Amid the Financial Chaos, Blessed Be the Name of The Lord (Pt. 2)

In Part 1 of this article, I described the nature of the financial chaos now facing us.  I concluded that section with the following words:

“One thing that many investors do realize is this: money laboriously accumulated over many years can vanish quickly when market confidence sags as fear replaces greed.  Following this, many workers will soon experience the same in the arena or employment. Under these conditions, retirement timeframes lengthen, and people are taken advantage of.”

The Quick Fix

Of course, governments don’t like situations as described above, especially if an election looms.  Voters become upset, and the finger pointing begins.  It’s my belief that Republican Presidential Candidate, John McCain, often seen as having close ties to the Bush presidency, was defeated when the United States economy began to implode in the fall of 2008.

Many blamed the Bush presidency for the nation’s economic woes. I don’t think that was entirely fair. Politicians may influence, but they don’t control the economy. Nevertheless, the average voter thought differently and as a result, a Democrat was elected.  Where it will lead is anyone’s guess, but the voter had his say.

What we do know is that President Obama, despite his mantra of “change” is likely to carry forward the same economic medicine prescribed by his predecessor’s team. Increased market liquidity in the form of handouts, bailouts, lower interest rates, and eventually greater public spending on infrastructure projects etc., are likely to continue. Remember the tax rebate checks sent out by the Bush administration in 2007?  Watch for more of the same.

These tools and others will be used because they’ve been used in the past with some temporary success (e.g. by FDR in the 1930’s) and they’re readily available, because fiat money makes it possible.  The problem is that the financial spin doctors don’t follow the advice of their mentor John Maynard Keynes. He suggested that fiscal stimulus and deficits were good during bad times, but that their use during good times should be curtailed.  The problem is that this never seems to happen.

Welfare, for example, is never severely curtailed during good times, but rather it seems to morph into various forms, especially when times are good. In the public’s mind, social system handouts become entrenched entitlements; politicians see them as useful tools when seeking re-election. As a result, the fiscal problems of credit inflation and the knock on effects associated with deficits and excess liquidity remain. They accumulate and fester, much like a wound left untreated. In the end, the current problems will blow over, but a day of reckoning is looming. Eventually, the total fiscal problems will become so large that no government can solve them with their bag of tricks.

In the interim what will we see?

Taxes will rise, deficits and unemployment will grow, and inflation caused by excess fiscal stimulus will rear its ugly head, but the world’s bankers will cooperate to prop up the current system in the face of inflation. This means, in part, that the US dollar will be supported now, even as it’s later allowed to quietly and gently decline in value almost unnoticed.

Will gold rise as the US dollar quietly declines?

As an alternative to paper fiat money, it should. If it does not, the Gold Bugs will notice. They’ll be quick, as they have in the past, to suggest that there’s a concerted worldwide effort (read conspiracy) to suppress a rise in gold prices which, if left unchecked, would indicate a failure of the US dollar and expose the truth of things.

Surprisingly, governments sometimes listen.  In particular, after many voices were raised against perceived gold price manipulation several years ago, the Central Bank Gold Agreement was signed in 2004 limiting Central Bank sales of gold. Remember the example from Isaiah in Part 1 of the article? (Isa. 2:20; Isa. 31:7). As predicted, and now suspected by some, the world’s central banks have been casting off their hordes of silver and gold to prop up their paper fiat money system. They may continue when the current agreement expires. More inflation will be the result (Rev. 6:6).

Why do governments allow this?

The underlying causes are non-God based governmental systems. Democracy, although a better form of government than communism, is still a flawed human system.  Alexander Tyler, a Scottish History professor at the University of Edinburgh, is reputed to have noted, democracy fail when voters learn that they can use the ballot box to pick the pockets of others for their own gain (e.g. various undeserved social benefits for some, paid for by others).

Another reason that democracy doesn’t work is that it attracts the wrong people to office. All authority is given by God, but this does not mean that the currently elected politicians and their attendants are necessarily His first choice. They are merely His current choice. How many scandals in the news surround the political class? Look at the social changes that they’ve brought to our world. How much of this lines up with God’s Word?

