1 Thessalonians 5:3 For when they shall say, Peace and safety; then sudden destruction cometh upon them, as travail upon a woman with child; and they shall not escape.

Luke 21:25 And there shall be signs in the sun, and in the moon, and in the stars; and upon the earth distress of nations, with perplexity; the sea and the waves roaring;

Increasing Global Economic Collapse and Distress of Nations: The US & EU – On the Road to Bankruptcy. Inevitable.

April 15, 2020 by IWB by Egon von Greyerz

Most people don’t understand the cause of hyperinflation. Many argue that we can’t get hyperinflation since asset prices are now under pressure and there is no demand led inflation as most people currently have very little money.

What few people understand is that hyperinflation is a currency driven event. It doesn’t arise as a result of prices going up. Instead hyperinflation comes from the value of the currency imploding. In every case of hyperinflation in history, it is the collapse of the currency that is the cause. So what leads to the currency collapsing? Well, exactly what is happening now around the world, namely unlimited money printing and credit creation. Led by the Fed and the ECB, the whole world is now extending trillions in loans, subsidies and guarantees to companies and individuals. Government deficits are now surging as tax revenues collapse and expenditures increase rapidly. So governments will also need to print money to finance their galloping deficits. The inevitable outcome will be bankruptcy although few nations will admit it.

US DEBT DOUBLES EVERY 8 YEARS

I produced the debt chart below the first time at the end of 2017 when Trump was elected president. I forecast then that US debt would reach $28 trillion by the end of 2021 and double by 2028 to $40 trillion. These kind of debt increases seemed incredible at the time. But very few people study history and learn from the past.

All we need to do is to go back to 1981 when Reagan became president. Since 1981 US Federal debt has on average doubled every 8 years, without fail. Obama doubled debt during his reign from $10 to $20 trillion. Thus, it was totally in line with history that the US debt would be $40 trillion 8 years later, in 2025.

Until a couple of months ago, it seemed totally impossible to reach these high debt levels.  But today it looks like we could exceed those figures by a big margin, especially the 2025 one of $40T. I am not surprised. Because when you make these forecasts you know that there are always unforeseen events that will occur to fulfil them. And the end of the biggest asset and debt bubble in history had to end with an unexpected event.

The bottom part of the graph above shows US tax revenue. It was $0.6T in 1981. Currently it is $3.4T. With the present situation in the US, it is likely that tax revenue will collapse, thus increasing the deficit further. But even at the current level of $3.4T, tax revenue has gone up less than 6X since 1981 whilst debt has gone up 31X.

As the banking system comes under pressure with debt defaults and imploding asset prices together with the $2T derivatives going up in smoke, the US will be looking at an economic and social situation which is terrifying.

With falling tax revenues and galloping debt and deficit, the US is clearly on the way to default and bankruptcy.

SO WE ARE LOOKING AT THE FINANCES OF A BANKRUPT STATE. No additional printing of worthless dollars will remedy the situation. All it will lead to is a collapse of the dollar and an implosion of US debt. SO HYPERINFLATION HERE WE GO!

But the US won’t be alone, since sadly the EU (ED-European Disunion) and many other nations will encounter a similar destiny. A bankrupt world is the inevitable result of the irresponsible actions of central banks and governments in the last 100 years.

As Voltaire said already back in 1729:

PAPER MONEY EVENTUALLY REACHES ITS INTRINSIC VALUE – ZERO

The table below shows all the major currencies since the Fed was created in 1913. The straight line at 100 is Gold which represents stable purchasing power. In the last 100 years all major currencies have gone down 97-99% against gold.

ALL MAJOR CURRENCIES HAVE LOST 82-87% THIS CENTURY

If we look at more recent periods, the table below shows the currencies’ decline since 1971 and 2000. Since 1971 they are all down 98-99%, except for the Swiss franc and Yen, thanks to Nixon closing the gold window.

 What few people realise is that since 2000 all the major currencies, except for the Swiss franc, are down 82-87%. This means that in real purchasing power, the currencies in industrialised countries have lost more than 4/5th of their value. So the final leg of the destruction of the current monetary system started 20 years ago. And from 2020 for the next 1-3 years, we will experience the final destruction down to Zero.

MOST CURRENCIES WILL LOSE 100% IN THE NEXT FEW YEARS

But what we must remember is that final fall to the bottom involves a 100% fall from today in the value of the Dollar, Euro, Yen etc. It was always clear that the current monetary system would end like all the others in history since no currency has ever survived intact with the exception of gold. And the world’s central banks have now started the process that will lead to the demise of paper money as we know it today.

