Just five years ago, it would have been hard to imagine an official representative of the German government making such statements in a speech outlining his government's position in Germany's parliament, the Bundestag. Yet at the end of September, German Finance Minister Peer Steinbrück bluntly stated his view of the world financial crisis.
One thing is absolutely clear, he said: "The United States is the place of origin and the focal point of the crisis." Although the long-term effects of the crisis are as yet undetermined, Germany 's finance minister stated bluntly that America "will lose its status as [the] superpower of the world's financial systems."
Stunning financial developments
It doesn't take a lot of insight to identify America as "ground zero" of the turmoil in the world's financial markets. The latter part of 2008 will go down as one of the most noteworthy chapters in the history of the modern financial system. In less than 30 days the world witnessed several alarming developments in the United States:
• The U.S. Department of the Treasury nationalized mortgage lenders Fannie Mae and Freddie Mac.
• The investment bank Lehman Brothers declared bankruptcy, making it the largest insolvency in American history with a loss of some $600 billion.
• To stave off possible failure, the investment banks Goldman Sachs and Morgan Stanley applied to operate as commercial banks to gain access to the FDIC for securing investor deposits. In so doing, both banks voluntarily accepted regulation by the U.S. Federal Reserve Bank.
• The U.S. Congress approved an emergency aid package worth $700 billion to prevent a possible economic meltdown.
According to Steinbrück, the financial malaise in the United States "spread like a poisonous oil spill." The European Union and several Western countries took emergency measures of their own to cope with the crisis. The Bundestag quickly passed legislation authorizing the establishment of an emergency fund for German banks that was proportionately even larger than America's initial $700 billion plan.
"The world will not be the same again"
One result of the worldwide financial crisis is already foreseeable: "The world will not be the same again as it was before this crisis," was Steinbrück's prediction. Europe's response to the crisis is likely an indication of the shape of things to come.
The European Union and Asia are pushing for new regulations to oversee the world's financial markets. Former U.S. President George Bush reluctantly approved additional regulation.
For 40 years former U.S. Federal Reserve Chairman Alan Greenspan has championed unregulated capital markets. "I made a mistake," Greenspan said in recent Congressional hearings, "in presuming that the self-interest of organizations, specifically banks and [other financial institutions], were such that they were best capable of protecting their own shareholders and the equity in the firms."
Some analysts called this a "non-apology apology," an attempt to deflect blame away from his management decisions.
An alternate view is that the U.S. Congress is itself largely responsible for the crisis because it interfered too much in the mortgage industry. It ordered lenders to give mortgages to people who would otherwise not be able to obtain one, leading to the now infamous subprime mortgage meltdown.
Regardless of the political viewpoint, it is naive to fail to account for human nature's ability to make use of an opportunity for personal enrichment at the expense of others. "Love of money" is one of the characteristics of the perilous times to arise in the last days, wrote the apostle Paul (2 Timothy 3:1-2 2 Timothy 3:1-2  This know also, that in the last days perilous times shall come.
 For men shall be lovers of their own selves, covetous, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy,
American King James Version×).
Even without the current crisis, though, the U.S. position as the world's financial leader has been threatened by America's risky financial policies.
A developing shift in the geopolitical balance of power
With the turbulence in world financial markets, "small" investors are understandably concerned about the safety of their deposits and investments. However, the current situation is more than just a financial crisis. It signals an impending irrevocable shift in global power. The age of America's dominance as the world's financial superpower is coming to an end.
The damage to America's standing in the world community as a result of the current crisis will be irreversible. Government intervention in the U.S. economy and the nationalization of financial institutions defies the principles of free capitalist markets. The inherent weaknesses in America's economic system are being exposed, just as were those of the Soviet system.
The American system operates on the premise that capital markets will be self-regulating to everyone's benefit. The result of this false premise—as the current financial crisis clearly demonstrates—is a "predatory capitalism" where some seek quick profits using greed techniques like short-selling, leveraged buyouts, speculative hedge funds, etc., that provide no real economic value.
For years American administrations seemed to be schoolmasters, lecturing other countries on the virtues of sound financial planning, budget deficits and related issues. American influence within the International Monetary Fund was the reason countries like Argentina, Indonesia and Thailand went into recession when their governments were forced to cut government spending in exchange for funding by the IMF.
However, the United States did not practice what it was preaching. Overspending and the burden of unforeseen military obligations have led to an unprecedented increase in the federal budget deficit.
