Tsunami Coming?

Background and disclaimers

For the past fifteen years, I have subscribed to a number of newsletters that report on, analyze, and predict economic, political, and geopolitical events and trends. I have been able to gauge their reliability over time and now believe I know which ones are likely to be accurate. I have done this because, as a cross-cultural worker and now leader of an international ministry, I felt obliged to understand the present and possible context for our work.

What follows is a very brief digest of the overall perspective these newsletters – as well as a number of books – have provided me, with my own thoughts about what the significance might be for Christians. The entire purpose of this enterprise is to encourage us all to prepare to serve God effectively in an environment that could be much more difficult than what we have known so far. My concerns are entirely missional. If your goal in life is “personal peace and affluence” (to use Francis Schaeffer’s words), this essay is not for you! So, here goes.

Summary

Only God knows when the world will come to an end, but many experts believe that life in the Unites States as we have known it is about over. In short: The United States faces economic decline, and perhaps disaster. Its military power and worldwide influence will decrease greatly, and perhaps rapidly, profoundly altering the world’s balance of power and the living conditions of not only Americans but many others around the globe. China, Russia, India, Iran, and other nations will rush to fill the vacuum, with immense consequences. Christians will come under increased pressure in many lands. Missions based on American money, power, prestige, and protection will be severely curtailed. The church will grow, but under conditions more like those recorded in the book of Acts than those prevailing in much of the world during the past fifty years of the Pax Americana.

Objection

This is an old claim. As one friend put it, “Where have we heard this before?” Indeed, doomsday predictions have proliferated in the past three decades, some of them laced with apocalyptic scenarios claiming to come from the Bible. This criticism has great merit. After all, the U.S. has known marvelous prosperity and power ever since the end of World War II. The feared meltdown has just not taken place. The Y2K scare proved baseless, as have all other cries of “wolf!” The stock market is booming, if volatile. We are still the world’s only superpower. Other countries face problems equal to, or more serious than, our own. There is much strength, resilience, know-how, creativity, wealth, and sheer military might in the U.S. True. But let us look a bit deeper. The collapse that people predicted has been averted – say these analysts – by several factors: (1) The dissolution of the Soviet Union, leaving the U.S. as the sole superpower, with its currency backed by overwhelming military superiority; (2) instability in other areas of the world, combined with the perception of America as a “safe haven” for foreign funds; (3) continued growth in the U.S. economy, fueled by continued “easy money” policies of the Fed; (4) the relative economic and military weakness of other major nations, including Russia, China, and India. In recent years, however, much has changed, including: (1) The rise of China, the resurgence of energy-rich Russia under a strong president; (2) the attacks of 9/11 and the ensuing war on terror, with strikes against American, British, and other Western interests around the world; failure in Iraq; the emergence of Iran and North Korea as real threats to world peace; unraveling of American support among former allies; resilience of the Taliban in Afghanistan; seizing of power by anti-American leftists in several Latin American countries; a growing closeness of hostile and potentially-hostile nations (e.g., Iran and Venezuela); (3) the recent slowing of the American economy; lower interest rates which make investment in the U.S. unattractive; a falling dollar; immense infusion of credit by the Fed, fueling fears of inflation; the collapse of the sub-prime mortgage market and incipient unraveling of other sectors of the financial markets; (4) rapid loss of manufacturing and service jobs to China and India, with a concomitant rise in these economies and in others like Brazil; recovery from the Asian financial crisis of 1997 and of the Japanese economy. In other words, say the pessimists, American prosperity may have been propped up far longer than would normally have happened, creating a huge inverted pyramid, the collapse of which will have far greater impact than it would have when the “gloom-and-doom” prophets began to voice their concerns. Now let’s turn to some specifics:

Financial weakness

According to the Government Accounting Office – the nation’s official financial watchdog – the United States Government spends far more than it earns; it has debts that can never be repaid; it has unfunded obligations that far surpass any possible future resources; and its own books are so messed up that the GAO will not make a comment on their reliability. In laymen’s terms, the U.S. Government is technically bankrupt, though nobody knows just how bad the situation is, because the accounts are so sloppy. Furthermore, despite a recent Wall Street Journal that noted a slight improvement in the overall federal financial picture in recent years, the fact remains that experts around the world have publicly voiced profound concern about the viability of our Government’s finances and of the American economy in general. These include the International Monetary Fund, the International Settlement Bank, the head of the European Union Central Bank, the head of the Chinese central bank, and former Federal Reserve Chairmans Paul Volcker and Alan Greenspan, among many. These people are not crazies on the fringe. They are responsible people with a very real fear that the U.S. situation is so serious that a worldwide slump – or even a severe depression – is on the horizon because of the interconnectedness of the world’s economies. The U.S. current accounts deficit continues to defy economic gravity, with trillions now held by foreigners from whom we have bought more than we can afford. The value of the U.S. dollar is falling rapidly (despite temporary rallies). Other governments are seeking ways to diversify their vast holdings of dollars into other assets, including the euro, British pound, Swiss franc, Japanese yen, gold, and oil. They must proceed slowly, lest a sudden collapse of the dollar wipe out their own dollar-denominated assets, but they have announced intentions to decrease their reliance on the dollar. Some nations – notably Russia, Iran, and China – are working towards the replacement of the dollar as the world’s reserve currency. Even Saudi Arabia has recently indicated it may un-peg its currency from the U.S. dollar. The implications of this decline are enormous. To mention only one: As oil-producing countries increasingly demand payment in euros or other currencies (such as the ruble), the price of oil in dollars will rise dramatically. Another: America’s reliance on imports will become an increasingly-expensive habit, feeding inflation at home (though exports may grow). In other words, prices at Wal-Mart and the gas pump would go up. Foreigners are already beginning to reduce their holdings of dollars, as we have seen. Since they hold most U.S. government obligations, that means that the Treasury will have to find other ways of financing the deficits, the national debt, and the war on terror. They are already increasing the money supply of the nation so fast that they refuse to publish the numbers (for fear of being seen as irresponsible), and this trend could continue. The Fed may eventually have to raise interest rates in order to slow the flight from the dollar. Some experts predict that an inflationary depression is not out of the question; others believe it is certain, though no one knows when. Meanwhile, the average American is deep in debt, with virtually no savings. Many are only a couple of paychecks away from bankruptcy. Rising interest rates, including increases in payments for the ARMs that are coming due this year, will lead many homeowners to beg banks for mercy, which the banks will not be able to afford to grant. Defaults on mortgages and foreclosures by banks are at the highest level in years, and rising. Already, the housing slump is affecting construction, manufacturing, and other industries. Outsourcing has grown from a trickle to a river, and may become a flood. Thousands of factories have closed down, or moved to China and other lands with cheaper labor. Major corporations cannot meet their pension and health-care obligations. Some have sought protection from bankruptcy courts, but this option is closing. Millions have lost their jobs, and more could be pounding the pavement looking for work soon.

