The Coming Storm

Dark clouds are converging over America’s economy. Here are three scenarios on how they could develop into a serious storm that could hit you.
From the April 2007 Trumpet Print Edition

Fishermen and sailors must be constantly on the lookout and prepared for changing weather. Smooth sailing can quickly turn into a fight to keep one’s head above water. Likewise, today’s breadwinners must be prepared for abrupt changes in the economy. Good times can quickly turn into recession; high-flying stock markets can crash; and as history clearly shows, all bubbles eventually pop. Often, fat years are followed by lean years.

As economist James J. Puplava has said, “Economic and financial conditions never remain constant. They are as seasonal as the weather. Forecasts change depending on the patterns that emerge” (Financial Sense Online, March 15, 2001).

Financial meteorologists and prognosticators identify two looming, yet self-induced storm fronts threatening America’s economy: deflation and inflation. However, like climatologists trying to predict the weather, many disagree as to which poses the most immediate danger. Further, some identify a third and even more powerful economic storm brewing.

Although the outcomes of these coming storms are predicted to be very different, their origins are similar.

Mounting Debt Levels

Like a downdraft of dense freezing air, virtually all levels of American society have become weighted down and pressured with debt. Personal, corporate, state and federal debt levels are all at or near record highs.

U.S. consumer credit debt hit an all-time high of $2.4 trillion last September, soaring 80 percent since 2000. Similarly, the amount of household and mortgage debt as a percentage of disposable income is at its worst level in over a quarter century. For the past two years, Americans on average spent everything they made and then some. During 2006, people spent 1 percent more than they earned. The only other time in history America’s savings rate was in negative territory for a full year was during the Great Depression.

In corporate America, debt has become so endemic that there are now more companies with “junk” credit ratings than with investment-grade ratings, says credit rating agency Standard and Poor’s.

State and federal governments are also bursting with debt obligations. For example, New Jersey’s total debt has almost doubled over the past six years, from $15.2 billion to $29.7 billion. California is heavily indebted; New York, Massachusetts and Hawaii are all in the “danger zone” of debt, according to a Citizens Budget Commission report. Kansas’s state debt exploded from $420 million in 1992 to $4 billion in 2005.

Then there is America’s national debt, which is now a record $8.7 trillion. When all levels of debt (federal, state, corporate, personal, etc.) are totaled, according to the Federal Reserve Bank, Americans owe over $43 trillion—and that doesn’t include future government promises such as Medicare and Social Security.When those numbers are included, the total debt soars past $60 trillion.

In contrast, the total value of all the goods and services produced in America last year was only $13.2 trillion. The profit made on those goods and services was minuscule by comparison.

This massive ocean of debt threatens to swamp America.

Deflationary Storm Building

Americans are so indebted that a slowing economy could create a nasty deflationary spiral, or so predicts one school of economic analysts. These analysts say that when the debt bubble explodes, deflation (a reduction in the money supply) will ripple through the economy. For workers, this means less money to spend, whether because of job losses, asset depreciation or other trouble. That is why debt is so dangerous. It doesn’t matter that you lost your job or that your house has no equity left in it—debtors require payment.

A declining housing market is a looming deflationary force. Market psychology has changed, and people are beginning to anticipate lower future prices. The incentive to make a quick purchase has disappeared. “Bids are drying up. Many potential buyers are simply waiting for lower prices. The word is that ‘it pays to wait,’” says economic analyst Richard Russell. Why buy a house today when you can buy it for less next month or maybe much less next year? A 5 percent housing decline would result in at least $1 trillion in lost home equity. That’s definitely a deflationary force—never mind all the lost construction, home supply and financing jobs that would be associated with a housing bust.

Wage pressures are also aggravating deflation. Foreign competition is putting pressure on consumers. Thanks largely to outsourcing, American workers have lost bargaining power at the wage table. In the increasingly globalized economy, corporations have the option to simply move operations to low-cost foreign countries. Consequently, many workers are having problems maintaining their current salaries, let alone bargaining for wage increases. The legislation for a federal minimum wage increase currently being debated by Congress is proof that at least low-wage earners have little bargaining power. As wages lag and the cost of living increases, it gets harder for consumers to make debt payments.

