Stock markets across the world slumped on Monday as China continued its struggle to bring its economy under control. Last Thursday, there was a record spike in commercial lending rates as the government took measures to limit risky credit growth.
While China’s economy has grown at breakneck speed for the last few decades, it now faces the same problem the United States faced in 2008: a credit bubble. Excessive borrowing during its boom years has caused Chinese businesses to rack up huge amounts of debt that they can’t pay back. Now the Chinese government is cracking down to try and prevent a serious meltdown like the U.S. had.
But the crackdown is coming at a difficult time. The hsbc Purchasing Managers Index for May rated China at 49.2, indicating that its manufacturing sector was shrinking; a rating over 50 means a country’s manufacturing sector is expanding. A shrinking manufacturing sector suggests that China’s exports are falling. But if China’s exports are falling, how will it be able to pay its massive debts?
A full-blown economic crisis in China would have serious repercussions for the rest of the world, considering the U.S. is also going through some shaky financial times as the Federal Reserve looks to tighten its ultra-loose monetary policy as well. If China’s exports diminish, China’s manufacturers will inevitably decrease their imports of raw commodities. Commodity producers will feel the squeeze.
And no nation will feel it worse than Australia.
In fact, Australia is already beginning to feel the effects. Newcrest Mining, Australia’s biggest gold mining company, saw its stocks fall 7.9 percent on Monday to near 10-year lows. Newcrest Mining’s stocks have been sliding for months but this has been its biggest hit. Two of the world’s largest coal mining companies, Peabody Energy Corp and Glencore Xstrata, announced on Tuesday that they would be cutting a combined 500 mining jobs in Australia. Anglo American Chief Executive Officer Mark Cutifani said, “In the past 12 months alone, close to 9,000 mining jobs have been lost in New South Wales and Queensland. Based on current press coverage, those numbers look like they are about to rapidly increase.”
Many are saying that Australia’s resource boom is over, and there are fears of how well it will handle a transition to an economy that isn’t driven by mining. Australia’s economy only grew by 2.5 percent in the first quarter of this year, below its decade-long average of 3 percent. Right now, its non-mining economy remains fragile, and if demand for raw materials decreases, Australia has little to fall back on.
Australia is in an especially difficult position because China is Australia’s biggest trading partner. The Wall Street Journal quoted Greg Gibbs, a currency strategist at rbs in Singapore, as saying, “‘If a China financial crisis evolves’ the Australian dollar is at risk of falling to us$0.70.” Right now it is trading at us$0.92, the lowest it’s been in 2½ years.
While Australia has profited from China’s rise for the past few years, the Trumpet used Bible prophecy to predict in 2008 that Australia’s natural resources weren’t a guarantee against recession:
The average Aussie may think the massive demand for Australia’s raw materials will bail the country out of any economic hole into which it risks sinking. On the surface that may appear to be so—as long as the demand is spread across a number of customers and as long as the strength in demand continues. Australia’s problem with this is that it has too few eggs in too few baskets.
America’s latest move in its retreat from Afghanistan has once again shown how desperate it is to remove itself from a costly and arduous war. While the United States attempts to hand over more authority and jurisdiction to Afghan forces, it is being forced to deal with what to do with all its equipment. Should it be transported, sold, abandoned, given to the Afghans, or destroyed? The U.S. has a mass of expensive machinery which, if not dealt with, could end up falling into enemy hands.
One of the biggest problems is what should happen to the mine-resistant ambush-protected vehicles (mrap’s). The problem with these hulking vehicles—which cost over $1 million apiece—is that they are too expensive to ship home. So the U.S. is now taking steps to scrap the vehicles.
The U.S. could have handed the vehicles over to Afghan troops, but the Afghans lack the ability to maintain and operate this equipment. Lt. Gen. Raymond V. Mason, the deputy chief of staff in Afghanistan, is reported as saying, “We don’t want to give [the Afghans] a lot of equipment that they can’t handle.” Instead, the U.S. has worked to outfit the Afghan forces with light all-terrain vehicles that are more suited to the Afghan landscape.
