From the time you start reading this blog until you finish the last sentence the world will have changed…and possibly drastically. These are historical times and the speed with which change is happening is off the charts. Of all the voices to recognize and quantify how quickly change is occurring, nothing makes the case better than money.
Economics is the study of the language of money. In 2020, due to Covid and the ensuing governmental actions in our country, we experienced a unique economic downturn. This downturn was five times worse than the ‘average’ recession we’ve experienced since World War II yet it occurred in 25% of the time of previous recessions. Eleven million more people were unemployed during this ‘economic downturn’ yet, we had the largest increase in personal income in 20 years. Confusing fast talk.
Due to the Cares Act, in three months during 2020 the deficit increased more than the previous 5 recessions combined. In economic terms, money’s native tongue, there was 25% more liquidity added into the American economy over the last two years. Economists use terms like velocity of money, but in simple terms, there is more money talking faster than ever before.
Money may be a fast talker but you can see what it says in slow motion. The result is evident when you go to Home Depot for a DIY project. Lumber is through the roof. Check out the price of copper…corn…cotton…oil, you name it. This is not an economics lesson on supply and demand, but the Central Banks of the world have bastardized the most important price in the world, the price of money. The result is higher prices for everything, lack of available materials and products…and a tight supply of people who work with these products. Money is screaming to tell you something, but it can be hard to understand until the conversation is over.
In the Bible, Jesus conversed more about money than heaven and hell combined. Christ talked about money more than love. Almost a third of the parables He used were about money and finances. The only subject Jesus spent more time on than money, was the Kingdom of Heaven. Christ reminded anyone listening that ‘ “where your treasure is, there your heart will be also.” ‘ Matthew 6:21. If your treasure is measured in dollars and cents, listen closely.
We were warned that money is possibly the loudest god of THIS world. Jesus followed up his speech about treasures by saying money was a master, not a Central Bank liquidity tool for political and economic policy. He said there was a competing dichotomy between money and God and ‘ “Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.” ‘ Matthew 6:24.
We need to listen more to God than the dollar, but don’t miss what money is currently saying. Money spoke about the pandemic before it was a pandemic. Read my blog, Shakin The Bush Boss, from March 15, 2020. The W.H.O. had hundreds of millions at stake as an incentive to declare a pandemic. Testing and reimbursement for Covid positive patients impacts finances and the bottom line for hospitals and nursing homes. The CEO of pharmaceutical giant JNJ has let it be known the company stands to make billions because there will be a need for multiple vaccines for years to come. Money talks about the motives and ambitions of health care.
If you paid any attention to the last Senate race in Georgia, you saw the ads slamming Kelly Loeffler about profiting from her knowledge of the virus. Last March four Senators, Democrats and Republicans, were accused of using inside information to profit from the pandemic before others knew about it. A few months later the charges were dropped. Those candidates never defended their market actions because insider trading is NOT illegal for Congressmen and Senators. Advertisements say these politicians were crooked and cared for themselves more than the voters. Money speaks to the state of politics AND the politicians.
We are currently hearing one of the loudest speeches money has made in a while. Pretty soon, everyone will hear what is being said but I’m not sure who will care; initially. Money is the canary in the coal mine to watch on the world stage.
Cryptocurrencies have been cocktail party conversation for years but…Elon Musk recently revealed Tesla had used a sizable portion of their cash reserves to buy Bitcoin. Apple was said to be the next in line to convert their cash into the digital coin. You might think this is much ado about nothing but I believe it’s worth watching. Money reveals where it is treated best and where it can hide.
Christ preached that money reveals the heart. Judas was a lesson in spades about an underlying heart condition and his real ambitions. The ambitions of world players are now front and center with their plans for money.
China has talked about a digital yuan for years but a few weeks ago they were given the seal of approval from the gatekeeper of global payments to initiate a NEW payment system for moving money around the world. The old system supports paper currencies and is dollar centric. The new digital system will allow money to continue talking, but the conversation will become digital…and more restrictive. Like the people who carry it around, freedom of speech is at risk. The freedom money has enjoyed is at risk in the near future.
If I haven’t lost you yet, this part should start to make sense and get your attention. The changes ahead may look slow but their effects will be immediate. Anything is possible in this era of rapid change. Consider the possibilities and the current climate.
The implementation of digital central bank currencies will hasten the removal of cash from the world stage. China has moved from a cash based system to almost completely cash-less in 10 years. Cash is anonymous but digital leaves a trail of records. With Central Bank Digital Currencies, governments will have full insight and oversight of money flows. Transactions can be monitored and this opens the door to a more Soviet model of banking with full state control. The rapid increase in cryptocurrencies is a reflection of the battle that is coming and will facilitate a more rapid change over to digital currencies.
Many will say this is good. Less black-market illegal transactions for criminals. In turn, there will be more potential oversight on how and where YOU spend every nickel as well. Less freedom on moving YOUR money around to earn the best rate of return. More possibilities for someone else to direct where your money is needed. Maybe a ‘favored’ corporate bond instead of your choice of a money market fund. Instead of an advisor you get a manager that directs where you can invest your money. If someone thinks your net worth is too much, you’re charged a negative interest rate until you agree and reallocate to those less fortunate. A ‘known racist’ or ‘suspected anarchist’ charged with posting hate speech on social media has their account deducted by an appropriate amount. When cash disappears and digital is all that’s left, the freedom you thought your money gave you goes bye-bye.
In my last blog I tried to make the point that when we start to lose freedoms, it can be like a wildfire that consumes more than speech or gun ownership. Ambitions can be lost. The control of your money could be the next freedom to go.
The writer of Proverbs warned long ago, ‘Trust in the Lord with all your heart and lean not on your own understanding…Do not be wise in your own eyes, fear the Lord and shun evil.’ Proverbs 3:5-7. There is nowhere we use more of our OWN wisdom and understanding than with money. Yet, every financial decision and investment is a spiritual issue. I hope we don’t learn that the hard way.
We think our money gives us freedom but it may be an endangered freedom. Proceed and pray accordingly.
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