year and not the effect of our cumulative debt. As we’ll soon see, what is even more important is the ratio of debt to the money supply.
We also have much more debt than just the federal debt. The following chart shows total debt over time (state, federal, personal, corporate). Once again, we see an exponential curve.
(Source: Michael Hodges, Federal Reserve, U.S. Treasury)
What about our money supply? We should expect to see the same trend – and we do.
Hard currency appears to be somewhat linear, but it’s an illusion. If we reduce the scale (since hard currency is such a small percentage of the total money supply), we see the same trend:
(Source: wikipedia.org)
Since the Federal Reserve stopped publishing M3 (total amount of dollars in circulation) money supply data in 2006, a couple of economists have worked to re-create it. The next graph was created by John Williams at shadowstats.com. Take note of how the year over year growth of our money supply has steadily increased since early 2005. Also note how the rate of growth is beginning to slow since the beginning of 2008. (I originally wrote this post in early 2008 - I have updated the graph below to show money supply growth through July 2010 - you can see how the current credit 'crisis' is now causing our money supply to contract).
I believe we’re going to see our money supply growth continue to slow since we are now at the point that we cannot create enough new money (through debt) to support the existing debt. If we’re not able to create enough new money (through debt) each year to service the interest on the existing debt – the system begins to collapse (loan defaults & bankruptcies begin to increase). The world tells us that our economy is ‘maturing’, which is why our economy’s growth is slowing. The truth, as you see, is much different. We are beginning to see the very real signs of an economy on the brink of collapse under the weight of its monetary system. We’ll talk about these signs later in this post.
Let’s continue by viewing inflation. Once again, we hear the world tell us that inflation is running at a rate of 3% a year and we all accept this as normal – and we forget that this rate is compounded year after year. If we see our money supply increase at such a fast pace, we should expect to see inflation also rise at an exponential rate – and we do. (Source: Federal Reserve)
Now you know why cars that once cost $3,000 now cost $30,000 or a loaf of bread that once cost $0.25 now costs $2.50. Prices increase within the system if the
volume of money increases at a higher rate than economic activity (goods &
services)
More people with more money to spend places upward pressure on prices for everything – cars, fuel, food, natural resources, etc. As money supplies throughout the world increase at an exponential rate, we see inflation skyrocketing across the globe. More on this below.
What about other economic indicators? We see the same trend.
Government Spending: (Source: wikipedia.org)
Government Revenues:
(Source: Mark Wieczorek)
Commercial Bank Credit:
(Source: Federal Reserve)
Total Revolving Credit:
(Source: Federal Reserve)
Total Consumer Credit:
(Source: Federal Reserve)
These are all interesting, but the most important graph will show us the
rate of increase of our debt and the rate of increase of our income. If we see
a widening gap between the two, then we know that the system is beginning to
break down as the rate of increase in debt (new debt – retired debt + interest)
is outpacing our ability to service the debt and keep the system from
collapsing.
(Source: Michael Hodges, Federal Reserve, U.S. Treasury)
Sobering isn’t it? What you are seeing is a system on the brink of total collapse.
With no way to ultimately pay off our debts
(since money is created by debt), this was inevitable at some point.
Even though our money supply is also on an exponential curve, it cannot (mathematically) keep up with the runaway debt. We are nearing the end of an inevitable cycle. A cycle that ends with the economic collapse of the United States. As I mentioned earlier, this would not be a surprise to the men who created the system in the U.S. in 1913, nor is it a surprise to the men who are controlling the system today.
What about the rest of the world? Can’t they continue to finance our debt? Won’t this help delay our collapse? What you are about to see is that every major world economy also has a Central Bank – and therefore is on the same exponential curve as us. At some point, the entire world system will be unable to sustain itself unless the entire system changes. We’ll just take a look at money supplies of some of the world’s biggest economies. As you view these graphs, also take note of the total amount of Euros (European Union) in circulation compared to the amount of dollars in circulation. If you consider that there are trillions more dollars in circulation throughout the world compared to pounds and euros and also consider the massive amount of U.S. debt – it shouldn’t surprise anyone that the overall value of the dollar is declining against the world’s major currencies.
Global Money Supply:
(Source: Dollardaze.org)
European Union:
(Source: wikipedia.org)
Australia:
(Source: wikipedia.org)
New Zealand:
(Source: wikipedia.org)
India:
(Source: wikipedia.org)
In addition, in recent months China’s money supply (M1+M2) has been growing at a 16-18% annualized rate. So, it’s easy to see that the same insane economic/monetary system has been instituted the world over. The question is – why? Before we answer this, let’s take a look at what is going on in the U.S. economy today.
Let’s think about what we would expect to see if the economic system of the United States begins to collapse due to this monetary system. As the amount of total debt continues to increase faster than the money supply, we would expect the number of personal and corporate bankruptcies to continue to increase. As global inflation also continues to increase prices on a broad range of products and commodities (due to increases in money supplies the world over), we would expect this to also negatively affect individuals and corporations in America. We would also expect to see those of us with the lowest cash reserves to be affected first. Are we seeing these things? Absolutely. We see them everyday in our news. The current ‘credit crisis’ began when subprime borrowers began defaulting on their home loans. Now, we see that the number of Alt-A and Prime borrowers falling behind on their mortgages is also increasing. Home prices are now decreasing across the nation as a result. How does this affect the money supply? If a homeowner defaults on a loan, the bank must ‘foreclose’ and take a loss on its books. The bank then must sell the home – but sell it in a depressed housing market. If the home was originally purchased for $100,000; and the bank can only get $75,000 now - based on what we now know about how money is created - you can see how the money supply will begin to be affected in a very big way. As home prices decline, the amount of money generated from the home loans from consumers also declines. As banks tighten credit due to the rising defaults, the vicious cycle continues – fewer loans and lower prices equals less money created (thanks to this debt based monetary system). Less money created means less money to loan and less money to buy things – and the exponential money creation cycle from debt begins to reverse itself. It’s also easy to see that falling housing prices and falling housing sales are not the only problem here – all of the suppliers, subcontractors, etc. are also affected. The rapid increase in the money supply generated by private banks that we’ve seen over the past decade is beginning to slow significantly. But as you know, this isn’t all that’s happening.