There is coming a time when the consumer will be tapped out, and the debt-fueled consumption binge will end. When it does, consumer confidence will be replaced with fear and eventually panic. This panic will result in increased asset sales and reduced spending as workers attempt to pay off their debts (or save their homes). Evaporating confidence will cause consumers to rethink current and future spending plans. The economy, hit with a lack of demand, will slow, corporate earnings will fall as businesses lower prices to move stock, and layoffs will become prevalent. As more people enter the unemployment line, consumer demand will continue to fall and the deflationary spiral will intensify.

Yet, as America’s northern horizon grows dark with a deflationary storm front, rumblings of a high-pressure inflationary front approach from the south.

Even though economic theory suggests that massive debt loads are deflationary, increasing numbers of financial weathermen believe the massive debt in America will ultimately be inflationary. Why? Because there is only one way America will be able to pay all its bills—and that is by inflating its way out. That means printing more dollars.

Inflationary Storm Building

As of March 23 last year, when the Federal Reserve stopped publishing its m3 money supply statistic, the figures on how much money is being created are no longer public. Since m3 was the only number that provided a true picture of how much money was being put into circulation, many analysts criticized the Fed for trying to obscure its actions. You be the judge. During former Chairman Alan Greenspan’s tenure, the money supply was expanded at a comparatively low average of 5.85 percent per year. During his last year, the money supply ballooned by 8.9 percent. Since the March 23, 2006, m3 deletion, the U.S. money supply growth rate has shot up to an annualized rate of 12 percent.

The fact that Ben Bernanke is the new Federal Reserve Bank chairman is also helping the inflation argument. Before taking over, “Helicopter” Ben made himself famous by saying he would willingly drop money from helicopters if deflation ever threatened.

Although operating the printing presses in overdrive may ease national debt payments and temporarily stimulate the economy, the longer-term effects can be disastrous. As more dollars are created, each previously created dollar becomes worth less. Eventually, the higher number of dollars filtering through the economy results in price inflation. In other words, although some people have more money to spend, things cost more for everyone. Additionally, since dollars are worth less, your accumulated savings are worth less too. At a 12 percent growth rate, the nation’s money supply will double in just over six years. Will your retirement savings double in six years?

The primary reason inflation has not reverberated more severely is the dollar’s status as a reserve currency. Today, the majority of global trade is denominated in dollars. This means that as global trade has grown, nations have held on to more dollars as opposed to spending them in the U.S. This has mopped up much of the increased dollar supply. Also, since historically the dollar has been fairly stable, many nations have chosen to put their savings into dollars (by lending money to the U.S. and purchasing government bonds, etc.) as opposed to their own currencies. This too has kept excess dollars out of circulation.

However, the dollar’s status as a reserve currency is shaky. The euro is rapidly gaining on the dollar as a unit of global trade. As a result, demand for the greenback is receding. This is evident in the dollar losing a third of its value against the euro since the euro’s introduction. Over the same period, the greenback has suffered from double-digit percentage losses against other currencies such as the Canadian dollar and the Australian dollar.

This loss of value has undermined the dollar’s reputation as a safe store of wealth. Consequently, many nations have decided they want to hold less of their savings (currency reserves) in dollars. Central banks in Russia, Qatar, the United Arab Emirates and Syria have all announced intentions to dump dollars in exchange for euros. Sweden’s Riksbank has done the same, while the Bank of Italy, in what was the most dramatic move to date by a G-7 country to slash exposure to the dollar, dumped one quarter of its currency reserves (mostly U.S. Treasury bonds) in exchange for sterling. However, possibly the greatest threat to the dollar is coming from China’s central bank. China has telegraphed its desire to diversify, which would mean dumping at least some of the us$1 trillion it holds.

As more nations shun the dollar, selling their dollar holdings before their value drops further, and as the federal government continues to print more money to pay debts, a seemingly never-ending supply of dollars will begin washing up on American shores. Prices for oil, food and other commodities will skyrocket—especially foreign imports that Americans now rely so heavily upon. Foreigners seeking to spend their dollars before further depreciation will attempt to purchase American-based corporations and assets, further fueling price increases. The average American will be economically ravaged as his inflation-eroded savings lose purchasing power and as wages fail to keep pace with rising prices.

Yet, even while the deflation/inflation debate rages on, a third, more dangerous storm could be in the making.

