[Dateline: 24 November 2008]
In Part 1 of this evolving series of essays I wrote about the deleterious effect that our current economic crisis and continuing decline may have on the big business of NASCAR and other professional sports. That essay had some tongue-in-cheek elements but this one does not. This is pure seriousness.
I’ve read that the average stock market investor has lost half the value of his portfolio in the recent stock market plunge. A man I work with, who has faithfully saved for years, and invested in stocks, admits to losing $250,000 this year, thus far. I have not lost so much. That’s because I don’t have so much. But if I did, I still wouldn’t have lost it because I wouldn’t have had it in the stock market.
People seem surprised that this economic downturn happened so fast and so seriously. Everyone from Alan Greenspan, to small business owners, to factory workers are expressing shock and awe at the sorry financial situation our country is in.
But why are they so surprised? I'm not surprised. A lot of people aren't surprised. It was no secret that the economy had some serious underlying flaws. It was no secret that we were due for a collapse of some sort. Even I, a relative financial ignoramus, knew that prosperity could not continue indefinitely, that trouble was soon to be, and that it would be significant.
All anyone had to do was read Bill Bonner’s free daily e-mail newsletter, “The Daily Reckoning,” to see that “Mr. Market” was due for a significant correction; that the whole interconnected, global house of cards was going to come down. And Bonner was just one of many voices in the wilderness, sounding the contrarian alarm.
I can recall a discussion with some coworkers a few years ago in which I asserted that the stock market was not a safe place to put one’s money. They laughed at that. They told me they had made a lot of money in the stock market. They said it could go down a lot and they would still be ahead. They told me that the stock market has always proven to be a very good investment over the long run.
I replied that, historically speaking, the stock market could go way down and stay there for years. What if it went down when they needed the money? I explained that the massive Baby Boomer generation was buying most of the stocks, that the stock market is, to a significant degree, driven by supply and demand. The demand for these stocks will not be so high when the Baby Boomer generation starts selling off. I told them that stock market profits, as long as they remain in the stock market, are something of an illusion; they can disappear as fast as they appeared. And I told them they didn’t have any idea what they were doing. Very few people really understand the stock market.
I was, of course, dismissed as a Doom&Gloomer. Now that the market is sinking like a rock, and the credit crisis is upon us, everyone is a Doom&Gloomer. The difference is that I still have all my money and they don’t.
But I’m not gloating. Really, I’m not. That’s because I’m persuaded that, before long, we are all going to suffer the significant consequences of an economy that is very likely only in the beginning stages of collapse.
What’s next? I sure don’t know. I’m no expert. I’m no prophet. But when I look at the big picture, with historical precedent in mind, the possibilities come into focus a little better, and it gets kind of frightening. That said, there are a couple of possible scenarios.
But before I talk about them, I want to say that these kinds of events can happen very quickly, as we’ve seen in the past couple of months. Look at Iceland. Up to a couple months ago, Iceland was a prosperous country. Their economy unraveled in a few days. Now the country has had to get emergency loans from the International Monetary Fund. It came apart in a matter of days.
Right now our American government is, as you well know, spending money like there is no tomorrow. It is bailing out private businesses with hundreds of billions of dollars that it doesn’t have. Under the Obama presidency government spending is sure to increase significantly. Where is the money coming from? It is borrowed. Who are we borrowing from? You know the answer as well as I do. The money comes from foreign investors.
Those foreign investors are not stupid. They will not invest their money in the debt of this country forever. There is some evidence to suggest that foreign investors are already putting on the brakes. Whatever the case, how will America pay back the debt, plus interest? We are not the rich industrial nation we once were. It is doubtful that we will ever pay off the debt.
The only “solution” to the problem would appear to be to print more money. That amounts to inflation. The more paper dollars in circulation, the less they are worth. Inflation is a devious way for governments to extract wealth from the masses. If inflation gets out of control, that could be a nightmare for America.
