As bizarre and woolly as monetary policies are around the world at this point in history, we may have seen nothing yet. The Guardians of the Mammon Temple (central bankers) have engineered negative interest rates (both in real and nominal terms). Presently as much as two-thirds of the European sovereign bond markets have negative yields.

Why is this happening and what does it mean? While virtually no one had predicted that the world would fall into a state of negative interest rates, this state of affairs could well continue for some time.

To begin, the global monetary wars continue to rage. Given the continuing (and still rising) high indebtedness and low economic growth, policymakers are prone to attempt currency devaluation. To do so, they slash administered rates and embark on aggressive monetary programs (quantitative easing and “money finance”).

Over the past two years, the four major central banks (all taken together) bought more government bonds than were issued. In other words, total government bond issuance has been monetized over this period. This commonly believed “central banker impunity” is not factual even based on recent evidence. Past monetary programs (post the Global Financial Crisis) did not pump-prime economic growth. Yet, the “faith” remains firm.

Lately, Europe has launched its reply to the expansive monetary policies applying to both the US dollar (see graph of unprecedented M1 expansion on front page) and the yen. As such, the euro has plummeted in recent months against the US dollar. This can only continue for a short while longer. Before long, a disappointing US economy (relative to current optimistic expectations) and booming European exports will create a new global imbalance. And so the wheels keep turning.

In the meantime, a high level of faith and confidence is given to central bankers. For example, according to a recent Citibank survey, fully two-thirds of participants agreed that central banks are now fully in control.

They are the modern day “court wizards”…the equivalent to the “shamans” of old. A Biblical parallel might be Jannes and Jambres who were magicians of the Pharaoh during Moses’ time.

Recently, there have been a number of weighty research reports issued focusing on the topic of debt. McKinsey Global Institute (MGI) released an update of its 2010 and 2012 reports on global debt trends, titled Debt and (Not Much) Deleveraging. It confirms that now, 7 years after the start of the Global Financial Crisis, debt continues to rise around the world in aggregate. Deleveraging as a whole has technically not yet occurred overall. Debt continues to rise around the globe and is predicted to continue to rise (measured as a ratio to GDP, see graph on page 4).

Also, the Bank of International Settlements issued a report titled Secular Stagnations, Debt Overhang and Other Rationales for Sluggish Growth Six Years on. It argues that large debt overhangs (external, private and public) have been a major reason why economic recoveries have been so sluggish to date. This institution points out that an important marker for the completion of a crisis is a significant unwinding of debt. Darkly, they conclude that “[…] figures indicate that high leverage remains a headwind some 6 years after the initial crisis.”

So there we have it. Debt (and leverage) is still increasing overall according to MGI and the B.I.S. says that this is opposite of what is required to signal an end to sluggish economic growth and crisis.

How do policymakers get around this apparent impasse? According to “new economic thinking” there is an easy answer, this being that one should only focus on net government debt (not gross).

Specifically, one should only focus on government debt netted out for central bank bond holdings. To illustrate, McKinsey points out that overall government debt levels in the US would fall to 67% of GDP as opposed to a gross total of 89% of GDP. Voila. This debt virtually disappears to absolutely nothing. After all, the interest income received on these bond holdings get paid back to the US Treasury in any case.

Consider the transformation of Japan’s debt levels when viewed net of central bank holdings: Net government debt falls an equivalent of 141% of GDP!

This could be a free lunch, according to the “new economic thinkers.” Central banks can continue to buy government bonds (whether in secondary or primary markets) and not worry about any holes in their balance sheets. It doesn’t matter for an institution that can create money. In this way, then, rising gross debt levels will be seen to be benign — actually, highly stimulative — while not raising net government debt.

Of course, this is smoke and mirrors and can provide no free lunch. Ultimately, a price will be paid … with interest.

As we have often mentioned in these updates, we fully expect a decline into rampant “money finance” policies by all of the major central banks. How soon? We can’t exactly say. However, we are less doubtful about the outcome that will follow.

It will be a whirlwind of deceptive trends and developments, underneath of which will lie a desperate and immoral redistribution of wealth. We expect little opposition to these last ditch attempts because financial asset values will be sure to keep climbing. This is the surest way to divert attention from the real underlying destruction. All of this may take a number of years to play out.

However, the ultimate fall-out of these unwise policies will be quite terrible, capturing an even larger percentage of societies as economically oppressed. There is only so long that “Ponzi” type policies can continue.

