john hagee

20 Pages·2008·1.92 MB·English

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Everything prophesied
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in the Bible is coming to pass!
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It is no secret that we are living in a time of global crisis. The financial meltdown of
Wall Street, bank failures, the subprime lending crisis, and uncontrollable gasoline
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prices are creating enormous stress for Americans. And now we are facing a
global economic crisis that many are comparing to the events leading up to the Great (cid:60)
Depression. (cid:52)
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People everywhere are asking themselves critical questions like:
“What is happening?” “Where are we headed?” (cid:19)(cid:19)(cid:19)
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“What can I do to protect myself and safeguard my family?”
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You can be assured that God is not surprised by these issues—in fact, all of these
events are clearly documented in the Bible as signals pointing to the “end of the age” A
as we know it. In Financial Armageddon, Pastor John Hagee, a master teacher on Bible g
prophecy and an astute and successful businessman, clearly demonstrates… e
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(cid:129) Why our current economic crisis is happening d
(cid:129) What will ensure your financial freedom in the face of any crisis o
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(cid:129) How world events are lining up with Bible prophecy
(cid:129) What the Bible says will happen next
(cid:129) And much, much more!
What you must do to survive
As you read, remember that God has promised to bless His people. You can rest
assured that He is in control. You will be encouraged to put your trust in God—our the devastation of an economic collapse!
Master Investment Counselor—with the assurance that He will never let you down.
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A r m A g e d d o n
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A r m A g e d d o n
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Foreword
The financial crisis that developed on Wall Street
n the fall of 2008 s unlke anythng I’ve seen before n
my career. No one seems to have the answers, even though
everyone s tryng to figure out what the crss means.
Financial Armageddon by Pastor John Hagee provdes answers
from the Word of God. Hagee s a powerful mnster whose
preachng and teachng put dfficult tmes nto perspectve for
Chrstans, and he has great nsght nto the meanng of current
events from a bblcal perspectve. For example, when ol prces
skyrocketed n md-2008, Hagee prepared a teachng seres ttled
“The Ol Crss and the Road to Armageddon.” The response to
the seres was more than double what s usually expected. Why?
Because people want answers, and Hagee gves them.
I beleve the exstng crss s so mportant that I encouraged
our Strang Book Group to rush ths book nto prnt. It appeared
on bookstore shelves only sx weeks after we conceved the dea—
a tme frame that s almost unheard of n publshng crcles.
The problems we are currently experencng have a greater
sgnficance than a typcal credt crunch or mortgage crss.
They are a precursor to a tremendous battle that wll take place
at what the Bble calls Armageddon. (See Revelaton 16:14, 16.)
In order to understand them, we must learn to dscern the
tmes, as the sons of Issachar dd n 1 Chroncles 12:32, and
vew them n lght of the Word of God.
As a busnessman, I read Hagee’s manuscrpt wth great
nterest. What happens on Wall Street or n nternatonal
markets affects me and those who work wth me. Plus, I have
some nvestments n the stock market for my retrement years,
and I don’t want to see them wped out. Whether you own a
busness as I do or work for someone else, I know you too want
to understand what s gong on.
Let me add my perspectve to what you’re about to read, and
v
v | Financial ArmAgeddon Foreword  |  x
maybe I can help you comprehend somethng about what the buy the goods and servces we sell or to pay our paychecks.
meda sometmes hystercally call a financial meltdown. When any part of the system breaks down, we are vulnerable
The stock market has plummeted before, and I beleve t wll lke everyone else. Perod.
recover. So I’m not plannng to revamp my stock portfolo. I So we must do what we can not only to survve but also to
expect the value of the stocks to ncrease n the future. I stll thrve n dfficult economc stuatons such as the current bear
remember the dot-com bubble that burst a few years ago, the market on Wall Street, whch may be part of the bgger finan-
recesson of 1992, and the terrble “stagflaton” of the 1970s cal Armageddon that s comng.
when I was just begnnng my career. The first step s to ren n our fear. Fnancal crss can lead
Our current stuaton has come as no surprse. Consderng to collapse smply because people become afrad and panc. We
some of the bad loans that were made, the creative instruments must understand that God’s Word s true whether stocks are
Wall Street created, and the overblown real estate market, t up or down and whether credt s tght or abundant.