At the end of September the U.S. national debt exceeded $10 trillion for the first time in history. By Jan. 6 then-President-elect Barack Obama warned Americans of the likelihood of "trillion-dollar deficits for years to come" due to government spending and lowered revenues from a battered economy. Yet he is now, as president, advocating vast overspending through what is claimed to be an emergency stimulus package.
More spending, less saving
In the past, concerns over America's growing national debt were countered by the argument that the creditors were largely Americans themselves, who bought U.S. treasury bills. Today, however, 25 percent of America's annual federal budget deficit is paid for by foreign purchases of treasury bills.
The percentage has doubled in just the last 20 years and is set to continue to increase. Why? The average savings rate of the American public—the percentage of disposable income set aside in savings—is at an all-time low and is actually negative at about 2 percent. That means the average American is actually spending more money each year than he has available to spend. By contrast, the German savings rate is at a postwar record level of 11.2 percent.
America's emergency economic stimulus packages will lead to more deficit spending, which is being financed increasingly by foreign nations like China. Oddly enough, China has been one of the nations that Washington lectured in the past on sound fiscal policy.
But will China and other nations that have been major purchasers of U.S. treasury securities in recent years—countries like Russia and the petrodollar nations lining the Persian Gulf—continue to support the U.S. dollar as the world's leading currency? Or will the current crisis be the impetus that eventually leads to moving away from the dollar?
Whatever the answer turns out to be, the United States won't be determining the answer on its own. The current financial mess can only be solved through cooperation among the affected regions of the world.
Caught in a debt trap
The U.S. economy will remain the world's largest economy for the time being. However, the demise of former world empires was often tied to the adverse effects of vast government spending, with one adverse effect being the rise in national debt.
For example, the British Empire began to buckle under the weight of its colonial obligations in the 19th century, and expenditures for World War I pushed Britain further down the road to losing its position as the world's financial center. One of the reasons for the collapse of the Soviet system was the failure of its economy, which was strained by its war in Afghanistan and the attempt to keep up with the United States in the Cold War arms race.
It won't be any different for America when it comes to the impact of mounting deficits and increased government spending. In the five years since the United States invaded Iraq, the national debt has grown by $500 billion annually. This trend would have threatened America's position as the world's primary financial center even without the current crisis.
Currently the publicly held portion of the national debt accounts for about 37 percent of the U.S. gross domestic product (GDP). When that portion of the national debt held by U.S. governmental agencies is factored in, the percentage rises to 65 percent. That is twice as high as at the end of World War II, which was the most expensive war in U.S. history. By contrast, the current ratio of national debt to GDP for China is only about 19 percent.
If current trends continue and legislated increases in U.S. entitlement programs and deficit spending for unfunded Social Security obligations are factored in, then America's national debt will be well over twice the country's annual GDP by the year 2040. As financial expert David Walker asks, "Who will want to lend us money then?"
What does the Bible say?
Proverbs 22:7 Proverbs 22:7The rich rules over the poor, and the borrower is servant to the lender.
American King James Version×reveals an interesting principle that this development will have on America's status as a world leader: "The rich rules over the poor, and the borrower is servant to the lender." Most Christians do not realize that America's greatness as a nation—as well as her impending decline—were prophesied in the Bible. America's real heritage can be traced back to the ancient nation of Israel with its 12 tribes.
One of the blessings promised Israel for faithfulness to God was a solid financial standing among the community of nations: "You shall lend to many nations, but you shall not borrow. And the Lord will make you the head and not the tail; you shall be above only, and not be beneath" (Deuteronomy 28:12-13 Deuteronomy 28:12-13  The LORD shall open to you his good treasure, the heaven to give the rain to your land in his season, and to bless all the work of your hand: and you shall lend to many nations, and you shall not borrow.
 And the LORD shall make you the head, and not the tail; and you shall be above only, and you shall not be beneath; if that you listen to the commandments of the LORD your God, which I command you this day, to observe and to do them:
American King James Version×). Conversely, Israel was prophesied to become a debtor nation if it chose to disobey God (verse 44).
As noted earlier, the U.S. national debt has now surpassed $10 trillion. Only a generation ago the United States was the world's largest lender. Today it is the greatest debtor nation in the history of the world.
Bible prophecy indicates a shift in the balance of power among the world's major regions for the period preceding Jesus' return. The main focal point of that development will be the continued decline of the English-speaking peoples that descended from their British homeland, including the United States.
That is the real story behind the current financial crisis and the impact it will have on America's future. Are you paying attention? GN