Your House Will Never Recover Its Value

Your House Will Never Recover Its Value

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Meanwhile a bigger, more dangerous bubble is forming.

For beat up homeowners with inflated mortgages, the road to recovery looks ominous. Economist Robert Shiller, co-creator of the Case-Shiller housing price index, said last Tuesday that house prices may not recover within this generation’s lifetime.

That is a staggering statement.

It means that millions of Americans’ biggest investments are not really investments at all—but are really depreciating consumer goods that will financially cripple them.

“I think there is a real chance that we are in a … slump that would go on for years and years,” he said. “Suburban housing may not do well for decades to come.”

The latest statistics seem to support Shiller’s view. House prices across the 20 city Case-Shiller index have fallen by 3.8 percent from a year ago. If you bought a $200,000 house just last year, it is now worth $7,600 less than you paid for it. If you put a 20 percent down payment on the house, you just saw a fifth of it disappear.

At the current rate of decline, in just five years that $200,000 house will only be worth $164,000. If you had to sell, after realtor fees and so on, that 20 percent down payment you scrimped and saved for, plus all the mortgage payments made over five years, would be completely gone.

Wiped out after five years. That’s worse than buying a brand new American-made suv.

Since 2006, national house prices have fallen by 34.4 percent. In some major cities, valuations are down more than 50 percent. The cost of an average house in America is back to 2002 levels.

Although some analysts think house prices have hit bottom, Shiller notes that national house prices have fallen for five straight months. Following the initial price plunge, “downward momentum in the real-estate market has accelerated in the past five years,” he says.

That may be startling news, but it is downright ominous considering everything the government has done to prop up the market.

But perhaps it should not be so surprising. There are always unexpected consequences of government interference. For example, many of the steps the government has taken to prop up the market may actually be setting it up for the next multimillion-unit pile-up.

Remember all those government handouts to help first-time home buyers purchase houses they couldn’t afford? Three years later, many of those buyers are now underwater with houses that have lost more value than what they gained on the tax credits. These homes could be foreclosures waiting to happen.

Additionally, with mortgage rates at historic lows, many realtors are convincing potential buyers that now is a once-in-a-lifetime opportunity to buy. Mortgage rates are at historic lows. But remember, for realtors it is always a great time to buy.

Interest rates are low because the Federal Reserve is artificially pushing them down to bail out the banking sector. This has cost the Federal Reserve hundreds of billions of dollars. It is unclear how much longer the Federal Reserve will be able to keep this up.

If rates return to their historic norms, mortgage rates could easily jump 3, 4, or even more percentage points. As rates rise, not only does the pool of buyers shrink, but house affordability plunges. A $1,000 per month mortgage payment at 4.5 percent will let you purchase a $200,000 house. But at 8.5 percent, you can only afford a $130,000 house.

Buy that $200,000 Cadillac of a house today (at record low rates) and you might find yourself owning something valued like a used Oldsmobile in a couple of years, and a busted down old junker not long after (if rates just return to mean). But as far as the bank is concerned, you still need to make payments on the Caddy.

Many politicians see this looming problem too. There is currently a push by some lawmakers for principal forgiveness. By principal forgiveness they do not mean the bailed-out big banks should forgive mortgages. They want the government—aka taxpayers—to pay down underwater homeowners’ mortgages.

So if housing prices are not going to recover for a generation, what does that mean for the average American?

It means baby boomers will have to find another way to fund retirement. It means that people will be stuck paying interest on something that is going down in value. It means fewer jobs. It means a slower economy.

And it means: Get ready for another bubble—and another accident.

From 2001 to 2007, 40 percent of all jobs created in the U.S. were either directly or indirectly related to the housing market. These jobs are not coming back anytime soon.

That means there will be growing pressure on politicians to do something—anything—even if it is actually detrimental to the overall health of the economy. Politicians will embrace ever more dangerous stimulus measures to get the jobs back. The government paying off people’s mortgages will only be the beginning.

