The global economy is in the worst crisis since the Great Depression of the 1930s! Despite unparalleled affluence in the Western World, personal and corporate bankruptcies are soaring. So is consumer credit. Millions are losing jobs. More millions their homes. The United States national debt is measured in trillions of dollars! Headlines of credit fraud, identity theft and corruption fill the news. Events are spinning out of control.
All of this is unnecessary—if you have God’s keys to financial prosperity.
Let’s consider some sobering statistics: Since 2007, the economic crisis has erased a staggering $50 trillion dollars in wealth around the world. The world’s largest economy, the United States, is now more than $12 trillion dollars in debt—and this debt is growing by about $4 billion daily! This amounts to a $39,000 bill for every U.S. citizen—or over $111,000 per taxpayer. Some expect the debt to be almost $14.5 trillion after the next fiscal year—which means a growth of additional billions per day next year! Such debt can never be repaid! Tragically, most nations of the West are being crushed by impossible debt. Catastrophe now looms—and, in the case of America, here is why.
The United States expects to receive an estimated $2.19 trillion in tax revenue in 2009. (However, this estimate continues to shrink.) Projected spending is at $3.94 trillion for 2009. (This number continues to rise.)
Now suppose these estimates represented the spending of an American family of median income. Such a family would take in $50,303 (2008 estimate), but be planning to spend $90,042—while already carrying more than $275,632 in debt! Individual families would not do this—or if they tried, would go bankrupt before it could happen. But governments can print money.
Such deficit spending is unsustainable—and the national debt is projected to top $18.6 trillion in 2014!—and $24.5 trillion in 2019!—more than double the present. Now understand that just a small one percent interest rate increase will raise the interest payment from $200 billion to over $800 billion each year. But this is only true if the deficit did not rise! Incidentally, many think all these projections to be very conservative. They will likely be much worse.
No thinking person believes such overspending can continue without end. Further, the addition of expensive new government programs and exotic new kinds of taxes will only greatly exacerbate the problem. America will not stop spending because it is conditioned to believe it can have anything it wants. It need never deny itself. A country this big, this great, and one with such a rich history, cannot fail.
This thinking is tragically wrong. What world empire—with half America’s problems—ever survived?
The economies of America and other nations of the West will soon collapse into full-blown bankruptcy. This will happen, although things could temporarily get a little better. Various individual states will in fact likely precede this country into bankruptcy, and thus hasten the overall collapse. Of course, nature abhors a vacuum, and a European-based world government will step in to fill America’s abdication as global leader. This cannot now be far away.
The world as you know it—including your life, and I mean all aspects of it—will change beyond your wildest imagination.
So far, we have only discussed government debt. Private debt—from loans and credit cards—amounts to an additional $54,000 for every American, compared to an average savings of only $2,700.
Since 2007, $7 trillion has been lost in the U.S. stock market and $6 trillion in its housing market. These are devastating losses to people’s investments, including stocks, bonds, retirement plans, employee stock ownership and home values. Hopes and dreams crash daily!
Employment is now shrinking at the fastest rate since the Great Depression. Unemployment percentages have climbed into the double-digits in the United States. And this does not include the discouraged who have given up looking. Many other countries are much worse.
The combination of exploding debt and unemployment is hitting home! In 2009 alone, well over 1 million Americans declared bankruptcy, with more and more families also winding up jobless and in despair—facing abject poverty. This problem is worldwide. Many well-educated, middle-class people now live on unemployment, or welfare and food stamps—having never thought this could happen to them. Tent cities are springing up across America. Thousands are living in cars, and growing numbers now live in sewer systems!
The combined budget deficit and weakening dollar threaten to introduce hyperinflation, ruin the finances of America’s citizens, and totally destroy the country’s economy. China, Japan, Germany and other creditor nations are deeply concerned about investing more money in a bankrupt country. If they either pull out of American investments or call in their loans, the consequences will be disastrous. The world’s second richest man, Warren Buffett, declared the U.S. economy has “fallen off a cliff”—his words (CNBC).
