The Coming Economic Disaster: Out of Control
By Elder Lawrence Nelson
Recently I read the following chilling facts concerning America’s economy. It brought to my memory that I had preached on this subject some ten years ago. I searched through my old notes and was amazed to discover how serious is America’s present financial condition in 2003. As you listen to these unquestionable facts you will agree that our economy is out of control.
To begin let me read to you the introduction to this problem as found in the McAlvany Intelligence Advisor for the month of January 2003. The editor, Donald S. McAlvany, is a professed Christian and writes the facts as he sees them. I quote, “The US economy is out of control. The Fed is out of control. The world’s biggest credit bubble is out of control. In fact, America’s entire financial system is out of control and is headed for a crack-up.” Now that is a startling revelation.
Let me continue with his analysis, “The Federal Reserve is the non-government bank which controls our money by loaning and printing. It is now printing paper money at the rate of two trillion dollars a year. That is about $216 billion in new credit to America every six weeks. The head of the Federal Reserve, Allan Greenspan, is doing this in an attempt to keep the US finance bubble from collapsing. This is an expansion of our money supply at the rate of 22% increase yearly. It is completely out of control. One of these days it will suddenly change our lives completely.”
Let me explain. In my younger days I was sent by my church as a missionary to China in the early 1940’s. As I arrived in Shanghai I found the Chinese government was at war with Japan and was spending money it did not have by printing paper money. The results will amaze you. I was told that three years before I arrived in China you could purchase any item by using either an American dollar or a Chinese yen. Both were equal in value, but within 36 months the Chinese dollar became practically worthless because the Chinese government was printing paper money. The results were unbelievable. It cost me 10,000 yen to ride the bus to town, and I shall never forget the day I needed a pair of tennis shoes for which I paid one quarter of a million dollars. This explains what happens when a government starts to print paper money. I have given you a glimpse of what is to come in America.
Now, before we continue, let us read from God’s Word what is to happen just before the return of Jesus at the end time. I am reading Daniel chapter 12. “And at that time shall Michael stands up, the great prince which standeth for the children of thy people: and there shall be a time of trouble, such as never was since there was a nation even to that same time: and at that time thy people shall be delivered, every one that shall be found written in the book.”
Let us pray. Our loving Father which art in heaven, we come to Thee asking Thy Holy Spirit to open our eyes that we may discern how near we are to this time of trouble such as never was since there was a nation on earth. Please Father, grant us heavenly insight as to how we may individually prepare and be ready for this coming crisis. In the name of Jesus, we ask, Amen.
In this tape we will not spend time discussing end-time signs such as that of crime, war, earthquakes etc., but rather zero in on the coming financial collapse of government. We are going to talk about money such as I have never preached in sixty-three years of my ministry for God. Some of you who are listening may declare me to be an alarmist, and that’s your privilege. That’s what they called Noah, Jeremiah, Joel and Jonah, and even the apostle James, not to mention Jesus Christ who spoke of the coming destruction of old Jerusalem.
In the Bible Timothy speaks of many problems. I’m reading from 1 Timothy 6:10 -11, “For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows. But thou, O man of God, flee these things; and follow after righteousness, godliness, faith, love, patience, meekness.” Before I finish this discourse we will discuss some godly counsel of do’s and don’ts that will help us meet the coming financial problems, for we must do as Timothy urges – make God first by following after righteousness, godliness, faith, love, patience and meekness.
Now let us consider the coming economic system in which we live. We will begin with the Great Depression of October 1929 which lasted some four years. During this time our national debt arose to some $22 billion. Tens of thousands of Americans lost every penny they had in the stock market. Over 5,000 banks closed forever. Unemployment reached 40%. Countless thousands lost their homes; I know, my father was one of them. During this crisis Franklin Roosevelt became president and saved the country, as many thought, by changing the Federal financial structure. He did this by manipulating the Supreme Court thus making it possible for our government to start down the road to inflation.
Let us see what happened according to statistics recorded by President Reagan’s “Cost Control Study.” By 1935 our national debt arose to 22 billion dollars. By 1960 our government owed $35 billion; by 1965, $40 billion; by 1970, 45 billion dollars. What is the acceleration? – by 1980 we owed $1.4 trillion; in 1985, $2.5 trillion. In 1990, $5 trillion; in 1995, $7.4 trillion; in 2000 $20 trillion. What an amazing increase! You’ll agree that our debt is completely out of control.