was only a matter of tme untl somethng drastc happened Long before Presdent Frankln D. Roosevelt, n hs 1933
to correct the mstakes. But the panc that has set n has made naugural address, sad n reference to the depressed economc
the problems worse, even though our federal government has condton of our naton, “The only thng we have to fear s fear
spent bllons of dollars to try to stablze the market. tself,”1 God Hmself had gven us the admonton not to fear. He
I thnk we can expect that Amerca wll come out of ths sad through the prophet Isaah, “‘Fear not, for I have redeemed
bear market and financal slump just as t has before. But every you. . . . When you pass through the waters, I wll be wth you;
tme we experence a downturn, people want our government and through the rvers, they shall not overflow you. When you
to do more. Year by year we become more of an nternatonal walk through the fire, you shall not be burned, nor shall the
market, dependng on nternatonal banks to help stablze the flame scorch you. . . . Snce you were precous n My sght, you
financal stuaton. If ths doesn’t occur, people panc. have been honored, and I have loved you” (Isa. 43:1–4).
When people panc, they look for a strong leader who wll Next we must understand that there are dfferent levels of
gve them what they want and make ther financal problems go economc problems. The first s a normal negatve cycle n
away. Do you see the pattern that develops? A global economy the markets. Such cycles come and go, and thngs usually get
and global crses make people yearn for a global leader to solve better. But at the same tme, they set us up for a greater danger,
ther problems. Suddenly you have the scenaro the Bble says what author Larry Bates calls “the new economc dsorder,” n
leads to the rse of a man called the Antchrst, who leads us whch world banks control the money, cartels control ol, and
nto the Battle of Armageddon! evl leaders set the scenaro for the comng Antchrst.2
If you don’t thnk ths s possble, look at hstory. It was the When Armageddon comes, no one wll escape t, because
terrble nflaton and financal problems after World War I n world events wll crash together wth bblcal prophecy n the
Germany that made the people turn to Htler. Not only could t final conflct of the ages, as Pastor Hagee explans n these pages.
happen agan, but, accordng to the Bble, t will happen agan. Yet there s hope for belevers who understand that the Rapture
That’s why t’s mportant to understand what s gong on. wll take away Chrstans “n the twnklng of an eye.”
All of us are at rsk because we lve n a complex, world- Of course, t’s that knowledge that has also led generatons
financal system that causes us to be dependent on others to of Chrstans to be passve and smply wat for the Second
provde the groceres we buy and to delver the gas we put n Comng to whsk them away from all the troubles of the world.
our cars. We are dependent on others to have the money to Ther atttude s lke that of the preacher who joked, “It’s easer
x | Financial ArmAgeddon Foreword  |  x
to thnk about the ‘sweet by-and-by’ than t s to deal wth the bottom of the economc totem pole just watng for the Rapture.
nasty now-and-now.” Ths mage s not accurate, and the Bble has answers for the
Maybe the problems we’re experencng wll wake up the mess we’re n. That’s why John Hagee’s book s so mportant.
church. Maybe godly leaders wll emerge n government and Read t and share t wth frends. Follow the advce he gves.
the economc communty to provde answers based on the Remember that, no matter what happens, we are to do as
prncples of God’s Word that wll change the tde or at least the nobleman n the Bble nstructed hs servants, and “occupy
slow t down. tll [our Master] come[s]” (Luke 19:13, kjv).
Some Chrstans n the world—belevers n the Sudan, —Stephen Strang
Communst Chna, or Inda, where there has been so much Founder and Publisher of Charisma
volence aganst Chrstans, or n the Muslm world, where
Chrstanty s banned—may thnk Armageddon has already
begun. Amercans, on the other hand, beleve they are somehow
mmune. They thnk, “Surely these problems won’t happen to
us.” We’ve been blessed wth relatve peace and prosperty so
long we beleve they are our rghts. Yet bad thngs can happen
and are happenng. As the leader of the free world, Amerca s
not exempt.
Consder 9/11. We never thought we would be attacked on
our own sol, but we were. I beleve many other events that have
been prophesed wll take place, and we can only prepare.
As people the world over become more and more hostle
to the gospel, and as those who are evl get nto power and
take away our freedoms, Chrstans must do what the Jews dd
n Europe, where they were persecuted for years—engage n
professons and trades we can take wth us when thngs get
bad. The trend that developed durng those years explans
why many Jews are n bankng, jewelry, and so on rather than
farmng today.