Stagflationary Mega-storm

Economic analyst and investment newsletter writer Jim Willie warns that the ultimate result of such massive debt loads combined with excessive money creation could be the development of what he terms a stagflation “mega-storm”—incorporating some of the worst aspects of both deflation and inflation.

“The contrast of greater high pressure against greater low pressure will add to the storm differential. Its power will increase, just like a hurricane. Higher pressure will come from … monetary inflation …. Lower pressure will come from the shrinking value of the housing sector, from the diminished credit lines off flat home equity, and from eventual cutbacks in household spending” (Hat Trick Letter, Oct. 6, 2006). Puplava refers to this impending scenario as “the perfect financial storm.” He says the economic pressures at play are so huge, it is conceivable that the world’s present economic system, based upon the dollar, may be about to end.

If deflationary and inflationary forces butt heads, the U.S. economy will be whipped back and forth like a wind-torn flag on a flagpole.

If that happens, the resulting economic instability will lead to a vicious cycle of consumer spending cutbacks, a plummeting economy and soaring unemployment. Home prices, along with many other domestic-demand-driven assets, will be sucked into a deflationary spiral, likely stimulating a banking crisis as thousands of bad loans must be written off. Simultaneously, import prices will soar as the federal government continues to inflate and spend money in a vain attempt to stimulate the economy, prop up the banks, and keep paying promised Social Security and Medicare liabilities. The dollar will fall further as boatloads of rapidly depreciating greenbacks flood into America when foreign debt holders try to spend their U.S. dollars before they become worthless.

Where will these events leave the majority of Americans? Without a job, without a home, with little or no money (what little savings Americans do have will be destroyed by inflation), coping with food shortages and skyrocketing food and heating prices. As is the case during economic crashes, the middle class will almost certainly be hurt the worst.

Sound a little too apocalyptic? The fact is, it doesn’t matter what we may think: The storm is coming.

Setting aside the billowing thunderclouds of economic evidence, the Bible says this “mega-storm”-type scenario is just around the corner. Further, Scripture warns of a time when economic conditions in America become so bad that people will resort to extreme measures to secure food (Deuteronomy 28:53; Isaiah 9:20; Jeremiah 19:9).

The good news, however, is that God always provides a way out to the individual willing to obey Him and live by His way of life. There are steps you can take in order to be protected and even blessed as future economic storms hit America. To learn how to live God’s way of life, request copies of The Incredible Human Potential and Repentance Toward God, and read the following article, “Storm-Proof Your Financial House

American Lawyers: Terrorists’ Weapons

American Lawyers: Terrorists’ Weapons

Sean Gallup/Getty Images

A stealth battlefront in the “war on terror”
From the May 2007 Trumpet Print Edition

America’s “war on terror” is actually a war against some very inventive, if ruthless, individuals. Though outmatched by American might in every sense, clever Islamists are leveling the battlefield by turning our strengths into liabilities. Commercial jetliners, for example, make for devastatingly effective guided missiles.

One weapon Islamists are using against us is American lawyers.

The Rise of “Lawfare”

“Lawfare” is a recently coined term denoting efforts to achieve military objectives through legal maneuvers. It is proving to be a helpful tool for Islamists, who have used it to intimidate the American military into softening its battle tactics, to shut down terrorist surveillance programs, to access secret information on counterterrorist measures, to secure extra rights and even gain freedom for captured terrorists, and to swing American and global public opinion against the United States. These successes jeopardize American lives and handicap the nation’s war-making capabilities.

Lawfare practitioners do not act alone. They hire whole colonies of Lilliputian lawyers to tie Gulliver—the U.S. Armed Forces—to the ground. They rely on the active help of self-righteous civil rights groups such as the American Civil Liberties Union (aclu), the Center for Constitutional Rights (ccr), and the Council on American-Islamic Relations (cair). And giving their litigious efforts greater traction with the public is the artificial amplification provided courtesy of the newsmedia, which are eager to publicize any allegations of government or military wrongdoing while ignoring the big picture.

A peek at just how calculated the effort is came when British authorities seized an al Qaeda training manual instructing operatives, if captured, to falsely claim torture and other abuses. This tactic has worked especially well at Guantanamo Bay; detainees’ accusations have turned the prison into a lightning rod for public criticism over human-rights violations and generated countless demands for its closure.

