Debasement and Crony Capitalism

By J. Richard Duke

Solomon: Nothing is New Under The Sun

trashSolomon stated that nothing is new under the sun:  “The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.”  Ecclesiastes 1:9.  The debasement or debauching of money or of currency is a perfect example that nothing is new under the sun; and rings true about most financial matters today. Debasement of money (silver), government actions against the people, lobbying for the benefit from kings (modern-day crony capitalists), and transfers (through debasement of the silver) to the government and crony capitalists, etc., has not changed since biblical times.

The debasement of money began in Biblical times with unequal weights and measures. Both relate to money (silver) debasement, improper weighing of grain, and diluting wine. The purpose of debasement of silver and the falsification of the weight of grain is always to increase the wealth of the king and the wealthy at the expense of the common man (the “Flyovers” as discussed below).  Against the debasement of money stands Austrian economics and the Bible. Both reveal the negative financial consequences to those not connected with the government (commoners) as contrasted with those connected with the government (kings and their cronies).

Austrian economics shows how the currency is debauched from inflation; and the consequence of inflation is a rise in prices—in general or in certain areas.  It teaches how the Federal Reserve creates the paper dollar (Federal Reserve Note) and also makes digital entries (digits of numbers) into bank accounts.  Both paper dollars and digital entries are created from no backing.  It teaches how credit is created out of thin air under the fractional reserve banking system.  And, the first recipients of this newly created currency and credit are benefitted at the expense of later recipients.  This expense to the later recipients is due to the loss in purchasing power (from the newly created currency and credit).

Those who understand just the basics of Austrian economics can teach people about their incorrect belief that price rises is inflation.  Austrian economics teaches that the rise in prices is due to the decreased purchasing power of the dollar which is caused by what the mainstream wants to hide: inflation.  It explains that inflation is the increase in the amount of money (currency) and credit, which results in the consequences of a rise in prices for goods and services.  Refer to the end of this post for a lesson with a one dollar bill.

Unequal Weights, Measures and Balances in History and the Bible

Before the first coins were minted around 640 B.C., merchants measured out pieces of silver and gold according to weight. As a result, terms of weight (such as shekels, minas, and talents) also were used to express amounts of money. In keeping with this practice, the translators of the Contemporary English Version (CEV) have sometimes expressed these weights using terms like “pieces of silver” rather than converting them to an equivalent metric weight. The fact that the biblical authors frequently warned against using dishonest scales and measurements is evidence that weights were not as precise then as they are now.  (American Bible Society).

Nehemiah: Government Tribute and Extraction; Crony Capitalism

In Nehemiah V, the king and his nobles extracted so much of the property and income from the people that many had to sell their children to stay alive. Nehemiah and the verses below show how the wealthy (and the government) get more and more wealthy at the expense of others.

And there was a great cry of the people and of their wives against their brethren the Jews. For there were that said, we, our sons, and our daughters, are many: therefore, we take up corn for them, that we may eat, and live. Some also there were that said, we have mortgaged [arab—pledged, exchanged] our lands, vineyards, and houses, that we might buy corn, because of the dearth [ra’ ab—hunger]. There were also that said, we have borrowed money [keceph—silver; and by implication money] for the king’s tribute [middah—height or breadth; a measure], and that upon our lands and vineyards. Yet now our flesh is as the flesh of our brethren, our children as their children: and, lo, we bring into bondage our sons and our daughters to be servants, and some of our daughters are brought unto bondage already: neither is it in our power to redeem them; for other men have our lands and vineyards. Nehemiah 5:1-6.

The English translation above uses the word tribute. But the Hebrew word (middah) means height or breadth; a measure. The measure (amount) of silver content in the coins was reduced, which is debasement. This particular reference to a measure involving silver is made as a warning: “You shall do no wrong in judgment, in measure of weight, or capacity. You shall have just balances and just weights.” Leviticus 19:35-37. “Differing weights and measures, both of them are abominable to the Lord.” “Differing weights are an abomination [tow’ebah—something disgusting; abomination] to the Lord, and a false scale is not good.” Proverbs 20:10, 23; 11:1.

“Thou shalt not have in thy bag divers weights, a great and a small.  Thou shalt not have in thine house divers measures, a great and a small.”  Deuteronomy 25:13-14.

“Saying, when will the new moon be gone, that we may sell corn? And the Sabbath, that we may set forth wheat, making the ephah small, and the shekel great, and falsifying the balances by deceit?”  Amos 8:5.

