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Analysis of the Economy: How We Got to Where We Are Now

Lewis Walton
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Lewis Walton is a tax attorney in Los Angeles. A magna cum laude graduate of the University of San Diego, where he earned nearly a dozen academic awards, he is the author of thirteen books and has lectured around the world. Prior to becoming an attorney, he was a news broadcaster, reporting major stories including the Cuban Missile Crisis and, a year later, the assassination of President John F. Kennedy. Walton practices tax law with his son, Richard, an honors graduate of Georgetown who has served as an attorney advisor to the United States Tax Court.




  • August 7, 2009
    3:30 PM
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just after World War II only for the CM worship is underway in Chesapeake Bay in the evening and the Yahoo junior lieutenant was standing watch and the captain had retired to his underway safe room leaving the young man in command of the ship and everything was going pretty well until a resent sudden just awful heart stopping career ending moment when the ship was moving it just stopped rocking little bit is about again they had gone around and the young man was just opening his mouth to say something when the captain burst on the liberation began giving orders I can't quartermaster what you're heading very well run a religious engines back one third messenger pipe damage control of the bridge on the double land quartermaster get me around bearings and backing the answering orders icer make ships engines back one BC to the bridge around the bearing service blowout on the bridge wings à la base began to swing the lineup with a church steeple in the White House and some other sure site object illuminated in the evening life in those lines buried are brought in and lay down on the chart and bingo there you had a perfect three line cross right over that notation on the chart that's endangered shoal water and again turned to the young officer he said Mister having a ruin your career and probably mind I have a question for you were you surprised this error and he said will and I have another question why it was right there on the chart now two months ago at Manhattan's church in Southern California by their weekend series on the economy I told that story and I haven't seen the DVD and tell me there is one out there somewhere if perchance you seen that DVD you'll recognize I told that story before I told again for a very simple reason that Dan Halton 's church and by the way thank the Lord for Dan Houtman 's family aren't they wonderful people regularly have done for ASI for the Adventist church is just incalculable and I got highest praise we can pray them that have paid them is that they raised two wonderful sons who are faithful of the advent message can say more than that well in any of that at his church I told this story but I didn't tell it all because I have say something for ASI so here I'm going to finish the story by asking the sixty four million dollar question why did that young officer run aground we had a chart he had accomplished the other seaman apprentice at the helm following orders what's missing let me explain it to you because the mistake he made is one we could make both spiritually and prophetically very insidious very dangerous very easy to make at synodical problem is defined by a very simple word calls that SCT here's how it works you know your vessel 's position you know where you want to go all you want to get to that dock on the shore so your watcher position to lay down a compass course director that Doc and theoretically you're going to get their correct except that in the medium in which you float there is a sideways current due to when adding Tyler flood tide or just a perennial Equatorial current wherever it might be so that as you steer a perfect compass course toward the horizon toward the object which you want to reach here is also very gradually and imperceptibly does this now let's change color is just for the high drama of the moment right here was the spot on the chart marketing your chilled water this can happen happened on a vessel I was stationed on the X solo full commander had failed to take into consideration unending tide and as we pulled into the we use a wooden minesweeper as offender we were all full steam powered warship with five inch guns mounted and when we brushed up against that little piece of United States Navy property called minesweeper you can your current country country crunch as the timbers began keeping it the captain the minesweeper was running down the dock before we had the first line aboard this is no joke it can happen to you okay now what's the lesson for us here there are forces deep in the medium that carries us to be in water or human events is suddenly my site only moves in a direction we don't perceive until it's too late we may perhaps we had the time all figured out ignoring the factor into the equation Lucifer is not stupid these retinal prophecies too he knows the Natalie 's as well as we do and just maybe better and luciferase capable of engineering Dean currents that move us off course even when we think we know where we are and where were headed what's the remedy at a time of unparalleled world complexity where it is very obvious Congress doesn't understand what's going on very obvious the White House is struggling with the very obvious that the Kremlin doesn't have a clue nor does the Politburo in Beijing how do we handle it how do we relate to the world we live in making a very simple perhaps facially naïve answer that we might one I cannot take seriously we need the implicit faith and prophetic guidance even when we can't see the reason for God to give you an example in recent years has been popular among folk who style themselves as progressive thinkers whatever that may mean to relegate Ellen White to harmless oblivion either from the need for career preservation are just political necessity is often done by condemning her with faint praise and bless her heart she meant well she wrote some wonderful devotional literature but after all we are moving into the twenty first century she was stuck in the nineteenth and insults and we set ourselves up for their imperceptible sideways drift toward problems and obstacles we cannot foresee and none of us could expect but a prophet could see because in holy vision they foresaw the problem and here's a perfect example of that you disparage a profit at your peril was going along my piece of advice hard to understand any rate it seems even counterintuitive to what she had said heretofore she said with respect to labor unions brethren state problem know why I mean back in the air when she said that huge fortunes were being made and spanned by a very few wealthy families in