past year, we have observed some remarkable, world-wide — and, we would even
say, earth-shaking — developments. It would not be an exaggeration to say so
and we will explain why. At the very least, another major turning point is
evident. All of the world’s largest central banks have crossed the so-called
“Rubicon.” They have gone past the point of no return. They knowingly and
willing have chosen to brazenly “steal and thieve.” It is awe-striking to
signifies a turning point … a new defining moment in the slide to global
financial bedlam? Recently, some unorthodox new policies were announced by a
number of major central banks around the globe.
August, Mario Draghi (the head of the European Central Bank (ECB)),
announced that they would “do whatever it takes” to preserve the euro and
the European banking system. He basically threatened financial markets to
take him at his word. They did, and both European bond and stock markets
soared, thinking that no matter how severe the financial state of the
Eurozone, the central bank could be relied upon to eventually bail everyone
weeks later, the U.S. Federal Reserve Board (FRB) also demonstrated its
resolve to print unlimited money (though claiming it will sterilize its
purchases, for those who follow such things). It announced QE3 (Quantitative
Easing #3, a third program to flood the economy with money deposits). Ben
Bernanke, the head of the FRB, stated that he would do so “without limit”
and assured financial markets that ZIRP (zero interest rate policy) would
extend into the year 2015.
Meanwhile, the Bank of Japan announced one more of its “quantitative
easings,” the eighth by some counts. The monetary battles and currency wars
of the world’s central banks are in full swing.
likely would not be surprising to most that the U.S. and Europe are still
suffering from the after-effects of the conditions that led to the Global
Financial Crisis (GFC). Government budget deficits are still large,
economies are weak, and government debt levels continue to shoot higher
amongst other ailments. However, it is not only the weak countries that are
suffering but also the strong. How so? Because, given the globalized and
integrated world-wide financial system, any financial imbalances or
disturbances will radiate everywhere, touching everyone.
Particularly tragic is that countries such as Switzerland (also Canada,
Singapore and others) which historically have been seen as stable countries
are also being adversely affected. As investors and depositors flee from
financially-teetering countries (such as Greece, Spain and others) they seek
for example, Switzerland is literally overwhelmed with flight capital.
However, this deluge of money pushes up the exchange rate of the Swiss
Franc. This, in time, severely impedes its export trade as manufacturers
become uncompetitive due to an over-valued currency. Here we see that
drowning swimmers, in their panic, pull under the strong swimmer as they
grasp for safety. What we here witness is that major crises today are
global, affecting the entirety of humanity. All will be pulled into the
vortex of crises and instabilities.
tragic is that the Swiss National Bank (SNB), the central bank of a rather
small country (ranking the 19th
largest in the world in
terms of the size of its economy) that has historically been considered a
“hard money” institution (meaning, highly protective of the value of its
currency) has decided that monetary integrity is much too costly. The SNB
joined the “stealing and thieving” fraternity and began to buy in any and
all European bonds to help stop the rise of its currency. To date, the
cumulative money expansion of the SNB (i.e. the size of its balance sheet)
is now equivalent to 79% (yes, this is correct, seventy-nine percent!) of
the annual economic output (GDP) of Switzerland. This is unprecedented; more
than three times the average of other major central banks.
Accelerating Trends with No Return
a doubt, we are now in an era where the major central banks of the world are
desperate. They have chosen to break all the rules and have abandoned any
semblance of probity and integrity. They are manipulating monetary systems
and are creating “infinite” money as never before, openly and brazenly
corrupting the “scales.” As Mario Draghi was quoted as saying recently in an
interview with the Spiegel magazine: “We are also currently in a crisis that
was previously inconceivable.
It is therefore not very helpful to compare our measures with the past.”
madness. Anyone with any common sense knows full well that such monetary
magic cannot solve the problems at hand.
At best, these tactics only serve to delay the ultimate outcomes.
However, the more the delay, the more disastrous the final outcomes. That
may yet take some time to unfold; or it may not.
The exact timing of such turning pints are impossible to predict.
Some observers have commented that while it may take a long time for
crises to finally break out, when they do unfold they do so extremely
quickly. As Vladimir Lenin was
to have said: “There are decades when nothing happens; and there are weeks
where decades happen.”
not be surprised that this will be the case, as several Bible prophecies
leading to the Tribulation period mirror the same condition.
The Lord may be tarrying but when the time of judgment arrives, it
will unfold lightning quick.
