The economy, both personally and globally, has been a lot on my mind lately. Looking at the indicators and news, it is obvious that we are rapidly transitioning into a time when we are going to need each other, and every Godly relationship we can build, much more than ever before. In this post I’d like to relate a conversation with a banking representative, and review the video entitled Money as Debt, which is very helpful to those seeking the truth about our economic situation. There’s also a couple of photos of the Data Vision Services shop.
I’ve been busy, business has been good. I haven’t posted here lately for several reasons, one of which is that I’ve been “starting” another business. For the first time since high school I’m now a Sole Proprietor again. So far in October the Lord has been gracious to me, and I’ve turned the talents I was given into enough for the month’s bills. I’ve got some catching up to do, after having been gone all summer, but there is hope, as I find that the demand for what I can provide is still there and sufficient business comes my way. “All I have needed the Lord has provided… Great is thy faithfulness, Lord unto me.”
Yesterday a representative from the bank came by the shop to bring papers to sign for the new merchant processing agreement for Jeffrey A. Klute, dba Data Vision Services. The partnership that DVS was a part of has had a similar agreement with the bank for a decade now. These days, more than ½ of my customers ask me if I take MasterCard or Visa. I try to talk them into paying me with a check or cash (this is something the credit card people don’t want me to do). But if a customer hints that the only way they can get the computer they need is by using MC/VISA, I factor in the 3-4% fee and take on the job.
So to some, I suppose I’ve already revealed something controversial about my view of economics, and right and wrong concerning a Christian’s involvement in the current money system. Feel free to comment, as maybe some of you will recoil in horror that I consider it, for my part, not sinful to take a part in creating money from nowhere by the swipe of a card. The issues are complex here, but it is sufficient to say that my conscience is clear. It is an interesting question of ethics to ponder and meditate upon in the light of God’s word (Psalm 1:2). My stand on this particular issue has developed from over a decade of being in small business and considering the application of His word to economics. But this isn’t about whether or not it is OK for a Christian business to accept MC/VISA (or FRNs, which are not much different). What I wanted to talk about briefly was the conversation I had with the bank representative after we got done finalizing the paperwork.
I asked him what he thought of the present “financial crisis.” We got to talking about it, and I admit, I had more to say than he did about solutions. He seemed to agree that the actions taken by the government to bailout financial institutions wouldn’t in the long run help anything. So I dove in head first and began to talk about how “solutions” that don’t address the fundamental core issues as to how we got into this situation in the first place aren’t going to make a difference. You can fiddle with the controls on this sinking ship, but as there is a big hole letting sea water in, it doesn’t matter what you do with the engines, sooner or later she’s going down.
So I talked about what is fundamentally wrong with our money system. He was surprised and incredulous to find out that the Federal Reserve is a private corporation, and is not really a branch of the Federal Government. Another fact he hadn’t ever heard was that all the money we are by fiat required to use is based solely upon debt, and if all the debts were paid, there wouldn’t be any money (of this type, anyway). I could see the wheels turning in his head as he pondered the historical fact that until about 400 years ago, usury and interest on loans was generally considered a gross sin, and was legislated against in many countries throughout the world. I find it indicative of how poor a job the church has done in proclaiming the truth about money. This man has made a career of working in the banking industry, and for the most part is ignorant of how our money is created and where it comes from, as well as any history concerning how we got to where we are today.
Now I know that I came across as peculiar, to say the least. But I remember that we’d had a similar conversation the last time he came to the shop about five years ago, and he didn’t run from me screaming then either. I’m not sure it made a difference to whether or not he thought I was worth listening to, but then as well as now we were sitting in the electronics shop, with the evidence of production and hard work all around us. I think in general, bankers are interested in businesses that produce something, as deep down inside maybe they realize that they are out of business if there aren’t any producers in the economy.