U.S. federal courts are choked with lawsuits from Taliban and al Qaeda prisoners. The Wall Street Journal reports, “The suits range from habeas corpus petitions to free captured enemy combatants [such suits were dismissed by the Court of Appeals in Washington, d.c., on February 20 in its ruling on Boumediene v. Bush—though the case is being appealed to the Supreme Court], to tort suits seeking monies from U.S. government officials, to challenges regarding the detainees’ conditions of confinement. … Several suits [also] seek to hold the U.S. liable for the alleged misconduct of other governments”—such as torturing individuals whom the U.S. has deported (February 23).

Via several separate cases, lawyers have aggressively worked to secure the right of captured foreign combatants to petition federal courts for freedom. Misguided activists behave as though the rights given to U.S. citizens under the Constitution extend by natural-born right even to foreigners engaged in terrorism against the U.S. After spending considerable time on trial at all levels, up to the Supreme Court, the issue has met with some measure of success. (Most notably, in the 2004 Rasul v. Bush case, the Supreme Court found that appeals by prisoners at Guantanamo over wrongful imprisonment fell under the jurisdiction not of the U.S. military but of U.S. criminal courts.) That such efforts could put dangerous people back into business is evidenced by the fact that 1 in 20 terrorism suspects the U.S. government has released has later been found engaging in terrorist activity, according to military analyst James Dunnigan. It appears that some American lawyers are prioritizing invented “rights” of dangerous enemies over the lives of American citizens.

Trying terrorists and foreign combatants in U.S. criminal courts comes with genuine security risks. For one, there is a potential that, in the discovery process of a legal proceeding, in which each side must turn over information to the other, the enemy will learn how the U.S. gains its intelligence to prevent attacks. This occurred in 1995, during the trial of an Egyptian jihadist, when the U.S. handed over a list of names to the defendant’s lawyers that eventually fell into the hands of al Qaeda’s leaders, tipping them off to what Washington knew about them.

But the implications of extending the jurisdiction of civilian courts over military matters—in effect blurring the line between military law and criminal law—are even more far-reaching and ridiculous. Jeff Breinholt, deputy chief of the U.S. Department of Justice Counterterrorism Section, gives one example: “[T]he U.S. military could, under established rules in the Law of Armed Conflict, legally bomb a building, but then legally be prohibited, based on the Fourth Amendment, from searching the same building without a warrant” (, March 9).

While this would never happen, it illustrates the flaw in allowing enemies to call on the judicial branch of the U.S. government for help in a war being waged by the executive and legislative branches.

Criminalizing Warfare

In trying to handicap U.S. anti-terrorism efforts, these groups have also attacked technological intelligence gathering. In the most well-known example, the aclu, ccr and cair filed suit against the National Security Agency for listening in on phone conversations of al Qaeda suspects on American soil. With the help of the New York Times, the lawsuit attracted public outrage over the program; meanwhile, terrorists, having learned of their vulnerability, switched to using disposable cell phones that were beyond the listening ear of the U.S. government.

In the end, lawfare is meant to spook military leaders and soldiers into hypersensitivity over the legalities of each word and step; as they modify their actions to avoid being slapped with war-crimes charges, they lose effectiveness as a fighting force.

Bruce Anderson explained in the Spectator that soldiers “have to make instant life-and-death decisions. In the nature of human decision-making, not all of them will be the right ones. But if this means that lawyers thousands of miles away can spend many hours reviewing a decision which a soldier had to take in a fraction of a second, two consequences will ensue. Fine young men will be subjected to injustice. Worse still, the entire process of military decision-making will be degraded. At a moment when the soldier’s mind should be focused exclusively on operational requirements and the safety of his comrades, he cannot be expected to ask himself how the lawyers might second-guess him. If he does, he will cease to be a good soldier” (July 23, 2005). Just as the enemy wants.

It is not difficult to imagine how vulnerability to prosecution would undermine the confidence and readiness, not to mention morale, of a fighting force. Today’s military is already saturated with examples of political correctness trumping security concerns. As the Wall Street Journal said, the goal of lawfare seems to be nothing less than the “criminalization of traditional warfare” (op. cit.).