The problem is that America is broke. The national gas tank is almost empty. The engine is burned out. The battery is dead, the radiator is leaking and the pistons are starting to seize. For now, the government credit card still works, but there is no money for a new car, and our foreign bankers are threatening to cut us off.

America’s ability to borrow money may be far more limited than many people think.

When the federal government finally hits the ultimate debt ceiling—and eventually it will hit it—the Federal Reserve will have no choice but to drastically intervene in markets.

The Fed is already printing money to cover more than half of all government spending. And that isn’t enough. Ben Bernanke is once again hinting that more “stimulus” will be needed to jump-start the economy.

But sustained money printing is an accident waiting to happen. All that newly created money and credit may cover government debts, but it eventually flows into the markets. It distorts them. Then the speculators arrive. Prices skyrocket. You know the rest. It ends with tears.

Not long ago there was the dot-com bubble. Next was the housing bubble. Get prepared for an even bigger bubble. It is forming now. And it is the most dangerous one yet. When it pops, it could lead to the worst economic crash in the nation’s history. For a preview of what that bubble is, look for a future column.

Herbert W. Armstrong Walked Through Open Doors to Deliver the Gospel to Latin America

Herbert W. Armstrong Walked Through Open Doors to Deliver the Gospel to Latin America


Japanese Diet members helped him reach seven Latino countries.

During August 1974, Herbert W. Armstrong, Ambassador International Cultural Foundation (aicf) officials and members of the Japanese Diet completed a seven-nation tour through Latin America. Mr. Armstrong organized for the group to travel aboard the Gulfstream ii aircraft that the aicf owned and used as global transport for this ambassador for world peace without portfolio. The Gulfstream ii allowed carefully scheduled air travel to expeditiously reduce the trip from what could have been around six weeks by commercial air travel to just two weeks.

After rendezvousing in Hawaii and boarding the Gii, Japanese officials set about opening doors for Mr. Armstrong to preach Christ’s gospel message, per Matthew 24:14, in Mexico, Panama, Guatemala, Peru, Ecuador, Brazil and the Dominican Republic. A highlight came while in Brazil when the combined delegation greeted the president and officials from government departments. Mr. Armstrong and aicf representatives “met chiefs of protocol in the countries visited” to confirm “future appointments will be set up with their presidents and any other government leaders that Ambassador College wishes to contact” (Worldwide News, Sept. 2, 1974).

Head of the Japanese delegation was former minister and Diet member Bunsei Sato. He was one of several international representatives who attended the opening of Ambassador Auditorium and had also visited all three campuses of Ambassador College, in Pasadena, Big Sandy, Texas, and Bricket Wood in England.

During a dinner conducted in Washington, d.c, following the two-week goodwill tour of Latin American countries, representatives of the Japanese delegation thanked Mr. Armstrong for the aid he had provided them on this trip. aicf officials noted, “They were extremely grateful because they know they would be unable to make the kind of effort they did in such a limited period of time without the utilization of the aircraft and the crew and the help of Mr. Armstrong ….” Japanese Prime Minister Tanaka reportedly “extended his gratitude” to the much-revered “ambassador for world peace without portfolio,” who affectionately referred to 10 key government officials as “his Japanese sons” (ibid).

Two years earlier, Mr. Armstrong related an incident where Prime Minister Eisaku Sato was visiting California to see President Nixon and called for a personal meeting with Mr. Armstrong. Unable to attend because of illness, Mr. Armstrong sent two Ambassador College executives in his stead. Mr. Sato requested during that meeting “that we fly two top members of the Japanese Diet (their Congress) and eight representatives of the Japanese press to our Texas campus for a couple of days, which we did. They had ‘the time of their lives’” (Herbert W. Armstrong, co-worker letter, Feb. 28, 1972).

The Japanese government officials had been instrumental the previous January in opening doors for Mr. Armstrong to reach the leaders of Egypt and other Arab countries with the hope-filled message of the coming government of God.

