First there was the housing bubble—over a year ago. Then there was the financial bubble—under a year ago. And now we are beginning to witness a third bubble bursting—a world trade bubble.
Trade figures appallingly down
The figures are alarming. For December 2008, Japan’s exports were down by 35 percent; Taiwan’s were down 42 percent; South Korea’s exports tumbled 17 percent; and in January 2009, China ‘s exports were down 12.5 percent. Trade among emerging markets was just as grim, and the developed countries all suffered big export declines.
Now comes the news of the economic dire straits that Russia and some Eastern European countries are in. Nations such as Austria, Germany and Italy are also deeply exposed financially, due to prior lending to many Eastern European nations that now appear unable to pay them back.
The Wall Street Journal recently wrote: “The economic distress and currency tumbles in Eastern Europe will ‘trigger a write-down into the Western European banking system,’ says Hans-Guenter Redeker, a currency strategist at BNP Paribas in London. ‘The question is how much.’ He says a conservative estimate would be about 20% of the total invested by such banks in the region. Moody’s estimated the total at $1.3 trillion at the start of 2008” (“Banks Reel on Eastern Europe’s Bad News,” Feb. 18, 2009, online edition).
A looming trade war?
One should take note of what this can mean during 2009 if world economic production and trade continue to skid downward. Already, The Economist magazine is bringing up the possible consequences—a looming trade war.
The recent February 2009 U.S. stimulus program of $787 billion had some provisions of “buy American.” While this makes much sense nationally, if all the nations begin to turn inward, it will derail international commerce and produce an even bigger downward spiral.
In an article titled “Buying American” The Economist explains, “In 1929 Willis Hawley and Reed Smoot, two protectionist Republicans in Congress, sponsored a bill to raise tariffs to the highest levels America had ever seen. And in the midst of economic distress, the protectionists won. The result was a round of reciprocal tariff hikes elsewhere, and a disastrous collapse in international trade…
“[Now] House Democrats want to require that all iron and steel used in stimulus-funded infrastructure projects should be made in the United States…But American exporters fear retaliation against their goods, both in places like China, at whom the steel provisions are aimed, and in rich countries, which are already slipping domestic-purchasing requirements into their own stimulus packages” (Jan. 31, 2009, p. 40).
“Beggar thy neighbor” policies
This, in economic terms, is called a “beggar thy neighbor” policy. As each nation strives to stem the political distress over the dire economic situation, it begins protecting and heavily subsidizing its own industries and raising protectionist tariffs. This raises the possibility of a trade war.
The term “trade war” strikes a nerve in me. Over 30 years ago, I remember taking an economics class at college where the professor, an avid Bible prophecy reader, mentioned that the most feasible end-time scenario would be one where an international trade war begins the process.
We asked, “Why is that?” He answered, in effect, “Because it would disrupt the world economic system to the point where unemployment would reach unacceptable levels and nations would turn inward for solutions, hoarding the money for themselves and causing further economic decline. People would then demand that a different economic system emerge that placed jobs, security and order over freedom and a free-market system.”
This is precisely what happened in Germany in the 1930s, as the trade war and economic and political weaknesses helped bring Adolf Hitler to power and led to World War II.
For several decades, we have not experienced the devastating effects of a trade war. As long as nations continue to trade among themselves, each contributes to the welfare of the other and each can help prop the other up. But a trade war turns your economic friend into an adversary and much ill-will is generated. In a short time, a trade war can also lead to another type of war—of the military genre.
Possible scenario for end-time prophecy
In Daniel 7:2-3 Daniel 7:2-3 2 Daniel spoke and said, I saw in my vision by night, and, behold, the four winds of the heaven strove on the great sea.
3 And four great beasts came up from the sea, diverse one from another.
American King James Version×, we read of four world empires represented as wild beasts emerging from the churning ” Great Sea ” (the Mediterranean Sea), indicating restlessness.
In Revelation 13:1 Revelation 13:1And I stood on the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and on his horns ten crowns, and on his heads the name of blasphemy.
