June 29, 2015
Who Is Next?
Perhaps we have become impervious to the doom-and-gloom of financial news. After all, since 2008 our own economy has been on the decline --- no matter how much the White House and various news organizations would like us to believe otherwise. And it's been a couple of years since I wrote on this blog about Greeks scavenging for food in dumpsters, and the panic that many felt about their future. The threat of bank closures has always hung in the air; and now it is reality.
From my limited understanding, the crisis centers around the European Central Bank (ECB) announcing that it will end liquidity funding (fancy name for a bailout) that was being used to prevent a Greek banking collapse. Greece's European partners want it to agree to an austerity plan that is unpopular with Greece's leader and its people. In fact, Greece’s prime minister Alexis Tsipras suddenly terminated negotiations with the European lending institutions, surprising everyone, and called for a referendum of the Greek people on July 5.
According to a CNBC report, Greeks are expected to vote on whether to accept the bailout measures offered by international creditors, which come with strings attached; they can accept prolonged austerity measures, or reject them and potentially leave the euro zone. This has the European markets on edge, and the Eurogroup of eurozone finance ministers met without Greece present, to take steps for the protection of the eurozone.
Of course, this is a risky gamble if the people of Greece vote to exit the eurozone. What happens next? Well, for one thing, Russia and Vladimir Putin are waiting in the wings to help Greece solve its financial crisis. Reports on Russia Today, quote President Putin as saying that Greece has not asked for a bailout of its €316 billion debt, but Moscow could help out by buying Greek state assets in privatization sales, or in other investment projects such as Turkish Stream, the working name of the proposed natural gas pipeline from the Russian Federation to Turkey across the Black Sea. In 2015 the Greek government plans to privatize €1.5 billion worth of assets, and Russia appears ready to take advantage of that strategy.
You will also find it of interest that Gazprom, Russia's largest oil producer, and holder of the world’s largest natural gas reserves, tried unsuccessfully to buy a controlling stake in Greece’s Public Gas Corporation [DEPA] for €900 million in 2013, when Antonis Samaras was prime minister. But it's a new day in Greece, with a new prime minister. Could this play be back on the table? Just think how that would upset the world's apple cart -- Russia would have a foothold in Europe, not to mention a position in the world's strategy for control of gas and oil reserves -- and the future of the world's economy could drastically change.
But Greece isn't the only country in the world facing financial difficulties, and their situation is sure to affect the stability of the entire globe. According to Breitbart News, China’s stock markets have been in free fall since June 12, falling almost 20 percent in a couple of weeks. The People’s Bank of China (PBOC) made a major move, cutting interest rates sharply, to a record low, which in effect, props up the stock market, but it will have little effect on China's economic growth.
Then there is Puerto Rico’s governor Alejandro García Padilla, who has announced that the island territory will be unable to pay off its $72 billion in debts. As Breitbart's John Xenakis wrote, "Many people have invested in Puerto Rico bonds because they pay 10 percent interest (yields) and because under federal law they’re “triple-tax free,” meaning that you can earn 10 percent interest every year and not have to pay federal, state or municipal tax on the interest you collect. It’s a sweet deal, provided that Puerto Rico doesn’t go bankrupt, because if it does, then you lose most or all of your initial investment. But the unemployment rate in Puerto Rico is 13.7 percent. Only 700,000 of the 3.5 million people, or 20 percent, work in the private sector. The other 80 percent either are on welfare, or they receive unemployment or other aid, or they work for the government." (There is a lesson here for us, if we are smart enough to pay attention).
Mr. Xenakis presents this very important scenario ... Today we have major financial crises in China, in Europe and in Puerto Rico. In each case, officials have made some preparations. But can the global financial system handle all three simultaneously? Economic gurus have been pointing out that our own Wall Street stocks are in bubble territory, and dangerously close to bursting. Will the current world economic crisis be the catalyst that causes a panic similar to our 1929 crash? No one knows for sure.
So, while America seems determined to ignore the global financial crisis, the reality is that the world sits on the precipice of financial disaster as the world banks struggle to solve staggering debts. The prediction is that the Dow will react negatively to the latest news from Greece, and it will remain to be seen how the rest of the world reacts. Could this be the beginning of a political and economic crisis that the Bible predicts? One in which this end-times prophecy in Revelation is fulfilled? ... “ten kings who have received no kingdom as yet, but they receive authority for one hour [a brief period] as kings with the beast.” The Bible tells us that conditions will be so desperate and dramatic that these 10 rulers will give their authority to a powerful figure who, as head of a new global superpower, will bring order out of chaos.
We cannot know when this event will take place, but if you are a Believer, you can be assured that it will happen. We should all be watching what happens with the Greek situation, and it is undeniable that these are interesting days in which we live....
Proverbs 22:7 "The rich rules over the poor, and the borrower is the slave of the lender."