In Bubbles We Trust, For Tomorrow We Die

By Wilfred Hahn ((Eternal Value Review) 

Policymakers and societies at large are desperately waging their fight against the consequences of their past choices. Again, they have turned to the spurious advice of humanist shaman advisers and prophets — namely, macroeconomists and monetary theorists — who didn’t recognize nor anticipate the current problems to begin with. Their hope and presumption is that money — its manipulation, fabrication and supply — along with the magic hand signals and opaque hints of the monetary policymakers will surmount the chronic problems of our times.

However, before commenting further, a quick disclaimer for any new readers. As this letter is freely available and accessible to anyone, we do encounter the occasional shocked response. Just from whence comes our seemingly warped reference point … from a one-time top-ranked secular analyst, no less?

This column derives its perspectives solely from the Bible. Why? Its compilation of 66 ancient books (miraculously interconnected) has a lot to say about economics, justice and money, and this long before anyone defined such concepts as capitalism, Marxism, socialism or neo-liberalism … to name just a few modern belief systems. Crucially, the Bible claims to understand the heart of mankind saying “The heart is deceitful above all things and beyond cure. Who can understand it? I the LORD search the heart and examine the mind […]” (Jeremiah 17:9-10). The fact that the human heart is deceitful and its thoughts unpredictable, throws a wrench into any economic model or policymaker’s theory.

No doubt, regulators, having witnessed the massive corruption in the U.S. mortgage industry during the 2002-2007 period and in securities markets from time to time, might be inclined to side with Jeremiah. They were unable to sufficiently “search the hearts” and couldn’t keep up with deceit that was beyond cure. Humans today are prone to the same lures and temptations that they were before the Flood when the Bible says that “[…] every inclination of the thoughts of the human heart was only evil all the time” (Genesis 6:5).

Most would agree that the viewpoints found here will be mostly in contradiction to those that dominate the secular mainstream. That is not to say that a moral perspective or a Biblical world view would disqualify one from participating in investment decisions or economic diagnosis. On the contrary, in our opinion. If anything, it adds understanding to the nature of human actions. Nonetheless, many Biblically-based viewpoints would be in contradiction with the secular consensus and economic theories promoted on Wall Street. Why? Because, for all intents and purposes, modern-day economics does not deal with the issue of morality and instead focuses only upon its amoral theories.

Let’s return to our discussion of the trials of policymakers and leaders of nations. Of course, no one expects monetary policies to solve things like endemic poverty or malnutrition. Yet, similarly, the amoral monetary policies being perpetrated by the major central banks of the world today will not correct conditions of extreme wealth distribution, aging populations, post-Familialism, and various other global and ethical imbalances either. That is why policymakers are indeed becoming ever more desperate. Their potions aren’t working as of late.

Japan, its economy having stagnated for some two decades, piling up immense government debts during this period, finally threw all caution to the wind, recklessly depreciating its currency (yen). Lately, Chinese leaders are worrying that the economic slowdown that has recently gripped their nation might spin out of control and trigger a massive deluge of debt defaults. What to do? Plunge further into debt and try to reinstate the unsustainable policies that led to the current problems in the first place? To date, Japan’s actions have not spurred any recovery (nor is this likely to happen).

The same frustrations are being experienced by most countries, including the U.S. Unstable economic conditions extend from Brazil to Russia. Were conditions to deteriorate further, the world would find itself in a most dangerous condition, with a return to recessionary conditions at a time when interest rates are already low (in fact, at negative levels after adjustment for inflation).

continue reading at Rapture Ready:

http://www.raptureready.com/featured/hahn/h111.html