“If they hear and serve Him, they shall end their days in prosperity, and their years in pleasure.” Job 36:11
By Ron Dorner
In the last issue, I spoke of the importance of Christians seeking God’s guidance in their personal finances. If ever there was a time to be sensitive to God’s leading in this area, it is now.
It is an art to study economics and determine what will occur in the future. Often there are conflicting analyses. In this issue, I wish to share my view on the future of the U.S. economy, based on more than 20 years of study.
I believe financial disaster looms ahead for many. It is important to realize not all of what the press and government tell the public is accurate. Remember when the economy is going downhill, the last thing the government wants is for individuals to become financial conservatives.
Because your future financial survival is tied to the U.S. economy, it is important to realize there may be a problem and act accordingly. It is impossible in this limited space to give all the reasons and facts which have brought me to this gloomy prediction, but here are a few facts:
Real estate prices are in a bubble.1 Unreasonable lending practices2 may result in a coming worldwide financial mess. Already billions of dollars, euros, and other monies have been printed and pumped into the world systems3 to try to help. A significant part of the U.S. economy will feel the effects of this real estate bubble. Large portions of our economy are tied to real estate.
The U.S. has become the lender’s slave (Proverbs 22:7). Much of the money needed to run our government comes from Treasury bonds. Currently China and “not so friendly” countries4 hold more than one third of these bonds. The Federal Reserve (who sets rates of interest on Treasuries) has a serious problem. If they lower interest rates to help the economy domestically, they will see China and other nations flee from Treasuries; hence no money to run the U.S. government.
The U.S. citizenry is not ready for the times ahead. Most have way too much debt.5 When the slump comes full force, many will be faced with bankruptcy. One alternative is federal bailouts for homeowners, builders, lenders, etc. If this is done, it will be very inflationary. If it is not done, large numbers of people will lose their jobs.
Remember, it is within the power of the U.S. government to change the worth of your money. Today it takes 24 percent more dollars to buy what you bought 10 years ago.6 And that was during fairly good times.
I am not trying to scare you. I am trying to prepare you for what might be ahead.
What should you do to minimize the impact on you and your family? Here are my recommendations.
Pay off as much debt as possible.
Don’t buy on credit, if it can be avoided. If you must borrow, do it only with fixed interest rates.
Create a written plan to implement should you lose your job(s).
Have some emergency money set aside.
If you have investments, get serious about reducing your risk.
— Invest in a variety of companies/mutual funds including internationally.
— Keep 10 to 15 percent of your investments in gold, silver, or gold/silver mining companies.
— Consider legal ways to place some of your money away from the influence of the U.S. economy.
My prayer is that we will not see serious financial difficulties as a nation. However, as I read Scripture, I see no mention of the United States in the end times. From observation, I feel that the average U.S. citizen’s obsession with material things and a turning away from God may be the underlying cause of economic failure.
Are you listening — not to me, but to God? Plead your case before the Almighty, seek His will for your financial needs, and trust in Him.
Ron Dorner is director of Biblical Money Management. BMM has been helping believers handle their finances and estate planning since 1984. Online counseling is available at www.BiblicalMoneyManagement.com.