The recent turmoil in U.S. financial markets has drawn the attention of the entire world. What's behind the crisis? Where could it lead? A look from a biblical perspective helps us understand.
A look at the financial news reveals a world full of economic difficulties. Most of us are—or will be—affected in some way.
A growing crisis in U.S. financial markets led the presidential administration to propose and Congress to pass a $700 billion intervention to prevent an economic meltdown. On Sept. 19, 2008, President George W. Bush warned: "This is a pivotal moment for America's economy . . . Given the precarious state of today's financial markets . . . government intervention is not only warranted, it is essential."
When such difficulties arise, it's good to review biblical principles. Let's examine aspects of Scripture, history and prophecy that can help us gain some proper perspective.
Greed: the root of the crisis
The magazine BusinessWeek stated: "What brought down the markets? Bad choices, greed—and never learning from past mistakes" (Paul Barrett, "Wall Street Staggers," Sept. 17, 2008, online edition).
The Bible describes greed as a sin and talks about what happens when it takes over. It's well summarized in the famous quote from the movie Wall Street where the lead character Gordon Gekko says: "Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed is good."
This fictional person was based in part on the financier Ivan Boesky, who once said in a university commencement address: "I think greed is healthy. You can be greedy and still feel good about yourself." A few months later he ended up in jail for insider trading, paying a $100 million fine and banned from the stock market.
Jesus warned about greed—the lust for money or other things—in Luke 12:15: "Watch out and guard yourselves from every kind of greed; because a person's true life is not made up of the things he owns, no matter how rich he may be" (Today's English Version).
The Bible also says: "People who want to be rich fall into all sorts of temptations and traps. They are caught by foolish and harmful desires that drag them down and destroy them. The love of money causes all kinds of trouble. Some people want money so much that they have given up their faith and caused themselves a lot of pain" (1 Timothy 6:6-10, Contemporary English Version). Sadly, in today's interconnected world, the greed of many can lead to financial pain for everyone.
Let's divide this complex topic into three parts to try to clarify some of the confusion.
Why do things like this happen?
Simply put, from time to time the financial world falls victim to unbridled greed—the unchecked lust to make money in spite of great risks. True perspective is lost, as when a gambler on a roll thinks his luck will last forever. Eventually his luck runs out.
Psychologist Erich Fromm warned, "Greed is a bottomless pit which exhausts the person in an endless effort to satisfy the need without ever reaching satisfaction."
The Roman poet Aurelius Clemens Prudentius said around 1,600 years ago, "Hunger for gold is made greater as more gold is acquired." His words are just as true today.
A Sept. 18, 2008, article in The Washington Post, "Scrambling to Clean up a Category 4 Financial Storm," provided an overview of the nation's complex financial crisis:
"What is really going on, at the most fundamental level, is that the United States is in the process of being forced by its foreign creditors to begin living within its means . . . For most of the past decade, foreigners seemed only too willing to provide U.S. households, corporations and governments all the cheap money they wanted—and Americans were only too happy to take them up on their offer.
"The cheap money was used by households to buy houses, cars and college educations, along with more health care, extra vacations and all manner of consumer goods. Governments used the cheap money to pay for services and benefits that citizens were not willing to pay for with higher taxes. And corporations and investment vehicles—hedge funds, private-equity funds and real estate investment trusts—used the cheap financing to buy real estate and other companies.
"Two important things happened as a result of the availability of all this cheap credit. The first was that the price of residential and commercial real estate, corporate takeover targets and the stock of technology companies began to rise. The faster they rose, the more that investors were interested in buying, driving the prices even higher . . . Before long, these markets could best be characterized as classic bubbles . . .
"Suddenly, in early 2007, something important happened: Foreigners began to lose their appetite for financing much of this activity . . . What should have happened at that point was that the interest rate on those loans should have increased, demand for that kind of borrowing should have decreased, the price of real estate and corporate stocks should have leveled off, takeover activity should have slowed and companies should have begun to cut back on expansion.
"Mostly, however, that didn't happen. Instead, the Wall Street banks that originally made these loans before selling them off in pieces decided to try to keep the good times rolling—and, significantly, keep the lucrative underwriting fees pouring in. Some used their own 'AAA' credit ratings to borrow more money and keep the loans on their own balance sheets or those of 'structured investment vehicles' they created to hide these new liabilities from regulators and investors.
"Others went back to the foreigners and offered to insure those now-unwanted takeover loans and asset-backed securities against credit losses . . .
"As a result, when the inevitable crash finally came, it wasn't only those unsuspecting foreigners who bought those leveraged loans and asset-backed securities who wound up taking the hit. It was also their creators—Bear Stearns, Merrill Lynch, Citigroup, Lehman Brothers, AIG and others—who made the mistake of doubling-down on their credit risk at the very moment they should have been cutting back.
"We are now nearing the end of the rocky process of uncovering the full extent of the credit losses of the major Wall Street banks and hedge funds. But . . . the markets have only just begun to force some financial discipline on the majority of U.S. households that relied on borrowed money to maintain their lifestyles. With nobody willing to finance those lifestyles, there are really only two choices.