Are there still minds in Japan and Latin America that yet remember that witness? When troubles impact their nations in their increasingly destabilized hemispheres, will they recall that white-haired patriarch who came among them preaching the good news of the coming Kingdom of God? Read Herbert W. Armstrong’s autobiography to learn more about this unique ambassador for world peace.

North Korea Preparing Long-Range Missile Test

North Korea appears to have stepped up preparations for a long-range missile test. Satellite images of a launch site taken at the end of March contain evidence that these preparations are more extensive than previously understood, according to an analysis by the Johns Hopkins School of Advanced International Studies.

The launch is scheduled for mid-April. North Korea says it will fire a satellite into orbit to study the country’s crops and natural resources. But Washington says North Korea actually uses such missile launches to test its delivery systems for nuclear weapons.

Any launch will violate an accord between North Korea and the United States that involves shipping U.S. food aid in exchange for a moratorium on missile tests, nuclear tests, and development at the Yongbyon nuclear facility.

Washington says that it has already put food shipment plans on hold.

These images and announcements indicate that even with a new leader installed, North Korea is playing the same old game. The launch would be the fourth of its kind since 1998, when Pyongyang sent a long-range rocket over Japan.

The latest rocket launch took place in 2009 and led to condemnation from the United Nations. North Korea then walked away from six-nation nuclear disarmament talks, and weeks later, it conducted its second nuclear test.

Expect more of the same from North Korea. The United States will continue to allow North Korea to play diplomatic games that buy more time for its weapons program. This is yet another sign of America’s broken political willpower.

Toulouse Slaughter Enflames Europe’s Immigration Tensions

Toulouse Slaughter Enflames Europe’s Immigration Tensions

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Some European leaders say the massacre means it’s time for Europe to wage war on Islam.

In the aftermath of France’s biggest terror spree since the mid-1990s, some European leaders are being galvanized to fight back against Islam’s push.

In mid-March, Islamist gunman Mohamed Merah strapped a video camera to his chest and shot a French soldier in what he later said was a protest against France’s foreign military interventions. In the following days, the Frenchman of Algerian origin killed two more French soldiers, and murdered four Jews outside of a school—a teacher and three young children. Merah’s carnage injured six others.

As Islamists continue to push against Europe in various ways, more and more Europeans wish to combat the rising Islamic tide.


On March 31, far-right groups from across Europe will assemble in Denmark to work toward building a Europe-wide anti-Muslim alliance. The meeting was planned months before the Toulouse killings, but analysts expect it to be significantly more successful in the wake of the murders. Previous attempts by Europe’s far-right factions to join forces have failed because of differences in ideology, but coordinators on Saturday will be able to harness the revulsion at the Toulouse slayings to build unprecedented cohesion among right-wing groups.

It’s a “counter-jihad meeting” designed to be a public discussion of “the continuing Islamification of Europe,” said Stephen Lennon, head of the English Defense League, which will be participating in the summit. Lennon predicted that attacks like those by Merah will become more frequent in the coming years across Europe unless Europeans join forces and stand up against Islam.


Charlotte Knoblauch, former head of the Central Council of Jews in Germany, said the killings should be seen as a “warning signal for Germany.” The problem of Islamism has been “played down, misjudged and underestimated,” she said. Coming from a Jewish leader, such remarks are unsurprising. But a few days after the Toulouse killings, a German court ruled that, in order to prevent illegal immigration, police are now permitted to conduct spot checks on Germany’s train lines based on people’s skin color.


In the Netherlands, Prime Minister Mark Rutte has made headlines for refusing to distance himself from an anti-immigrant website launched recently by Geert Wilder’s far-right Party for Freedom. The site’s message is that the Netherlands is not obliged to treat all of the country’s citizens equally. Wilders and his party believe that opening up the Netherlands’ borders is a major error, and that “new arrivals” will never truly be part of Dutch society. Analysts say Rutte’s silence about the new website reveals deep-rooted political division in the Netherlands and an uptick in anti-Islamic sentiment among the Dutch.


The response appears strongest, unsurprisingly, in the nation where the killings took place.