For example, the final power regime that will rule the world just prior to
the appearance of the Antichrist will come to form very quickly and will be
on the stage for only “one hour” (Revelation 17:12).
And, the Antichrist, who is also identified as the 8th
king who belongs to the prior 7 world hegemon kingdoms, he will exist but a
“little while” (Revelation 17:10). “While people are saying, “Peace and
safety,” destruction will come on them suddenly, as labor pains on a
pregnant woman, and they will not escape”
(1 Thessalonians 5:3).
the Mammon Lure of the Infinite
may already have a sense of the identity of the monetary magicians to whom
we referred in this article’s title (namely, the central bankers), but just
where does Mephistopheles come into this discussion?
Recently, Jens Weidman, President of the Bundesbank (Germany’s central
bank), who is a sharp critic of the policies of the European Central Bank,
made the connection to Mephistopheles. He recalled the policies of
Mephistopheles (this being the demon devil in Goethe’s version of Faust)
attributing such similar policies to Mario Draghi, (head of the European
Central Bank). The comparison is certainly apt, though really applying to
most all central bankers, not just Mr. Draghi.
Faust, Mephistopheles makes this recommendation to the Emperor:
paper, in the place of actual gold, is practical: we know just what we hold
… But wise men will, when they have studied it, place infinite trust in what
wise men will be able to tame the metaphysical powers and carnal lures of
“infinite” money but not desperate and unprincipled people. So long as
mankind will choose to serve Mammon (and bend its ear to consider its wicked
temptations to gain and wealth) Mephistopheles will be able to organize and
commandeer an unlimited number of antichrists to do his bidding
and not God’s. “[…] even now many antichrists have come. This is how we know
it is the last hour” (1 John 2:18).
view of the economic trials and troubles being experienced by many nations
around the world, it was only a matter of time before central bankers threw
all caution and integrity to the wind. This deterioration in values is a
natural handmaiden to the relativistic bent of increasingly humanistic and
the fractional-reserve system (upon which our modern-day monetary systems
are based) has always embodied an element of sanctioned trickery and
thievery, in the main, it is only since 2007 (the start of the Global
Financial Crisis) that the major central banks all together began to invoke
monetary policies that were extremely unorthodox.
Concerned that a major economic depression would unfold as a result of the
many crises of financial institutions in 2007 (some of the biggest banks in
the world and major Wall Street firms were technically bankrupt) central
banks slashed interest rates to the bone. They did so in a coordinated
fashion around the globe, more so than ever before. Even though a major
contributor to the financial frailties was over-indebtedness, an express aim
of these low-interest rate policies was to restimulate debt growth … to
create more of “what is infinite.” But just how did the world come to such a
point where central banks had such overweening power?
of the Infinite Lures of Mammon
upon time there were only a few central banks in the world. Only as recently
as the year 1900, there were 18 such institutions in the world. At the time,
all of these were in Europe, with the exception of the Bank of Japan. The
gospel of central banking then spread widely between the two World Wars. By
1980, over 100 or so were in operation. After the rapid spread of
globalization, there are now over a 170. Even former and presently Communist
countries followed suit. Consider that China’s central bank is today the
second largest in the world!
large, all central banks have adopted the same basic operating policies.
They claim that they can regulate the ebb and flow of inflation as well as
debt growth in the commercial banking system. They do so through various
means (the details of which we will spare the reader). Some central banks
may be more constrained than others due to different country statutes and
same, all central banks have one most powerful ability. Technically, they
can “create” money out of thin air. Think about this for a moment: You the
reader, and this writer, can only accumulate money through earnings and
investment gains. We cannot lawfully create money; perhaps adding zeros to
our bank account, or printing counterfeit notes. However, a central bank can
effectively redistribute the existing savings of the entire country (and, we
should add, the whole world) by creating more money.
been happening, and most notably this past half year as already partially
explained, central banks have created a lot of money. To this point, much of
this money may remain inactive as bank deposits due to economic uncertainty.