Most troubling for this superpower—long the engine of the world’s economy—may be the ongoing woes in its banking system. In 2008, 25 banks collapsed. In 2009, this may multiply six times.
What started with subprime mortgage losses has now grown into a full-blown financial crisis. U.S. banks have lost many, many billions of dollars, and this will grow much higher. No one knows how much—and thus where it ends.
America’s economic problems have ignited a global firestorm! Several European and Asian countries are also in recession. Many face shrinking economies, big deficits, mounting debt, unstable currencies and rising unemployment. Financial markets are unraveling with a speed not seen since the Great Crash of 1929.
To compound matters, increasing economic, health and hunger crises in Third World nations are adding to the First World economic burden. As leaders scramble for solutions, deep fear pervades the world’s corridors of power!
All of this threatens to destroy the global economy. Attempting to solve the crisis, leaders are calling more often for a unified economic system. Some now suggest one currency, one economy and one world government!
Understand. The world economic outlook is grim and growing darker daily. In time, this will affect you. How does one escape what is coming?
It is important to first understand the origins—the causes—of today’s economic distress.
The crisis began with the so-called “credit crunch”—the reduction in the availability of loans. Banks became reluctant to lend—to individuals, businesses or other lenders.
Banks traditionally operated by taking deposits from customers and lending to those seeking loans. The difference between the interest rate paid on deposits and the higher one charged on loans—the “spread”—was profit. If customers defaulted, banks were liable to depositors for payment. They held the risk “on the books”—it was their responsibility.
It was therefore in a bank’s interest to carefully screen customers before lending. The customer needed a good job and sizeable down payment. This conservative approach enabled banks to be sound—and highly profitable—for decades.
In the 1990s, banks changed their way of operating. Seeking ever-higher profits to satisfy shareholders, and to secure executive bonuses, they decided they could make even higher profits if they loaned more. Careful screening of applicants stopped.
Customers who previously never qualified under standard lending procedures—“subprime” customers—were aggressively targeted as a lucrative source of income. Loans were provided to people with no income, no job and no assets—so-called NINJA loans.
Other “sweeteners” were provided, such as no down payment and interest-only payments. Those who approved these loans were no longer attached to the risk of default—and were handsomely paid for their efforts. The subprime mortgage market became a ticking bomb, waiting to explode.
Two developments have played a significant role in the onset of the current crisis. The first was deregulation of the U.S. financial services industry with the 1999 repeal of the Glass-Steagall Act. Carefully crafted during the Great Depression to control stock market speculation, Glass-Steagall prevented retail and investment banks, and insurance companies, from owning each other.
With the repeal, huge financial services conglomerates rapidly formed, combining these types of financial institutions. Industry behemoths such as Citigroup and JP Morgan were born. This meant that retail banks seeking ever-higher profits could dive into high-risk speculative ventures through ownership of—or being owned by—investment banks. This brought disaster in 1929.
The second change was the low interest rate policy pursued by the Federal Reserve. These rates encouraged banks to target subprime customers with variable rate mortgages. They offered initially low “teaser” rates that would reset upwards in two or three years. With home prices rising, customers took the bait, believing that when the reset arrived they could refinance at affordable rates.
Many mortgage brokers misrepresented terms and conditions to eager customers who were themselves providing fraudulent information. Many banks did not bother to check the information. “Predatory lending” invited “predatory borrowing!”
Banks then sold risky bonds as safe investments to unsuspecting investors. Rating agencies, paid by the banks, rated these bonds (those with subprime components) as safe—even giving some the highest rating.
With big, steady, annual increases in real estate prices, builders nationwide went on a building spree. This created a sense of “easy money”—“something for nothing.” In their greed, many “scammed the system.” This does not count the many others who were outright corrupt—and scammed people in the usual ways. And of course predatory lawyers are now having a field day at every turn.
