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Wednesday, June 13, 2012

Dispensationalism and the Menorah

Dispensationalism is a foundational concept in Eschatology. One cannot properly understand God’s Plan of the Ages without knowing this biblical view of history. Scholars have written extensively about these seven dispensations that reveal God’s dealings with man throughout the various stages of history. They are taught as the dispensations of:

  1. Innocence
  2. Conscience
  3. Human Government
  4. Promise
  5. Law
  6. Grace
  7. The Kingdom
In each dispensation, God established a covenant with mankind. At the conclusion of each age, however, man is seen as a failure:
The dispensation of Innocence ended with the sin of Adam and the expulsion from the Garden of Eden.
The dispensation of Conscience ended with the Flood of Noah.
The dispensation of Human Government ended with the confusion of languages and mankind’s dispersion throughout the Earth.
The dispensation of Promise ended with bondage in Egypt.
The dispensation of Law ended with the death of Christ, the destruction of Jerusalem and the dispersion of Jews throughout the world.
The dispensation of Grace is predicted to end with the Tribulation Period.
The dispensation of the Kingdom will end with the final battle of Gog and Magog and the White Throne Judgment.
In every case, man is shown to be a total failure, in need of God’s grace.

A Menorah Design


The golden menorah built by the Temple Institute in Jerusalem. It awaits the day when the religious Jews restore Temple worship.
In this study, I would like to point out the menorah design in the plan. There were seven lamps in Israel’s ancient lampstand — a center lamp was elevated above the others, and faced out toward the center of the Holy Place. It was perpendicular to the lampstand. The three lamps on the left pointed toward the center lamp; and the three lamps on the right pointed toward the center lamp like a mirror image of the opposite three. The center lamp of the menorah was called the shamash or servant lamp. In our book, The Mystery of the Menorah, we noted that all of the sevens in the Bible appear to have a menorah design. So it is with the seven dispensations. In the menorah, the first lamp rested on the top of a branch that continued in a circular pattern down and across the trunk, then extended upward again to the seventh lamp. This design shows the relationship of the first lamp to the seventh lamp.
Likewise, the second lamp rested on the same branch that supported the sixth lamp. The third lamp sat atop the same branch that held the fifth lamp. Therefore, lamp #1 corresponded to lamp #7; lamp #2 was related to lamp #6 and lamp #3 was associated with lamp #5.
The first three lamps looked forward to the shamash and the last three lamps look backward to the shamash. This relationship continues in all sevens found throughout the Bible.

Innocence/Kingdom

Note that the first dispensation (Innocence) is related to the seventh dispensation (the Kingdom). In Innocence, we had paradise. In the Kingdom, we shall have paradise regained.

Conscience/Grace

The second dispensation (Conscience) is related to the sixth dispensation (Grace).
With the fall of Adam, guilt was introduced to the human race in the form of Conscience. However, with the death, burial, and resurrection of Christ, mankind is introduced to Grace — forgiveness and a clean conscience.

Human Government/Law

The third dispensation (Human Government) witnessed the development of man’s attempt at civilized society. However, it was a government without God, which led to a confusion of languages. On the other hand, its counterpart, the fifth dispensation (Law) provided God’s plan for civilized society.