To date in this series, we have concluded that, without a doubt, America was definitely in God’s eye when He created the Universe. We left off Part II with this question: Did the Lord purpose to use America as a benevolent or punishing force against the Jews and Israel? Could America have a similar role to the great ancient Persian king, Cyrus? Or, despite its great mandate, will it end up no different than all the rest of the Gentile nations?

After all, the second largest population of Jews today (behind Israel itself) is found in North America. It has been the Golden Age of the Jew in the U.S. (and Canada) since the early 1950s. This would certainly have been a protective, Cyrus-like role for the Jew … at least at the outset.

But, frankly, it is much too early to answer this question. Why? It is not until the last chapter—the ending—that such questions can be answered.

No doubt, America has been decidedly supportive of the Jew and Israel (though certainly not unwaveringly). But what will the future yet hold?

Anything could happen. No scenario regarding the Jews in North America can yet be ruled out. The history of the Diaspora has shown ominous patterns with respect to the treatment of the Jews during this present Age of the Gentile. America’s recent interventions into the affairs of Israel and its handling of Israel’s enemies would certainly not be the actions of another Persian Cyrus.

In any case, it may be more fitting to compare America to other powers that at one time harbored large populations of Jews during the Diaspora. Here we think of Spain in the 1400s, and Russia in the late 1800s. Over the past two millennia many nations have cast out the Jew.

In the end, we are reminded that all the nations will forsake Israel in the last days. Says the Lord: “I will gather all nations and bring them down to the Valley of Jehoshaphat. There I will put them on trial for what they did to my inheritance, my people Israel, because they scattered my people among the nations and divided up my land” (Joel 3:2). All nations are accused of dividing the land of Israel. Most certainly, America is taking part in this today.

Therefore, all nations will be judged and punished. “The day of the LORD is near for all nations. As you have done, it will be done to you; your deeds will return upon your own head” (Obadiah 1:15).

The Fruits of Pride and Haughtiness

Not only does God exact justice and raise His hand against those who persecute the “apple of His eye” (Zechariah 2:8). He also takes into account the godless conduct of each individual nation.

One characteristic that God punished often is pride. The Lord detests pride … namely, national arrogance. There are innumerable indications of this in the Bible. Says the Proverbs writer: The LORD detests all the proud of heart. Be sure of this: They will not go unpunished” (Proverbs 16:5); “Pride goes before destruction, a haughty spirit before a fall” (verse 18).

Many examples are given in the Old Testament showing that God abides with those that depend upon Him; whose strength is in Him. Whenever the Israelites became self-confident and dependent on their own strength, God allowed that they be defeated (for example, see the account of the defeat at Ai in Joshua 7). The kings of Judah that walked righteously and depended upon the faithfulness of God, were protected (i.e. Abijah, Asa, Jehoshaphat, Uzziah, Hezekiah). Wicked kings such as Jehoram, Ahaz, and Joash were not.

Even the righteous kings were vulnerable to pride for periods of time. For example, “[…] after Uzziah became powerful, his pride led to his downfall” (2 Chronicles 26:16); and also 2 Chronicles 32:26, where we see that “[…] Hezekiah repented of the pride of his heart.” We conclude from this, that whether righteous—perhaps a Christian—or not, arrogance can bring catastrophic consequences.

We see that nations other than those of Israel or Judah (entities that were not in a covenant with God) were brought down because of their pride. For example, Tyre was punished because, “In the pride of your heart you say, ‘I am a god; I sit on the throne of a god in the heart of the seas’” (Ezekiel 28:2). Also Moab, “[…] how great is her arrogance!” (Isaiah 16:6). Even the great Nebuchadnezzar—the “head of gold” himself—was deposed from his royal throne and stripped of his glory because, “his heart became arrogant and hardened with pride” (Daniel 5:20).

The same can happen to America. Its arrogance, as with any other nations, will not go unnoticed. In recent decades, America has staked its hope in its economic might; the macroeconomic theories of economists, of monetarism, and its military might. It thinks to create its own prosperity, one that is independent of any consequence of what it has sown.

Incredibly, many believe that its recent economic challenges are attributable to “lack of consumer want.” Its recent presidents have said that it is the will and resolve of its people that allow it to overcome its obstacles, and that it will “build bigger and better” should it face any setbacks.

Near-term Geopolitical Outlook for the U.S.

Lately, geopolitical analysts have been arguing that major new global initiatives have no chance of going ahead unless they are supported by at least two key players. Who are they? The United States and China. Yes, believe it or not, China is now considered by some to be a co-leader of the world.

