It’s a no-man’s-land. The paths are ambush havens. Dangers lurk. Trip wires and land mines newly buried or planted years ago sleep in the underbrush. This isn’t the Burmese jungle. This is the American economy.

Many people are confused as to where the world is going. The economy is in uncharted territory, and navigating our way past the pitfalls and minefields of 2009 will be like fleeing war-torn Sudan into the Congo. Here are some of the prospects that this year might hold.

Said simply: The world faces “total” financial detonation. That’s the conclusion of the governor of the Bank of Spain less than two weeks ago. “The lack of confidence is total,” he said. “This is the worst financial crisis since the Great Depression.”

Miguel Angel Fernandez Ordonez is not alone. He has joined a formerly exclusive list of experts who have put their reputations on the line to warn America: analysts like Nouriel Roubini, former Treasury Department adviser who has now earned the nickname Dr. Doom; analysts like Robert Schiller, the Yale professor who correctly predicted both the dot-com and housing bubbles; and analysts like Peter Schiff, president of EuroPacific Capital, author of the top seller Crash Proof and scorned by media pundits who have now seen his bearish predictions proven eerily true.

And what these men and the sober few like them have to say should jar Americans everywhere into reality.

Let’s take a look.

The Point of No Return

Bill Gross, the founder of Pimco, the biggest bond trading house in America, said that while 2008 will be known for its massive stock market crash, “it was really much, much more. It was a year in which every major asset class … suffered significant double-digit percentage losses, resulting in the destruction of over $30 trillion of paper wealth ….” He continued, “As 2008 nears its conclusion, we … face a new reality. Wall Street and Main Street are fearful that a recession may be replaced by a near depression.”

The mother of all debt bombs has detonated, $7 trillion in U.S. wealth has been obliterated, and America’s financial center lays in ruin.

“The most important news for 2008 was the destruction of the big global banks’ net worth and their badly wounded ability to conduct normal business and make market-moving loans,” says Roger Wiegand, editor of Trader Tracks newsletter and the popular WeBeatTheStreet.com.

The most famous names in American-style capitalism came crashing down this year. It began with 86-year-old Bear Stearns, a company that survived World War ii and the Great Depression, but collapsed practically overnight in March. That explosion was only the first in a chain reaction that left IndyMac Bancorp, Lehman Brothers, Merrill Lynch & Co., Washington Mutual and Wachovia Corp. dead and covered in worthless debris. Other towers of high finance like Morgan Stanley, Goldman Sachs and Citigroup are severely wounded and could die. Many more, such as the $5.2 trillion Fannie and Freddie mortgage twins, and insurance giant aig, are walking zombies—alive only as long as the government continues to infuse cash into their hemorrhaging balance sheets. General Motors’ financial arm, Chrysler Financial and American Express are also now taking direct infusions from taxpayers.

The gaping crater left in the nation’s now-discredited financial core is America’s financial 9/11. “The week surrounding September 11 of this year will prove to be a more significant turning point than the one that occurred seven years before,” the Trumpet wrote. “It was a stark, blaring announcement to the world that the American economic system has passed the point of no return. And when America’s economy goes, the world as we know it will be radically transformed.”

Nouriel Roubini agrees: “There’s no going back, and there is no bottom to it.”

America will never again dominate global finance.

This destruction has left a power vacuum in the world of borrowing. Interbank lending has frozen up, despite the Federal Reserve taking the unprecedented step of lowering the rate to between 0.25 and zero percent. Banks are insolvent, and don’t trust each other enough to lend among themselves, let alone to other commercial and private borrowers.

In fact, banks are calling in their loans and are refusing to roll over old loans. Money is being pulled out of the economy. This is what the credit crunch is. The Wall Street Journalreported last month that half of all U.S. companies could be at risk of failure because they may not be able to borrow more money. That’s right: Half of corporate America may be on the verge of bankruptcy over the next couple of years if the credit crunch is not resolved.

Consumers are now being picked off too. According to Wiegand, “Consumers are broke and going broker.” Debt levels remain high, and wages are stagnant. Credit cards are tightening requirements and home equity lines of credit are no longer available to many.

Retirement plans for millions of Americans are also now shot. The most severe stock market crash since 1929 has wiped out pension plans across the country. With the Dow Jones currently down 36 percent from its highs, year-end accounting may soon reveal how massively underfunded the plans have become. Pension benefits will be cut, and even some cities could be pushed into bankruptcy.

Job Sector Breached

Making matters worse, job losses are intensifying. Global think tank leap/e2020 expects an “explosion of unemployment” in the U.S. and around the world.