When I look at the fiscal carnage day after day and read about the hardship it’s wrought, I shudder in disbelief. For those who have lost money or jobs, the immediate future seems gloomy. As the disaster continues to unfold, many seem similarly shell shocked by the swift downward vortex. During this time, a man I know asked a question. “There must be a lesson in all of this” he muttered quietly to himself.  Many of you reading this article may have asked yourself the same question.

Keep a Cool Head Man

The lesson is this. When a financial system pursues the wrong objective of more at all costs, trouble comes (1 Tim. 6:10).  When the wrong people are in charge, trouble comes (Prov. 29:2; 1 Cor. 6:9).  When the financial system is based on confidence and the designs of men, and God is forgotten, trouble comes (Deut. 8:18; Isa. 46:10; Rev. 21:6; Prov. 17:2; Eccl. 10:7).

Nevertheless there is a solution. “Be of good cheer” Jesus said, for “I have overcome the world” (John 16:33). There is coming a future kingdom of prosperity which is known as the Millennial Kingdom. It will last a thousand years on the Earth.

The righteous, as God sees it, will rule under the stewardship of Jesus (Rev. 20:4-6).  Under His guidance, the world will experience peace and prosperity (Isa. 9:6-7; Isa. 2:4; Isa. 11:6-9; Isa. 65:21).  Men will live much longer lives (Isa. 65:20).  Each man will enjoy the fruits of his own labours and not another’s (Isa. 65:22).  Those who practice wrong doing will be excluded from leadership (1 Cor. 6:9).  Democracy, fiat money, the stock market and dirty tricks will be things of the past.

Will everyone be convinced? No! There will still be rebels within (Isa. 65:20) requiring a rod of iron to rule (Ps. 2:9; Rev. 2:27; Rev. 19:15) and culminating in rebellion (Rev. 20:7-10), but things will be better.

There are some caveats though.

In order to enter an office of authority in the Millennial Kingdom, you must either survive the Great Tribulation, or be returned from the dead, and become a spirit-born being during the first resurrection.

Who are these people?

They are the ones who have accepted Jesus as their sovereign Lord, ruler and personal Saviour (Matt. 10:33). These are people who have also repented of their worldly ways and adopted the attitudes, beliefs and habits of the God of the Bible (Rev. 3:8).

What is this new way? In a word, it is love. God is love (1 John 4:16; Eph. 2:4).  Jesus said it this way:

“If you love Me, keep My commandments.” (John 14:15)

God’s commandments are not burdensome (1 John 5:2-3).

Greed and fear drive the financial markets. Greed is a form of idolatry which is sin (Col. 3:5), and those who refuse to repent and turn to God’s way of thinking cannot enter in (1 Cor. 6:9; Rev. 22:15).

Those who practice love do not sin. As well, perfect love casts out fear (1 John 4:18).  In the coming Kingdom, neither greed nor fear will predominate. Love will.

My advice to you, dear readers, is this; keep a cool head, the future belongs to those on God’s side! This world and its troubles will pass! If you want to invest, invest in the Kingdom (Matt. 6:19-20; Matt. 16:24-28) by running after God and His way (Matt. 6:33).

Afterwards, blessings will come supernaturally. If you have a need, seek God through prayer (Eph. 6:18-19) and fasting (Ps. 35:13; Dan. 9:3; Luke 2:37; Acts 14:23). From personal experience, I tell you that this world’s plans often don’t work except for the rich.

Where are you investing today?

Addendum: Parts 1 and 2 of this article were written in December 2008 at the height of the economic collapse. Since then, the markets have revived and many commentators are sounding the “all clear” siren.  Much of the revival seen in the stock market by June 2009 is due to government driven liquidity, and previously sidelined investor money re-entering the market.  Many of the underlying economic fundamentals have not changed. My advice is this, be cautious.



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