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The Black Swan
I first saw black swans on my first trip to Australia more than 20 years ago. While they are fairly common in Australia, they are quite rare everywhere else—especially outside of a zoo. But on Sunday, September 5, 2021 a rare black swan landed in front of tourists at Tiananmen Square in Beijing, China.
There is a common saying among economists that when a rare and unexpected event occurs that causes financial disaster, it is a “black swan event.”
https://corporatefinanceinstitute.com/resources/knowledge/finance/black-swan-event/
A black swan event, a phrase commonly used in the world of finance, is an extremely negative event or occurrence that is impossibly difficult to predict. In other words, black swan events are events that are unexpected and unknowable. The term was popularized by former Wall Street trader Nassim Nicholas Taleb, who wrote about the concept in his 2001 book Fooled by Randomness.
China’s Lehman Moment
The black swan showed up in the midst of a big financial crisis involving China’s real estate giant, Evergrande, which is essentially bankrupt. The company is $300 billion in debt, and its credit rating was cut last week, making it impossible to secure more funding.
Today, its Hong Kong traded shares plummeted as much as 8.8 per cent to HK$3.53 (RM14.67) — sliding down towards the price it initially listed at in 2009 — before closing 7.75 per cent down.
The stock rout comes on the same day Moody’s Investors Service downgraded Evergrande’s credit rating, indicating it is “likely in, or very near, default”….
Last week, Evergrande said its total liabilities had swelled to 1.97 trillion yuan (RM1.2 trillion) and that the group faced mounting legal challenges and “risks of defaults on borrowings”.
Goldman Sachs has cut the stock from neutral to sell, Bloomberg News reported Tuesday, adding that the stock has dropped 76 per cent this year….
Evergrande is one of the largest private companies in China, with a presence in more than 280 cities.
Any possible bankruptcy of the group—which claims to employ 200,000 people and indirectly generate 3.8 million jobs in China—would have major repercussions on the country’s economy. — AFP
The Evergrande bankruptcy is being called “China’s Lehman moment,” a reference to the collapse of Lehman Brothers on September 11, 2008, which plunged the USA into recession. That was the moment—7 years after the Twin Towers crisis—that marked the start of the huge deficits of the US government after bailing out the banking system.
Whereas Lehman Brothers was a $60 billion collapse, Evergrande is a $305 billion collapse. This is 5 times bigger than what occurred in 2008.
Bailouts or Bank Failures?
Most people do not believe that the CCP will allow Evergrande to fail but will be forced to bail out the company in order to prevent an economic collapse in China that would then spread around the world in a chain reaction. That would make sense, of course, but that view assumes that they want to perpetuate the system. They already know that it is collapsing, and the world leaders have been preparing for this since at least 1975.
If they decide that they are ready to replace the current system with the new digital currency system, which they have been developing, they might not bail out Evergrande. The very fact that they are still debating what to do and have not committed themselves to do a bailout shows that they are considering it. We should be prepared for either scenario.
The appearance of a highly symbolic black swan at the height of this crisis in such a highly symbolic location as Tiananmen Square in Beijing only heightens our awareness. Further, we are again approaching the big emotional date of September 11, which is next Saturday. This could be a very important economic week, depending on what happens in China.
Without a Bailout
If China allows Evergrande to fail, watch for other banks and companies to fail as well. Watch for contagion around the world over the next few weeks and months. In America, FDIC member bank accounts are insured up to $250,000. However, no one knows how long it might take for banks to reopen or what restrictions may be placed in withdrawals.
Remember what happened a few years ago in Greece and Cyprus. People did not necessarily lose their money, but they would allow people to withdraw only $300/week of their own money. For most people, this was only a fraction of what they needed to pay their bills. Yet they said these restrictions were necessary to prevent bank runs and to save the banking system.
Such a crisis would not come without warning, but I have found that few people know warnings when they see them. Being unfamiliar with economic and financial matters, they usually do not understand what is happening until it is too late to prepare. I myself am not an expert either, but in the past 20 years I have taken the time to learn as much as I can and to prepare for the eventual collapse of the Babylonian financial system.
The most important preparation is spiritual. We must be grounded in the word and understand prophecy. The more we know about timing, the better off we will be. And if we understand the signs of the times—such as the unexpected appearance of a black swan in China’s capital—we will see the crisis before the general public sees it.
Effects of a Bailout
We have already seen how America’s “Lehman moment” affected us since the first $700 billion bailout in 2008. Money has been gushing freely for the past 13 years, but it has accelerated greatly since 2020. In fact, about 40 percent of all the US currency ever created was issued in the last year and a half. When you see a parabolic rise in the money supply, you know that it is about to collapse.
The banking system would have failed in 2008 if there had been no bailout at the time. The bailout only postponed the problem, however, because the underlying problem could not be fixed. The problem was built into the system in 1913 with the Federal Reserve Act. The underlying problem is that currency is created through borrowing. Every dollar is a debt note that someone owes. It was not a problem at first, but eventually, when the debts become insurmountable, the system collapses.
