For decades, Herbert W. Armstrong, editor in chief of the Plain Truth (the Trumpet’s predecessor) warned that the collapse of the American dollar (and general economy) would be the primary catalyst for the rapid and dramatic fulfillment of the end-time events discussed in the book of Revelation and elsewhere.

“Should the dollar collapse,” he wrote to his supporters in 1968, “it could well mean a repetition of the disastrous depression that strangled the economic world in 1929” (emphasis his). Earlier in the same letter he wrote that if the dollar is devalued, “inflation will almost surely result” and would lead to “economic collapse for the United States.”

The editorial page of the Washington Times now seems to agree, at least in part. It lamented today that the Fed’s intention to flood the financial markets with $1.2 trillion is as stunning as it is dangerous:

The size of this $1.2 trillion increase is breathtaking, and the U.S. monetary base has already more than doubled so far, from $800 billion to $1.7 trillion. …Devaluating our currency and our debt is a dangerous game. It may cure short-term ills but, in the long run, countries won’t want to hold U.S. government bonds or other investments if they think they risk losing a lot of money this way.

When the Fed made its announcement last week, the dollar dropped quickly. On March 12, for example, it cost $1.27 to buy a euro. By last Thursday it cost $1.37. The Times continued (emphasis ours throughout),

The Fed seems to think that it is battling what might be a massive deflation and wants to protect against the unemployment that might result from sticky wages and prices. But instead of deflation, these huge increases in the money worry us that the opposite, a hyper-inflation, will be more likely the case and there will be real costs.

Not only will flooding the economy not curb unemployment in the long-term, it will also drive interest rates up. “Interest rates will go up, simply because lenders will have to be compensated for the fact that any money that they get back a year from now will be worth less because of inflation. With the rates up, investments will fall.” The Times concluded,

This huge increase in the money supply may provide a short gain, but the long-term costs are going to be huge. The notion that the Federal Reserve is capable of smoothing out the impact that such a change has on inflation is hubris at its worse.

There is little doubt Americans are deeply concerned about the current economic crisis. Unemployment is going up, credit cards are maxed out and foreclosures haunt many. If inflation now escalates, as is expected after last week’s announcement, food and gas prices will soon start going up too. But as alarming as these concerns should be, America’s financial collapse will precipitate crises much larger and more dangerous than these.

The Mullahs Must Be Laughing—Again

President Obama spoke of “a new day” for American-Iranian relations in a videotaped message released on the Internet Friday. He said a “common humanity” bound the two peoples together and that his administration is committed to “pursuing constructive ties among the United States, Iran and the international community.” Investor’s Business Daily noticed some revealing differences between the English version and the video bearing Farsi subtitles:

The version with Farsi subtitles—presumably the one pegged for Iranian consumption—was closely cropped, with no sign of the U.S. flag (although you can see the tiniest edge of the red and white stripes for a time during the second half of the message). Even the president’s lapel pin of the flag is cropped out during much of the address.While bereft of anything to offend Iranians who make a practice of burning the stars and stripes, the video’s “tough diplomacy” consisted mainly of palavering the Islamic nation.

According to the New York Times, Obama’s use of the term “mutual respect” in his speech is a code word signifying the new administration’s intent to “break” from the Bush administration’s “axis of evil” rhetoric.

The “break” from President Bush’s policy, however, has been an embarrassing failure. In his Friday speech, Mahmoud Ahmadinejad simply ignored the U.S. president’s remarks. He said world powers had now been persuaded that they could not block Iran’s nuclear progress.

Yesterday, Iran’s supreme leader, Ayatollah Ali Khamenei, said there would be no changes in U.S.-Iranian relations unless President Obama ends American hostility toward Iran and makes “real changes” in U.S. foreign policy.

“They chant the slogan of change but no change is seen in practice. We haven’t seen any change,” he said. According to Khamenei, President Obama has “insulted” Iran from the very first day he stepped in office. “If you are right that change has come, where is that change?” he asked.

Surprised? Germany Dominates EU Summit

“The closing document agreed on by European Union leaders gathered in Brussels reads like a German wish list,” Der Spiegelreported Friday. “Chancellor Merkel was able to convince the EU to focus on financial-market regulation—and to resist new stimulus programs.”

We are not surprised. Spiegel continued,

Chancellor Angela Merkel, Foreign Minister Frank-Walter Steinmeier and Finance Minister Peer Steinbrück looked immensely pleased with themselves at the Friday press conference that closed this week’s European Union summit in Brussels. It’s remarkable how far the world has come in two years, Steinbrück said. Much of the agenda promoted in vain by Germany in early 2007—when Berlin held the rotating presidency of the G-8—has now become consensus, he pointed out smugly.

For years we have written that Germany is skillfully and subtly shaping European economic policy in an effort to establish its dominion over the Continent. This reality is being exposed further by the current financial crisis. Today it has reached the point where the German finance minister is publicly and “smugly” gloating over the fact that Europe is now practicing an economic agenda established two years ago by Germany!

With the G-20 summit looming in April, the European Council, after meeting last week, released a 22-page outline of how the EU plans to deal with the financial crisis. “Much of it is dedicated to the Europeans’ demand for increased regulation of the financial markets,” Spiegel reported, “with passages devoted to economic stimulus looking truncated by comparison.”

One thing is for sure: The document, which espouses greater regulation, economic discipline and tremendous caution when it comes to stimulus packages, has a distinct German whiff about it. Inside Europe, everyone knows Berlin has preached this solution from the earliest days of the crisis.

