Aug 10, 2009
America’s Biggest Creditor
This past week I received a shock when I read a report on the various groups
that have been helping the United States government fund its massive $12
trillion national debt. Most troubling was the entity that topped the list as
our largest creditor.
The buzzword in the market for U.S. debt of recent has been China. The
world’s most populous country is an important buyer of U.S. debt. China's
holdings now stand at $739.6 billion as of January. Oddly enough, that nation is
not the largest holder of U.S. debt.
It's not Japan. Another major U.S. trade partner, Japan carries a huge amount
of the country’s debt, with a stunning $634.8 billion; it currently holds the #2
spot.
It's not oil-rich states. Big oil means big money and big investment into
U.S. debt. As a group, these states don't even come close to being a major
creditor. Included in the group of oil exporters are Ecuador, Venezuela,
Indonesia, Bahrain, Iran, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United
Arab Emirates, Algeria, Gabon, Libya, and Nigeria. Together, they hold a total
of $186.3 billion of our debt.
It's not retirement funds. One example is pension funds. They control large
amounts of money, reserved for personal retirements, and thus are obligated to
make relatively safe investments. This group includes both private and local
government pension funds totaling $456.4 billion.
It's not insurance companies. According to the Federal Reserve board of
governors, insurance companies hold $126.4 billion in Treasury securities. This
group includes property, casualty, and life insurance firms.
It's quite a mystery when you consider that none of these debt holders are
over the $1 trillion mark.
Drum roll please...The biggest holder of U.S. government debt is the United
States itself. The Federal Reserve and other U.S. intergovernmental holdings
account for a stunning $4.806 trillion in U.S. Treasury debt. This amount is six
and a half times larger than that of the Chinese. I read that the Fed plans to
add another $1 trillion to its tab. About a decade ago, total government
holdings were "only" $2.5 trillion.
It's absurd to simply declare the Federal Reserve a separate body, with the
power to gobble up debt. We are basically printing money to cover our
obligations, which is probably the reason the Treasury has stopped reporting on
the growth of the money supply.
The Fed holds a lot of debt that is of questionable value. It has purchased
$800 billion in bad assets from banks, lenders, and insurance companies just
from the recent financial crisis. These agencies are still losing money. Fannie
Mae said it plans to tap $11 billion in new government aid after posting a
massive $15 billion quarterly loss.
Our government leaders have no plans to rein in this flood of red ink. One of
the clearest examples of how ridiculous our spending has become is the so-called
“Cash for Clunkers” bill. Under the program, car owners receive $3,500 if they
trade in an 18-or-fewer-miles-per-gallon vehicle for a new car getting at least
22 mpg. Vouchers of $4,500 are available for owners who trade in a car that gets
18 mpg or less combined for a model that gets at least 28 mpg. Congress has
pledged $3 billion for this popular program.
Why stop at cars? We could have “Bucks for Boats” or “Cash for Computers.” I
understand the idea is to stimulate the auto industry, but that debt has to be
accounted for at some point in time.
The president and Congress are planning on a major expansion of health care.
This new program will add trillions to our future debt load. I already know
there will be no Social Security or Medicare when I reach retirement age. This
new plan will bankrupt the system all the sooner.
One reason for the massive amount of deficit spending is the lack of money
coming into the government coffers. The recession is starving Uncle Sam of tax
revenue. The situation could not be more stark: Tax receipts are on pace to drop
18 percent this year, the biggest single-year decline since the Great
Depression, while the federal deficit balloons to a record $1.8 trillion.
Our whole financial system is based on blind faith in paper. Modern man is no
better than the pagans who prayed to gods made of stone. Once people lose
confidence in the almighty dollar, economic Armageddon will ensue.
The question is: Why haven't we seen a collapse? I'm amazed to see that we
have gone from one extreme to another. I guess God is the determining factor
here. He is the only explanation I can come up with for why our debt bubble has
gone beyond every other benchmark history can provide.
The rapture could be the pin that pops the bubble. As I've said before,
America has the highest percentage of Christians than any other nation on earth.
The loss of such a large portion of the population during the rapture would
cause this nation to collapse into total chaos.
End-time Christians already have a good reason not to be fixated on the cares
of this world. The perilous state of our financial system should only add to the
urgency of being focused on promoting the kingdom of God.
-- Todd
Rumors of Peace
These are indeed the strangest of times. Two particular—and most
important—indicators given by Jesus himself (remember that He is the very Word
[John 1:1], thus all of the Bible is from Jesus) forewarning the end of the age
are on or near today's front-page headlines. These indicators involve both war
and peace—rather, rumors thereof.
Jesus issued the word for Daniel the prophet to write about a coming false
peacemaker and false peace that will bring disastrous consequences: "And through
his policy also he shall cause craft to prosper in his hand; and he shall
magnify himself in his heart, and by peace shall destroy many..." (Daniel
8:25a).