The option of selling the equipment is also unlikely to work. Buyers would have to try to get the equipment out of Afghanistan themselves, something the U.S. is already struggling with. To give more incentive, the U.S. could sell the military hardware at discount prices, but that would hurt the U.S. defense industry.
Afghanistan isn’t like Iraq. Iraq shared a border with Kuwait, which already housed U.S. military hardware. It was just a matter of driving south into the neighboring country and leaving the equipment there until it was reassigned. To drive the mraps out of Afghanistan would mean traveling south through Pakistan. According to Maj. Gen. Kurt Stein, who is overseeing the drawdown in Afghanistan, corruption, taxes, bribes and tariffs make it an expensive trip. Pakistan sees that it has the U.S. over a barrel, and will make the most of the opportunity.
The idea of transporting all the military hardware out of the country is not an option. More than 20 percent of America’s equipment will be scrapped, destroyed or abandoned. The remaining gear will cost $2-3 billion to repatriate, and then repairs will sap the U.S. government of a further $8-9 billion.
For now, the U.S. is cutting its losses and taking the less expensive option of selling the mraps for scrap. The U.S. is receiving only pennies for every pound of scrap it sells to local dealers. On top of that, because of the durable nature of the machines, it takes 12 hours to break down a single mrap. Million-dollar vehicles are being sold for loose change, and then there are workers that need to be paid for breaking the machines down.
A report from a Harvard research project totaled the cost of the wars in Iraq and Afghanistan as being between $4 and $6 trillion. That makes them the most costly wars in U.S. history. The billions of dollars the U.S. has invested in Afghanistan has not brought about peace. Nor have the lives and sacrifices of U.S. and other international soldiers brought real change. According to the Afghan ngo Security Office, the first quarter of this year has seen a 47 percent rise in attacks on Afghan security forces. Now, at a time when Afghanistan needs a strong U.S. presence, Washington is having the military tear apart its machinery and sell it off in pieces to scrap companies.
The U.S. is abandoning Afghanistan at a critical moment. The U.S. foreign policy of economizing its forces and becoming more of an observer than a major player when the battle is not yet won sends an ominous message to the world: America is tired of fighting. It has all the military armaments, but no will to use them.
“Suicide bombing, towns and villages getting blown up, allegations of extra-judicial killings by the police and the military, kidnappings, terrorist attacks on government establishments—total confusion and a lack of solutions to the violence is no longer just news, but a terrifying daily reality show,” he wrote (May 20).
Nigerian President Goodluck Jonathan declared a state of emergency in three of Nigeria’s 36 states on May 15 as the Nigerian military began to push back against the Islamic terrorist group Boko Haram.
Just over a week before, on May 7, Boko Haram killed 22 policemen, 14 prison officials, two soldiers and five civilians during an attack on a prison, according to the Nigerian military.
That was merely the latest in a whole series of attacks. Between April 19 and April 21, at least 185 died in one of the terrorist group’s biggest attacks.
Sixteen students and two teachers were killed last week as Boko Haram attacked two schools. Many students are too afraid to attend.
Government officials report that 19,000 farmers have fled their homes due to attacks and threats from Boko Haram. Borno state agriculture commissioner Usman Zannah warns that the region is now expecting serious food shortages.
“The insecurity is spreading to other parts of the country,” warns Ehikhamenor, saying the nation’s largest city, Lagos, is coming under threat (ibid). “Many churches in the city have fully armed policemen holding AK-47s guarding entrances during Sunday services,” he wrote. “And it is no longer odd to walk into a café or restaurant and find armed policemen guarding diners, with guns resting among cutlery.”
“When we now appear in foreign news segments we are right there with Syria, Afghanistan, Iraq … places that are in full-blown war and used to seem so far away,” he concluded. “And the question trembling in most people’s lips now is—are we also at war in Nigeria?”
The bad news for Ehikhamenor is that things seem set to get worse. Iran is getting involved in Nigeria.