“Shall I count them pure with the wicked balances, and with the bag of deceitful weights?”  Micah 6:11.

Tribute (improper measuring; unequal weights and balances) to the king caused the destitution of the people as stated in the first five verses of Nehemiah V.  In contrast, the king and his cronies are wealthy. The king exacts income and property and requires the people to sell their sons and daughters into bondage with no power or financial ability to get them back because others (noblemen—crony capitalists) own their lands and their vineyards.

“And I was very angry when I heard their cry and these words,” Nehemiah states in verse 6.

After hearing the cries of the people, Nehemiah determined his action in verses 7-10:

Then I consulted with myself, and I rebuked the nobles [chor—noble in rank], and the rulers [cagan—a ruler; subordinate ruler], and said unto them, ye exact usury [mashsha—impose interest on a loan], every one of his brother. And I set a great assembly against them. And I said unto them, we after our ability have redeemed [ganah—to get, acquire, possess] our brethren the Jews, which were sold unto the heathen; and will ye even sell your brethren? Or shall they be sold unto us? Then held they their peace, and found nothing to answer. Also I said, it is not good that ye do: ought ye not to walk in the fear of our God because of the reproach of the heathen our enemies? I likewise, and my brethren, and my servants, might exact [nashah—to lend, be a creditor] of them money and corn: I pray you, let us leave off this usury.

Nehemiah rebukes the nobles (in modern terms, the government in partnership with the crony capitalists).

In verses 11-13 below, Nehemiah demands the king and the crony capitalists to return the people’s land, vineyards, olive yards, houses and all (one hundred) of the money, corn, wine and oil that were exacted from the people wrongfully.

Restore, I pray you, to them, even this day, their lands, their vineyards, their olive yards, and their houses, also the hundredth [me’ah—a simple number; a hundred] part of the money, and of the corn, the wine, and the oil, that ye exact of them.

Then said they, we will restore them, and will require nothing of them; so will we do as thou sayest. Then I called the priests, and took an oath of them, that they should do according to this promise.

Also I shook my lap, and said, so God shake out every man from his house, and from his labour, that perform not this promise, even thus be he shaken out, and emptied. And all the congregation said, Amen, and praised the LORD. And the people did according to this promise.

In the factual story of Nehemiah V, the king demands more wealth and assets—debasement of the silver—thus exacting property and lands from the people, etc., burdening the people with paying interest, while he and his cronies become richer. The king and his cronies are wildly benefitted, but there is no regard for the people. Instead, they are required to sell their children to survive.  How does Nehemiah react? “And I was very angry when I heard their cry (verse 6) and rebuked them (verse 7). Nehemiah, with the power of God, stands in the presence of these crony capitalists and rulers; and seriously asks them: “It is not good that ye do: ought ye not to walk in the fear of our God…?” (verse 9). And, the only way to walk in the fear of the Lord was to restore the people (verse 11) and not engage in further theft against the people.

Isaiah: Debasement of Silver; Harming Orphans and Widows

In the book of Isaiah, the government is likened to a prostitute; and their bad political acts cause destruction and death.  The silver was refuse and the wine diluted with water. Because of debasing the coins, the princes (government rulers) became rebellious and companions of thieves (crony capitalists and their lobbyists). This debasement caused the government and crony capitalists to love donations and bribes.  Lobbyists today use donations to bribe or sway congressman, the executive branch and others in the US government system. The consequences to the people from Isaiah’s time apply today: The lives of the orphans and the widows (those in desolate places) are of no concern to the government and crony capitalists.  Isaiah 1:21-23:

How is the faithful city become an harlot! [zanah—to commit adultry] It was full of judgment; righteousness lodged in it; but now murderers [ratsach—{piel} to murder, assassinate]. Thy silver is become dross [elyg—refuse], thy wine mixed with water [mayim—water; by euphemism urine or semen]: Thy princes are rebellious, and companions of thieves [ganab—stealer]: every one loveth gifts [shachad—present, bribe], and followeth after rewards [shalmon—bribe]: they judge not the fatherless [yathown—orphan], neither doth the cause of the widow [almanah—widow; a desolate place] come unto them.

Joseph: Reducing People to Servitude

Some 1,100 years before Isaiah, Joseph lived in Egypt where the people were enslaved because their money failed. When the money of the people of Egypt and neighboring Canaan disappeared, all Egypt came to Joseph and said, “Give us food. Why should we die before your eyes? Our money is used up [failed].” Genesis 47:15.