And surely, during these past few decades, some very significant geopolitical shifts have been underway in the world. China, after nearly two centuries of slumber and isolationism, has re-emerged. It has in mind to establish its control over the South China Sea and is speedily ramping up its military outlay, particularly on its Navy.

Also, Russia is reasserting itself. The Muslim world, too, is in a state of upheaval with much more instability to come. The ancient nations of Iran and Turkey are rousing even as the old, historically Christian-influenced world is crumbling, succumbing to its liberal and humanist values.

That said, we still doubt that China will ultimately play a leading role in the final endtime events. The Bible mentions no specific role for China. However, we think it is possible that a rising China, along with other Asian nations, may very well contribute important influences as well as trigger the responses of the nations of the Roman-derived West. That would, of course, include the Roman Offshoot nations such as the United States, Canada, and perhaps others.

However, let’s make no mistake: America remains the most powerful nation in the world. Other contenders are attempting to usurp its influence and power. Its perceived role as world power regulator and policeman, has been receding, however. A power void is gradually opening up in the world. Will it continue … or will America soon reassert itself on the world stage?

Thoughts to Ponder

America, which indeed has played (and likely will continue to play) a significant and enabling role in the time-line of God’s dealings with Israel (and the nations; and the souls of mankind), will at some point be deposed. It will reign no more. This applies to all nations.

As we have speculated, if America is or is not to be a member of the last-day 10 king coalition described in the Bible (the most complete account of this coalition is given in Revelation 17), either outcome holds significant implications for its earthly stature. In either case, it would seem logical to conclude that America must lose power and influence. Time will tell.

In the end, it is Israel that receives glory. “Although you have been forsaken and hated, with no one traveling through, I will make you the everlasting pride and the joy of all generations” (Isaiah 60:15). While America continues to be a great power for now, ultimately, once God has judged the nations of the world, it will be Israel that will be the head, and not the tail (Deuteronomy 28:13).

Zechariah describes this outcome most majestically: “‘Shout and be glad, Daughter Zion. For I am coming, and I will live among you,’ declares the LORD. ‘Many nations will be joined with the LORD in that day and will become my people. I will live among you and you will know that the LORD Almighty has sent me to you. The LORD will inherit Judah as his portion in the holy land and will again choose Jerusalem. Be still before the LORD, all mankind, because he has roused himself from his holy dwelling’” (Zechariah 2:10-13).

Before that happens, God has purposed that the Gentile nations would be used one last time to discipline and punish the Israelites (Hosea 10:10).

Could mighty America itself be disciplined by God? This is, of course, all within the power of God. He is the one that considers nations “[…] like a drop in a bucket; they are regarded as dust on the scales; he weighs the islands as though they were fine dust” (Isaiah 40:15). He is the One that laughs at the machinations of the nations. “[…] The Lord scoffs at them” (Psalm 2:4).

Nebuchadnezzar—he whose dynasty is shown as the third head on the 7-headed beast of Revelation 17—himself confirmed this outcome, saying that “[…] the King of Heaven […] is right and all his ways are just. And those who walk in pride he is able to humble” (Daniel 4:37).

John the Revelator shows this symbolically. “The heavens receded like a scroll being rolled up, and every mountain and island was removed from its place” (Revelation 6:14). And, “In that day the LORD will punish the powers in the heavens above and the kings on the earth below” (Isaiah 24:21).

Here we see the consistency of the Bible from beginning to end, both in symbol and in word. “Mountains” (these representing the might of nations) and “islands” (nations of the world) are being deposed from their rule. Both earthly kings (representing nations) and “powers in the heavens above” (the Serpent and his demons) will be punished. Mentioned here are the participants of the “Man/Satan Collusion” (a collaboration of demons and mankind) against God, that are represented by the 7-headed beast.

America most certainly has played a significant role in God’s plans for Israel and the Jew. Whatever we may think of America, the erstwhile protector and ally of modern-day Israel (and pro-Israel Canada) today, the Bible foretells that all of them will abandon and persecute Israel.

Then the day comes where, “The eyes of the arrogant will be humbled and human pride brought low; the LORD alone will be exalted in that day” (Isaiah 2:11; also Isaiah 3:17).

What next for America—good or bad actions?

The Bible tells us in advance the free-will choices of nations and people. Whether yes or no—though we know in advance the final outcomes according to the Bible—this does not release anyone to lose hope or participate in an evil which might be inevitable according to prophecy. Christians, whether individual citizens of America, Canada, or other nations, remain free to continue making free-will choices that honor God. In His grace, He is inclined to leave choices to every generation. There is (almost) always the opportunity for the present generation to repent and change its ways.