The Crash of 2008 part four

The financial crash of 2008 is the product of greed, boom and bust cycles and the manipulations by power players. But it is also the product of man’s sin, man’s mammon worship and God’s judgements.

Prophetic insights tell us that God wants to humble people and the nations and to have them rely only on Him, not on their money or their survival plans.

What Should You Do?

What are the things you should do to weather the storms we are facing and will face in the future? I suggest that you consider the following list of things that I have taught others to do in this situation.

Humble Yourself

If it is true that God is at work in this situation, seeking to humble the nations and bring them back to Himself, then the best thing you can do is be quick to humble yourself. It is time to repent of your materialism and to stop looking to money to be your saviour. Money is proving unstable and even toxic to some.

You also need to consider whether you have been worshipping Mammon. God wants you to worship only Him.

Cry Out To God

Call on the name of the Lord, cry out to God and trust Him to deliver you in this situation. God is ready to rescue those who trust in Him. So call upon Him. Put your trust in His ability to protect and save you.

God promises in His Word that we can be kept safe even when we go through the flood and the fire.

“When you pass through the waters, I will be with you; and through the rivers, they will not overflow you: when you walk through the fire, you will not be burned; neither will the flame kindle upon you.” Isaiah 43:2

Expect God’s Blessing

We are able to expect God’s blessing, even in a time of famine or trouble. God’s ability to bless us is not limited by physical circumstances.

Thousands of years ago Isaac, son of Abraham, experienced a 100 fold return during a time of famine.

“And there was a famine in the land, beside the first famine that was in the days of Abraham. And Isaac went to Abimelech king of the Philistines unto Gerar ……. Then Isaac sowed in that land, and received in the same year one hundredfold: and the LORD blessed him.” Genesis 26:1,12

Whatever is happening in the global markets, God is able to protect you and to bless you. He is even able to bring you amazing provision when everyone else of struggling, just as Isaac had a one hundredfold return during a time of famine.

Avoid Slavery to Debt

Debt is not sin, but debt does make people servants or slaves to others. Those who are in debt are vulnerable to having their situation overturned by the lender.

“The rich rules over the poor and the borrower is servant to the lender.” Proverbs 22:7

I reiterate that it is not sin to have debt, but it is dangerous. In a season of financial upheaval it is possible to be penalised by the one who has lent you the money. If you have the opportunity to get out of debt, that would be to your advantage and an excellent strategy.

Let God Purify Your Heart

When our faith is tested then so too is our heart. God holds our faith to be of great value. He tests us to see how we cope under various pressures and to see what comes out of our heart.

“I the LORD search the heart, I try the reins, even to give every man according to his ways, and according to the fruit of his doings.” Jeremiah 17:10

As your financial and material security is put at risk your heart will be exposed. You will either trust God or be angry with Him. You will either rest in God’s provision or you will strive more and more in your own strength and cunning.

I have personally been through protracted times of hardship and those seasons tested and purified my heart. In such seasons I have been able to sort out my attitudes toward material goods, worldly values and God’s call on my life.

So, let God purify your heart even in the challenging financial times you may be going through.

Stand On God’s Word

People of faith know how to stand secure on the Word of God. God makes many promises about His blessings and His protection in our lives. Rather than looking to the newspaper headlines, you are much better to look into God’s Word and stand firm on what He is saying.

God says the He will supply all your needs (Philippians 4:19) and that His blessing meets your needs without bringing you sorrow (Proverbs 10:22).

Look To God

People seek to protect what they have and to build up a greater store of assets. This is the desire for gain and fear of loss which drive so much of our markets.

The Bible reveals that God is our greatest source of security and blessing. In fact, unless God supports your plans for protection and profit you are wasting your time.

Unless the LORD builds the house, the builders waste their time: unless the LORD protects the city, the watchman wakes in vain.” Psalm 127:1

Look to God, not your own cunning or resources. Your financial advancement and your security are found in him, not the markets or your clever ideas.

Help Us Turn Australia (and the Nations) back to God

God is challenging the pride and rebellion of the nations that try to survive without Him. Christians have the role of bringing the nations back to God. Rather than being eaten up in your own concerns, ask God how you can help to bring your nation to repentance and humility before God.

The Crash of 2008

We are living through the Crash of 2008. This time will be long remembered and it will be used as a reference point, just as the 1987 Crash and the Great Depression are. So we should take stock of what is going on and what we are going through.