You’ve watched as the value of CDO’s (Collateralized Debt Obligations), CLO’s (Collateralized Loan Obligations), SIV’s (Structured Investment Vehicles) and other derivatives are now plunging in value resulting in huge write-offs for banks. As foreclosures have risen, the value of the bonds created from these mortgages have plunged in value – even those bonds based on ‘prime’ mortgages. All of these things are reducing the money supply. If you have an investment that you thought was worth $100, but now is only worth $60 on the open market, your access to money has been substantially reduced. Auction rate securities, once thought as safe as cash, now can’t be sold – there are no buyers. What you are seeing are the cracks beginning to form in the dam.
What is the Federal Reserve doing? Basically, they are trying to plug the holes by injecting money into our economy to delay the inevitable. Money creation through the private banking system is faltering, so someone has to step in or something catastrophic is going to happen. As the process has accelerated, not only are banks slowing their lending to consumers, they have also significantly reduced lending to each other. In order to get the capital they need, many banks are now borrowing more money directly from the Federal Reserve discount window. Remember, the Fed isn’t giving the money away; banks are borrowing this money from a private corporation. We can see the impact from the current credit crisis from the graph below.
(Source: Bloomberg)
We see this problem developing with the money supply, but there is one area of our financial system that has yet to suffer a significant drop in value – the stock market. It’s been very volatile, but has not really suffered a prolonged decrease in value. Think about this – what happens when financial conditions worsen, people can’t pay their bills/debts, all other investments have significantly declined in value and there’s only one remaining large source of wealth remaining? People will sell their stocks to survive. There’s an obvious problem with this – if a large number of people start selling – what happens? Prices drop significantly. Since stocks are one of the most volatile investments in the world, the coming decline in the stock market will, in all probability, be much worse than the current decline in value of CDOs/SIVs, Auction Rate Securities and other bonds. One thing is for certain, it’s not a matter of if, but when this will happen.
Dow Jones Industrial Average (1970 - 2008):
(Source: Wall St. Journal Online)
Take a look at the above graph of the Dow Jones Industrial Average (Share volume is also shown). Look familiar? Once again, we see an exponential curve. The DJIA is shadowing both our debt and our money supply. Why? Think about how the world tells us to invest. We’re constantly told that stocks offer the best long term returns. If you only look at stock returns over the past 30 years – this would appear to be good advice (if you ignore the possibility of something negative happening tomorrow). The problem is that there are two very good reasons why the stock market has continued to increase over this time period – and they have nothing to do with the stock market itself. As money has increased exponentially over the past 30 years – more and more liquidity has been placed in the hands of investors. What is another consequence of this exponential money growth? Inflation has also increased exponentially. We have more and more money in a system where inflation is eroding the value of this money. In this situation, everyone is trying to at least maintain the value of their money – by trying to earn a return higher than the inflation rate. So, we see more and more people investing more and more money into risky investments (stocks, hedge funds, CDO’s, SIV’s, Auction-Rate Securities, etc.) in an attempt to outrun the inflation rate.
There’s also another problem that no one in the mainstream media is discussing. We assume that our inflation rate has been approximately 1%-5% in recent years because this is what our government tells us. The problem is that since the early 1980’s, the government has changed the way it measures inflation. I won’t go into details here (please watch Chris Martenson’s video for further information on how our government has changed how it calculates inflation and other economic data: http://www.chrismartenson.com/fuzzy_numbers). The truth is that the actual annual consumer inflation rate has been between 8%-12% over the past 10 years – which means that you would need to average an annual return of around 10% over the past 10 years just to break even. The current rate of inflation is closer to 13% and increasing - not 5% as we’ve been told (I have updated the graph in 2009 to show how the current crisis is causing deflationary pressures).
(Source: Shadowstats.com)
If we also consider the impact that the actual inflation rate has on real GDP (inflation is subtracted from nominal GDP to calculate real GDP) – we see why businesses and consumers are telling us that we’re in a recession – while our government tells us that our economy is still growing. The current state of our economy starts to make sense when we see inflation in double digits and negative GDP for several quarters.
(Source: Shadowstats.com)
Do you know people who have lost their jobs recently? Wonder why it’s difficult to find a job right now? It’s because the current unemployment rate is closer to 13% - not the 5% that we’ve been told (I have updated the graph in 2009 to show the continuing impact of the current recession/depression - real unemployment is now approaching 20%). The government selectively removes ‘discouraged workers’ from total unemployment in order to calculate the lower rate. It’s simply a way for our government to manipulate the data to show more favorable percentages.
(Source: Shadowstats.com)
What is going to happen to the stock market as our money supply growth continues to slow, GDP continues to contract, inflation continues to increase, housing prices continue to fall and more people lose their jobs? The stock market will, once again, shadow our money supply straight down as the system collapses. We’re beginning to see how this is affecting the stock market today. The market has been extremely volatile as earnings reports from companies seem to contradict government economic data. When it becomes clear to everyone that we’re in serious trouble – we’re going to see a mass exodus from stock markets worldwide.
If you’re wealthy, you may feel somewhat secure that you’ve got a nice nest egg to see this through. Where is your money? It’s most likely in dollar currency in the system – checking/savings accounts, money market funds, stocks, bonds, 401(k)’s, retirement accounts, etc. What happens if it’s not just a segment of the system that collapses, but the entire system? It won’t matter what you have - $5 or $5 million – your wealth will vanish before your eyes. We are facing a far worse scenario than 1929. From 1929 through 1933, our money supply contracted approximately 30% after a period of money supply expansion in the 1920’s. As you can see from the money supply trends in previous charts, we have also been through a period of significant money supply expansion from 1995 until 2007. It appears that 1929 was a trial run for what will happen in the near future to us.