Perhaps we should pause here to illustrate the amount of money we are discussing. A million US dollars pressed and bound in one-thousand dollar bills would stack exactly four inches tall. A billion dollars of these one-thousand dollar bills will reach 300 feet tall. A trillion dollars in one-thousand dollar bills will reach 63 miles high. When we are talking now of owing $30 trillion today the stack of one-thousand dollar bills would reach 1, 890 miles high. That is more than two-thirds the distance to the moon! Given another two or three years it will reach past the moon. Four small words describe our debt – “Absolutely out of control.” Let’s face the facts. Nobody – Congress, the President, you name it – nobody can stop the coming financial disaster. Beloved, it’s out of control.
But that is not all. In addition, consider this: We Americans owe a personal debt of some $2 trillion on our credit cards, home mortgages, automobiles, etc.; then add the US government debt plus the state and the corporate debt for a total of $30 trillion. Now we are faced with unemployment as corporate America downsizes its workforce. In the month of November and December of last year alone 39,000 retail jobs were lost and 45,000 jobs were cut in corporate industries.
Now comes more bad news. The last Christmas slump was the worst in the last thirty years, so Wal-Mart has announced that it will close 325 stores and axe 37,000 more workers. Alcoa is cutting 8,000 jobs. Over the past two years more than two million US workers have been laid off. The government claims unemployment to be about 6%, but don’t overlook the fact that the government has removed all those from its list who have given up hope of finding a job so it is actually close to 8%. It is no wonder then that in 2001 personal bankruptcies amounted to more than $1.3 million and to $1.5 million in 2002. What will it be in 2003?
Corporate America is likewise out of control. United Airlines, one of the world’s largest, has declared bankruptcy. Consider the 39 DOW Industrial companies which now owe $4.9 trillion in liabilities with only $727 billion in book-value assets. A closer look will reveal that some $218 billion of this is considered “goodwill” so these most respected corporations of America have only a net worth of only $510 billion, yet they own six times their present assets. Corporate America is out of control.
In the last twelve months 186 publicly trading companies filed Chapter 11 for bankruptcy. Weiss Research, which rates these companies such as banks and financial institutions, expects 1,000 more such companies with high-risk ratings to join for the largest bankruptcies in our history.
Our states and cities are also in bad shape. Forty-seven of the fifty states are running budget deficits with California leading with some $35 billion and New York with over $20 billion. Governor Davis of California intends to raise taxes by $8.2 billion this year. Such local governments are out of control. To make matters worse for the US economy, foreign money is now being withdrawn from American capital at the rate of several hundred billion dollars per month which will only increase our unemployment. US manufacturers are quietly moving their manufacturing jobs to China and to India for cheaper labor. For example, wages plus benefits cost $20.00 an hour in Japan, $18.00 in France and Germany and $12.00 per hour in the United States, but only $0.35 per hour in China and $0.50 an hour in India.
Who will have the purchasing ability to buy the products produced in these countries with unemployment here in America growing by leaps and bounds? Take a quick look at America’s working pension fund totaling $2.7 trillion all of which is deposited in the stock market which has lost 50% of its value. Don’t be surprised when I tell you that the Seventh-day Adventist retirement fund lost $50 million in the stock market this last year. Those of retirement age in corporate America are in for a big surprise.
Permit me to say a little more about the stock market. From the “Safe Money Report” of December 2000 I gleaned the following, Electronics have plummeted 31% in 2000. For example, Circuit City fell from $20 a share to $10 a share. In the toy industry they went down 28%. Sears Roebuck fell from $59 to $22 per share. The May Department store dropped from $38 down to $23 a share; Home Depot took a fifty per cent drop. Safeway has taken a 50% drop; Florsheim Shoes filed for bankruptcy. Macdonald’s is closing 175 of its restaurants and its stocks have fallen from $30 to $18 per share.