Of course the military must operate under the rule of law. But it is of necessity a different law than that which applies to the rest of the us. As one British general put it, “Soldiers are not merely civilians in uniform. They form a distinctive group within our society, which is required either to kill other human beings or … to sacrifice themselves for the nation.” Thus soldiers, operating under military law, face punishment and/or protection from military officers who are trained to review and judge actions within the appropriate context. Civilian courts, by accepting certain cases and ruling in ways that blur these lines, risk being used and exploited by enemies of the nation for nefarious purposes.

The fact that these Islamist abuses of the American judiciary are as successful as they are exposes some tremendous flaws in our system. The American judiciary has become a paperwork factory, a protocol mill that entangles us in a web of processes that provide only a caricature of real justice. Our pursuit of impartiality has effectively outlawed common sense.

“No One Goes to Law Honestly”

The logic in Proverbs 18:5 is basic, but it is largely ignored: “It is wrong for a judge to favor the wicked and condemn the innocent” (The Living Bible). A truly functional system could not be hijacked by enemies of the state; real justice would never take a backseat to criminal rights, real or imagined. For example, in the system of Mosaic law, in which much of American law finds its roots, is the simple but wise dictum, “Keep thee far from a false matter …” (Exodus 23:7)—a law that, if kept in a spirit of fair and sound judgment, would instantly unclog the judicial logjam that results from having to treat every trumped-up lawsuit with equal seriousness.

Even now, wise, authoritative judges can still shut down foolish lawyers and activists who seek to misuse the system. But as the Prophet Isaiah foretold of our modern world, such judges are disappearing (Isaiah 3:1-2). As a result, base individuals behave themselves proudly against the honorable (verse 5). Another of Isaiah’s end-time prophecies reads, “No one enters suit justly, no one goes to law honestly; they rely on empty pleas, they speak lies, they conceive mischief and bring forth iniquity” (Isaiah 59:4, Revised Standard Version).

Though a blizzard of accusations has been leveled against the U.S. over all aspects of the execution of its “war on terror,” all but a few have been proven false. By several measures, no military in history has worked harder in a time of war to protect civilians and mete out violence with such precision. Still, in the virulently anti-American environment of today, even false accusations, pumped through the megaphone of the media, serve to prejudice the American public and tip the scales against the U.S. in the court of world opinion.

Lawfare provides a microcosmic look at the nature of our time: The strong, under curses from God, are becoming weak; and the weak, strong.

Crimes Against Jews Soaring

From the April 2007 Trumpet Print Edition

Jews in the United Kingdom were victims of a record number of hate crimes last year, says a new report by the Jewish community’s defense organization, the Community Security Trust (cst).

The cst says these crimes have doubled in the last 10 years, and that 2006 saw a 31 percent increase in anti-Semitic incidents over 2005. The 594 incidents included 112 violent assaults, 70 attacks on Jewish property, 365 occurrences of abusive behavior, and 27 threats. Crimes in each category except threats represented at least a 34 percent increase over 200; attacks on Jewish property were up an astounding 46 percent. Of the incidents, more than one in five occurred during the 34-day war between Israel and Hezbollah.

Such attacks demonstrate a noticeable shift of attitude within a country that has been an ally of Israel. Ironically, however, biblical prophecy tells us that Britain and Israel face a common fate in the time ahead. For more, request our free book The United States and Britain in Prophecy.

Universal Prosperity: Is It Possible?

Universal Prosperity: Is It Possible?


Taken from the October 1984 Plain Truth.
From the May 2007 Trumpet Print Edition

Can you imagine a world where all poverty is banished? Well, I have news for you. Yes, good news. You’re going to see it, and in your lifetime, but not the way that men think.

Does a world of universal prosperity sound fantastic? Why should it? All material wealth comes out of the ground, and there’s enough in this Earth to provide plenty, even luxury for everyone. Stop and think a moment. Why is today’s world filled with so much poverty, hunger and want? Why do the few live in comparative wealth and the many in dire need?

One idea in circulation today is that God Almighty created this world to be poor; that God hates the rich and loves the poor. We hear a lot about “God’s poor.” Does God hate the successful and the prosperous? Is prosperity a sin?

Listen to what God Himself has said in His inspired revelation to mankind, the Holy Bible. Through John, God says, “I wish above all things that thou mayest prosper and be in health ….”

