Edition 131: August 19th 2012

The coming big triple economic catastrophe

News events and commentary:


My comment begins with ***

●Israel and the US have been conducting joint naval exercises.

●”Iran can build an A-bomb by October at present rate of uranium enrichment.

●An Israeli strike on Iran will be like nothing in history. Cyber warfare will be pre-eminent paralysing Iran’s systems.

●Russia believes new US led sanctions on Iran is “blackmail.”

●Egypt’s Morsi takes full control of military and declares he wants to change peace deal with Israel giving Egypt complete sovereignty of Sinai.

●Some years ago I warned on the arising of Syria and Iran into prophetic times. This was before the Arab spring had even started. I recall saying that Syria would go bang first and then Iran immediately afterwards. Today we’re on the door step!


The coming big triple economic catastrophe:


We’re heading for very interesting and fast moving prophetic times.

The world will soon be thrown into chaos of monumental proportions. Part of this chaos will be economic. As regular readers know, I’ve been warning of these coming dramas for some time. The mighty empires of debt created by the US government, Japan and Europe are the main culprits.

But a new nightmare is!

Right now the world economy is slowing down, but it’s still keeping its head above recession, although many individual nations are back in recession again, especially in Europe.

The economic recovery from the previous severe recession has stalled and is now on shaky ground. New big shocks to the system will send it falling hard and create fear and panic in the financial markets.

One big shock to the economy would be bad but three simultaneously would be a disaster!

The China Implosion.

The coming world food crisis.

The coming oil crisis.

Let’s have a look now at these three soon coming catastrophes.

The devastation from all three of these will be primarily economic, but are likely to lead to social upheavals, and many other problems. Bear in mind that there may be variables simply because we’re looking into the future. What I’m presenting to you is a very strong probability and possibility.

A big world economic collapse does not happen overnight. It takes time to mature. But the emotions of fear and panic spread around the world in seconds!

Also bear in mind that many other prophetic events are also dovetailing together right now as well. These issues in isolation may not be that significant, but because of the grand prophetic picture, they are important now.

A remarkable story:

But before we get into the triple disaster, let me draw your attention to a remarkable story.

In the past 12 months more than 600 banking executives and top banking bosses worldwide have been fired or resigned.

Wall Street insiders are becoming aware of a growing, consistent selling theme of financial stocks. Legendary investor George Soros, who deals in billions at a time, has just sold all of his banking shares and shares of other financial institutions on Wall Street. He is currently buying gold assets of many types. The latest estimate is that he has now spent over $130million in gold shares alone, just in the last few months.

Billionaire John Paulson has been ditching shares in banks and financial institutions and just bought huge quantities of gold shares. His $24billion fund is now weighted heavily in gold.

Other astute large investors are doing the same thing.

Central banks around the world are presently “preparing for something big.” Central bankers generally have two faces. The public only sees one. What they do in secret or behind closed doors is far more telling.

The World Gold Council has just reported that the amount of gold bought by the world’s central bankers has skyrocketed.  The WGC says they’ve seen a rise of 62% in gold purchases by central banks in the last quarter. Central banks have bought 157.5 metric tons of gold in the last quarter. This is far more than normal. Gold demand has dropped in the last quarter generally, but it rose sharply amongst the central banks and the so-called “legendary investors.”

It’s worth taking note of what some of these big players do with their money, rather than what they say.

Their actions point towards a big coming seed-change! They point towards something big coming soon!

(See section further down on gold)

The coming China catastrophe:

The great chant of the world’s economists and analysts has been “China is our saviour”

China most certainly has been the world’s engine of growth and has helped all nations recover from the previous crushing world recession. The size of China and its so-called insatiable desire for commodities has been the driving force of the recovery.

Now have a look at the graph below of GDP (growth) in China. Note that it peaked some time ago and is now falling fast one quarter after the next. The big dip was the previous recession and now we see growth falling back hard again.


This graph shows that what I am telling you not some analyst’s opinion...the slow-down is real and accelerating.

As China led the recovery from recession, it will be the very reason we head back into a devastating world recession.  

How can an economic saviour suddenly become the very reason for a new nightmare?

Some of the things I’m going to share with you now may be a bit difficult to get your head around if you’re not familiar with macro-economics, but bear with me, there’s much you will understand clearly.

►Political wisdom creates economic stability, while political stupidity creates economic instability.

The government of China is stupid!

They have created a growth machine on an economic model that is unsustainable and is already starting to collapse. By the way, the politicians of Europe and the US are just as stupid having created a monster of debt that will soon eat them alive!

But China is a different story.

