Tag Archives: inflation

Good Friday 2012: When the Line Is Crossed

By Daniel Downs

An excellent editorial was published in yesterday’s edition of the Guardian, a U.K. newspaper. The editor shows how the short story Christ in Concrete relates the Good Friday story to past and present sacrifice of individuals that altered human history. The story was a thinly veiled account of the life and death of Italian-American writer Pietro di Danato’s father Geremio, who was an underpaid brick layer. Peitro likened his father life and work-related death on Good Friday to the Via Delarosa of Christ and his selfless suffering as a result of mindless capitalism. Christ in Concrete shifted the American mood, and Geremio’s death counts among those that have, to one extent or another, altered history.

The editor also mentioned the Buddhist monk Thich Quang Duc who burned himself to death protesting against the South Vietnamese government’s terrible treatment of fellow Buddhists. His death sparked a movement among the South Vietnamese people that resulted in the fall of the Ngo Dinh Diem’s government.

The editor is right the sacrifices of those men and of men like Jan Palach in Czechoslovokia in 1969 or Mohamed Bouazizzi in Tunisia in 2010 cannot be compared to the sacrifices of lives in Jihad.

They cannot even be compared to the sacrifices farmers, parents, spouses who sacrificed their lives so that their loved ones would survive the end of their life of farming. In the 1980s, Federal Reserve induced inflation caused many rural bank defaults and interest rates of agricultural loans to skyrocket. Farm loans encouraged by rural farm lenders has to be called in. Of course, most farmers couldn’t pay, resulting in bankruptcy. What urban bankers, investors and politicians didn’t realize was that farming is life to generational farm families. The end of farming meant the end of life. As a result, many unusual accidents occurred killing the head of the bankrupt farms. The benefit was the large insurance claims were be paid to their surviving spouses and children.

“The insecure economic world in which Geremio lived – and died – is back with us again, after a half century during which we thought we had made its return impossible. Our leaders, and those who influence them, are not malign. But they are inept, and they seem often to be uncaring.”

What the editor failed to mentioned is that Jesus Christ lived in a world dominated by the same kind of leaders who produced economic conditions that impoverished masses in Israel, Asia, Europe, and the rest of the world they controlled. The difference between Jesus’ death and those mentioned in the editorial is this: The sacrifice of the lives mentioned in editorial produced freedom and justice in their nations for a season, but Jesus’ sacrifice secured life for all people in all nations forever. The death and resurrection of Christ is source of the freedom enjoyed by West still today.

We fail to return to the source of our freedom at our own peril.

(The eidtorial can be read at http://www.guardian.co.uk/commentisfree/2012/apr/06/good-friday-when-line-is-crossed.

New High: 93% Say They’re Paying More for Groceries Than A Year Ago

Americans nationwide continue to lose faith in the Federal Reserve Board to keep inflation under control, with the number who say they are paying more for groceries now at an all-time high.

The latest Rasmussen Reports national telephone survey of American Adults shows that just 31% are at least somewhat confident that the Fed will be able to keep inflation under control and interest rates down, and that includes only eight percent (8%) who are Very Confident. Sixty-five percent (65%) are not confident the Fed can keep inflation and interest rates under control, with 25% who are Not At All Confident.

Prior to the latest survey, overall confidence in the Fed to handle inflation and interest rates ranged from a low of 32% to a high of 41%. The number who hold no confidence at all is now at its highest level in nearly two years.

This lack of confidence stems partly from the fact that 93% of adults report paying more for groceries now than they did a year ago, the highest finding to date. Only four percent (4%) say they’re not paying more for groceries now compared to a year ago. Prior to the latest results, the number that said they are paying more for groceries ranged from low of 75% in April 2010 to a high of 91% in May of this year.

Seventy-nine percent (79%) of adults now expect the amount of money they spend on groceries to be higher a year from now, up five points from last month and just a point below the highest level measured. This number stayed in the low to mid-60s throughout 2009 and 2010.

Only three percent (3%) think they’ll be spending less on groceries in a year’s time, while 15% expect to pay about the same amount.

For the third straight month, 79% of adults are at least somewhat concerned about inflation, including 49% who are Very Concerned. Only 19% aren’t as concerned about inflation, with just four percent (4%) who aren’t concerned at all.

Democrats hold more confidence in the Fed to keep inflation under control and interest rates down than do Republicans and adults not affiliated with either major party.

Investors are slightly more confident than non-investors that the Fed can handle both of these matters.

But strong majorities of adults from all demographic groups agree they are paying more for groceries now than they were a year ago.

