SHEMA!
Tevet/Shevat 5768 January 2008
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MA CHADASH? WHAT’S NEW?
Evangelism On Thanksgiving Day
Detroit
has one of the oldest and biggest Thanksgiving
Day parades. On Thanksgiving about 12 of us handed
out 5,000 Thanksgiving pamphlets reminding people
about the true meaning of Thanksgiving and declaring
the Good News about Messiah. We got into some
good conversations and made an impact on many
thousands of people at the parade. Special kudos
go to the youngest Good News bearers - Ari and
Levi Harris. And we want to thank those of you
who gave money to print the pamphlets and prayed
that this would be the blessed outreach it was.
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TODAH RABAH! THANKS VERY MUCH!
We
teach generous, cheerful giving - not giving grudgingly
or because you feel forced to give, because the
Lord loves a cheerful giver. We recommend - we
don’t demand, we only suggest - that ten percent
is a reasonable amount to try and give if you
are able to do so, as so many have done before
us. Then Jacob made a vow, saying, "If
God will be with me and will keep me on this journey
that I take, and will give me food to eat and
garments to wear, and I return to my father's
house in safety, then the Lord will be my God.
This stone, which I have set up as a pillar, will
be God's house, and of all that You give me I
will surely give a tenth to You" (Genesis
28:20-22). We thank the Maker of All Things for
those of you who give generously to your own religious
community and also give to support our efforts.
May the Three-In-One God abundantly bless you!
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LOOING AHEAD TO 2008
Last
year in an article in the January 2007 Shema newsletter
called “Looking Ahead to 2007: American Dream
or Nightmare?”, I wrote the following: At
the beginning of this new year, I’d like to offer
some guesses about the future. It is human nature
to want to hear that all is well and things will
get better; but honestly, I see difficult times
ahead. Here is the reality of the situation: The
people of the United States, having been blessed
with a godly foundation, tremendous natural resources,
and a great political and economic heritage, have
been squandering them all. For the past 50 years
we have steadily been turning our backs on God.
King David warned us that the nation that forgets
God will return to Sheol - the place of the dead.
We are rapidly becoming one of those God-forgetting
nations. The signs of moral, social, religious
and economic decay are all around us.
Social
and Moral Decay
We
have murdered close to 50 million babies since
1973. This is unbelievably evil and worthy of
the severe judgment of God. There has been a huge
increase in violent crime, murder, suicide, divorce,
out-of-marriage births, sexual immorality, sexual
deviancy, new sexually transmitted diseases and
the percentage of the population affected by STDs.
The institution of marriage - long understood
to be the foundation of civilization - is rapidly
eroding through divorce, people living together
outside of marriage, and the redefinition of marriage
by those with a radical agenda. Educational standards
have decreased. Blasphemy and obscenity pervade
the popular culture.
Religious
Decay
Most
so-called Christians are lukewarm, and rarely,
if ever, engage in evangelism. Only a small minority
believe the basic teachings of the Faith. Many
popular churches preach more about materialism
than the cross, denying the world, seeking the
lost and preaching the Good News.
Economic
Decay
Our
economy may seem strong, but in reality it is
fragile. I would compare our economic situation
to the Babylonians who were feasting and insulting
the God of Israel, confident they were safe in
their city, while outside the walls of Babylon,
the Medes and Persians were besieging the city.
That same night Babylon fell. There has been a
huge increase of personal, municipal, state and
federal debt. The federal budget deficit is much
higher than reported if all the real expenses
and liabilities are factored in. We have gone
from the leading creditor nation to the leading
debtor nation. Government and corporate pensions
are seriously underfunded. Foreigners are holding
a big percentage of our debt, which they could
dump, driving up interest rates. Large portions
of the manufacturing sector have been gutted and
good jobs outsourced. US trade deficits are very
high and rising. The personal savings rate is
extremely low. The reserves of the fractional
reserve banking system are dangerously low. There
is extreme leverage in the world’s financial system,
largely in the form of financial derivatives.
There is a dangerous worldwide housing bubble
forming the biggest financial mania in history.
The bubble has started bursting in the US. A quarter
of all US mortgages are the adjustable rate type,
and most will reset in 2007. I believe at least
half of those who took them likely won't be able
to sustain the higher rate, resulting in a huge
percentage of homes going into foreclosure. Expect
housing prices to go down dramatically. The multi-trillion-dollar
government- sponsored home lending institutions
- Fannie Mae and Freddie Mac - are like houses
of cards that could fall. Inflation is higher
than reported and will likely keep on getting
higher, and wages won’t be able to keep up. The
US dollar is falling and could head much lower.
