Financial Management Seminar

STEWARDSHIP

A steward is a person who manages another’s money, property or financial affairs. The children of God should consider themselves to be stewards of the Lord’s resources. Everything that we are, and everything that we have really belongs to Him. The Earth is the Lord’s and all it contains, the world, and those who dwell in it. The Lord owns us because of creation. He is our Creator and we are His creation, and so we belong to Him. Also, the Lord has a claim on us because of redemption. You are not your own. You have been bought with a price. He purchased us with the very highest price - the life, the blood, the death and the resurrection of the Son of God. We belong to Him. If He owns us, then surely He has a right to claim everything that belongs to us, including our possessions. With this in mind, here’s a simple formula for being a good manager of the finances that we have been entrusted with: give ten percent, save ten percent, and live on the other eighty percent.

A FAITHFUL MANAGER SHOULD TRY TO GIVE 10 PERCENT

In the time before the giving of the commandments at Mount Sinai, the Torah records that Abraham and Jacob both gave a tenth, a “tithe” or ten percent of what they had. When it comes to our responsibility to give money under the Covenant made with the Jewish people at Mount Sinai, it becomes more complicated, because we are dealing with the economic system of an entire nation. According to my understanding, each year two tithes were required of the Jewish people, along with other special offerings.

The First Tithe and the offerings took care of the Temple, the Priests and the Levites, and is described in Numbers 18:8-29. The Priests and their families were allowed to eat those parts of the sacrifices that were not burnt on the bronze altar. The firstfruits - the first part of our crops, were also given to the Priests. Our firstborn animals were sacrificed and eaten by the Priests. Instead of our firstborn sons being required to serve at the Temple, the tribe of the Levites were substituted in their place, but our firstborn sons had to be redeemed with five shekels of silver, which was given to the Priests. This is called “Pidyon Haben” - the Redemption of the Firstborn son, which is still practiced among more religious Jewish people to this day. The Levites, who were far more numerous than the Priests, and who assisted the Priests, were supported by the First Tithe of the Jewish people. The Second Tithe is found in Deuteronomy 12:5-7 and 14:22-29. The Second Tithe was connected to the Seven Year Cycle, and it was designated to take care of the poor, the Levites in the local area, and the worshipers’ needs when they went up to Jerusalem to celebrate the Three Holidays.

There were other important economic principles under the Covenant made at Sinai : every seven years the Land of Israel was allowed to rest. It was not to be planted. God promised to provide enough during the sixth year, so that we could survive until the harvest two years later. Also, every seven years a person’s debts were forgiven (Deuteronomy 15:1-3). If you got into financial difficulty, you were allowed to borrow from a fellow Israeli. He was allowed to loan money to you, but he could not charge interest. At the end of seven years, if you could not pay him back, the debt was to be forgiven. If things became desperate enough, you could be sold into servitude, and work off the debt for six years. The seventh year you were to be released and given enough resources to start off fresh. Every fiftieth year, during the Shanat Yovel (the Year of Jubilee), on Yom Kippur, all property that had been leased was restored to the original owners. If your family had a piece of property that was the family’s inheritance, and things had gone badly for you, you were allowed to lease out your property until Shanat Yovel, when it had to be returned to your family.

If the Chosen People followed all of God’s commands, including His wise economic principles, He promised to bless and prosper us as a nation spiritually, physically, materially and economically. Poverty would be at a minimum; debt, if there was any, would always be manageable . Our people would never become so indebted that the entire nation would go into a devastating bankruptcy, with all the terrible economic, social and political consequences it brings.

As we turn our attention to the New Covenant Scriptures, it is critical to understand that the New Covenant Community made up of Jews and Gentiles is not the same as the nation of Israel living under the Covenant made at Sinai . We are under a New Covenant and function in a new dispensation that God manages in a new way. Most Messianic Jews and Christians are living outside of Israel, in various nations with their own governments and economic and social systems. When it comes to our responsibilities to give, there are similarities to what came before, but there are differences as well.

Just as the Temple, the Priests and the Levites had material needs, so too every New Covenant Congregation has financial needs that need to be met. We have two full-time rabbis on staff - Rabbi Glenn Harris, and myself, to serve the various needs of our synagogue, and needs beyond the synagogue. For example, we need to pay the rent each month. We have phone bills. We have computers to maintain and our website to support. Almost every year we send evangelistic mailings that reach 50,000 homes. We send out a monthly newsletter. We hand out literature. We support others who are reaching out with the Good News to the Jew first, and also to the Gentiles. We help the poor in our community and elsewhere. We try to help with the needs of those who get into financial difficulties among us. We have a growing Shabbat School that needs to be funded. We need to buy food to help with our Onegs (times for food and fellowship on Shabbat). We want to bring in special speakers and artists, who deserve to be financially supported for their labors. To do these things, we need money. We are a New Covenant Community, and as a community, all of us are responsible to make sure the bills get paid.

The New Covenant Community (the Church) is not the nation of Israel living under the Covenant made at Sinai, nor are our rabbis the Levitical Priests, nor do we offer bulls, goats, lambs and other offerings as the sons of Aaron did at the Jerusalem Temple, nor are we are living under the same economy as the nation of Israel from Sinai to the Destruction of the Second Temple. Rather, we are a religious community living within another nation - the United States, with it’s own government and financial and social system. For these reasons, we don’t teach tithing as was commanded to the Jewish people under the Torah. Nor do we like the way that the majority of the non-Messianic Jewish community raise finances. The financial needs of most non-Messianic synagogues are raised by charging their members annual dues. Membership entitles you to various privileges, including admission to High Holiday services. If you don't pay your dues, many synagogues will not give you a ticket to enter the High Holiday services. We don’t feel that membership dues are the right way to raise the necessary funds for our synagogue. We don’t teach "tithing" and we don’t structure our finances around membership dues. Instead, we teach generous, cheerful giving. We recommend - we don’t demand, we only suggest - that at least ten percent is a reasonable amount to give - like Abraham and Jacob did before the giving of the Law.