Was wealth destroyed during the Great Depression? No. Wealth was transferred. If you read the biographies of some of the great bankers of that era (J.P. Morgan and others), you will see that the majority of them did not have their money in stocks. Earlier in 1929, they moved their investment holdings to cash and gold. For them, the crash of 1929 was not a catastrophe, it was a buying opportunity. A buying opportunity they created. The price of assets dropped dramatically during this time - and guess who happened to have the cash on hand to buy assets at depressed values?
Until now, you’ve probably thought that we’re all playing by the same rules – we’re not. This really isn’t about money – it’s about power and control of the world. It’s about a ruling elite enslaving humanity on a worldwide scale. A ruling elite given power by the world’s spiritual ruler. Now you know a little more about why the Lord has warned us. He warned us that this beast would be deceptive and would deceive the whole world – and you’re beginning to see why. When God tells us in His Word that something in our future will be deceptive on a worldwide scale – it’s a warning we should heed.
This leads us to why our monetary system exists. In 1913, the battle for the control of the United States banking system was lost – and the Federal Reserve Bank was created. The name of this private corporation should tell us all we need to know – it’s a lie. It’s a bank that is not Federal and there are no reserves. The truth is that this ingenious monetary system was created by some highly intelligent men for one purpose – global power. Whoever controls interest rates and the volume of money in a nation controls the nation (and ultimately the world). In a world focused on money and the pursuit of money, whoever controls our money has the power – absolute power. These men created a monetary system that forever places our nation in debt and one that can be manipulated by them for their purposes. What is going to happen when markets collapse? Guess who, once again, will be there to acquire depressed assets?
As I’ve said before, this was inevitable. If you give a banking system, in our evil world, the ability to control the money supply and the ability to charge interest on the money they create, the bankers will slowly, over time, exchange worthless money (paper and electronic fiat currency) for real assets – gold, silver, land and property. If you view this from a spiritual standpoint, you begin to understand why Jesus told us that building the foundation of your life on the things of this world is not wise. As has happened before, and will happen again, wealthy people of this world will see the foundation of their lives (money) slowly sift away through their fingers. Our wealth is an illusion. Satan has offered wealth and power to many in this nation and they have gladly accepted. They are about to witness what happens when you do a deal with the devil. Take him on by yourself and sooner or later – he’s going to find a way to get his tentacles into you. What happens when wealth is taken away from people who are focused on wealth? It’s not pretty. How do we overcome? As I’ve said before, and will continue to say until I leave this world – you will not overcome this world and its ruler until you humbly ask forgiveness from God. Until you acknowledge your sins and truly believe the Lord’s promise of salvation through His Son, you will never get free of the world. You will always be susceptible to the world’s many disappointments. When you truly repent and are born again, what happens in the world no longer matters because you know the Lord and the Lord stands with you – until the end.
At some point you’ve probably wondered how on earth this monetary system has survived until now. If you read the many quotes throughout recent history from bankers, world leaders, economists and tycoons about central banks – and really pay attention to what they’re saying - it’s no secret that those in power knew what was happening (I have listed many of these quotes on my website). Why hasn’t anyone stopped this madness? It’s not hard to figure out – fear. If you attain a position of power and are told to look the other way or face the consequences – what do you do? Most people in the world will gladly take the money and power….and look the other way. Why place my life at risk when I can continue living this nice lifestyle by not rocking the boat? Yes – I said that by standing against this beast – you place your life at risk. I’m not saying this merely to make a hypothetical point. Take a look at this list. These men had three things in common.
Abraham Lincoln James Garfield John F. Kennedy
All were Presidents of the United States. Each man spoke out against the issuance of money by anyone other than our Government and made it clear who they were targeting with these comments – and all were assassinated. Lincoln refused to attain loans from the European banks to finance the Civil War (he was offered loans at 24%+ interest) and instead had the U.S. Treasury issue its own money. JFK gave a speech in 1961 about a worldwide ‘monolithic and ruthless conspiracy’ which is ‘a system that has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations’. I have added a link to the speech on my website. (Here’s the link: http://www.youtube.com/watch?v=QeYgLLahHv8) JFK even had the audacity in the summer of 1963 to give the U.S. Government the authority to, once again, create its own money via Executive Order 11110 (based on a Silver standard). The U.S. Treasury actually began to print its own money in 1963….but as we all know, this didn’t last long.
As you read the quotes below, notice carefully what these men are telling us. They didn’t realize it at the time they made these statements, but each one of them learned about and then commented on – one of the beasts of Revelation 13. Some of them paid the ultimate price for doing so. The Lord doesn’t arbitrarily label something a ‘beast’ without reason. He uses the term ‘beast’ to tell us who and what we’re dealing with – an organization that will kill, steal and destroy anyone and anything in its path – anything that opposes it. This beast obeys its father – the father of lies and deceit who walks in complete darkness. There is only one way in this world that you and I can oppose this beast and survive – by standing with and obeying the Lord.
