Today Ben Bernanke, Chairman of the Federal Reserve Board of Governors, announced QE3. Stock markets went wild. This was the big one they were all waiting on.
Here’s what happened, and what it means for you:
The Dow Jones rallied 1.5% to 2007 highs. Gold , in growing anticipation of the announcement, climbed from around $1590 per ounce on August 13th to $1740 per ounce today, September 13th. Tonight, at the opening of the Asian markets, post-QE3, gold jumped another $35 to $1775 per ounce.
That is almost an increase of 12% in 30 days — and 2% tonight in less than 3 hours. Gold is a crisis hedge, and a mass inflation hedge. Soaring gold prices are not a good sign for us.
Let us not mince words so that you go away with anything but an absolutely crystal-clear understanding: central bank inflation — whether it is called QE2, QE3, monetizing debt, monetizing bonds, monetizing mortgage-backed securities — is nothing but petty theft, just on a grand scale.
You don’t need to understand economics to understand the ethical link between cause-and-effect (but a good place to start for those who do is the Mises Institute’s free books section — Murray Rothbard, What Has Government Done To Our Money?).
Theft is immoral, ungodly behavior.When a nation persistently endorses immoral behavior that violates God’s laws, it should expect judgment to be dispensed in God’s good time. He never judges immediately; God is slow to anger, and he always gives a nation an opportunity to repent.
People who swap a low time preference — future-orientation — with a high time preference — present-orientation (gotta have it now, no matter what it costs me!) — have become ungodly. God wants his people to be future-oriented. He wants us to save for the future to build his kingdom slowly.
Whenever anyone offers instant gratification, you should be wary (see Genesis 3).
Our modern economic policies are heavily focused on immediate gratification. Modern economics promotes spending, not saving. In fact, it thinks saving is bad. So bad, that the government should spend our money for us to jump-start the economy because a committee of bureaucrats knows what’s better for us than hundreds of millions of free-minded thinkers.
These policies are leading towards economic destruction.
John Maynard Keynes, the father of all modern economic theory, knew it. When someone suggested to him that his policy suggestions, long-term, were harmful, he said “In the long run we’re all dead.”
This is the pinnacle of very un-Christian extreme pessimism about the future. This is primitive pagan belief. Christ calls us to be hopeful and build wealth to leave as inheritance to our childrens’ children (Proverbs 13:22) — to teach all nations to observe all things He has commanded us (Matthew 28:18-20) — but the economics of today, with central banks controlling the money supply and dictating monetary policy, is the economics of squandering our inheritance.
As a nation, we are like the apostate Israelites who Isaiah rebuked: “And behold joy and gladness, slaying oxen, and killing sheep, eating flesh, and drinking wine; let us eat and drink; for tomorrow we shall die.” (Isaiah 22:13)
It’s not good for us. This is the economics of ruin. He who has ears to hear, let him hear.
If you have ears, and you are listening, click here to take the next step to prepare yourself.