ANOTHER PROPHESIED END-TIMES SIGN – ECONOMIC COLLAPSE

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America’s Banks Are Still Teetering on the Edge

Abstract from an article by Briton Hill, co-founder of Weber Global Management.

The U.S. survived the largest banking crisis in its history earlier this year… So far, at least.

It might seem like a distant memory. But in the first half of 2023, the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank wiped out nearly $550 billion.

When Silicon Valley Bank and Signature Bank collapsed over a three-day period in March, ripples of fear shot through the economy. Anxious depositors lined up outside nearly every financial institution. And they pulled hundreds of billions of dollars out of U.S. banks.

The panic initially hit regional banks the hardest. Some of these banks’ stocks fell almost 50% in a single day. It didn’t take long for the crisis to spread throughout the financial services industry. Even some of the country’s largest institutions fell victim to the panic… For example, Charles Schwab’s (SCHW) depositors and investors didn’t need to worry about bankruptcy. And yet, the panic caused the company’s stock to plunge more than 30% in a matter of days. The entire U.S. financial system teetered on the brink of collapse.

So on March 12 – a Sunday, by the way – the Federal Reserve stepped in. The central bank said it would “assure banks have the ability to meet the needs of all their depositors.” In other words, it guaranteed all depositors’ funds in the failing banks. Crisis averted. At least for the time being.

The unrealized losses on investment securities for U.S. banks in 2022 and 2023 make the financial crisis look like child’s play…

Bank of America (BAC) is the second-largest bank in the country. It holds $760 billion in U.S. Treasury securities. But recently, it was sitting on an unrealized loss of $110 billion.

That’s more than the entire financial system at any point during 2008 or 2009.

If U.S. consumers catch wind of how big this problem is, it could ignite another bank run…

We’re talking about hundreds of billions of dollars in unrealized losses. These losses are keeping banks’ balance sheets underwater. As a result, many banks’ “reserve ratios” are off. (The reserve ratio is the portion of cash that a bank needs to hold, rather than lend out or invest. It’s how the system makes sure the bank has enough cash on hand to meet customer withdrawals.)

In other words, the banks can’t lend. America’s banks are paralyzed. They’re still teetering on the edge of collapse today.

But just because the banks can’t lend doesn’t mean cash needs to completely disappear… This situation has created a vacuum. People and businesses still need cash. And they’re willing to pay premium rates. But banks can’t help because of their terrible balance sheets. As a result, a long-forgotten sector has been reborn over the past few years… Private credit.

Nonbank lenders are filling the void. They’re gobbling up billions of dollars in market share every day…

The size of the private-credit market totalled around $875 billion in 2020. These days, it’s around $1.5 trillion. That’s a roughly 70% increase in just three years. In fact, insurance companies are essentially becoming the “new banks” in the market. They’re making a fortune doing it. This helps corporations and investors but what about the average worker depending upon his bank for finance?”

The chasm between the rich and poor is only going to get larger and is one of the reasons Jesus must return to restore righteousness. Prior to God destroying this Earth by fire, it has another 1,000 years with Jesus ruling and reigning with the glorified Saints. The nation God established for His purposes, Israel, will finally fulfill its destiny but only with Jesus ruling from a new Jerusalem.

“From His (Jesus) mouth comes a sharp sword with which to strike down the nations, and he will rule them with a rod of iron. He will tread the winepress of the fury of the wrath of God the Almighty. On his robe and on his thigh he has a name written, King of kings and Lord of lords.” Revelation 19:15-16

Then we will have had 6,000 years of unregenerate man ruling the world under the influence of Satan and his demons followed by 1,000 years with Jesus and the Saints ruling the nations with a rod of iron. At 7,000 years this Earth’s history is complete.

“Then comes the end, when he (Jesus) delivers the kingdom to God the Father after destroying every rule and every authority and power. For he must reign until he has put all his enemies under his feet. The last enemy to be destroyed is death.” 1 Corinthians 15:24-26

Then comes the second resurrection of the dead followed by the White Throne judgement and only then does John see a new Jerusalem descending from a new Heaven onto a new Earth where only the righteous dwell.

“Then I saw a new heaven and a new earth, for the first heaven and the first earth had passed away, and the sea was no more. And I saw the holy city, new Jerusalem, coming down out of heaven from God, prepared as a bride adorned for her husband. And I heard a loud voice from the throne saying, “Behold, the dwelling place of God is with man. He will dwell with them, and they will be his people, and God himself will be with them as their God. He will wipe away every tear from their eyes, and death shall be no more, neither shall there be mourning, nor crying, nor pain anymore, for the former things have passed away.” Revelation 21:1-4

TECHNOCHASM & THE END TIMES

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A chasm has opened in America… a great divide. On one side… a new aristocracy, amassing more wealth, more quickly than any other group in American history. Today, the one percent makes more money in one month than most people make in a lifetime. On the other side… The opposite is happening. Wealth is flowing out of the pockets of ordinary Americans at an unprecedented rate. Today, nearly 80% of Americans are living paycheck to paycheck.