Perhaps you have grown weary of figures so let’s take a look at bread lines in America. Maybe this will arouse you. Recently I saw Sixty Minutes on TV showing the hunger lines in American cities and, believe it or not, some were three to four blocks long! They were not composed of what you would consider “bums” – that is, those who are looking for a handout, but not willing to work. These people were middle-class citizens holding one or more jobs at $7/ hour but they could not pay the home rent and the utilities and have enough left to feed the family. I shall never forget one mother who with tears in her eyes was telling how she would buy a gallon of milk and then dilute it with a gallon of water to fill the tummies of her hungry little children. This is America today?!? Friend, it is completely out of control.
What I have said of America can be said of Japan which has been out of control for thirteen years and is on the brink of bankruptcy. Look at Germany, the hub of the New European Economy – she is financially worse off than America. All it will take is for one of these world-leading nations to collapse and all will fall with her. There is no way out. One of these days our government will no longer be able to borrow and loan you money. One solution will remain – print paper money till it becomes worthless. Perhaps this will force a cashless society in which you can only buy and sell by a law. One thing is absolutely certain and that is found in Revelation 13:17, “That no man night buy or sell, save he that had the mark, or the name of the beast, or the number of his name.” The fact that the United States’ finances are out of control is surely leading step by step to the soon fulfillment of this text.
Now let us listen to God’s counsel as to what we should do to get ready for this coming crisis.
Get Out of Debt
As you read your Bible and the Spirit of Prophecy this message comes through loud and clear. In 2 Kings 4:7 it reads, “Pay thy debt.” In Matthew 18:29 this scripture refers to those who owe debt but cannot pay. They may expect to be “cast … into prison, till [they] should pay the debt.” King Solomon, considered to be the wisest man that ever lived, wrote in Proverbs 22:26, 27, “Be not thou one of them … that are a suret[y] for debts. If thou hast nothing to pay, why should he take away thy bed from under thee?”
The Spirit of Prophecy also speaks clearly of this matter. In Testimonies for the Church, Volume 6, p. 217 I read, “We should shun debt as we should shun the leprosy.” If you have ever traveled abroad and seen hundreds of lepers, as I have, with finger and toes eaten away, some with hands or a foot missing, and others with open eye sockets for the leprosy had eaten their eyes, you will agree with me, leprosy is the last thing you would want to get in this old world.
And don’t let the credit card deceive you. Years ago Dean and I woke up to the fact that we had some twenty credit cards which were leading us into tight circumstances. We read the chapter on finance in the book The Adventist Home and decided to take the scissors and cut them all up and thrown them in the garbage can – an act we have never regretted. Listen to what is stated in this book on p. 379: “We should pay up squarely as we go; gather up the dropped stitches; bind off your raveling edges, and know just what you can call your own.” On p. 392 I read, “Many poor families are poor because they spend their money as soon as they receive it. You must see that one should not manage his affairs in a way that will incur debt. …When one becomes involved in debt, he is in one of Satan’s nets, which he sets for souls…. Abstracting and using money for any purpose, before it is earned, is a snare.”
On p. 393 I read, “Deny yourselves a thousand things rather than run in debt. This has been the curse of your life. …Avoid it as you would the smallpox.” This reminds me of a personal experience I had in China as I rode the bus to town. A man got on the bus covered with a white sheet and he sat down on the seat next to me. I wondered why he kept pulling the sheet tightly around his face until only his eyes could be seen. But, as the bus hit the many potholes in the street, the white sheet opened here and there and to my amazement I discovered that he was covered with smallpox. I was so frightened I pushed my right hand up my left sleeve to feel if the marks of my smallpox vaccination was still there. I got up immediately and got off the bus at the next corner and took the following bus to my destination. What did Inspiration state? – “Avoid [debt] as you would the smallpox.”
Leave the Cities
As I read the following paragraph from Maranatha p. 141 notice the word “increase.” “Light has been given me that the cities will be filled with confusion, violence, and crime, and that these things will increase till the end of the earth’s history.” If you think things are bad now just wait until this financial crash comes. I believe you will agree with me that we haven’t seen anything yet in comparison. This is why Inspiration states, “‘Out of the cities; out of the cities.’ — this is the message the Lord has been giving me.” Country Living p. 31. How can we hesitate when the message comes from the Lord, for God knows what is coming!