So what can Chrstans do? Start busnesses. Get nvolved n
the process to change thngs rather than beng subject to the
whms of bg busness.
Then run your small busness n a way that can handle a
downturn. Have reserves; keep debt low; make fallback plans.
In the process, be able to help others as the Bble says.
Too often Chrstans, lke the men Moses sent to spy out
the Promsed Land (Num. 13:32–33), have seen themselves as
grasshoppers n ther own eyes—n ths case, as beng at the
Chapter 2
AmericA’s economic
meltdown: the
Perfect storm
★
In this chapter, we will discover how our global
economc crss reveals a panorama of thngs to come.1 In the
past quarter century, the Unted States has wtnessed unparal
leled economc growth. Durng ths perod, the naton ganed
forty mllon jobs, the Dow Jones moved from eght hundred
to over fourteen thousand, and the world saw a sgnficant
reducton n poverty.2
However, by the end of Frday, October 10, 2008, the Dow
ended ts worst week n hstory, droppng over 18 percent n
just five days. Even more troublng, from ts hgh one year
earler, the Dow was down over 40 percent. Another stock
market ndcator, the S&P 00, was down over 42 percent.3
One estmate suggested that more than $7 trllon n share-
holder value had been wped out.4
In the two prevous years, more than one mllon people
had lost ther homes, wth another mllon expected to lose
them n the comng year.5 One scholar beleves t s concev-
able we could see a total drop of 2 percent n housng prces,
comparable to the Great Depresson.6 Former Federal Reserve
charman Paul Volcker has sad, “We are n the mdst of the
worst financal turmol snce the Great Depresson.”
We are not there yet. Unemployment durng that perod ht

6 | Financial ArmAgeddon America’s Economic Meltdown: The Perfect Storm   |  7
2 percent, far worse than the current 6 percent, and the naton The federal government also encourages home ownershp
experenced sharp drops n GDP (gross domestc product), through the Federal Natonal Mortgage Assocaton (Fanne
somethng the naton has yet to see n 2008. Nevertheless, Mae) and the Federal Home Loan Mortgage Corporaton
banks have faled, the federal government s takng drect (Fredde Mac). Fanne Mae was establshed durng the Great
control of large parts of the Amercan economy, and poltcal Depresson, whle Fredde Mac was created n 1970 to provde
leaders are promsng large tax hkes n response to the crss.7 competton to Fanne Mae. Although the two companes
Comparsons to the 1930s are becomng more common and eventually became publcly traded companes, the federal
have even entered the poltcal debate. government heavly regulates them, and ther charters requre
The Unted States has experenced bankng crses before n them to promote home ownershp among lower-ncome and
ts hstory. Earler examples nclude 1797, 1819, 1837, 187, dsadvantaged groups.10 In ths sense, home ownershp for the
1873, 1893, 1907, 1929, and 1987.8 The queston s: What poor s seen by some as a key cvl rghts ssue, and both Pres-
caused the current financal crss? Ths chapter wll outlne dent Bll Clnton and Presdent George W. Bush pushed home
the causes of our current problems, connectng those causes to ownershp as a matter of polcy.
other aspects of the Amercan and world economc systems. None of ths explans why thngs got out of hand. How dd
a phlosophy of home ownershp become a real estate bubble
How tHe Financial crisis evolved that burst?
As recently as the early 1980s, mortgage rates were as
The current financal crss was caused by the real estate bubble
hgh as 18 percent. By 2003 they had declned to just over 
that began n the late 1990s, but t s connected and lnked to
percent. In the nterm, several mportant thngs happened. In
a varety of other factors. In an effort to clarfy the story, I wll
the 1990s, Chna began to rse n mportance as an economc
treat each factor n turn, but t s mportant to recognze that
powerhouse. Manufacturng n Chna began to flood the
these varous elements are all nterconnected.
world wth cheap products, whch helped to keep nflaton low.
