The Coming Economic Crisis

One of the issues on my radar is a potential coming economic crisis that some are referring to as "The Perfect Storm." For the past year I have been an avid listener of Jim Pulplava's weekly web cast, "Financial Sense Newshour." You can add the podcast and download more than three hours of news and financial information each week.

There is just far too much information available on Pulplava's web site to even provide a summary of his beliefs. The best option is to begin reading for yourself. Not only will you find his web site very informative, but also quite interesting.

I suggest you begin with a series of articles he has written under the heading of "The Perfect Financial Storm? Financial Storms Heading Towards the U.S. Economy."

The issues that lead financial advisors to suggest the U.S. economy is heading into turbulent times include:

1. Federal Reserve's failure to allow the natural ebb and flow of the economy to occur, thus creating asset bubbles like the recent housing bubble.
2. The Fed's monetary policy that is leading to a continual devaluing of the U.S. Dollar and the concern that too much U.S. debt is in the hands of countries not friendly toward the U.S. (e.g. China, Russia, etc.). Just this past week, for example, NBC News reported on the strength of the Canadian Dollar, which is a sign of the U.S. Dollar's weakness.
3. The threat of peak oil, that the world will enter into a real oil crisis as the demands from developing countries like China continue to grow exponentially while the production of oil is declining. This is coupled with the strong environmentalist movement within the U.S. that prohibits the exploration for new sources of oil.
4. The growing debt crisis within the U.S., both the federal debt and consumer debt. Again, this is compounded by the reality we owe countries like China our future.

Pulplava's co-host for "The Financial Sense Newshour" is John Loeffler. I first started to enjoy Loeffler's perspective as an avid listener of Chuck Missler's ministry, Koinonia House. Loeffler is the host of a weekly web cast called "Steel on Steel." He has defined a crisis "target window" of 2009 - 2012 as the period of greatest threat. He believes that it is during this three year period we will see these issues begin to metastasize.

For his part, Chuck Missler has also released a new briefing pack he is calling "The Vortex Strategy." As the promo clip states:

Compiled from public and private sources, Dr. Chuck Missler, an internationally known business executive, outlines our current economic predicament and defensive steps you can take to lessen the impact of the impending economic crisis.

I've listened to "The Vortex Strategy" and I'll post a review of it at a later date.

My Perspective on "The Perfect Storm" Scenario: as I listen to the various parties mentioned above talk about "The Perfect Storm" and draw conclusions, there is much that makes sense. I admit up front that I am a new student of economics, but I find it fascinating. With that said, I also am a student of history, and history and economics make an interesting combination. Like history, no one can predict what will happen in the economy tomorrow, next week or two years from now. Like history, however, we can learn from our past and make value judgments by observing historic trends.

Clearly, or so it seems, we are due for an economic correction of historic proportions. The last major correction in the economy occurred in the late 1970s until 1981. As Pulplava points out, it was Fed Chairman Paul Volcker who prescribed the harsh medicine that allowed the economy to cleanse itself and brought an end to the period of "stagflation" that marked the 1970s and early 1980s.

Since 1983, we have watched the economy grow, and grow, and grow with only a few minor corrections (i.e. recessions) in 1987, 1991, and 2001. We have also watched two historic asset bubbles expand and explode during this same period of time: the tech stock bubble of the late 1990s and the housing bubble from 2002 to 2006.

Moreover, the recent rate adjustment (September 2007) by the Fed was in response to the current crisis in the mortgage sub prime market and fears that this crisis could spill over to affect the whole economy.

Yet, in spite of all the indicators, I have to question whether this is a real crisis of historic proportions or another hiccup in an overall upward trend? I can't help but remember the doom and gloom forecast by the late Larry Burkett in his 1991 book, The Coming Economic Earthquake. Using what seemed to be credible data at the time, Burkett predicated an economic earthquake that would destroy the U.S. economy (and all of us along with it). The cause, in 1991, was the mounting federal debt.