The price of energy, especially from oil and natural
gas, may continue to accelerate. We may be approaching
“Peak Oil,” which is when more than half the world’s
oil will have been consumed. I suspect that stocks,
bonds and real estate will head lower - maybe
not in nominal value, but in real value if measured
by real money: gold. Add to this dangerous economic
brew the risk of terrorist attacks against the
US, an increasingly destabilized Middle East,
and the potential for a bird flu epidemic.
Recommendations
We
are reaping the unpleasant consequences of 50
years of forgetting our Judeo-Christian heritage,
and I think we will be reaping even more. For
the difficult times ahead, I recommend we prepare
emotionally, mentally, financially and, most importantly,
spiritually. Get out of debt. Avoid adjustable
rate mortgages. If you can’t afford a conventional
mortgage, be willing to rent. If you are having
trouble with debt, make the necessary changes
to begin living within your means. Get involved
with a good community of Believers who are committed
to support one another and stay faithful to the
Word of God. Learn about real money - gold and
silver. It should provide some refuge from financial
storms.
So,
How Did I Do?
My
comments last year about our moral, social, religious
and economic decay were pretty accurate and my
recommendations were good. The social, religious
and economic decay are interrelated. They indicate
that, like other nations and empires that have
risen and fallen before us, the United States
is in a state of decline.
A
Couple Of Clarifications
I
would like to clarify some of my 2007 comments:
First, I said that most of the adjustable rate
mortgages will reset in 2007. The big wave of
resets began in 2007, but will continue through
2008. Second, I don’t like the way I defined “Peak
Oil”. Peak Oil doesn’t mean that half of available
oil is consumed. It means that production of oil
peaks and then declines. US oil production peaked
in 1970. It went from 10 million barrels of oil
per day to the present 5 million barrels of oil
per day. The same thing is now happening on
a global scale. Fifty-five nations have already
reached Peak Oil, and world production seems to
have peaked in May 2005 at around 84 million barrels
of oil per day. Meanwhile, as production may be
close to peak, demand for oil is increasing because
of the rapid industrialization of the huge populations
of China and India. In a world that is increasingly
dependent on oil, even a small increase of demand
over supply can make the price of oil go up suddenly
and dramatically. Reaching Peak Oil doesn’t
mean that there is no oil. It means that very
quickly there might be no cheap oil. Inflation
and Peak Oil explain why the price of oil is close
to 100 dollars per barrel and probably headed
higher - maybe much higher.
What
Does The Future Hold?
As
we begin a new year, I want to continue offering
some thoughts about the future. Just as Peak
Oil seems to be a reality, Peak Christianity seems
to be a reality in the US and Europe. The
moral, social, religious and economic decay in
the United States and Europe will continue. Meanwhile,
there is good news. Christianity is growing in
Africa, South America and Asia! Expect anti-Semitism
and anti-Zionism to continue intensifying around
the world. Expect Israel to experience increasing
amounts of pressure to compromise land for a “peace”
that can never last long.
The
economic crisis that I have been warning about
is here and is getting worse, like an avalanche
picking up speed. One did not need to be a
professional economist to see this crisis coming.
Those individuals who understood traditional economic
teachings (the Austrian School of Economics) knew
this crisis would happen. Just as there are
physical laws (gravity, entropy) and spiritual
laws (the wages of sin is death, sexual activity
outside of marriage is wrong), so there are economic
laws. When economic laws are violated, problems
result.
As
I write this in early December, the stock market
is still close to its high (in dollar terms, but
not when measured by gold), which prevents most
people from sensing how bad things are. However,
this crisis is not centered in stocks, but in
the credit/debt area. What happened is that ever-increasing
amounts of easy-money/credit were given to less
and less credit-worthy people and institutions.
New and complex and risky financial instruments
were created (Mortgage Backed Securities, Asset
Backed Securities, Collateralized Debt Obligations
and Structured Investment Vehicles). Now we are
experiencing the results of such foolish practices
- huge national, state, municipal and individual
debt; unprecedented levels of defaults on loans
given to people who never would have qualified
for a mortgage under traditional standards; the
collapse of the MBS, ABS, CDO and SIV products.