“Bring your livestock,” said Joseph. “I will sell you food in exchange for your livestock, since your money is gone.” So, they brought their livestock to Joseph and he gave them food in exchange for their horses, the sheep and goats, their cattle and donkeys, and he brought them through that year with food in exchange for all their livestock. Genesis 47:16-17.

When the money failed, the Egyptians had to sell their fields and give everything they had to Pharaoh resulting in their servitude:

When that year was over, they came to him the following year and said, “we cannot hide from our lord the fact that since our money is gone and our livestock belongs to you, there is nothing left for our lord except our bodies and our land. Why should we perish before your eyes—we and our land as well? Buy us and our land in exchange for food, and we with our land will be in bondage to Pharaoh. Give us seed so that we may live and not die, and that the land may not become desolate.”

So Joseph bought all the land in Egypt for Pharaoh. The Egyptians, one and all, sold their fields, because the famine was too severe for them. The land became Pharaoh’s, and he reduced the people to servitude, from one end of Egypt to the other. Genesis 47:18-21.

Modern-Day Unequal, Weights, Measures and Balances

Today, false scales and differing weights and measures are fiat currency and fractional reserve credit—currency and credit created out of thin air by printing paper or digitally entering legalized counterfeit money (debt) into bank accounts.  From the fingers of the Federal Reserve, a simple keystroke transfers credit, causing loans to be deposited, brokered through Wall Street banks, into the bank accounts of the US Treasury in exchange for Treasury bonds or securities (IOUs from the Treasury).

Most of this digitized credit richly benefits the government and their crony capitalist partners as first receivers of the credit.  This credit created by the Federal Reserve does not benefit most of the people of the United States, and is an unequal weight or scale benefitting the government, the elitists and others, and is an abomination to the Lord.  The teachings of the Bible are clear: “You shall do no wrong in judgment, in measure of weight, or capacity.”  These transactions—Federal Reserve, US Treasury, etc.—are judgments of benefiting targeted groups at the expense of larger groups and individuals.  The false scales and unequal balances continue today.

The zero-interest-rate policy (ZIRP), which is an extremely low, nominal interest rate established by the Federal Reserve, shows that nothing under the sun has changes, and is another example of unequal weights, balances, measures and false scales.

The consequences of ZIRP to many all people, companies and firms (not crony-capitalist firms partnering with the government) and retirement plans, is that little or no interest can be earned on investments, savings, etc. In addition, few small or entrepreneurial companies and firms can borrow for business purposes from banks to take advantage of lower-than-market-rates of interest on credit.

ZIRP benefits Wall Street banks, the government, and crony capitalists. Wall Street banks borrow at low interest rates from the Federal Reserve and make risky investments; the government borrows and repays these loans also at low interest rates (such as to the Federal Reserve as creditor); and, the government supports and hires crony capitalist companies. The Wall Street banks, government and crony capitalists are first recipients of this newly created fiat credit (created by the Federal Reserve). The foregoing benefits to the few are harmful to the people (mainstream Americans) because they are not first recipients of this credit. This inflation (creation of newly created credit) has the consequence of causing prices to rise, as we see in the super market or grocery stores.

Mainstream Americans can earn little or nothing on their savings, their investments, including their retirement plans. ZIRP loans benefit Wall Street banks, government, and crony capitalist companies and represent a false balance to mainstream Americans. The Wall Street bankers are capable of making large returns on their investments until the investments blow up contrasted with the financial repression of mainstream Americans, such as nongovernment-connected businesses, firms and individuals.

Wall Street banks use ZIRP to borrow at extremely low interest rates from the Federal Reserve, which allows the Wall Street bank, with all its power, connections, etc., to make risky and large investments around the world often with huge returns (until the investments blow up), further allowing those working at the Wall Street banks to receive huge salaries and bonuses. While the Wall Street banks are making large returns on investments, the mainstream Americans, or the “Flyovers” as referenced to by Mr. Stockman, earn little or nothing on their investments.

David Stockman in his latest book, Trumped! A Nation of the Brink…And How to Bring It Back, along with others, discuss risky investments relating to real estate/mortgages that failed in 2008. How were these failed malinvestments handled? The banks were bailed out, paid for by Americans who earn little or nothing on their investments, savings and retirement plans.

