Is the world rapidly heading for an economic meltdown?

By AF
National bankruptcy is the big story, in America, Europe and elsewhere. I have repeatedly said: We are heading for the buffers in a slow motion train wreck.” Well, the buffers are just ahead, in my opinion. Read on: there are steps you can take. Above all, get right with God. Terrifying times are just ahead. You don’t have to be too clever to see what’s gone wrong.

Here’s what Texan Ron Paul, one of the few fiscally literate Congressmen, said this week: “When a country is indebted to the degree that we’re indebted, the country always defaults. We will default because the debt is unsustainable. This default will not be because we don’t send out the checks. We will send out the checks. It will be a default because people will get their money back, or they will get their Social Security checks, and they won’t buy anything.”

In other words, you will be repaid in more or less worthless “funny money.” No wonder the Chinese - big creditors of the US –are so twitchy. Once you get a majority of the population taking from government rather than paying taxes, when you have about 43 million Americans getting food stamps, once you build a constituency armed with begging bowls, as Obama has done, there is no way back. Take the goodies away and outcome the mobs - as in Greece. Greece, of course, "did a deal" this week. A lot of people foolish enough to lend them money have lost 21 per cent of it - so far. But the deal solves nothing. It buys time, perhaps a year or two, but the problems remain.

I suspect that many of the world’s large banks are in fact broke. Just like Freddie and Fannie - I’m glad I don’t own any of their ‘assets’. Open up the vaults containing their so-called “assets” and a nasty smell emerges. That’s why banks have become the largest commercial and residential property owners in the world: if they dump all these redundant properties at once on the market the value of these “assets” would be revealed for what it really is – perhaps a third of what the books say.

The reason Treasury Secretary Timothy Geitner and “Helicopter Ben” Bernanke are so nervous about the refusal of Congress to increase the debt ceiling is that America is just Greece writ large. I’ll restate my central point: There’s no way any of these debts are going to be repaid; they couldn’t possibly be. If you take in all the unfunded liabilities, the debt load on every household in America is well over $500,000. How much do you have in your piggy bank?

There’s no way it can be paid. Go on to the links on this website and click on to the Debt clock to see the latest figures on US debt. They’ve had riots every day in Greece and politicians are too scared of the mob to do the right thing, and the right thing is often nothing. Let the crash come; let it all happen, because if you keep putting it off, reality crashes in whether you like it or not, and by then it is even worse.

We have been in a period of unreality since 2008, when the stock markets crashed, housing slumped - but funny money was created and pumped into the faltering machine.. It’s like dream time. Very few people will actually tell the truth, because it’s scary; it’s very frightening. And even if politicians know what they should do, they have a hard job getting it past their parliaments.

George Osborne, Britain’s top money man, is no fool. He knows what needs to be done, but who wants to vote for belt tightening, austerity, working longer hours, working more years before a pension, maybe pay cuts? Instead, the easy thing to do is what many nations of the world are doing, including Britain and America: borrowing money to pay the interest on the debt. Oh dear. Hands up anyone who thinks this can last.

Austerity is not a very appealing package; no votes in that. People have got used to what they regard as ‘rights’ and they don’t want to know about responsibilities. In the west life’s been pretty good for the most people, but it’s often been done on borrowed money. Now we’re coming to a time when the world at large is going to have to face reality and if we don’t let the train wreck happen, maybe in a controlled way, it will happen in an uncontrolled way, and that will be much more devastating. Of course, today's political poltroons hope they will be out of office, on fat pensions, before the final great crash.

It would have been better if we had let it happen in 2008; it would have brought discipline into banking for a start. If you know you’re going to get bailed out, what not take risks? There’s got to be personal pain; that’s what teaches us discipline and responsibility. Life doesn’t come as a sugar coated pill. I don’t think they can keep these financial balls in the air too much longer. I was expecting the crash in or around 2006. I could see the state of companies, councils and countries, dancing in a fools' paradise of credit.

We expected the meltdown then, two years before it started. Anybody could have worked it out; people were living beyond their means in every street – new cars, crates of wine being delivered – their wages hadn’t risen to pay for all that. There’s going to be a lot of tears. We should just follow the principle of living within our means and be satisfied with a simple lifestyle. As someone who grew up in poverty I can tell you that the greatest luxuries are 1) Enough food to eat 2) A house with a roof that doesn't leak 3) Central heating and 4) Hot water.

I will never forget when, after I had worked hard, saved and bought my first house, how wonderful it was to have a hot shower and to be warm in winter. Until then I had lived in landlords' properties, in the days when such places were primitive, with outside toilets, no bathrooms, no heat and no hot water. Until I was 24, I had to heat up water and bail it into a bath. You have to know what it was like to realize how good people have it today. Furthermore, when I grew up food was rationed, which is why we had to grow much of our own. We survived and it made us appreciative. I am a man truly grateful for what we have.

We don’t have to have the latest electronic toys. We’re not babies. We don’t have to have a mega house. Think of what was good enough for your grandparents, your parents. Learn to cook and garden; stop eating out except as a special treat. Use your head: above all, keep it above water! Finally – find a good church, that teaches sound Bible doctrine. Get involved, learn God’s way to live. That is the only way for a true solution to any problem.