Subprime lending Ths allowed central banks, such as the Federal Reserve n the
A central aspect of the publc phlosophy n the Unted States Unted States, to keep nterest rates very low.
s home ownershp. One scholar calls t a “natonal obsesson.”9 Deflaton, not nflaton, was a major concern. When the
Home ownershp s perceved as an ntegral part of the Amercan tech-stock bubble collapsed n 2000, leadng to the relatvely
dream, and publc polcy s geared to promote t. The federal mld recesson of 2001, nvestors looked for a place to put ther
ncome tax code s structured to encourage home ownershp, money. That place was real estate.11
and t has been a key aspect of electoral poltcs. Ths phlosophy For most of the century pror to 1997, home prces had not
became so powerful that n 1977 Congress passed, and Presdent changed very much. When adjusted for nflaton, prces vared
Jmmy Carter sgned nto law, the Communty Renvestment slghtly wthn a farly narrow band. But n the late 1990s,
Act (CRA), whch declared that banks have “an affirmatve obl- a housng boom took off. From 1997 to 2006, real home
gaton” to meet the credt needs of the communtes n whch prces ncreased 8 percent.12 Home sales rose and prces rose,
they are chartered. When banks were later accused of dscrm- causng buldng constructon to rse for all sorts of reasons.
natng aganst poor and mnorty neghborhoods, the Clnton Some buyers smply wanted to take advantage of the boom to
admnstraton tghtened the regulatons on banks to encourage renovate or remodel ther homes. Others wanted to refinance
them to nvest more money n hgher-rsk areas. to gan greater wealth. Some used the opportunty to trade up
8 | Financial ArmAgeddon America’s Economic Meltdown: The Perfect Storm   |  9
to a hgher-qualty home. Frst-tme buyers sought to grab a The housng boom turned nto a bubble when people began
pece of the Amercan dream. to thnk of housng not as a means to buy a home but as an
One of the thngs that made ths massve level of actvty nvestment. Wth the tech-stock bubble gone and low nterest
possble was the exstence of subprme loans. Subprime loans rates, what can we do wth our money? So, nvestors sought
are loans made to ndvduals who have a weak or troubled a pece of the acton, as dd speculators who bought and sold
credt hstory.13 Prime borrowers are people who have a good propertes quckly for a profit. Banks took advantage of the stu-
hstory of debt repayment. Subprime borrowers are people who aton to seek hgher profits by makng rsker bets. Instead of
ether have problems wth debt repayment or who have no credt banks holdng a mortgage for the lfe of the loan, banks began
hstory at all. Wth offical government polcy encouragng to collect all of the loans, ncludng rsky subprme loans, nto
home ownershp for as many people as possble, ncentves a sngle pool; then they dvded ths pool nto separate peces
exsted for lendng nsttutons to provde new loan products to sell to a global market.16
for people wth shaky credt hstores—especally those from The rde came to an abrupt end n 2006. As housng prces
poor or mnorty neghborhoods, the prme target of Fanne contnued to rse, housng constructon boomed. Eventu-
Mae and Fredde Mac. ally prces got too hgh, and overprced homes began to fall
Polcy makers, ncludng Federal Reserve charman Alan n value. When adjustable-rate mortgages had ther rates
Greenspan, encouraged the development and use of subprme reset, people suddenly found they could not afford to make
loans. In 2006, 90 percent of subprme loans came n the form ther payments. Home owners saw three hundred fifty dollars
of adjustable rate mortgages (ARMs). Fxed-rate mortgages, per month added to ther house payment. The result was the
the more tradtonal form of financng homes, lock n monthly begnnng of an era of bankruptces and foreclosures that has
payments that never change. ARMs typcally start at an nterest yet to end. Home owners soon owed more on ther loans than
rate lower than fixed-rate loans but reset after a perod of tme ther houses were worth. Prces came crashng down, wth the
to match a specfic nterest rate benchmark. Rates may adjust drop felt n all sectors of the country and at all prce ters, as
as often as every sx months, up or down dependng on the well as overseas.17
nterest rate. Other vehcles used to encourage home ownershp Far worse, bankng nsttutons were caught flat-footed. Bad
ncluded lttle to no down payments, mnmal or nonexstent subprme loans had been dvded nto many smaller parts and
proof of ncome, and even stated income loans n whch the spread throughout the world’s financal system, and all of a
borrower smply states hs ncome and the lender accepts that sudden those nvestment vehcles were bad. No one knew exactly
number wthout proof.14 In short, lenders who should have where these assets were, and the result was a panc and loss of
known better were gvng loans to people purchasng homes fath and trust n the system. Ths led to a reevaluaton of rsk
they could not afford. n general. After all, f mortgages were overvalued, so mght be
All of ths actvty mght have been fine had housng prces all knds of other assets. Ths s how the bundlng of mortgages,
contnued to rse. However, scholars analyzng ths stuaton comprsng only $200 bllon n a multtrllon-dollar global
agreed that a bubble psychology took shape n the global economy, could cause banks n other countres to go under.18
economy. People began to beleve we were n a new era n The result n 2008 s now well known. The housng crash
whch prces would never come down, at least not natonally. and ensung loss of confidence n the credt markets caused the
In a new era of riskless risk, people began to thnk that home nvestment firm Bear Stearns to lose access to credt n March.