In the first Psalm you read this: “Blessed is the man that walketh not in the counsel of the ungodly…. But his delight is in the law of the Lord…. [W]hatsoever he doeth shall prosper” (verses 1-3). The man who walks God’s way, who delights in God’s law and is obedient in whatsoever he does, God says shall prosper. That’s a promise from God Almighty.

Notice Genesis 39:2-3: “And the Lord was with Joseph, and he was a prosperous man…. [T]he Lord made all that he did to prosper in his hand.” Joseph served God (verse 4).

Psalm 84 says: “[N]o good thing will [God] withhold from them that walk uprightly. O Lord of hosts, blessed is the man that trusteth in thee” (verses 11-12). Blessings are promised. Do you know that God set before His people blessing on the one hand and cursings on the other? And He said to man, “Choose.” Man has chosen curses and death, when God Almighty intended that man should choose happiness and blessings, prosperity and eternal life.

But God warns through David against setting our hearts even on the prosperity that He gives. That’s what’s wrong with this world.

The way to happiness and prosperity revolves around the true gospel of Jesus Christ. He preached the Kingdom of God, which means the government of God—God’s government over our lives and over society as a whole; over all of this Earth.

The laws of God’s government are the ways of love; of giving rather than of receiving; of serving, not getting the best of others. It is a matter of doing, not of inactive hearing. It’s a matter of diligence—applying God’s way, not the way of laziness. The Ten Commandments summarize that entire law. The Ten Commandments are the way into prosperity and financial success, if you understand the real meaning and spirit back of the Ten Commandments; their purpose according to the spirit of the law rather than just the letter.

The basic law of God’s government is the only way to peace, to true happiness and to lasting prosperity. But this world doesn’t believe it, and this world has not found prosperity. All the world’s ills, all suffering, all inequality and injustice, yes, and even all poverty have come from transgressing the spiritual law—the Ten Commandments.

Sin is the transgression of that law (1 John 3:4). The Apostle Paul said that that law is spiritual, holy, just and good. Many people don’t believe that today, and that’s why there’s so much poverty in this world.

To transgress the ways that lead to prosperity, to health, to peace, to happiness and joy—is sin, and the way of sin is not good for us. It brings penalties, and one of the penalties that we are reaping in this world is poverty. God Almighty never intended it. Sin, then, is the cause of poverty, of suffering, of unhappiness and even of death.

If all men would put their lives under the government of God—if they would live by God’s laws—all soon would be prosperous.

But this world has transgressed the laws of God. In the professing Christian world people have been brought up to believe that “the law is done away”—that we mustn’t obey that law today or we’ll be under a curse. That’s what many in the professing Christian world believe. Is it any wonder we have inequality, suffering and poverty? If only this world would turn to God Almighty and to God’s ways and live God’s ways. You’d just be dumbfounded at the result.

Jesus put the matter in its true relationship when He commanded us to seek first the Kingdom of God. That is, to submit our lives to the government of God (the Kingdom of God is the government of God), to obey God’s commandments, to live the life that God directs in His Word, to really seek after God and His ways, rather than setting our whole heart and mind on seeking after money. Jesus Christ promised that when we have done that first, material prosperity shall then be added.

But you’ll need to find the spiritual riches first, because they’re the more valuable.

Europe To Help Israel?

From the April 2007 Trumpet Print Edition

At least one Israeli Knesset member has lost faith in the United States’ ability to mediate the Arab-Jew conflict and says Europe should take over. Shlomo Breznitz of the Kadima party has proposed a radical plan to break the current deadlock: handing administration of the West Bank and Gaza Strip over to Europe until a Palestinian state can be established.

The plan would require following the plan implemented in the Gaza Strip last summer: dismantling Jewish communities and vacating the Jewish presence from the West Bank. The difference, however, is that rather than immediately turning the area over to Palestinians—which in Gaza has produced a haven for terrorist activity—the West Bank would move under the control of tens of thousands of European soldiers.

The proposal rules out a role for the U.S. because, says Breznitz, the U.S. “has lost its status as an honest broker in the view of the Palestinians and the Arab states.” This provides strong evidence of a trend the Trumpet has long been tracking—a shift in confidence away from the U.S. in favor of Europe. It also constitutes one of the strongest-ever statements of confidence in Europe’s peacekeeping powers from an Israeli politician.