Promise

The fourth dispensation (Promise) corresponds to the servant lamp that provides the light of God’s plan for the redemption of man. This tells us that the Abrahamic Covenant is the central theme of the entire Bible. Our new life in Christ is based upon Abraham rather than Moses. Eternal Life is the essence of God’s promise that the ‘seed of Abraham’ would bless all the families of the Earth. The Mosaic covenant, on the other hand, was only made with Israel — not the rest of mankind. The only hope for all nations lay in the fulfillment of the dispensation of Promise — the promise given in the Abrahamic Covenant.
The first three lamps look forward to the servant lamp, and teach us that the first three dispensations looked forward to the future “Promise” of redemption. The last three lamps look back to the dispensation of Promise. Therefore, the most important of all seven dispensations is the fourth, in which Abraham “… believed in the LORD; and he counted it to him for righteousness” (Genesis 15:6). That’s what makes the Abrahamic Covenant to become our shamash or servant lamp.
When Christ said, “I am the light of the world,” He was fulfilling the prophecy of the lamp that passed through the sacrifice made by Abraham in Genesis:
“And it came to pass, that, when the sun went down, and it was dark, behold a smoking furnace, and a burning lamp that passed between those pieces.
“In the same day the LORD made a covenant with Abram” (Genesis 15:17,18).
In the opening verses of John’s Gospel, Christ was introduced as that light:
“In him was life; and the life was the light of men.
‘And the light shineth in darkness; and the darkness comprehended it not” (John 1:4,5).
When Christ died on Calvary’s cross, He fulfilled the promise Abraham made to Isaac:
“And Isaac spake unto Abraham his father, and said, My father: and he said, Here am I, my son. And he said, Behold the fire and the wood: but where is the lamb for a burnt offering?
“And Abraham said, My son, God will provide himself a lamb for a burnt offering: so they went both of them together” (Genesis 22:7,8).
Jesus is Abraham’s lamb. John also pointed out this fulfillment as he records John the Baptist’s proclamation:
“The next day John seeth Jesus coming unto him, and saith, Behold the Lamb of God, which taketh away the sin of the world” (John 1:29).
When the holy city New Jerusalem descends from heaven, it will be Abraham’s city:
“By faith Abraham, when he was called to go out into a place which he should after receive for an inheritance, obeyed; and he went out, not knowing whither he went.
“By faith he sojourned in the land of promise, as in a strange country, dwelling in tabernacles with Isaac and Jacob, the heirs with him of the same promise:
“For he looked for a city which hath foundations, whose builder and maker is God”(Hebrews 11:8-10).
Again, John was faithful to point out this city and its builder:
“In my Father’s house are many mansions: if it were not so, I would have told you. I go to prepare a place for you.
“And if I go and prepare a place for you, I will come again, and receive you unto myself; that where I am, there ye may be also” (John 14:2,3).
All seven dispensations revolve around God’s covenant made with Abraham, just as the lamps of the menorah. Every dispensation ended with failure, including the dispensation of Law. Mankind simply cannot be saved by Law.

Law Versus Grace

The single-most difficult problem facing Christian theologians down through the centuries has been the subject of “salvation by grace” versus “salvation by the works of the law.” The subject has divided theologians in every generation.
The Apostle Paul wrote extensively about the subject. He was constantly plagued with Judaizers who contended that his Gentile converts should be circumcised and keep the Mosaic Law. Paul maintained that Gentiles were saved by faith and faith alone. On the other hand, James wrote, “… show me thy faith without thy works, and I will show thee my faith by my works” (James 2:18).
This argument has kept heads spinning down through the centuries! Peter was a devout Jew, who reluctantly carried the Gospel to a Gentile — the Roman centurion, Cornelius. In his second epistle, Peter said of Paul’s writings:
“And account that the long-suffering of our Lord is salvation; even as our beloved brother Paul also according to the wisdom given unto him hath written unto you;
As also in all his epistles, speaking in them of these things; in which are some things hard to be understood…” (II Peter 3:15,16).
Peter had a difficult time understanding so complex a matter. Furthermore, in his first epistle, Peter said that even the angels had a bit of difficulty with this part of God’s plan:
“Unto whom it was revealed, that not unto themselves, but unto us they did minister the things, which are now reported unto you by them that have preached the gospel unto you with the Holy Ghost sent down from heaven; which things the angels desire to look into” (I Pet. 1:12).
Even the angels could not comprehend the grace that God has bestowed upon us! If Peter confessed to having a hard time understanding, and reported that even the angels desired to look into the matter, no wonder Christianity has been in a quandary down through the centuries! This difficulty has produced over a thousand differing denominations — most of them built around a particular view of what constitutes salvation.
The difficulty resulted from Israel’s view of the Mosaic Law. Early Christianity was born out of a culture that circumcised every male child. Each family strictly observed the Jewish festivals — Passover, Pentecost, Trumpets, the Day of Atonement, and Tabernacles. In fact, the Jewish society rigidly kept 613 laws of Moses, which covered every area of their lives. They even worshipped on Saturday!
We normally think of salvation by grace as saving us from these difficult laws. We think that Jesus nailed the Mosaic Law to the cross — that He fulfilled the Law and therefore did away with it. On the other hand, some Gentile Christians in our day want us to return to a keeping of the Jewish holy days. Messianic congregations are filled with Gentiles who meet on Friday nights.
They eat kosher foods and observe as many of the 613 Mosaic laws as they possibly can. Another Christian denomination worships on Saturday and urges their people to observe their stylized version of the Mosaic Law.
Some Jewish believers in “Yeshua Ha Meshiach” (Jesus the Messiah) preach that the Jesus worshipped by most Christian denominations today is not the same Jesus of the New Testament. They claim that the Jesus we serve is a Gentile concoction that doesn’t even resemble the original Jesus of Nazareth. I’ve read one Jewish writer who claimed we are all idolaters and that Yeshua (Jesus) will throw us all into hell when He comes!
The argument rages on!
It is true that Law versus Grace is a deep and difficult doctrine to comprehend, much less explain. However, perhaps we can help put the problem into a proper perspective. Let me start by saying that the Law of Moses never offered eternal life in the first place. Surprised? Allow me to explain.
In Numbers 25:12, God makes a covenant with the Levitical Priesthood: “Behold I give unto him my covenant of peace.” The Hebrew term for “peace” is shalom ouka. But it is spelled with a broken vav u.