[By the way, this is where we sat and talked, the main shop room at Data Vision Services. We custom designed and built the Formica counters 40-1/2" from the floor to make the work easier sitting or standing, and not just because I'm tall. It is good to be back at work here after this summer's travel:]
I toyed with the idea of entitling this post “Banker Meets Biblical Economist.” But fundamentally, the problems we face in this nation are to a certain extent exacerbated by an ignorance of the basics and history. The level of unawareness of the true nature of our money system is staggering. The church has truly dropped the ball here, and there is so much work to be done in proclaiming the gospel as it applies to our wallets.
The night before my meeting with the bank representative at the shop I ran across this video Money as Debt. (I discovered it while browsing Bret McAtee’s site Iron Ink.) I promised to send the banker a link to this video, which he indicated an interest in. This promise is what got me over the hump on writing this post.
This excellent quality video was produced by Paul Grignon, of Canada, who is very active in monetary reform. You can read about it and order the DVD at http://moneyasdebt.net/.
What follows here is my review of this video, with caveats and exhortation. The producer intended it as “a general introduction to the conceptual basis of money.” Please take the time to watch this! You won’t regret it, as it is enjoyable, fun to watch, educational, thought provoking and rewarding. It is a very good explanation of where money comes from today, and helpful at a level most people can understand. It would be a valuable addition to a homeschool program in economics, once the biblical presuppositions have been grasped. I’m overjoyed that this video was produced, proclaiming the truth. I highly recommend it, with the following reservations, to anybody interested in answers for our present woes in this country.
The movie should also be very disturbing to those who are entrenched in and with the modern thinking of Keynesian debt-based economics. But facing what we are facing in this nation, this “disturbance” should be a very good thing, leading by the grace of God, hopefully, to reformation in individual and government action.
The video is not ostensibly from a Christian or biblical viewpoint, however full of truth it is. I say “ostensibly,” because they don’t connect the truth they reveal to any presuppositional stand developed from the word of God. This is OK, in one sense, because I suppose the video will have a wider audience by avoiding the knee-jerk reaction most have from being told that what is being shared is biblical. But in another sense, it is the main reservation I have about this video, as the solution presented towards the end is not biblical or sustainable (let the government create money directly without a central bank), any more than the present system (the government borrows what it needs from a private central bank).
Please, God, that you would move upon your people, who know your law, to produce such a video with biblical solutions! But since we don’t have that yet, watch this video. It is a better educational video than anything produced ostensibly by the church on this subject. The first 25-30 and the last 7 or so minutes are the best parts, because in the middle he advocates a solution that is unworkable without government control and ownership of the means of production and infrastructure (known as communism by others). But sprinkled throughout are excellent quotes and historical perspectives.
What can be seen clearly from this material is that usury, or interest, is the motive that drives a partial reserve system and money as debt. If you take away “the right” to loan at interest, there is no greed or profit motive at work in the hearts of corrupt men to encourage the development of the “house of cards” we have built up in the past century since the establishment of the Federal Reserve. We would not be where we are now if the church had maintained the biblical stand that it is sinful to loan at interest or usury. Without such a profit motive, true money, which is always based upon tangibles, would win out, and we wouldn’t have the spiraling debt we have today, as we would be bound to live within our means in a sustainable fashion on the land.
The video makes the statement that there’d be no money at all if all debts were paid. True to a certain extent. However, this needs to be qualified. There would be no debt-based fiat money if all debts were paid. True money, based upon tangibles, is always there, ready to be used. Historically, it has never taken a government or a central bank to create money. People will engage in buying and selling, commerce and trade, using honest weights and just measures in the absence of a government mandated form of fiat currency. The heart of the problem is not that we need the government or a bank to create money. The problem is that we’ve allowed the government to decree what money is, contrary to God’s word. The same government has then legally given the sole right to create money to a private central bank which profits from its creation through the charging of interest. Without these biblically unlawful interventions in the economy that the government has been involved in, true money, based on tangibles, would thrive. And without usury, debt-based fiat currency would be at a severe disadvantage against true money.
