Barack Obama’s awful, no good, very bad day

Barack Obama has had a bad day. His bad day actually started last Friday when the stock market dropped 500 points on news of Europe’s failure to deal with its own debt crisis. After the close of markets that day, Standard and Poors, one of the rating agencies for financial bonds, made a long feared announcement that it was downgrading the credit rating of the United States. To make matters worse, the U.S. federal debt was revealed to have reached 100 percent of GDP a few days earlier, a milestone not seen since 1947.

Over the weekend, investors and ordinary Americans (who are one and the same if they have a pension, an IRA, or a 401k) contemplated how the downgrade would affect Wall Street and Main Street. To add to the somber mood, on Saturday, August 6, an Afghan insurgent shot down a U.S. Army CH-47 Chinook transport helicopter killing thirty Americans, including members of a U.S. Navy SEAL team. Seven Afghan soldiers and a civilian interpreter were also killed.

There was much speculation as to what would happen when the financial markets around the world opened today, the first trading day after the announcement of the downgrade. What happened was what some observers called a financial “bloodbath.” The stock market crashed for the second time in two trading days. The Dow Jones Industrial Average fell 635 points to a level that erased almost ten months of gains. Financial markets around the world were hit.

At this point, many economists are warning that the United States is likely entering a second recession. In a Dick Morris column, James Fitzgibbon, director of the Highland Fund called today “the second phase of the meltdown.” Fitzgibbon believes that “stocks, real estate will collapse and keep falling into 2013. The lows of 2009 will be easily taken out on the downside.” Chillingly, Fitzgibbon believes that the worst is yet to come: “The real horror will be later in the year when the U.S. Treasury Bond goes into a freefall. Then a depression is possible. Soaring interest rates. Collapsing asset values. Contracting economic activity. Surging unemployment. And business closures.”

This is a particularly bad day for Barack Obama for several reasons. ABC News notes that the selloff sharpened after the president spoke in the afternoon and called for more taxes. This shows that investors have lost faith in President Obama’s vision for the nation. They realize that the fiscal problems of the United States are too great to be fixed by raising taxes on the wealthy. The only solution to the problem of overspending and deficit reduction is to cut spending, a prescription that President Obama and the Democrats have steadfastly resisted.

The second reason that today was a bad day for President Obama is that he must realize that the new crisis is his fault. This is not a crisis that he inherited from George Bush. This one is purely of his own making. The debt crisis is due to the fact that President Obama’s Keynesian stimulus projects have failed miserably while increasing the federal debt by a third. President Obama has no serious plan to repay any of the money that he has borrowed in the name of the American people.

The president must also realize that, as the U.S. economy sinks into another recession, his hopes for re-election also diminish. Voters generally vote their wallets. If times are good economically, they vote for the incumbent. If times are hard, they vote against the incumbent. In a Gallup poll taken before the recent stock market crashes, President Obama’s approval rating was down to 43 percent (with 48 percent disapproving). With the bad economic news, his approval rating will only fall further.

This is not altogether unfair. The current carnage in the world’s financial markets is the logical end result of his policies. His administration has been an unending saga of new regulations on business, not the least of which is Obamacare, that stifle job growth. His solution to the first economic crisis was to borrow money and spend it on pet projects. An additional attempt to resolve the crisis was to print more money through the Federal Reserve’s quantitative easing programs. As a result, the United States has the highest unemployment in recent history, a downgraded credit rating, and a devalued dollar, all due to President Obama.

In Georgia, the unemployment rate is even higher than the national average. According to the Georgia Department of Labor, Georgia’s unemployment rate is at 9.9 percent while the national rate is 9.2 percent. Three years after the initial crash of 2008, Georgia’s foreclosure rate remains the sixth highest in the nation according to the Atlanta Business Chronicle. This has led to falling tax revenues for the state and local governments, which has in turn led to massive layoffs of government workers and teachers. Untold numbers of Georgia businesses have failed. Georgians have watched their retirement plans dwindle year after year. After the events of the past few days, it seems that all of this will get worse. Barack Obama lost Georgia by five percent of the vote in 2008. He will likely lose by much more in 2012.