OTHER PRINCIPLES FOR GIVING TEN PERCENT

Why should we give? How should we give? To whom should we give? Let’s start with the first question, “How should we give?” The Word of God tells us how: we are to give sincerely and with the right motives: Rabbi Paul, writing in 1 Corinthians 13:3, pens the following: If I give all my possessions to feed the poor, and if I surrender my body to be burned, but do not have love, it profits me nothing. You need to give with the right motives, out of genuine love for the God of Israel, and out of genuine love for man. We give out of love - not to receive back material things. This is one of reasons the reasons I don’t like the “seed money” or “30, 60, 100-fold return teaching” as it is taught in the corrupt “Prosperity Movement”.

We are to give quietly: Yeshua, teaching us in Matthew 6:2-4, says, “So when you give to the poor, do not sound a trumpet before you, as the hypocrites do in the synagogues and in the streets, so that they may be honored by men. Truly I say to you, they have their reward in full. But when you give to the poor, do not let your left hand know what your right hand is doing, so that your giving will be in secret; and your Father who sees what is done in secret will reward you.” Give as quietly and privately as possible. Declaring your giving to the IRS to get a tax break is permissible. You won’t lose your reward.

We are to give systematically - Rabbi Paul was very concerned about the poor Messianic Jewish believers in Jerusalem who were persecuted and impoverished, and so he would raise funds from the Messianic Congregations that were prospering financially, to help the poor Jewish believers. Writing to the congregation in Corinth, he instructed them: Now concerning the collection for the saints (poor Messianic Jews in Jerusalem), as I directed the congregations of Galatia, so do you also. On the first day of every week each one of you is to put aside and save, as he may prosper, so that no collections be made when I come (1 Corinthians 16:1-2). That’s systematic giving.

We are to give generously, willingly and cheerfully: Now this I say, he who sows sparingly will also reap sparingly, and he who sows bountifully will also reap bountifully. That’s generous giving. Each one must do just as he has purposed in his heart, not grudgingly or under compulsion, for God loves a cheerful giver (2 Corinthians 9:7-8). That’s voluntary, cheerful giving.

We may even want to give sacrificially: 2 Corinthians 8:1-5 Now, brothers, we wish to make known to you the grace of God which has been given in the congregations of Macedonia, that in a great ordeal of affliction their abundance of joy and their deep poverty overflowed in the wealth of their liberality. For I testify that according to their ability, and beyond their ability, they gave of their own accord, begging us with much urging for the favor of participation in the support of the saints, and this, not as we had expected, but they first gave themselves to the Lord and to us by the will of God. That’s spiritual and sacrificial giving! You remember how the Lord commended the poor widow above all? It took place that last week of the Messiah’s life on Earth, right before Passover, and He was in Jerusalem at the Temple, and He looked up and saw the rich putting their gifts into the treasury. And He saw a poor widow putting in two small copper coins. And He said, “Truly I say to you, this poor widow put in more than all of them; for they all out of their surplus put into the offering; but she out of her poverty put in all that she had to live on'' (Luke 21:1-4). It’s not so much the amount that we give, but the generous and sacrificial heart that loves God - that’s really what is important to Him.

To whom should we give? The Word of God makes it clear that we are to give to our congregation, so that the leaders who are serving the Lord can be supported: 1 Timothy 5:17-18: The elders who rule well are to be considered worthy of double honor, especially those who work hard at preaching and teaching. For the Scripture says, “You shall not muzzle the ox while he is threshing” and “The laborer is worthy of his wages.” The elders are to rule, to lead the congregation, and those who rule well should receive double honor - and honor here means “money,” as is made clear in two more of Paul’s quotations on this same subject. 1 Corinthians 9:7-14: Who at any time serves as a soldier at his own expense? No one - soldiers expect to be paid a decent salary. Who plants a vineyard and does not eat the fruit of it? No one - people who plant vineyards do so expecting to eat the fruit. Or who tends a flock and does not use the milk of the flock? No one - the shepherd expects to benefit from his flock. The natural order of the world - the soldier, the one who plants a vineyard, and the shepherd, teaches us that workers have a right to get paid for their labors. But is nature all we have to turn to for instruction on this subject? I am not speaking these things according to human judgment, am I? I am not inventing this - this is not something I am making up with my own, limited, human understanding, is it? No, this is taught in the Torah. This is not a new teaching I’ve invented. God has already taught us about the need to financially support our spiritual leaders: Or does not the Torah also say these things? For it is written in the Torah of Moses, "You shall not muzzle the ox while he is threshing.'' God is not concerned about oxen, is He? Or is He speaking altogether for our sake? Yes, for our sake it was written, because the plowman ought to plow in hope, and the thresher to thresh in hope of sharing the crops. In other words, it is right and proper for spiritual leaders to expect to be paid for their services.

If we sowed spiritual things in you, is it too much if we reap material things from you? No, it is not too much for rabbis and pastors to expect to get paid, especially since we understand that spiritual things are of more value than material things. Rabbi Paul continues his question and answer method of instruction in verse 13: Do you not know that those who perform sacred services eat the food of the Temple, and those who attend regularly to the altar have their share from the altar? Yes, we know that Paul. The Torah is quite clear that the Coheneem - the Priests, were supported by eating some of the sacrifices offered at the Temple. Therefore, what is the conclusion? So also the Lord directed those who proclaim the Good News to get their living from the Good News. Paul has shown us that from the natural order of earning a living in the world, and from the Torah, that those who are professionals, serving the Lord, are to get their living, are to get paid, are to be financially supported. It is the Lord who is speaking here through Paul. It is the Lord who is directing this.

Galatians 6:6-7: The one who is taught the word is to share all good things with the one who teaches him. Do not be deceived, God is not mocked; for whatever a man sows, this he will also reap. Our spiritual leaders, who teach the congregation, especially in a full time capacity, are to be supported, and hopefully, supported generously by the members of the congregation. God is pleased with those who give generously to support their rabbis and pastors, and the Lord will reward that generous giver, but He may withhold reward to the one who is stingy toward the synagogue.