This is why usury and interest on loans should be outlawed. It is the fundamental nature of our money system that is the problem. Tinkering within the system won’t solve anything, it only postpones the day of judgement. The church needs to loudly and emphatically proclaim the truth of God’s word concerning honest weights and just measures, the sinfulness of putting your money out at usury, and the government’s true and biblical role in our money system. In this nation our founding fathers believed that the government’s involvement was to insure that the coining and circulation of true money was kept honest, nothing else. They most certainly objected to the establishment of a debt-based money system in the control of a private central bank.
Usury is at the heart and root of the problems and solutions for our monetary woes. Without it, no problems like we have today in this “global economic crisis” would be possible. The sin of usury springs from the greed and sloth of man, to take advantage of others in their need in a way that avoids sweat and labor. Truly, the love of money is at the root of all evil, and this truth is being magnified and made manifest before our eyes today in this Godless economy. God is bringing reformation! It will come when the chastising sting of our errors wakes us from our slumber.
Beyond presenting the truth of where money today comes from, the makers of the video propose that the government create the money it needs for public works projects, and that it be spent directly into the economy without bearing interest. Although I agree that there shouldn’t be an accruing interest on debt based currency, I don’t agree that money should be debt based at all. In God’s economy, the common people who work the land and create true wealth from production create tangibles and money which is not based on debt, but on assets. The power to create money — is God’s, and the people’s under God — through wealth from production. If the government creates the money, they’ll own and control the assets, just like now wherein the corporate banking system creates the money, and the ownership of the assets is accruing to the hands of those that own the banking system. Giving the government that same power won’t change much but the landlords.
So although it is very helpful and instructive on where debt-based money comes from, this video is also a Trojan Horse. It advocates government creation of debt-based money. But that is not the role of government. The constitution agrees, and so does the bible, that civil government should insure that (1) money is honest and meets standards of weight and purity, (2) there is no profit motive for debt creation through usury and interest and (3) all issues of credit are backed 100% by tangibles, i.e., gold, silver, wheat, etc. A return to these principles WILL make a difference. Why doesn’t the church grasp this and run with it?
Despite the negatives I’ve mentioned, I still think everybody should watch this video. It cracks wide-open the issues and subjects that need to be considered if we are going to bring monetary reformation to pass. Please comment and let me know what you think about it.
Because the views I have shared here are so overwhelmingly swamped by the unbiblical positions of ignorant and wicked men who do not acknowledge Jesus Christ as Lord and King, I often feel like a small and quiet voice in a huge loudly speaking mob. Oh well, you’ve got to do what you’ve got to do. The duty is ours, the rest is up to God.
Enough said. I’m not a banker, so I must needs go back to being productive now!
Larger View
This is the shop in November, 2005. I live next door in the yellow house (short commute).
Lord, magnify your truth in the church and make manifest the reasons for our current distress. Be merciful to your people who have abandoned the clear teachings of your Word and gone after other gods to seek salvation in the provision of their needs. Be glorified in all places of your Dominion, Amen.
Tadit Anderson | 16-Oct-08 at 2:43 am | Permalink
This is not a rebuke, but some encouragement to expand you monetary and economic literacy. There are two other videos that you should consider. One is “The Money Masters” which is a two dvd set focusing on monetary history. The second video is only recently available for sale, “Zeit Geist: The Addendum,” which is about 2 hours long on one dvd. Both are available to be viewed through the You Tube site though are broken up into fragments. The Ameerican Monetary Institute website has a number of related articles as well by Stephen Zarlenga. Good luck.
Jeffrey | 16-Oct-08 at 7:41 pm | Permalink
Psalm 119:130:
The entrance of thy words giveth light; it giveth understanding unto the simple.
From the official website for the movie Zeitgeist: Addendum:
‘This solution is not based on politics, morality, laws, or any other “establishment” notions of human affairs, but rather on a modern, non-superstitious based understanding of what we are and how we align with nature, to which we are a part.’
I’ve got more of a problem with this solution than I did with the one presented in “Debt as Money.” I align with and worship Christ, not nature. Fundamentally it appears this solution springs from a desire to advocate the immorality of being moral, which is an insane contradiction in terms. A corrupt and confused tree cannot bring forth a right and logical solution.