The facts and tables in this article are indisputable. The message couldn’t be clearer.

Still, most people don’t get gold, since less than 0.5% of world financial assets are invested in physical gold.

As I have outlined in many articles, stocks, bonds and property will lose 90-99% in real terms, against gold, in the next few years. Many bonds will lose 100%. And paper money will lose 100%.

Jesus Christ’s Offer of Salvation:

The ABCs of Salvation through Jesus Christ (the Lamb)

A. Admit/Acknowledge/Accept that you are sinner. Ask God’s forgiveness and repent of your sins.

. . . “For all have sinned, and come short of the glory of God.” (Romans 3:23).

. . . “As it is written, There is none righteous, no, not one.” (Romans 3:10).

. . . “If we say that we have no sin, we deceive ourselves, and the truth is not in us.” (1 John 1:8).

B. Believe Jesus is Lord. Believe that Jesus Christ is who He claimed to be; that He was both fully God and fully man and that we are saved through His death, burial, and resurrection. Put your trust in Him as your only hope of salvation. Become a son or daughter of God by receiving Christ.

. . . “That whosoever believeth in him should not perish, but have eternal life. For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life. For God sent not his son into the world to condemn the world; but that the world through him might be saved. (John 3:15-17). For whosoever shall call upon the name of the Lord shall be saved.” (Romans 10:13).

C. Call upon His name, Confess with your heart and with your lips that Jesus is your Lord and Savior.

. . . “That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved. For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation.” (Romans 10:9-10).

. . . “If we say that we have no sin, we deceive ourselves, and the truth is not in us. If we confess our sins, he is faithful and just to forgive us our sins, and to cleanse us from all unrighteousness. If we say that we have not sinned, we make him a liar, and his word is not in us.” (John 1:8-10).

. . . “And he is the propitiation for our sins: and not for ours only, but also for the sins of the whole world. (John 2:2).

. . . “In this was manifested the love of god toward us, because that God sent his only begotten Son into the world, that we might live through him. And we have seen and do testify that the Father sent the Son to be the Saviour of the world. Whosoever shall confess that Jesus is the Son of God, God dwelleth in him, and he in God.” (1 John 4:9, 14-15).

. . . “But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us. Much more then, being now justified by his blood, we shall be saved from wrath through him. For if, when we were enemies, we were reconciled to God by the death of his Son, much more, being reconciled, we shall be saved by his life.” (Romans 5:8-10).

. . . “For the wages of sin is death; but the gift of God is eternal life through Jesus Christ our Lord.” (Romans 6:23).

. . . “Jesus saith unto them, I am the way, the truth, and the life, no man cometh unto the Father, but by me.” (John 14:6).

. . . “For I am not ashamed of the gospel of Christ: for it is the power of God unto salvation to everyone that believeth.” (Romans 1:16).

. . . “Neither is there salvation in any other: for there is none other name under heaven given among men, whereby we must be saved.” (Acts: 4:12).

. . . “Who will have all men to be saved, and to come unto the knowledge of the truth for there is one God, and one mediator between God and men, the man Christ Jesus.” (1 Timothy 2:4-6).

. . . “For God did not appoint us to suffer wrath but to receive salvation through our Lord Jesus Christ.” (1 Thessalonians 5:9).

. . . “But as many as received him, to them gave the power to become the sons of God, even to them that believe on his name.” (John 1:12).

True Church / Bride of Christ Spared from God’s Wrath:

 Romans 5:8-10. “But God commendeth his love toward us, in that, while we were yet sinners, Christ died for us. Much more then, being now justified by his blood, we shall be saved from wrath through him. For if, when we were enemies, we were reconciled to God by the death of his Son, much more, being reconciled, we shall be saved by his life.”

Romans 12:19. Dearly beloved, avenge not yourselves, but rather give place unto wrath: for it is written, Vengeance is mine; I will repay, saith the Lord.

1 Thessalonians 1:10. And to wait for his Son from heaven, whom he raised from the dead, even Jesus, which delivered us from the wrath to come.

1 Thessalonians 5:9. For God hath not appointed us to wrath, but to obtain salvation by our Lord Jesus Christ,

Romans 8:35. Who shall separate us from the love of Christ? shall tribulation, or distress, or persecution, or famine, or nakedness, or peril, or sword?

Jeremiah 30:7. Alas! for that day is great, so that none is like it: it is even the time of Jacob’s trouble, but he shall be saved out of it.

Revelation 3:10 Because thou hast kept the word of my patience, I also will keep thee from the hour of temptation, which shall come upon all the world, to try them that dwell upon the earth.