“The very word secrecy is repugnant in a free and open society – and we are, as a people, inherently and historically, opposed to secret societies, to secret oaths and to secret proceedings.” –JFK
“We are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covet means for expanding its sphere of influence – on infiltration instead of invasion – on subversion instead of elections – on intimidation instead of free choice. It is a system that has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine - that combines military, diplomatic, intelligence, economic, scientific and political operations. Its preparations are concealed, not published. Its mistakes are buried, not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no secret is revealed.” -JFK
“I am asking your help in the tremendous task of informing and alerting the American people.” –JFK referring to the worldwide conspiracy mentioned above
“Whoever controls the volume of money in our country is absolute master of all industry and commerce….and when you realize that the entire system is very easily controlled, one way or another, by a few powerful men at the top, you will not have to be told how periods of inflation and depression originate.” -James A. Garfield
“The Government should create, issue and circulate all the currency and credits needed to satisfy the spending power of the Government and the buying power of consumers. By the adoption of these principles, the taxpayers will be saved immense sums of interest. The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the government’s greatest creative opportunity.” -Abraham Lincoln
“We are grateful to the Washington Post, the New York Times, Time Magazine and other great publications whose directors have attended our meetings and respected the promises of discretion for almost forty years. It would have been impossible for us to develop our plan for the world if we had been subject to the bright lights of publicity during those years. But, the world is now more sophisticated and prepared to march towards a world government. The supranational sovereignty of an intellectual elite and world bankers is surely preferable to the National auto-determination practiced in past centuries.” –David Rockefeller in an address to Trilateral Commission Meeting, 1991
"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that willgrow up around them (around the banks), will deprive the people of their propertyuntil their children will wake up homeless on the continent their fathers conquered." –Thomas Jefferson
"Capital must protect itself in every way... Debts must be collected and loans and mortgages foreclosed as soon as possible. When, through a process of law, the common people have lost their homes, they will be more tractable and more easily governed by the strong arm of the law applied by the central power of leading financiers. People without homes will not quarrel with their leaders. This is well known among our principle men now engaged in forming an imperialism of capitalism to govern the world. By dividing the people we can get them to expend their energies in fighting over questions of no importance to us except as teachers of the common herd." -J.P. Morgan
"We shall have World Government, whether or not we like it. The only question is whether World Government will be achieved by conquest or consent." –James Paul Warburg (Chairman of the Council on Foreign Relations, speaking before the U.S. Senate, 1950)
"The real truth of the matter is, as you and I know, that a financial element in the large centers has owned the government of the U.S. since the days of Andrew Jackson. History depicts Andrew Jackson as the last truly honorable and incorruptible American president." –Franklin D. Roosevelt
"[The task is to] covertly lower the standard of living, the whole socialstructure, of America so that we can be merged with all other nations." –Rowan Gaither (President of the Ford Foundation, 1954)
“I am myself persuaded, on the basis of extensive study of the historical evidence, that... the severity of each of the contractions - 1920-21, 1929-33, and 1937-38 - is directly attributable to acts of commission and omission by the Reserve authorities and would not have occurred under earlier monetary and banking arrangements.'' –Milton Friedman (Nobel Prize-winning economist, economic advisor to President Ronald Reagan)
"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the U.S., in the field of commerce and manufacturing, are afraid of somebody, are afraid of something. They know that there is a power somewhere so organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when they speak in condemnation of it." –Woodrow Wilson
"A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom." -Woodrow Wilson
"We have restricted credit, we have restricted opportunity, we have controlled development, and we have come to be one of the worst ruled, one of the most completely controlled and dominated, governments in the civilized world--no longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and the duress of small groups of dominant men." –Woodrow Wilson
"This Act (the Federal Reserve Act, Dec. 23rd 1913) establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs the Bill, the invisible government of the Monetary Power will be legalized... The worst legislative crime of the ages is perpetrated by this banking and currency Bill." –Charles A. Lindbergh Sr. (Congressman and father of the famous aviator)
"The most wonderful thing of all is that the distinguished Lutheran andCalvinist theologians who belong to our order really believe that they see in it (Illuminati) the true and genuine sense of Christian Religion. Oh mortal man, is there anything you cannot be made to believe?" - Adam Weishophf upon establishing his "Order of the Illuminati", on May 1, 1776
"It is ironical that the only nation which affirmatively expresses a dependence upon and belief in Almighty God in its birth certificate, should now be in mortal combat for its very existence with a godless conspiracy intent upon conquering the world, and reverting human society to the hazards and indignities of the Dark Ages." –Loyd Wright (Former President of the American Bar Association, 1961)
"From the days of Spartacus, Weishophf, Karl Marx, Trotski, Belacoon, Rosa Luxenburg, and Ema Goldman, this world conspiracy has been steadily growing. This conspiracy played a definite recognizable role in the tragedy of the French revolution. It has been the mainspring of every subversive movement during the 19th Century. And now at last this band of extraordinary personalities from the underworld of the great cities of Europe and America have gripped the Russian people by the hair of their head and have become the undisputed masters of that enormous empire." –Winston Churchill, 1920
"The real menace of our Republic is the invisible government which like a giant octopus sprawls its slimy legs over our cities, states and nation. At the head is a small group of banking houses generally referred to as 'international bankers.' This little coterie... run our government for their own selfish ends. It operates under cover of a self-created screen...[and] seizes...our executive officers... legislative bodies... schools... courts... newspapers and every agency created for the public protection." –John Hylan (Mayor of New York, 1918-1925)
"The sovereignty fetish is still so strong in the public mind, that there would appear to be little chance of winning popular assent to American membership in anything approaching a super-state organization. Much will depend on the kind of approach which is used in further popular education." (Council on Foreign Relations, 1944) If you spend some time studying these international bankers who have instituted this debt based monetary system worldwide, you will find that at the top echelon of power there are approximately 300 names. These are the same 300 families who own stock in the Federal Reserve of the United States and all of the other central banks the world over. These are the people who wield the world’s real power from the shadows and provide the wealth and power needed to infiltrate the world’s monetary and political systems. These are the people the Lord describes in Revelation 13 – this ‘beast out of the earth’.
If you continue to study how they have gained this power, you will be led back in time to the early 1690’s to the founding of the Bank of England – the world’s first central bank. And if you continue to search for the truth, you will find that all roads on this journey eventually lead to one name – Rothschild. The world will tell you that the Rothschild’s banking empire has been reduced to a ‘niche’ bank – catering mainly to very wealthy investors. The truth is that they control approximately 70%-80% of the world’s wealth from the shadows. If I had told you this at the beginning of this post, you would have probably rejected this statement outright. Now you know how it’s possible – they print the world’s money and exchange it for the world’s real assets. As I mentioned at the beginning, it’s really an ingenious plan – when you realize why it was created. It’s evil, but ingenious. The Rothschilds and every member of these ‘elite’ families would tell you that this plan was devised by them for their purposes – but we know the truth. The Lord has told us Satan’s plans – they’re simply obeying the one they serve.