"One is to turn to Uncle Sam to keep the economy and the financial system afloat. In the end, however, there is only so much the government can borrow and so much the government can do.
"The only other choice is for Americans to finally put their spending in line with their incomes and their need for long-term savings. For any one household, that sounds like a good idea. But if everyone cuts back at roughly the same time, a recession is almost inevitable . . . The inevitable second round of this financial crisis . . . still lies ahead."
What can we do?
We should first carefully analyze our own economic situation and seek sound financial advice (see, for example, "Coping With a Growing Economic Crisis,' The Good News , May-June 2008 and "Are You a Slave to Debt?" The Good News , July-August 2008). While we can hope for the best, we need to be prepared for the worst.
We also need to ask: What is our true currency, ultimately? It shouldn't be money, but faith. If we are faithful to God, He will provide. In a period of widespread famine, He fed the prophet Elijah through ravens bringing him food for many days. God can intervene in many ways to provide for His obedient and faithful servants.
As Jesus said in Matthew 6:24-33: "No one can serve two masters, for either he will hate one and love the other, or else he will attach himself to one and despise the other. You cannot serve both God and Money . . . Look at the wild birds—they neither sow, nor reap, nor gather into barns; and yet your heavenly Father feeds them! And are not you more precious than they?
". . . Do not then ask anxiously 'What can we get to eat?' or 'What can we get to drink?' or 'What can we get to wear?' All these are the things for which the nations are seeking, and your heavenly Father knows that you need them all. But first seek his Kingdom and the righteousness that he requires, and then all these things shall be added for you" (Twentieth Century New Testament).
We do not want to sound like all is doom and gloom, that the economy can't recover from its current battering. Too many people cry wolf at the first signs of crisis. It's good to remember that there has been at least one recession for each decade in recent years—roughly around 1973, 1982, 1992 and 2001. In any case, this should be a wake-up call for each of us to examine our financial situation and our faith.
Economic turmoil and Bible prophecy
Furthermore, as regular readers of The Good News magazine understand, we should keep in mind the framework of end-time prophecy whenever we consider the world scene.
The fulfillment of Bible prophecy can be compared to riding on a roller coaster—there are many ups and downs with world events, but eventually, according to the Bible, humanity will reach the end of the ride.
However, we don't know when that will be. So Christ told us we have to watch world events (Luke 21:36), and just as fig leaves come out as summer nears, so when biblical end-time events start to happen, we should be ready (Matthew 24:32-34).
Could the current financial crisis eventually lead to end-time events foretold in Scripture? No one knows, and it would be premature at this point to suggest this. Nevertheless we should carefully watch and analyze the long-term effect of this crisis, which is spreading to other countries. The Bible does indicate that the world will one day fall into great economic turmoil that will trigger a new world order centered in Europe and not the United States .
An end-time prophecy in Revelation 17:12 speaks of "ten kings who have received no kingdom as yet, but they receive authority for one hour [a brief period] as kings with the beast." Indications are that conditions will be so desperate and dramatic that these 10 rulers will give their authority to a powerful figure who, as head of a new global superpower, will bring order out of chaos.
The political and economic system of these rulers and a dominant leader described as "the beast" is called in biblical language "Babylon" (Revelation 18:2).
Why does it rise to power? In the midst of great turmoil, people will be desperate and in need of a savior figure. This leader will then take charge. He will share power with a deceiving religious leader called in Revelation "the false prophet" (Revelation 19:20). The merchants of the earth will be pleased because the system will bring security and prosperity (Revelation 18:3).
Remember Adolf Hitler's rise to power in the early 1930s? It was enabled by the economic depression in Germany at that time. Without it, there would have been no discontent to exploit, and Hitler probably would have gotten nowhere.
And what did he do when he took over? He introduced his program—a fascist system known as national socialism (the party name National Socialist being abbreviated as Nazi ). Soon Hitler began to control the nation's economy and to rapidly build up its huge military, which gave people work. He also did much for the ordinary German citizen.
Of course, the future system need not follow exactly the same track, but there may be similarities.
Hope during troubling times
While the Bible prophets revealed what is coming, they did not know exactly when their prophecies would transpire. So it is today. We know what will happen in the future, but not exactly when significant end-time events will begin.
Also, in spite of the future difficulties foretold, the Bible gives us a message of hope. It tells us God's people will be protected through the coming turmoil. We read in Revelation 3:10: "Because you have kept My command to persevere, I also will keep you from the hour of trial which shall come upon the whole world, to test those who dwell on the earth. Behold, I am coming quickly! Hold fast what you have, that no one may take your crown."
Yes, our protection and our ultimate currency is our faith— our trust, obedience and love of the truth. Those who have made wealth into an idol will be devastated. But God will provide for the faithful, and He has promised not to abandon us.
Jesus Christ asked in Luke 18:8, "When the Son of Man comes, will He really find faith on the earth?" Will we remain faithful? Will we seek God in times like this? Let's develop a strong faith! For as has been said of earlier difficult days, "These are the times that try men's souls"—testing their spiritual character and faith in God. GN