Military weakness

The government’s own combined intelligence report described only three possible scenarios for Iraq: (1) Total breakdown and chaos, ethnic and tribal conflict, leading to anarchy. (2) A partitioned state, divided among the Shiites, Sunnis, and Kurds. (3) A Shiite dictatorship, supported by Iran. The recent “surge” has had some stabilizing effects, but few believe these will be permanent, especially with rising Congressional pressure on President Bush to withdraw troops. In other words, the U.S. faces a colossal disaster in a war that has cost hundreds of billions of dollars. U.S. troops are exhausted and lack adequate equipment. It does not seem likely that they can succeed in Iraq, but their departure would only plunge the nation – and perhaps the region – into conditions that could threaten the stability of the world. U.S. military prestige – hitherto a key plank in the value of the dollar as the world’s reserve currency – is suffering a setback even worse than in Viet Nam. Massive resources have been committed to, and consumed by, the war in Iraq. It will take years to replace them, and to rebuild the strength and morale of at least the Army, and perhaps other services as well. Meanwhile, other threats have had to be placed on the back burner: North Korea, Iran, even China and Russia. North Korea has nuclear weapons and the capacity to deliver them, and Iran – already possessing the strongest conventional forces in the Middle East – is pursuing nuclear capability. Russia has continued to build its strategic forces, and supplies advanced weaponry to Syria, Iran, Venezuela, and other anti-American countries. China is modernizing its military; has deployed more than 1,000 missiles opposite Taiwan; “blinded” an American spy satellite briefly with a laser beam in 2006; and recently shot down one of its aged weather satellites in a chilling display of how it could disable America’s technology-reliant military power. Overall, America faces an array of present and potential foes unprecedented in recent history: Self-declared enemies such as North Korea, Iran, Islamic terrorists, Venezuela, and Cuba; potential adversaries such as Russia, China, and several leftist nations in Latin America. Factor in largely anti-American Europe; mix that with growing Chinese influence in resource-rich areas such as Africa, Latin America, and the Middle East; and top it off with the prospect of inability to pay for a continued military build-up – and you have a recipe for a swift decline, even collapse, of American power around the world.

Changing society

Evangelical Christians in the United States realize that the culture is undergoing change at a pace so rapid it’s hard to adjust. Same-sex marriages are legal in several states; hate crime laws could make it technically illegal to read the first chapter of Romans, as has happened already in Canada and Europe. Bible-believing Christians are considered dangerous by a large section of the populace. George Bush, known as a believer, could become one of the most unpopular presidents in American history. Under President Bill Clinton, “fundamentalist” Christians were called more dangerous than Islamic terrorists by Attorney General Janet Reno. With Democrats in control of Congress and poised to take the White House in the election of 2008, the rights of Muslims, homosexuals, and others might take precedence over those of orthodox Christians.

It could get worse

So far, I have spoken of trends, though most are fast-moving and already quite upon us. But what if some trauma were to strike? Could these “chronic” conditions become “acute”? Yes, and it could happen very quickly. For example: - Not many years ago, the relatively small Long Term Capital hedge fund collapsed, and it required intervention by the Fed, which mobilized the biggest banks in New York to bail out LTC, to prevent a financial collapse. Now, the derivatives market is a hundred times larger, and highly vulnerable. If something – such as the recent difficulties of Bear, Stearns to meet its obligations - upset this delicate balance, the entire world economy could suffer a body blow within a few days, or even less. - What if Iran, confronted by U.S. and European sanctions, or perhaps in retaliation for a widely-expected strike by Israel upon its nuclear facilities, decided to close the Strait of Hormuz, through which much of the world’s oil flows? The president of Iran believes that he is divinely commissioned to usher in the end times by creating chaos, and has indicated his willingness to go to any lengths to protect his country and destroy Israel and America. Closing off the Persian Gulf, even temporarily, would not only shut off oil and drive its price sky-high, but bottle up U.S. forces in that part of the world. - The U.S. government has said repeatedly that it is not a matter of whether terrorists will attack American soil again, but when. And they foresee not just a relatively small blow – like the ones on 9/11, devastating as they were – but something far worse. Chemical, biological, and even nuclear weapons may be available to our avowed foes. Such an assault could kill hundreds of thousands, and disrupt communications, the economy, and much of society overnight. These are only a few of several possible traumas that could quickly turn life in America to a struggle for survival. Overseas, Christians in many countries could, as I have said, face less freedom and greater pressure. Without the presence of a powerful U.S. monitoring human rights around the world, believers in China, India, and elsewhere could find themselves objects of even more hostility and attack from government and rival religions than they have recently. In particular, Taiwan could be “re-united” with China sooner rather than later. President Chen of Taiwan, whose scandal-racked administration has only two years remaining, is not known for caution. He seems hell-bent on making Taiwan independent not only in fact but in name also. China has promised to attack in such a case. Chen seems to believe that the U.S. would protect Taiwan, but America has said it would not come to help under such circumstances. And even if President Bush were to fulfill his promise to defend Taiwan, would American forces have the requisite power? More likely however, would be some indirect assault that would achieve the same purpose. Assets could be frozen; the Strait of Taiwan could be declared off limits; Taiwan’s ports could be blockaded; a missile blitz could force a quick surrender – all before the U.S. even had time to respond. China does not want war with the U.S., but its hand might be forced by a precipitous move by Chen, who is fighting for his political survival and even his personal freedom after he leaves office (he has immunity from prosecution now, but is an un-indicted co-conspirator with his wife in a fraud case). That’s the gist of what I have been reading.