The Abrahamic Covenant

Before there was a Moses, there was a man named Abraham. Before there was a Mosaic covenant, there was an Abrahamic Covenant that offered eternal life:
“And I will establish my covenant between me and thee and thy seed after thee in their generations for an everlasting (okug) covenant, to be a God unto thee, and to thy seed after thee” (Gen. 17:7).
The fact that this is an everlasting covenant automatically offers the promise of eternal life. The Hebrew term, translated “ever (as in forever),” “of old,” “always,” “perpetual,” or“everlasting,” is olam okug, used 384 times in the Old Testament with the vav u and 33 times as olam okg, without the vav u. In every case, it seems to refer to eternity, or an eternal existence, not bound by time. It is used thirteen times in the book of Genesis. Eleven of those references use a vav u in the spelling. The vav u appears to refer to a divine connection (vav u means “hook”). It seems to have a spiritual reference to the Messiah, for without Him; we would have no chance of being connected with heaven.
Don’t miss the importance of this. The entire New Testament is based upon the Abrahamic Covenant. The New Testament is not related to the Old Testament Mosaic Law. Our New Testament is not a made-over Old Testament. It is entirely different.
I must admit, for most of my life, I thought it was. I thought the New Testament replaced the Mosaic Law. I was wrong. The New Testament doctrine of salvation by grace is not related to the Law of Moses. That is what the Apostle Paul was driving at in his epistles to the Romans, Galatians and Hebrews.
These controversial passages were actually Paul’s explanation to a Jewish culture that their salvation was not dependent upon the Mosaic Covenant, but rather upon the Abrahamic Covenant!
When the New Testament was written, Matthew introduced the entire subject of eternal life through Jesus Christ by announcing that He was the “son of David” and the “son of Abraham.” There was no mention about Moses or his Law.
Jesus is the fulfillment of the Abrahamic Covenant, which was extended to David. Matthew’s genealogy of Christ begins with Abraham. Matthew does not carry the genealogy back to Adam, as does Luke, because the subject of eternal life goes back to Abraham.
The first five books of the Bible (Genesis through Deuteronomy) are generally considered to be the Mosaic Law. But if you consider them carefully, you will note that the Mosaic Law was introduced in Exodus — not Genesis.
Genesis introduces the covenant with Abraham. That is the covenant upon which even the Jews base their concept of eternal life. When a Jew prays, he closes his prayer in the name of Abraham — not in the name of Moses (we close our prayers in the name of Jesus). When a Jew died, he went to Abraham’s bosom — not Moses’ bosom. Paradise was placed in the charge of Abraham — not Moses.
The very name of heaven appears to be a derivative of Hebron, site of the tomb of Abraham, Isaac and Jacob. Abraham bought a cave at Hebron, which means, “seat of association.”
Genesis 23:19 says, “And after this, Abraham buried Sarah his wife in the cave of the field of Machpelah before Mamre: the same is Hebron in the land of Canaan.”
Again, Genesis 25:10 says, “The field which Abraham purchased of the sons of Heth: there was Abraham buried, and Sarah his wife.”
Hebron became the capital of Israel under David for the first seven years of his reign. David then moved the capital to Jerusalem. Hebron was a “seat of association” until the kingdom was moved to Jerusalem. In like manner, the “Bosom of Abraham” is associated with the future eternal city, New Jerusalem. With His death and resurrection, Jesus moved the Old Testament saints from Abraham’s Bosom directly to the Father’s house. The names of the twelve tribes have been written on the pearly gates.
In Matthew 8:5-13, the story is given of a Gentile who came to Jesus seeking healing for his servant. The Gentile was a Roman centurion. When Jesus told him that He would come and heal his servant, the Gentile said, “I am not worthy that thou shouldest come under my roof: but speak the word only, and my servant shall be healed” (v. 8).