As the 1990s rolled on, the next "coming crisis" that promised to bring absolute destruction to America was Y2K. Authors like Michael Hyatt sold many books first identifying the crisis and then helping us understand what we must do to survive the crisis. Again, the indicators were very credible. Major corporations were spending millions of dollars to correct the problem. Personally, I knew of several IT people who were assigned to various Y2K projects over the course of a three year period. While the Y2K advocates were publishing their books, selling "survival kits" and doing constant radio interviews, there were few voices of caution. One such man was Steve Hewitt, publisher of Christian Computing Magazine. In the end, the Y2K bug didn't live up to expectations. To this day, I do not know if it was a serious crisis that was avoided due to the hard work of many nameless men and women or if it was truly a hoax.

I bring up these two examples because as I read and research "The Perfect Storm" scenario, I find myself questioning if this is not the same hyperbole that fanned the flames of those two crisis. Clearly, I am not capable of providing an answer to that question today, but it will certainly interest me to watch this scenario unfold over the next three to four years.

The War Prayer

As a Christian and historian, I’ve always found the border between war and religion to be an interesting boundary between man’s spiritual life and his political / military aspirations. While many Christians strongly stand in defense of the Bible as the absolute authority Word of the Lord God we worship, these same Christians find it within their theology to support interventionist wars as a method of achieving political aims. What is even more conflicted (in my mind) is that during the first part of the 20th Century, when Christian nation fought against Christian nation, both sides lifted their prayers before the Lord seeking His blessing in their righteous cause.

In the last 50 years, our military aims have transitioned from a fight against Communism in the post-World War II years to a “War Against Terror,” which in my opinion is driven by oil and economics.

Below is a short story by Mark Twain that was published after his death in 1910, but just prior to America’s entry into World War I in 1917. I’ve always found it to capture perfectly the contrast between the followers of a Savior who preached love for one another (Matthew 22:37-40) and “Christian” patriots who want to pound their enemies into the ground.—CE

The War Prayer
by Mark Twain

It was a time of great and exalting excitement. The country was up in arms, the war was on, in every breast burned the holy fire of patriotism; the drums were beating, the bands playing, the toy pistols popping, the bunched firecrackers hissing and spluttering; on every hand and far down the receding and fading spread of roofs and balconies a fluttering wilderness of flags flashed in the sun; daily the young volunteers marched down the wide avenue gay and fine in their new uniforms, the proud fathers and mothers and sisters and sweethearts cheering them with voices choked with happy emotion as they swung by; nightly the packed mass meetings listened, panting, to patriot oratory which stirred the deepest deeps of their hearts, and which they interrupted at briefest intervals with cyclones of applause, the tears running down their cheeks the while; in the churches the pastors preached devotion to flag and country, and invoked the God of Battles beseeching His aid in our good cause in outpourings of fervid eloquence which moved every listener. It was indeed a glad and gracious time, and the half dozen rash spirits that ventured to disapprove of the war and cast a doubt upon its righteousness straightway got such a stern and angry warning that for their personal safety's sake they quickly shrank out of sight and offended no more in that way.

Sunday morning came -- next day the battalions would leave for the front; the church was filled; the volunteers were there, their young faces alight with martial dreams -- visions of the stern advance, the gathering momentum, the rushing charge, the flashing sabers, the flight of the foe, the tumult, the enveloping smoke, the fierce pursuit, the surrender! Then home from the war, bronzed heroes, welcomed, adored, submerged in golden seas of glory! With the volunteers sat their dear ones, proud, happy, and envied by the neighbors and friends who had no sons and brothers to send forth to the field of honor, there to win for the flag, or, failing, die the noblest of noble deaths. The service proceeded; a war chapter from the Old Testament was read; the first prayer was said; it was followed by an organ burst that shook the building, and with one impulse the house rose, with glowing eyes and beating hearts, and poured out that tremendous invocation

God the all-terrible! Thou who ordainest!

Thunder thy clarion and lightning thy sword!

