Special Feature | The Coming Economic Collapse

An eTPL31 Circular Letter

The Trump Administration wants to get the economy open again and return the country to “normal” again in short order. But some economists state unequivocally that such a return cannot be accomplished in the near term. Instead, some are predicting dire consequences for the USA and the broader world economy.

The failure of the president’s optimistic plan is already becoming evident...

The highly destructive impact of the coronavirus has all but frozen commercial activity throughout the nation at its height – and the greatest impact is yet to come, if one listens to many of the movers and shakers – the long-term, serious thinkers – who are speaking out.

They are largely those trained in economics; many of them are expecting a much deeper collapse of the world economy.

Whether the pandemic is now receding (doubtful) or expanding (that seems more likely), the nations will experience wave after wave of bankruptcies – not only millions of personal bankruptcies but countless commercial ones as well. Even the largest and formerly most prosperous companies are at risk as the crisis deepens...

These include the airlines. The recent government bailout dollars have covered only a small fraction of their catastrophic losses. All of them are burning through millions of dollars of losses daily. Thousands of highly-paid employees including pilots have been permanently furloughed. Huge fleets of expensive aircraft have been flown to remote desert locations and parked in the blazing sun until business rebounds. It may never do so...

The energy sector is suffering immensely as crude oil prices hover around $40 per barrel. Many companies, and entities such as Russia’s oil industry, need to sell their crude oil for at least $80 per barrel in order to prosper. In the US, oil fracking operations also must be able to see their product for a price much higher than the current prices. Many of these are failing.

Most cruise ship operations are on hold until after the end of 2020 as the dangers of crowding on their vessels is highly conducive to the spread of Covid-19.

Restaurants throughout the US which recently ventured to reopen with widely spread-out table service are now being coerced to pull back their service and revert to drive-in operations.

Professional sports teams are being forced to play their games in empty stadiums – a necessity which shatters their box office sales and cuts deeply into players’ salaries.

Hotels are operating at far below profitable occupancy levels and their prospect of a quick recovery is directly affected by the lack of all other commercial recovery.

The travel industry is suffocating as business travel is stifled and mostly halted worldwide.

Many giant retail chains can see no profitable way forward; retailers such as J. C. Penney, the Gap, Macy’s and many others are being forced to close almost all their retail outlets.

Commercial real estate is taking a severe hit with prospective wholesale failures of their tenants; shopping malls are prospectively empty shells in the face of this threat. Entire strip malls could be abandoned and fall into gross delinquency.

Property owners are doomed to unrecoverable losses and certain failures as rents are not paid.

Manufacturing plants are being shuttered unless considered essential (such as meat and poultry producers) and their workers are drawing limited unemployment benefits. What happens to these families when their unemployment benefits expire is unthinkable.

The natural sequelae of consumer and business bankruptcies and mortgage (and other loan) defaults will result in the rapid failure of many banks, credit unions, insurance companies and other financial businesses.

Such a quick review illustrates that those are only the slightest glimpse of the overall challenge to business and industry.

Car and truck sales will start to falter as families and businesses fail to come up with the funds to replace worn out rolling stock. Used car prices will doubtless rise due to demand.

Utility companies – usually some of the most stable and prosperous businesses – will not be able to stay in business as individuals and companies fail in their ability to continue paying high utility rates.

The tax revenues of all municipalities, counties, and states – as well as the federal government – are falling rapidly, which will have an effect on all services rendered by these functionaries.

And just think of this: almost all those difficulties are a result of the coronavirus outbreak.

But that is perhaps only the tip of the vicious iceberg...

The result could doubtless be the worst financial downturn since the Great Depression of the Twenties and Thirties. Millions of folk will be forced to withdraw from the labor market and will cease trying to find a paying job. It has happened before. After the crash of 1929, many workers sought jobs for up to eight years before reaching the recovery years of 1938 and 1939 – a wave of nascent prosperity only brought on by the approach of a great war.

All those factors are incredibly frightening because they are NOT “future” prospects – they are already here! They are a present reality!