Today we are in the midst of a struggle behind the scenes to create a new system. Those who have accumulated enormous wealth on the debt-money system are trying to set up something where they can transfer their wealth to a new system without losing it. Others are working to set up a more equitable system that will not make the rich richer and the poor poorer. Neither side really seems to take Scripture seriously. Knowledge of a Kingdom economy, based on biblical law, was lost long ago.
Biblical Money
Yet we know a few things. First, we know that silver and gold are biblical money, and the law correlates silver with barley (Leviticus 27:16). Hence, mining and agriculture are valued according to the amount of labor and scarcity that each requires to produce.
Modern paper money continues to be worth less and less, a little each day, and a dollar is now worth only 3 percent of what it could purchase a century ago. Even so, people today try to gain one percent interest per year on their savings, while the inflation rate is running at 10 percent. In an inflationary scenario, money should be spent or invested, because it does not pay to save it in an account that is full of holes.
Preserving Wealth
I cannot give anyone financial advice, of course. Everyone has to do their own research. But I believe that in the next few months the market managers and manipulators will lose control of the price of silver and gold. The rise in price does not mean that silver and gold are going up in value; it means that the value of the dollar is going down in value, so it will take more dollars to buy the same amount of gold and silver.
Not everyone has accumulated wealth, so any talk of preserving wealth is irrelevant to them. But one should be prudent with what one has. In my view of prophecy, the arms of silver (Persia, Cyrus, the messiah) are about to overthrow the head of gold (Babylon). That is why I prefer silver to gold. Both will rise, but silver will do much better. When the spot price of silver hits $50/oz, it will mark the point where Babylon is in full collapse mode.
The main thing is to know that the black swan event means we should watch what China does about the Evergrande bankruptcy. Watch for ripple effects among banks around the world. It is likely that bailouts will increase the creation and flow of currency, which will only devalue currencies and increase the inflationary rate.
Government statistics are highly manipulated, so as a rule of thumb, whatever the government says is the inflation rate, double it. In America they do not factor food and fuel prices in their inflation statistics. That way their figures remain low and inaccurate. Food prices greatly increased in August. Fuel prices have doubled in the last year.
Geopolitical Changes
On August 15, 2021 we reached the 50th anniversary of Nixon’s announcement that the US dollar would no longer be convertible to gold. That was in 1971. In 1973 Saudi Arabia agreed to price their oil in US dollars only to prop up the dollar, in exchange for US military protection.
Therefore, we knew that August 15, 2021 was a major watch date, and this was marked by the fall of Kabul (Afghanistan). Then on August 24 Saudi Arabia signed a military agreement with Russia, essentially abandoning the previous agreement with the US. Nigeria did the same on August 25. These represent major geopolitical shifts that will have major financial impact.
These things are signs that US dominance in the world has ended. It also marks the end of the US dollar as we know it, because the dollar is no longer being backed by oil. The only feasible choice is to return to the gold standard that Nixon abandoned in 1971. The inevitable collapse of the US dollar will be marked by a dramatic rise in the price of gold and silver.
I believe that September 2021 will see the first signs of this massive change, and that October and November will see a lot of financial turmoil. It will not be the end of the world. In fact, it will be a new beginning. Men will have their own agendas that they promote as “solutions” to the problem. But God has His own solutions, and His Kingdom will come out on top in the coming years.
Those who have seen victory in spiritual warfare know that we have already won this battle. But we must get through the turmoil of Babylon’s collapse before the victory emerges in the world. How long that will take is unclear, but I do not think it will take very long. Recall that we are in the midst of a great seven-year cycle from 2017-2024.
The year 2024 marks the end of 7 x 490 years since Joshua crossed the Jordan and established the Kingdom era in his day. The year 2024 brings the earth into Blessed Time on a very long and major time cycle. The final cleansing period of 76 years is from 1948-2024. So we might have a few years of turmoil to one degree or another, but I do not believe that it will go past 2024.
Meanwhile, understand that Babylon is falling in answer to our prayers. So when we see turmoil, let us not be afraid but let us rejoice that God’s Kingdom is replacing the kingdom of Mystery Babylon. The fall of Babylon was bound to cause geopolitical problems, especially to those whose lives are tied to Babylon. But we are Kingdom people, and our lives and destinies are tied to the success of the Kingdom. When all is shaken, we are unshakeable.
The world will act in fear; we walk by faith. So look up, for your redemption is drawing nigh.
Dr. Stephen Jones has been writing blog posts since 2005 on a variety of topics from Bible Studies to World News, and he has been writing books since 1992. Dr. Jones' most important writings came after God brought him back into the full-time ministry in 1991. It is here that all his earlier years of searching the Scriptures began to come into clear focus. He combines a knowledge of the Old and New Testaments with a personal revelation of God that began and developed during the "wilderness" period of his life, which he often refers to as God's True Bible College... Read More
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