great business trust were combining to put in the hands of a very few people control over enormous claw all our economic output in this country and the workers who enabled all that wealth were underpaid uncared for living in grinding poverty and Ellen White condemned and you see America was just recovering from the nightmare of slavery and when Yelena demon like that losing your society you and your collective national life you also set in motion forces were sooner or later everybody is imperiled and everybody is capable of suffering and so it was an era of big business combining and the worker suffering very badly in America Elimite roundly condemned it advantages and has always been very stoutly aware of and concerned about civil and constitutional rights and well we should be are you aware to the early Adventist pioneers the Miller writes almost to a person were ardent abolitionist we recognize that when anybody in our society suffers the Constitution is imperiled because the Constitution 's function is what to protect the minority from the majority and God help us if we never lose that that value in this country so Ellen White said in a time when she would otherwise have supported the rights implied in the working people with union with respect to union she should stay out of and she gave a reason she so they will bring on a time of trouble such as the world has never seen well in the nineteen eighties when a lot of people were trying to rewrite Adventism it was very easy to say on why way were you immediately operate there in terminal decline and they seemed to be because President Reagan among other things had decimated the air traffic controllers union and they seem to be recessive in our society but the winning service down there were Alan what credit is having insight into law powerful forces were in play that void in the horrific autumn of the twenty first century change America in ways to where we probably will never be the same again massive forces were pushing us off course off the course we thought we were staring and you and the reason for this was pretty simple the United States was systematically pricing itself out of the world marketplace it happened first quite rightly with a merchant Marine onion from the awesome sleeves of thousands of merchant vessels that we had on the high seas during World War II by the mid- nineteen fifties you can travel the world and very seldom see an American flag ship you would see plenty of American old ships with a Panamanian or Liberian flag on the Stern the simple reason being that the owners of those vessels just didn't feel they wanted to pay the price it cost to flagship as American so we began to lose our maritime power first but shortly thereafter we began to lose what the steel industry it began to recede and the offshore suppliers and we developed in this country a and deepening economic recession and what we now call the rust belt hard on the heels of that automobiles as hard-working capable conscientious Asians began to turn out vehicles at a lesser price and when you drove along the dealer 's lot everything worked soon thereafter high tech stuff like television like computers like appliances like tools like household goods went to Japan Taiwan Korea Singapore India and then this grade Asian giant China you wake up little by little our industries were going off shore well back then the first the experts soothed us with the shards as no big deal we aren't manufacturing economy anymore we are a service economy we provide intellectual property to the world we provide services that the world that's what we do were way beyond the era of blast furnaces and heavy hammer shaping automobile parts and appliances but then guess what happened our services began going offshore community recently not the shorthand which is reflective on this issue have you bought a computer or TV or something that you need a little technical advice on you took it out of the box and it didn't quite work right and somewhere buried in the owner 's manual was this 800-number you're supposed to call you call it up you listen at twelve fifteen minutes of elevator music and finally a voice comes on the line that morning my what is your customer number we went talking to Sam 's name is on the and you're not talking the Cincinnati are talking to Calcutta okay our services begin to go offshore little by little once everything was made in America now try to find anything made in America and as America offloaded the goods and services that she is always heretofore furnished the world something else was happening the nations of the world increasingly capable increasingly competitive increasingly productive were beginning to something called the global economy in military literature in the Naval Institute proceedings to which I subscribe for years as a reserve officer there began to be more and more talk about globalization that was the buzzword coming out of DOD and the Pentagon we have to address is globalization what they met was the globe was unifying into a fabric of a global economy and that affected our entire perception of what our military should be doing byways of force projection and protection of a growing world economy something was happening the world was globalizing economically Melanie stop right here please don't misunderstand me I am not saying that the cause of the strange crisis in which we find ourselves today is labor unions that kind of oversimplification is just not not fit for anything like the intelligent educated mind there is no single factor that is contributed this thing all I'm saying is that that's one of many factors and is America offloaded all of the things and services we used to make and do we began to engender a global economy that set the stage for other events to them cascade into the mess we find ourselves in today what I'm really trying to say is simply this was a prophet speaks lesson Vegas anymore she will have seen and understood the things we don't immediately see and understand and the thing with labor unions is amply illustrated by this particular point when a prophet speaks there may be more than meets the eye okay the US was not process of exporting industry services and jobs meanwhile global economic giants were rising together with the growing global economy and they were stitching it together and do something that was becoming a unified whole now watch the pieces of this puzzle come together on September eighteen two thousand eight the Secretary of the treasury and the chairman of the Federal Reserve held an emergency meeting of the US capital it was late in the afternoon on that September day was held in Nancy Pelosi 's office it was attended by senior members of Congress both parties in both houses and this afternoon the chairman of the Fed had a stark message for them he said we night need a seven hundred billion dollars and I