When Jesus heard the Roman centurion make such a statement, He said, “I have not found so great faith, no, not in Israel” (v. 10).
The next statement is based upon the Abrahamic Covenant, not the Mosaic Covenant. Keep in mind; this Gentile exhibited “great faith” having never kept the Law of Moses. Jesus made this startling statement:
“I say unto you, That many [Gentiles] shall come from the east and west, and shall sit down with Abraham, and Isaac, and Jacob, in the kingdom of heaven” (v. 11).
There is no mention here of Moses. The kingdom of heaven is based upon the covenant made with Abraham, and passed on through his posterity — Isaac, Jacob, etc. Yes, Moses will be in the kingdom of heaven, but not because of his Law. Moses will be there because he believed in the Abrahamic Covenant! And so will Samuel, and Isaiah, and Jeremiah, and Daniel, and Jonah, and Ezekiel, and all the rest!
Jesus included Gentiles “from the east and west” who will join Abraham in the kingdom of heaven. Those Gentiles will not get there because they adopted or kept the Mosaic ordinances. They will get there by trusting in that part of the Abrahamic Covenant that promised, “God will provide himself a Lamb!” (Genesis 22:8).
When we arrive at the very conclusion of the New Testament, we will find that “The Revelation of Jesus Christ” reveals the Savior as that Lamb! John writes:
“And I beheld, and, lo, in the midst of the throne and of the four beasts, and in the midst of the elders, stood a Lamb as it had been slain…” (Rev. 5:6).
Look around the throne room. Do you see a reference to the Mosaic Covenant? No. Throughout the entire book of Revelation there is only one mention of Moses. And the reference is to the Song of Moses, not his Law (Rev. 15:3).
In the final chapters of Revelation, Christ is portrayed over and over again as the Lamb.
The Holy City New Jerusalem belongs to the Lamb! John is taken to see the “Lamb’s wife!”(Revelation 21:9). On the foundation of the city are written the names of the “twelve apostles of the Lamb” (v. 14). The city needs no sun or moon to shine in it for “the Lamb is the light thereof” (v. 23). Those who live there have their names written in the “Lamb’s book of life” (v. 27). The “throne of God and of the Lamb shall be in it” (Rev. 22:3).
This is the Lamb of the Abrahamic Covenant. It was Abraham who “looked for a city which hath foundations, whose builder and maker is God” (Hebrews 11:10).
This amazing statement about the faith of Abraham is the key to understanding the concept of eternal life. The faith of Abraham is the foundation upon which the doctrine of eternal life in the New Testament is written.
When Jesus died on Calvary, He made the faith of Abraham available to all — including Gentiles. Besides, the Jews were never saved by Law in the first place! They based their hope of eternal life by faith in the promises made to Abraham!
Of course, by the first century, many Jews were so steeped in the Mosaic Law that they could not understand the message of salvation by faith in the promises of Abraham.
John 9:28 points up the problem: “Then they reviled him, and said, Thou art his disciple; but we are Moses’ disciples.” They based their hope of eternal life on the Mosaic Law instead of on the faith of Abraham.
Earlier, Jesus had explained their problem. In John 7:19, Jesus said, “Did not Moses give you the law, and yet none of you keepeth the law?” The Law could not save. It is impossible to keep. Only Jesus kept it perfectly. And He didn’t need to be saved. He was Deity. He was the Creator. He was the Jehovah of the Old Testament. He was the Testator — the one who originally made the covenant with Abraham.
In Acts 3, Peter addressed the Jews after healing the lame man at the gate of the temple. He began his sermon by saying: “The God of Abraham, and of Isaac, and of Jacob, the God of our fathers, hath glorified his Son Jesus…” (Acts 3:13). He did not refer to the God of Moses, he turned the attention of the people to the very basis of their hope for eternal life. He talked about the God of Abraham!