Iran and Hezbollah
Nigerian authorities arrested three Hezbollah operatives between May 16 and 28 in northern Nigeria’s biggest city, Kano, and later they arrested a fourth. The operatives had thousands of rounds of ammunition, 17 AK-47s and 11 60-mm anti-tank weapons, as well as rocket-propelled grenades, anti-tank mines and other weapons.
Just days earlier, on May 13, two men were sentenced to five years in prison for their involvement in a 2010 plot to smuggle weapons to Gambia. One of the men, Azim Aghajani, is believed to be a member of Iran’s Revolutionary Guards’ infamous Quds force.
In February, authorities arrested three men whom they accused of being members of an Iranian-trained terrorist cell that planned to attack U.S. and Israeli targets.
No wonder Israel’s left-wing newspaper Haaretz concluded that “more recently it became clear that Nigeria, Africa’s most populous nation, has become a hotbed for Iranian/Hezbollah terrorist activities.”
Nigeria already has its own home-grown version of Hezbollah. In the wake of the 1979 Iranian revolution, members of Nigeria’s Muslim Student Society traveled to Iran, where they were trained to repeat the revolution in Nigeria, according to Dawit Giorgis, a visiting fellow at the Washington-based think tank Foundation for Defense of Democracies. These students formed the Islamic Movement in Nigeria (imn), which “flourished with cash, training and support from Iran,” he wrote in an article for cnn.
“The imn has provided Hezbollah-style military training to hundreds of Nigerians in camps throughout northern Nigeria,” he wrote. “And although the group has yet to launch an attack, it is surely not unreasonable to expect an attempt at some point. As Muhammad Kabir Isa, a senior researcher at Nigeria’s Ahmadu Bello University, told the bbc: ‘When you embark on military drills, you are drilling with some sort of anticipation. Some sort of expectation.’”
Giorgis also warns that the leader of the imn “has reportedly worked to ensure that his members are recruited into the army, the police force and the state security establishment.”
Iran obviously has a powerful tool already in place in Nigeria, just waiting to be mobilized.
The other major fear is that Boko Haram could link up with Hezbollah and Iran, if it has not done so already. When the arrest of the most recent Hezbollah members was announced, Nigeria’s military said it was investigating the possibility of a link between the two terrorist groups.
Bassey Etang, director of the State Security Service in Kano, said “we cannot link them with Boko Haram until the conclusion of investigation, but we suspect such group like Hezbollah can have links with Boko Haram.”
Boko Haram follows the Salifist Sunni tradition of Islam, while Hezbollah and Iran are Shiite. Boko Haram is also believed to be receiving support from al Qaeda, whom Iran is fighting in Syria. But such an alliance would not be unprecedented. Iran has already demonstrated that it is willing to work with al Qaeda on occasion, in order to attack the West.
Boko Haram also appears to have been strengthened by other African Islamist groups. Some of Nigeria’s militants fought in northern Mali and have returned with heavy weapons that presumably came from Libya.
But what does Iran have to gain through this involvement? Adel Assadinia, a former Iranian diplomat who fled to the West, said in an interview with freelance journalist Dan Brett published in 2009 that in working with groups like the imn, “Iran’s objectives are to establish a local power base to exert influence over the national government and to act against Western interests.”
The Nigerian government has already been forced to withdraw troops from Mali in order to gain control of its own country, according local media.
Nigeria is also Africa’s largest producer of crude oil, and the 12th largest in the world. It has the second-largest proven oil reserves in Africa, after Libya. The oil production takes place on the coast, away from the Islamist groups’ centers of power. But if they could destabilize the country enough, they could disrupt this oil industry. Add to that Iran’s control of the Strait of Hormuz, influence in Libya and alliances with nations along the Red Sea, and it becomes clear that Iran has formidable power to disrupt the world’s energy supply.
With a population of 175 million, Nigeria is also Africa’s most populous country—the seventh most populous country in the world. This alone makes it one of the most strategically important countries in the region.