We now see how the world’s financial system has been overtaken by a few very powerful men. If we take what we know and think about the ‘mark of the beast’, we realize that control of the world’s financial system isn’t enough to satisfy the prophecies about the ‘mark’. Controlling the world’s financial system is one piece of the puzzle, but something else is needed – enforcement. Everyone throughout the world will be ‘forced’ to accept the mark. These powerful men need a way in which to deceive us into believing that humanity needs protecting – and now we know why the Lord tells us in the book of Revelation about ‘miraculous signs’ used by this beast. The beast creates these ‘signs’ to strike fear among us – fear that will eventually drive humanity to give over its freedom to the beast – and Satan. We’ve seen many of these ‘signs’ already, but they are only the beginning.
When it comes to spiritual deception, you are beginning to see just how blind we really are in this world when we walk away from our Creator. We focus on the things in the world – money, careers, cars, houses, addictions, stuff, etc. – and we forget about the subtle things that are missing from our lives. Some of these things are big picture – How did we come into being? Why are we here? Does God really exist? If He exists, why can’t I see Him? Can I really know God - personally? Where do I go when I die? Am I really alone in this fallen world? How can I get free of this mess? Other questions are smaller picture, but would also lead us to the truth if we would just slow down for awhile and think about what we’re consistently told in this world and compare it to God’s truth – could someone really consolidate the world’s government, world’s religion and world’s financial system within 7 years? If God has allowed His children to experience pain and suffering throughout human history in order to strengthen them in this world, why would He change now? Sometimes it’s a very simple question that leads us to some very important answers – how is our money created? Think about how many times in your life – friends, parents, teachers, professors – someone has explained our monetary system to you. Never? You’re not alone – and there’s a reason it’s being hidden. If I were to ask 1000 Americans today what is the greatest threat to our nation’s sovereignty – how many do you think would respond - ‘the war on terror’? My guess is that 99% of us would agree that ‘the war on terror’ is our greatest threat. Our spiritual enemy has created a perceived threat – while his true ‘beasts’ gain control of the world through deceptive means – subversion, infiltration and intimidation. Again, an ingenious plan – and not of this world. The only way to overcome it is to obey the One spiritual being that Satan cannot deceive, intimidate or overcome – our Father in heaven.
The truth is that never before, in the history of the United States, have we faced a greater threat to our national sovereignty as we do now – never. We are facing an enemy that is much more intelligent and powerful than you and I - an enemy that has not used brute force against us, but works in the shadows to deceive and infiltrate. At times in the past I would think about the book of Revelation and wonder how the people of the world could ever allow themselves to be subjected to an evil world government. I simply didn’t want to believe it was possible and I, like most people today, disregarded the Lord’s warnings about how this beast would deceive the whole world. Now that I’ve humbled myself and know the truth, I listen to this beast talk to us everyday through corporate, governmental, banking and religious leaders – leaders of the United States. It’s no longer a mystery. Their plan has almost come to fruition. At some point, you might think that all hope is lost – that they are too powerful and the plan is too far along. How can we possible stop this? I’m not fearful of these things because I know that God could see this coming since the creation of the world – and I don’t need to figure out what to do on my own. I will simply continue to seek the Lord’s will for me – His plan, not mine. What you are about to see throughout the world is that God is going to go on the offensive – and he’s going to do it with you and me. Now is not the time for weak people with weak ministries to proclaim a weak message. Now is the time to allow ourselves to be strengthened spiritually. Now is the time to stand in the face of overwhelming odds – and succeed.
At different times in your life you have probably felt that something wasn’t quite right. You could ‘sense’ it, but you couldn’t ‘see’ it. You couldn’t really explain it, but you knew that there was something not quite right about the world you live in. The economy is up – the economy is down. Life is good – life is not so good. Chaos seems to rule the world. It’s like we’re walking on very thin ice that is constantly cracking – about to give way. You are now beginning to understand that there is a method to the madness. When the world chose death over life, sin over righteousness – when we chose to believe lies instead of the Truth – this was the inevitable result. What gets the true Christian through all of this is that this isn’t the end – it’s only the beginning – and we’re not alone. The end is glorious for us – end of story.
You’ve seen me reference the movie ‘The Matrix’ and how many aspects of the movie are similar to the spiritual battle being waged in the world. I’m going to end this post with some dialog from the movie because it certainly relates to most of us. The following scene takes place right before Neo learns the truth about his world.
Morpheus: I imagine that right now, you're feeling a bit like Alice. Hmm? Tumbling down the rabbit hole? Neo: You could say that. Morpheus: I see it in your eyes. You have the look of a man who accepts what he sees because he is expecting to wake up. Ironically, that's not far from the truth. Do you believe in fate, Neo? Neo: No. Morpheus: Why not? Neo: Because I don't like the idea that I'm not in control of my life. Morpheus: I know *exactly* what you mean. Let me tell you why you're here. You're here because you know something. What you know you can't explain, but you feel it. You've felt it your entire life, that there's something wrong with the world. You don't know what it is, but it's there, like a splinter in your mind, driving you mad. It is this feeling that has brought you to me. Do you know what I'm talking about? Neo: The Matrix. Morpheus: Do you want to know what it is? Neo: Yes. Morpheus: The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work... when you go to church... when you pay your taxes. It is the world that has been pulled over your eyes to blind you from the truth. Neo: What truth? Morpheus: That you are a slave, Neo. Like everyone else you were born into bondage. Into a prison that you cannot taste or see or touch. A prison for your mind.
I finally found a video that does an excellent job of explaining our monetary system in simple terms. I recommend that you watch it to get a better understanding of what I have discussed here. The video was created by Paul Grignon and is only 47 minutes long. It’s available on Google Video at: Money As Debt (copy into your web browser). I have used a couple of Paul’s examples in this post.
This is the first article I read by Chris Martenson. I read this article sometime in early 2008 and it led me to Chris' website. It is well written and covers the basics of exponential money/debt growth and what it means for our future.
