Friday, July 25, 2008

Economic Outlook

I would like for us to look at history and reference the Economic crunch that happened in Argentina during the latter 1990’s and eventually ended in 2002. I am of the opinion that they have yet to recover from the full effects of the economic crunch. Let us carefully examine the facts and I will encourage your own comparisons.

“The Argentine economic crisis was part of the situation that affected Argentina's economy during the late 1990s and early 2000s. Macroeconomically speaking, the critical period started with the decrease of real GDP (Gross Domestic Product) in 1999 and ended in 2002 with the return to GDP growth, but the origins of the collapse of Argentina's economy, and their effects on the population, can be found in action before. As of 2005, the crisis is arguably over, though many challenges remain for the country.” (Wikipedia).

Ultimately, the problem began to arise from a series of weak governments and huge amounts of public debt that was largely due to “unfinished projects” such as the Falkland/Malvinas Islands War. Interestingly, the State decided to take over private debts (bailing out) and ultimately this led to a steady increase in inflation. In other words, the government could not pay the debts so they printed money to cover the cost and hyper-inflated the currency and caused it to crash.

They battled the inflation issue for years and in some regard made really good progress at slowing it down. But Argentina had large overseas debt to pay, and unfortunately they had to keep borrowing money.

There was a fixed exchange rate and that helped make imports cheap, which caused copious amounts of money to flow OUT of the country, which led to an increase in unemployment.

In the meantime, government spending was still high and corruption was common among the government. Eventually, by 2001 investors had no more confidence and people all over began withdrawing large sums of their money from the banks and converting their cash to another currency. The Government acted fast and implemented a law that essentially froze ALL banks accounts for one year. As you can imagine, especially if it was your money, this led to public outrage and social break down immediately followed the financial break down.

Well, I won’t bore my readers with this any longer but I do want us to wise up a little.In America, we have gradually deflated our Gross Domestic Product and now import as much as we possibly can from China, India, and other places where labor is extremely cheap (slaves in some cases). With a decrease in exports and an increase in imports, watch out.Did you know that our Government currently borrows $3 billion per day to fund its operational cost? ($2 Billion per day according to Business Week)

We borrow money to pay the interest on money we have already borrowed. Economically, that means that the interest is compounding daily. Furthermore, the FED now makes the decision to assume, or take over, large amounts of public debt by “bailing out” failing banks and mortgage companies.
Does this sound familiar? If it doesn’t, go back up and re-read the parts about Argentina’s failed economy.
As Christians, what should we do?

1) Spend and manage your money and assets wisely.
2) Remain Faithful
3) VOTE - not based on a party, but rather on your heart
4) Be prepared for troubled waters, just in case

One way God provides for us in troubled times, is that He gives us wisdom before the troubled times hit.Remember, Joseph saw the turbulent times ahead and prepared himself for what was coming.

Not that I want to sound like a “doomsday” kind of guy, but I use this as a Biblical example of Godly wisdom and protection. God didn’t take Joseph out of Egypt because a famine was coming, but instead gave him the wisdom to prepare for it.

5) Lastly, we need to pray. Pray for our nation and our leaders.

The upcoming election, I am not afraid to say it, troubles me greatly.This is going to be one of the most critical times in US history.God’s people must rise to the challenge and walk by Faith and in our Faith.Now I know what you’re thinking..”What are you some kind of a nut?”For the last 10 years or so the primary message the church has been hearing in the pulpits is a message of “prosperity”. Many have been blessed and done well in business; however, most have squandered it all away on bigger houses, bigger cars, and bigger jewelry. The “God is going to make you rich” mentality is one of the greatest tragedies of the modern times. At least for the American church anyway.

Remember, God doesn’t need much in a jar to make a meal last a long time. God doesn’t need much in a bank account to take care of His faithful. Walk in His ways, and watch Him do miracles in your life.

Your Friend,

Monday, July 21, 2008

Economics # 2 (Just some more preparatory thoughts)

It is time for lesson 2, so hopefully all of my readers have brushed up a little on what economics is and or does.

When considering the Economics of America, which is without a doubt the greatest and most successful nations in the history of the world, what exactly makes us successful?

Why are we considered the richest nation on the planet? (Even though we are now the world’s largest debtor)

The United States remains an industrial power, with chemical products the leading manufacturing field. The United States is the third largest producer of oil in the world. It is the world's number one producer of electrical and nuclear energy, as well as liquid natural gas, sulfur, phosphates, and salt. While agriculture accounts for just less than 1% of GDP, the United States is the world's top producer of corn and soybeans.

The country's leading cash crop is marijuana, despite federal laws making its cultivation and sale illegal.

The New York Stock Exchange is the world's largest by dollar volume. Coca-Cola and McDonald's are the two most recognized brands in the world. As American’s, it is vital that we examine the source of all of our prosperity.

We must understand that Almighty God –Jehovah, sovereign creator, is the source of our blessings and prosperity.

On the faith of the founders, God developed through His divine providence a nation that would embody the grafted “Olive tree” that would be used to usher His message and His Glory throughout the world.In the words that solidified the purpose of this nation, the founders declared:

“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”

Let us also remember the words of John Winthrop in his famous sermon “City on a Hill”:
“For we must consider that we shall be as a city upon a hill. The eyes of all people are upon us. So that if we shall deal falsely with our God in this work we have undertaken… we shall be made a story and a by-word throughout the world. We shall open the mouths of enemies to speak evil of the ways of God… We shall shame the faces of many of God's worthy servants, and cause their prayers to be turned into curses upon us til we be consumed out of the good land whither we are a-going”.

For in this day that we have forgotten the blessings and guidance of God, let us quickly remember that He is Just, and “His Justice will not sleep forever.”