This chasm between the rich and poor is only going to get larger and is one of the reasons Jesus must return to restore righteousness. Prior to God destroying this Earth by fire, it has another 1,000 years with Jesus ruling and reigning with the glorified Saints. The nation God established for His purposes, Israel, will finally fulfill its destiny but only with Jesus ruling from a new Jerusalem.

“From His (Jesus) mouth comes a sharp sword with which to strike down the nations, and he will rule them with a rod of iron. He will tread the winepress of the fury of the wrath of God the Almighty. On his robe and on his thigh he has a name written, King of kings and Lord of lords.” Revelation 19:15-16

Then we will have had 6,000 years of unregenerate man ruling the world under the influence of Satan and his demons followed by 1,000 years with Jesus and the Saints ruling the nations with a rod of iron. At 7,000 years this Earth’s history is complete.

“Then comes the end, when he (Jesus) delivers the kingdom to God the Father after destroying every rule and every authority and power. For he must reign until he has put all his enemies under his feet. The last enemy to be destroyed is death.” 1 Corinthians 15:24-26

Then comes the second resurrection of the dead followed by the White Throne judgement and only then does John see a new Jerusalem descending from a new Heaven onto a new Earth where only the righteous dwell.

CHASM BETWEEN RICH AND THE POOR

Over the last four decades, advancements in computing power, data storage, communications gear, artificial intelligence, and other technologies have followed a trajectory like you see on the left side of the chart below. This is because they started at very low levels. But after many years of advancing at exponential rates, technologies are entering the “liftoff” phase.

This rapid increase in the rate at which the world is changing has stunning business and investment ramifications. The world around us is changing at never-before-seen speeds… the speed and capabilities of our computers are increasing at unfathomable rates… And it’s catching many people off guard.

This is creating a gigantic shift in the way our economy works and how we build wealth. Today, the acceleration of our technological progress allows companies to operate with just a fraction of the number of employees businesses used to require. Forty years ago, it took the work of tens of thousands of people to build a business worth $20 BILLION or more. Now, some businesses can do it with less than 2,000 people. For example, in 2019, the workplace software company Slack achieved a market value of $23 BILLION. It had less than 1,700 employees. Getting to a $23 BILLION valuation with just 1,700 employees never used to happen! Back in 1989, Kodak had about 145,000 employees and was valued at around $16 BILLION… But in 2017, Snapchat achieved a $24 BILLION valuation and had just 1,800 employees. Back in 1964, AT&T had more than 750,000 employees… But in 2017, Google was a bigger and far richer company than AT&T with 92% fewer employees sharing the wealth. Plus, people who invested in Google when it went public made about 17 times more gains than those who invested in AT&T over the same time.

The best new companies of today simply don’t need many people compared to companies from a decade or two ago. The number of great jobs is decreasing while the pay for these employees getting the jobs is radically soaring! This is why the wealth gap gets wider and wider every single year. The incredible rise in computing power, automation, and robotics makes all these things possible. The rules of business and building wealth are being rewritten in front of our very eyes. Over the last few decades, it took on average about 20 years for the typical Fortune 500 company to reach a market capitalization of $1 BILLION.

In 1998, Google reached $1 BILLION in market cap in just eight years, which was considered incredible. By 2004, Facebook had done it in just five years. By 2009, Uber had done it in under three years. In 2012, virtual reality firm Oculus did it in under two years. From 2012 to today, Facebook shareholders enjoyed as much as a 1,507% return on their investment. From 2010 to today, Tesla investors have made as much as 9,100% gains. Snapchat investors have made as much as 1,213% since 2018. By now, you can see how in many cases the time it takes for massive change is getting “compressed.” Industries are being transformed in a short time. As a result, new industries are springing up at a rapid and ever-increasing pace… while old industries are being disrupted at a rapid and ever-increasing pace. It will wreck family businesses, careers, and investment portfolios. New industries are springing up at a rapid and ever-increasing pace… while old industries are being demolished at a rapid and ever-increasing pace. As Uber and Lyft soared to billion-dollar valuations, the old taxi industry was devastated. It lost millions of dollars in revenue.

Since 2004, at least 1,800 American newspapers have ceased publication. The sector has shed 47% of its jobs during this time. Amazon has transformed the way we shop and get our stuff. In the process, it’s driven dozens of old-school “brick and mortar” retailers into bankruptcy. Department stores have lost 18 times more jobs than coal mining since 2001. In less than seven years, Uber demolished the “old” taxi industry. Airbnb now offers more rooms than the top five hotel brands, including Hilton, Marriott, and Hyatt, combined… Google has taken over information… by 2012, Encyclopedia Britannica published its final volumes, after 244 years of circulation. Spotify and iTunes have turned the music world upside down. Facebook, YouTube, Twitter, and Instagram have disrupted traditional media outlets… 

The information in this post was taken from an article by Louis Navellier of Investor Place (an investment advisory service)