prces would stay hgh permanently.15 At that tme, the federal government chose to ntervene and
10 | Financial ArmAgeddon America’s Economic Meltdown: The Perfect Storm   |  11
rescue Bear Stearns by facltatng ts sale to JPMorgan Chase. Some scholars call attenton to the potentally dangerous role
Congress gave the Treasury Department authorty to take over Chna plays n the global economy. Potentally, Chna repre-
Fanne Mae and Fredde Mac n July, and the Treasury naton- sents the next economc bubble. In ts attempt to jon market
alzed those two enttes on September 8. forces to a Marxst poltcal system rpe wth corrupton and
On September 1, Lehman Brothers took the honors for the nefficency, Chna s pavng the way for problems at the global
largest bankruptcy filng n Amercan hstory. The followng level. Its purchasng of commodtes worldwde, ncludng ol,
day, the Federal Reserve made a loan to shore up Amercan ndcates a smlar psychology to the real estate bubble—no
Internatonal Group (AIG), the largest nsurance company n one beleves t wll burst. When t does, the consequences for
the world. All of these firms had trouble securng financng the world wll be deflaton, global stock market collapse, and
because of the housng crash, due prmarly to bad subprme long-term stagnaton.
loans. As financal nsttutons throughout the world began The growng dsproportonate male-female rato n Chna,
to understand what had happened, the resultng loss of trust due to ts one-chld polcy and common practce of abortng
prompted them to stop lendng to each other. female babes, s creatng a demographc nghtmare that wll
In the wake of these actons and the resultng stock market only compound the problem. Alternatvely, Chna could wth-
turmol, the federal government s takng unprecedented draw ts reserves from the global system, leadng to world
actons to address the problem, ncludng a $700 bllon balout nflaton as central banks rase nterest rates to compensate.20
plan for Wall Street and clamng part ownershp of the largest Such a move would seem unlkely.
banks to provde stablty to the market. A 2007 study found that no sngle naton holds enough U.S.
debt to cause a major dsrupton, and takng such acton would
Other factors
undermne the value of ther own holdngs, causng them to
The relatonshp between subprme lendng and the housng
suffer huge losses.21 Stll, that prognoss depends on the assump-
bubble was the prncpal cause of the current financal crss,
ton that natons wll always act ratonally, and the current
but there are related factors as well. For example, the role of the
subprme crss demonstrates the folly of such an assumpton.
new Chnese economy cannot be overstated. Chna’s emergence
Lnked to both Chna and the real estate bubble s the role
as an economc power n the 1990s helped force down prces
of foregn ol. In md-2007, the prce of ol was sxty-five dollars
for manufactured goods, leadng the Federal Reserve to keep
per barrel. One year later t had nearly doubled. Demand for
nterest rates down to fight deflaton. Chna’s entry nto the
ol by Chna helped rase the prce, but Amercan consump-
World Trade Organzaton (WTO) made t a low-cost place to
ton of foregn ol played ts own part. The housng crss led
produce goods, and Chna soon began producng more than 10
to a drop n the dollar, creatng another surge n ol, food,
percent of the world’s goods, adversely mpactng ndustres n
and commodty prces. The resultng hgh ol prces joned the
other countres. The resultng trade defict meant foregn coun-
subprme crss n puttng downward pressure on the dollar.