On one hand, France prides itself on sensitivity to the plight of Jews since it saw so many deported from occupied France to Nazi camps during the World War ii era. On the other hand, many French feel guilty and embarrassed about the country’s colonization of North African territories from the 17th to 20th centuries. This guilt has prompted France to virtually open up its borders to residents of its former colonies—many of whom are Muslims. As a result, France is home not only to Europe’s largest Jewish community—just over half a million—but also the continent’s largest Muslim population, around 5 million.

But the recent massacre is prompting some in France to reevaluate the country’s tolerance of Islamism. On March 21, French far-right presidential candidate Marine Le Pen said Mohamed Merah’s attacks showed it was time to “wage war” on Islamist groups that have flourished in Europe due to lax government policies.

“It is time to wage war on these fundamentalist political religious groups who are killing our children,” said Le Pen, who is in third place in polls for France’s April 22 election. “The fundamentalist threat has been underestimated.”

“[Merah’s killing spree] is not the matter of one man’s madness; what happened is the beginning of the forward march of green fascism in our country,” Le Pen said, referring to radical Islam. “How many Mohammed Merahs are there in the boats, the planes that arrive each day in France, full of immigrants?”

Le Pen isn’t the only French leader reacting to the killings. On March 26, President Nicolas Sarkozy announced that some radical Muslim clerics will be banned from entering France for a conference next month. Those barred include Sheik Yusuf al-Qaradawi, who has defended Palestinian suicide bombers in Israel, calling their deaths “martyrdom in the name of God.”

In recent years, more and more French Jews have been buying homes in Israel amid a rising tide of anti-Semitism in France, saying the country is no longer a safe place to raise Jewish children. After Merah’s murderous rampage, Israeli Member of the Knesset Ya’akov Katz called on all Jews to leave France: “There is no Jewish future in France,” Katz said, adding that Jews should not trust their fate to Sarkozy.

Will “tolerant” France allow Islamists to give the nation an anti-Semitic reputation?

A Lone Gunman?

Columnist Caroline Glick said the camera Merah wore provides sobering evidence that he “was not a lone gunman,” or even “one of the lone jihadists” that often make the news (Jerusalem Post).

The exhibitionism common to [Merah and other Islamist murderers’] behavior makes it obvious that that their attacks were not the random actions of isolated crazy people or lone extremists. All of these killers were certain that they were part of a global movement that seeks the annihilation of the Jews, the subjugation of the Western world and the supremacy of jihadist Islam. And they were convinced that their actions served the interests of this movement and that they would be viewed as heroes by millions of their fellow Muslims for their killing of innocents.

The Friday after Merah was killed, Imam Mamadou Daffé addressed hundreds of Muslim worshipers at Toulouse’s Mosque of Mirail. Some wore white djellabas and thick beards. Most wore jeans or suits. Daffé spoke heatedly of the “injustices” being brought upon France’s Muslims, especially in the wake of the killings. He said the same French politicians who have called for restraint have caused the very hatred they now say they must restrain.

Regular readers of the Trumpet will be well acquainted with the words of Daniel 11:40: “And at the time of the end shall the king of the south push at him; and the king of the north shall come against him like a whirlwind ….” For two decades, Trumpet editor in chief Gerald Flurry has explained that this key scripture foretells an end-time clash between radical Islamic forces (the “king of the south”) and a European superpower (the “king of the north”). When Mr. Flurry began delivering that forecast in the early 1990s, the tension between Islam and Europe was almost nonexistent.

Today it’s off the charts.

As Islam’s push against Europe intensifies, more Europeans will wake up to the threat and demand that their politicians take action. This decisive action will culminate in a clash that will be a precursor to the return of Jesus Christ. To understand how today’s headlines are rapidly leading to this astounding future, study our free booklet The King of the South.

Germany—Southern and Eastward Strategy

Germany—Southern and Eastward Strategy


It started in the Balkans. It is heading for Jerusalem. Germany’s moves south and east have been long predicted.

Herbert Armstrong said that following a future—and final—demonstration of renewed German military power, the nation would declare, “You made us do it.” That day is getting nearer.