In Selected Messages, Book 2, p. 141, 142 Inspiration tells us, “The time is fast coming when the controlling power of the labor unions will be very oppressive. Again and again the Lord has instructed that our people are to take their families away from the cities, into the country, where they can raise their own provisions; for in the future the problem of buying and selling will be a very serious one. We should now begin to heed the instruction given us over and over again: Get out of the cities into rural districts, where the houses are not crowded closely together, and where you will be free from the interference of enemies. …The trades unions will be one of the agencies that will bring upon this earth a time of trouble such as has not been since the world began.” With the coming economic disaster you can visualize what will happen when the labor union get out of control.
Now with such alarming news for the future I’m sure you have been thinking of moving out into the country but maybe the following quotation will give you an incentive to act quickly. Listen to this startling revelation taken from Selected Messages, Book 2, p. 142. “Erelong there will be such strife and confusion in the cities, that those who wish to leave them will not be able. We must be preparing for these issues. This is the light that is given me.”
Some years ago I was conducting a “Voice of Youth” evangelistic meeting in England. I was preaching on the Sabbath day and I noticed that the congregation was very sad. Some even had tears in their eyes. When I asked why I was told that many in that church had been planning to move out of the city, as Inspiration had counseled, but they had waited, feeling there was plenty of time. Some had even purchased the land in the country and were planning to build someday. But suddenly, without any foreknowledge of government plans, a law had been passed that very week making it impossible for them to ever move to the country. Without telling the people in advance the British government decided that conditions were such that they could control the people with less problems if they were all confined to a city. So, under the pretence of environmental protection, they passed a law that no new construction could be made on country property. If a building such as a barn existed it might be granted to renovate it into a house, but from that day on – even if you owned the property – you could not build there to live. Furthermore, when a present city could no longer provide for growth, the government would build high-rise apartments and rent them providing for population growth. So, suddenly – overnight – our Adventist brethren found it impossible to get out of the city. And something like that could happen in America one of these days.
Prophecy Predicts When America Will Face National Financial Ruin
This is found in Bible Commentaries, Volume 7, p. 976, 977. “When the Protestant churches shall unite with the secular power to sustain a false religion, for opposing that which their ancestors endured the fiercest persecution; when the state shall use its power to enforce the decrees and sustain the institutions of the church—then will Protestant America have formed an image to the papacy, and there will be a national apostasy which will end only in national ruin. …The law of God will, to all intents and purposes, be made void in our land; and national apostasy will be followed by national ruin.”
Do I hear someone say, “Elder Nelson, don’t get so excited then. You have just read that this will not happen until the National Sunday Law is enacted.” That is true, but have you ever heard Inspiration’s wake-up call – “The last movements will be rapid ones”? Brother and sister, this is no time to slumber with a “wait and see” attitude. Believe me when I say that last-day prophecies are fulfilling faster than we can keep up with them. It’s no wonder that each morning as I take a few moments to listen to the news I wonder what great prophetic event may have happened during the night. But thank God, we have the promise of divine help if we are daily obedient to God’s counsel.
In Maranatha p. 181 I read, “In the last great conflict of the controversy with Satan, those who are loyal to God will see every earthly support cut off.” Now beloved, that means everything will be out of control for there will be no Social Security, no Medicare, no jobs, no pensions, no return on your investments. Let me read this again. “In the last great conflict of the controversy with Satan, those who are loyal to God will see every earthly support cut off. Because they refuse to break His law in obedience to earthly powers, they will be forbidden to buy or sell. It will finally be decreed that they shall be put to death. …But to the obedient is given the promise, ‘He shall dwell on high: his place of defense shall be the munitions of rocks: bread shall be given him; his water shall be sure.’ Isaiah 33:16. By this promise the children of God will live.” Praise the Lord!
I am sure that this message has convinced many that it is high time to obey God’s counsel, but let me add – don’t become rash in making any move without much prayer. Ever remember, God is able to open and shut doors; He knows what is best for you. Let the Lord know you mean business. He will answer your prayers and will open doors that you thought were impossible to open. Remember, God cares for you. “Jesus knows us individually, and is touched with the feeling of our infirmities. He knows us all by name. He knows the very house in which we live, the name of each occupant. He has at times given directions to His servants to go to a certain street in a certain city, to such a house, to find one of His sheep. Every soul is as fully known to Jesus as if he were the only one for whom the Saviour died. The distress of every one touches His heart. The cry for aid reaches His ear. …Through all our trials we have a never-failing Helper. He does not leave us alone to struggle with temptation, to battle with evil, and be finally crushed with burdens and sorrow. Though now He is hidden from mortal sight, the ear of faith can hear His voice saying, Fear not; I am with thee.” Desire of Ages p. 479 – 483.
