CHURCH – PREPARE FOR GLOBAL FINANCIAL CRASH

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Signs are brewing that asset markets are finally reaching a tipping point. we’re heading for a similar bubble burst to 1987, 2000, 2008 or even 1929, only this one will be bigger. Who has the most to lose? Whilst these are US statistics they don’t differ much in the western world. The rest of the world’s economists, having observed America’s apparent financial success, copied its Keynesian methodology developed in the 1930s. Thus, virtually the whole world is now marching in lockstep like lemmings towards the edge of a cliff.

OWNERSHIP OF FINANCIAL ASSETS

Since 1983, the top 1% has climbed from 34% of financial asset ownership to 40% (and I’ve seen some studies say that it’s closer to 50%). The bottom 90% have fallen from 32% financial asset ownership to 21%. How much can the latter lose when they don’t have many financial assets to begin with?

For a broader view, look at this chart, which shows the top 10% versus the top 20%.

The top 20% control 90% of the financial assets while the top 10% controls 79%. That means the bottom 80% control only 10%!

The whole wealth curve is exponentially skewed, much more than income…

So, there are no two ways about it: When this bubble finally bursts for good, and wealth is destroyed for a long time, it will be the richest that lose the most! Whilst they lose the most, it will be the 90% that will suffer the most as they will not have money or jobs to put food on the table.

Church are you preparing for what’s coming? It will be church as described in the Book of Acts that will be a blessing.

“Now when the multitude of those who believed were of one heart and one soul, neither did anyone say that any of the things he possessed was his own, but they had all things in common. And with great power the apostles gave witness to the resurrection of the Lord Jesus. And grace was upon them all. Nor was there anyone among them who lacked; for all who were possessors of lands, of houses sold them and brought the proceeds of the things that were sold, and laid them at the apostles feet; and they distributed to each as anyone had need.” Acts 4: 32-34

 

MAJOR GLOBAL FINANCIAL CRISIS IMMINENT

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Ten indicators that the next major global economic crisis is imminent. The mainstream media in the United States almost entirely ignores Europe, but what is going on over there is key right now.

  1. The 9th largest economy in the world, Italy, is in the midst of yet another financial meltdown. Italian banking stocks crashed really hard this week. Italian two year bond yields are the highest that they have been since the crisis of 2014. In fact, there are fears that it could spread to other areas of the euro zone. Europe could barely handle what happened in Greece, and the Italian economy is many times its size.Deutsche Bank share price graphic
  2. German banking giant Deutsche Bank just announced that it will be cutting another 7,000 jobs as it “seeks to turn the page on years of losses”.  Many are amazed that it has survived for this long.  If Deutsche Bank fails in 2018, it will essentially be a “Lehman Brothers moment for the entire planet.
  3. In the US, the “smart money” is getting out of stocks at a rate that we haven’t seen since just before the financial crisis of 2008.
  4. Moody’s is warning that a “particularly large wave” of junk bond defaults is coming.  Junk bond defaults are often an early warning indicator for a major financial crisis.
  5. According to the FDIC, a closely watched category known as “assets of problem banks” more than tripled during the first quarter of 2018.  What that means is that some really big banks are now officially in “problem” territory.
  6. U.S. Treasury bonds are having the worst start to a year since the Great Depression.
  7. Mortgage interest rates in the US just hit a 7 year high, and they have been rising at the fastest pace in nearly 50 years.  This is going to be absolutely crippling for the real estate and housing industries.
  8. US retail industry debt defaults have hit a record high in 2018.
  9. The US is on pace for the worst year for retail store closings ever.
  10. The two largest economies on the entire globe are on the verge of starting an international trade war.

Once things start unravelling in Europe, the US will be deeply affected as well.  The global financial system is more interconnected than ever before, and at this point the US is even more vulnerable than it was just prior to the crisis of 2008.

When this thing breaks loose, it won’t matter who is in the White House, who is in Congress or who is running the Federal Reserve, there is nothing that anyone will be able to do to stop it.

Global central banks have been able to buy a few extra years of time by engaging in unprecedented levels of intervention, but now they are almost out of ammunition and events are beginning to escalate at a very frightening pace.

Church will need to be like in the Book of Acts where believers shared their resources with those in need. Be prepared, get out of debt, and make sure you have readily available reserves.