Europe—What Does the Future Hold?
For Europe, hard times are coming as well. The Intelligence Digest of January 16, 1998, states that “Some European banks have exposures in the [Asian] region as high as 10 percent, or even 15 percent. The combination of debt rescheduling and bad debt provision could easily run as high as 20 percent of the Asian loan book, spread over three or four years,” meaning that potentially as much as 20 percent of the European loans to Asia will not be repaid.
An editorial by William Rees-Mogg in the January 22 London Times states, “The United States and Europe will lose exports and take in imports. Continental Europe will suffer the worst. The United States and Britain are now close to the limit of their expansion, but in Europe unemployment is already very high, at 12.5 percent in France and Italy, close to 10 percent in the former West Germany, and at 20 percent in eastern Germany and Spain. Europe does not have the high technology of the United States, which gives some American exports a monopoly power…. We [Europeans] must now expect the Asian exporters to get up off the canvas and land a heavy blow on the grey stubble of Europe’s chin.”
Europe also offers a real threat to America as well due to the impending competition against the American dollar by Europe’s new currency, the euro, which goes into full effect on January 1, 1999, less than ten months away. The Washington Post of January 26 says, “Economist Lester Thurow at the Massachusetts Institute of Technology predicts that, after a break-in period, the new euro will bring down the curtain on the era of American financial [superiority]. Within a decade, Thurow predicts a bipolar world in which jet airplanes and oil, now priced exclusively in dollars, will have two price tags and central banks around the world will divide their reserves between dollar and euro-based assets.” William Cline, chief economist at the Institute of International Finance was then quoted as saying, “Sooner or later, people around the world will have less need for holding [U.S.] dollars.”
The failing of America in its role as hegemon will drive a united Europe and its new currency up over America and the dollar. Many prophecies of your Bible deal directly with the rise of this new German-led, religion-driven, economic superpower known as the “beast.” See Revelation 13 and 18, and Habakkuk 1:6-11.
The City News of London, in its electronic telegraph of January 17, quotes Renato Ruggiero, the director-general of the World Trade Organization as saying, “While financial crises can rise and fall quickly, trade crises can have a more lasting and damaging impact. What must be avoided above all is a vicious circle of economic reactions and counter reactions leading to wider and deeper distress.” The article then says, “The trade body is concerned that the collapse in Asian countries’ currencies will cause other nations [like China] to devalue [their currencies] to remain competitive, or will encourage governments to erect trade barriers to counter the increased price of imports.” Mr. Ruggiero is then further quoted as saying, “The current situation is bad enough, but the greater danger is that we will make policy errors in response to these events which could prolong the crisis and even extend the difficulties. Turning inward in the 1930s in response to financial crisis helped drive the world into economic depression and, ultimately, world war.”