So, what does it mean for Christians?

As I said above, if these analysts are correct, life as we have known it will soon come to an end. So must our expectations of what it means to be a Christian. What can we do about all this? Probably not much, aside from prayer. I do not underestimate the value and power of prayer. God can change the course of history in a second. Ordinarily, however, he does not do so. These trends seem to be part of his plan for the world, at least for the foreseeable future. In my opinion, we can posit at least two possible reasons for what seems to be the inevitable decline, perhaps even sudden collapse, of the United States as a strong, free, and prosperous nation: - Judgment for our sins. Need I say more? - New opportunities for the spread of the Gospel. As my wife commented recently, perhaps American believers would begin to learn what it means to be a Christian. Faced with conditions like those in the Early Church, maybe we would start to imitate their faith, hope, and love – and make a much greater impact on those around us. Elsewhere, Christians might not face the criticisms that they are the wards, even agents, of a powerful America seeking world hegemony. They would probably not have to answer for the foreign policy initiatives of fellow – Christian George W. Bush. Money from America would dwindle to a trickle, and local ministries would no longer be accused of dependence on outside funding. Self-support would become a reality, and reliance on God alone a necessity. Many more American Christians might emigrate to find work elsewhere, and learn to live the pilgrim lifestyle exemplified by Abraham, Joseph and Mary on the run from Herod, Jesus, the apostles, Priscilla and Aquila, Moravian missionaries, and countless others throughout history who have sought a “better country.”

What should we do?

In full awareness that I must apply these suggestions to myself, I advise that we: - Get off the couch and into better physical shape. - Get ready for sudden trouble. Go to the FEMA Web site for practical steps to take. - Get serious about God, and purse righteousness, godliness, faith, love, steadfastness, and gentleness – in short, God’s kingdom – rather than our own personal peace and affluence. - Get focused on God’s goal for our life: His glory, the spread of the Gospel, and our own conformity to the likeness of Christ. - Get prepared for suffering which, as the Scriptures say, is both normal for disciples of Christ and necessary for entrance into the kingdom of God (Acts 14:22). - Get out of debt. - Get out of risky or money-losing investments (if you have any savings at all, which I don’t!) and into safer ones. Go to these Web sites for some possibilities: www.safemoneyreport.com; www.everbank.com; www.mcalvany.com; www.investmentrarities.com (for more information, write gwestgaard@investmentrarities.com. Say you are responding to Doyle’ s article, and he will give you special treatment). I do not agree with, and do not endorse, all that you would read in some of these sources, but I have found them quite helpful, and largely accurate, over the past few years. - Get connected with other believers who mean to follow Christ, no matter what. - Get excited about the wonderful opportunities to share our hope with panicked people around us. Even more, get excited about that hope itself – the grace to be brought to us at the revelation of Jesus Christ (1 Peter 1:13). G. Wright Doyle Revised September 24, 2007 * These pages do not represent the opinions of the Board of Directors or of anyone else connected with China Institute. They reflect my thoughts only.