My desire  is not to scare people but to warn them of what I believe will be the most difficult time in American history: I wrote in a 1999 book that I’m 100% convinced that a total collapse of the economy is in our future. I still believe it.
   
The world is reeling from the Enron disaster, America’s largest bankruptcy ever! At one time the Houston-based company’s stock sold for $90 then plunged to 26 cents a share. Almost 60,000 investors were wiped out. Other financial disasters are bubbling such as Global Crossing, the fourth largest bankruptcy in U.S. history.   
   
The Enron disaster rippled throughout the world as many states and governments had purchased Enron stock. While there was no doubt that company leaders were immoral and incompetent if not illegal, I must remind you that those stock purchasers chose to invest in Enron and chose to ride it to the bottom being told by the experts that it was only a dip and would bounce back. It did not. So many investors lost everything because they “put all their eggs in one basket” contrary to all prudent advice.
   
Then came Argentina during the closing days of 2001 when they announced their default on $155 billion in national debts. That was the largest debt default in world history. Hundreds of U.S. banks are still staggering from that action including J.P. Morgan Chase, Bank of America, and others. Added to the cost of American banks, banks in Europe are bleeding badly from Argentina’s self-inflicted wound.
   
I wrote an article for my paper in 2001 that pointed out the danger of Japan’s economy bringing down America’s. I started the article by saying that “Japan is going down like a sinking battleship.” It is still sinking. Japan’s former Finance Minister, Kiichi Miyazawa said that Japan’s economy is “very close to collapse.” 
   
I pointed out that some major Japanese banks have already collapsed and others would follow. Now, almost all their banks are about to go belly up being buried under one trillion dollars of bad debts! That was trillion not billion!
   
The latest issue of the Economic Outlook report by the American Enterprise Institute for Public Policy Research reveals that Japan is on the road to default leading to the failure of the entire banking system. It goes on to report that “Japan’s deflation and debt crisis now constitute systemic risk to the global economy.”
   
Many Japanese families paid almost half a million U.S. dollars for a small 800 square foot house fifteen years ago and now discover that same house has lost half its value! And unemployment is worse than it has been since the Big Bombs were dropped on them shutting down World War II.
   
I closed my article in mid-2001 thusly: “The economies of this world are ready to explode. They are like a boy standing up to his knees in gasoline, flicking a cigarette lighter. And I’m afraid you and I will get burned along with everyone else.”
   
The title of my article was: “Will Japan bring down U.S. economy?” I believe then and I believe now that it will. Argentina has hit us bad but Japan’s collapse will devastate the U.S. and the world’s economies because Japan is the world’s second largest economy and the leader in technology.
   
“But, the International Monetary Fund will come to the aid of nations such as Argentina and Japan,” says the Innocent One. Not this time. There is too much debt for a bailout of both countries and there is a very practical problem: If the IMF bails out Argentina, there will be a stampede from other nations who are only a few months away from the same problems in Argentina. The “M” in the IMF does not stand for  “Miracle.” There is not enough money available for all the troubled nations.
   
Venezuela is about ready to explode with as bad or worse political and social problems as Argentina; Brazil’s debt is twice that of Argentina; Asian nations are bleeding and about to gasp their last breath. A few years ago they were called “Asian tigers” but now they are sick pussycats licking pathetically at the leg of anyone who might help them. Europe is no better.
   
Yet, we still have politicians and Wall Street brokers telling us that this is a “buying opportunity” and we “will bounce back” very soon. In fact, the turn around is “just around the corner.” I’m not a pessimist but please remember that those same people never warned us that we were facing a recession. In fact, some tell us that we are still not in a recession!
   
A recent survey reports that 95% of economists think that the recession will be over in March of this year and 42% think it is already over! However, when you look at the unemployment figures, consumer spending, manufacturing, savings, bankruptcies (personal and corporate), credit-card debt and loan defaults, it is obvious that the nation’s economy is in deep trouble.
   
Those of us not trained in economics can understand a simple fact: when falling income and rising debt converge on the same family or business, the result is financial disaster. We are at that juncture today,  even a Harvard professor knows we are in a recession and speeding swiftly into a major depression! yet we are told by the wise guys on Wall Street and media pundits that “we are in recovery.”