A month ago, reported that “Josef Braml, a scientific adviser to the usa/Transatlantic Relations Program at the German Council on Foreign Relations (dgap), writes in a recently published analysis that, since 2008, the financial and economic crisis has hit the usa very hard. … Because the U.S. is forced to adopt stiff austerity measures to confront the crisis, Braml predicts that Washington, to ease the strain on its budget, will pressure Berlin to increase its participation in Western global military interventions” (February 20; emphasis added).

Such a scenario fits exactly with Herbert Armstrong’s prediction. As a massively debt-bound U.S. continues to draw down its troop presence within Europe and the Middle East, it is inevitable that another power will fill the security and defense gap within those regions. The only nation within reasonable proximity to the Middle East possessing the industrial and economic might to do so is Germany.

German elites have anticipated this for some time. Yet they still have the problem of public opinion at home to contend with. As we report in the upcoming edition of the Trumpet magazine, German elites have mounted significant public relations initiatives to influence the minds of the masses to support the future projection of German power in a manner that befits its newfound world power status.

In the meantime, German military and defense elites are moving to carefully develop their strategy of moving south into northern Africa and east into the Middle East to consolidate control over their much-needed energy supplies.

This strategy for southern and eastward influence started with Germany sparking a security emergency in the Balkan Peninsula by unilateral recognition of Slovenia and Croatia as sovereign states separate from greater Yugoslavia. This was Germany’s first foreign-policy initiative following unification of East Germany with its western counterpart. The rest is history, and a rather bloody history at that. The resultant Balkan wars ended with the entire Balkan Peninsula a veritable colony of the German-dominated European Union.

Recently—this time by Germany applying an economic rather than a military chokehold on its victim—Greece has succumbed as the final Balkan nation to capitulate to Berlin’s demands. In every respect, Greece is now subservient to Berlin as its latest Balkan colony. It now remains for Cyprus to fold under financial and economic pressure from Berlin. Then Germany will have all its stepping stones into the western shores of Israel set like ducks in a row.

In the meantime, moves are afoot to strengthen German military presence in what is developing as the most crucial seaway in the world—the nexus between the Indian Ocean and the Arabian Sea, through which a third of total global trade travels.

We reported last week on German moves, via the EU, to strengthen its naval, military and air presence around the Horn of Africa. A further effort to shore up Germany’s naval strength—enhancing its ability to strike land-based targets in Somalia—was highlighted last week by the sharp analysts at

Following the European Union approval for its Somali mission to strengthen its military presence off the coast of Somalia, enabling it to engage land-based targets, German military advisers are pressing for extra strike capability. “German government advisers are pleading for using submarines in the war on piracy at the Horn of Africa. Thanks to their ‘highly modern sensor technology,’ German submarines are not only capable of ‘covertly observing the pirates’ vessels’ and following their course, but also of ‘observing the pirates’ potential bases both day and night,’ according to a statement just published by the German Institute for International and Security Affairs (swp). The bases could therefore be attacked with greater precision, as the EU decided Friday” (March 27).

Yet, as our friends at point out, the real reasons behind this push for German combat-ready dominance off the Horn of Africa is geostrategic. In fact, it is a further initiative to consolidate Germany’s military moves south and east. “Geostrategic considerations are at the core of the militarization projects being promoted by the Bundeswehr. The Indian Ocean has become extremely important in global policy and it will play a pivotal role in future conflicts with China. Under no circumstances should the ‘new momentum in the greater region of the Indian Ocean’ be neglected, warns the director of the swp. Military strategists are underlining the importance of a strong naval presence in the ocean between Africa and Southeast Asia” (ibid).

What is the end goal of Germany’s military moves south and east? Believe it or not, the real prize, even above that of protecting access to vital energy supplies, is the jewel in the German elites’ imperialist crown: Jerusalem!