The Lord warned of rumors of wars for the last days: "And ye shall hear of
wars and rumours of wars: see that ye be not troubled: for all these things must
come to pass, but the end is not yet" (Matthew 24:6).
First in this commentary we will briefly look at the possible
Iranian-engendered war rumored to break out at any moment. Developing reports
seem to indicate that rumors of the impending war might be fading just a bit,
while at the same time rumors of peace are rising to the surface of the seas and
waves of these end times.
Iran's nuclear development program has for many months held the rapt
attention of the world's diplomats—and of those of us who look at that troubling
situation from the perspective of Bible prophecy. Iran's just re-elected
president Mahmoud Ahmadinejad, of course, has been at the heart of verbally
fueling the nuclear weapons development threat to Israel and the world. We will
secondly examine the peace prognostications coming from some quarters, while the
Iranian tyrant's unending call for Israel to be erased from the Middle East, and
even from planet earth, seems to be fading from his most recent rhetoric.
Ahmadinejad's words clearly avoided all mention of Israel during his
inauguration speech. One report gives the inferred changes in the Iranian
leader's public rage against the Jewish state:
In his inaugural address—in tones somewhat quieter than his often-bombastic
style—Ahmadinejad called for the nation to put aside its differences and “join
hands.”... Ahmadinejad did not directly address Obama's outreach for the start
of a dialogue on Iran's nuclear program, which the U.S. suspects is geared
toward producing weapons. Iran says it only seeks energy-producing reactors.
[Ahmadinejad ] said: “Iran is a nation of logic, dialogue and constructive
interaction. The basis of our foreign policy is wide and constructive contacts
with all nations and independent governments based on justice, respect and
friendship.” (“Ahmadinejad Sworn in as Iranian President,” Jerusalem Post/
Associated Press, August 5, 2009).
The Iranian dictator faces a divided nation of citizenry, and even hostility
within his own government. The change in his modus operandi—by at least for now
not making Israel the center of hatred—indicates that he perhaps isn't as
anxious to shake the nuclear fist in the faces of Israel and the rest of the
world as he has been doing for so long. This opens up an interesting train of
thought that I've been harboring in more recent weeks.
Considering the Ezekiel chapters 38 and 39 prophecies, I've wondered how
Israel might ever get to the status Ezekiel prophesied—that is, to be at peace
and without military self-protection so long as Iran (known as Persia in ancient
times) poses such threat. If Israel were to strike a blow against Iran's nuclear
development facilities as predicted by many, such action would not lessen
Israel's antagonists' rage, but would almost certainly cause it to increase.
Thus, Israel could not for the foreseeable future put down her defenses.
While most who observe the matters involved in the Israel-versus-Iran
confrontation believe that Iran's nuclear weapons production will in some way
bring about the God-Magog attack, I can't see it at this point. Israel must be
at rest—in "unwalled villages” (unworried about attack) for the Gog-Magog
assault to occur. Israeli Defense Force generals would certainly laugh at such a
proposition if one said to them that the Jewish state is presently without
defense, or unconcerned about possible attacks.
I can see no scenario—in immediate or even near-immediate—terms that an
Israeli attack on Iranian nuclear facilities would initiate the Gog-Magog
attack. I'm wondering for now if the Iranian leadership, perhaps with the sly
thinking and arm-twisting of the Russian leadership, might not to some extent
step down from its nuclear weapons development—or at least convincingly appear
to do so.
At the same time Iran might be stepping somewhat away from the brink of
confrontation with Israel, news is coming from Jerusalem that movement might be
afoot in the “Roadmap to Peace” process. Former U.S. Senator George Mitchell, on
behalf of President Barack Obama, has apparently proposed two unofficial
initiatives to move toward the two-state solution that would frame a more
expansive peace.
The Obama Administration is close to presenting its plan for peace in the
Middle East to Israel and the Palestinians, senior officials said yesterday...No
details were released, although it is thought that the plan is based on an Arab
initiative whereby Israel would gain recognition from the Arab world in return
for the creation of a Palestinian state...It is thought that the plan will have
a broader regional approach than previous peace efforts, and will include the
participation of Syria, Egypt, the United Arab Emirates and Lebanon...One idea
that George Mitchell, the Middle East special envoy, discussed with the Israelis
has been for Israel to agree to a temporary halt in settlement constructions to
get both parties to the negotiating table. Israel has demanded that the
Palestinians who, with the exception of Hamas and other Islamist factions, have
long since acknowledged Israel’s right to exist, should officially recognize it
as a Jewish state... (“Barack Obama Is Close to Revealing Plan for Middle East
Peace,” James Hider in Jerusalem and Tim Reid in Washington, Times online,
www.timesonline.co.uk).
Although it is likely far from becoming official, the proposals Mitchell
presented to the Israelis and certain Palestinian leaders seem to be taking
root. If it does eventuate, it will be peace best expressed in terms once used
by President John F. Kennedy, describing in his inaugural address peace during
the Cold War era. It will most assuredly come to be a "hard and bitter peace,"
according to Isaiah 28.
--Terry