In February this year, Trumpet editor in chief Gerald Flurry warned that “Northern Africa is turning into a battleground with enormously important prophetic implications,” in an article that appeared in the April print edition.
“Iran has designs on being the strongest power throughout the region, and is extending its reach throughout North Africa,” he wrote.
Iran’s push into Nigeria is part of this same strategy, though it will not necessary win, especially as Europe has shown that it is willing to step in if things get too bad.
Iran’s pushy strategy is bringing it increasingly into conflict with Europe. For more on this important battle in North Africa, see Mr. Flurry’s piece “Watch Algeria!”
German prosecutors are investigating two men of Tunisian origin they suspect were planning “extremist” attacks using model airplanes.
The federal prosecutor’s office said nine properties were searched on Tuesday in various parts of Germany and in neighboring Belgium. The aim of the searches was to gather “evidence for possible attack plans and preparations.” They also sought evidence of financing of extremist activity.
A spokesman for Bavaria’s State Office of Criminal Investigation said it sent a special forces unit comprised of special weapons and tactics officers into the suspects’ apartments. Investigators followed to search for evidence.
According to a statement from prosecutors, the two men are suspected of “procuring information and objects to commit Islamic extremist explosive attacks with remote-controlled model airplanes.”
Investigators also searched apartments of four associates they suspect are financing extremists. The investigation targeted another acquaintance suspected of money laundering.
Daniel 11 prophesies of a coming battle between the German-led king of the north and the Iranian-led king of the south. Iran is provoking Europe through its sponsorship of European-based terrorism. For more information on this coming battle, read our booklet The King of the South.
German Machinery and Equipment Industry Dominates Europe
The Berlin government proudly declares, “Machinery and equipment (M&E) is the second-largest and most innovative industry sector in Germany. It is one of the technological motors that drive Germany as a high-tech nation, and one which combines all of the key future technologies including electronics, robotics, materials, and software” (“Industry Overview: The Machinery and Equipment Industry in Germany,” 2013/2014).
System integrators from abroad have set up shop in Germany, the beating economic heart of the eurozone, lured by business-friendly policies and incentives. The long-proven history of engineering ingenuity, efficiency and technological innovation continues in Germany amid continental economic crisis, positioning the country as the undisputed M&E kingpin.
Europe’s economic malaise has not slowed Germany’s M&E juggernaut: “With a new all-time record market turnover high of €209 billion in 2012, Germany’s machinery and equipment industry remains the strongest in Europe,” with growth of 2 percent projected for 2013 (Germany Trade & Invest).
In early June this year, officials from Germany Trade & Invest, the “official government-sponsored investment attraction entity,” attended the 18th International Machine Components and Metal Working Fair hosted in Istanbul, Turkey.
The forum displayed M&E products, technologies and services. The German Pavilion enabled the industry leader to promote itself to system integrators and “provide free consultation on any phase of the investment process” (ibid).
The presence of Germany Trade & Invest in Istanbul was but one of numerous such ongoing continental and global endeavors aimed at attracting new business. The government agency offers free services to venture capitalists including location advice, legal and tax consultation, provision of statistics, government investment advice, and facilitation of recruitment and networking.
The M&E success is underscored by other market sector expansion, combined with a robust job market fueling the government-led international media marketing campaign “Smart-up Your Business,” which is aimed at luring more job creators to the land of employment Lebensraum.
The Holy Bible prophesies of these very events, identifying Europe’s economic powerhouse as most venerated by the “merchants of the earth” (Nahum 3:16; Revelation 18:3, 11, 15, 23).
Gerald Flurry has drawn particular attention to the domineering of Europe by Germany. On the surface, the ever increasing overt actions of its elites appear to be just another business plan. However, such aggressiveness, exploitation, regional expansionism and blatant Euromart domineering points to an aggressive economic battle plan whose scope has disturbing, far-reaching, historic implications. To understand more, request Gerald Flurry’s shocking booklet Germany’s Conquest of the Balkans.