mean not next week we need it now and if we don't get it the world financial system is going into meltdown and one of the one of the individuals and the room said there was a pause in the room as the oxygen life but I'm getting ahead of my story my presentation this afternoon has two parts number one how did it happen how did we get here this mess and point number two which I really would like to emphasize as being the more important point is what are the end time implications and how should we react to that end what do we in ASI have to say so point number one how did it happen well let me go to the board in the race something here is another draw you another pretty picture once upon a time when you went to the bank to say get a home loan the transaction looked very much why yes CSS we know that banks are all stable and classically reliable we put Green pillars on the front they used to do that next typically Henry pillars up front to just let you know how safe you work RI what happens here these people need money to buy a home the bank has money these people over time are capable of providing income to the bank form of interest which the bank needs so it is a very simple linear bilateral sort of transaction this way probably knows you it is based in the town where you live that they will thoroughly vacuum as to what you know now what your income is how much in savings you have what your credit history is what your spouse may or may not do for a living the bank will thoroughly vet you for all of this stuff including how much money you can afford to pay down for a very simple reason for a expect to get their money back just that simple all all that worked for a long time very satisfactorily but in the strange new world of the twenty first century things began to work differently because home loans were treated as a commodity they were bundled into investment packages and now enters a third party an investor to loan the bank I signed your loan and to home you will now pay money so it becomes a triangular relationship and it doesn't just happen once all was that by several hundred thousand times and you have big changes of home loan investments being sold by major investment firms to the investing public including houses like Bear Stearns who are buying them as an investment no longer are we terribly worried about the financial picture of these people here for the simple reason that real estate prices are on an Escalade inclined or going stratospheric it doesn't much matter if these people have a down payment or a vacant even afford the balloon payment that like uncle Lou is straining at its tiedown rope a few years into the horizon of the future because land prices are rising there is no chance of anything going wrong is there even if these people can't pay the investor can foreclose on the property and will have plenty of money not only to recover the investment but the probably profit at the expense of the borrowers that's the theory and the never land of soaring real estate values that matter whether five years from now you can afford the monthly payments just telling real estate nature were going to get very rich didn't it and so home loans became an investment trade on Wall Street crate of whiskey and cobbled up where new securities that even few bankers understood including credit default swaps by which these investors were guaranteed they couldn't lose money guaranteed by entities like AIG yet couldn't lose money are you for just a moment let's go back to the spirit of prophecy did Alan White ever and an author any advice with respect to speculation mounted here somewhere you volume two page six sixty five he's talking about believers were beguiled by speculation the prospect of getting more money fast and easily a lures them they can see no possibility of failure all way golden means out of their hands and they soon learn to their regret that they have made a mistake but now notice the next statement Satan out Jenna rolled them he managed to deprive the cause of God of that which should have been used in saving souls do you realize how often speculation has derailed I mean derailed spectacular opportunities for finishing the work of God this is a recent thing this has happened over and over again in the history of God 's people in eighteen fifty six the rosary Bible just spring up within Adventism it happened because James White against regional Laodicean message this power that message if you Google that you listen to it if you let your mind listen there is power in the Laodicean message is just invigorated the church provoked a huge revival within God 's people in the context of that revival Alan White invasions and I saw heaven sending angels everywhere to prepare unbelieving hearts for truth and she saw America delivered of slavery before the Civil War that that's the division in which she saw that she had the slaves cast off their chains not disabling and very very Arboles finally get a hold contain level of the Emancipation Proclamation they did so with the coming of Christ that was heaven 's plan and the revival of eighteen fifty six could have brought about Ellen White saw happening but it was a conditional prophecy well what went wrong but interesting thing is that there is there were two parallel curves here there was a great revival in Adventism and very shortly thereafter hard on the heels of it there was a great revival in the nonacademic religious world which historians to this day cannot explain it didn't come from from the top down any religious organization it just happened suddenly in Boston Philadelphia New York and across the Atlantic merchants were closing their offices at noon and having prayer meetings nobody could figure out what was happening here I wrote all about that in my book mornings trumpet in a chapter entitled when Jesus almost came and I regret to say there aren't any of the logo 's books are sold out now but that was my thesis the Lord could come before the Civil War and that explains the vision in which Alan White saw deliverance for the slaves happening before that time since that time are critics of the bone trying to debunk her by saying what she saw something that didn't happen so it is a Gilly Ezekiel saw Temple it never got built the failure was not God it wasn't the profits the failure was that people then as now but what happened here this revival crested and came back down as did the one in the world and we crashed into this monster disaster call the Civil War it would take six hundred thousand lives what caused the collapse of a revival in Adventism speculation God 's people selectively discovered there were huge fortunes to be made investing in stuff like mining stock they bought it and that they forgot all about heaven as I had a pretty in just like the Jews the other one they make money big money and problem them uncle back home to Jerusalem