Beloved, always keep in mind when events get out of control, He has a plan to save you. When evil became so great that God had to destroy the world with a flood, He had a plan for faithful Noah and his family. When God forsook Jerusalem of old and left it to be completely destroyed, He had a plan for saving every Christian and provided a way for their escape. So I appeal to you to make sure that you are right with God. I commend to you these words found in Maranatha p. 57, “Closely examine your own heart as in the light of eternity. Hide nothing from your examination. Search, oh! search, as for your life, and condemn yourself, pass judgment on yourself, and then by faith claim the cleansing blood of Christ to remove the stains from your Christian character. Do not flatter or excuse yourself. Deal truly with your own soul. And then as you view yourself as a sinner, fall, all broken, at the foot of the cross. Jesus will receive you, all polluted as you are, and will wash you in His blood, and cleanse you from all pollution, and make you fit for the society of heavenly angels, in a pure, harmonious heaven. There is no jar, no discord, there. All is health, happiness, and joy.”
Now for a final thought – We live in troublous times with wars and rumors of wars, economic upheaval, with the danger of loss of employment, monthly income, or a lifetime of savings or retirement funds. Many retirees are being forced out of retirement because their anticipated retirement funds have dried up or have declined with the stock market. We live with the specter of terrorism hanging over our heads – a fact we are reminded of every time we watch CNN, read a newspaper, or go through an airport security check. Every time we board an airliner, somewhere in the back of our minds we may wonder, “What if we had been on one of the four doomed airliners on 9/11?” or “Is this plane targeted for a terrorist attack?”
We live in a day when it is very easy to have continual, low-level, chronic anxiety or fear. All of this adds to our stress levels and ultimately to health problems. If a chronic, low level of fear or anxiety are the norm for millions of Americans today, what could this become if America goes into a major war, if we have a terrorist attacks worse than 9/11 – perhaps including weapons of mass destruction? The Bible has a great deal to say about fear in literally dozens of passages.
The Lord tells us continually in scripture (Isaiah 41:10, 13), “Fear thou not; for I am with thee: be not dismayed; for I am thy God: I will strengthen thee; yea, I will help thee; yea, I will uphold thee with the right hand of my righteousness.” “For I the Lord thy God will hold thy right hand, saying unto thee, Fear not; I will help thee.”
In Psalms 27:1 we read, “The Lord is my light and my salvation; who shall I fear? The Lord is the strength of my life; of whom shall I be afraid?”
Psalms 34:4 says, “I sought the Lord, and he heard me, and delivered me from all my fears.”
Psalms 91: 5 – 7 tells us, “Thou shalt not be afraid for the terror by night; nor for the arrow that flieth by day; Nor for the pestilence that walketh in darkness; nor for the destruction that wasteth at noonday. A thousand shall fall at they side, and ten thousand at thy right hand; but it shall not come nigh thee.”
Psalms 23:4, tells how the followers of the Lord do not ever have to even be afraid of death. “Yea, though I walk through the valley of the shadow of death, I will fear no evil: for thou art with me; thy rod and thy staff they comfort me.”
In times of danger, difficulty and even death we are told that we do not have to fear evil. I am reading 1 Peter 5:7, “Casting all your care (that’s you anxieties, your fears, your worries) upon him; for he careth for you.”
Let us pray. Oh God, with everything soon to be out of control, please help us to never lose our vision of heaven and our Savior’s promise to come and save us from this coming time of trouble such as never was. In His name we ask, Amen.”
Divine Guide
By Kay Carter Jewarsky
I know not the way I am going,
But well do I know my Guide,
With a childlike faith I offer my hand,
To the mighty Friend by my side.
The only thing that I say to Him,
As He takes it is, “Hold me fast,
“Suffer me not to lose the way,
And lead me home at last.”