American King James Version×, we also read of the emergence of a great power at the end time as coming out of the sea, possibly signaling that it comes out of something deep and restless. The apostle John said, “Then I stood on the sand of the sea. And I saw a beast rising up out of the sea, having seven heads and ten horns, and on his horns ten crowns, and on his heads a blasphemous name” (Revelation 13:1 Revelation 13:1And I stood on the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and on his horns ten crowns, and on his heads the name of blasphemy.
American King James Version×).
This unexpected emergence from a restless society will certainly take the world by surprise.
We hope that the looming trade war does not materialize. But what can we do if it does?
In the short term, you can prepare financially for the present recession by reading our free booklets Managing Your Finances and Making Life Work . It is certainly time to get our financial houses in order. Also, you can contact trained ministers for help at our ucg.org Web site, under “Contact” and “Local Congregations.”
In the long term, we must be ready spiritually if the coming events lead to an end-time scenario. When we pray each day, “Thy kingdom come,” we are reminded that God is ultimately in charge of everything, and His Kingdom that is coming will solve all the world’s ills under the righteous government of Jesus Christ. That is at least very comforting to know!
Christ’s advice in eight points
Also, Jesus Christ warned, “But take heed to yourselves, lest your hearts be weighed down with carousing, drunkenness, and cares of this life, and that Day come on you unexpectedly. For it will come as a snare on all those who dwell on the face of the whole earth. Watch therefore, and pray always that you may be counted worthy to escape all these things that will come to pass, and to stand before the Son of Man” (Luke 21:34-36 Luke 21:34-36 34 And take heed to yourselves, lest at any time your hearts be overcharged with surfeiting, and drunkenness, and cares of this life, and so that day come on you unawares.
35 For as a snare shall it come on all them that dwell on the face of the whole earth.
36 Watch you therefore, and pray always, that you may be accounted worthy to escape all these things that shall come to pass, and to stand before the Son of man.
American King James Version×).
We can break down Christ’s admonition into eight points:
1. We need to first examine ourselves spiritually and see how we are doing before God.
2. We need to make sure we are not so absorbed in the daily cares of life that we aren’t concerned about Bible prophecy. True, we shouldn’t get wrapped up in Bible prophecy to the point that we forget to take care of our physical needs, but going to the opposite ditch is just as damaging.
3. We need to realize “that Day” is coming, whether we like it or not. To stick our heads in the sand like the proverbial ostrich is not a sound policy.
4. We need to realize that most of the world will be unaware of the coming of that Day, just as they were during Noah’s day about the coming Flood (Luke 17:26-27 Luke 17:26-27 26 And as it was in the days of Noe, so shall it be also in the days of the Son of man.
27 They did eat, they drank, they married wives, they were given in marriage, until the day that Noe entered into the ark, and the flood came, and destroyed them all.
American King James Version×). Noah, after all, was a “doom-and-gloomer” who got it right!
5. We need to watch world events to see the “fig leaves” (Mark 13:28-31 Mark 13:28-31 28 Now learn a parable of the fig tree; When her branch is yet tender, and puts forth leaves, you know that summer is near:
29 So you in like manner, when you shall see these things come to pass, know that it is near, even at the doors.
30 Truly I say to you, that this generation shall not pass, till all these things be done.
31 Heaven and earth shall pass away: but my words shall not pass away.
American King James Version×), or the signs appearing before “that Day.” That is the main purpose of World News vand Prophecy !
6. We need to “pray always.” Don’t let down in your spiritual life—you need God’s help more than ever!
7. We need to focus on the hope “that you may be counted worthy to escape all these things that will come to pass.” This means God has a way out for all of us from the coming world-shaking events—a place of safety He has promised for God’s faithful people.
8. We need to remember the all-important purpose of our lives: “To stand before the Son of Man.” Christ has promised to return, and He wants us to humbly stand before Him. We won’t be ashamed in “that Day” if we now put Him first in our lives and fulfill His work upon this earth—helping get the true gospel out to the world and helping to prepare a people for Him as He establishes His Kingdom of peace, love and joy.
So, as you can see, there is plenty to do as we continue to watch these disconcerting and unprecedented world events! WNP