During July, 1992, Munich, Germany played host to the Group of Seven (G7) economic summit. This meeting is held on an annual basis with one of the seven participating countries acting as the host nation. The purpose of the summit is for the seven leading industrialized nations to cooperate in plotting economic strategy for the future. Members of the group include Germany, USA, Japan, Canada, UK, France and Italy.
The mood of this year’s meeting was different from that of recent years. The agenda consisted primarily of survival planning, rather than strategic planning for fundamental growth. This change of agenda was necessitated by the fact that six of these seven prosperous nations have been consistently running a deficit budget for several years. The national governments are spending more money than they are taking in.
As a consequence of this overspending, the economic situation today is rapidly becoming critical. G7 participants are concerned about this continuing trend of deficit financing and the prospect of total collapse of the entire economic structure of the industrialized world. Such an occurrence would not only cripple the nations immediately involved but would also have disastrous effects upon developing and third-world economies.
The situation today
In the time that it has taken you to read this far in this article, the debt of Canada has increased by $70,000 (CDN) and that of the USA by $800,000 (US). The total annual U.S. deficit continues to grow at the alarming rate depicted in the accompanying chart.
Not only are the national governments burdened with incredible debt, but so are most states, provinces and municipal governments in these countries. For example, in 1992, California is projected to add $10.7 billion to its debt. California has run a deficit for the past four years which has been financed from her cash reserves. As of July 1, 1992, the state started printing IOU’s to cover its continuing deficit. The Toronto Globe & Mail reported on July 2, 1992 that “Interest bearing IOU’s — termed registered warrants — worth $34 million, mostly for those receiving personal income tax rebates, were issued yesterday.“
Similarly, the most populous province in Canada, Ontario, has been running a deficit budget since 1970. The Globe & Mail reported on May 2 that “the province will need to borrow $11.1 billion this year, down from the $11.5 billion to cover the $9.9 billion deficit and refinance old debts that are coming due.”
A worldwide condition
The situation that exists in North America is a reflection of what is happening around the world. The number of nations that are running a surplus budget is less than 10.
As we approach the latter days, we find that not only are governments running deficits, so also are some of the largest corporations in the world. The largest property developer in the world, Olympia and York, has now declared bankruptcy in Canada and Britain. In addition, the once prosperous publishing empire controlled by the late Robert Maxwell is now in ruins, with both his sons under arrest in Britain.
The American banking system has been experiencing a slow and debilitating decline. Numerous saving and loan organizations have declared bankruptcy within the last decade and major banks have had their credit ratings lowered as a direct result of bad loans. The following diagram illustrates the point.
Obviously this trend cannot continue indefinitely; the financial system must experience a miraculous recovery or it is doomed. For Bible students, a collapse is spoken of in the scriptures.
Revelation 18
Prophecies contained in this chapter reveal a time will come when world trade will exist no more. Could we be approaching that day now?
John records, “Terrified at her torment, they will stand far off and cry: Woe! Woe, O great city, O Babylon, city of power! In one hour your doom has come! The merchants of the earth will weep and mourn over her because no one buys their cargoes any more, cargoes of gold, silver, precious stones and pearls…The merchants who sold these things and gained their wealth from her will stand far off, terrified at her torment. They will weep and mourn” (Rev. 18:10-15).
Is it possible that we are witnessing the events which will lead up to a total collapse of the world’s economic foundation? Let us continue to watch and pray for our Master’s soon return!
The Origin of the Organic World – Part One