Nevertheless, consider the scale of central bank interventions over these
past five years. For example, the U.S. Federal Reserve is buying some $85
billion in government and mortgage-backed bonds every month. It simply buys
them, and by doing so, adds “instant” money to the commercial banking
told, this is an immense amount of money and therefore also a significant
destabilization of U.S. wealth distribution. Consider that $85 billion per
month is an annualized rate of $1.02 trillion, not much less than the U.S.
government’s budget deficit. Believe it or not, dysfunctionalities have
progressed to the point that some financial observers are concerned that
there will be a shortage of longer-dated U.S. treasury bonds. It is hard to
imagine that this could be true of a country with a government that must
continue to issue over $1 trillion in treasury securities every year due
their still-massive budget deficit.
massive distortions do not stop here. Globally, we note that the 8 largest
central banks of the world have expanded their balance sheets (an indication
of how much money they are pushing into the commercial banking system as
well as non-bank sectors) from $5 trillion to $15 trillion since 2007. These
figures are so large, they are impossible to gauge. Today, these central
banks have swelled in size to the equivalent of nearly 24% of world GNP
(gross national product)! This seems unbelievable. Yet, it is fact. Will
there ever be any limits? Likely not.
these activities have been largely ineffective in producing employment gains
and acceptable economic growth. As such, the central banks are frustrated
this is because most households are reluctant (or may no longer quality) to
borrow money. Many people are too concerned about their future retirement,
existing debts, or equity losses in their homes to consider borrowing money.
The lessons of the Global Financial Crisis are still much too fresh. Given
the corruptions and self-interest of Wall Street, households are no not
likely to “trust in the infinite” that the so-called wise men of monetary
policy are foisting upon them.
Similarly, corporations are reluctant to spend money on capital projects or
increased labor income due to uncertainties. As such, U.S. corporations
today sit upon record cash holdings, recently surpassing the $2.0 trillion
level, an all-time record.
consequence, much of the “money printing” of the central bank sits idle as
cash deposits or as reserves with the central bank. This is a main reason
why consumer price inflation has yet to rise sharply. For this and other
reasons, central bankers pat themselves on the back for having done a good
job of saving the world from an economic depression. But, they speak much
too soon. Eventually — and most assuredly — mankind will reap what they have
sown. “They sow the wind and reap the whirlwind” (Hosea 8:7).
Mephistopheles’ alluring recommendation has wreaked its intended havoc. Once
on the path of infinite money, there is no easy road back. In a recent
speech, Richard W. Fisher, head of the Federal Reserve Board of Dallas, (one
of the few realists in the U.S. Federal Reserve System, and a man who has
the courage to recognize the facts) said the following:
truth, however, is that nobody on the committee, nor on our staffs at the
Board of Governors and the 12 Banks, really knows what is holding back the
economy. Nobody really knows what will work to get the economy back on
course. And nobody—in fact, no central bank anywhere on the planet—has the
experience of successfully navigating a return home from the place in which
we now find ourselves. No central bank—not, at least, the Federal
Reserve—has ever been on this cruise before.”
ability to “create” unlimited money (either technically, temporarily, or
permanently) is a most powerful weapon. Yet, it remains that governments
cannot alone create wealth or growth. They can most certainly delay the
consequences of bad policies. But they cannot prevent the ultimate damages
of past excesses. Ultimately, all destruction of productive capital will
come to roost, though it results may be diverted for a time.
not give mankind the ability to create wealth fictitiously, but only through
labor and savings. Nevertheless the human has always been prone to believe
“get rich” schemes. In this sense, modern-day central bankers delude
themselves as well as all people who put their hope in them.
no thing as a free lunch. Similarly, there is no such thing as costless,
fabricated money. Ultimately, all money is owned by someone or some entity.
When money is created fictitiously by the stroke of a pen, it may seem
effortless, but it is not free. Overtime, it causes painful societal
distortions, economic dysfunctions and uneven wealth distribution. It all
leads to (or is symptomatic of) increasing distrust and lawlessness at many
the time being, the world chooses to believe what it wants to believe. In
the same spirit of the Old Testament Israelites, the world says “Give us no
more visions of what is right! Tell us pleasant things, prophesy illusions”
conversion of the whole world to the gospel of “infinite money” is near
complete and fully integrated globally. The entire world is its host — its
prey. It is a phenomenon that has swept the globe in a very short space of
time … these being the very last of the last days. You can be sure that such
conditions, as are born out of a corrupt monetary system as we see today,
will play a defining role in leading the world to its foreknown destiny as
described in the Bible.
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is a global economist/strategist. Formerly a top-ranked global analyst,
research director for a major Wall Street investment bank, and head of
Canada’s largest global investment operation, his writings focus on the
endtime roles of money, economics and globalization. He has been quoted
around the world and his writings reproduced in numerous other publications
and languages. His 2002 book The Endtime Money Snare: How to live free
accurately anticipated and prepared its readers for the Global Financial
Crisis. His newest book, Global Financial Apocalypse Prophesied:
Preserving true riches in an age of deception and trouble, looks further
into the future.