“Debt as Money” is high “bang for the buck” to those who have little time to study economics. But keep your eyes on the fundamental core problems. I’m here to promote the exposition and establishment of biblical answers to these simple moral questions:
Fiat currency … right or wrong?
Money as debt … right or wrong?
Usury or interest … right or wrong?
Perpetual debt … right or wrong?
Good Providence
Jeffrey | 16-Oct-08 at 8:21 pm | Permalink
Further followup…
I sent the link to the video “Money as Debt” to the “bank representative” I mentioned in the post, including a link to this post. Here’s his initial response:
Thanks, Jeff!
I have been thinking a lot about our discussion of the state of the economy and also noticing many paradigms between what I learned and what I hear in the news and what is going on in the world. I appreciate your time in explaining this entire “concept” and our current financial situation.
Thank you for your insight and I am looking forward to viewing the video and the review on your blog.
I just hope he’s still thankful after he reads the review and watches the video. Maybe we’ll find out!
JohnD | 18-Oct-08 at 5:52 am | Permalink
I agree with you that debt based money system is the root of our problems. This is showing up now in disastrous turmoil in the world economy. Fraudulent banking is at the heart of nearly every social problem on the planet and is responsible for the rape of the planets resources.
The core problem is that there is no permanent money supply that is existent in any economy of the world. The roots of this flaw began with the creation of the Bank of England in 1694 and evolved and copied by every country. BoE has now been nationalised in 1946 but your FED Reserve is still in private hands. This makes it harder for the people of the USA to take back control of the FED as a 1st step. But I think that must be done.
Paper and coin money and an electronic money storage and transfer system is needed. The private banks control this at the moment and make vast wealth from loans out of thin air money. They also own (collectively) the money supply.
Some means needs to created to get a non debt based money into the economies without inflating the the currency. This will take many years to evolve to from our present system presuming this crisis does not explode to a worldwide calamity where the whole economic system breaks down. Hoping that does not happen the evolution over many years needs to take place.
How? Certainly public eduction of the realities of the money and financial system is very important. Money as Debt does a good job in that for starter. I would recommend a book called “Grip of Death” by Michael Rowbotham. He goes into great detail of the huge flaws in the financial system. You will be a whole lot more educated after reading that book as it goes into vast details that Money As Debt cannot cover in a short film.
My own theory is that all banking should be nationlised and through this medium the Governments could then a) loan itself money for government spending interest free (repaid with taxes) AND b) loan money to citizens interest free for houses. All repayments would decrease the amount you owed. eg. pay a $1000 each month = $12,000 per year = end of year you owe $12,000 less on your mortgage. The money repaid would be genuine money that has been earned into existence and this money could then stick in the economy as a supply of debt free money.
I know there are alot of “oh you cant do that because of this and that reason” but in the end the final thing we need to get to is a real supply of non interest bearing money in each economy. Whatever way is chosen can be criticised on some angle. Nevertheless, that is the key question in my view.
I would disagree that the upshot of Money as Debt is the proposal of communism. I don’t think that is what is being proposed at all. There is no reason capitalism and markets could not work well inside of a public controlled banking system. Sticking labels on things like communism and that is bad is not a great idea. The fact is that capitalism and communism and socialism all have some great ideas inside them. But these political ideolgies are born from within the distorted system that is the present debt based money system and the inequities that it has brought.
We need practical ideas to tell our politicians a direction because they do not have a clue.
Jeffrey | 19-Oct-08 at 5:54 pm | Permalink
JohnD,
Thank you for your comments, even though I find my self in opposition to most of your views and your solution. This subject does tend to bring all sorts of opinions out from many different viewpoints. But after consideration, it always boils down to only two different camps.
I’m not interested in relativistic ethics. I’m interested in absolute ethics from an absolute God. As far as our present economic woes, we agree in some of our observations of the problem. But because we come from radically different starting points, the solutions proposed are different and can’t be reconciled. To illustrate this, I present some of the contrasts in thought. You said:
We seem to agree here to an extent. But the bible says it is the love of money, not the money, that is at the root of every social problem and evil on the planet. It is man’s sin, individually and corporately, not the systems he puts in place. I agree the present captive-market capitalism does not lead to the best allocation and use of our planet’s resources. However, debt based money systems and fraudulent banking are only consequences of the sin of man. I see them as symptoms, not causes, because the solution requires the more radical (deeper to the center of truth) view that God gives us in His word: sin leads to death.