Besides our teachers and leaders, we should also give to those who are traveling and bringing the Good News to others. John, in his third letter, writes in verses 5-8: Beloved, you are acting faithfully in whatever you accomplish for the brothers, and especially when they are strangers; and they have testified to your love before the congregation. You will do well to send them on their way in a manner worthy of God. For they went out for the sake of HaShem - the Name - God, accepting nothing from the Gentiles. These missionaries and evangelists did this for God’s sake - to please the Lord, and serve Him, and fulfill His purposes. And, they did not accept money from those who were not believers. Therefore we ought to support such men, so that we may be fellow workers with the truth. We need to support missionaries and evangelists so that they can go and preach the Truth, the Good News that alone can save us, to all people everywhere, and extend the Kingdom of God in other areas. By financially supporting these men, we become “fellow workers” with them. We are partners with them, co-laborers, and God will reward us along with them. Isn’t that great? That although you may not be able to bring the truth about the Messiah to other areas, by financially supporting those who do, God considers you a fellow worker, a co-worker with them? Way cool! How do we support such men? Generally, the best was is by giving to your church, so that together the church may support them. However, if you want to support a missionary or evangelist, but your church is not prepared to do so, you might want to support them yourself.

Wealthy congregations can give to poorer ones. Rabbi Paul, in his letter to the Romans, in Romans 15:26-27, writes: Macedonia and Achaia (Believers in Greece) have been pleased to make a contribution for the poor among the saints (Messianic Jews who were poor) in Jerusalem. Yes, they were pleased to do so, and they are indebted to them. For if the Gentiles have shared in their spiritual things, they are indebted to minister to them also in material things. In the First Century, wealthier congregations gave money to help poor and persecuted Believers. In this case, the richer Gentile Believers gave money to poor Messianic Jews living in Jerusalem. Referring to the same situation, Paul wrote this to the Corinthians: For this is not for the ease of others and for your affliction, but by way of equality at this present time your abundance being a supply for their need, so that their abundance also may become a supply for your need, that there may be equality; as it is written, "He who gathered much did not have too much, and he who gathered little had no lack” (2 Corinthians 8:13-15). Just as the Jewish people gathered up the manna, and if someone gathered too little, and someone else gathered too much, they distributed it so that everyone had enough, so that’s what Believers are to try to do for one another. It’s nice when one congregation looks out for another, and then, maybe if the situation is ever reversed, they will be in a position to help you out in your need. Isn’t this what family does for one another? I think this is what the Lord meant when He responded to Peter’s statement that Yeshua’s disciples had left everything and followed Him. Yeshua said, “Truly I say to you, there is no one who has left house or brothers or sisters or mother or father or children or farms, for My sake and for the sake of the Good News, but that he will receive a hundred times as much now in the present age, houses and brothers and sisters and mothers and children and farms, along with persecutions; and in the age to come, eternal life.”

Established and mature congregations can give to help beginning and immature congregations. 2 Corinthians 11:7-9: Or did I commit a sin in humbling myself so that you might be exalted, because I preached God’s Good News to you without charge? I robbed other congregations by taking wages from them to serve you; and when I was present with you and was in need, I was not a burden to anyone; for when the brothers came from Macedonia they fully supplied my need, and in everything I kept myself from being a burden to you, and will continue to do so. The congregation in Corinth was young, immature, and didn’t have much respect for the great Emissary Paul, or really understand how much authority the Lord had entrusted to him. So, he decided not to receive money from the immature Corinthian congregation, but instead be supported by the more mature Macedonian congregation, who did understand who he was. There were and still are Churches and Messianic Synagogues that did support us at the beginning, when we were young and just starting off. Some continue to help us now. I thank God for all of them! What a help and blessing and encouragement they were and are to me. And now we are getting more established, and we are starting to help others!

Apart from giving to support our congregation, we should also give charity to various needy people and other good causes (see Matthew 6:1-4, Luke 12:33).

Why should we give? There are lots of good reasons. First, giving is part of God's nature. Love and goodness are two of the attributes that describe the nature of God, and love and goodness both imply giving. For God so loved the world that He gave His only begotten Son, that whoever believes in Him shall not perish, but have eternal life (John 3:6). It is God’s very nature to look outside of Himself and seek to give. On the other hand, fallen human nature is consumed with self. It wants to take. It may even be willing to steal, kill or destroy in order to take more for itself. When we give out of love, we become more like God. We’re givers, not takers. Truly it is better to give than to receive.

Giving is an evidence of God’s activity in your life: 2 Corinthians 8:1-4: Now, brothers, we wish to make known to you the grace of God which has been given in the congregations of Macedonia, that in a great ordeal of affliction their abundance of joy and their deep poverty overflowed in the wealth of their liberality. For I testify that according to their ability, and beyond their ability, they gave of their own accord, begging us with much urging for the favor of participation in the support of the saints. It was the grace of God working in the Macedonian congregations that produced this generosity, this tangible expression of love. Giving is an evidence of God’s activity in your life.

Giving is the expression of genuine love: 1 John 3:17-18: Whoever has the world's goods, and sees his brother in need and closes his heart against him, how does the love of God abide in him? Little children, let us not love with word or with tongue, but in deed and truth. Don’t merely talk about your love for God and man, and the spiritual level you have attained, and how your life is so much better now that you are a Believer.

Giving meets the needs of others and serves the Messiah Himself. Romans 12:13: We are to “contribute to the needs of the saints.” There are real needs among God’s sons and daughters, needs which need to be met. Helping meet those needs is our responsibility. And, by do so, we serve King Messiah! When the Son of Man comes in His glory, and all the angels with Him, then He will sit on His glorious throne. All the nations will be gathered before Him; and He will separate them from one another, as the shepherd separates the sheep from the goats; and He will put the sheep on His right, and the goats on the left. Then the King will say to those on His right, “Come, you who are blessed of My Father, inherit the kingdom prepared for you from the foundation of the world. And the reason for this blessed, eternal inheritance which originates before the world was created, that the good people will receive? For I was hungry, and you gave Me something to eat; I was thirsty, and you gave Me something to drink; I was a stranger, and you invited Me in; naked, and you clothed Me; I was sick, and you visited Me; I was in prison, and you came to Me.” Then the righteous will answer Him, "Lord, when did we see You hungry, and feed You, or thirsty, and give You something to drink? And when did we see You a stranger, and invite You in, or naked, and clothe You? When did we see You sick, or in prison, and come to You?” The King will answer and say to them, “Truly I say to you, to the extent that you did it to one of these brothers of Mine, even the least of them, you did it to Me” (Matthew 25:31-40). We did it to you Lord? You mean that You so love and identify with your human brothers, that if we met their needs, we are doing something for You, who need nothing? We can actually do something for You? Wow!

