My sister and I hated losing Monopoly. When faced with bankruptcy, we’d beg the other to lend us more money to keep the game going.

Something like that just happened with the global economy. The big difference is that the economy is not a board game. There is a lot more at stake, and it’s possible for everyone to lose all at once.

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Japan has been losing badly—and it’s threatening to bring down the U.S. This is an example of the chaotic mess the global economy has become and how easily it could collapse.

• Japan’s debt is around 250 percent of its gdp, making it twice as indebted as the U.S.
• It’s struggling to get out of a deflationary spiral: People feel poorer, so they spend less, so they earn less, so they feel poorer, so they spend less.
• Japan’s central bank has instituted some of the lowest interest rates in the world, which dipped even below zero before February 2024: The bank would pay you to borrow money.
• This has fueled the “carry trade”: Borrow money cheaply in Japan, buy dollars, invest in U.S. treasury bonds or other assets, and make easy money.
• Even the Japanese government has got in on the act. It sells yen and buys dollars. This makes the yen weaker, so the cars and gadgets Japan sells abroad are cheaper, stimulating Japanese manufacturing. The Japanese government then invests the money in U.S. treasuries.
• The result is that Japan is massively in debt but is also America’s largest creditor.

Now the wheels are coming off. Japan likes a weak yen, but there is such a thing as having a currency that is too weak. Last week, the yen hit its lowest level in about 40 years. Why?

• America’s interest rates have risen much faster than Japan’s. You can borrow in yen and pay 1 percent interest, then invest in U.S. treasuries and earn 5 percent. That difference turbocharged the carry trade, meaning many investors were selling yen, driving the price down quickly.
• Japan has to import almost all of its energy. The Iran war has sent those prices sky-high, so Japanese importers have to sell even more yen to buy the same amount of fuel.
• Japan could solve the problem by raising interest rates. But its heavy indebtedness means raising rates will become very expensive very quickly. This could push it back into the deflationary spiral it has worked so hard to escape.

Japan had another option: Sell some of its mountain of U.S. treasury bonds and use those dollars to buy up yen. This would strengthen the yen and stop the collapse.

• This made the yen America’s problem. If Japan stops lending to America, let alone sells the bonds it already bought, interest on America’s government debt could rise quickly.

So America’s Federal Reserve stepped in to join the Bank of Japan in trying to stop the collapse. This is the first time these two have worked together to prop up the yen since the Asian currency crisis in 1998. They sold billions of dollars’ worth of euros and bought yen.

• The latest figures from this morning indicate the Fed and Bank of Japan have been less successful in stabilizing the yen than they’d hoped.

The global economy has become a complicated mess of Band-Aids and short-term solutions designed to keep everything going just a few years longer. We’re all addicted to debt, and the problems caused by that addiction are popping up everywhere.

• America, in particular, desperately needs to keep borrowing money. Now it’s bailing out countries just so those countries can keep loaning it money. The U.S. is doing whatever it takes to keep the game going for another turn.
• The Bank of Japan and the Federal Reserve seem likely to find a way to patch things up for now—again. But global debt levels cannot keep exploding forever.

The fact is, our financial system is built on sin. Psalm 37:21 says, “The wicked borrows, and cannot pay back, but the righteous is generous and gives” (Revised Standard Version).

“Sins have consequences,” we wrote in 2018. “Mr. Armstrong believed that a worldwide financial crisis would accelerate many dire end-time prophecies.” For more on that coming crisis, read “The King of Debt.”

Ethiopia, Tigray Forces Resume Fighting

Fighting erupted between the Ethiopian government and opposition forces in the nation’s Tigray region on Saturday. It is the most serious breach yet of a 2022 peace deal that ended the 21st century’s deadliest conflict to date.

• The 2020–2022 phase of violence between the government and the Tigray People’s Liberation Front claimed an estimated 600,000 lives.
• Analysts warned for months that the war would restart soon, and Saturday’s clash could become the first battle of many. Hundreds of Ethiopians have already fled to Sudan.

The fighting erupted in Baeker, Mai Kadra and Shererina, a village on Tigray’s border with Sudan. Sudanese civilians who could hear the gunfire said it lasted all day; some projectiles killed refugees in Sudanese camps. Both sides blame the other for starting the fighting. Though conflict died down for an unknown reason early on Sunday, the situation remains fraught.

