Thoughts on Markets

Wednesday, May 28, 2008

Gold and Silver Returning a Bit -- Looking at Debt



I am still amazed at the steepness of the drop (See the red traces on both graphs) near the New York open yesterday in the prices of both of these precious metals. It is so obvious that the market is being manipulated by the very largest investors. Tuesday was also the expiration date for the options which seems to be the reason for the downward push in prices. A large share of the Call options on the metals were closed out without value as the prices dropped. This allowed the sellers of those option to have all of the costs of the options safely put into their own pockets as the holders of the options suffered their losses. Both metals are showing some recovery today (green graph lines). Gold is now at 898.30 and silver 17.39.

The hit in the metals was much more severe than that of the miners. Yes, the miners were hit, too, but not nearly as badly. In fact, many are holding on very nicely and even up more today. The market vector miners broke the 200 day moving average, but are still holding quite well in spite of the move in the metals, themselves.

On to the application of biblical principles to Economics and Politics.

Today, I would like to look into the biblical view of debt: lending and borrowing. I have previously discussed how the fractional banking system allows banks to create paper currency with every loan they make. Then they demand payment of interest on every loan. They have a business where they are able to create out of nothing, at no cost, a rental item, rent or lease it, and then collect rent (interest) from the renter (borrower). That, my friends, is a great business to run. Of course, were we to try the same business, we would be arrested and convicted of counterfeiting and likely usury (excessive interest charged). With the help of Federal legislation, banks have this power as monopolies in every nation in the world.

Romans 13:8 tells us, "Owe nothing to anyone except to love one another; for he who loves his neighbor has fulfilled the law." Certainly, the last part of the verse is vitally important. Scripture overflows with commands to love one another. For example: Ephesians 5:1-2a, "Therefore be imitators of God as beloved children; and walk in love, just as Christ also loved you. . ." Or Matt. 19:19b, "You shall love your neighbor as yourself." I would suggest that this is the major emphasis in the verse; however, it does say "Owe nothing to anyone."

Pr. 22:7 warns, "The rich rules over the poor and the borrower becomes the lender's slave." Yes, in fact, debt is a form of slavery. The borrower gives up a portion of his freedom when he goes into debt. 1 Corinthians 7:23, warns, "You were bought with a price; do not become slaves of men." Thus, it seems that, as Christians, we are not to be in debt, but then God does give guidelines for debt under the correct circumstances. We will go into that on the next posting.

In 1988, S. C. Mooney wrote Usury the Destroyer of Nations. His basic premise is that nations which borrow from other nations will be destroyed as the debt grows. I suggest that that is the situation in America today. The U. S. of A. was once creditor to the world. Almost all of the world owed us. Now we are the nation with the greatest debt. In fact, our governmental, business, and individual debt is above any that has ever before been seen in the world. This is a problem which is unfolding now. We must pray that King Jesus will provide leaders who will save America before it is too late.

Best to each, Doug

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