and so will God 's people blinded that stuff just in time for the financial panic of eighteen fifty seven and the rest is history over and over again speculation and that is the allure of wealth has derailed opportunities for God 's work and on July ten nineteen oh five from San Jose California LMI roach will brother who thought he had a need ideas and sister white I can make big money in mining stock I can help to finish the work and she wrote back to my dear brother you have presented before me a proposition to invest in mining stock you feel confident such an investment would prove successful when you think you'll be able to help the cause of God I am written to say but she's not saying in my opinion I think this is a prophet speaking saying I got instruction will from where from the throne I am bitten to say this is a device of the enemy to consume or tie means then she said I invite you to take shares in the greatest mind is ever been worked okay so on Wall Street investors gamble that real estate prices couldn't fall on one of the major investors within these derivatives was Bear Stearns now I want to watch the events of a fateful week in two thousand eight just one week just within the passage of eight days Monday March ten at eleven a.m. the rover begins to circulate the Bear Stearns is running out of cash and all it takes on Wall Street is a rumor that's like a bullet to the brain ballroom or can do it their stock started coming down like a grand piano stock once worth one hundred and seventy one box fill the sixty dollars depositors began pulling out funds it was a classic run on the bank only be sworn in all grandma with her passport in her sweaty hand going to draw out her in oh eighteen hundred dollars of life savings these were billion-dollar investors they have lost confidence in Bear Stearns by Wednesday Goldman Sachs Lehman 's major are our Bear Stearns major financier began to retreat from their trouble prior customer and worse the nightly regional market began to retail every night their short-term investments were the investing public will overnight invest in various entities and on that particular Wednesday night the repo market began to give a vote of no-confidence the Bear Stearns the cash reserves dwindle the lenders led by Thursday their stock plummeted continue to plummet the cash reserves were almost gone by six p.m. it's real clear that they're not have enough capital to open the next morning they had twelve or fourteen hours to raise enough emergency capital to stay in business but I couldn't get it from the investing public the investing public was running from them like they had leprosy but there is one last chance they decided to go to bed Federal Reserve Bank of New York headed by a gentleman named Timothy Gagner they would he went to bear the Fed went to bear discovered hundreds of billions of dollars in subprime loans and hundreds of billions in these credit default swaps toxicants can be to get near him you feel like you can take a bath or just getting off toxic fumes and the worst problem was that with these default swaps and bear went down investors around the world also went down because there was ensuring them that was the nightmare the international house of cards of financial globalization had helped to stitch together and which now threatened of the world told by the way does this prophecy have anything to say about cancel global economic meltdown will Revelation describes someone and hence that it happens fast limited range of verses from Revelation eighteen actually portions of three versus revelation eighteen eleven and the merchants of the earth shall weep and mourn over her for no man by their merchandise any more gone wrong in commerce verse fifteen the merchants which were made rich by her shall stand afar off saying alas alas for me in one hour so great riches is calm and not and a great reward therefore one hour the Greek word air for one hour this felt like this for what does it mean it's not real specific but we know what short the great mortal rock basically means a indeterminate but very short period of time whatever happens happens fast by the way that same word is also used in describing the time of trouble when that happens it happens fast to think that the last law bunch of the time of trouble I'm convinced just a prior clause out of this world we only want to go to heaven we hang on to this world with all were worth like on a pull account off of a roof Israel happier there until you try to listen down the ladder milligrams the roof will a time of trouble takes care of that problem force doesn't so revelation suggest something in the economic world such as the apostle James James suggests a time when even the most stable forms of wealth go through your fingers like rust on young arenas one from the from the RSV is a just written so clear now you rich if we can help James five verse one when and how your riches have rotted your Carmen 's alarm on your gold and silver have rested better something wrong in that sentence is these metals here don't rest goals so chemically and nurtures almost nothing the will react with that silver will form protective oxide Asian housewives know what those together they don't rust James is describing something mechanically cannot happen he is describing something that economically cannot happen unless we could rust if the rules of chemistry changed and this could go through your fingers like so much rest of the rules of economics didn't work so good anymore you following me so James talks about this and he makes it real clearance and end time prophecy because he talks about you weighing up traffic treasure for the last day Bible suggests something happens at or near the end of time orifice go back now to this fateful week in two thousand eight at four a.m. on what was now a fateful Friday got your call Denver ninety German others with news that has to await the upper nineties instantly because he was a student is a student of the Great Depression Denver ninety 's this is an expert in the history of the Great Depression and when Gartner called him up and he says the whole systems at risk were in danger of a global banking collapse bingo or Nike wake up immediately because he of all people would recognize the depression was caused less by the stock market 's collapse then by the collapse of the banking system while at stormy day an interesting scheme was invented see Bear Stearns wasn't a regulated banks of effect couldn't properly loan the money so through a clever usage of the rules the Fed decided long as Morgan who was in tears clearing bank and thus they were indirectly lending conveyor in so doing they prop them up briefly but they were also publicly admitting to the investing public that there was about the fatal why else would they need financial infusion from the Federal Reserve and one out when the