When Stephen addressed the Sanhedrin, he opened his sermon with Abraham’s encounter with God: “Men, brethren, and fathers, hearken: The God of glory appeared unto our father Abraham…” (Acts 7:2). Stephen began with the very foundation of their faith — the covenant with Abraham.
When Paul preached his first recorded sermon at Antioch of Pisidia, he addressed the people as, “Men and brethren, children of the stock of Abraham…” (Acts 13:26). Paul’s message took the people back to the very foundation of their faith — Abraham.
The epistle to the Romans was written to explain to the Jews at Rome that their loyalty to the Law of Moses was not then, nor ever had been, the basis for their hope of eternal life. He showed that the Law existed for the sole purpose of exposing their sins. The Law offered only a curse.
When Paul illustrated the basis of eternal life, he used the faith of Abraham to do it. In Romans 4, Paul showed how Abraham was saved by faith long before there was a law. In fact, Abraham was saved by faith long before he was circumcised! The covenant of circumcision was not the basis of the Abrahamic Covenant — faith was!
“What shall we say then that Abraham our father, as pertaining to the flesh, hath found?
“For if Abraham were justified by works, he hath whereof to glory; but not before God.
“For what saith the scripture? Abraham believed God, and it was counted unto him for righteousness” (Romans 4:1-3).
To show that the promises God made to Abraham were not based upon the Mosaic Law, uncircumcised Gentiles were included in it:
“Cometh this blessedness then upon the circumcision only, or upon the uncircumcision also? for we say that faith was reckoned to Abraham for righteousness” (Rom. 4:9).
Not only was Abraham the father of Judaism, but of Gentile Christianity as well:
“And the father of circumcision to them who are not of the circumcision only, but who also walk in the steps of that faith of our father Abraham, which he had being yet uncircumcised”(Rom. 4:12).
The basis for the entire doctrine of eternal life was not based upon Moses, but Abraham. Paul put it this way in Rom. 4:13:
“For the promise, that he should be the heir of the world, was not to Abraham, or to his seed, through the law, but through the righteousness of faith.”
The covenant with Abraham was extended to Gentiles because that was one of the main goals of the covenant to begin with. In Gen. 22:18, the Gentiles were included in the covenant of Abraham. “And in thy seed shall all the nations of the earth be blessed; because thou hast obeyed my voice.”
Again, in Gen. 26:4, the same promise is given: “And I will make thy seed to multiply as the stars of heaven, and will give unto thy seed all these countries; and in thy seed shall all the nations of the earth be blessed.”
The covenant of Abraham is the prevailing covenant — not the covenant of Moses. In Galatians 3:13-14, Paul was quite clear concerning our basis for eternal life:
“Christ hath redeemed us from the curse of the law…
“That the blessing of Abraham might come on the Gentiles through Jesus Christ; that we might receive the promise of the Spirit through faith.”
Note that Paul refers to the Law of Moses as a condemning factor, not a saving factor. He called it, “the curse of the law.” That was the purpose of the Law from the beginning. It revealed the curse of sin, yet had no method for relief. The Law and its sacrifices all pointed to Christ — the only redeeming factor — and Christ offers eternal life through the Abrahamic Covenant, not the Mosaic Covenant. Furthermore, Paul says that no one can ever — ever — ever annul the Abrahamic Covenant. It is still active to this very day!
“Brethren, I speak after the manner of men; Though it be but a man’s covenant, yet if it be confirmed, no man disannulleth, or addeth thereto.
“Now to Abraham and his seed were the promises made” (Galatians 3:15,16).

