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Economic Update on Babylon

May 06, 2008

Well, last September's prediction that we would see $120/barrel oil by Spring has finally come to pass by the middle of Spring with 6 weeks to spare! Now the news is projecting $200/barrel by next year.

What that really means is that the value of the dollar is going so low that it takes a whole lot of them to purchase anything, including oil.

It also shows a huge global shift of wealth from America to oil-producing countries, which, if continued, has the potential of bringing the American standard of living down to third-world status.

The ultimate result of "free trade" in a "global economy" is to equalize the living standards of the world. Ours goes down, because it was at the top in past years. Theirs goes up, because they were at the bottom in past years. We meet somewhere in the middle. This is, of course, "good for America," meaning Corporate America, of course. It's not so good for the individual workers trying to make a living.

The passage of GATT on Nov. 29, 1994 was a major step in this new American direction. We understood this as a "watch date" a year earlier, because Nov. 29, 1993 was the prime date of Round One in our Jubilee Prayer Campaign, whereby we appealed to the Divine Court for the overthrow of Mystery Babylon.

Babylon is, by law, "urban property," and so it falls under the prophetic rules of Lev. 25:29. The overcomers, in effect, "purchased" urban property, which was being sold at auction, much like God sold the original Babylon at auction to the Medes and Persians in Daniel 5:28.

Babylon had reached the end of its divine mandate to rule the world, but like the old Babylon, they refused to let the people go free (Jer. 50:33). And so we appealed the case in the Divine Court, even as Daniel did in Daniel 10. We won the case in Court, but could do nothing with this newly-purchased urban property for a full year, according to the law in Lev. 25:29. This is why Nov. 29, 1994 was a major "watch date" for us.

We watched it with interest when the GATT treaty was passed on that date, with Tom Foley of Washington presiding as Speaker of the House. Foley had just lost the election earlier that month to George Nethercutt. Since we were living in Washington state at the time, we heard the political rhetoric about how they intended to de-Foley-ate (defoliate) Washington DC by beating Tom Foley in the election.

We recognized this as an unintended prophecy of a modern fulfillment of Daniel 4, where king Nebuchadnezzar dreamed of a great "tree." In the dream, God defoliated the "tree" of Babylon (Dan. 4:14) before cutting it close to the ground. But in that original situation, "Babylon" remained alive as a stump with a bronze band around it. In the modern fulfillment, this "tree" received a LOWER CUT. Hence, George NETHERCUTT ("lower cut") beat Tom Foley, and Washington was de-Foley-ated. Immediately after the GATT treaty was passed by the House, Tom Foley resigned as House Speaker, and so he fulfilled the prophetic type of Nebuchadnezzar leaving office precisely 12 months (one year) after his dream of the "tree" (Dan. 4:29).

Prophetic stuff can be strange. If it did not appear foolish, everyone would see it, believe it, and then prevent its fulfillment. God works in the dark and in ways that appear foolish to the average person, "because the foolishness of God is wiser than men" (1 Cor. 1:25).

The point is, since 1993 we have had progressive revelation about this Babylonian "tree" being cut down with a lower cut--a cut that would end its life, rather than allow it to live for another day. The Jubilee Prayer Campaign proved to be a 13-year "Jericho march" that did not end until Oct. 7, 2006. Jericho was a type of Babylon and Mystery Babylon. So we understood that the "walls" of Jericho, like the "tree" of Babylon, would not begin to fall until the spiritual battle had been completed.

That is how we came to believe that this Babylonian economic system would begin to fall after October of 2006, and that we would begin to see it fall within a year (before the end of 2007).

The present economic situation, then, seems to be more than "just another recession." I believe that as time passes, the downturn will continue beyond a mere recession, until the people repent and re-establish the economy upon Kingdom principles from Scripture. This will be the equivalent to the downfall of Babylon, the end of debt-note money, and the reinstatement of money as a positive asset backed by actual wealth.

Last July we saw the beginnings of Babylon's defoliation in the subprime mortgage crisis, which soon spread as a housing crisis, followed by the rise of bond prices, oil prices, and now food prices. In economic terms, the rate of collapse is huge, and the domino effect is obvious. What yet has to be unravelled is the derivatives market.

Derivatives are complex financial insurance dealings that most people know little or nothing about. You can learn about it by going to:


In short, it is a way to invest without risk of losing one's money, because the investment is "insured" by another company--for a fee, of course. That insurance company, then, might want to reduce its own risk by sharing the risk with other insurance companies. So the initial investment is a business deal that produces "derivative" business with these other companies who are purchasing RISK.

The insurance fee is based upon the assumed risk factor. In normal times, they know that a certain percentage of mortgages or other types of business deals will fail, and so they calculate their fees accordingly. Sounds good so far.

But competition is the first problem, because only the insurers who are willing to be paid the LOWEST fees will get the business. The insurers calculate how close they can walk near the edge of the cliff without falling off, and the most aggressive of them get the business. Money flows to them, more bonuses are paid, the top executives sign off on the deals because they too get bigger bonuses for doing so, and the company sees good times.

Until something scuttles the economy. Suddenly, their paltry insurance fees are unable to cover the debts that they have insured. They go bankrupt, and then the companies who had purchased insurance discover that they paid insurance fees for nothing. They thought they had passed on the risk to someone else, only to find that their risky loans had bankrupted the insurance companies. Suddenly, these companies find themselves to be insolvent as well.

Part of the problem is that the people writing up the mortgages are able to sell the mortgages to other financial institutions. So the originators of the loans immediately pass on the liability to others and make a risk-free bundle of money doing so. The risk is passed on to others. So there is little incentive to be careful about who to give a mortgage to.

Secondly, the nature of corporations is such that there is only limited liability (at best) for individual employees. If they make bad loans, they make lots of money, and the risk is assumed by the company itself. If a company is going broke, the executives can quickly give themselves huge bonuses to suck up most of the remaining money in the company, and then declare bankruptcy. It is pretty hard to fight these people in court or to recover any money.

So far, the economic downturn has not really reflected an effect on the derivatives market. Oh, yes, MBIA and Ambac insurance companies have already been affected and ought to have lost their AAA rating. But the ratings companies maintain the AAA ratings facade to the day of bankruptcy.

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Category: News Commentary

Dr. Stephen Jones

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