When banking giant Barings collapsed in 1995, it shook the financial world to its core. How could a bank that survived the American Revolution, the Napoleonic Wars with France, and both great wars collapse so quickly?

Because of an earthquake in Japan. After the Kobe earthquake on January 16 that year, Japanese stock markets plunged—and a 233-year-old banking icon disappeared from history.

Although Barings was not U.S. owned, it held special significance for America. It was the British bank that helped finance the Louisiana Purchase in 1803 for the fledgling United States. It was that purchase that enabled America to become an economic superpower.

Newsweek called the Kobe earthquake “an act of God.” In the April 1995 Trumpet, Gerald Flurry said he agreed. “The Barings Bank collapse is a strong warning sign for America and Britain. The collapse of our nations is going to be just as sudden if we don’t repent!” he said.

Fifteen years later, has America learned anything?

A Bubble Bursts

Soon after the Barings disaster, the world was shaken again. In July of 1997, Asia went into currency meltdown. Beginning in Thailand and sweeping through virtually all of the Asia Pacific region, one currency after another collapsed as nations flirted with and succumbed to debt default.

After the Asian financial meltdown, the Trumpet warned that although America had emerged relatively unscathed, we shouldn’t “deceive ourselves by arrogantly thinking we are invincible” (November 1998).

“It is vitally important that we see behind the record-setting U.S. bubble stock market with all the hype and hoopla,” Trumpet writer Tim Thompson exhorted a few months later. “With the full view provided by combining news and prophecy, it is America which is in grave danger of an unstoppable fall over the precipice of financial ruin” (February 1999).

Over the following year, America’s economy grew at a wildfire pace. Giddy venture capitalists and fat pension plans drove the stock market to astronomic highs. The technology-heavy Nasdaq broke 5,000 and was still going up and up. Companies like DrKoop.com, Boo.com and Pets.com were supposed to unleash a new era of prosperity. Shares rocketed from pennies to hundreds of dollars. Companies that had never earned a cent were worth billions.

But despite the euphoria, the Trumpet kept declaring that the economy was built on sand. America was not being blessed from God, we said.

At the peak of the dot-com bubble, the Trumpetrepeated its warning (March/April 2000):

U.S. corporations and individuals are on a borrowing binge of historic proportions, which is making them more vulnerable than at any time in history to a slowdown in the economy. …The best thing we could recommend is that you get out of debt, such as credit card and other short-term debt, and get into a good cash position so that you can weather some of the early storms on the horizon.A lot of people are going to be wiped out financially.

How could you forget what happened next? The mania came to a dramatic end. The stock market plunged through the floor. The economy was thrust into a sharp recession and millions of people lost their jobs. Silicon Valley became Death Valley for many.

A full decade later, America still hasn’t recovered. It took the Dow Jones almost seven years to return to its peak, although it has since fallen below it again. The Nasdaq stock exchange is worth less than half of its March 2000 value. On an inflation-adjusted value, both markets are way down.

But the lessons learned from the dot-com delusion were soon forgotten. Greed, corruption and leveraged financing soon returned. And of course, America’s moral slide continued.

In an effort to treat the symptom instead of addressing the cause of the collapse, the Federal Reserve slashed interest rates to 1 percent. Consumers and businesses dutifully gorged on cheap borrowed money again, and the speculators and gamblers returned. The good times appeared to return too, but in reality, the seeds for an even greater bubble were sown.

A Bigger Bubble

By 2004, it was clear what that bubble would be—even if the Federal Reserve refused to even acknowledge that bubbles could be determined before they popped.

In November that year, in an article titled the “Biggest Bubble Ever,” the Trumpet warned that this time the housing market was heading for a massive collapse. It could even be as bad as 1929. “Never before have we witnessed the confluence of so many negative economic factors to this degree,” we wrote. “We are truly in uncharted territory. Yet the U.S. economy has been perking along largely because it’s been propped up by the greatest housing bubble ever known.”

The Trumpet told readers to begin preparing for a major crash by reducing their standard of living. When the housing bubble pops, it could hurtle the economy into “chaos reminiscent of the Great Depression—or worse!”, we wrote (ibid.).

As it turned out, housing prices in America peaked two years later, in 2006. During the intervening time, Federal Reserve Chairman Alan Greenspan still denied that a bubble even existed.

How were we so sure? Yes, we looked at house prices, ownership rates, debt levels, interest rates, evidence of speculation and complacency—the same sorts of indicators many analysts looked at. But we also considered one other, more important source of knowledge that few value today—God’s Word.

“There is only one Master Economist, who knows all the intricate equations, all the delicate variables and all the laws that govern our modern economy,” the Trumpet wrote. “He has revealed some of the most fundamental principles of economics in His Instruction Manual for mankind” (May 2004).

God’s words and God’s prophecies form the basis of the Trumpet’s message.

“Are you willing to face reality, or will you keep your head in the sand?” we asked. “That decision is yours.”

Those who acted had more than two years to prepare before things started to get really bad. It was time well needed because when the housing bubble popped, it exploded with a bang—taking much of Wall Street with it!

Getting Our Attention

When Bear Stearns failed in March of 2008, the whole world awoke to the fact that something was seriously wrong in America. Whereas it took weeks for Barings bank to finally succumb to bankruptcy, 84-year-old icon Bear Stearns was shattered in 24 hours.

At that time, the Trumpet wrote, “Just like Bear Stearns, America is also about to wake up and discover that everything has changed.”

By the time 2008 was over, America had changed. The biggest names in British and American high finance were lying prostrate before the world. Lehman Brothers, Merrill Lynch, Wachovia, Washington Mutual and Indi Mac Bank were gone. Citi Group, Bank of America, Royal Bank of Scotland, Barclays, Lloyds and many other banks continued to exist only due to massive government bailouts.

The chain of failures caused a massive credit crunch, and America’s debt-addicted economy went into convulsions.

The picture of America’s economy that remains is not pretty. And it is going to get even uglier.

As Mr. Flurry said when Barings collapsed, “… I guarantee you, by the authority of God, these financial problems will intensify until they do get our full attention!” (April 1995).

America’s history from Barings to Bear Stearns is that of escalating punishment from God that has gone unheeded.

But there is hope in the punishment. God is punishing America for a reason. He wants to get our attention so that people will change their ways—and look to Him for direction. That is the only way that people will escape the economic punishment that is coming. That is how to experience prosperity and financial blessings.