As a percentage of the economy, the measure economists say is most important, the deficit would be 12.9 percent of GDP this year, the biggest since World War II. It would drop to 8.5 percent of GDP in 2010.¹

How can the United States recover from such a debt load?  No person or country can hope to become economically stable when they are borrowing $.50 of every dollar they spend!  And, it appears there is no end in sight. 

China sees the handwriting on the wall and has already begun to divest itself of US dollar holdings.  As much as I hate to say it, the dollar is doomed if things don't turn around quickly.  You cannot print dollars and give them away without destroying the purchasing power of those dollars.

Home prices won't stabilize until late 2010 and will fall another 12.5% from the end of 2008, according to a Fitch Ratings analysis.  The Fitch report cites limited refinancing opportunities and weak unemployment as the primary forces behind the deteriorating forecast.

The new estimate puts home prices falling to early 2002 levels, while they're currently at values seen in mid-2003. Home prices have already declined by 27% nationally, according to the ratings agency, and the revised estimates would create a 36% decline from the housing market's peak in 2006.²

I don't share this information with you to depress you but instead, to help you see that we are not out of the woods.  Our economy is very sick and will take serious time to recover.  Do your homework...prepare...and make wise decisions.  Preparation starts in your thinking.  "Therefore, prepare your minds for action; be self-controlled; set your hope fully on the grace given you when Jesus Christ is revealed."  1 Peter 1:13

Stocks sold off hard this week as the 9-week advance came to a screeching halt. The market had been over extended and was in need of a corrective pullback. The greenshoots, which were the subject of much debate over the past few weeks, turned into mold or mildew with some sobering economic numbers. No matter how much they talk up these markets, the economic prospects remain poor over the short to medium term.

The key for the markets will be what level they hold over the next 2 weeks.  The S&P and Nasdaq recovered 38% off their lows while the Dow recovered just 26%. We need to pay special attention to see if this was enough of a bear market rally to qualify for it being finished or will the Dow make it up to its 38% retracement as well.  We will keep you updated.

Have you stepped back and really thought of General Motors going from the world's largest automobile manufacturer just a few short years ago to being bankrupt today? Now, their plan is to possibly import Chinese made autos. If this isn't a wake up call to all Americans, I don't know what it will take.

The dollar went mostly sideways this week. This is an early warning sign for the once almighty buck. The stock markets took a sizeable hit this week and the dollar barely appreciated. This is in contrast to what has occurred over the past 10 months. What it could be telling us is that most of the short covering in the dollar has taken place and now the fundamentals are about to exert themselves.

Fundamentally speaking, the dollar is the worst single currency among the major currencies. We have a deficit and debt that we can never repay and an economy that relied on financial engineering for a decade to keep it going while we allowed our manufacturing base to shrink. We essentially became consumers for the Chinese made goods. This never was sustainable and now we are about to pay a very heavy price. 

Use the dollar's purchasing power now to buy gold, silver, and other tangible goods before the dollar drop turns into a crisis that will change our lives overnight. The day or reckoning is getting closer and closer. PREPARE!

Gold appreciated this week and reports of robust demand for physical gold continue to surface. Investors and governments continue to buy the yellow metal for a hedge against the coming inflation or worse, a possible currency crisis because of a lack of confidence in the dollar. Silver has also remained robust as investors are seeking alternatives. All commodity market have bounced in recent weeks. When the dollar weakens, all commodities priced in US dollars should rise and in some cases, dramatically.³

In total, over 4,000 U.S. cases of swine flu have been confirmed through lab testing so far, most of them ages 18 and under. Officials think the actual number of infections is much higher, and that infections are still occurring.

CDC officials said the swine flu may seem to be mild now, but they worry the virus will mutate into something more dangerous. One concern is that it will combine with the more deadly but less easily spread bird flu virus that has been circulating in Asia and other parts of the world.

Another concern is that it will combine with the seasonal H1N1 virus that went around over the winter. That virus was not unusually virulent, but it was resistant to Tamiflu -- the current first-line defense against the new swine flu. If the two virus strains combine, it's possible the swine flu will become resistant to Tamiflu as well, health officials worry.⁴

What steps have you taken to protect your family?  Are you prepared to stay at home for a period of time if health officials instruct you not to leave your home?  Don't "wait for something to happen" and then try to get ready.  Prepare in advance and you won't have to worry.