The last bad thing that happened to Barack Obama today is that Timothy Geithner informed the president that he would not resign as secretary of the treasury. As one of President Obama’s most trusted economic advisors, Geithner bears much of the responsibility for the current economic fiasco. Federal Reserve Chairman Ben Bernanke and Austan Goolsbee, chairman of the president’s Council of Economic Advisors, are also reportedly not resigning.

It is a bad day for President Obama. Unless he reverses his economic course, a change that he is most likely incapable of making, he will go down in history as a latter-day Herbert Hoover. He will be the president who spent the United States into an economic calamity, the likes of which has not been seen in eighty years. That is bad for President Obama, but worse for the rest of us.

If you disagree with the analysis presented in this article, please read “Serious questions for liberals, Democrats, and other Obama supporters.” If you can answer the questions presented, the author would welcome your response, either through email at thorntondavid@yahoo.com or as a comment.

Photo credit:  Elizabeth Cromwell/Wikimedia

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Economic Leaders Call for Single World Currency

Over the past month, world economic leaders have begun calling for a new world currency to replace the dollar. The world financial crisis has led to worries about the stability of the dollar, which, in turn, has led other countries to feel the need for a new world reserve currency.

For decades, the dollar has been the standard international currency. Many governments maintain a large reserve of dollars as part of their treasuries, such as the $1 trillion in US government debt and securities held by China. International commodities such as crude oil are bought and sold in dollars and international business is typically conducted in dollars.

President Obama’s attempts to stimulate the economy are leading to massive increases in government spending and federal deficits. Creditor nations such as China worry that the ballooning federal debt will lead to inflation and a devalued dollar, which would have almost the same effect on foreign creditors as if the US defaulted on its debt.

In late March, a United Nations panel released a report which recommended that the world create a new reserve currency based on a hard traded, basket of currencies similar to the old European currency unit (Ecu) or an accounting unit called the Special Drawing Right (SDR). The Ecu and the SDR are weighted combinations of currencies that can be traded in financial markets. The Euro had a similar start as a combination of European currencies.

Prior to the April G20 economic summit, both Russia and China indicated their support for world reserve currency. Arkady Dvorkovich, a Kremlin economic advisor, said that Russia would call for discussions of a “supra-national reserve currency.”

Zhou Xiaochuan, governor of China’s central bank, wrote that a new currency would help “to achieve the objective of safeguarding global economic and financial stability.” He worries that there are “inherent vulnerabilities and systemic risks in the existing international monetary system” based on the dollar. He would like the new currency to be used for international trade, commodities pricing, and accounting, unlike current SDRs, which are only used for government finance.

At one point, US Treasury Secretary appeared to agree with the Chinese proposal, saying, “We’re actually quite open to that.”

Within ten minutes of Geithner’s comment, the value of the dollar started to drop sharply. The Secretary quickly recanted his statement and noted that he had not actually read the Chinese proposal.

President Obama, Secretary Geithner, and Federal Reserve Chairman Ben Bernanke all downplayed the proposals for a new currency. “I don’t believe there is a need for a global currency,” President Obama said. He added “the reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world.”

Nevertheless, just a few days later, the G20 did decide to create $250 billion in special drawing rights for the International Monetary Fund (IMF) in what the international financial press described as a “surprising” move. The SDR is an accounting tool used by governments and is not a currency itself, but is made up of a basket of values of four currencies: the dollar, the euro, the British pound sterling, and the Japanese yen. The SDRs would be allocated to governments based on their contributions to the IMF for lending to poorer countries. In essence, SDRs are a form of foreign aid in which wealthy nations borrow to loan money to poor nations.

While the creation of the SDRs is not the creation of a worldwide currency, it seems to be a step toward a global economic system, especially in light of the recent Russian and Chinese proposals. It is also similar to the creation of the euro. The European Community had its roots in the 1951 Treaty of Paris between Belgium, France, West Germany, Italy, Luxembourg, and the Netherlands that created the European Coal and Steel Community. In 1957, the Treaty of Rome between the same nations expanded that cooperation to create the European Economic Community.

It wasn’t until 1979 that the European nations took the next step toward creating a common currency. That year the European Monetary System was created, and, with it, the Ecu, a common currency unit similar to the new SDR.

In 1986, the Single European Act extended the jurisdiction of the European Community to monetary policy. In 1992, the Treaty of Maastricht created the European Union and set a deadline of January 1999 to establish a common currency, as well as a single monetary and economic policy.