The core problem is man’s sin, and in the context of our current economic crisis, it revolves around transgressions of God’s law concerning money, debt and usury. A permanent money supply is not our primary concern in the present distress. Righteousness is, because it brings God’s blessing on a nation (Proverbs 14:34).
To help explain this point of view, I believe there is no permanent debt-based fiat-money supply. Inherent to the flaw that began with the creation of partial-reserve banking is the idea that man (or a few elite men) should have the power to create a money that is disconnected from a tangible asset base and accountability to God’s law.
Money that is backed 100% by tangibles has a permanent and stable supply, unless you destroy all tangible wealth, in which case, we’re dead (and God won’t let that happen, to His glory and advancement of His kingdom). I think you are convinced that money is always created by fiat through government and force of law. This may be the predominant type of money now, but it isn’t the only type of money now. In history there was a much greater appreciation of money as a symbol and substance representing tangibles and wealth that exist without government intervention. The government isn’t God the Creator of all true wealth.
The nationalization of the BoE has not solved the problem, and the nationalization of the FED won’t either. At the heart of the issue is whether or not it is sin to create a piece of paper, contract or obligation that has no convertible collateral and require by force of law that people use it to pay their debts, public and private. Biblically, this is theft, in violation of the 8th commandment.
I agree. I don’t advocate a return to an idealized notion of a primitive economy wherein all debts and obligations must be immediately paid by gold or silver. Paper and electronic money storage and transfer can be effected through biblically honest means that are not fraudulent (sinful). God has not commanded against money taking convenient forms that foster commercial growth and activity. But he has commanded against theft. For the most part the public, and most importantly Christians, are ignorant of what the word of God has to say about money, usury, interest, debt, slavery, fiat, theft and fraud.
However, even allowing for paper and electronic money, a just system MUST revolve around local stewardship of tangibles, and thereby would also protect the people against central control and tyranny. I believe that both are possible if the sin issue is legislated against (all legislation is moral or immoral according to the god or gods of the system).
A means does not need to be created. It already exists. For this, we simply need to look back in history to before when money started to be known in people’s minds as debt-based, usurious and by fiat. If the government would stop intervening in ways that favor the elite banking system, economies would have to return to a tangible base. By intervention, I specifically mention that by law government has decreed that we must use the banknotes of whatever central bank exists. In addition, government has, once again by law, promoted a system that is dependent upon and cannot exist without usury. Take away this house of cards, and true money will once again take hold and thrive if the government also takes steps to legislate against fraud and theft on an individual basis according to Romans 13. This legislation would take the form of prosecuting against forgery, usury and other forms of economic theft and slavery.
Yes, there will be a disruption in order for this to happen. A return to money based upon tangibles in local control will dethrone the powers that be, wreaking havoc amongst those that feed from and receive their life from the mother’s milk. It took many years for our current debt-based system to evolve to this point of dominance. I do not say a return to a biblical situation will happen overnight. For most, it will be a painful withdrawal from an ungodly addiction. For God’s people it will, along with the hardship, be a time of great rejoicing and prosperity.
Historically, supplies of usurious debt-based fiat money ALWAYS COLLAPSE. Hoping that this does not happen is a foolish dream. God has cursed these activities, as being transgressions of His law, and has promised to bring them into judgement. It’s only a matter of time.
The situation is too far gone to hope for reformation within. Collapse would be a blessing if it returned money to the basis of stewardship on the land and local control, for this cancer must be cut out, no matter the damage done.
I haven’t read the book “Grip of Death,” but the title appears to borrow from the truth of God. The wages of sin is death, and our present economic situation has been brought about by trying to make void His law.
