Sabbath Message 16/8/37/120
There is a widely anticipated market crash expected in the EU and the US soon. The US Federal Reserve is widely acknowledged to have sown the seeds of the next crash with Quantitative Easing (QE), which is the printing of money to increase the money supply.
The US Federal Reserve's Open Market Committee met again this week, and was widely expected to announce the end of its third round of money printing, dubbed "QE3".
Over the last six years, the Fed has injected $3.6 trillion into the US economy through so-called quantitative easing, buying government bonds and other securities from American banks in an unprecedented stimulus program.
Over the period, the US economy has gone from the near collapse of its financial system and a 6.3 per cent annualised economic contraction in the December quarter of 2008, to what is recognised as a moderate but fragile recovery.
Unemployment is now below 6 per cent for the first time in six years. The US economic growth rate has averaged 2.3 per cent since 2009 but there is grave concern over an impending collapse.
"The economy seems to be ticking over at a reasonable pace," according to Dr Shane Oliver, chief economist at AMP Capital. He notes that the EU has paid the price for not doing the same thing.
"Whereas, when you look at other countries, for example the Eurozone by contrast, they haven't used quantitative easing like the US and their economy has paid the price for that with 11 per cent unemployment."
It is widely reported that the Fed has been winding down – or "tapering" – QE3 since January.
There is a great deal of expert opinion that it has been a lot of money for little growth. The fact is that despite the economic gains since quantitative easing started, the reality is that it has done more to stimulate financial activity than the real economy. The banks have used the funds to artificially stimulate growth in the Stock market which is now over inflated since 2009 by a factor of three.
"In 2012/2013, the US was growing around about 2-3 per cent, which is between $500 billion and $600 billion of additional production of goods and services," said Satyajit Das, author of Extreme Money.
"Now to get that you needed roughly a new injection of money between $1 trillion and $1.8 trillion to create a very modest amount of growth."
Critics, including Rupert Murdoch and now the Australian Treasurer Joe Hockey, also blame quantitative easing for widening the gap between rich and poor. That was already glaring in the US and is now flowing through to other nations. The reality is that QE is already sowing the seeds for the next crash which will follow on very soon, as indeed it was planned to do by the NWO.
"People forget that QE has actually helped boost the US stock market by a factor of three from its nadir in 2009," observed Satyajit Das.
"But the problem is this is unsustainable because those prices have lost all sort of touch with the reality of earnings."
Also we all note that property prices in other markets, such as Germany, Canada, New Zealand and Australia, have hit record levels as the loose money from the US spills into other parts of the world.
It has been noted by journalists that in the US, where the sub-prime mortgage meltdown originated, a debt market bubble once again appears to be inflating.
In a repeat of the GFC it is noted that a record $360 billion worth of junk bonds were issued last year in the US, as lenders chase borrowers in riskier areas, including car loans for customers with bad credit records.
While acknowledging that QE has its shortcomings, AMP Capital's Shane Oliver says the world is a better place because of the program.
"If the Fed didn't do QE, you potentially would have had 20, 25 per cent unemployment, which would have made life very tough for the average American worker," he speculated.
"So I think you always have to compare that to what would have happened in the absence of this action."
So it would have meant 20-25% unemployed and the problems we are now experiencing would have been much worse.
The fact is we are in a property bubble and the stock-market is overinflated and banks have lent the money out to create these bubbles instead of stimulating the economic production of the world’s countries that it could have stimulated.
This is a crisis emerging of our own making by brainless banking systems that is morally bankrupt and that seeks to limit the growth of populations and industries. The EU is on the point of collapse and the UK may well withdraw. Germany is now at the stage of encouraging them to do so. A UK referendum would virtually guarantee it.
These wars are now being encouraged. Russia seems bent on inflating conflict. The Muslim conflicts will flow on into their system and guarantee the destruction of both.
Let us watch the conflicts develop over the next few months.
Next week we will release Commentary on Habakkuk (No. 021H) and also Commentary on Malachi (No. 021L). They will explain more of the conflicts in the Last Days. Habakkuk follows on from the paper Commentary on Haggai (No. 021J) and the Oracles of God (No. 184). These will prove interesting in the comparison.
Wade CoxCoordinator General