But there is another, possibly even worse, danger. At some point, it seems likely that American dollars will no longer be accepted as the reserve currency of the world. If, because of it’s unreliability and instability, the dollar is discarded, and another currency is adopted, that could well be the deathblow to our American economy, not to mention American hegemony.
We are not immune to experiencing a prolonged economic downturn equal to or greater than the Great Depression. Fact is, for the first time in the 79 years since 1929, America is in such dire financial shape that some who know far more about economics than I are suggesting we could be on the brink of a very long period of depressed economic activity; that we are on the brink of a Greater Depression.
While economic events can happen very quickly, the ramifications of those events on the masses of people can be somewhat slow to materialize. This is how it happened in the Great Depression. The full effects of the stock market crash did not hit most people until many months later. It is entirely possible that what we are now seeing in the news each day is nothing compared to what will happen as the full effects of the current crisis trickle down.
Some people are of the mind that a cartel of powerful people behind the scenes are manipulating all these events for their own wicked purposes. I suppose that is a possibility. I don’t know. All I know is that powerful forces and significant events are coming together in such a way that we are facing a form of reality that few people in this nation are prepared to handle.
Could it be that, one day soon, American money will, as a result of inflation, be so worthless that it is unable to purchase us the necessities of life? Or. could it be that, one day soon, the necessities of life will no longer be so plentiful or available for purchase in the stores of America? Answer: Yes, and Yes. Both outcomes are not only possible, they are probable, if current economic trends continue unabated to their logical conclusion.
Oh, there I go again... being a Doom&Gloomer. But,no, I’m being a realist when I write such things. I’m being a pragmatist. I’m being an activist. That is to say, I’m urging you to consider the situation, be decisive, and take action.
Right here is where I switch gears and sound my refrain. This is where I bring up Christian-agrarianism. It is the solution that I have been promoting here at this blog for the last 3-1/2 hears. I am now speaking to readers who are followers of Jesus Christ, and who take their Christianity seriously.
First and foremost, the economic downturn we are seeing is the physical consequence of spiritual disobedience, in the nation as a whole, and in those who call themselves Christians. We must, as individuals and families, humble ourselves, seek God’s face, confess our sins, repent, and pursue righteousness.
From there, we need to break our bonds with the Babylonian system that we live in and depend on for our sustenance. We must eliminate such dependencies. We must return to and focus upon a life of simplicity and separation. This is the clear Biblical mandate for God’s people (as I’ve discussed in other essays here). I’m not talking about some form of legalism. I’m talking about obedience and wisdom in a culture full of rebellion and foolishness.
Simplicity and separation calls for reducing our needs and wants, eliminating debt, growing our own food, preserving the harvest, homecooked meals, and working with our own hands to provide for ourselves apart from the goods of the industrial culture.
For many Christians, simplicity and separation may mean selling a large and comfortable home so they can move to a far more humble setting. To pursue this way of life is to pursue deprivation and hardship. Separation from Babylon is not easy.
Few who call themselves Christians in today’s culture will understand or agree with those last three paragraphs. What I am saying is so contrary to what they have known and what they desire for themselves and their children. Clearly, not all Christians will hear the call to this kind of life. But the calling is there.
The physical objective is to be able to provide for yourself and your family in such a way that, were money to become worthless, or were the stores shelves to become bare, you could still sustain your quality of life.
Some people define that kind of objective as “survivalism.” But I see survivalism as a temporary expedient, something to sustain life until the crisis passes. On the other hand, Christian-agrarianism is a lifestyle for a lifetime, and for generations to follow. It is the kind of lifestyle that my family has been pursuing for years. It is a full, active, healthy, satisfying way of life. It is not a lifestyle that revolves around the acquisition of money and things and success as the world defines it. It is a life centered around faith, family, community, and the daily work of the family on a section of land.
As I have said in the past, I am not the best example of a Christian-agrarian. I am still connected to Babylon primarily through my daily job. But I and my family are making progress away from our worldly dependencies all the time. It is a process. And, as the economies of the world crumble, we see much more clearly the simple wisdom of this process.
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