We’ve said it before, and we’ll say it again. Watch Germany—especially with the G-20 meeting looming. Clearly, Germany has been central in formulating Europe’s collective response to the current financial crisis. More than likely, Germany will be the voice that speaks for Europe at the G-20 conference.

The U.S.-Israeli Collision Course—Part Two

“Israel’s next government seems tailor-made for conflict with an administration in Washington,” wrote the Washington Times on Friday, stating that conflicting views on Palestinian statehood were a major cause of friction. The Times wrote,

While Netanyahu has compromised in past dealings with Washington—an earlier term as prime minister was cut short after he made land concessions at the urging of President Bill Clinton—his new coalition partners may not leave him much room to maneuver.

“The more narrow the government the more difficult it will be for Netanyahu to make some gesture towards the U.S.,” said Gerald Steinberg, chairman of the political science department at Bar-Ilan University outside Tel Aviv. On issues such as settlements, if pressure comes from Washington, “it is likely to lead to a major confrontation.”

The article noted that Netanyahu has said in the past the U.S.-backed peace talks were a waste of time. Spiegelwrote that the forthcoming coalition could damage Israel’s ties with its other allies as well. “German commentators are gloomy about the prospects for peace in the Middle East, arguing that Netanyahu and Lieberman represent a step backwards,” says Spiegel. One German newspaper referred to Netanyahu and Lieberman as “gravediggers of the peace process.”

For more on the U.S.-Israeli collision course, go here. Also, read what we wrote in the Weekend Web two weeks ago.

Jerusalem’s “Central Park”

Following the destruction of several homes in the Arab neighborhood of Silwan, the Palestinian Authority has accused Israel of “ethnically cleansing” East Jerusalem.

“This is an infuriating campaign by the municipality to ‘Judaize’ the city and expel the Palestinian population,” a spokesman for the Palestinian Authority said last Thursday.

Besides cracking down on the illegal construction of Palestinian homes, Jerusalem’s new mayor, Nir Barkat, makes no bones about his intent to expand an archaeology park in the ancient City of David, which is located in Silwan. In an interview with the Jerusalem Post last week, Barkat said,

This is one of the most strategic sites in the city, on an international level, which must be an open public area. …I would like to see what [New York Mayor Michael] Bloomberg would say about illegal building in Central Park. Would he give up Central Park because there is illegal building there?

According to the Post, Mayor Barkat hopes to reach an agreement with the 1,500 Arab residents living in homes that are targeted for demolition.

As many of our readers know, several of our Herbert W. Armstrong College students have volunteered at Dr. Eilat Mazar’s archaeological dig, which is situated right in the middle of the area that is currently under dispute. The Daily Oklahoman published a piece today about our support for Mazar’s work.

Even More Ponzi Schemes?

Bernard Madoff’s infamous $50 billion Ponzi scheme may be just the beginning, according to U.S. federal regulators. Bart Chilton, a commissioner at the Commodities Futures Trading Commission, warned of “rampant Ponzimonium,” as the watchdog investigates “hundreds of individuals and entities, many of which were related to Ponzi scams.”

He stated that the regulator was seeing more of these scams than ever before. “The floundering economy has unearthed many of these house-of-card scams,” said Chilton. “In the last month alone we’ve gone after crooks in Pennsylvania, New York, North Carolina, Iowa, Idaho, Texas and Hawaii.”

The Financial Times reported that “Mr. Chilton did not provide details of the investigations but it is likely the majority of the cases relate to small investments, in the range of a few million dollars to $50 million. In the latest case, the cftc this week charged a North Carolina investment company over an alleged $40 million Ponzi scheme in foreign exchange trading.”

This kind of rampant greed is endemic in the financial system. It is this kind of greed, and complete disregard for the millions of dollars that are being stolen from people, that causes economies to collapse. For more, see our article “Our Economy’s Boiler Room.”

Elsewhere on the Web

Terrance Corcoran’s “Is this the end of America?” from Friday’s National Post is a must-read.

Last week, Trumpet columnist Joel Hilliker explained that Mexico’s emboldened drug cartels are largely an American-made problem. To meet America’s insatiable demand for drugs, cartels are arming themselves with high-tech weapons made and sold in America. Writing in the Washington Times today, Torrey Meeks details the steady flow of weapons, which often originates from deep within the U.S., into the hands of Mexican cartels.

Yesterday, three police officers were gunned down, and a fourth was critically wounded, after a routine traffic stop in East Oakland. The deaths mark “one of the worst days in the police department’s history,” according to the International Herald Tribune. Tension between police and the black community has escalated since the fatal shooting of 22-year-old Oscar Grant iii by a transit police officer on New Year’s Day.

Approximately 10 minutes before a planned attack against an Attleborough high school, British police arrested a 16-year-old who said he was going to attack his high school with “arson and other forms of violence.” The 16-year-old was carrying a knife, matches and a plastic can of what the police described as “flammable liquid.” The incident was thwarted when a 21-year-old student from Montreal, Canada, came across the threat, which was posted on a music-sharing web page.

In Israel, a homicide bombing was narrowly averted yesterday at a mall in Haifa when one of the explosive devices in the car bomb malfunctioned. Israeli authorities believe the explosives could have brought down the entire mall.

And Finally …

According to Alexa.com, which rates the worldwide popularity of websites, theTrumpet.com’s average ranking over the last three months is 88,958, which is our best ranking yet. Four months ago, our ranking was 137,331. We only cracked the top 100,000 in February. So we’re heading in the right direction. Thanks for making it happen.