In January 1999, the European Union, by then eleven nations, pegged their exchange rates to the euro. At the same time, the euro began to be used for non-cash transactions and accounting. The euro was also used in stock markets and was used on bank statements and corporate bond offerings.

Three years later, in January 2002, the euro went into circulation. A few months later, the old national currencies were phased out.

The creation of the euro was a gradual process that took fifty years. The new Russian and Chinese proposals go beyond the creation of Special Drawing Rights, and may very well eventually lead to the creation of a worldwide version of the euro. There is a possibility that the world financial crisis will accelerate the timetable for the creation of this world currency, especially if the dollar becomes unstable under staggering mountains of US federal debt.

Until recently, the idea of a world currency has been the province of conspiracy theorists and Bible prophecy scholars. It is somewhat shocking to find the idea meeting with widespread acceptance from world leaders.
For many years, theologians have believed that the Biblical Book of Revelation has held an implicit prophecy of a single world currency. Revelation 13:16-17 says “He also forced everyone, small and great, rich and poor, free and slave, to receive a mark on his right hand or on his forehead, so that no one could buy or sell unless he had the mark, which is the name of the beast or the number of his name.”
The implication here is that the latter day world ruler, the beast or Antichrist, has total control over the world economy and financial system. Scholars believe that, at that point, the entire world economy will be tied together with a single cashless currency system. Using the system requires a mark of loyalty that, when applied to the right hand or forehead, is easily visible.

One possibility, explored in Tim LaHaye’s Left Behind series, is that when the mark is applied, a RFID (radio frequency identification) chip is implanted under the skin. This chip would be tied to the user’s bank and financial accounts, so that when a purchase is made, the transaction would be completed by simply scanning the buyer’s hand or face. Essentially, it would be like having a debit card in your body.

Interestingly, this technology is already available. In 2003, Applied Digital Solutions (now called Digital Angel) announced the development of a system called VeriPay, which used microchips half the size of a grain of sand to identify consumers to ATM machines in lieu of an ATM or debit card. The technology did not catch on, but the company changed its focus to market biochips to pet owners. A chip with an identification number is implanted between the pet’s shoulders. If the animal is found, the chip is scanned and the owner’s information is retrieved from a database. The chips have already been implanted into some humans as well.

A cashless economy based on electronic funds transfers would enable a world leader to exercise unprecedented control over world finances. Without cash, it would be impossible for an underground “black” market to thrive. Similarly, dissidents could find themselves with no access to their financial accounts.

The greater danger for those who participate in the beast’s economy is the loss of their souls. Revelation further indicates (20:4, 11-15) that those who take the beast’s mark, showing allegiance to the Antichrist, will be judged and cast into the lake of fire. The only way to escape this fate is accept Jesus Christ as Lord and believe that He rose from the dead (Romans 10:9).

The creation of a single world currency is most likely still a long way off. Recent events show that many world leaders would like to move in that direction, however. These steps are yet another positive indication that the Bible accurately foretells the future and that it is a reliable source of information from God. We can be assured that its prophecies of the return of Jesus are not only accurate; they are drawing nearer.


Sources:
http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318
http://www.russianews.net/story/483953
http://news.yahoo.com/s/ap/20090325/ap_on_re_as/as_china_global_currency
http://www.washingtontimes.com/news/2009/mar/26/geithner-gaffe-on-dollar-roils-stock-bond-markets/
http://www.telegraph.co.uk/finance/economics/5051075/A-world-currency-moves-nearer-after-Tim-Geithners-slip.html
http://online.wsj.com/article/SB123854148528775677.html
http://www.ft.com/cms/s/0/0afa92e4-21f5-11de-8380-00144feabdc0,dwp_uuid=60a3db68-b177-11dd-b97a-0000779fd18c.html?nclick_check=1
http://www.cbc.ca/news/background/euro/history.html
http://news.cnet.com/2100-1041_3-5111637.html

NOTE: This may seem like a strange topic for an Easter blog, but if Jesus was able to rise from the dead, then it follows that He will be able to return as He said He would. The signs that He gave to signify His return bear a striking resemblance to today's headlines.

Jesus is risen indeed.

Happy Easter!

Dulles VA