These findings add to a string of survey findings showing very negative perceptions of the economy among Americans.

FED’s $600 Billion Quantative Easing Tax, Is it Necessary?

Charles Plosser, CEO of Philadelphia’s Federal Reserve, addressed an audience at Cato Institute on the topic of employing monetary policy to prevent asset bubbles, which caused the current recession. He told the audience that using monetary policy to adjust interest rates in order to compensate for asset price gaps (bubbles) was not a good idea. One example given was raising rate on mortgages to restrict rising housing prices. Two reasons for being against employing broad-based monetary policy for individual asset markets like housing were: (1) The risk of wrecking havoc in other parts of the economy is too great, and (2) no precise measure of asset-movement exists by which to form sound rule-based monetary policy. (Read his Cato speech titled “Bubble, Bubble, Toil and Trouble: A Dangerous Brew for Monetary Policy.)

John Mauldin, CEO of Millenium Wave Advisers, came to a similar conclusion about Fed Chairman Ben Bernanke’s decision to inflate the economy through the latest $600 billion quantitative easing. Bernake’s reason was to prevent deflation, which means core inflation rate as measured by the Consumer Price Index (CPI) dropped below 1 percent. Core inflation is all consumer goods except food and energy. Mauldin claims core inflation is actually about 1.5% not 0.6% when housing costs are removed.

There seems to be two reasons Mauldin measures inflation without housing costs: (1) Historically, the Bernanke should have used monetary policy to lower an increasingly high inflation rate back in 2005 that was caused by the housing price bubble. (2) More important is the fact that over the past few years housing cost is growing at near zero percent (see the chart below).

If Puru Saxena, CEO of Hong Kong based Puru Saxena Wealth Management, is right, Bernake’s quantitative easing will not revive the U.S. economy. Just like the previous two stimulus bailouts, quantitative easings never do. (Read his article titled “Band-Aid Solutions

What Bernanke’s cash infusion will do is devalue the dollar. This will causing food, energy, and everything else to rise, which will act as a tax on disposable income. Less disposable means fewer sales. As Mauldin also pointed out, food and energy costs already are high for those with lower income. These people will suffer the most as a result of the Fed’s easy quantitative induced inflation.

There are some creative ideas that could solve the housing price problem. For example, Fannie Mae, Freddie Mac, and FHA could rent their growing stock of foreclosed houses, which would keep some people in their homes. Banks also could lend to investors (landlords) to buy cheap housing if they promise to rent them out. Read Maudlin’s article “O Deflation, Where is Thy Sting?” to learn more.

Imperial Health Care Anyone? Witness the Lord’s Day Debacle

If Democrats pass the Obamacare bill, America will enter further into the domination of global socialism. Contrary to elite members like Obama, Clinton, and Soros, our constituted nation was not founded on the consent of the duped by the deceiving salesmanship of power-mongering tyrants. It was founded on the coterminous principles of the informed consent of the governed and a covenant with the Providential Creator–God of truth. If that consent is based on cleverly devised half-truth or lies, the consent was not valid or legal.

If our supposed-representatives in DC have not even read the bill in order to determine its costs and benefits, it cannot be said that they have represented anything for any constituents. Their party line Yes or No vote means nothing. The only real meaning it has is a vote for the party agenda. Based on such a vote, no law can be enacted that violates our rights and Constitution.

That is what the Obamacare legislation does. Dictators dictate law. Obamacare law purports to dictate to free citizens by coercing them to purchase one of three healthcare insurance policies at the point of criminal prosecution, financial penalties, and possibly (at some point) imprisonment. By ultimately eliminating a free market in healthcare, the Democrats will force the same kind of failed socialist health care system experienced by Canadians and Europeans.

The grossly false claim that the best health care system and economy in the world will allow thousands of people die without a socialist take-over of the healthcare system is countered by the testimonies of Canadians and Europeans who would have died had they not come to America for treatment. They would have died like many others because they had to wait for their turn to receive medical treatment.

Just as many more unborn children will certainly be killed under Obamacare, many more elderly can be expected to die because of a decline in quality care.

Moreover, small businesses will be adversely affected by the mandates imposed on them by Obamacare. Small business owners and many in the middle income tax bracket will end up paying up to a quarter of their income on health care costs as structured by Obamacare, according to American Enterprise Institute Fellow and Physician Scott Gottlieb.

Health care costs will not decrease because of Obamacare; they will increase because of the various costs to insurers, businesses, and their inflationary costs passed on to consumers. Everyone will pay more for less.

