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Daniel 2:36-38 meaning
Daniel tells Nebuchadnezzar that his kingdom of Babylon is represented by the head of gold on the statue. Nebuchadnezzar's kingdom will last for only 66 years, one of the shortest time periods represented on the statue in his dream. The end of the Babylonian rule is actually chronicled later in the book of Daniel, when the Persians conquer Babylon. Daniel will pronounce the doom on Nebuchadnezzar's grandson, Belshazzar, by interpreting the handwriting on the wall. But Daniel does not mention the timing here. Only that Nebuchadnezzar's kingdom has absolute authority over the earth, but will fail and give way to another.
At the time of Nebuchadnezzar, Babylon is the greatest of the kingdoms. Nebuchadnezzar has the power, the strength and the glory, because wherever the sons of men dwell, or the beasts of the field, or the birds of the sky, God has given them into Nebuchadnezzar's hand and has caused him to rule over them all. The extent of Nebuchadnezzar's power is vast. Daniel's description of the king's authority echoes Jesus' statement of God's authority in the Lord's Prayer, when He says of God, "For Yours is the kingdom and the power and the glory forever" (Matthew 6:13b). The Lord had given into the hand of Nebuchadnezzar a power that was absolute and unrivaled. The vast power the Lord granted to Nebuchadnezzar might foreshadow the power that God will exert over the earth when His kingdom takes up physical residence upon the earth (Revelation 2:26-29). This is likely why Nebuchadnezzar's reign is described as the head of gold.
Nebuchadnezzar's rise to power involved many battles with Egypt. Prior to Daniel's captivity, Egypt fought against the kingdom of Judah, killing King Josiah in 609 BC. Egypt imposed a tax on Judah after this. Judah's loyalties were torn between Babylon and Egypt for many years afterward. Four years after the death of Josiah, in 605, Nebuchadnezzar defeated Pharaoh Necho of Egypt at the battle of Carchemish. Nebuchadnezzar pressed into Judah in that same year and conquered Jerusalem, which is likely when Daniel was taken captive.
King Jehoiakim of Judah submitted to Babylonian rule and paid taxes to Nebuchadnezzar. However, Babylon was not able to conquer Egypt, which led Jeohiakim to stop paying tribute to Babylon and ally with Egypt once more. Jeremiah the prophet warned against this decision, telling the king that God would protect Judah if it would keep its treaty with Babylon; if it broke its treaty, then God would turn Judah over to destruction by the Babylonians. But Jeremiah was ignored. Nebuchadnezzar returned to Jerusalem and conquered it again. Jehoiakim died during the siege, and his son Jehoiachin was briefly made king. After Jersualem's defeat, Jehoiachin was taken into captivity to Babylon, along with more exiled Jews. Nebuchadnezzar placed Jehoiachin's uncle, Zedekiah, on the throne of Judah as a vassal king.
Eventually King Zedekiah also revolted against Babylon's rule, trusting the Egyptians to defend Judah. Jeremiah the prophet urged Zedekiah and the Jewish people to repent to God of their many sins and to endure Nebuchadnezzar's rule, for God allowed the Babylonians to conquer His people as punishment. But there was no repentance, only idolatry and rejection of God. So God set a 70 year period for the exile of Judah to Babylon, and nothing could undo it. Zedekiah and the Jewish people believed Egypt was more powerful than Babylon, and made a secret alliance with Egypt. Against God's command, they trusted in Egypt instead of trusting in God. In 597 BC, Egypt marched to Jerusalem to fight off another siege from Babylon, which prompted Nebuchadnezzar to withdraw his forces for the time being (Jeremiah 37:11). At that point, the Jewish people might have thought they were vindicated in trusting Egypt.
However, this supposed liberation did not last. Ultimately, Nebuchadnezzar returned to Jerusalem with his entire host for a decisive siege (2 Kings 25). Forts were built around the city. The assault was long, and the people in Jerusalem suffered and starved. In 586 BC, the siege ended with Babylon breaching the walls and burning Jerusalem to the ground. The walls, the temple, and the entire city were destroyed. Zedekiah was captured, blinded, and taken to Babylon in chains.
After this, Babylon's dominance of the Middle East was secure. The empire of Babylon was mighty and wealthy, like the head of gold in Daniel's dream.