This
economic crisis is picking up speed because the
“guns and butter” spending since the Vietnam war
(large military spending abroad and big government
social programs at home) has put us further and
further in debt. We have been spending and consuming
more than we have been saving and producing. The
problem is that debt-based “prosperity” is not
genuine prosperity. It’s like the family who owns
a 160 acre farm, and each year over a 40-year
period must sell four acres to maintain a standard
of living that is too high. At the end of 40 years,
the family has nothing left. That is what our
nation has been doing since the 1960s through
every Republican and Democratic congress and administration.
We are at the point of having almost nothing left.
This
economic crisis is picking up speed because hundreds
of trillions of dollars of derivatives (derivatives
function like insurance) were created; but the
risks were misjudged and the assets backing these
derivatives are probably not sufficient. These
derivatives have the potential to overwhelm the
financial system.
This
economic crisis is picking up speed because we
abandoned the gold standard in 1933 and 1971.
Because there was no gold or silver backing our
money, it was easy to create lots of money not
backed by anything. From easy money comes easy
credit, and since 1971 money and credit of all
kinds have expanded hugely. This has created inflation
and enabled bad investments and bad debts to occur.
This
economic crisis is picking up speed because our
banking system is fractionally based. Banks generally
only need to keep ten percent of their assets
in reserve, which allows them to multiply credit
by a factor of nine. Because they are fractionally
based, banks must be very conservative and cautious
with their loans. Even if just ten percent of
the loans become worthless, banks can become bankrupt.
But for the past decade, banks have not been careful.
They have been aggressive, greedy and foolish.
Someone put it this way: Our biggest banks got
involved in the proliferation of securitizations,
derivatives, leveraged speculation, credit guarantees/insurance
and highly tangled debt structures. With the credit
bubble bursting, these things are falling apart.
This
economic crisis is picking up speed because the
government keeps interfering in the business cycle,
trying to prevent recessions from taking place.
Recessions perform a necessary function. They
cleanse the economic system. It’s like firefighters
always being called out to prevent brush fires
from taking place. Nature needs the occasional
fire to burn the brush and cleanse the forest.
If firefighters prevent that from happening, the
brush builds up and when conditions are right,
a massive fire destroys everything. The economy
(like a forest) is in danger of a huge fire (severe
recession or depression).
My
prognosis: Expect the economic crisis to increase
in speed. Expect the US economy to continue to
decline. Expect the dollar to continue to go down
in purchasing power. Expect some big banks or
institutions like Fannie Mae or Freddy Mac to
fail. Expect the price of one ounce of gold to
reach parity with the Dow Jones 30 Industrials,
like it did in 1980 - the last time there was
a lot of fear and instability in the market. I
am so concerned about the instability of our economic
system that I think the potential exists for the
U.S. to experience a Weimar Germany scenario.
After the defeat of World War I, hyperinflation
took place in Germany’s Weimar Republic. Hyperinflation
was followed by a depression and a disillusioned
population who responded to a tyrant who ended
the republic and installed a dictatorship.
My
Recommendations For 2008
My
recommendations for 2008 are the same as for 2007.
Prepare for hard times. Get out of debt. Spend
wisely. Save your money. If you do have wealth
and want to preserve your capital, store your
wealth in real money - gold and silver. If you
want to invest in things, precious metals, precious
metal mutual funds and maybe oil companies should
do well. For more information about economics,
finance and investing, go to my Financial Management
Seminar on the Shema website at www.shema.com/Financial.
Some
Good News
I
know that what I wrote above is not pleasant to
consider. But our nation is much in need of social,
religious and economic correction. If this economic
crisis does lead to a severe correction, we hope
to see people turn to God and the things of God.
And that would be a great thing, wouldn’t it?
May the peace that passes human understanding; and the wisdom
that God gives to all who properly ask; and the
comfort He alone is able to comfort us with; and
His grace which is sufficient for us - be yours
in abundance this month, throughout 2008 and forever
and ever!
Shalom!
Rabbi Loren
SHEMA!
(Hear!)
is the newsletter of
Congregation Shema Yisrael
P.O. Box 804 Southfield MI 48037
Phone: 248-593-5150
Email: Shema777@aol.com
Website: www.shema.com
Services: Saturday 10:30 a.m.
Wednesday 7:00 p.m.
at the facilities of Bloomfield Hills Baptist
Church
3600 Telegraph Road in Bloomfield Hills
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