Because the price tag of Obamacare is over a trillion dollars, all will pay higher taxes either directly or indirectly. On top of higher taxes and cost of goods, the increase in federal debt will trickle down through the loss of jobs, reduction of income levels, decrease in number of small businesses, or some combination of them. As financial analysts keep warning, more government debt means fewer investment dollars, which in turn means less capital for current and start-up businesses. Thus making it a real possibility that America will enter into a European-like level of value-add tax socialism that once characterized the Roman Empire. Rome fell in part because it was overburdened by financial debt, by many over-taxed angry subjects, and by ever-increasing political corruption.

Pax Americana may be next.

I pray the gracious, the powerful, and the providential God defend and protect America from the political scheme aimed at winning votes in November’s election at the expense of all our economically common good. Long live the true and supreme Lawmaker, King, and Judge.

(See also my previous posts on how health care reform legislation effects small businesses and its funding of abortion.)

Sabbath Discussion : National debt and divine justice

By Daniel Downs

The national debt was $10.6 trillion. According to Rep. Steve Austria, the national debt will increase another $1.1 trillion as a result of recent stimulus-bailout legislation. If we add the previous $800 billion bank bailout legislation, a more accurate figure is $2 trillion raising the national debt to $12.5 trillion. The Government Accounting Office (GAO) reports that foreign ownership of the national debt was around 30 percent. But at the beginning of the year, it increased to over 50 percent. If that were not bad enough, the Congressional Budget Office reports that Congress will spend $1.2 trillion more than it will receive this year. Again, if we add the recent stimulus bill, the numbers climb to over $1.7 trillion more than last year and all of it on credit. The U.S. government not only owes around $6 trillion to foreigners, the two largest creditors being Japan and communist China, but Congress intends to spend $2.1 trillion more than it can repay. When we compare the national debt to the total national economic productivity or Gross Domestic Product (GDP), which is estimated at a little over $14 trillion, it becomes apparent that politicians assume they have right to spend nearly all of the people’s wealth on credit.

Sadly, America is a debtor nation. As we will see, this type of compulsive spending for the cause of secular, socialist, and global agendas is a curse of divine justice. The following then is what the penmen of God had to say about this matter.

One of the more pertinent illuminations of ancient wisdom comes from the writer of Proverbs, who many scholars believe King Solomon was its author. King Solomon wrote:

Do not be among those who become guarantors of debt. (Pro. 22:26)

The federal government is a guarantor of student loans, bank loans, business loans, mortgage loans, loans to foreign governments, and other types of loans. For decades, the federal government has been bailing out bank and Wall Street because of bad lending practices to corporations and foreign governments. It is part of the purpose of the Federal Reserve, federal deposit insurance, and federal loan guarantee programs. Taxpayers have been footing the bill without even realizing it. Maybe now it will be understood that working taxpaying Americans are ultimate bailing out all these rotten practices for the benefit of those in power. As Austria has pointed out, the average Joe or Juanita benefits little. It should be apparent that profit over people is not working well for most Americans.

It is important to note that the Hebrew word used for debt in the above verse refers to interest bearing loans. In the modern vernacular, the proverb could be rewritten thus: “Do not be among those who guarantee interest bearing bank or payday loans for anyone.”

The law of Israel prohibited loans with interest. At the same time, the law also required society to give loans to the needy or poor. According to the laws governing credit and debt, all outstanding loans to fellow citizens had to be canceled every seven years. Only loans to foreign nations or foreign individuals were exempt from God’s law of debt forgiveness. (Ex. 22:25; Deut. 16:1-11)

If the covenant people were faithful to covenantal law, God promised a specific kind of blessing: they would become creditor to the world but not a debtor. However, if they did not follow God’s law, the Jewish nation was promised judgment. One aspect of the promised judgment was that they would become debtors and foreigners would consume their productivity. (Deut. 28:44, 33, 38)

Right now, foreigners either through financial debt or through an on-going international trade imbalance consume over 50 percent of economic productivity of Americans. By importing more foreign goods and services than exported, more of working America’s wealth goes to foreigners. What America exports more than it imports is military related goods and services. Yet, that too is more allusion than reality. For example, Congress gives Israel $2 billion in aid for the purpose of Israel using most, if not all, of it to purchase military equipment like airplanes from American companies like Lockheed. That $2 billion is part of the public debt borrowed to fulfill the aforementioned allusion. It is taxpayers funding the purchase of weaponry for the sole benefit of only a few Americans.