Giving helps us combat the temptation to be worldly and too materialistic. Messiah warned us, “Beware, and be on your guard against every form of greed; for not even when one has an abundance does his life consist of his possessions” (Luke 12:15). A man's life does not consist in the abundance of the things which he possesses. Striving after wealth doesn't make sense since it is not substantial, it doesn't satisfy and it won't last. We are better advised to set our hearts on the true wealth which will last forever. Do not store up for yourselves treasures on Earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in Heaven, where neither moth nor rust destroys, and where thieves do not break in or steal; for where your treasure is, there your heart will be also. Giving produces eternal dividends - treasures in Heaven which will last forever. How we spend our money also reveals where our heart is really at. You want to know the spiritual maturity of somebody? Look at his checkbook! Is he investing for treasures on Earth, or in Heaven? Beware, and be on your guard against every form of greed. Giving helps us combat the fallen human heart’s tendency toward materialism and greed. Remember the rich young ruler who came to Yeshua and asked the good Rabbi what he needed to do to inherit eternal life? Yeshua reminded him to keep God’s commandments, to which the young man responded, “All these things I have kept from my youth.” But Yeshua knew that he did not truly love God with his whole heart, that there was an idol there. A god of materialism was dwelling in the inner Temple.

The Son of God knew that no one can serve two masters; for either he will hate the one and love the other, or he will be devoted to one and despise the other. We can’t serve God and wealth. And so Messiah said to a rich young man, “One thing you still lack; sell all that you possess and distribute it to the poor, and you shall have treasure in Heaven; and come, follow Me.” “Follow Me - become one of My disciples. I am the long awaited King Messiah, the Son of God who has come from Heaven, bringing redemption, salvation, reuniting the world to God. I need some good and talented young men like you. I am personally inviting you to follow Me, to work with Me in the Tikkun Olam - the Restoration of the world. Follow Me!” What an opportunity Yeshua presented this man with! What a privilege to be one of His disciples! This man may have become as well known as Peter or Paul. 2,000 years later we might know about him, and study his life, and the great contribution he made to the Kingdom of God. But unfortunately, when the man heard these things, he became very sad, for he was extremely rich, and he would not become one of Yeshua’s followers. And Yeshua looked at him and said, “How hard it is for those who are wealthy to enter the kingdom of God! For it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God.”

Messiah also said: Blessed are you who are poor, for yours is the kingdom of God... But woe to you who are rich, for you are receiving your comfort in full. Woe to you who are well-fed now, for you shall be hungry. Woe to you who laugh now, for you shall mourn and weep. Giving helps us combat the fallen human’s hearts tendency toward greed, materialism, worldliness, selfishness, which is idolatry.

Giving is part of worship which delight’s God’s heart: Hebrews 13:16: Do not neglect doing good and sharing, for with such sacrifices God is pleased. You mean, my giving is like a one of the burnt offerings that were offered in the Holy Temple, which rose up and made a delightful aroma in the nostrils of God? That’s right! God is pleased with our sharing. Paul, writing to the Philippians, commends them for their giving to support his service to the Lord, and concludes with these thoughts: I am amply supplied, having received from Epaphroditus what you have sent, a fragrant aroma, an acceptable sacrifice, well-pleasing to God (Philippians 4:18).

Giving honors God - Proverbs 3:9: Kabed - honor the Lord from your wealth and from the first of all your produce. When we give to the Lord, it brings Him kavod - honor, glory.

Why we should not give: The New Covenant Community is not the same as God’s specially Chosen Jewish People, His Am Kadosh - His Holy Nation. God does not promise to bless partakers of the New Covenant in the same way - financially, materially, physically, as He did to the Jewish people. We don’t give to get back financial rewards in this life. We give expecting only spiritual blessings, and treasures in Heaven, and that our basic physical needs will be met. I find all teachings offensive that offer physical material blessings if we give. That is not the right motivation for giving. Don’t give to get rich. Don’t fall for any spiritual get-rich-quick con-game, any “sow your seed money into my ministry to get your 100-fold return” scheme from some religious charlatan. The Prosperity Teaching is a fraud and those who teach it are religious fim-flam men.

Watch out for greed in the guise of religion. Those who want to get rich fall into temptation and a snare and many foolish and harmful desires, which plunge men into ruin and destruction. For the love of money is the root of all sorts of evil, and some by longing for it have wandered away from the faith, and pierced themselves with many a pang... do not fix your hope on the uncertainty of riches, but on God who richly supplies us with all things to enjoy (1 Timothy 6:6-10, 17).

Recommendation: Try to give at least ten percent of your income. The majority of your tithe should go to support your congregation, but other needy people and good causes that the Lord calls your attention to should receive your charity as well.

A GOOD MANAGER SHOULD TRY TO SAVE TEN PERCENT

PRINCIPLES OF INVESTING

You want to know the secret of getting wealthier? There is no secret! It takes time and work and discipline and delayed gratification. You must delay present gratification for your future good. You must defer present pleasures in order to have future security. You must find ways to consume less and save more now, and then put the savings into good investments which grow over time .

Know what real money is: "Money" is any article, substance or even an entry in a record-keeping system, that is used as a medium of exchange, means of payment, or measure of value. Money allows profits, assets, purchases, and virtually every single facet of a civilization to be transferred, and stored for future use. Barter allows for simple transactions, but money is necessary for more complicated transactions, and modern commerce is impossible without it. Human beings have used various things as money - cows and other animals, animal skins, beads, tree bark, stones, seashells, paper and other things. The best kind of money is something that is scarce so that the supply can only increase slowly, valuable, widely acceptable, enduring, divisible into various sizes and compact so that it is easily transportable.

