Friday, November 16, 2007

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Economics & Geulah

by Akiva at Mystical Paths

Financial markets have increased instability, and the top US banks are now beginning to report major financial hits. This is my ongoing analysis of this, both by a global economic view and in line with how this might hint towards Geluah and the coming of Moshiach. (But I am neither a navi, a prophet, nor an expert financial analyst.)

B'derek Teva, according to the natural path, when markets get so unbalanced that normal correction mechanisms are overwhelmed, they 'crash', take a 20-30% hit. The unbalancing cause collapses, loosing most of its value (mortgage bonds for example). Companies without solid assets and incomes fall in value, some fail, especially those with business models tied to the problem.

This causes a recession, and with the worldwide business base, it travels the world.

Central banks around the world will try to counteract the situation, and if they work together they can weaken the severity, a lot.

I predict a relatively severe US recession. Not because of the scope of the problem, as I think the central banks will coordinate well to push back on it. No, rather because Americans have been funding a lifestyle increase through cheap equity credit, which is more and more disappearing. When it's gone, so is one of the major economic drivers. (But remember, I'm not an expert market predictor, if I was my children's yeshiva tuitions would be fully paid, and they're not.)

The amazing news is this is happening so slow slow slow. Lots of indicators, lots of time to react (and even short term market opportunities).

(Still on Derek Teva) Will Israel be impacted? Of course. Exports to the US, medicine, medical equipment, military goods, software, will fall. On the other hand, imports from the US are getting cheaper (as the value of the dollar falls). That's good and bad, as the US also invests heavily in job centers in Israel (many companies have R&D offices in Israel).

The Israeli housing market has been bid way up by Americans with too much money coming in and buying up property, especially in Jersualem. Israel does not have the mortgage problem the US has, it's much harder to take loans in Israel. But it does have a tight housing market made worse by too much foreign money. That should improve with the dollar value drop, but some Israelis have built businesses on the basis of that money, which will fall away.

Net net - Israeli housing market gets better, that's good, exports fall, that's bad, imports get cheaper, that's good. Israel gets a minor downturn / readjustment, much less impact than the US.

That's all b'derek teva, according to a natural understanding of economic events. On to otherwise...

Many indicators are we're at some stage of the geulah process. The Yalkut Shimoni Yishayahu Remez 499 (that Dreaming of Moshiach recently posted and reminded me of) struck me, as it's the FIRST TIME the King of Arabia has EVER gone to Rome. The Yalkut states in the year the king is threatened (by Iran) and goes out for advice, it's the year Moshiach (ben Yosef?) comes, or rather is revealed (not the year geulah is complete).

The navi describes a "coalition" force coming into Israel (traditional commentary on Zechariah 12), escorted by the Israeli army. I can't see how the US could commit to that with an economic collapse, given their current spending in Iraq. (Further it describes the troops coming via the north, through the 'mountains', which in Israel is pretty much limited to the Hermon, the Golan, and down into the hills of the Shomron, which means via Lebanon, or more likely coming out of Iraq via Syria.) Which means to me that US economic impact stays at a 'moderate' impact level UNTIL the troops are in place.

The Anapolis meeting is at the end of this month? Watch carefully what comes out of that. If the Shomron is given up, and Jerusalem divided, and NATO troops proposed (with Russian support), then we're up to active Geulah stage 2. But expect months, 4 or more, of "planning, coordination. preparation" or something like that. It won't be 'instant'.

First, expect Iran to take some radical world shaking move at any moment, and the US to level them. I believe that's a prerequisite, call it active Geulah stage 1. Here I'm going to make a WILD guess based on the words of various mekubalim and events - - - they're going to take a serious shot at Israel, possibly nuclear, maybe under some excuse of going after Dimona (Israel's nuclear facility), and MISS, hitting the Med and sending a tsunami into Gaza. [Complete speculation on my part.]

THAT SAID, WE'VE BEEN AT A POINT where active Geulah could begin at least 3 times in the last 5 years, and more in the last 15 years. The chachamim have written about those who announce a ketz (a geulah-end date), cursing them for doing so. Many generations of Torah scholars, wise and with true Torah insight (none of which I claim) have looked at events of their times and stated that it appears to be the time of Geulah. To our regret at this time, that great day has not yet come, may it be soon.

We can only have emunah in HaKodesh Baruch Hu, with absolute knowledge that all Hashem does is for the best, and His heavenly plan will be doing things exactly when they need to be done, regardless of our limited understanding.

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