The financial benefits to Wall Street banks derived from borrowings at the Federal Reserve, at the expense of others, are unequal weights and measures.

Mr. Stockman states in his book, at page 307:

What kind of crank economics contends that brutally punishing two of the great, historically proven economic virtues—thrift and prudence—is the key to economic growth and true wealth creation?

Indeed…Fed policies currently result in a giant fiscal transfer of upward of $250 billion annually from household depositors and savers to the financial system and ultimately to Wall Street speculators.

Love of Money

Fiat currency and fractional reserve credit are extreme examples of unequal weights, measures and balances. Most of the digital currency and credit benefit first recipients, such as the government and crony capitalist companies. The monetary system reflects Biblical words: “For the love of money [philarguria—love; avarice] is the root of all evil [kakos—of a bad nature; wicked]: which while some coveted after [oregomai—to give in to desire], they have erred [apoplanao—to lead astray] from the faith [pistis—conviction of the truth of anything including that God exists], and pierced [peripeiro—to torture one’s soul] themselves through with many sorrows [odune—consuming grief; pain, sorrow].” 1 Timothy 6:10.

A hundred years after Solomon stated that nothing under the sun is new, the Book of Amos, shows the mistreatment of the needy:

“Hear this, O ye that swallow up [shaph—gasp, pant after] the needy, even to make the poor [aniv—depressed, weak, afflicted, humble, meek] of the land [erets—whole earth] to fail [shabbat—{Hiphil} to cause to cease, exterminate, destroy]. Saying, when will the new moon be gone, that we may sell corn? And Shabbat, that we may set forth wheat, making the ephah [a measure of grain; a measure in general] small, and the shekel [a weight used as a commercial standard] great, and falsifying the balances [mozen—scales, balances] by deceit [mirmah—deceit; fraud]?” That we may buy [qanah—to acquire] the poor [ebyown—subject to oppression and abuse] for silver, and the needy for a pair of shoes; yea, and sell [shabar—deal in grain] the refuse [mappal—fallings; chaff] of the wheat [bar—corn, grain]?” Amos 8:4-6.

Amos, prophet of God, challenges practices that create untrustworthy markets. God does not condemn markets. Rather, God’s laws are about creating trustworthy markets, which create social prosperity and from fair exchanges. For Amos Commentary, click here. Throughout time, the lives of orphans and widows have been of little or no concern to the government and crony capitalists.

Final Score

Kings and Cronies – 1; Commoners – 0

The Nehemiah’s of today can level the playing field and even the score, by heralding the message of today’s financial truths. And, for all who will listen, I refer you to the study of Austrian economics to explore and understand fiat currency, fractional reserve credit, the consequences of inflation, activities of the Federal Reserve, etc. I invite you to learn about Biblical economics, which understanding is helped by at least understanding the basics of Austrian economics.

Jesus said: “And you will know the truth and the truth will set you free. John 8:32. “Truth” in the Greek in this verse and many other verses of the New Testament is aletheia, which essentially means knowing what is going on around you (reality). When a person learns a truth about himself, God can then confront that person. Peter denied Christ three times and was confronted with two truths: he was arrogant and not as strong as he thought. From this confrontation, Peter could deal with the problems and thereby be set free (in these areas). When a person learns the truths as highlighted in in this post about what in reality is happening around them, they become free to decide for themselves about many matters, become better equipped to plan for their futures, and become empowered as to how to better protect their assets.

Opportunities for Teaching

The next time you are at the supermarket or grocery store, and a person in line questions why prices on certain items have increased, take the opportunity to teach a truth: Take out a dollar bill and show and explain that it is a Federal Reserve Note: a piece of paper created by the Federal Reserve and not by the government. Explain that more of these pieces of paper and digital entries created out of thin air constitute inflation. The rise in prices is the consequence of this inflation of dollars; point out that most Americans are wrongfully and improperly taught that inflation is the rise in prices.

Until we learn the truth about the monetary system in the US and the negative consequences, we cannot understand how to financially protect ourselves. False balances, weights and scales are still happening today. Benefitting the first recipients of the newly created currency and credit at the expense of the later recipients continues today.

serveimageDietrich Bonhoeffer, the great German theologian who is often referred to as a pastor, spy and martyr was hanged at age 39 at the direction of Hitler a few days before Germany surrendered stated:

“Silence in the face of evil is evil itself.”

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