However, remember that not one famous Wall Street oracle told us to SELL before the market started sliding. No, it is always a “buying opportunity.” You see they are called “brokers” because if you deal with them very much you will be broke! Do you know that none of the Wall Street hot shots or television pundits told us to sell Enron even as close as a couple of weeks before it sank! As the ship was going down, it was time to buy more shares of the Titanic!
   
The philosophy on Wall Street and in Washington has been that the big banks and big corporations were too big to fall. And they were propped up when they began to buckle. However, we know different now. Bethlehem Steel, Polaroid along with Enron have gone belly-up. Recently K-Mart went into Chapter 11 bankruptcy, and will be the largest retail chain to go broke. 7-Eleven is staggering; Xerox is gasping for breath! Maytag is wallowing in debt; Lucent is overwhelmed with debt; Nextel has over 17 billion in debt; PSINet has about 3 and a half billion in debt; Campbell Soup, Ford, General Motors, Kellogg, General Mills, Del Monte and others are trying to keep their corporate heads above water.
   
Financial advisor, Dr. Martin Weiss revealed that 352 publicly traded companies went broke in 2001 and this year hundreds of others are at “high risk” of breathing their last breath including Ford, Kmart, Xerox and other “household” names. Added to all that is the desperate position of America’s largest banks that are piling up bad debts every time the sun sets. Wachovia, Bank One, Bank of Americana, First Union, Chase Manhattan, Wells Fargo, J. P. Morgan, etc., are hemorrhaging badly.
   
But it gets worse! Some of those banks have lent money to companies that have already taken bankruptcy like J. P. Morgan Chase & Co. that lent LTV Corp $600 million dollars, but that didn’t save them and they filed for bankruptcy and asked Morgan for $225 million more! And they got it! No wonder banks are in trouble. You may feel sorrow for the banks. Not I. Although I know their demise will affect millions of innocent people.
   
Dr. Weiss reveals that U.S. banks are on the hook for $639 billion in commercial real estate loans, and “That’s 35% more than the combined capital of all U.S. banks put together.” It appears that big banks, big insurance companies and big business are all going down together. May be a good thing if big government  follows them.
   
So what should prudent Christians do about this major catastrophe that is about to hit us right between the eyes? Get out of debt if possible. Sell your stock; after all, something is better than nothing.  I have been trying to get my friends and readers to get out of the stock market since January of 1999. Some of you did and have called and written to me of your appreciation. Others have waited, and it is almost too late. Take any temporary rise in prices as an opportunity to sell any stocks except possibly gold shares. I also suggest that you get a part-time income if your job is insecure (and who is not?), or better yet, start a sideline business.
   
And don’t plan on retiring! Retirement is never found in the Scripture. Adam was to work to the day of his death. There is something carnal about waiting all your life until the day when you can lie around all the time, fishing, hunting, and generally playing. Of course, bad health can demand that you stop working. However, you can not count on your pension plan being available or sufficient to replace your working income. And those under 50 are very foolish or naïve if they plan on Social Security to provide the necessary retirement income. Work is in your future, and a wise move on your part would be to plan for that now. If not, plan on being a stock “boy” at the local supermarket, greeter at Wal-Mart or item checker at Sam’s.
   
I am suggesting that the party is over. Difficult days are ahead for all of us. It is time to save, cut back, make do, do without, plant a garden, fill a large pantry with food and water, buy some gold and silver (Abraham did!), etc.

Perhaps the scariest statistic is this: Japan is also the world’s largest creditor. For example, Japan’s four largest troubled banks claim assets totaling $3.7 trillion. Much of this is overseas in liquid instruments, such as $333 billion worth of U.S. Treasuries and bank loans to the U.S. If, in fact, George Bailey’s dilemma does hit Japanese banks, if there are huge runs on deposits, these overseas loans could be “called in.” And, if that happened, as Forbes puts it, an “economic contraction would sweep America and the globe.”

Rygi Musha, a Japanese strategist for the Deutsche Bank in Japan probably put the most ominous words to it. He said, “The world is heading for a once-in-a-century economic crisis.” I agree.

Tags: finances