With the consolidation of its presence in the Mediterranean (access being opened up by the gift of warm-water ports in the Adriatic courtesy of the Balkan wars) and efforts to now harden its presence at the southern tip of the Red Sea, Germany is carefully positioning itself to gain direct and open access to the tiny nation of Israel. In fact, German elites intend to ultimately take over the Middle East peace process.

Germany took a step in this direction last week in its latest public declaration of support for the Palestinian cause. German Middle East diplomacy is working in tandem with German military policy for the Middle East. At the end of a meeting of the German-Palestinian Coordination Council last Wednesday in Berlin, Foreign Minister Guido Westerwelle announced that the German government would render financial support to the Palestinian cause: “‘Our aim is a Palestinian state as part of a two-state solution,’ he said, ‘and we support the development of that state not just theoretically, but also practically.’ Germany, he said, was a friend and partner for the Palestinian people and for the Palestinian Administration in Ramallah.

“The commission was founded in 2010 as a balance for the regular consultations between the German and Israeli governments” (Deutsche Welle, March 29).

Meanwhile, Israeli government officials hold to a line that, after the U.S., Germany is their greatest ally.

“Germany is regarded as the country’s closest friend, said former Israeli ambassador to Germany Avi Primor. … Germany has also already sold weapons, including submarines, to the Israeli armed forces. In mid-March it was announced that the Israelis would receive a sixth vessel and that Germany would pay for about a third of it. Experts said the boat, which is thought to be capable of carrying medium-range nuclear weapons, could be part of a strategy of deterrence against an Iranian missile threat” (ibid, April 1).

Thus we see Germany playing both sides against the middle between the Palestinians and the Israelis.

Israel’s recognition of its friendship with Germany and Germany’s efforts to take over the Middle East peace process are in complete accord with the Bible prophecies in the books of Hosea and Micah.

There are other angles to this story which it will take more than one brief article to expose.

Keep checking this website for the clearest analyses of the rise of German power south and east of Berlin. It’s a great sign of the ongoing fulfillment of the most powerful of end-time prophecies leading to Jesus Christ’s most imminent return.

What Is the Real Reason Canada Is Ditching the Penny?

What Is the Real Reason Canada Is Ditching the Penny?


Canada finds anti-money.

Canada announced the death of the penny last Thursday.

“Pennies take up too much space on our dressers at home,” Finance Minister Jim Flaherty told the House of Commons. “They take up far too much time for small businesses trying to grow and create jobs.”

Flaherty’s lighthearted comments highlight a dangerous problem with the Canadian dollar. It just can’t seem to hold its value.

But it is a problem faced by virtually all the world’s currencies. Everywhere you look, money seems to be on a race to the bottom. Canadian dollar, U.S. dollar, kroner, pound, euro, yen, yuan—they all are losing purchasing power at a startling rate. It now costs 1.6 Canadian pennies to mint a penny (zinc plus labor costs).

Consequently, the Canadian government loses $11 million per year making money. No money tree here—just anti-money.

There was a time when minting money actually made nations money. Many nations, including the United States, Canada and Australia, actually minted half-penny coins. And these coins could be used to purchase real goods.

In 1970, at the age of 77, Herbert W. Armstrong wrote about how as a boy his mother had asked him to “[g]o to the meat shop and get a dime’s worth of round steak. And tell the butcher to put in plenty of suet.” A “dime’s worth” meant each person in his family received a modest-sized piece of meat, plus plenty of gravy for the potatoes.

In times past, the dollar certainly stretched farther. Mr. Armstrong quoted the Labor Department’s figures for how much $5 would have purchased in 1913: 15 pounds of potatoes, 10 pounds of flour, 5 pounds of sugar, 5 pounds of chuck roast, 3 pounds of round steak, 3 pounds of rice, 2 pounds each of cheese and bacon, and a pound each of butter and coffee; that money would also get you two loaves of bread, 4 quarts of milk and a dozen eggs. “This would leave you with 2 cents for candy,” he wrote.

Wow. Today, $5 might buy you 1 pound of round steak.

The world’s devaluing currencies are a symptom of a very sick financial system. Expect much more upheaval ahead. And for your money to become worth a lot less.