As of November, over 500,000 jobs are disappearing per month, and the economy has been shedding jobs since December 2007. Official unemployment in the U.S. stands at 6.7 percent, but this statistic is the narrowest measure and does not include those who are underemployed or those who have given up searching for work. The less-reported real unemployment number is approximately twice the officially quoted statistic: over one in 10. By the end of this coming year, the real unemployment rate will “near the all-time 1930s Depression high of 25 percent,” predicts Wiegand. The rustbelt states will probably be even worse off. Already 11 million Americans are receiving food handouts and related welfare, he notes. And the Greater Depression is only beginning.

Government-run job-creation programs will probably be inefficient and wasteful. Merrill Lynch economist David Rosenberg says he would like to see how President-elect Barack Obama is going to create the 3 million infrastructure jobs he has promised, as opposed to the 2.5 million pledged just weeks earlier. Rosenberg notes that, outside of the housing construction sector, the bulk of the joblessness is in financials, retail/wholesale, leisure/hospitality and health/education. “And if investment bankers, shopkeepers, bell captains and medical chart technicians have anything in common, it is that they don’t have much experience in shovel-ready activities,” he says.

Three million jobs makes good headlines, but you need people with the skills to build ocean ports, public transit infrastructure, electrical grids and “green” technologies. And, for the most part, it is not engineers and scientists who need the jobs anyway. Some jobs will be created—but at the current rates of job losses, Obama’s taxpayer-created jobs will only replace the jobs that will be lost by June of next year.

And jobs will continue to be lost.

Mortgage Mayhem

Despite the Federal Reserve’s successful effort to drive 30-year mortgage rates down, the housing market remains in free fall. And it may be about to get much worse. Subprime was only the beginning.

“The trouble now is that the insanity didn’t end with subprimes,” says respected fund manager Whitney Tilson. “There were two other kinds of exotic mortgages that became popular, called ‘alt-A’ and ‘option arm.’”

The subprime crisis involved about $1 trillion worth of mortgages. Alt-A and option arms together total around $1.5 trillion. The bulk of these mortgages reset and/or revoke their low teaser rates in 2009 and 2010. That means that monthly payments for many people will rise. And, in case you were wondering, “the defaults [on these types of loans] right now are incredibly high. At unprecedented levels. And there is no evidence that the default rate is tapering off,” says Tilson. “Those defaults almost inevitably are leading to foreclosures, and homes being auctioned, and home prices continuing to fall.”

So far, government-endorsed plans to prevent foreclosures are failing.

An astounding 55 percent of borrowers whose mortgages were modified to help keep them in their homes during the first quarter of this year were already delinquent only six months later, Bloomberg reported.

What this means is that there may be even more jobs lost from within the construction, real-estate and lending industries.

Since a consumer’s biggest asset is his house, when house prices fall it makes people much less willing to borrow and spend. According to housing analyst Robert Shiller, house prices could easily fall an additional 15 percent over the next couple of years. Home prices have already fallen 25 percent from their peak.

Unsurprisingly, Christmas retail sales plummeted this year, and it will be one of the worst holiday sales seasons on record according to the Wall Street Journal. Even John Mauldin, president of Millennium Wave Advisors, who is well known for his view that the economy will eventually “muddle through,” notes with concern that shopping is down in America despite unprecedented markdowns.

If retail sales continue to plummet, commercial real estate is sure to take a hit as stores close up shop. That could mean additional big losses in commercial real estate for banks.

Over 30 banks have failed this year. Jim Rogers, one of the world’s most prominent international investors, says the banking crisis is going to get much worse. “Without giving specific names,” he says, “most of the significant American banks, the larger banks, are bankrupt, totally bankrupt.”

Printing Press Launch Sequence Commencing in 3 … 2 … 1 …

The collapsing economy, destroyed banking sector, free-falling housing market and rising unemployment means bad news for the dollar. Also, the trillions the government has proposed in stimulus packages means government finances will be strained.

In what may prove to be one of the most profound developments of 2008, the Federal Reserve announced its intention to monetize the national debt. In December it said it was “evaluating the potential benefits of purchasing longer-term treasury securities.”

Strap your helmet on tighter. This is Zimbabwe policy.

The U.S. government is broke. Its debts are so massive that, going forward, it will increasingly have to rely on the printing press to finance expenditures. That is what the Fed was signifying in the above statement (i.e., the Fed will create new money and lend it to the U.S. government by purchasing treasuries).

And according to John Hussman of Hussman Funds, a dollar rout may already be in the making. In his recent article “The Dollar Crisis Begins,” he indicates that if the Fed begins purchasing the U.S. government’s debt, it may end up doing more buying of treasuries than expected “in order to absorb the supply from foreign holders set on dumping them.” When the Fed creates new dollars, it devalues existing currency. That means it makes U.S. treasuries, which are denominated in dollars, worth less too. This provides a powerful incentive for treasury owners to sell their holdings.