Enjoy.
jg - October 28, 2009 _________________________________
THE END OF MONEY
by Dr. Chris Martenson
January 8, 2007
[Note: I begin today with a short bit from where we left off last week. Also today’s title is the same as the economic seminar series I give to ever growing audiences.]
The greatest shortcoming of the human race is our inability to understand the exponential function.
~Dr. Albert Bartlett
While it was operating well, our monetary system was a great system, one that fostered incredible technological innovation and advances in standards of living. But every system has its pros and its cons and our monetary system has a doozy of a flaw.
It is run by humans.
Oh, wait, that’s a valid complaint but not the one I was looking for.
Here it is: Our monetary system must continually expand, forever.
Which means it has a math problem in the same way that a beached whale has a breathing problem. In each case we have a massive organism that was optimized for a very different set of conditions than those in which it currently finds itself.
Our monetary system was conceived at a time when the earth seemed limitless and so nobody gave it much thought when we designed it such that every single dollar in circulation would be loaned into existence by a bank, with interest. In fact most thought it a terribly modern concept and most probably still do.
Since some people might begin grumbling about whether the earth is limitless or not, for the moment let’s remove any debates about natural constraints and simply talk about the mathematical evidence that our monetary system is now entering a stage of explosive, exponential growth.
Consider these data:
Money supply growth has gone parabolic. It took us from 1620 until 1974 to create the first $1 trillion of US money stock. Every road, factory, bridge, school, factory, and house built, every unit of economic transaction that ever took place over those first 350 years required the creation of $1 trillion in money stock. But it only took 10 months to create the most recent $1 trillion and I don’t recall seeing an entire continent’s worth of factories, schools or bridges built during that time.
Household debt has doubled in only 6 years. Think about that for a minute.
Total credit market debt (that’s everything) was about $5 trillion in 1975, has increased by $5 trillion in just 2 years, and now stands at over $51 trillion.
The wealth gap between the super-wealthy and everybody else is widening at a furious pace.
What’s going on here? Could it be that the US economy is so robust that it requires monetary & credit growth to double every 6-7 years? Are US households expecting a huge surge in wages to be able to pay off all that debt? Are wealthy people really that much more productive than the rest of us? If not, then what’s going on?
The key to understanding this situation was snuck in a few paragraphs ago; every single dollar in circulation is loaned into existence by a bank, with interest.
That little statement contains the entire mystery. If all money in circulation is loaned into existence it means that if every loan were paid back, all our money would disappear. As improbable as that may sound to you, it is precisely correct although some of you are going to consider this proof that I could have saved a lot in tuition costs if I had simply drunk all that beer at home.
But with a little investigation you would readily discover that literally every single dollar in every single bank account can be traced back to a bank loan somewhere. For one person to have money in a bank account requires someone else to owe a similar sized debt to a bank somewhere else.
But if all money is loaned into existence, with interest, how does the interest get paid? Where does the money for that come from?
If you guessed “from additional loans” you are a winner! Said another way, for interest to be paid, the money supply must expand. Which means that next year there’s going to be more money in circulation requiring a larger set of loans to pay off a larger set of interest charges and so on, etc., etc., etc. With every passing year the money supply must expand by an amount at least equal to the interest charges due on all the past money that was borrowed (into existence) or else severe stress will show up within our banking system. In other words, our monetary system is a textbook example of a compounding (or exponential) function.
Yeast in a vat of sugar water, lemming populations, and algal blooms are natural examples of exponential functions. Plotted on graph paper they start out slowly, begin to rise more quickly and then, suddenly, the line on the paper goes almost straight up threatening to shoot off the paper and ruin your new desk surface. Fortunately, before this happens, the line always reverses somewhat violently back to the downside. Unfortunately this means that our monetary system has no natural analog upon which we can model a happy ending.
When comparing the two graphs above you are probably immediately struck by the fact that one refers to a nearly mythical creation especially revered at Christmas time while the other is a graph of reindeer populations. You may have also noticed that our money supply looks suspiciously like any other exponential graph except it hasn’t yet transitioned into the sharply falling stage.
To get the best possible understanding of the issues involved in exponential growth, while spending only 10 minutes doing so, please read this supremely excellent transcript of a speech given by Dr. Albert Bartlett. If, like me, your lips move when you read, it may take 15 minutes but I’d still recommend it. In this snippet he explains all:
Bacteria grow by doubling. One bacterium divides to become two, the two divide to become 4, become 8, 16 and so on. Suppose we had bacteria that doubled in number this way every minute. Suppose we put one of these bacterium into an empty bottle at eleven in the morning, and then observe that the bottle is full at twelve noon. There's our case of just ordinary steady growth, it has a doubling time of one minuet, and it's in the finite environment of one bottle. I want to ask you three questions.
Number one; at which time was the bottle half full? Well, would you believe 11:59,one minute before 12, because they double in number every minute?
Second Question; if you were an average bacterium in that bottle at what time would you first realize that you were running out of space? Well let's just look at the last minute in the bottle. At 12 noon its full, one minute before its half full, 2 minutes before its ¼ full, then 1/8th, then a 1/16th. Let me ask you, at 5 minutes before 12 when the bottle is only 3% full and is 97% open space just yearning for development, how many of you would realize there's a problem?
And that’s it in a nutshell right there. Exponential functions are sneaky buggers. One minute everything seems fine, the next minute your flask is full and there’s nowhere left to grow.
So, who cares, right? Perhaps you’re thinking that it’s possible, just this one time in the entire known universe of experience, for something to expand infinitely, forever. But what happens if that’s not the case? What happens if a monetary system that must expand can’t? Then what? How might that end come about? And when? For an excellent description of this process, please read this article by Steven Lachance.
A debt-based monetary system has a lifespan-limiting Achilles heel: as debt is created through loan origination, an obligation above and beyond this sum is also created in the form of interest. As a result, there can never be enough money to repay principal and pay interest unless debt is continually expanded. Debt-based monetary systems do not work in reverse, nor can they stand still without a liquidity buffer in the form of savings or a current account surplus.