The crisis began slowly in mid-2007. Due to a glut of homes for sale, housing prices fell moderately. But the scales were tipped—as the first round of rate resets was coming due. Faced with exploding payments, falling prices and inability to refinance mortgages, millions defaulted. Confronted with higher payments, and on mortgages greater than the home’s value, owners began abandoning their mortgages—many simply turning in keys.
Rising numbers now feel no moral obligation to fulfill what they promised to repay, believing it better to just walk away. This is in stark contrast to years ago when borrowers felt an obligation—a duty!—to pay off loans. With moral values disintegrating nationwide, many lack the fiscal responsibility—the character!—of previous generations.
As the crisis intensifies, mortgage defaults are multiplying. And everyone is on the hook. “Monoline” insurance companies have suddenly become liable for multiple billions of debt. Investors have been left holding bonds that will never be repaid. Banks are finding it difficult to sell additional bonds as investors have backed out of the market, leery of poor investments. The banks’ fee income has dried up—leaving them with massive capital deficiencies.
Thus, banks have sharply reduced lending to each other, and to the public, fearful that loans will not be repaid.
Evidence is clear that shockwaves from the crisis are being felt in other sectors of the economy. Liquidity is drying up and less money is available to finance commercial loans.
The credit crunch has pushed beyond retail banking, and now affects major business deals and commercial real estate. Municipal bonds (that fund cities, colleges and hospitals)—once considered safe investments—can no longer easily find buyers.
As more loans reach interest rate resets, more defaults will occur. The crisis will deepen.
A fast-moving financial tsunami now approaches the shores of the world economy! I repeat: It IS coming.
The main motivating factors behind the crisis were greed and covetousness. Human nature has been accurately described as vanity, jealousy, lust and GREED. Understand. Banks were greedy for ever-higher profits. So were investors who took foolish risks for higher return on investment. And greedy individuals sought loans they could not repay to purchase material goods they coveted, but did not need—and could not afford!
Of course, used cautiously and sensibly, credit is not wrong. It can permit the purchase of a car, home—or an education.
Simple lack of self-control drives many into bankruptcy. Impulse buying has turned the loan industry into a thriving business. Credit is now used for luxuries, leaving little to show for it except the monthly bill.
Obsession with material goods is fueling—in fact, supercharging—the mounting debt crisis. People now routinely spend more than they make. They want the best clothes, newest gadgets and fanciest cars. “Keeping up with the Joneses” and “Everyone else is doing it!” drives them.
Jesus warned, “Beware of covetousness: for a man’s life consists not in the abundance of the things which he possesses” (Luke 12:15).
Do any still believe this?
When unhappy or discouraged, many go shopping until they feel better. Ironically, existing debt often brought the unhappiness. So the cycle continues. The result? Governments, financial institutions and millions of citizens are all sliding toward bankruptcy.
The present generation is very different from those of the past. Many, in fact most, now live solely for pleasure, comfort, gain and entertainment. Personal responsibility and character-building have almost disappeared. So many reflect—“I want”—“I want a lot”—and “I want it now!”
The apostle Paul foretold all that is happening. Notice: “This know also, that in the last days perilous times shall come. For men shall be lovers of their own selves, covetous, boasters, proud, blasphemers, disobedient to parents, unthankful...false accusers...fierce, despisers of those that are good, traitors, heady, highminded, lovers of pleasures more than lovers of God; having a form of godliness [there is plenty of religion around], but denying the power thereof: from such turn away” (II Tim. 3:1-5).
Make no mistake. As trends and conditions degenerate, violence will ensue—and in a big way. Uprisings, riots and tumults will increase in number and severity—so will violent crime, as the increasing number of desperate people take desperate action in an attempt to save THEMSELVES—at all costs. With this, the confusion of people asking, “What do we do?”—“Where do we go?”—“Who do we listen to?”—will grow beyond anything ever before seen.