Another voice of ancient wisdom and enlightenment was the priestly prophet Isaiah. During an earlier stage of his preaching for God, what appears to have been a message addressed to the whole world is recorded in chapter 24 of the book by his name. The following are a few excerpts relevant to our discussion:

“Behold, the Lord lays the earth waste, devastates it, distorts its surface and scatters its inhabitants. And the people will be like the priest, the servant like his master, the maid like her mistress, the buyer like the seller, the lender like the borrower, the creditor like the debtor. The earth will be completely laid waste and completely despoiled, for the Lord has spoken this word…. The earth is also polluted by its inhabitants, for they transgress laws, violated statutes, broke the everlasting covenant. Therefore, a curse devours the earth and those who live in it are held guilty…. So it will happen in that day, that the Lord will punish the host of heaven on high, and the kings of the earth on earth.” (Isa. 24:1-3, 5-6a, 21)

Isaiah probably had in mind the law of credit and debt when he wrote that God was going to waste the earth and cause it to be despoiled. (24:3) This divine punishment will be the result all inhabitants polluting the earth. The earth becomes corrupted because of the perpetual violations of the eternal covenant and its laws. (v. 4) Because all people are as guilty as the next guy, all would experience what God means by making the earth completely laid waste. (v5) The peculiar result is stated by the prophet this way: “The buyer will be like the seller, the lender will be like the borrower, and the creditor will be like the debtor.” (v 2)

Many scholars, Jewish and Christian, claim the eternal covenant refers only to the 663 laws written in the books of Moses or Torah. This is not the case. The eternal covenant began with Adam and his sons. It was perpetuated through Noah, later though Abraham, expanded to a national model of society through Moses and Israel, expanded again with the priesthood and the royal bloodline of David, and more fully completed through Jesus of Nazareth and his disciples. The moral law of the eternal covenant is still in effect today just as it was when most of the laws of the American colonies and later the states and the nation conformed to it.

What makes the prophecy of Isaiah so interesting is the fact that it has been happening in our lifetime. For example, most workers today produce goods and services that they or others within their companies sell. All workers in turn buy things they want or need from other sellers. Seller and buyer are virtually the same.

Okay, it could be rightly argued that it has always been the case since ancient times. Not so with banking, which didn’t exist universally? In banking, depositors lend their money to banks often believing that they will earn more money through interest. This belief is erroneous because banks only pay interest rates near the inflation rate. Bank CDs pay little over the inflation rate as well. Therefore, banks only allow depositors to keep the same value of their original loans also called deposits. Banks take the depositors loans and lend to borrowers at higher interest rates in order to make a profit. Depositors are very kind people because they lend money to needy bankers so that they can earn a living without having to do much strenuous labor.

We can apply the same to the national debt. Taxpayers hold the gigantic public debt in the federal government who lends to as well as borrows from the American people and from foreigners. Government borrows by exchanging paper bonds of specified value for money of equal value with a promise to repay at set interest rate, which rate is usually a little more and sometimes less than the inflation rate. As with depositing wealth in federal banks, lending wealth to the government is not very profitable, especially for individuals. It is an allusion because the feds inflationary program consumes any real profit. The actual beneficiaries are institutions of government and corporations. (By the way, Federal Reserve Banks, Fannie Mae, and Freddie Mac are unconstitutional and illegal corporations, and so are any other institutions incorporated by the federal government. The records of the Constitutional conventions prove it. Their existences are monuments to criminal acts against the Supreme Law of the Land.)

Another golden nugget of ancient enlightenment reveals the likely outcome of unethical and lawless financial acts against God’s eternal covenant. As it was written by the author of Proverbs:

“The borrower becomes the lender’s slave.” (22:7)

To whom then is the America enslaved? Is the imperial government enslaved to both the global agenda of its politicians as well as to foreigners? Are we the people really free? Are we not more like indentured servants to a corrupt government, corporate powers, and foreigners? Consider that foreigners now own a significant percentage of all industries and physical capital. Moreover, federal and state governments have seriously considered leasing our highways to foreigners to fund their transportation departments.

Isaiah 24 also sheds light on Revelation 13. When the beast or anti-Christ arises, he will gain control over the global economy. When this global dictator does, all–both buyer and seller–will become truly equal. They both will be subservient to him. None will they be able to buy or sell without giving allegiance to this dictator and his politics of change. Here is secular egalitarianism at its worst.

This is the end result of a globalized economy regulated by a unified world government fostered by world socialists on Capitol Hill, in state government, corporations, and universities of America. It is part of the divine judgment and the eventual end to their grand schemes whether called secularism or socialism or globalism or democracy.

As depicted by Isaiah 24, the eternal covenant will still stand after they have perished from the earth.