market opened on Friday bears talk when and with fifty percent selloff it just collapsed by ten a.m. the stock that it once been hundred and seventy one box share is now down to thirty wait a second how many people had funds in their news is not an academic problem limited the Wall Street financiers 401(k) money into your retirement plans in section four twelve defined benefit plans this is retirement money by average citizens it's their security for old age real people are getting hurt people of retirement years who now face the prospect and going be any retirement well anyway the feds bailed out there that there was a price you'll is always a price when government gets involved as I pointed out in my lecture this morning on the league creation of 501(c)(3) exempt organizations when you go into any relationship or government money is or seems to be involved even so far as exempting from taxation there is always a price to pay and on Sunday morning price began to be obvious the Fed arranged divorce marriage between Baron J.P. Morgan funded with thirty billion dollars of federal money but with federal money comes one federal control and Paulson decreed that when they are stock was sold in this arranged marriage their stock which was then still selling at thirty dollars a share would be sold for two bucks now thirty percent other side wasn't all that by their employees that was their retirement that was their security and when they got the news not surprisingly some of whom cried just seven days Bear Stearns was gone now once again let's go back to the spirit of prophecy did outline ever predict that when it happens it'll happen fast volume nine page eleven nine eleven famous quote we are living in the time of the hand of fast fulfilling signs of the times declare that the coming of Christ is near at hand rate changes are soon to take place in our world and the final movements will be rapid once this much it happened in one week of two thousand eight the worst was yet to come in the summer of two thousand eight every major Wall Street firm was battered by housing losses approaching about a trillion bucks and other was a time when five trillion dollars represent real money now entered the specter of Freddy Mac and Fannie Mae were my clients when said Freddie Mac and Fannie Mac these entities have been mandated to make some very risky loans by powerful forces in Congress in the name of social engineering all of this was not necessarily the blame of manic mismanagement at management level there is enough blame here to go around in Congress modest Locke and except part of it Fannie and Freddie also collapsed that means within two weeks starting with the collapse of the verse two weeks till of the largest companies on hers loss sixty percent of their stock value now here's where it gets I see these two held five trillion dollars in mortgages and had been heavily invested in by the People's Republic of China who by the way is one of our biggest lenders now where in a tight if these two failed the investing public recognize the prototypes prototypical systemic worldwide risk that everybody is worried about including loss of credibility of foreign lenders like the Chinese without those loans we could not find our standard of living predicated on death well what was the result you don't have to ask you know the US nationalized Freddie and Fannie of foretaste of what was coming to portions of the banking industry now a huge shockwave through the economy what clear implications if the two if two of the largest companies on earth can fail anybody can just that simple and one day later on Monday September eight all this is happening just in a matter of days the disaster spreads as Lehman Brothers deep in the high risk mortgage market begins going under from similar toxic investments now the butcher 's bill here is going up a member back in the good old days when we lost Enron and we were in the run our hands over the loss of sixty billion bucks when Lehman go the price is over six hundred billion dollars and this time a student oh Secretary of the treasury Paulson Saddam drawn the line I can fail everybody out everybody only unwise investment income around expecting to be bailed out to reason Lehman just let them fail and he felt that he could do so without major repercussions well when Lehman didn't fail the markets crashed they came down hundreds of points from the opening bell see what range is now a systemic risk the problem here now is a no bank trust another bank even thanks and good solid standing know what is on the land anybody else for the simple reason they are not sure they're getting their money back to follow the problem so everybody freezes up they go into mode basically protecting their assets and about this time something funny happens to the investment curve and let me drawn up here for you from two thousand to two thousand nine cover that period of time the level of investments with and and federal securities linger down like this it what up-and-down up-and-down as we approach the crisis of late two thousand eight guess where money goes it spikes like this money is suddenly being put into federal funds in the T-bills not because they're yielding much interest there down to almost nothing but it's the last safe place on earth people feel they can put their money and when you see this flight from risk this risk aversion this flight to quality this flight to safety when the curve looks like that the investing public including the public with billions of dollars to put into some sort of investment vehicle you recognize you have real problems so that's about what the curve looked like well a credit markets froze and were not talking just mortgages but cars consumers small business even the safest banks on earth will alone is every thing had frozen and now enter AIG the world 's largest investment company with tens of billions of dollars in housing market investments and in credit default swaps some of which insured investments in Freddie and Fannie which were heavily invested in by the Chinese have everything here AIG ties to the whole world lay Manuela collapse AIG there's just not an option to let them collapse at least not in the minds of Washington DC there is a desperate need for cash credit markets are frozen and now the panic from Lehman 's friends to AIG spreads the Morgan Stanley sprints to Goldman Sachs friends to the whole world Ireland begins having financial problems the Bank of England against bailing out other banks in the UK the nation of Iceland figure hugging you go broke and Iceland but they managed to let you for over an California which is what the twelfth largest economy in the world is somewhere up in their well we know what happened in California while I said it wrong body Lavinia is anything China which had been a world Dynamo went for my growth almost no growth I wrote a