This Is Your Crash!

Just last month, in September 2008 world markets crashed and entered a time of great volatility. In the weeks since then governments have taken drastic action to save their banks. Panic has hit the markets. Uncertainty and fear grips most economies. And in the lead up to this crisis millions of Americans have lost their homes. And to top it off the nation of Iceland is on the verge of bankruptcy.

People want to know how far this is going. Where will it end? Is this a recession or a depression? Is this survivable or is society going to change from this year on?

History of the Crisis

Firstly let’s review the history of the current crisis. It springs in large part from the Sub-Prime Lending problem. Following deregulation of the banking and financing sectors in many countries during the 1980’s money was made available to people whose ability to pay was not as reliable as was previously required to borrow money.

Prime Lending is for those who have good credit rating and strong asset backing. Sub-prime means they do not meet that standard. Loans were also treated as an asset by the banks and having a large number of loans meant lenders could sell those off.

In the 1990’s many new lenders paid good commissions to sales agents for selling their loans to people. Consequently millions of people who were not good credit risks ended up taking loans.

The large volume of business made the lending companies appear successful. International banks were keen to invest their money into the USA home market because of the high return they could get. Everyone knew it was risky, but no-one expected to get burned.

Problems with the subprime lending game were evident in the early 2000’s as many loans began to go bad. In Sept 2002 USA Home Foreclosures were at a 30 year high.

Yet the subprime lending boom continued and more billions were poured into this risky business from people around the world who wanted part of the profit.

By early 2007 the problem had escalated. In the first two months of 2007 22 American lending companies went bankrupt. There were 1.7 million foreclosures in America in the first 8 months of 2007.

By August 2007 international fall-out from the Sub-Prime Lending problem became a house-hold topic in Australia as we realised that many Australian and international banks were going to be hurt from their lending to the USA Subprime players.

Over the following year the shock-waves of the problem continued to reverberate, until last month, September 2008, when two major home lenders in the USA, Fannie Mae and Freddie Mac were taken over by the USA Govt.

The repercussions on many international banks who were players in the USA home lending market, either directly or through various indirect connections, means that some banks have bone bust while others have had to be bailed out by their governments.

The recent $700 billion USA commitment and $1,370 billion Eurozone plans are just part of the scramble to stabilise the world economies.

The Bigger Historical Picture

This is not the first great crash and it may not be the last. What is happening here is part of a long history of people getting caught out while trying to make a profit. Prognosticators have warned for decades that balance of payment issues, high levels of personal and national debt, and other pressures spelt doom for our economies. Yet corrections, collapsing markets, booms and busts have been part of history for a very long time.

Speculation, Boom, Bust and Bubbles

What tends to happen over and over again is that people who are keen to make a profit and get rich quick will catch on to something that seems popular. They are all hoping to strike it rich and make their fortune. This feeds speculation, inflates bubbles and leads to some of the booms and busts.

Millions of people have crossed oceans and faced all kinds of hardship because someone found gold in some place or other. These Gold Rush enthusiasts left whatever they had in the hope of finding much more.

In the same vein investors and dreamers have all jumped on the bandwagon when various things looked profitable, often losing all they had in the hope of gain.

Bubbles in the Bubbling Economy

A “Bubble” is created when false expectations are set up and a venture is made successful only because people invest in it. There have been many famous Bubbles down the centuries.

Holland had tulip mania in the 1630’s.

In 1720 just about everyone who had money in England was drawn into investing in what is known as the South Sea Bubble. English and American investors lost huge amounts of money in the hope of profits from ships going to South America. Isaac Newton and Mark Twain are said to be among those who lost money in that bubble.

There was the British Railways Bubble of the 1840’s.

The US Bull Market of the 1920’s created what we know of as the Roaring Twenties.

Florida had a Property Bubble from 1920-1925.

More recently we have seen the Junk Bonds in the USA, the Japanese Bubble economy of the 1980’s, the Dot.com boom of the 1990’s, Hedge-Fund Mania and even Enron Mania.

What is Really Going On?

So much for the background. That is cold comfort when we still don’t know where we are going and how bad it’s going to get. To take this discussion further I need to discuss what is really going on. That is the topic of a follow-on article which I’ll be posting in the next week.