In the lifetime of most people living today there’s never been such a time as this. Barroso, the President of the European Union, has called it ‘unprecedented’.
Some banks and key financial institutions in certain national economies, particularly in the prosperous western world, are either being bailed out by national governments or going to the wall. We hear of 're-capitalization' in parts of the western world as some banks become nationalized, or governments at least become majority share-holders in them. Because of the behaviour of its banks, one entire country, Iceland, has taken the unusual step of asking the International Monetary Fund (IMF) for assistance.
Generally, banks appear to have lost confidence in lending to each other. Businesses, especially small businesses, are finding it hard to get credit which means they are being ‘crunched’ – with a real risk of being squeezed out of business.
In certain of those countries where there is high home ownership (like UK, USA & Spain), prospective home-owners face tumbling house prices as credit for house purchase becomes increasingly - perhaps prohibitively - expensive and the housing market stagnates. The 'sub-prime' housing market – high risk mortgages – in the USA was the trigger: too many lenders burned by ‘dodgy’ loans. People are left exposed financially, as their assets are now shown to have been over-valued.
Stock markets all around the world have suffered major falls - bad news for many who need to cash in company shares for their pensions. Also exposed were practices like 'short-selling' – another obscure term which has become a household word – referring to the practice of traders borrowing shares, selling them before they fall in value, then buying them back at the cheaper price, before returning them, having pocketed a profit in the process.
Did the Bible predict this? Well, it does speak of a time when people will be 'lovers of money' (2 Tim 3:2), and there’s no doubt that greed - even institutionalized greed - has been largely responsible for this major crisis which threatens to plunge the world into economic recession and 'negative growth', a curious euphemism if ever there was one. We’ve also had a dramatic demonstration of just how interlinked the world's money markets are – to the extent that rogue trading in one market can even seem to threaten crippling not just one country’s economy but substantial parts of the entire global system. We might not have thought that was possible before, but we do now. It shows how believable is the word spoken in the Bible (Rev 18:17), when 'in one hour such great wealth has been laid waste'.
Financial upheavals, on an even greater scale, it seems, are to be expected as the world heads for the dramatic upheavals which the Bible’s last book describes. Then, the political landscape will change quickly when one man rises to such power that he’ll be able to exercise global control over commerce – to the extent of determining who will, and will not, be able to buy and sell (Rev 13:17).
Stemming from the current credit crunch, there's now, at the very least, a more widespread recognition that the global banking system needs to be reviewed and what the world really needs is 'a new financial world order’. It’s some 50 years since the first, and until now reasonably successful, worldwide system was established in the aftermath of the Second World War. Now, in times of relative global peace, it appears to need revision. How long until further change is required? Will such periods of reform get shorter and shorter until the days of the coming Dictator? And will governments become ever more co-ordinated and centralized and less free-market friendly until that time?
We’ll simply have to wait and see if this is a mere blip or a step towards the fulfillment of yet another of the Bible’s end-time prophecies. However, what the current credit crunch really does demonstrate is the timeless truth of the Biblical proverb: ‘Whoever puts up security for a stranger will surely suffer harm’ (Prov 11:15) – and we’ll certainly be wise to put our hope in God and not in ‘the uncertainty of riches’ (1 Tim 6:17).
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Ontario, N America
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