The China growth model has been based on stupid political aspirations of control and domination. They have one main driving factor and that is to cut costs and keep people employed. Cutting costs and keeping people employed is a short-term political goal. It will not last. It only works if the government and banks are behind you and even that has its limits.

You can’t sustain growth by cutting costs and having no profits for a long time.

China has far too many big businesses running at a loss, and a huge loss at that!

Property prices are tanking in China. They’re down 35% in Beijing in the last few months alone!

China has been on a building spree. They’ve been building roads, bridges, dams and entire cities as if there is no tomorrow. China has built numerous entire cities full of infrastructure, but without one single inhabitant. They’re called the “ghost cities”. They’ve built dozens of these cities not only in China, but in other nations as well, Angola being a case in point.

Why have they been doing this? Simply to give people jobs. Now state subsidised building companies can’t get government funding anymore, and they’re going bankrupt at a rate of knots!

The property bubble is already popping. China is offering huge discounts of 30% to 40% on business properties in their big cities. But that’s just the start. There is always a knock on effect to the banking world and then on to other sectors.

The two images below are compilations of the “ghost cities”:


The demise of the giant:

The problem with China’s doomed economic model is that its founded on the economic principles of Marxist / Leninism. Yes China has liberalised to some degree but its heart is still full of its devil worshipping fathers of communism. It is a command economy.

Profit motivation is the only economic model that works over time. Of course the free market system needs restraints built into it as well, but it works. You simply can’t run an economy without profits for any length of time.

The free market system simply works because it’s the Biblical pattern.


The China “bang-moment” has already happened. They’re doomed unless they wake up and completely liberalise their economy fast. They need to change everything to a free market economy. That’s not going to happen with the present government in power, because that will allow unemployment to rise as normal market forces take root.

In fact right now, there are big political rumblings on the go within China’s power-elite. But, whatever they do, it’s really too little too late.

Yes we may see an upturn in one or two quarters, but the overall trend is lower.

It’s not the subject of this edition, so I’ll just briefly mention it. The debt empire created by stupid politicians in the US and Europe is going to crash. The growth model based on debt rising faster than growth is as stupid as the China model!

When total interest on debt overwhelms the nominal growth of the economy, it’s all over! What’s needed for a healthy economy is moderate debt sustained by proportionate growth.

So, in the West we’re seeing the emergence of a huge over-balanced debt-laden sinking ship and in the East we’re seeing a coming catastrophe because of no debt at all and no profits.

The coming world food crisis:

Worldwide drought is a creeping disaster!

mississippi drought

The Mississippi River in the US is drying up fast as the worst drought in 50 years cripples farmers and sends food prices rocketing. River traffic is already stuck in the mud! 60% of the nation’s food crops and 22% of the oil and gas travel down the Mississippi. The cost to the nation is about $300 million a day.

The cost of wheat, corn, maize, soya, coffee and many other fruits, vegetables are rising far too quickly. Some prices have risen by 45% in the last month alone.


Some nations are already in the worst drought in 50 years while others are experiencing crippling drought, combined with heat waves. The problem is that it is occurring amongst the world’s largest grain, and food producers. This knocks on to animal feeds, fertilisers, cattle, sheep and just about everything else.

Brazil is seeing large scale crop failures especially in coffee. They’re about to introduce new stimulus measure to try to yank their country out of economic slow-down.

Russia is now seeing devastating crop failures. Many farmers have no crops because condition prevented them from even planting in the first place.

We’re not seeing any spectacular rises in food prices yet and inflation worldwide is still quite tame. But as said, this is a creeping disaster in the making.

The arrows on the map below point to the largest agricultural producers of the world, all now in drought. These are The US, Brazil, Russia, China, India and a few others.

The “hot” areas on the map below are the severe drought conditions. (This is a daily map.)


The world has often seen events like these and snapped out of it quite quickly. The reason we should take special note of this now, is due to our collective position in prophecy. 

The Bible predicts large scale droughts, famines and pestilences in the last days. Now we can’t call this a famine of Biblical proportions yet, but it’s the direction that’s the problem.

The coming oil catastrophe:


I’ve reported on this many times before, so I’ll just mention it briefly again. The oil price is directly linked to just about everything in the world. All goods and services have transportation as part of their input costs, somewhere in the works.

A rising oil prise is sustainable without inflationary effects when it is gradual and within reason, but a sharply rising oil prise is always a shock to the economic system. If it rises too fast and too high at the same time it is crippling to the world economy.

We’ve seen the oil price rise steadily for a good few years now and inflation is tame.

I once went into a shop down the road from my home and the owner had literally doubled the price of her nice home-made pies and reduced the size. I told her that she was thief and I would never walk into her shop again. True to my word I never have.

The point is simple. The excessive price rise was a shock.