Since gold and silver have met these requirements better than anything else, for most of history, and for most of the civilized world, “money” was silver and gold . In fact, the Hebrew word for money is “kesef” - which means “silver.” If we go back early in man’s history, to the time of Abraham, we discover that when Sarah died, Abraham wanted to buy the cave of Machpelah in order to bury her. He bought the property in which the cave was situated for four hundred shekels of silver, which is around two hundred ounces.

The US Constitution seems to require that money be gold or silver, not just pieces of paper based on intangible promises. Article 1 Section 10 states: “no state shall ... make anything but gold and silver coin a tender in payment of debts.” During most of American history, gold and silver, or paper money that was backed by gold and silver, was our money. But in the 20^th Century the world launched a great monetary experiment. The United States and every other government stopped backing their money with gold and silver. In 1933, during the Great Depression, our government confiscated our citizens’ gold. In 1966 our silver coins were eliminated, and in 1971 we went off the gold standard altogether so that other nations could not redeem our dollars in gold.

Gold is like the anchor of a boat. A boat needs an anchor or it will drift and crash. The world’s connection to the anchor has been broken since the 1930s, and we are now drifting closer and closer to the rocks .

Inflation is the supply of money going up without the amount of available goods or services going up. It is an increase of the money supply above the growth rate of the economy. The problem with paper money which is not backed by silver or gold is that governments won't live within their means. To stay in power, and reward their voters, they will cheat by printing more paper money, which dilutes the value of the money already in circulation. More money available to purchase the same amount of goods and services causes inflation, which is detrimental to a currency and an economy. It is a kind of “false balances.” It is a kind of lying and cheating and defrauding.

There are different kinds of “money” of and they are of different quality. Gold and silver are the truest form of money and the safest. They are not dependent on someone’s ability to repay. They have inherent value. Bonds and credits paper money are also forms of money, but a lesser quality of money. When they talk about increasing“liquidity” they are talking about increasing bonds and various forms of credit and the paper money supply, they are talking about creating inflation.

Larry Edelson, of MoneyandMarkets.com wrote: As long as there is no gold standard - nothing and no one to hold back politicians from spending money and creating debt at will - then the value of the U.S. dollar will keep plummeting and inflation will keep rising. As examples he notes that "a postage stamp in the 1950s cost 3 cents; [today] it's 41 cents: That's 1,266% inflation. A gallon of gasoline at full-service stations used to cost 18 cents; [today] it's $3.25 for self-service: That's at least 1,705% inflation. In 1959, the average price of a new house was $14,900; [today] it's $220,900: That's 1,382% inflation, despite the recent price dip in the real estate market. A dental crown used to cost $40 in the late 1970s; [my] dentist just quoted me $1,400. That's 3,400% inflation. In 1970, seniors paid $5.30 a month for Medicare insurance. Today, they pay $93.50 a month. That's 1,644% inflation.

Signs Of Inflation

1) Gasoline prices

2) Food prices

3) Home prices

4) Medical expenses

5) College tuition costs

6) Equity prices

7) Precious metals prices

8) Prices of art and other collectibles

9) Prices of yachts

10) The decreasing value of the $US on the foreign exchange market

Most paper monies become worthless over time. Someone observed: “All currencies, not only the American dollar but all currencies, always go down, mainly because of democracy. The voters will vote for a person who is going to spend too much. And so you have to expect all currencies to go down. America has started to spend too much and the currency has already gone down a lot. But other nations now realize that and they don't want to lose out to America. So they make their money go down, too." Our money is increasing at about 13% a year right now. In the European Union, the expansion of the money supply is over 10%; India 17%; China around 20%; Russia around 40 or 50%! This is not good. This will eventually lead to inflation and the destruction of these currencies, along with economic pain and hardship.

Learn to measure values in real money terms - gold and silver: The stock market may go up, as the government allows inflation to occur, but if you look at the value of the stock market in terms of gold, it will not be going up, but going down. Try to measure the value of things in terms of gold and silver - especially the price of the stock market and the price of houses. If you do, you will see that stocks have gone down dramatically in the past 5 years. I think that the price of housing will also be going down dramatically if you measure it in terms of gold and silver.

HUMAN ECONOMIES ARE UNSTABLE AND IMPERMANENT

They are hurt by war, collapses of the government, and financial instability. Do not weary yourself to gain wealth, cease from your consideration of it. When you set your eyes on it, it is gone. For wealth certainly makes itself wings like an eagle that flies toward the heavens (Proverbs 23:4-5). In this fallen, unstable world, wealth is insubstantial and can disappear very quickly. You set your eyes on wealth and it is gone. It makes itself wings and flies away like an eagle - fast, high, and for a long time! This is true for individuals, corporations and nations.

At about the time our original 13 states adopted their new constitution in 1787, Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian republic some 2,000 years prior: "A democracy is always temporary in nature; it

simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship”. The devaluation of the German Mark in the early 1920's illustrates this.

James Cook wrote the following: “You can continue to believe the wizards of Wall Street and Washington, who claim their inflationary brew will perpetuate prosperity, or you can listen to the classical economists who have combined the lessons of history with the basic principles from two centuries of sound economics. Whether you choose to listen or not, be assured that the following inevitable consequences of inflation will cloud your future; an ongoing financial and economic crisis, moral and cultural disintegration, stagflation, bigger government, runaway social spending, higher taxes and a shrinking dollar. Somewhere out there lies complete and total collapse. That utter collapse is coming as surely as the sun will rise tomorrow and the government will keep inflating until the bitter end” (www.weedenco.com/welling/Downloads/2006/0804welling022106.pdf).

