Tsunami of Bad Debt Hits World Economies
A commentary by Peter Hawkins
United Church of God pastoral coordinator, The British Isles
Four years ago 2005 began with the world reeling from the devastating
tsunami that had slammed the Indian Ocean coastline, taking more
than 230,000 lives and displacing millions more.
As 2009 begins the world is again reeling—this time from
the economic tsunami that is affecting the day-to-day life of every
person on earth. As the 9.3 magnitude earthquake in the Indian Ocean
triggered the December 26, 2004 tsunami so has exposure of inadequately
secured loans by the world's financial institutions swept
away confidence in today's free market system.
Something had to break, and it did!
The first evidence that an economic tsunami would create havoc
in world markets was the sub-prime mortgage collapse in the United
States. Also in the past year home values have plummeted up to 13%
in both the British Isles and Europe .
Anatole Kaletsky, in a 29th December London
Times article, summarizes how the markets unravelled: "The
sudden seizure of Fannie Mae by the US Treasury and the even
more unexpected decision to put Lehman Brothers into bankruptcy
triggered a collapse of confidence in every major financial
institution in the world. Suddenly all the banks and insurance
companies previously considered 'too big to fail' were
exposed…
"It was only when the entire world financial system suffered
this unprecedented nervous breakdown that the real economy of consumption,
jobs and industrial orders fell off a cliff. The corollary is that
the world economy might well have avoided a serious recession had
it not been for the Fannie and Lehman blunders, which triggered
the greatest banking panic the world had ever seen."
Call it a credit crunch or a correction in the market, the net
result is that millions of people have new and troubling challenges
in their lives. The savings of many elderly citizens no longer produce
sufficient interest for them to live on. Some have lost their entire
savings. Homeowners find themselves with negative equity, having
borrowed against the market value of their homes to fund new cars,
education for children and overseas trips.
Jeff Randall writes in the Telegraph 26th
November: "Personal debt [in Britain] has ballooned
to £1.4 trillion, four fifths of which is underpinned by
an unstable housing market. An occupational pension system, once
the envy of Britain's competitors, is in pieces…."
We are used to seeing well-stocked shelves in our supermarkets.
Products from African countries, South America, Eastern Europe,
China and the Far East have been available in abundance. Unless
confidence is restored in the international banking system, we could
soon see the disappearance of many of these products from stores.
Countries and trading blocks will try to protect their own economies
through embargos and restrictions.
Unemployment is rising, creating serious social consequences. The Telegraph
online reported
in the 18th December edition: "With economists now predicting
that unemployment could hit 3 million by 2010 the unemployment ripple
is threatening to develop into a tsunami."
The good times may be over.
In Matthew 24 Jesus Christ foretold the final result of man's
many and varied attempts at self-rule. He explained that just before
His return to earth as the King of kings "there will be greater
anguish than at any time since the world began. And it will never
be so great again. In fact, unless that time of calamity is shortened,
not a single person will survive. But it will be shortened for the
sake of God's chosen ones" (verses 21-22, New Living
Translation).
Regardless of how close we are to the complete disintegration of
modern civilization, it is time for each of us to examine our priorities.
Jesus says, "Take heed and beware of covetousness, for one's
life does not consist in the abundance of the things he possesses" (Luke
12:15).
He explained to His disciples the priorities that we should have. "Therefore
I say to you, do not worry [be overly anxious] about your life,
what you will eat; nor about the body, what you will put on. Life
is more than food, and the body is more than clothing?…And
do not seek [as your top priority] what you should eat or what you
should drink, nor have an anxious mind. For all these things the
nations of the world seek after, and your Father knows that you
need these things. But seek [as your number one priority] the kingdom
of God, and all these things shall be added to you" (Matthew
6:25, 31-33).
 For a clear perspective of where the world is headed and what really
matters in our lives during this turbulent time, request, read online
or download our free booklet: Are We Living in the Time of the
End?
|