It will be worth following this idea in the coming months. Based on biblical prophecies regarding a relationship opening up between Israel and Europe, and Israel apparently soliciting Europe’s help in managing its increasingly unmanageable problems, we expect some version of Breznitz’s proposal to gain traction in Israeli politics.

Port Gwadar Goes Operational

Port Gwadar Goes Operational


China has invested over a billion dollars into this strategic Pakistani port. What does it hope to gain?

The Chinese financed Pakistani port of Gwadar officially opened for business on March 20. This former fishing village turned strategic port-complex is set to become both a commercial and industrial center as well as a massive shipping hub. Its key geographic positioning will make it a jewel for its new Chinese investors. China has positioned itself to control another vital sea gate trade route.

“I stand where there was nothing except sand and dust when I came five, six years ago,” said Pakistani President Pervez Musharraf as he formally inaugurated the country’s new deep-sea port. “It is the friendship between China and Pakistan that has made my dream of Gwadar come true. It is this, the Chinese relationship with us, their spirit of assisting Pakistan, which has made this dream a reality. We thank you. We thank China.”

As President Musharraf stated, Pakistan does have much to thank China for. As the primary developer, China has spent more than a billion dollars in construction and has indicated its desire to spend multiple billions more on other future developments (, Nov. 20, 2006). Once complete, the port is intended to have road and rail links to Afghanistan, several Central Asian states, western China and northern India. China is also to construct a 60,000-barrel-per-day oil refinery, power plants, and an international airport, while the Port Singapore Authority International plans to build a desalination plant and cold storage facilities. Talks are also underway to develop a coal mine and rehabilitate a local copper-gold deposit. Several oil and gas pipelines radiating from Gwadar to China, Central Asia, India and Iran are also proposed. The completed center could feasibly rival Singapore, Hong Kong and Dubai, says the Business Recorder.

So why is China spending so much money in Gwadar?

The first reason is economic. Gwadar will act as a gate opening western China to the rest of the world. For centers in western China, the country’s east coast is more than twice the distance away. Additionally, China is sure to benefit from the estimated $60 billion in annual trade that the port will generate. Also, as future supplies of oil and gas from the Middle East reach China overland via Gwadar, thousands of miles of easily interruptible and more expensive ocean transport will thereby be eliminated.

The second and probably more important reason is Gwadar’s strategic value. The port of Gwadar is located on the southwestern coast of Pakistan, close to the Strait of Hormuz, an oil transit choke-point through which more than 13 million barrels of oil passes each day. Reports indicate that China will be allowed to use Gwadar to dock its navy.

Thus, China, by having a controlling interest in Gwadar, is achieving two critical objectives: On one hand it is establishing a base from which its navy can guarantee the security of its oil as it comes through the Strait of Hormuz. On the other, it is increasing its navy’s sphere of influence. Gwadar will serve as a base from which China can patrol the high seas—specifically the Indian Ocean and the Arabian Sea. The Chinese Navy will be on the doorstep of the Middle East!

Chinese naval penetration of the Indian Ocean and Arabian Sea has caused concern in Washington, New Delhi and Tokyo. Authorities are concerned that China will now have a proximal base of operations for its navy, which would greatly increase its capability to project both military and political influence in the region. In the case of any conflict, this would increase China’s ability to obstruct oil transport sea lanes. Some analysts are even calling Gwadar the “Chinese Gibraltar,” likening it to the British-owned sea gate that controls maritime trade and movement between the Atlantic Ocean and Mediterranean Sea (Gibraltar is also arguably one of the top two or three strategic sea gates in the world).

China has taken control of some of the most critical seaports around the globe. Chinese government or private companies own or partially own ports in Europe, Asia, Latin America, South America and even Africa.

Reports indicate that Japan and India are concerned about growing Chinese influence in Gwadar and elsewhere. However, soon their concerns won’t matter. Relations between these two nations and China are elsewhere showing real signs of improvement and are bound to get even better in the future. Bible prophecy shows that Japan, India and China will be three of the nations that comprise a great Eastern alliance. Russia and China in Prophecy will help you prove these facts for yourself.

It’s a different story for America, however. China’s naval presence is growing and has become a serious concern for the United States. U.S. influence over and ability to control global trade and shipping is quickly eroding. Even the U.S.-built Panama Canal—probably the most strategic sea gate in the world—is long gone from U.S. control, just as the Bible prophesied would happen.