When interest charges exceed debt growth, debtors at the margin are unable to service their debt. They must begin liquidating.
Mr. Lachance reveals the mathematical limit as being the moment that new debt creation falls short of existing interest charges. When that day comes, a wave of defaults will sweep through the system. Which is why our fiscal and monetary authorities are doing everything they can to keep money/debt creation robust.
But it’s a losing game and they are only buying time. How do I know? Because nothing can expand infinitely forever. The evidence clearly points to exponentially rising levels of money and credit creation. As the bacterium example shows, once an exponential function gets rolling along, its self-reinforcing nature quickly takes over requiring larger and larger aggregate amounts even as the percentage remains seemingly tame.
Similarly, our supremely wealthy suffer only from an inability to spend what they ‘earn’ on their capital (interest & dividend income) which means their principal is compounding. But, because each dollar is loaned into existence, it means that when Bill Gates ‘earns’ $2 billion on his holdings a whole lot of people somewhere else had to borrow that $2 billion. Taken to its logical extreme, and without enforced redistribution, this system would ultimately conclude with one person owning all of the world’s wealth. Game over, time for a Jubilee, hit the reset button and start again.
When we started our monetary system, nobody ever thought that we would fill up our empty bacterium bottle. Nobody really thought through what it would mean to society once wealthy people earned more in interest & dividends than they could possibly spend. Nobody considered if it was wise to place 100% of our economic chips into a monolithic banking system that requires perpetual, endless growth in order to merely function.
So we must ask ourselves; does it seem possible that our money supply can continue to double every 6 years forever? How about another 100 years? How about another 6? What will it feel like when we are adding another $1 trillion every month, week, day, and then finally hour?
Just remember, money is supposed to be a store of value or, said another way, a store of human effort. Currently it seems to be failing at meeting that characteristic and therefore is failing at being money.
Who ever thought that oil production would hit a limit? Who knew that every acre of arable land, and then some, would someday be put into production? How could we possibly fish the seas empty?
We have parabolic money on a spherical planet. The former demands perpetual growth while the latter has definitive boundaries. Which will win?
What will happen when a system that must grow can’t? How will an economic paradigm so steeped in the necessity of expansion that economists unflinchingly use the term ‘negative growth’, suddenly evolve into an entirely new system? If compound interest based monetary systems have a fatal math problem, what will banks do if they can’t charge interest? And what shall we replace them with?
Since I’ve never read a single word on the subject, I suspect there’s even less interest in exploring this subject by our ‘leaders’ than there is in being honest about our collective $53 trillion federal shortfall.
I am convinced that our monetary system’s encounter with natural and/or mathematical limits will be anything but smooth, possibly fatal, and I have placed my bets accordingly. It seems that our money system is thoroughly incompatible with natural laws and limits and therefore destined to fail.
Now you know why I have entitled my economic seminar series “The End of Money”.
But the end of something is always the beginning of something else. Where's our modern day Adam Smith? We need a new economic model.
The greatest shortcoming of the human race is our inability to understand the exponential function. ~Dr. Albert Bartlett
The greatest shortcoming of the human race is our inability to understand the exponential function. ~Dr. Albert Bartlett
In the previous post, we reviewed the United State’s monetary system and how that system has placed our money supply, debt, inflation, and overall economic growth on exponential curves. We reviewed who is behind this system and why it was created. We also demonstrated that this monetary system has been adopted the world over by every major world power. There are now only a few nations throughout the world who do not have a central bank and debt-based monetary system that is growing exponentially (Not coincidentally - Iraq and Afghanistan were two of them). In case you haven’t read the previous post, I have included graphs below that show the growth of our money supply and Federal debt. It’s not hard to see that both are growing exponentially – and it’s easy to see that we are now on the steep inclines of an exponential curve in both cases. The previous discussion explained why these trends cannot continue indefinitely without a collapse of our economic system.
As I began studying and praying about these things over the past 3 years, I began to wonder – is the world’s monetary system the only thing following exponential growth? The answer, not surprisingly, is – no. What you are about to see is that many systems present in the world today are growing exponentially – not just our monetary and economic systems. You will also see – similar to our monetary system – that all of these systems are now climbing the steep incline of an exponential curve.
In this post, we’re going to take a look at some of the systems in the world today that are growing exponentially and what it means for our future. You will also see – similar to our monetary system – that the exponential growth of these systems is going to cause us serious problems in the very near future. You may ask – what does this have to do with Bible prophecies? How can studying exponential functions help us understand the Lord’s prophecies? After all, this is just math! You’re probably thinking that you didn’t like math in high school/college – and you don’t like it now. In this case, math gives us some very important clues to our future. You probably thought that your high school math teacher was crazy when he or she told you that math has practical ‘real world’ applications. I’m here to tell you that your teacher was more correct than even they knew. The truth is that we can see significant mathematical trends in the world today and how they relate to Bible prophecy if we will take the time to pay attention. I believe that the Lord has made it very clear what is happening in the world and why – if we’d only pay attention to Him and what is happening in our world. If you’ve read my posts on the judgments of Revelation, then you know that the Lord has given us warnings about our future in His Word – warnings regarding our oceans, atmosphere, earth’s temperature, plant life, famine, drinking water, etc. You’re about to see how exponential growth in the world today is pointing to serious problems regarding all of these things.
As you read through this post, you will probably ask yourself - why couldn’t I see this before? These things seem obvious – why couldn’t I see them? Remember, as always, that the world’s spiritual ruler tries to suppress the truth at all costs. How is your knowledge of Bible prophecy? How’s your Biblical knowledge? The truth is that most of us lack the Biblical knowledge required (I was certainly included) to know how events in the world today relate to God’s Word. This is not by accident. Our enemy has very deceptively led us away from the truth – just focus on your life in the here and now – and has blinded us to what is really happening in the world. Satan will always focus us on short term gains – not the long term consequences of our actions. When it comes to sin, we can certainly see this in our own lives – the consequences of making wrong choices and disobeying God. What we haven’t paid attention to – is how wrong choices will affect us on a worldwide scale.