few years ago I was attending a meeting of military personnel down in San Diego and Admiral Edwards who was then on active duty with the Navy just stepped around from a lectern no-no snow not twenty just a very front of his audience began taking on the ways in which China's growing economy could enable force projection in the military sense all around the world China is a force to be reckoned with I don't know how it into the end of the hi there there another time the Chinese people figure in some way in a very significant way to end time world well even they suffer a recession to the point where they go from high growth to no growth or order a least slow growth wait a second China is one of the big enablers of our debt-financed economy what the they can't afford to lend to us anymore hold that thought is were coming to ingest the second the Dow goes into freefall on a single day it collapses seven hundred and seventy seven points and one commentator said this just all happened in the flash of an eye grade changes are soon to take place in our world and the final movements of the record one the world now looking into the throat of a volcano in just two days after the Lehman collapse Kuttner called Paulson the chairman of that calls the secretary of the treasury says we got no choice we have got to go to Congress we've got a get this stopped and so it was we now come circle back to that meeting we started with September eighteen and Nancy Pelosi 's office on Capitol Hill and Paulson is telling the assembled senior congressional leadership unless you act the financial system of this country and the world will melt down in a matter of days I need seven hundred billion dollars in order to buy toxic securities and once again an observer sender to stop pots and oxygen left the room well a federal money came with the bailout of the banking industry in the hole that would do that would become the bailout there were six lines of text they were buried in hundreds of pages indicated nowhere to go looking for me you never see him but the language went as follows if the sec Kerry determines that the use of a market mechanism under subsection age is ineffective the Secretary shall pursue additional measures even find that if you wanted to read slow through several hundred pages of legalese if you didn't know exactly where to go you'd never know was there and in the aftermath one Sunday Secretary Paulson summoned the leaders of the nation 's nine largest banks you should be here tomorrow your Monday they came to his office the next day the chairwoman of the FDIC was there they were placed at a conference table in alphabetical order opposite stands at government Secretary of the treasury chairman of the Fed chairwoman of the FDIC the government informed the bankers this is not a negotiation exercise your not here to discuss it were not here to negotiate what you are going to hear our orders the treasury has tens of billions of dollars we will become a shareholder in your banks and when the banker said some of them said we don't want the money to stay clear of us we don't want to they were told you will take the money each of them was given a sheet of paper describing the term just one sheet terms were described rather briefly they were told you will sign this before you leave town all nine of them did for a hundred and twenty five billion dollars the US government had bought into nine of our largest banks and the rest is history and where does that leave us we have effectively created one trillion new dollars with trillions more we always dangerous step on the way of a question I posed to you is where are we going to get the money from the pay that debt were now spending far beyond what we can hope to raise in taxes so pray tell from where does the money come as a tax trial attorney I couldn't help noticing that Congress is pondering tax hikes add them up and they look like this including the proposed surtax on single people earning over two hundred and eighty thousand dollars a year and before it's over that number will come down most of whom are small businesspeople who provide jobs and that hikes in capital gains increased payroll taxes higher marginal income tax rates which define the amount of money you pay whatever tax level you are at on other government expenses like healthcare add-ons soaring state tax rates as in New York and California and you wind up with the tax burden at present computed and I'm not sure it won't go higher but it presently be potential tax burden reaches fifty eight percent and even that won't pay the national mortgage what I'm afraid were doing and I'm not blaming anybody were just in a mess here and good people with good intentions trying to solve the problem are struggling with it and Alan White one step what they are struggling they put the economy on a more secure basis putting down on anybody I'm just telling you the problem is significant but I'm afraid you are doing is paying the house mortgage with this and do that for a few months I've had clients do it but it don't last long gay you don't pay the house mortgage with the MasterCard you have any idea if we raise taxes to pay off this debt you have any idea how long it takes to pay off the debt with taxes that any of you hear noticed that on your telephone bill there was a subtle disappearance of attacks pleased to be attacks on your long distance phone bill it was there faithfully every month and arrived safely in a care anymore it's gone you know why because the tax was put on long distance telephone calls as a way to pay for the Spanish-American war which lasted all of one couple a weeks and we just know that the thing paid for you have any idea how long it takes for taxes to pay down the debt I'm afraid that attacks and sixty percent will be the depth I don't think our unborn great-grandchildren will get the debt paid down even at that tax rates so the finance our debt burden have to do what turned to foreign lenders principally whom China and the Middle East which leads to a couple of problems number one any debtor is forever at the mercy of the lender what is slain why we tolerate what do little to stop North Korean arms and ventures and the launching of missiles by a nuclear North Korea over our ally Japan it may also explain why with an emerging nuclear Iran we find there is little were able to do are at least willing to do we need the Chinese now fully is badly has they need us they need our market but we need their investment point number one the debtor is at the mercy of the lender point number two what if and I repeat what if our foreign lenders finally decide as did Bear Stearns lenders that were no longer a worthy credit risk what they what happens when a nation prints money it doesn't have the process is called monetizing the debt you turn your data into newly created money and history suggests that the process