tres were nvestng heavly n U.S. Treasury bonds, as well as
To put ths problem n perspectve, every penny ncrease n
other tems such as mortgage securtes. Chnese demand and
the prce of a gallon of gas costs over one bllon dollars n
explosve growth also led to soarng ol prces, thus lnkng
extra annual spendng. The jump from three dollars per gallon
real estate speculaton to speculaton n energy. The surge n
to four dollars per gallon caused the naton’s gas bll to rse
ol prces led to ncreasng nvestment n energy, ncludng
more than $100 bllon, renderng the federal government’s
ethanol, whch led n turn to a surge n food prces, creatng
tremendous problems n developng countres.19
12 | Financial ArmAgeddon America’s Economic Meltdown: The Perfect Storm   |  13
2008 stmulus checks nearly mpotent. The potental for a free consequences oF tHe Financial crisis
fall of the dollar and collapse of the economy s very real.22
Although t s mportant not to exaggerate the consequences of
Indrectly lnked to the subprme crss, but drectly connected
the current financal crss, t s crtcal that we understand where
to ts potental consequences, s the state of Amerca’s natonal
t could take us. The obvous consequences le n the economc
debt. Before the Wall Street balout package passed by Congress,
arena, should the crss contnue and worsen. If people suspect
the most obvous source of rsng debt for the Unted States was
that they wll lose ther money, we could see a run on the banks.
from money spent to fight the war n Iraq, whch over the past
Banks keep only a fracton of deposted money on hand, and
five years s rapdly nearng $600 bllon. That may be dwarfed
such a run would be devastatng. The crss that led to the Great
by the $700 bllon balout package and $20 bllon govern-
Depresson started before 1929 n the housng market.
ment purchase of bank shares. The federal defict for fiscal year
Less apocalyptcally, the country faces a real threat of reces-
2008 s estmated at a record $4 bllon, more than twce the
son. Demand for home constructon wll fall, whch wll affect
amount of the 2007 budget defict. Some analysts beleve that
employment and the economy. State and local publc finances
fiscal year 2009 could see a defict n excess of $700 bllon.
depend on property taxes, and the housng crash could nega-
Far more mposng on the future s the enttlement debt
tvely affect government finances. A fallng dollar and renewed
ncurred by the Unted States. As the baby boom generaton
surge n ol and food prces wll put pressure on the famly
begns to move nto retrement, we may see the Socal Securty
budget, and a declne n home owners’ net worth wll make
and Medcare systems overloaded. Between 2000 and 2030,
money for college that much more dfficult to come by. Some
the sxty-five-year-old populaton wll more than double n
households wll see ther nest eggs dsappear, whle others wll
ths country. The number of retrees wll go from thrty-five
no longer have access to credt.25
mllon to seventy-two mllon—20 percent of the total popu-
Internatonally, we are already seeng the effects of the
laton. The cost of Socal Securty, Medcare, and Medcad
subprme crss. Iceland has essentally gone bankrupt, forced
wll rse from $1.1 trllon and 40 percent of the federal budget
to accept help from Russa and to once agan consder possble
today to more than $2 trllon and 7 percent of the federal
membershp n the European Unon (EU), further expandng
budget n 2030.23 Medcare Part A benefit payments should
that body. The vgorous actons of natonal governments also
exceed revenue ths year, and assets wll not be sufficent to
rase the specter of moral hazard—balng out rsk takers
pay full benefits as early as 2019. Socal Securty payments wll
wth taxpayer money. Ths may be an understandable devel-
exceed revenue n 2017, and assets wll not be sufficent to pay
opment snce the crss tself has ts geness n the lack of
full benefits by 2041.
moral vrtue—when workng hard s seen as less mportant
Total natonal debt—the nterest on whch consttutes an
than shrewd nvestng, and rresponsble bankers and poltcal
ncreasngly large percentage of the annual federal budget—
leaders volate ther trust.
now exceeds $9 trllon.24 Perhaps most shockng, the true
The most profound and potentally far-reachng consequences
natonal debt—defined as all debt held n the Unted States,
may be poltcal. Hstorcally, economc crses have never been
publc and prvate—s $3 trllon. Common sense tells us that
knd to the ncumbent party n a presdental electon year.
such a debt s unsustanable.
Severe recesson n the late 1830s called nto queston the stew-
ardshp of the economy by Jacksonan Democrats, allowng the
Whg party to wn control of both Congress and the Whte
House for the only tme n ts hstory. The worst depresson