The Order of Melchizedek

We are told in Hebrews that Christ is a High Priest after the order of Melchizedek, unto whom Abraham paid tithes. Melchizedek was a priest who lived in the days of Abraham, not Moses. Furthermore, even Levi (father of the Levitical priesthood under the Mosaic Law) paid tithes to Melchizedek:
“And as I may so say, Levi also, who receiveth tithes, paid tithes in Abraham.
“For he was yet in the loins of his father, when Melchizedek met him” (Hebrews 7:9,10).
According to the treatise to the Hebrews, Christ is not related to the Levitical priesthood under the Mosaic Law, but to the Melchizedek priesthood and the covenant with Abraham.

The Schoolmaster

Now let’s consider the unique purpose of the Mosaic Law. In Gal. 3:24, the Law of Moses is introduced as a schoolmaster:
“Wherefore the law was our schoolmaster to bring us unto Christ, that we might be justified by faith.”
The work of “schoolmaster” allows us to detect a Torah design throughout the pages of the New Testament. For example, Matthew divides the life of Christ into five parts, corresponding to the themes found in Genesis, Exodus, Leviticus, Numbers and Deuteronomy. This framework for the Gospel shows the “schoolmaster” or teaching aspect of the Mosaic Law seen in the Divine design. Also, Matthew, Mark, Luke, John and Acts appear to have a similar Torah design.
The seven lamps of the Mosaic menorah can be seen throughout the New Testament — especially in the book of Revelation. Why? Because the Law is a teacher or “schoolmaster.”
The intricate design work of Almighty God can be seen through the Mosaic Law. Proof that the Bible could only have been written by God can be seen in its Torah designs. That is the purpose of the Mosaic Law. It is a teaching mechanism to prove Divine handiwork of God.
The Tabernacle, Jewish prayer shawl, and other Old Testament types, offer magnificent views of the glory of our faith, but those things are just teachers (schoolmasters) to point us to faith in Christ. They are not the basis of salvation. Only faith in the Lamb promised to Abraham can bring eternal life.
If you are not sure of your eternal destiny, then take a moment to pray. Repent of your sins. Tell the Lord that you know your are a sinner. Ask Him to forgive you and save your soul.
Then go to church this Sunday. Walk the aisle during the invitation and tell the pastor that you have accepted Christ as your Savior. Submit to believer’s baptism and become a member of that congregation.
J.R Church

Israel 'to evacuate Tel Aviv' in event of missile attack



AFP - Israel will evacuate the entire population of Tel Aviv if it is hit by missiles, particularly if they have unconventional warheads, the commander in charge of Israel's central region told AFP.

Colonel Adam Zusman, chief of the Home Front Command in Israel's Gush Dan region, which encompasses the city of Tel Aviv and its environs, said an attack on the centre of the country would force massive evacuations.

"In case of a missile attack on the centre of Israel, especially unconventional, the population from Tel Aviv and other cities will be evacuated and relocated in other areas of the country," Zusman told AFP in an interview at the weekend.

"Massive evacuations will take place in case of unconventional attacks and if buildings are destroyed by a missile."

Zusman said Israel continued to face serious threats from Iran and its allies, the Lebanese militant group Hezbollah and Gaza's Hamas rulers.

"We estimate that in case of war, hundreds of missiles will hit Tel Aviv and its nearby cities. As a result of these attacks, there will be hundreds of Israeli casualties.

"In the next war, nobody will be able to drink a coffee in Dizengoff," he said, referring to a popular street in downtown Tel Aviv.

"Israeli civilians will have to face the threat. Today, every civilian is threatened in Israel."

Zusman said Israel has some of the "most sophisticated" anti-aircraft system in the world, but that the Jewish state could not count on any system for total protection.

"We are getting ready for the worst-case scenario."

He acknowledged that gaps in preparedness remain, with around 30 percent of the residents in the area under his command lacking gas masks.

But in other areas, he said, precautions had been taken, including the running of regular drills and the preparation of hospitals to deal with the potential of treating casualties while under attack.

France 24

The Genius of Mutual Indebtedness - Nigel Farage

Italy May Have Two Weeks Tops, As "It Already Is Where Spain Is Heading"


Yesterday, Austrian finance minister Maria Fekter ruffled the unelected Italian PM's feather by saying "forget Spain, Italy is next in the bailout line" - a statement which as expected was promptly loudly refuted, mocked, and scorned by everyone possible: the type of reaction that only the truth can possibly generate in Europe. So far so good: after all the typical European reaction to any instance of the truth is loud screams of "lies, lies" and promptly sticking your head deep in the sand. 