The real danger if this deadly war reignites is that violence could spread throughout the region. Specifically, analysts fear the clash could draw Sudan into open conflict with Ethiopia.

• Sudan’s foreign minister said on May 5 that his country was ready to fight Ethiopia if necessary.
• The conflict-watching organization acled believes the Tigray rebels sent a group called Army 70, which has been fighting alongside Sudan in its civil war, to take the territory.
• The Sudanese Echo reported that Ethiopian troops moved into the region along Sudan’s border at the behest of the United Arab Emirates. It’s reported that the U.A.E. wants to open a new front against Sudan to slow its efforts to win its own civil war.

Eritrea and other groups would likely join the fight should a full-out war in Ethiopia resume.

• Hours after the fighting ended Sunday, high-ranking Tigray leaders welcomed senior Eritrean military commanders to the region. (Click here for a deeper look at these threats.)

WarFronts reported that, should full-out war erupt, “Ethiopia will need a Noah-sized ark to save it.”

Bible prophecy says Ethiopia’s government is about to change drastically. A renewed conflict could provide the upheaval necessary for the fulfillment of this imminent prophecy.

Spokane Burns

In what Spokane Mayor Lisa Brown called “the worst natural disaster our region has faced,” three wildfires have been torching Washington’s Spokane County since Saturday, consuming over 10,000 acres, destroying over 700 structures, and forcing at least 67,000 people to evacuate. At this point, they are still zero percent contained.

• Local resident Aaron Farinacci has been arrested on suspicion of arson. There are currently no reported fatalities, but 14 people are unaccounted for.

Spokane resident Katie Sullivan told komo News: “There was a moment of fear I think I’ve never felt before in my life where a cloud of smoke comes and blocks the sun and you can hear things exploding, catching fire. … There’s nowhere to go.”

Fourteen other major wildfires are burning in other parts of Washington. The state experiences wildfires every summer, and in terms of acreage, this fire season is not the worst in even the last decade. But unlike most fire seasons, it is affecting heavily populated areas.

When such disasters strike, a common refrain among politicians and other leaders is that their “thoughts and prayers” are with the affected. This implies an appeal to the divine. Why would a loving God allow an entire community to go up in smoke like this?

Detailing God’s judgment against an evil nation, Nahum 1:5-6 read: “The mountains quake at him, and the hills melt, and the earth is burned at his presence …. Who can stand before his indignation? and who can abide in the fierceness of his anger? his fury is poured out like fire, and the rocks are thrown down by him.”

• Verse 7 continues: “The Lord is good, a strong hold in the day of trouble; and he knoweth them that trust in him.” Yet with Spokane in trouble and some people praying for help, why is He not acting as a stronghold for them now?

These questions deserve answers. Our free booklet Why ‘Natural’ Disasters? states: “We cannot be careless about something so critical. We are talking about the state of our eternal lives!”

These questions do have answers. Why ‘Natural’ Disasters? explains how disasters like those in Spokane fit in with God’s plan and why “such disasters should increase your faith—not decrease it!”

IN OTHER NEWS

Russia and China elevate satellite-destroying capabilities: Moscow and Beijing are sharing intelligence, orchestrating joint strategies, and investing ever greater sums into capabilities to destroy or disrupt military satellites, the Indo-Pacific Defense Forum warned yesterday. Those capabilities include co-orbital satellites capable of impeding other nations’ satellites, electronic warfare systems for jamming communications, and ground-based infrastructure, such as directed-energy weapons that disrupt optical sensors hundreds of miles above. The Trumpet has long warned of the stratospheric danger of America’s reliance—specifically that of its military—on computer technologies that are highly vulnerable to enemy attack.

Dads’ junk-food diet linked to chubbier babies: A Brazilian study published on Saturday in Nutrition Research found that fathers who consume more chips, soda, fast food and other ultra-processed foods before conception tend to have heavier babies with extra fat in the thighs and waist. Scientists tie this to epigenetics, the process by which a person’s diet and other health choices can switch genes on or off without changing their actual dna. Higher birth weight and early fat may raise later risks of obesity, diabetes, heart disease and reduced motor skills. Mothers who ate the same foods early in pregnancy had the opposite result—smaller, lighter babies. The work shows both parents’ diets matter and gives yet another reason to cut out low-nutrient, high-toxin foods.