is dangerous didn't work with Roman they began devaluing the Dean areas for the time Rome fell within areas which had once been a hundred percent silver was down zero two percent silver didn't work with France and the lady in the late seventeen hundreds a real estate bubble there are caused a collapse of the French shot currency and the result was the French Revolution but more spectacularly of all in the work in post World War I Germany Weimar Germany had this huge unpayable debt I mean the victorious Allies did something really stupid in the imposed on the on the Germans adeptly couldn't pay so Germany said that the only thing that you think our latest on the printing presses on and began printing the mark as a result in April of nineteen nineteen for one dollar you can buy twelve marks pretty good exchange rate in the by November of nineteen twenty one one dollar by two hundred and sixty three marks pretty good time to get on a ship and go over and you have a nice holiday in Germany on by August of nineteen twenty three one dollar one by four sixty two million marks and four months later in December of the same year it was one dollar of four two trillion marks that currency collapse and death finally the markets are so worthless they wouldn't printed on both sides of the paper was worth the ink now the same thing happened in Argentina you know in the language nineteen eighties and a rain and will probably run out of paper there just wasn't enough paper to print all of the Argentinian currency and they went into catastrophic currency decline out when currency devalues like that those are circumstances where you go to war restaurant you pay for your meal before you order because if you wait till after you've eaten the price and it's funny but were laughing with tears in our eyes currently the story goes of Heinrich in open and post-World War I Germany gets his wheelbarrow of March to go down and buy a loaf of bread and along comes Gerhard 's friend out there walking together Gomez a reading and I think in the bakery and just as the wheelbarrow down Watson site Gerhard says hi and to leave that out there summary will steal it he's a nobody will steel lattice to worthless it was right when he came back the money was there and I see somebody had stolen the wheelbarrow I currency devaluation money show you something here here is a ten dollars the whole United States ten dollar bill from nineteen twenty two great big thing is and look on the back notice what color reviews what color is it orange their best effort to re-create gold why was it that color is on the front it says this certifies that there has been deposited in the treasury of United States of America ten dollars in gold coin payable to bearer on demand business things deliver something with inherent value and sell a time when Wi-Fi the way right after FDR took office and became very obvious this gold standard wasn't going to work what in the government do pull low-level circulation made it a federal crime even on days like twenty dollars an ounce a couple weeks later they resulted from thirty five here's another piece of American money this one looks kind of similar only it was issued in nineteen fifty three easy come easy go this one says this certifies there is on deposit in the treasury United States five dollars and silver payable to the bearer on demand back in those days you can still go and get something with intrinsic value and then we completely severed the another dollar from any gold valuation whatever we let it float now current money simply says federal reserve note what's a note promissory note I hold you up a well I'm not putting down on entirely there are reasons why there is it is advisable in the inland normal decent economy did be able to enter regulate the money supply in order to tie everything the goal is only so much gold if you have a very vibrant growing economy you can run out of enough money to relief on that so I don't want to oversimplify and say that everything likes out and went off the gold standard that matches you know that and in the Libyan what I am saying is that what were dealing with now is nothing more than some of his confidence in a piece of paper issued by our government when confidence disappears what happens let's go back to Germany Germany was issuing pieces of paper basically asking people have confidence in the Weimar Republic and the German people lost confidence when their currency collapsed what happened to Howard talking about people you know of the inferior ability the German people are wonderful people are industrious they're right the German people can produce high even though they were stupid enough to throw them out they can produce what they can produce Martin Luther they can produce wonderful works of music they did produce the first cruise missile the first ballistic missile their technology started both the Soviet and US space programs their bright intelligent people but those bright intelligent people confronted with the collapse of their currency did what went for a guy with a mustache there is the risk you debase a nations currency and you imperil its survival and you create circumstances where a lamb like these can be paid like a dragon following you have the circumstances the raw materials for Revelation thirteen we may pull out of this current economic recession I sincerely hope we do I deal every day of the week with clients who are really hurting from this thing I see good people hurting I pray the recovery works I don't like to see people get hurt that bad but even if we do pull out of this one may I suggest that this crisis has like a tidal wave like a tsunami washed onto the beach of history so much the bringing that we will never ever be really be the same again it has changed our lives it's left government and labor unions and significant control of major sectors of our society we have seen a tectonic shift in the global economy our manufacturing is gone offshore our service industries and gone offshore now foreigners who are at best only casually friendly to the United States if not hostile are funding our standard of living in a a user-friendly world meanwhile the government has bought control of banking manufacturing and quite possibly the healthcare system now do you see any end time implications here point number two of my presentation this afternoon I don't know where the current economic crisis will build that there is at least a reason for concern America's veering in a new direction and let me put it this way we have voted in a new administration with very different approach to solving our national problems are addressing them think about what would happen if it's a very liberal approach to national problems fails to solve the problem what happens the American people are not notoriously patient what has starts to hurt we start to scream and it doesn't take