The cacophony of fearful uncertainty will be deafening!
Now back to the subject of finances. Differing opinions on why the personal debt crisis—and how to take control of your finances—fill newspapers, magazines, books and radio talk shows. But financial counselors offer advice that misses the crux of the problem.
The housing market: Rafael Aponte (left), who lost his job and his home in foreclosure, protests outside the National Constitution Center in Philadelphia, Penn., where a congressional panel met to look into homeowner-rescue programs (Sept. 24, 2009).Source: Charles Fox/Philadelphia Inquirer/MCT
With so many “experts” presenting theories (so often contrary to what other “experts” say), whose advice should be followed? Where can people find real solutions to real problems?
The answer is the Bible—God’s Instruction Manual for mankind! Just as manuals exist for how to operate complex machines, the Creator God included a Manual for the most complex creation ever made—human beings.
Only by carefully following its guidelines—the immutable laws—in this Manual, can humanity achieve success.
Think of the following. God has created laws to govern every aspect of His Creation. Just as the laws of gravity and inertia govern portions of it, God has ordained laws that govern all aspects of money matters. By following them, people can ensure financial security.
Most just do not understand that laws govern every action in life. The law of CAUSE and EFFECT—where actions always bring REactions—applies to finances. There is a way—a direct path!—to financial freedom.
Jesus explains this. Notice: “I am come that they might have life, and that they might have it more abundantly” (John 10:10).
Before entering this path, a choice must be made. Almighty God revealed this choice to ancient Israel: “I call heaven and earth to record this day against you, that I have set before you life and death, blessing and cursing: therefore CHOOSE life, that both you and your seed may live” (Deut. 30:19). God will not force anyone to follow His ways. The choice is simple: Obeying Him leads to blessings and happiness—disobedience leads to misery and unhappiness. Like the Israelites, many refuse God’s warnings. They ignore the fact that by not following His laws, bad effects will come. Through man’s rebellion, unhappy lives result, with none having any idea WHY. The same is true with God’s financial laws.
Be honest. Admit you spend much time thinking and talking about MONEY. For most, the “money struggle” is constant. The pressure can seem unbearable. Just the stress can drive away the happiness and peace everyone seeks.
The Bible contains many practical, helpful points about finances. Some mistakenly assume God believes money is evil, and that Christians should be poor. They associate prosperity with the lustful, sinful lifestyles of the wealthy, holding the belief that “humble Christians” must go without to demonstrate “true” Christianity.
How many choose frugality?: Shoppers wait in long lines at a Target store in Madison Heights, Mich., as they take advantage of holiday sales on Black Friday (Nov. 27, 2009).Source: Eric Seals/Detroit Free Press/MCT
This is wrong thinking! III John 2 ALSO reveals that God wants His people to live a prosperous, healthy life. Unless one’s finances are in order, and well managed, this is impossible.
God has appointed you steward of your finances—or your family’s—and COMMANDS that you do this correctly! The Bible contains valuable lessons that help one practice successful stewardship.
King Solomon, the wisest man ever, said, “Whatsoever your hand finds to do, do it with your might...” (Ecc. 9:10). Work hard!
But diligence must accompany hard work. Solomon also wrote, “See you a man diligent in his business? He shall stand before kings...” (Prov. 22:29). This is an amazing verse. Could you ever believe this might be you? Then remember this: “The desire accomplished [through diligent hard work] is sweet to the soul” (Prov. 13:19).
Everyone enjoys completing tasks. This IS “sweet to the soul.”
Building certain principles into your character will ensure you function at your peak managing your finances.
Many now face the fearful reality of losing their job. The majority of these still do not budget and save. As spending and standards of living rise, family saving has dropped—drastically! The result? Millions are on the brink of financial disaster, only a couple paychecks from the street.
Before a purchase, ask: Do I need this—or do I just want it? Can I do without it?