However, this time around Italy may not have the benefit of the doubt, nor the benefit of some sacrificial replacement of a prime minister: Silvio is long gone, and at this point switching one banker figurehead with another will do precisely nothing. Which is why this morning's assessment from Bloomberg economist David Powell is spot on: "Italy would probably be forced into receiving a bailout if it were to face another two weeks like the last seven days." But the punchline: "The bad news for Italy is the country’s stock of debt is already as large as Spain’s may become after years of fiscal turmoil. In other words, Italy already is where Spain may be heading."

Surely Powell must be joking: has he not heard that Spain is not Uganda, and that there is "no risk" Spanish contagion will shift to Italy? Apparently not: which is actually what happens when one does the math and relies on facts instead of bluster, rhetoric and propaganda.

From Powell:

The seven-year sovereign yield has increased to 589 basis points from 538 basis points a week ago. That figure can be used as a proxy for the level with which the average cost of debt will eventually converge, as long as the current maturity profile is maintained, because the average age of the nation’s bonds is seven years.





The country would violate the IMF’s definition of solvency if its average cost of debt were to surpass 680 basis points. The fund defines debt as sustainable if the debt-to-GDP ratio starts to decline before the end of the forecast horizon. A rise to that level would push the ratio up to about 131 percent in 2016 and marginally higher the following year, according to Bloomberg Brief estimates. Those calculations use the projections of the IMF for growth, inflation and the primary budget deficit. If the average cost of debt were to remain at 5.89 percent - the present level of the seven-year yield - the debt-to-GDP ratio would peak in 2014 at126 percent. It would then decline to 124 percent by 2017.

The picture would deteriorate if the IMF’s economic growth forecast for this year were to prove too optimistic. It has estimated a contraction of 1.9 percent.

That looks like a best-case scenario. Output already declined 0.8 percent quarter over quarter during the first three months of the year.

The PMI data suggests the second quarter will be worse. The readings for the manufacturing sector were lower in April and May than they were at the start of the year. The figures for January, February and March came in at 46.8, 47.8 and 47.9, respectively. They were 43.8 and 44.8 for the following two months.

It gets worse...

The debt-to-GDP ratio already violates the proxy of national solvency derived from the research of Carmen Reinhart and Kenneth Rogoff. They have found sovereign debt becomes detrimental to economic growth, on average, when the ratio surpasses 90 percent.

The good news for Italy is the country has avoided a real estate bubble capable of bringing down the domestic banking system and the government has already closed the primary budget deficit. The major problem for Spain has been a recapitalization of the nation’s lenders and several years of persistent budget deficits may push the country’s debt-to-GDP ratio toward the territory of insolvency.

...And much worse.

The bad news for Italy is the country’s stock of debt is already as large as Spain’s may become after years of fiscal turmoil. In other words, Italy already is where Spain may be heading.

A sharp rise of funding costs is capable of making the size of the liabilities of Italy start to look relatively as large as thoseof Greece.

And so the temporal bogey is set at +/- 14 days, as the bond market sets its sights on the exits in preempting the Nash equilibrium defection out of Italy.

Now, we look forward to blaring denials out of Italy that all of the math above is simply idiotic and that we should trust them, because all is fine. Also: Italy is not Somalia.

Zero Hedge

Italy's debt worries add urgency to Merkel's dream of integration




There simply isn't enough money under current bail-out arrangements to rescue Italy should it require help. And markets are once more preparing for that eventuality.

Rome became a fully paid-up member of the 6pc-plus club on Tuesday as its cost of borrowing jumped to 6.14pc. Its predicament is different from Spain's and Spain's was different from Greece's. But that didn't stop Spain needing financial aid.

Italy's budget deficit is not the primary concern (although its shrinking economy is a worry) but its ability to service €2 trillion (£1.6 trillion) of debt – more as a share of GDP than anyone bar Greece and Japan. It has to borrow €35bn a month.

Any further negative shocks and its access to jittery capital markets is at risk. There's only one way to fireproof Italy and that's for France and Germany to step in and agree fiscal, and therefore political, integration with Rome.

Angela Merkel has already held out this as her ultimate vision for Europe but it may have to happen much sooner, and under much more trying circumstances, than even she's envisaged.

The Telegraph

Schiff Radio Exclusive: Rand's Romney Strategy