Richard Russell, Editor-in-chief of Dow Theory Letters

June 13, 2007

On June 7 the national debt of the US was $8.85 trillion. The annual interest on this debt is $406 billion or over one billion dollars each and every day of the year. The debt is increasing at the rate of $1.38 billion a day. Thus, we see the magic of compounding, but unfortunately what we're seeing is compounding in reverse. With the above in mind, you have to ask yourself, "How in the world is the US going to finance its rising and compounding debt?" And the answer rings loud and clear - it will be financed through inflation. I've said it for years, and I'll say it again - it's a case of "inflate or die," and the US has no intention of dying. So we'll inflate, it's simply a matter of how rapidly we inflate and how successful the government and the Fed are in keeping the American people in the dark about what's happening to their money.

I'm an old-timer which means that I have a real-time perspective on what's happening to the purchasing power of the dollar. I remember bread at a dime a loaf, I remember full-course dinners at neighborhood restaurants for 90 cents, I remember new Ford cars for $450, I remember a double-scoop ice cream cone for a nickel. I've watched the purchasing power of the dollar going down the drain all my life. Now the process seems to be accelerating.

More recently, I've watched David M. Walker, our brave Comptroller of the United States, as he tours the nation and evidently will continue to tour until the 2008 elections. Walker is talking to anyone who will listen about the recklessness of borrowing money from foreign lenders to pay for running the US government and about the "demographic tsunami" that will arrive when the baby-boom generation begins to retire. All the above is why I suggest that my subscribers accumulate gold. Furthermore, I've suggested that subscribers think of their gold holdings in terms of the number of ounces held. As for the price of gold, the price will take care of itself as the dollar slowly (I hope slowly) slides into the dusky realms of fiat-history. There's no way of gauging how long this whole inflation process will continue or how long the dollar will be able to withstand the pressure of negative compounding. I've said for years that the Achilles Heel of the US is the dollar. Our "prosperity-on-loan" depends on the willingness of our overseas "friends" to accept US dollars. International finance is a cut-throat business. Nations tend to do what's best for them. All nations hold various quantities of dollars, and all dollar-holders must know that the US has no alternative but to continue on the path of systematic inflation.

Inflation is going global: Why are all the banks creating so much money and credit? Bill Bonner at DailyReckoning.com explains. “Tthe titanic stimulus given by the U.S. economy has had a worldwide effect. The American - along with many of his cousins in the rest of the English-speaking world - went on a spending spree. Dollars flowed out of the United States... and into foreign countries, where central banks 'sopped them up' by printing more of their own currencies. No nation wanted its own money to go down faster than the U.S. brand, because it would put them at a commercial disadvantage. Result - a huge competition to inflate paper currencies."

Fractional Reserve Banking, by its very nature, is inherently unstable: Banks expand the supply of money and credit (money and created are related) when they take your money, and lend it out to others, but they are able to loan out more than they take in. Banks only keep a small percentage in reserve (10% or less), so if there is a crisis, or people lose confidence in the system, and everyone wants their money back at the same time, it’s not possible. When that happens the banks become “bankrupt” - ruptured, so they can’t function. (You too can expand the money and credit supply! Have good credit and write some IOUs. People can sell these IOUs to others, who sell them to others, and they become a kind of money).

Taking on too much debt creates instability: In the United States, individual, corporate and governmental debt levels are very high, and bankruptcies are at record levels. Within twenty-five years we have gone from the biggest creditor to the biggest debtor nation. Many other nations are likewise deep in debt. The Daily Reckoning observes: “In the early 1930s the residual debt of the Roaring Twenties totaled more than 250% of GDP. Today, the still-growing debt of the Dollar Standard Era reaches more than 350%. At all other times - that is over the plains and valleys of the rest of the century, debt to GDP averaged only about 150%.” Mr Bonner goes on to describe the accumulation of debt in the United States: “First, there were the debts from the Revolution itself... which were paid down quickly. Then came the War of 1812, War with Mexico, and the Civil War. Each time, spending was increased, debts were taken on, and then... after the war... the debt was paid down, or paid off completely. WWI saw federal debt explode from $3 billion to $26 billion. Presidents Harding and Hoover paid it down to $16 billion. But then came the Depression, Roosevelt, and WWII. By 1945, federal debt had reached $260 billion. But then came something new. The war did not end. It continued as ‘The Cold War’... which meant, rather than paying down the debt, it was increased. Under Ronald Reagan, America's debt seemed on course for Mars. Less than $1 trillion in 1980, it soared to $2.7 trillion before Reagan left office. One might have expected some relief after the Cold War was over. But the habit of getting something for nothing is hard to break. By the time George W. Bush took office, the debt had risen to $5.7 trillion... The Bush Administration added more debt to the nation than had been built up in the first 200 years of its existence.”

The Federal Reserve was created in 1913 to help stabilize the US economy, and make sure our money was sound, but that didn’t prevent the financial and investment excesses of the 1920s which led to the stock market crash and bank failures of the Great Depression. It wasn’t until 1954, 25 years later that the stock market recovered to its pre-Depression heights. In the 1930s an English economist (Keynes) suggested that governments could manage the economy, stimulate it with measures like work programs, deficit spending and monetary policy (raising or lowering the interest rates, expanding or shrinking the money supply). The US government adopted this economic philosophy, started running bigger and bigger deficits, but even when the stimulation did help, they never cut back on deficit spending, and so over the past 50 years, through both Democratic and Republican administrations and congresses, the deficit only got worse.

The following statistics on the US Public Debt come from US Department of the Treasury, Bureau of the Public Debt

The 2006 Financial Report of the United States Government from the Government Accountability Office Statement which was published on December 15, 2006, tells us the real state of the national debt: “Beginning in fiscal year 2006, the Statement of Social Insurance, which shows long-range actuarial projections of scheduled social insurance benefits in excess of earmarked revenues, became a principal financial statement. This new statement shows projected scheduled benefits exceeding earmarked revenues by approximately $394 trillion in present value terms for the next 75-year period. Considering this long-range projected funding gap in social insurance, in addition to reported liabilities (e.g., debt held by the public and federal employee and veterans benefits payable) and other implicit commitments and contingencies that the federal government has pledged to support, the federal government’s fiscal exposures totaled approximately $50 trillion as of September 30, 2006, an increase of about $4 trillion over September 30, 2005, and up from about $20 trillion as of September 30, 2000. This translates into a current burden of about $170,000 per American or approximately $440,000 per American household.”