Impulsive spending is the product of a generation lacking in strength and character, and is the accelerant bringing the mountain of debt now burying so many! Successful businesses run on budgets. So do successful households!
Most never discover they are spending unwisely. They constantly spend and waste, without knowing where their money went—or what purpose was served.
Read our helpful booklet—Taking Charge of Your Finances. It offers instruction from God’s Word, as well as practical, common-sense advice you can use.
Now for the greatest key to financial prosperity.
While consumer, corporate and national debt are now monumental, another far greater debt has been ignored! This one is toward God. Mankind has been stealing from Him for 6,000 years.
God declares: “The silver is Mine, and the gold is Mine” (Hag. 2:8) and “The earth is the Lord’s, and the fullness thereof” (Psa. 24:1). God owns everything—so says your Bible! He designed, created and maintains all things. This sets the stage for vitally important knowledge.
Everything people take for granted as theirs really belongs to God! But He has permitted man to use His planet and His resources. He allows us to be His stewards. All will one day give account of how they managed what was never theirs. God commands that we not steal from Him. Yet most do.
How? Notice: “Will a man rob God? Yet you have robbed Me. But you say, Wherein have we robbed You? [God’s answer] In tithes and offerings. You are cursed...for you have robbed Me, even this whole nation. Bring you all the tithes into the storehouse...and prove Me now...if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it” (Mal. 3:8-10).
God asks only for a tithe—10 percent—of what one makes (plus “offerings”)—and lets you keep the remaining 90 percent, although that still belongs to Him! He challenges skeptics to “prove” His promise of blessing the tithepayer.
Again, most Western nations are staggering under impossible debt. There is a reason. So are millions of people. There is a reason. Terrible, national punishment now lies just ahead for the world’s greatest nations because hundreds of millions of individuals have stolen from God—every day.
Understand. The Real Truth magazine does not ever take political positions. Enough others do that. This is not our purpose—and we never do it.
Paul wrote that God’s people do not “entangle [themselves] in the affairs of this life” (II Tim. 2:4). This includes the ineffective governments of men. Voting for better politicians is not going to solve what are insoluble problems. These national and individual troubles are consequences of nations and peoples disobeying God, not of merely bad politicians or wrong government policies. Do not be among those who blame the government instead of human nature—including your own.
But some argue, “I can’t afford to tithe.”
God says otherwise. You cannot afford NOT to tithe! He also blesses generous givers. No one has the power to give as God does. While many search for ways to stretch their income, the most unlikely way is the only way to do this.
Thousands are learning God’s tithing system WORKS. In force for millennia, this system works and brings success.
Return to God a small portion of what is actually His. He agrees to bless you more than you can imagine. Do not wait for financial ruin. Learn to be a steward, and obey God’s financial laws! Let God’s promise work for you.
Another booklet you need is End All Your Financial Worries. You will be so very glad you read it.
There is an entire Church that God is blessing because it knows and obeys His tithing laws—as well as all the other laws and truths in His Word. You can write us to learn more about it. It is, in fact, tithes and offerings that make it possible for you and millions of others to read this magazine and the kind of free literature referenced here.
Financial collapse will come for the West only after the Work of this Church—preaching the gospel of the kingdom of God to all nations—is complete! God’s true servants will then be protected from the horrible punishment that will follow.
After the punishment, the corrupt governments and economies of men will be replaced by the perfect, marvelous government of God. This ultimate new world order will not only teach individuals how to manage their personal finances—but also their entire lives.
Do not become activists by marching on the Capitol or by writing your representative about today’s mushrooming political and social problems. Your efforts will be in vain—and in fact these fight God’s Purpose—which is to teach all peoples that they should have obeyed Him! You will find our booklet Should Christians Vote? eye-opening.
Finally, to better understand what is soon going to happen, and why, read our extensive book America and Britain in Prophecy.
I urge YOU: Obey God’s tithing command—and practice good financial stewardship.
Then reap the benefits!