Then came the "long" prayer. None could remember the like of it for passionate pleading and moving and beautiful language. The burden of its supplication was, that an ever-merciful and benignant Father of us all would watch over our noble young soldiers, and aid, comfort, and encourage them in their patriotic work; bless them, shield them in the day of battle and the hour of peril, bear them in His mighty hand, make them strong and confident, invincible in the bloody onset; help them to crush the foe, grant to them and to their flag and country imperishable honor and glory --

An aged stranger entered and moved with slow and noiseless step up the main aisle, his eyes fixed upon the minister, his long body clothed in a robe that reached to his feet, his head bare, his white hair descending in a frothy cataract to his shoulders, his seamy face unnaturally pale, pale even to ghastliness. With all eyes following him and wondering, he made his silent way; without pausing, he ascended to the preacher's side and stood there waiting. With shut lids the preacher, unconscious of his presence, continued with his moving prayer, and at last finished it with the words, uttered in fervent appeal, "Bless our arms, grant us the victory, O Lord our God, Father and Protector of our land and flag!"

The stranger touched his arm, motioned him to step aside -- which the startled minister did -- and took his place. During some moments he surveyed the spellbound audience with solemn eyes, in which burned an uncanny light; then in a deep voice he said:

"I come from the Throne -- bearing a message from Almighty God!"

The words smote the house with a shock; if the stranger perceived it he gave no attention. "He has heard the prayer of His servant your shepherd, and will grant it if such shall be your desire after I, His messenger, shall have explained to you its import -- that is to say, its full import. For it is like unto many of the prayers of men, in that it asks for more than he who utters it is aware of -- except he pause and think.

"God's servant and yours has prayed his prayer. Has he paused and taken thought? Is it one prayer? No, it is two -- one uttered, the other not. Both have reached the ear of Him Who heareth all supplications, the spoken and the unspoken. Ponder this -- keep it in mind. If you would beseech a blessing upon yourself, beware! lest without intent you invoke a curse upon a neighbor at the same time. If you pray for the blessing of rain upon your crop which needs it, by that act you are possibly praying for a curse upon some neighbor's crop which may not need rain and can be injured by it.

"You have heard your servant's prayer -- the uttered part of it. I am commissioned of God to put into words the other part of it -- that part which the pastor -- and also you in your hearts -- fervently prayed silently. And ignorantly and unthinkingly? God grant that it was so! You heard these words: 'Grant us the victory, O Lord our God!' That is sufficient. the *whole* of the uttered prayer is compact into those pregnant words. Elaborations were not necessary. When you have prayed for victory you have prayed for many unmentioned results which follow victory--*must* follow it, cannot help but follow it. Upon the listening spirit of God fell also the unspoken part of the prayer. He commandeth me to put it into words. Listen!

"O Lord our Father, our young patriots, idols of our hearts, go forth to battle -- be Thou near them! With them -- in spirit -- we also go forth from the sweet peace of our beloved firesides to smite the foe. O Lord our God, help us to tear their soldiers to bloody shreds with our shells; help us to cover their smiling fields with the pale forms of their patriot dead; help us to drown the thunder of the guns with the shrieks of their wounded, writhing in pain; help us to lay waste their humble homes with a hurricane of fire; help us to wring the hearts of their unoffending widows with unavailing grief; help us to turn them out roofless with little children to wander unfriended the wastes of their desolated land in rags and hunger and thirst, sports of the sun flames of summer and the icy winds of winter, broken in spirit, worn with travail, imploring Thee for the refuge of the grave and denied it --

For our sakes who adore Thee, Lord, blast their hopes, blight their lives, protract their bitter pilgrimage, make heavy their steps, water their way with their tears, stain the white snow with the blood of their wounded feet!

We ask it, in the spirit of love, of Him Who is the Source of Love, and Who is the ever-faithful refuge and friend of all that are sore beset and seek His aid with humble and contrite hearts. Amen.

(*After a pause.*) "Ye have prayed it; if ye still desire it, speak! The messenger of the Most High waits!"

…

It was believed afterward that the man was a lunatic, because there was no sense in what he said.