According to an article in USA Today, (Taxpayers on the hook for $59 trillion, by Dennis Cauchon, May 28, 2007), the federal government recorded a $1.3 trillion loss last year - far more than the official $248 billion deficit - when corporate-style accounting standards are used. Modern accounting requires that corporations, state governments and local governments count expenses immediately when a transaction occurs, even if the payment will be made later. The federal government does not follow the rule, so promises for Social Security and Medicare don't show up when the government reports its financial condition. The loss reflects a continued deterioration in the finances of Social Security and government retirement programs for civil servants and military personnel. The loss - equal to $11,434 per household - is more than Americans paid in income taxes in 2006. Taxpayers are now on the hook for a record $59.1 trillion in liabilities, a 2.3% increase from 2006. That amount is equal to $516,348 for every U.S. household. This hidden debt is the amount taxpayers would have to pay immediately to cover government's financial obligations. Like a mortgage, it will cost more to repay the debt over time. Every U.S. household would have to pay about $31,000 a year to do so in 75 years. In addition, U.S. households owe an average of $112,043 for mortgages, car loans, credit cards and all other debt combined.

We are so far in debt we will not get out unless we begin to reneg or limit Social Security and other programs, or pay the debt back with inflated dollars .

In many ways our recent prosperity should be considered artificial prosperity, since in large part our “prosperity” was based on borrowed money. If you are making $75,000 per year, but you are able to borrow another $75,000 for a year and spend it all, you might feel rich during that year, but it’s deceptive and won’t last and you will be much worse off at the end when you have to start paying it back. If you extract an extra $100,000 of “equity” (what happens if the price of your house goes down and all your equity vanishes?) out of your house by refinancing or by home equity loan, and each year for five years you spend $20,000 more than you ordinarily would because of that “equity”, you can seemingly prosper - for a while - until the money needs to be repaid. But, it is not real prosperity and real wealth, as people discover when the loan needs to be repaid and the equity vanishes. Debt based “prosperity” is not genuine prosperity!

In general, the best policy is to avoid debt - neither to borrow nor to lend, as Rabbi Paul taught the saints in Rome: owe nothing to anyone except to love one another (Romans 13:8). The lender worries if he will be repaid, and the one who is in debt takes on additional financial pressure and other stresses that result. A little debt may be OK, but too much debt brings financial ruin. If you do borrow money, you are obligated to pay it back as soon as possible. The wicked borrows and does not pay back (Psalm 37:21).

In our economy, taking out a mortgage on a house may be the only way a family may ever be able to live in a house. Houses have traditionally been an investment - they usually, although not always, go up in value. Since the Great Depression, buying a home with a reasonable mortgage has generally better than renting. Now, with the housing bubble bursting, and the cost of renting far less than the cost of carrying a mortgage, taxes and home upkeep, in many cases it makes more sense to rent. However, when it comes to most other things, you would be prudent to pay cash. If you can’t pay cash, then you probably shouldn’t buy it. You can use a credit card, if it is paid off at the end of each month. If it is not paid off right away, credit card debt can be a financial destroyer. When you are in debt, it is the moral and ethical and right thing to pay it off as soon as possible. Pay your debts on time. Only have one or two credit cards at the most and try to pay off the full amount each month. When you are in debt, buying non-essentials and luxuries is immoral! Live within your means! Get out of debt! Be careful with your ATM cards. Watch out for Adjustable Rate Mortgages (ARMs) with teaser rates.

How One Family Descended Into The Nightmare of a Foreclosure

Inside Stories From Today’s Real Estate Market by Jason Walker, AOL Real Estate

“We’re into the last leg of our foreclosure. Once the mortgage company has gotten you out of the house, then the sale date is posted. You basically have no more shot at that point,” says Lisa (who asked that we not use her real name). When we spoke with this 35-year-old wife and mother of four, her house was just a few weeks away from being auctioned off on the town’s courthouse steps. “Several years ago, we bought our first house. We’d rented until then and hated renting. (My husband) was the only one working, and we had two kids at the time. We were getting by OK, and I didn’t want to work so I could take care of the kids. We were able to eek by and it was a fixed loan. I never went for an adjustable loan,” says Lisa.

Refinancing Their Way Into Trouble

“We started having problems with our cars and had to get two new ones. So we refinanced the house and put the car expenses into the house loan. Real estate prices were skyrocketing, so it was easy,” says Lisa. Then the family grew to a third child and then a fourth. “I talked to my real estate agent and lender, who was the same person. I guess that’s a conflict of interest. We were talking to her about moving after the fourth baby and getting a larger house. The agent really pushed us to list our house. I was always the one who was more cynical and negative. But we had already listed the house, so we just went for it.” “We did not get an adjustable. We got a fixed rate,” says Lisa. “The payments were still kinda tough, and we also had a second mortgage.” In total she says they were paying about $2,100 a month. “Then we got into a cycle of refinancing to pull money out and cover the bills we couldn’t cover,” says Lisa. She estimates that they eventually refinanced around six times.

Those Little Checks That Come in the Mail

“We would pull out as much as we possibly could (when we refinanced) to pay down credit card bills. We were using our credit cards to pay the bills. They give you those little checks in the mail and so I used those to pay the mortgage,” says Lisa. She also points out that she and her husband were always careful to pay bills on time so as to maintain high credit scores. “We were neurotic about paying our bills on time.”

One Late Credit Card Payment Tipped the Scales

Lisa says she had most of her credit cards from the same company. Then she made one late payment, and they raised the interest rate on all the cards. “I forgot to pay one account and wound up paying late. So they raised my interest rates way up. I had at least three cards with $20,000 on each and they were full! The minimum monthly payment was like $750 for one of the cards and like $530 for one of the others.” Considering that their monthly mortgage payments at this point were more than $2,000, there was little left over for expenses. “I had no more room on my credit cards. We basically could not make any more payments on the mortgage. We had to fight just to keep the electric on and gas on,” says Lisa. “Never in a million years would I have imagined myself getting into a foreclosure and filing for bankruptcy. You never would’ve thought this could happen, having had a 700-plus FICO score.”

