Bond markets reeled after United States President Donald Trump imposed 10 percent tariffs on nearly every American trading partner. Yet at least one country stands to benefit: Germany.

U.S. 10-year treasury bond yields have spiked from 4.00 percent to 4.38 percent over the past two weeks, yet German 10-year bond yields have fallen from 2.64 percent to 2.49 percent. The reason U.S. yields rose, while Germany’s fell is that many investors started selling their U.S. bonds and replacing them with German bonds.

“Traditionally, you might have gone into the U.S. during a period of volatility, but this is a U.S. story,” Ken Egan, senior director for sovereigns at kbra, told cnbc on April 9. “Germany is benefiting from a wider flight to quality. The country has already told the market what it’s going to do; there’s clarity about what its path will look like.”

Debt-to-GDP

Since the U.S. has a 124 percent debt-to-gross domestic product ratio, many investors are worried that a protracted trade war could hurt America’s ability to pay back its investors. Germany has a much lower 63 percent debt-to-gdp ratio. That makes German bonds seem like a much safer investment in times of financial turmoil.

Silvia Merler, the head of esg and Policy Research at Algebris Investments, believes the euro could end up replacing the dollar as the world reserve currency if the eurozone bands together and starts marketing eurobonds.

The eurozone’s debt-to-gdp ratio is only about 88 percent—worse than the German ratio but much better than the U.S. ratio. This means eurobonds could be an attractive alternative to U.S. treasury bonds if Germany agrees to take responsibility for highly indebted neighbors like Portugal, Italy, Greece and Spain (collectively referred to as the pigs).

Fiscal Union

In 1979, the late Herbert W. Armstrong warned Chinese leader Tan Zhen-lin, the vice chairman of the National People’s Congress, that a group of European nations would unite into a military superstate. Mr. Armstrong said:

Mr. Vice Chairman, there is something I want to say to you about Western European defense against the Soviet Union. I do not expect you to believe what I’m going to say, but I’ll tell you, and you can believe it after it happens.

There will be, within the next few years, a union of 10 nations or groups of nations, in Western Europe, and it might include two or three Russian satellite countries, in a union of church and state, brought about largely by the Roman Catholic Church. Now, I’m not in any way in favor of it, but it will form a short-lived giant world power with military strength equal or superior to either the United States or Russia. They will have a common currency, a common government and a common military power. It will emerge out of the present Common Market.

Mr. Armstrong delivered this prophetic warning based on Revelation 17:12-13. The “Common Market” did not adopt the euro as its common currency until 1999, some 13 years after Mr. Armstrong died. But the eurozone now has a common currency and is working toward a common government and common military power.

The decline of the U.S. dollar could well be the catalyst that prompts the eurozone to unite into a military superstate capable of raising money through the sale of eurobonds, like the U.S. currently sells treasury bonds.

To learn more, read “How the Global Financial Crisis Will Produce Europe’s 10 Kings,” by Trumpet editor in chief Gerald Flurry.