There are a number of factors that could cause the dollar to devalue. But if treasury holders began selling, the increased supply on the market could really trigger a dollar crisis.

And there is nothing like a falling dollar and a global economy in crisis to ignite a trade war.

“The dollar has fallen by 40 percent against the world’s major currencies over the past seven years,” wrote the Trumpet back in February. “Sixteen percent of that loss has come in the past year and a half alone. Against gold, the dollar has fared even worse, losing 19 percent so far this year. The rapid fall in the dollar’s value is drastically changing global trade dynamics.”

A weak dollar generally means that Americans purchase fewer foreign-made goods, while foreigners purchase more U.S. goods. This is generally seen as a benefit to American manufacturers, and positive for jobs. But global economic conditions are eroding so rapidly that many nations may seek to devalue their currencies to grab trade. In addition, America’s manufacturing base is already pretty well shot. America’s economy mainly produces services and other less-tangible goods that are less essential to a global economy in lockdown mode.

Is the world about to embark on a beggar-thy-neighbor policy of competitive currency devaluation to boost domestic exports?

History indicates that, in time of economic crisis, governments tend to go down this road. The effects on global trade could be disastrous.

First Shots of Trade War

French President Nicolas Sarkozy, in a speech to Congress a little more than a year ago, warned that America risked triggering “economic war” with Europe if it attempted to devalue its way out of economic trouble by allowing the dollar to plunge in value. “Those who admire the nation that has built the world’s greatest economy and has never ceased trying to persuade the world of the advantages of free trade expect her to be the first to promote fair exchange rates,” Sarkozy said. “The dollar cannot remain solely the problem of others. If we’re not careful, monetary disarray could morph into economic war. We would all be its victims.”

When Sarkozy talks about economic war, what he means is tariffs and subsidies. And a lot of financial fallout that will affect your bank account.

During the Great Depression, countries sought to protect their domestic industry by limiting trade. This greatly intensified and prolonged the downturn.

The winds of trade war are blowing. Blockades are on the horizon.

“The Fed keeps telling us they will not repeat the mistakes of the 1930s, yet they continue to repeat the very same mistakes … on steroids,” writes investment adviser Mike Morgan. “The only difference this time is we have labeled the mistakes with different names and explain things away with magic dust.” Today’s new code for subsidies is “bailout.”

What is the difference, Morgan asks, between the auto bailout and foreign government subsidies to industry?

The same day the White House announced the $17.4 billion automaker bailout/subsidy, the U.S. began legal action against China at the World Trade Organization for supposedly subsidizing its industry. Tensions are heating up.

“We continue to believe that trade protectionism, competitive devaluations and military conflicts are the major risks for investors for 2009—this is, after all, the most broadly based global recession (according to the imf, not just us) in the post-World War ii era,” warns Merrill Lynch. “Since the G-20 meeting in … October, five of those countries—Russia, India, Indonesia, Brazil and Argentina—have announced their intentions to raise import tariffs or otherwise restrict trade.”

Vietnam, China, France and the European Union have all also recently strengthened import taxes, duties, subsidies or export rebates.

“[D]id anyone notice that this auto bailout excludes foreign companies?” David Rosenberg asked. “It’s all about self-preservation.”

Global leaders say they don’t want a trade war. Most economists and business leaders don’t want trade war, and the average worker certainly doesn’t want trade war—but trade tensions could easily ignite in 2009.

2009 is most likely going to be another tough year. That is what the best experts say—the experts that saw America’s economic problems before the crisis struck.

More importantly, that is what the Bible says.

According to biblical prophecy, there is a time coming when America will be blockaded by many of its former trade partners. Read it for yourself: “They shall besiege you at all your gates until your high and fortified walls, in which you trust, come down throughout all your land; and they shall besiege you at all your gates throughout all your land which the Lord your God has given you” (Deuteronomy 28:52; New King James Version). That prophecy relates directly to the Anglo-American peoples.

God has said in His Word that He will take away every one of our national blessings and replace them with curses—because of disobedience to Him (Leviticus 26). As Herbert W. Armstrong wrote in The United States and Britain in Prophecy, “We have to learn that material goods are not the source of happiness. … Our peoples have basic lessons yet to learn. The true values are spiritual.”

The prosperity and blessings that America and other English-speaking nations have enjoyed as a result of their forefather Abraham’s obedience, are being taken away by God because our peoples have failed to acknowledge the Source of those national blessings. “Punishment implies correction,” Mr. Armstrong wrote. “Correction means a change of course. … God is going to keep multiplying chastening—correction—upon our peoples until they do turn from their evil ways—until they turn to the ways that cause peace, happiness, prosperity, all the good things!”

And that is why we warn of America’s impending fall.