Iran's Revolutionary Guards have begun deploying mobile launchers for surface-to-air and surface-to-sea missiles in the Strait of Hurmuz and other areas in the Gulf, it has been revealed.  An Iranian official, quoted anonymously in the Saudi daily Al-Watan, said Iranian forces deployed the missile bases following secret reports that the United States and Israel were working on a military strike against Iran's nuclear facilities.

Iran has threatened to retaliate to any aggression on its soil by closing down the strategic Strait of Hormuz, which will disrupt global oil supplies.  Last year Iran opened a new naval facility in Jask, in the entrance to the Gulf, the declared aim of which was to enable Iran to block the enemy from entering Iran in the event that the country were attacked.  Gulf countries, including Iran, hold more than half of the world's crude oil reserves and more than 40 percent of the world's proven gas reserves.⁵

Saber rattling continues in the Middle East between Iran and Israel.  Like two bickering brothers, this situation could erupt into a full-blown fight in a moment's notice.  The question is, "Who else will get drawn into the fight and how far will they go to win?"

[Editor's note: What follows is an excerpt from an editorial printed in the Jerusalem Post this week that gives an Israeli perspective on the Middle East peace process and the role of the Obama administration.] 

Arctic winds are blowing into Jerusalem from Washington these days. As Prime Minister Binyamin Netanyahu's May 18 visit to Washington fast approaches, the Obama administration is ratcheting up its anti-Israel rhetoric and working feverishly to force Israel into a corner.

Using the annual AIPAC conference as a backdrop, this week the Obama administration launched its harshest onslaught against Israel to date. It began with media reports that National Security Adviser James Jones told a European foreign minister that the US is planning to build an anti-Israel coalition with the Arabs and Europe to compel Israel to surrender Judea, Samaria and Jerusalem to the Palestinians.

The operational significance of the administration's anti-Israel positions is that Israel will not be well served by adopting a more accommodating posture toward the Palestinians and Iran. Indeed, perversely, what the Obama administration's treatment of Israel should be making clear to the Netanyahu government is that Israel should no longer take Washington's views into account as it makes its decisions about how to advance Israel's national security interests. This is particularly true with regard to Iran's nuclear weapons program.

Rationally speaking, the only way the Obama administration could reasonably expect to deter Israel from attacking Iran's nuclear installations would be if it could make the cost for Israel of attacking higher than the cost for Israel of not attacking. But what the behavior of the Obama administration is demonstrating is that there is no significant difference in the costs of the two options.

By blaming Israel for the absence of peace in the Middle East while ignoring the Palestinians' refusal to accept Israel's right to exist; by seeking to build an international coalition with Europe and the Arabs against Israel while glossing over the fact that at least the Arabs share Israel's concerns about Iran; by exposing Israel's nuclear arsenal and pressuring Israel to disarm while in the meantime courting the ayatollahs like an overeager bridegroom, the Obama administration is telling Israel that regardless of what it does, and what objective reality is, as far as the White House is concerned, Israel is to blame.⁶  [End of editorial]

Islam will be the dominant world religion in just a few short years if current trends are not reversed.  I am strongly recommending all readers to take a few moments and view this alarming video showing the expansion of Islam. http://www.youtube.com/watch?v=6-3X5hIFXYU

We are still working very hard to develop the Prepare2Share materials for churches and individuals.  We hope to have the Preparation Handbook and the Small Group materials ready this summer.  In the meantime, make sure that you have taken steps to prepare your family in the event that a life-changing event takes place.

The mission of Global Perspectives is to inform, equip, and prepare God's people.  We live in perilous times and none of us know when we may face an economic disaster, a terrorist attack, another war in the Middle East, or even a pandemic. A wise person will consider the possibilities and take steps to prepare for such things.

The GPUpdate is one small step in the process of informing believers of current threats looming on the horizon.  Help us spread the word by forwarding the Update to friends and family and then encourage them to sign up and stay informed.

Remember, the secondary purpose in preparation is to share your resources with others in their time of need in order to that you may demonstrate the love of Christ and earn the privilege of sharing the Gospel with them.