The soon coming conflict in the world’s large oil producing nations of the Middle East will send the oil price into orbit.

These militant Islamic nations have threatened to use oil as a “weapon” against the West.

A big rise in the oil price will shock the world economy right into recession!

The graph below is a five year view of the oil price. The big collapse on the left of the graph was the previous recession. Since then the oil price has been edging higher. Right now it’s turning sharply higher again! (I’ve drawn in the underlying trend)


The gold the bad and the ugly:

A perfectly legitimate question is how do you prepare for a collapse in the world economy?  What should you do with your money? Yes we have the well-worn verses like “I’ve not see the righteous forsaken nor his seed begging bread.”  This verse and others normally used by the prosperity bunch are quite true. Nothing wrong with the verses! It’s how they’re applied that is the problem.

Bible verses like this one are not to be used to prop up life styles of worldly excess.

People will have to change their lifestyles. They’ll have to be wise and scale back. They’ll have to practise denial of self! Then we can call on verses like the one above.

In terms of investments, what do you do?

In light of the coming catastrophes, gold is going to be the only investment safe-haven.


Now before you send me angry e-mails saying that we shouldn’t be interested in these things, let me suggest that you speak for yourself.

Many people have significant investments and live off the proceeds. Besides, all asset classes are linked to the stock markets and other investment forms. Gold is the only asset class that will hold its value in perilous times.

World stock markets will soon go into a tail spin. If you’re sitting there thinking, “good that’ll teach them” Let me inform you that a big stock market collapse affects everyone in the world. Many businesses go out of business, unemployment sky-rockets, crime increases and prices go up, inflation rises and poverty hits the poorest the hardest. A general nightmare ensues.

For those of you invested in the stock market, I’m not suggesting you sell out now. I am suggesting that you watch and remain informed.

World stock markets could go a lot higher before they collapse. So don’t blindly sell out.

The gold price is volatile, but in times like these, it’s likely to be the best asset class. You should have some investments in gold. (This would be either in gold itself, gold coins or the shares of gold companies.)

Again, I’m not suggesting that you run to gold right now. We may see a fair bit more volatility in gold assets before the expected take-off. But then you also don’t want to be chasing a rocket that has already taken off!

The graph below from the World Gold Council shows how the nations of the world have been buying gold of late. When the Central Banks are in the market, it’s worth taking note!


Deeper into the tribulation period there will be no safe-havens and all asset classes, including gold will tumble, but that’s for then and not now. Hopefully, we won’t be here to see it!


The timing of these things is critical indeed.

Economic survival will be most difficult in the coming days, but many will be wise and survive and thrive and help others as well.

The world economy does not like focussing on more than one macro event at a time. It is ill equipped to deal with even one big meltdown issue. So now we have three big coming catastrophes.

China may be able to slow down its slow-down and return to some sort of growth pattern, but this is unlikely in the short term. Turning things around is a slow process anyway.

The US is facing what’s being called “the fiscal cliff” in January, which is a collection of economic events. Again the US might be able to duck the issue in the short-term.

Also bear in mind that Europe is still deteriorating. All the magic big-fixes have not worked. .

When Israel is drawn into any conflict in the Middle East, other Arab nations will immediately unify against their common enemy- Israel! This will draw in Russia and China on the Islamic side and some western nations on Israel’s side. Oil will be used as a weapon against the West. In the event of the closing of the three main oil trade routes, which are Islamic controlled, the oil price will rocket higher.

The Straits of Hormuz, the Gate of Tears and the Suez collectively see about 20% of the world’s oil pass on the way to the markets. This would mean that the oil tankers will have to go an extra 10,000kms to reach their markets. The oil price will go way above $200 as a result, crippling the now already crippled world economy.

There are too many macro-economic events brewing right now for us to ignore them. They will be devastating for the world.

The scenario I’ve presented is a very real possibility.

The take-home point of this edition is the phrase “a creeping disaster”.  Being forewarned is being forearmed!

The big issue:

The single most important thing you can and must do in these days is turn your heart is brokenness and soft humility to our Lord and Saviour. You must repent of all your sin. You must prepare to stand before our Lord. You must seek holiness and perfection; you must do it now!


Exodus 33:13-14 “Now therefore I pray, if I have found grace in your sight, show me now Your way, that I may know You and that I may find grace in Your sight, and consider this nation as your people. And He said: “My Presence will go with you and I will give your rest.”

Psalm 3:8 “Salvation belongs to the Lord. Your blessing is upon Your people.”


The answer to the world’s problems...the cross of Christ!

This is a painting by Marc Chagall representing Yeshua / Jesus on the cross of Calvary.


Shalom and grow in grace!

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