Education is important, but not unless certain radical heart issues are established first. One can be “ever learning, but never able to come to the knowledge of the truth.” As mentioned before, I believe that the entrance of God’s words brings light and giveth understanding to the simple. We need a lot more educators holding to a scriptural view of economics, pointing people back to the simple truths found in God’s word concerning idolatry, the worship of mammon, theft, usury, unjust weights and measures and how we should love our neighbor as ourselves. Without this type of revival in our hearts, a comprehensive knowledge of economics will avail nothing.
The fear of the Lord is the beginning of wisdom, but fools despise knowledge and instruction. Perhaps the pulpits will once again be aflame with righteousness when the pain in our wallets brings us to our knees?
OK, now we’re addressing solutions based upon your faith. These type of solutions come from believing that man is basically good. If the system is rearranged a little bit and people were educated everything would work out fine!
In contrast, I don’t believe debt-based fiat money loaned into existence is genuine money even if it is interest free. And how in the world you think it will magically transform itself into debt free money by the application of sweat is beyond the ability of a biblical economist to fathom.
The government controls way too much as it is, and today walks the land as God. Why would you wish to be a glutton for punishment and give it more power? As it is, we already have an arm’s length unholy love affair for profit between the government and central banking. What you are proposing is to permanently join them body and soul in marriage. I want the relationship voided, as it originated from violations of God’s law (uncleanness = fornication). Address the sin that got the relationship started in the first place, but don’t legitimize it.
I like what Bret McAtee said in this post on Iron Ink:
Maybe you see the biblical underpinnings of this thought which I wholeheartedly agree with. Maybe you don’t. But in any case, you seem obsessed with man being god and money creation by fiat.
Read the bible for wisdom, open it to any page and you’ll discover economics in application. Although there are key scriptures on the topics at hand, there isn’t a single passage that does not have its economic implications. A few tidbits for example were quickly pulled out by randomly opening the bible to Isaiah 10:20:
When we’ve had enough of being beat up economically by the government, we’ll dump our faith in ungodly tyrants and return to Him who is the truth. I flip a few pages and discover Isaiah 13:17-18:
God reveals His complete control in the present economic distress, in having stirred up tyrants against us for our good. Do you prefer to give control of the economy to a government that has no regard for silver or gold, and no pity on the fruit of the womb? Abortion and fiat currency go hand in hand in such a state.
Yes, I have a lot of “you can’t do that because of this and that.” But the “this and that” in my mind are the commandments of God. To me, they speak with authority and majestic sovereignty. What about you? The end does not justify the means. Your relativistic ethics are showing. The key question isn’t going to be answered from the reason and mind of man. It has already been answered from the reason and mind of God.
You want to nationalize banking, and hand total control of money creation to the government, all the while saying this would be in the hands of the people (the proletariat). Comrade, we’re already suffering a shortage of toilet paper!
Yes, practical ideas. It isn’t just the politicians that don’t have a clue. I believe the only sustainable policies are based upon God’s word. It’s really quite simple. Let’s address these sin issues here:
Fiat currency … right or wrong?
Money as debt … right or wrong?
Usury or interest … right or wrong?
Perpetual debt … right or wrong?
When the people find wisdom, the politicians will have no choice but to follow.
Therefore, I think our differences in viewpoint are basically irreconcilable. I believe in God, Creator of heaven and earth, who only has complete control and sovereignty in the affairs of man. He has the right to dictate the bounds and restrictions to be applied to governments and money, as well as the blessings and cursings to follow obedience or disobedience. Statism, however, believes in the government as created by man, creator of rights and money, in complete control and sovereignty. To the statist, man has the right to create the rules, as well as dictate the favor to come to those who comply with man’s decree, and the penalties for early withdrawal.
We’ll see who wins the fight … God or man. Choose you this day who you will serve and be enslaved to. As for me, I don’t owe my economic soul to the Fed or the government, and I won’t look to either one for salvation from our present distress. Let both collapse if necessary for a return to biblical sanity, and let the dead bury the dead, while those who God chooses work the land in peace.
Maybe I do only have a pebble in a sling to fight with. But I believe in God’s promise to give the Philistines into our hands. Faith in His word wins the battle.