long and what worries me is that in a very liberal approach fails to solve the problems we face today you will see Americans they are right back across the centerline to an ultra- right perspective probably grounded in religion and if you do you're looking at the end of time just a few weeks ago I met with I was in a meeting in LA with the government banking leaders they are basically the government very concerned about money laundering on the way are our hundred dollar bill as a medium of exchange for rough drug dealers and and terrorists all over the world so trying to money laundering Stockton they had a high-level meeting in LA that much among others was the lady who has the federal enforcement program against money laundering for the Western United States she's a Danish American Gail very nice lady one thing when the program is over I couldn't resist that I went up to earn greater and Danish you know what I want to start within her face just lit up like a lantern she replied behind my back Don's can you speak Danish lately I have a friend for life at the IRS okay him and for a tax attorney and I'm hurt to have a friend in the IRS anyway after the meeting we were discussing this with a major bank leader in LA and the guy who was who was retired as handle criminal enforcement for the IRS for Southern California we were discussing the problem of money laundering we came to the collective conclusion the only real way to work in a get a handle on Matt 's to go to a high tech tamperproof national identity card the only way you really get a handle on the problem here just take paper money out of circulation you digitize everything and every transaction you engage in goes through this thing so the cash register they have a record of how much you pay what you want when and where they also not disclose to be in this country or whether you're here illegally and if you lose this card you don't exist now is anything wrong with this technology no there's nothing morally wrong with that technology we've surrendered to it years ago and our credit card system what worries me about the national identity card which I pointed out to my interlocutors about banking meeting was that we have set in motion Angel point where government can absolutely control the buying and behavioral habits of the American people now thinking of that my mind reflected back on an old text of Scripture that we've often quoted because of all both small and great rich and poor free and bond to receive something that he might and that they might not buy or sell save he that had what the name the mark or the number or are we well my take on this thing is I don't know where the current economic crisis is going out with a lot of what I wish the government success but I think we can enter the vortex they could irreversibly ultimately lead to the forces aren't yet extreme but they are noticeable you can feel when you can feel the centrifugal force of this vortex beginning to operate it is as if he is a met another metaphor you can feel the first win of a rising storm and as we close on a reflect very briefly on the incredible blessing of being part of a spiritual movement blessed with advice from heaven and today millions of people are in mercy of a system to which they made themselves utterly dependent and are crowded into cities that are a just increasingly vulnerable to terrorism the natural calamity the economic forces to some sources of supply for the necessities of life in which my son and I were sitting on the sidewalk face in Venice Beach California and a small piece of the this will still see families and Ferraris and where it isn't there long enough you will see Hollywood personalities are there that's where they go we were sitting in a sidewalk with a having a bowl of soup served in humble me now go figure and we looked across the street of these beautiful people and rich commented to me he said it's so strange they don't realize helpful herbal way our in game goes wrong natural disaster interruption of the supply of water or power or food and the transportation system climbs up and these people are stuck here and they don't even know that I think of Ellen White's morning those who stay in the cities will be what trapped in a lineup that will solve I got about Marina del Rey if the flavors fill up on heading out to see him in Ellen White had some pretty good advice that is now being discovered by nonbelievers on how to minimize risk and exposure in the declining world and what was country living again and again the Lord is instructed that Arctic the Lord has instructed that our people are to take their families away from the cities into the country where they can raise their own provisions for in the future the problem of buying and selling will be very serious will we get hyperinflation believe me buying and selling will get serious her advice get out of the cities and rural districts where you will be free ministry of healing instead of dwelling were only the works of man can be seen more turmoil and confusion bring weariness goal oriented look upon the works of God find restless spirit of unity and peace of nature and where apart from the distractions of city life you can give your children your him shift finally the one that screams the text and screen is now being rediscovered by nonbelievers fathers and mothers who possess a piece of land in a comfortable home our kings and queens in your CNN now in the secular press echoes of those prophetic words can be seen in news stories and op-ed pieces simply by following a few passages of advice that I I've read we could've avoided a thousand barrels as I travel day after day during the week to my office on the corner Wilshire Boulevard three two one ten freeway I think about our quiet country home to which I go on weekends with JoEllen here and it's good so I only joy of dinner less than an hour out of the garden of starry night Sinclair aired during the daytime of place Joe and I got three years ago as we were smart enough to see two thousand nine coming we weren't we simply chose to believe something called the Spirit of prophecy how many dangers both spiritual and physical we could lessen the only if only if only as I cross LA morning and evening I reflect every time I do I wouldn't trade our country place for all of Los Angeles so in closing I want to say it's time to wake up to rediscover the wealth of truth that God has has embedded in the advent message to quit wondering whether we really had it right ladies and gentlemen yes we had it right and it still write more than that is worth sharing that's why were you thanks again for a comedian with my audio for maintenance services and industry if you would like to learn more and I find that he is not a assignment is a word is a free online service please visit www. nonbelievers


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