Can you say "yuan"?
We're borrowing $4 billion each day to pay our bills. Growth in entitlement programs such as Medicare, Medicaid and prescription drugs, as well as Social Security payments, continue to fuel mind-numbing increases.
Something has to give.
To solve the problem of accumulating mountains of new government debt (and not even addressing the $16 trillion we already owe), we basically have three options:
> We could cut government spending by 31%.
> We could increase taxes by 46%.
> We can artificially create more money.
Which do you think our esteemed government will do? It's safe to theorize that neither party has the political gumption to cut government spending or increase taxes enough to stop the deficits from continuing to increase.
So the only viable alternative is to print more money. The process has already begun with Quantitative Easing (QE) by the Fed Reserve.
QE1 2008 $1.2 billion
QE2 2010 $600 million
QE3 2012 $40-60 billion per month with no end.
We will eventually be able to pay down the old debt in discounted dollars. Those with tangible assets (real estate, metals, etc.) will win, those without tangible assets will lose. It will be a huge tax on the poorest people with no assets.
The more dollars printed (inflation), the less each dollar is worth. As the dollar deteriorates, it diminishes our international reserve status and world influence. Eventually, we'll lose it entirely.
Who will step in and fill the void? It won't be Europe! The euro is in worse shape than the dollar!
China, however, is going the opposite direction.
Gold ATM dispenser in China
China is moving to incorporate a gold-backed, or partially gold- backed, Chinese yuan. The Chinese government is also encouraging their citizens to buy gold, even to the point of putting in gold coin dispensers in public places.
The Chinese work ethic also gives China an advantage. In Europe and the United States, employers are fearful to hire new workers because they are too expensive due to union contracts.
The largest concern in Europe about hiring a new worker is that they don't have the right to fire the worker. Once hired, it is almost impossible to get fired for any reason. The clash between the company and worker has become untenable.
But in China, the mindset is that you work hard, the company pays you a wage and the family takes care of everything else... i.e. retirement, medical, etc. A Chinese worker can quit if they don't like the wage but it's not a crime to make a profit in China-- unlike Europe and the United States where "profit" has become synonymous with evil.
China, a god-less communist nation, would love to take over the leadership of the world. The current Chinese leadership sees being a "world leader" as job security. Their citizens would relish being the most powerful nation in the world. The Chinese leaders also know that a stable money is a first step in reaching their lofty goals.
But for China to be serious about world domination, she must also have the strongest military. And guess what, the Pentagon is now concerned about the growing military strength of the world's most populous nation--China. What a coincidence!
If we're living in the last days of the Church Age, scripture states that we should see some gigantic nations building east of the Euphrates River.
Referred to as the Kings of the East (notice that "Kings" is plural), these oriental nations will be able to field an army of 200,000,000 troops and march all the way to Israel!
Just supplying an army of 200 million with food and clothing would be remarkable, much less move it across Asia!
Today, China is THE king of the east with 1.5 billion or so in population. India is another king of the east with 1.2 billion. If you throw in Japan, Indonesia and Bangladesh, you get another half billion. Together they could actually field an army of 200,000 million-- assuming they were properly motivated in the future dispensation of the Seven Year Tribulation.
We will never know the identity of the Kings of the East, but if we're living in the time near Rapture, we should see these nations growing in power and influence... which we do.
Keep your eye on China!!
Bill Perkins is the founder and Executive Director of Compass International, Inc.
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