Selling Off the Family Possessions to Make Money

As a way to make extra money now, Lisa sells objects on eBay and Craigslist. “We have so much in the house, and it all has to go. We accumulated a lot of stuff as a family that I can sell. I don’t do any more buying. Just selling! But that’s the thing. I see so many listings on Craigslist and eBay where families are selling everything. So I know they are going through it, too. People stop short of saying they’re in foreclosure. They just say they’re moving, and not because they don’t own anymore. It’s totally humiliating.” Because of the stress from the foreclosure and the strain it put on their marriage, Lisa eventually moved out of the house into an apartment. Her children go back and forth between the house where her husband is still living and her apartment for now. “I don’t know what’s out there for me. And I know this is not the end. That’s what I want my kids to get from this. Things happen and change. I tell them how much I love them. We will be OK.”

Words of Advice

On getting a home loan: “I would say go to someone who is not going to benefit from your loan or refinance. See if they think you can meet the payments. (The agent we used) wanted to make her commissions. She was a very nice person and I don’t think she intentionally hurt us. She was just doing her job. I could have used a financial planner.” On refinancing your home and taking money out: “I would tell people don’t get sucked into the refinancing thing. You just don’t know when the market is gonna cap. Don’t believe the lender who says you can do it and is all positive. (Ours) was this perky little young thing. She was like, ‘The market will keep going up,’ and we could refinance. She was just a positive person and wanted it to be true. And we wanted to believe everything she said.”

Her Final Reflections

“I wish I could have gone back and just been happy with what we had. And not wanted something bigger and better.”

Someone’s Observations:

A bigger house, 2 new cars, 2 mortgages, and 20,000 each on 3 credit cards, 6 refis... How did they think this was going to work out? They did it dollar by dollar. Individually the dollars did not seem so big and each decision seemed like a good one. They thought it would work out because no one was there to tell them it wouldn’t. The only voice they heard was “Borrow... Borrow... Borrow”.

Financial shenanigans create instability: Differing weights are an abomination to the Lord, and a false scale is not good (Proverbs 20:23). There are lots of ways to cheat people out of their money. In times past, those who wanted to cheat you would have differing weights. They would have a weight that weighed less for what they paid or a weight that weighed more for what they received; this was done to cheat, but it was done deceptively, disguised as proper business practice. Cheating in business happens all the time, and there are many modern equivalents. Consider Enron: corporations like Enron found it easy to "cook the books" with deceptive earnings reports, “off balance sheet” corporations and "Pro Forma" accounting standards - which can be misleading and hide the true state of the corporation which would be revealed by the more traditional accounting standards. The US government has been trying some of the same tricks by changing the traditional measurements or discontinuing the reporting. For example, the report on M3, which is the best gauge of money and credit, was recently discontinued. The government announces the “core rate” of inflation, which excludes the increases in food and energy (which everyone needs), making the rate of inflation seem lower. The core rate is less than 3% while the rate of inflation for consumer goods is more than double that.

According to Shadow Government Statistics (www.shadowstats.com/cgi-bin/sgs/data) which measures things the old way, http://www.shadowstats.com/cgi-bin/sgs/dataunemployment is around 10%, CPI and the real rate of inflation is at 10%), M3 is around 13% in the United States (by the way, M3 in Europe is around 10%; India 17%; China around 20%; Russia around 40 or 50%!), GDP is -2%.

Bill Buckler of the Privateer newsletter explains, with all the fudging, lying, and outright deceit running rampant today, "We are all in the middle of history's biggest ever 'Potemkin Village' - a prosperous looking facade designed and erected to disguise the financial ruins behind it."

Injustice creates instability: Abundant food is in the fallow ground of the poor, but it is swept away by injustice (Proverbs 13:23). There is no need for poverty in this world - there are enough resources and food in the world around us, and plenty of opportunities. God has designed the Earth to yield enough if justice and decency prevail. It is injustice that takes away what labor produces and unfortunately, there is much injustice in the world. We need to pursue justice through our prayers, our votes and our actions.

We are now living in a one-world economic system, and that can create instability: Not too long ago nations’ economies were more independent of one another, so that if one nation was having problems, another nation might be doing better, and its stronger economy might be able to help the weaker economy. But we are now living in a high-tech one-world economy so that financial crises in one country can very quickly wreak havoc across the world. Currency crises in other nations (the yen-carry trade), governments defaulting on debt, weakness in other nations’ banks, a derivatives crisis, can rapidly spread here. Years ago when news traveled more slowly, there was time for the economic and political decision makers to work at solving the problems, but the time allotted them today is much shorter. This technologically interconnected, one-world economy can add financial instability.

Investors are human beings and tend to move in herds and may act irrationally (All we like sheep have gone astray). This herd mentality can add instability: Every so often market economies will go into a mania, a period of excessive excitement or “irrational exuberance,” where people lose common sense and invest in companies or goods, driving them up to stratospheric levels. When the financial bubble bursts, the excessive valuations come back down to the starting level or below. One of the classic manias was the 17th century Dutch Tulip Bulb Mania. “Tulips were first imported into Europe from Turkey in the mid 1500's. The flowers soon gained in popularity, and a demand sprang up for different varieties of the bulbs. The supply (and increasing popularity) of rare varieties of tulip bulbs couldn't keep up with the demand, and prices soon began to rise sharply. Prices rose to such heights that by 1610 one rare bulb was considered an acceptable dowry for a bride! As prices soared, ordinary citizens soon began to view tulip bulb speculation as a sure fire way to get rich. Holland, the largest producer of the bulbs, became the epicenter of the mania. People mortgaged their homes and businesses to buy the bulbs. The prices for many rare bulb types reached several hundred dollars each. One bulb of a very rare variety even changed hands at over $20,000! By 1637 people began to see that prices had reached an outlandish level. The smart money began selling and a crash soon followed. Many Dutch families lost the homes and businesses they had mortgaged to take part in this ‘sure thing’ investment” (From "A Brief History of the 17th Century Dutch Tulip Bulb Mania" at www.tulipsandbears.com/tulip.htm).

From Manias, Pa