In Brief... Prepare to Reduce Your Standard of Living
Do you remember the advertising line that said, "when [a certain financial planner] speaks, people listen"? People have become accustomed to "listening" to the vagaries of the stock market. Actually, they need to tune their ears to other voices-three in particular. Regardless of what happens in the near future in the major stock markets of the world, the following factors indicate rough times ahead.
Argentina has come perilously close to defaulting on its international debt. In late August, the International Monetary Fund (IMF) agreed to lend still more money to Argentina in an emergency effort to stave off what could be a catastrophic economic event for Latin America, the United States and Europe. The $8 billion loan brings the total amount of IMF loans to Argentina to $22 billion. In spite of the huge loans, Argentina is far from solid in its financial standing.
The second voice to which people should listen is that of Brazil. The IMF has also extended $15 billion in standby credit to Brazil, fearing that Brazil's economy would be pulled into the financial sinkhole created by an Argentine debt default. A double default by these large countries would most certainly plunge Latin America into a prolonged recession. "Globally, this would prolong the current economic slowdown in the United States and European Union, since a Latin American recession would hurt the earnings in stock prices of U.S. and European corporations heavily invested in the region, such as BellSouth, Ryder and Volkswagen AG" (Strategic Forecasting LLC, August 8, 2001).
The third voice that should be heard is Japan's. Opting for a cosmetic and short-term solution to the country's continuing economic woes, Japan's central bank announced in mid-August that it would print more money-1 trillion yen ($8.1 billion). This action only papers over structural cracks in the Japanese economy. What would a collapse of the Japanese economy portend for the rest of the world? "Japan's economy is the world's second-largest and is bigger than all other Asian economies combined. When it finally topples, reverberations will be felt throughout the world. It is increasingly likely that a collapsing Japan will throw healthier economies-even that of the United States-into recession" (ibid. August 15, 2001).
Look for developments, whether normal market shifts or manipulated ones, that separate the European economies from the United States. Europe, which has been preparing for the release of its new euro printed currency, is anxious to keep the breath of life in its economic body and resents taking a beating because of ties to the United States.
Angered by alleged unfair trade practices by the United States, the European Union recently announced that it is seeking $4 billion in trade penalties. On August 20, the World Trade Organization announced its judgment that the United States had discriminated against foreign competition by giving special tax breaks to Microsoft Corp., Boeing Corp. and others.
"U.S. Special Trade Representative Robert B. Zoellick has likened any EU sanctions of that magnitude to 'dropping a nuclear bomb' on the global trading system" (William Drozdiak, Washington Post Foreign Service). Negotiations are continuing, and the EU promises to step back from its demand, if the U.S. Congress agrees to enact tax legislation.
Additional source: BBC News.
An Article from:
World News and Prophecy: September - October 2001
Course Content
John Ross Schroeder
John died on March 8, 2014, in Oxford, England, four days after suffering cardiac arrest while returning home from a press event in London. John was 77 and still going strong.
Some of John's work for The Good News appeared under his byline, but much didn't. He wrote more than a thousand articles over the years, but also wrote the Questions and Answers section of the magazine, compiled our Letters From Our Readers, and wrote many of the items in the Current Events and Trends section. He also contributed greatly to a number of our study guides and Bible Study Course lessons. His writing has touched the lives of literally millions of people over the years.
John traveled widely over the years as an accredited journalist, especially in Europe. His knowledge of European and Middle East history added a great deal to his articles on history and Bible prophecy.
In his later years he also pastored congregations in Northern Ireland and East Sussex, and that experience added another dimension to his writing. He and his wife Jan were an effective team in our British Isles office near their home.
John was a humble servant who dedicated his life to sharing the gospel—the good news—of Jesus Christ and the Kingdom of God to all the world, and his work was known to readers in nearly every country of the world.
Jim Tuck
Jim has been in the ministry over 40 years serving fifteen congregations. He and his wife, Joan, started their service to God's church in Pennsylvania in 1974. Both are graduates of Ambassador University. Over the years they served other churches in Alabama, Idaho, Oregon, Arizona, California, and currently serve the Phoenix congregations in Arizona, as well as the Hawaii Islands. He has had the opportunity to speak in a number of congregations in international areas of the world. They have traveled to Zambia and Malawi to conduct leadership seminars In addition, they enjoy working with the youth of the church and have served in youth camps for many years.
Melvin Rhodes
Melvin Rhodes is a member of the United Church of God congregation in Lansing, Michigan.