Nearly forty million Americans have become unemployed. Their livelihood has been terminated more or less permanently – or at least for the foreseeable future. The precipitous loss of business functionality will mean the loss of some of the biggest corporations in the country; they will become insolvent and fail.

Because, as one economist put it, “Washington and Wall Street have been ‘cooking the books’” for many years! Dishonest manipulation of markets, deceptive accounting practices, and the prevalence of outright lies are bringing on a chain of economic disasters that will rock the nation ... and the world.

Of course, some of the outspoken commentators themselves have an agenda. Some of them offer a “secret” plan that will help the average worker preserve his wealth – and even grow it immensely – as the crisis further unfolds. Be wary of them!

The way we see it, only those folk who already have an assured income stream that is adequate for their standard of living are fortunate. Those and the super-wealthy, whose wealth can easily bridge many years of income loss and ongoing debt incurrence, the latter being a function of continuing existence – they are the fortunate minority in this great disaster which has fallen upon the contemporary world.

So, unless families can discover a means to protect themselves, every temporal thing they have worked for all their lives could disappear.

As Barron’s recently put it, “perhaps it’s better to think in terms of biblical disasters.”

Yes ... that’s it: Biblical disasters...

The unique place in which the current world finds itself has seldom been experienced before.

We think of the ten great plagues of Egypt – disasters which came in serial fashion for weeks on end – these were preparing a People (Israel) for its birth at the expense of its oppressors.

Insurance companies in Egypt doubtless labeled it “an act of God,” an ominous name that is still assigned to such societal disruption and overthrow. It was an affair which ended only at the Red Sea crossing when the decisive blow was dealt by YHVH – the utter destruction of Pharaoh’s elite charioteers and infantry ‘neath the raging waves that snuffed out their lives in an instant.

Egypt never recovered from that series of disasters; it became a base kingdom ruled by outsiders, sinking beneath its former status of might and power among the nations of the ancient world.

We think also of the abrupt termination of the societies of Sodom and Gomorrah. In that instance, righteous Lot and his family were being rescued and given liberation from the stifling, suffocating sin and iniquity of those cities ... liberty to begin life anew even though they subsequently and largely failed.

And we cannot omit consideration of the great flood of Noah’s time – a catastrophic event which snuffed out the lives of every man, woman, child, beast of the field and forest, and every creeping thing on the earth, while delivering eight righteous souls into a newly refreshed, purged world to begin civilization anew.

We think of today in those contexts, dear Bible lovers.

Because the rigorous events which the world is now enduring will also result in some marvelous instances of deliverance from ungodliness.

A significant fraction of the race will be relieved of its mortality ... and be given immortality as the faithful of all ages shed this mundane existence and don the white garments of righteousness in the eternal security of endless life in their perpetual association with the King of kings in His Age of Peace and Prosperity.

In addition, a beloved People (Israel) will be delivered of the irrepressible threat which has overshadowed its head for centuries – the oppression of God’s People by their enemies, culminating in today’s nearly impossible opposition that is relentlessly a-building against Israel among the nations round about them.

At its end, only the thunderous personal intervention of Messiah will be able to rescue them – will save them from those bloody hordes that perpetually hate them and intend to take their lives and lands for themselves.

It is therefore a journey well worth undertaking – this narrow, rocky pathway through our present valley of the shadow of death – for outside that delicate pathway, death is all that the present life offers: certain death, dissolution, rot.

Fortunate indeed are all those who utilized their ears to “hear” and their eyes to “see” the salvation that is offered without reservation to every man and woman born into the world.

For those blessed ones, deliverance is swiftly approaching. They shall be borne (and born) out of this present tribulation into a life more abundant – more productive – finally acceptable to their beloved Abba when His Son is moved to invite ten thousand times ten thousand, and thousands of thousands of us into the secure enclosure of the heavenly Jerusalem then to be prevalent upon Mount Zion, its walls providing the blessed security and longevity of those upon whom Righteousness is named by His grace.

Bro. Harold Lafferty