Let’s start by looking at the most important exponential curve in the world today. The world’s population growth. The world’s population has averaged just over 1% growth throughout our history, so it has taken some time to turn the corner. It’s not hard to see that we are now on the steep incline of an exponential growth curve.
What affect has this had on the world? Resources the world over are strained (food, water, energy, etc) – and pollution is becoming a serious issue the world over. What has human population growth done to animal species throughout the world? They’re becoming extinct – at an exponential rate. It is estimated that 1/3 of the world’s species will become extinct by 2050 (Thomas et al., 2004 (Nature 427:145-148)).
(Source: Dr. Edward Wilson)
How could this trend relate to Bible prophecies? Before we answer this question, let’s take a look at another graph.
In 1950, the world’s fish catch equaled approximately 20 million metric tons. In 2002, the world’s fish catch equaled approximately 90 million metric tons. What affect is this having on overall fish stocks? It is reported that approximately 75% of the major marine fish stocks are either depleted, over exploited or being fished at their biological limit (Source: UN FAO FISHSTAT Database). World fish stocks are plummeting. Take a look at what is happening in the North Atlantic. There has been a 90% decline in predatory fish populations.
What is one of the final judgments on the world?
“The second angel poured out his bowl on the sea, and it turned into blood like that of a dead man, and every living thing in the sea died.” (Revelation 16:3)
Today, we can see that pollution, global warming and over-fishing trends are having adverse effects on sea life (see other links on my website relating to coral death, ocean dead zones, melting arctic ice, wildfires, etc.) – and we see where the Lord tells us in His Word about these things. It should not surprise us that these things are happening on a worldwide scale.
Let’s take a look at other trends following the same exponential growth curve as the world’s population. What is happening to our atmosphere as the world’s population increases exponentially? Greenhouse gases (Carbon Dioxide, Methane, etc) are increasing exponentially.
The following charts show us carbon dioxide emissions from human activities. Once again, we see the exponential curve.
It’s easy to see that the U.S. is the biggest contributor to carbon emissions (charts below). Based on what we’ve learned about our economic system (requiring ever-increasing amounts of resources to sustain the system), this shouldn’t surprise us. With only 5% of the world’s population, we consume 25% of the world’s resources and use approximately 50% of the world’s gasoline. We constantly hear how China’s growing economy is contributing to greenhouse gases, but if you view the data – it’s not hard to understand why China doesn’t really want to hear our concerns. We’re not doing anything about it – why should they?
If we view CO2 concentrations over the past 1,000 years, we see the affects of human population on our atmosphere – and the growth trend is definitely exponential.
What about methane? Methane is another greenhouse gas that could also affect our atmosphere over time – to an even larger degree. As you can see – methane is also increasing at an exponential rate. Methane concentration in our atmosphere has increased approximately 150% since 1750.
What are the possible long term consequences of increasing atmospheric concentrations of carbon dioxide and methane? There is one, overriding concern. It’s easy to see in the following graph. This graph shows the relationship of greenhouse gas concentrations to earth’s temperature.
It’s easy to observe that global temperatures move in line with carbon dioxide concentrations. When CO2 concentrations increase – global temperatures increase as well. The problem is that we’re entering uncharted territory. Global atmospheric carbon dioxide concentrations are expected to rise to levels we have never seen. Based on past trends, it’s certainly possible that global temperatures will follow this trend upward.
If we look at just the past 150 years – what do we see? We see the beginning of an exponential curve for both carbon dioxide emissions and global surface temperatures.
What affect will global temperature increases have on our oceans?
We can see that ocean temperatures are heading in the same direction. Ocean temperature rise results in coral bleaching, sea level rise and loss of sea ice. As I mentioned in another post, if ocean temperatures rise six degrees Celsius, there is a very real possibility that our oceans will become marine wastelands – unable to support life.
We see these temperature trends – does anything in the Bible warn us about this? Absolutely.
“The fourth angel poured out his bowl on the sun, and the sun was given power to scorch people with fire. They were seared by the intense heat and they cursed the name of God, who had control over these plagues, but they refused to repent and glorify him.” (Revelation 16:8-9)
What other problems could increased temperatures create in our world? Deserts could spread across the globe, fresh water supplies could become even more scarce and food production could be significantly reduced. Are all of these things mentioned in the Bible? Yes – see other posts on the judgments of Revelation for a complete review.
World per capita cereal production, 1961–2000
World cereal yield, 1961–2000
The above graphs shows world cereal production per capita and world cereal yield. How much more land do we have in the world to grow food? How much more yield can we extract out of existing farmland? You’ll notice that the per capita trend above is beginning to decline as our population increases. We see the same trends for other food – corn, livestock, etc.
If we consider that the world’s population is increasing exponentially and we consider the possible impact of a changing climate – it’s easy to see that it will be very difficult for world food production to keep pace with the needs of the world’s population.
We could continue to look at other trends – world oil consumption, world energy needs, etc. – and see the same exponential curves. We could look at literally hundreds of graphs – and see that each one is approaching the near vertical phase of an exponential curve. What does this mean for us? My personal belief is that these exponential growth curves are not mere coincidences. I believe it’s yet another way that our Creator is giving us a message. A message that we are nearing the end of this present evil age.
There is something that we all need to keep in mind as we consider these trends and how they relate to Bible prophecy. Almost all of these exponential growth rates are a direct result of the exponential growth of the world’s population. If you study the illuminati and their plans for world government – you’ll find that population control is one of their priorities. They are very aware of the trends we have discussed here and are planning to solve the problem. This is why the Lord gives us information regarding this world government – its actions are evil.
“Then I saw another beast, coming out of the earth. He had two horns like a lamb, but he spoke like a dragon.” (Revelation 13:11)
Here are a couple of excellent articles/videos relating to exponential growth and current trends:
