Are we going to face inflation or deflation?… and why you should care on some level.

There is a battle commencing between the minds of two economic groups… both predicted the current crises, both are filled with intellectual powerhouses.  This battle can be summarized as a war between two economic schools: the Austrian vs the post-Keynesian.  It’s a war with heroes and legends.  The Austrian school’s prized fighter are Peter Schiff, Ron Paul, Jim Rogers and Marc Faber.  The post-Keynesian’s have Steven Keen, Mish (who copies Steve) and a number of others.  The war is this… will this global financial crises lead to INFLATION or DEFLATION.

An excellent question. though most would say ‘who cares’?  Let us examine the end result of each scenario:

INFLATION       The value of your money progressively decreases as central banks print enough money to prevent deflation (a contraction in the money and credit supply).  Anyone who has a debt will have no problems paying off the nominal value of the debt, as the nominal value of your wage increases over the nominal value of your debt.  Example: this year the price of bread is $1… next year the price of bread is $3.  I have covered this phenomena in some detail in previous posts, I encourage you to ask me questions if you still want some help understanding the concept of inflation.

DEFLATION      The value of your money progressively increases as central banks are unable to print enough money to prevent the contraction in the money and credit supply.  If you have a debt, it is almost impossible to pay off the debt as it’s real value increases (nominal value is unchanged) while the nominal value of your wage decreases.  Example: the price of bread decreases from $1 to 50 cents in one year.  The collapse of lending, increased number of loan defaults, all contribute to a contraction of the supply of money, which makes the individual value of money greater (think the polar opposite of inflation).

In short… INFLATION = good for people with debts.  DEFLATION = bad for people with debts.

Now “deflationists” will not contend with the assumption that INFLATION can occur, even hyperinflation like Zimbabwe, but they see it as highly unlikely as the level of money printing would be astronomically high.  Furthermore, any attempts to neutralize the effects of deflation with money print would hopelessly collapse as seen with the central bank of Japan in the Asian Financial Crisis.  Also, any money that is printed goes directly to creditors and doesn’t touch the local economy to raise the price of everything.  Post-Keynesian economists like Steven Keen, a man whom I deeply respect, also contend that there is evidence to suggests that the money print by the central bank precedes the increase in the money supply (M2 to be exact)…. which means that the central banks are printing money in response to bank insolvency.  Thus, the increase of $1-2 trillion in the Federal Reserve’s balance sheet was in response to the ‘bank runs’ which took place at the end of last year, rather than an effort to create new money to pump into the local economy.

Inflationists on the other hand say that the government is perfectly willing to go as far as to print our way to hyperinflation.  More importantly, that the government is currently pursuing a course that will inevitable lead to hyperinflation.  They contend that the government has a course of trading private debt with public debt, these are also known as bailouts and they continue to this day as the government is pursuing a relentless nationalization agenda.  This isn’t perceived to be so much of a problem as the price of the debt (i.e. the interest rate) is quite low, thanks to the majority of the debt financed by short terms T-bills (1-3 years bonds).  When these bonds are required to be paid off, the government rolls the debt over into new bonds… or simply put, it borrows money to pay off borrowed money.  This is somewhat manageable when the economy is in a boom phase, where there is predictable growth that can theoretically outpace the increase in debt.  The failure of neoclassical economics for both monetarists and Keynesians was that their models assumed the the economy would be in perpetual growth, which was found to be the case as gravity exists in the economics in the form of finite resources.  As the government increasingly swaps more private debt with public debt and simply rolls over the debt repayments, exponential functions take over and the debt servicing on the debt starts to become impossible.

Pretty soon, people who buy the debt (like China and Japan) start to realize that the US is not going to pay back that money with any real value and stop purchasing this debt (they already have btw).  This forces the US to start doing something called ‘quantitative easing’, which means that the central bank prints money and buys it’s own bonds.  As the money print continues, the government starts to pay creditors the freshly printed money.  These creditors want to dispose of this currency either through exchange into their own currency (as most of the creditors are foreigners) or they will spend it on raw materials or even US financial assets.  As more US money abounds, the value of this money begins to decrease, even outside the local US economy.  As the value of the dollar decreases, the US central bank will be in a trap: the only way to defend the value of the dollar is to raise interest rates, but this will increase the amount of debt the government as to go into to service the existing debt.  And, if the interest rates rise, all of a sudden the credit based economy grinds to a halt as no one can pay back their debts.  If the central bank chooses to ignore that the value of the money is decreasing and the prices of everything are increasing, entering into hyperinflation will occur more rapidly than anyone predicts as they will eventual ‘turn the corner’ on the exponential curve of the depreciation of the US dollar.

The Japanese example isn’t applicable, the inflationists say, as the nature and origin of Japan’s productive capacity and creditors are completely different to the US.  Also there is the tiny little fact that Japan is the largest creditor nation in the world, while the US is the largest debtor nation.  This is a striking point between the two schools… the PKs say that the scale of the debt black hole is too enormous for pure money printing to overcome.  The Austrians are saying that the money printing is being used to swap the private debt with the public debt, and if this process continues then the value of the currency will collapse.

So… which one is right?  The answer is, no one really knows.  Some people will say ‘I’m 100% sure this way or that way’, but in reality, we’re all just economic geeks watching the carnage unfold.  This is exciting to watch, but painful in reality to the people at the bottom of this gigantic pyramid scheme that we call money and banking.

Personally I’m not interested in the little esoteric arguments between the economic schools… and there are many.  I think there’s value in the analysis of the financial system from both schools and both possible scenarios make sense and are plausible.  We’ll just have to see what happens.  In any case, my advice is to horde faith in God and put your money in assets that will protect you from either scenario, which are precious metals (i.e. gold, silver, platinum).

God bless,

Washo

PS   And if you’re a US citizen, support bills like H.R. 1207 ‘The Federal Reserve Transparency Act’ aka ‘Audit the Fed’

I’m alive… I’m alive!!

Hey guys, for those who weren’t disheartened by my lack of activity on this blog and occasionally check-in, just letting you know that I’m still alive and kicking.  Since my last post, the following has happened in my life that has occupied my time:

1)  I finished PhD

2)  I got married

3)  I went on my honeymoon

4)  I moved into my new house (we’re renting, in case you were wondering)

5)  Adjusting to all of the above

Loads of stuff has happened since the last time we’ve talked… there is so much to comment on, I don’t know where to begin.  At least I’ll start by saying that I’ve been invited to contribute to a blog called http://www.aussienomics.com , which is a site devoted to hosting the Austrian school point of view of economics that affect Australia and the world.  So I’ll post to let you know that I’ve posted there.

Ok, that’s all for now.

God bless,

Washo

The Budget: I’ve had softer toilet paper…

This year’s Federal budget was nothing short of an unmitigated disaster… with a deficit of $50 billion, $200 over the next 4 years.  These nominal levels of debt have never happened before in the history of Australia.  But we are assured by our fearless leaders and economic experts that the solution to an international credit contraction is deficit spending and that we must ’spend’ our way out of this.  I have to restrain myself from calling them names in public… I don’t know what disturbs me more though: 1)  The shocking ‘Robin Hood’ budget and it’s ceaseless class warfare OR 2)  Nobody seems to care, we’re too busy watching ‘Gossip Girl’.  People don’t understand the magnitude of the things going on around them… fine, not my problem.

Here’s my breakdown of the budget:

1)  Economic Growth to fall to -0.5 per cent of GDP

This is just a fantasy… only falling by -0.5%!!  This is delusional if not morally repugnant.  It also happens to be built on an assumption that inflation will average 1.75% next year….

2)  Inflation to average 1.75 per cent

This number is also a fantasy.  All government stats are worth less than the paper they’re written on.  I suggest you do some research on hedonics to understand what I mean.

3)  First Home Owners Boost continued for six months

This program is the peak of moral hazards… house prices have already started to collapse, in spite of this recent boost.  The extension of this program will not stop house prices from falling… the party is over.

4)  Small Business and General Tax Break increased to 50 per cent for order this calendar year

This is one of the few decent moves made by the policy makers… the law of large numbers dictates they had to accidentally get something right.  The issue here is that these tax breaks are canceled out by increases in the Medicare Levy.

5)  Infrastructure spending to total $22b.  $8.5b for road, rail and port.  $4.5b on new clean energy initiative

Infrastructure spending is lower than previous government.  Contrary to popular believe, infrastructure don’t actually make you any money… it just employs people with borrowed money that each individual has to pay through higher taxes.  Unlike this budget, previous governments have spent more on infrastructure with taxpayer/surplus money, not borrowed money like this government.  Infrastructure spending in a time of recession is an old Keynesian economic myth… borrowing money to pay myself for remodeling my house, when I’m unemployed, doesn’t somehow save me out of bankruptcy.

6)  $5.3b on tertiary education, research and innovation.  $2.5b over five years to drive hospital and health workforce refor.  $3.2b from Health and Hospitals Fund to modernise hospitals and and improve cancer facilities.

Of course I don’t think that the government shouldn’t be involved in any of these areas… but that’s my libertarian quip.  In reality, the government is driving the cost for tertiary education, research and health care higher each year.  Each year the government tries to out-do the previous year’s spending on health and education so they can gain political brownie points to look like they’re doing something about these issues.  Well they are: making them more expensive.  If you’re a health care provider and you knew you were going to get money next year from the government, what would you do?  That’s right, costs would mysteriously get higher and there’s no incentive to compete.  The only way for health care to become affordable and prices to drop is to privatize them… let health care providers compete for the best services at the lowest cost.  Poor providers will lose money due to lack of business… excellent health care providers will be rewarded with better business and more capital.

7)  Private health insurance rebate reduced for higher income earners

The government shouldn’t be providing for an insurance rebate or anyone… now higher income earners will have to pay for everyone’s health insurance rebate.  No they don’t deserve it, it’s legalized theft based on a Marxist view of class warfare and retribution.

8)  Medicare Levy Surcharge increased

This is stupid… you don’t raise taxes and raise ‘levys’ in the middle of a full blown recession, when money is contracting.

9)  $731m over five years for paid parental leave scheme

This one has to be one of the worst proposals by the government.  Paid maternity leave sounds compassionate, but it will put extreme pressure on businesses who have to employ staff taking maternity leave, while paying both workers.  What will this lead to:  higher prices for goods and services.  The money has to come from somewhere… $731 million over 5 years is nowhere near going to cover the costs, the shortfall will be paid by business and prices will go up.  This legislation benefits some and the expense of everyone else.  Why should businesses pay for someone who isn’t working?  It’s a path to bankruptcy.

So you know that I’m not a monster, I remember the days when a husband could go off to work and earn enough to pay off a mortgage and thrive, while the mother could stay home and take care of the family (if she choose to).  Thanks to inflation and the housing bubble and credit expansion, brought to you by the last three governments, this is no longer possible.

10)  Pension age increased progressively to 67 years by 2023

Not a popular decision, and not a necessary one if we reduced a lot of our other spending.

11)  Single Pensioners to get extra $32.49 per week, couples to get extra $10.14 per week

Yes the government is subsiding death and divorce… well done.  Was it so hard to give every pensioner at $32.49/week increase?

12)  New $600 a year Carer Supplement for all Carer Payment recipients, plus allowance

Grudgingly in favor of this one.  It would be better if families took care of their grandparents rather then getting a carer for them.

13)  Extra $650m in funding for border protection

Excellent move… a national defense is a legitimate operation of the government.

These are my broad strokes comments about the budget.

God bless,

Washo

Economic Recovery: my 5 point plan… (also known as stay out of other people’s businesses)

Star Trek comes out this week... I thought this was appropriate.

Ok so people wanted my 5 point plan on how to fix the economy, so here it is.  It is grossly simplified but the general principle is totally relevant and effective.  I guess I should start by saying that no one man can ‘fix’ the economy or no ‘party’ or government can fix the economy… the economy will be fixed by individuals in a free market with the liberty to do so, the only thing that the government can really do is get out of the way, uphold civil liberties and protect against fraud.  Ok, onto the plan:

1)  Let companies fail.

Many companies are over-leveraged and unable to clear their balance sheets to go afloat… they should be allowed to go bankrupt.  Yes people will be unemployed.. unemployment will rise to 20%+, but this will be a temporarily disposition rather than an enduring 10 year reality like the Great Depression (where the government interfered horrendously with the economy).

One argument against this is that the financial systems would collapse if this occurred, due the securitized debt problem (hundreds of trillions of dollars).  The short answer to this is: sure lots of companies and over-leveraged institutions would fail and there would be a ripple effect.  However, individuals and businesses who built solid companies and protected the value of their wealth will be at the forefront of rebuilding the nation’s economy.   Not all of the banks are broke under capitalized and these will emerge as the new major banks in the country.  The financial system has been built on sand, the best way to reestablish a sound one is to let the old one collapse and let the competent people (not the government) rebuild it from a solid foundation… which brings me to point 2.

2)  Eliminate fractional reserve banking, replace with 100% reserve banking with optional debentures.

Fractional reserve banking is the very mechanism of inflation that allows massive asset bubbles to inflate and the crazy credit expansion to occur (i.e. securitized debt wouldn’t have expanded to the levels it has presently reached without fractional reserve banking).  This is more effective than regulation at preventing something like the current crises from happening again.

Optional debentures are like a fixed term deposit, where the money you deposit will be lent out to individuals/businesses.  This essentially means that you can place your money where it will be treated like classical fractional reserve banking… this fulfills a legitimate part of investment in the economy without tying it so intimately to people’s savings.  At the moment if the banks lend out all the money you’ve deposited, and then you show up and ask to withdraw your money, the bank borrows another bank’s money or the Reserve Bank’s money… which is incidentally somebody else’s money or freshly printed money in the case of the central bank.  This is the major tool for inflation and is a hidden tax on the population that people pay through higher prices (let me know if you want a further explanation of exactly how that works).

3)  Reintroduce private coinage.

Classic Hayek proposal that is actually better than reintroducing a gold standard.  This will essentially create a free market and competition in currency where towns, states, private firms or banks can issue their own currency.  These currencies can compete with the national currency, so essentially this breaks the money monopoly held by the government.  Here you can have firms or banks issue 100% backed currency, which will undoubtedly be the currency of choice over the current fiat money.

How this will work is that one day you go to Bank X and give them $1000 Australian dollars.  They use this $1000 to purchase the equivalent amount in gold, say 1 ounce of gold.  Instead of giving you a 1 ounce gold coin, they hold the gold in their vaults and give you paper certificates.  These paper certificates can be exchanged at the bank at a moments notice up to the 1 ounce of gold you purchased.  Alternatively, if you want to buy a suit, you can give these certificates to a suit vendor in exchange for the suit you wish to purchase.  The vendor can then go to the bank and withdraw the 1 ounce of gold.  If however you wish to pay for the suit in Australian dollars, you are free to do so… which is exactly the point, you have freedom to choose your medium of exchange.  Inevitably, there would be a move to use currency backed by precious metals such as gold, silver or platinum… maybe even diamonds.  Why?  Because the medium of exchange, the paper money we all know, is redeemable in a real asset that has real value.  This would be certainly preferable to government printed money which is backed by nothing… at all.

4)  Cut government spending… drastically.

The Federal government should have very few enumerated powers… primarily national defense.  A lot of the money for programs that include welfare, health care, education etc are completely unnecessary and actually make problems a whole lot worse.  I have two views that you must pay attention to before you label me a monster:

a)  A utilitarian argument that shows simply that a government controlled bureaucracy will ultimately be less efficient, more wasteful and poorly managed compared to a number of privately owned firms competing for business (note the key word is competing).

b)  If you really really think that the government should pay for everyone’s health care, education, welfare… fine, make your case to the local State government.  A big over-reaching Federal government will surely make things worse and will tax the people of one State to pay for the health care/*insert government program here* over another State.

I mean even I think that there’s a role for government to pay for people in society who absolutely can’t work through no fault of their own… but I don’t want a Federal government to do this, I’d prefer the State government to take care of it.  Even better I’d prefer the church to go back to it’s roots and take care of the defenseless, but that’s a separate issue altogether.

With spending cuts in the Federal budget, you will be a position to eliminate the income, capital gains, GST etc  Very few taxes would be necessary to fund the necessary responsibilities of a Federal government.

5)  Eliminate the Reserve Bank of Australia

No more centrally planned economy, no more artificial setting of the interest rates.  Interest rates must be based on the proportion of savings to money lent out (this is especially relevant if you do not eliminate Fractional Reserve Banking, but still valid under the optional debenture system).  No more printing of money, not more market operations, no more lender of last resort (if banks don’t have enough capital due to poor management, they go bankrupt) and no more purchasing of government debt with printed money.

Ok that’s my plan…

God bless,

Washo

How the government steals $900+ from you, and makes you feel good about it!

I have heard many positive comments about the $900+ stimulus check, generously stolen given by the Australian government to most Australians.  I’m not here to argue about all the wonderful things you’re going to do with the money – I know what I’ll be doing with it – but I want to remove any warm fuzzy feelings you have about this whole plan and dispel any propaganda misconceptions you may have.

1)  The government DOES NOT have any money to give you… the government only has money that it TAKES from you and REDISTRIBUTES, largely for political purposes.

What the government doesn’t tax, it borrows (which must be paid for by increased taxes).  When the government doesn’t tax or borrow, it prints… which causes inflation – otherwise known as the the unofficial sales tax for existence.  So let’s apply this point… the $900 you are receiving in the mail doesn’t come from money saved by the government (as it has already spent all of it’s budget surplus).  It is giving you borrowed money that it has to pay back… and when I say the government has to pay it back, I mean YOU have to pay it back through HIGHER TAXES.  Which means you’ll end up paying way more than $900 over the next couple of years, which is essentially an ADVANCE.

Let’s put it this way.  How would you feel if I took $900 from your wallet,  and you didn’t know it was me.  And then I generously lend you $900, with interest of course, in your time of trouble?

2)  The government is giving money to you to delay the Australian economy from IMPLODING…

Our GDP (gross domestic product, size of our economy) is approximately 70% dominated by the service sector… or in other words, CONSUMPTION (e.g. buying plasma TVs, iPods, clothes, cars and homes).  A large portion of this consumption is financed by DEBT… debt can only be serviced by wages from EMPLOYMENT.  What has happened over the last 10+ years is that debt has expanded from massive HOUSING BUBBLE in Australia… or in other words, people have used their houses like a giant ATM card.  Provided the prices of houses increasing, the amount of debt we could use to CONSUME increased.

But the bubble is now bursting… people can’t afford their houses, servicing debt is unsustainable, house prices are falling and UNEMPLOYMENT is skyrocketing.  What does this mean: no employment = no money = can’t pay debt = can’t buy stuff = contraction of GDP = more unemployment (lay off retail sector jobs) = no money = can’t afford mortgages or credit cards = etc… the circle of ‘death by debt’ continues.

So by giving everyone an ‘advance’ of $900, the government is telling people ‘PLEASE GO OUT AND SPEND!!!’ to stop our economy from crashing… but any reasonable person will see that this plan will only cause more problems than it temporarily solves.  Not only will people have to struggle to pay debt, now they have to pay higher taxes.

I’d like to say my 5 point plan to what should be done, but I know it will never be adopted… so I won’t waste my time.  Let me make a personal appeal to you instead: don’t waste the money.  Either pay off debt or invest the money into something that will make you money (yes there are still places that are legitimately making money – NOT HOUSING).

So do you research, don’t perish because of lack of knowledge.  Most importantly, trust God… He is your provider, not the government.

God bless,

Washo

Suggested reading:

www.debtdeflation.com/blogs

www.mises.org

The point of Easter…

This may seem strange that I have dedicated a blog post to talking about the meaning of Easter, because you might think it’s pretty obvious.  Well I disagree.  I think most people get the front-end of the story but they’ve missed the purpose and reason why they should respond.  Let me explain.

The bread and butter message of Easter is that Jesus Christ, a sinless and innocent man… the Son of God, was nailed to a Cross, dying in your place for the sin that you personally have committed, buried in a tomb and then was literally raised from the dead on the 3rd day by the power of God the Father.

You know this, but this isn’t just a nice story that doesn’t involve your participation.  It requires a response from you as Jesus said in John 3:16:

For God so loved the world that He gave His only begotten Son, that whoever believes in Him should not perish but have everlasting life.

It’s not enough just to know the story and think it’s nice… you need to believe in Jesus in your heart that the Easter story went down just as the Bible describes it did.  In other words, it requires faith from an individual to fulfill Romans 10:9:

That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved.

Alright… saved from what?  A lot of people like to use a politically-correct word for hell which is ‘a Christ-less eternity’.  Frankly though, many people are living in a ‘Christ-less reality’ right now… as in they don’t know Jesus or have any relationship with Him at all… so why should they be afraid of eternal life like that?  Of course the seriousness of the decision to be saved or not hinges on what happens if you say no: you go to hell when you die.

Now this shocks most people because they don’t think that they deserve to spend eternity in complete darkness, alone and in the torment of a lake of fire… with no parole, no one will ever intervene or care, forever.  But we do, we all deserve hell because we have chosen to sin (i.e. break the 10 commandments)… and if we were never to die on this Earth, our every thought and action would be sin perpetually (which means perpetual murder, lying, stealing, sexual immorality etc).  Some people are already like that, but even the nicest person you know hates God by default and everything He stands for… and when push comes to shove, they will sin to save their own skin.  Remember that there’s a difference between being good and being undisturbed.

Here is the amazing part though when it comes to Jesus, that you find in John 3:17-19:

For God did not send His Son into the world to condemn the world, but that the world through Him might be saved.

He who believes in Him is not condemned; but he who does not believe is condemned already, because he has not believed in the name of the only begotten Son of God.

And this is the condemnation, that the light has come into the world, and men loved darkness rather than light, because their deeds were evil.

What Jesus is saying here is that ‘I didn’t take on flesh and bones just to guilt-trip you, I came to save you if you want it‘.  It’s like the default state of humanity is condemned to hell… or like everyone is on a train that can’t stop where the tracks are at the edge of a cliff.  Everyone wants to be on that train, God won’t force anyone off the train.  He will only tell you the truth and give you a way out through Him… and He is the only way off.

If it wasn’t for Jesus, there was no way for you.  You need to decide this day whether you will give your life to Jesus Christ or go over the cliff into hell.

Hell isn’t the only reason why you must be saved.  The very first appeal for men to be saved came from Peter who said in Acts 2:38:

Then Peter said to them, “Repent, and let every one of you be baptized in the name of Jesus Christ for the remission of sins; and you shall receive the gift of the Holy Spirit.

Notice that Peter did not say ‘believe in Jesus so that you will go to heaven when you die’.  As a matter of fact, there isn’t a place  in the New Testament where heaven is used as the reason for a person to be saved.  What about John 3:16?  Well, Jesus said that we will receive everlasting life when we believe in Him.  So my question to you is, where does everlasting life come from… God or heaven?  I’ll add another one to that, what makes heaven such a great place?  Let me put it another way, what would heaven be like if God was not there?

To answer this question you need to hear the words of Jesus when He said in John 17:24:

Father, I desire that they also whom You gave Me may be with Me where I am, that they may behold My glory which You have given Me; for You loved Me before the foundation of the world.

And John 14:3:

And if I go and prepare a place for you, I will come again and receive you to Myself; that where I am, there you may be also.

And lastly John 17:3:

And this is eternal life, that they may know You, the only true God, and Jesus Christ whom You have sent.

Then the Apostle John refers back to this verse in 1 John 5:20:

And we know that the Son of God has come and has given us an understanding, that we may know Him who is true; and we are in Him who is true, in His Son Jesus Christ. This is the true God and eternal life.

So I hope you can see in these verses that what God wanted, all along since the foundation of this world, is for us to know Him and be with Him like a bride is with her beloved (Song of Solomon).  If heaven is everything we could imagine and more, but God’s not there… I don’t want to go.  I want to be with Him where He is… if that means in the backside of some desert, I’m there.  But God has already made a way for us to be with Him right now as we live on this Earth.  I’ll need two passages to describe this and then I’m done.

The first scripture is in John 14:16-17, 26, Jesus speaking:

And I will pray the Father, and He will give you another Helper, that He may abide with you forever– the Spirit of truth, whom the world cannot receive, because it neither sees Him nor knows Him; but you know Him, for He dwells with you and will be in you.

But the Helper, the Holy Spirit, whom the Father will send in My name, He will teach you all things, and bring to your remembrance all things that I said to you.

When you believe in Jesus Christ, give your life to Him, you will receive the Holy Spirit.  The Holy Spirit is the Spirit of God, He is God and a real person who lives inside of you.  And you can hear Him speak to you and you can speak with Him any place any time. He will never leave you, ever… no matter what you do.  The Bible actually goes further to describe this in 1 Corinthians 6:17:

But he who is joined to the Lord is one spirit [with Him].

So our spirit and the Holy Spirit are joined or connected together forever.  And we can know God because His Spirit lives inside us.  We don’t need to find God anymore, He has chosen to join Himself (the everlasting, uncreated, outside of time God) with us.  This is eternal life, this is the miracle of Easter… that when you were on your way to hell willfully, God sent His son to tell you the truth and save you, to take you out and join you to Himself forever so you will never die, but have an eternity with the God who created heaven and Earth.

Hope this blessed you,

Washo

Recommended reading:    Romans 6:3-14

Why mortgage relief for the unemployed is a bad idea…

The Federal Government is announcing that the major banks will give the unemployed as 12 month mortgage repayment ‘holiday’… which means that if they’re unemployed, they don’t have to pay their mortgage for a year.  Sounds noble doesn’t it?  Here are a few reasons that’s a stupid idea:

1)  It’s a moral hazard.  I don’t blame people for losing their jobs, but if you can’t afford a house then you shouldn’t have one.  Let people with the capital buy the house, let the house prices fall so that they’re affordable once again (and you don’t need two incomes to pay a mortgage) and let the ex-home owners rent.

2)  Even though you’re on a holiday, you’re interest isn’t.  So you will be left in more debt by the end of that year than when you started.

3)  It postpones the inevitable crash in home prices to a later date and thus compounds the pain we’re going to go through in the very near future.

4)  Australians are already in too much debt, keeping them in debt is not the answer to their problems… if they can’t afford to have a mortgage, credit cards and a new car, they should not be subsidized by the government.  They should default on their loans and start from a fresh debt-free base.  Does that mean that their standard of living will dramatically decrease… yes.  It is the unfortunate consequence of our debt-financed lifestyle with little to no savings.

This won’t make me exceptionally popular for saying this, but it’s the honest way to deal with financial problems facing our society.  There are consequences for shaping our economy after America, that is credit-financed consumption with little to no industry… a credit crash is inevitable, and our standard of living will follow it.

God bless,

Washo

Pastor Mark Ramsey – Influencing Your World

Influencing My World

Matthew 20:26 – “… Whoever desires to be great among you, let him be a servant…”

God is so into you being great that He tells you exactly how to do it.. Be a servant

Romans 1:16 “I’m not ashamed of the gospel of Christ…”

We’re carrying something massive, therefore we neer to increase our influence.

1. My inner world

When God asks us to change the world, we have to chance out inner world first.

Epheaians 4:23 “… Be renewed in thr Spirit of your mind…”

It’s not just about changing our mind, but the Spirit of out mind of our belief system.

Romans 13:11-14

Th moment is now.

The way we expand our inner word is through prayer, worship, intercession…

2. My outer world

Matthew 5:16 “… Let your light shine before all men…”

Evangelism by Christian example…

Everyone is born a champion, don’t die a loser.

The reason why Jesus was called Rabbi was becuse He was good at what He did… And His life had the integrity to backup His words. We must do the same in our lives, occupation, hobby etc.

3. Avoid the twilight zone

Dont get stuck in the twilight zone: saved out of something but not into something. It will leave you as a frustrated Christian (Ps Mark’s definition of a ‘frustrated Christian’: a kangaroo jumping under a low bridge).

Climate change insanity

The latest UN Climate Change report, which you can read at http://www.foxnews.com/story/0,2933,510937,00.html, outlines one of the most horrific and pathologically idiotic approaches to deal with carbon dioxide emissions.  It consists of essentially ruining the economies of developed nations (which aren’t doing so well lately if you haven’t heard) to pursue a policy of punishing industry through taxes and regulation.

Now this may be great news for countries like China and India, because they can absorb even more of the world’s industry that flees Australia, the UK and the US.  People also seem to forget that China is the largest contributor to CO2 emissions in the world, outdoing the US, yet it is exempt from the Kyoto treaty… and China’s projected increases in CO2 emissions will dwarf Australia’s own projected reductions as stated in the Kyoto treaty!

Why then should Australia punish it’s industry (the little that remains), go into debt, increase the tax and regulatory burden if the net effect will be negligible?  Well the answer is pretty simple: it’s a political thing.  Politicians now ‘get it’ that climate change is a pretty important issue among their constituents, so they need to look like their doing something.  The proposals that they unveil, like this totalitarian UN climate report, are like a cartoon mousetrap… a little bit of cheese to lure their victim, they start to nibble and SNAP… welcome to Big Brother.  We’re going to tell you how productive you can be, how much CO2 you can emit, how much you can exhale, what you can consume… remember, it’s all for the planet.

Ok, so apart from my ideological opposition to these idiotic proposals there’s a much more relevant point to be made here: they won’t work.  If China’s CO2 emissions continue on their projected rate it will make any reduction, on the part of other countries, useless to say the least.  Ultimately reducing carbon emissions is treating the symptoms and not the disease.  We’re still operating under the Industrial Revolution’s mentality for generating energy: heat coal/oil, boil water and turn a turbine to generate electricity (even nuclear power heats fuel rods to do the same).  If you want to reduce carbon dioxide emissions you need to make them irrelevant.  Basically we need a new means of generating electricity that is more efficient than traditional means (no not wind or solar, they suck aren’t there yet).

My solution:

1)  Scrap all the restrictions on industry for CO2 emissions

2) Give major tax incentives to industries that improve their energy efficiency

3) The ‘E’ prize – the major industrialized nations all chip into a global pool of money, prize money in the order of billions, for the first group to develop an energy source that cheap, clean, efficient and more effective than what’s on the market.  Provide funding for research groups who’s stated goal is to win the E prize.

Human beings are more productive when they work under incentive, not fear and intimidation.  If we really believe that, then our policies need to reflect that.  We need to dispel the notion that we can tax and regulate our way out of an energy crisis that dates back hundreds of years to the industrial revolution.  Deal with that and you’ll solve your climate change problems.

Ps Tim McDonald – God uses broken hammers to bang-in bent nails

1 Cor. 1:26-28 “… God has chosen the foolish things of this world… So that no flesh can glory in His presence…”

God uses our weakness, failures and mistakes, turns them around and uses them for good.

Six broken hammers that God can use:

1). The fearful

Gideon is a perfect example of this kind of broken hammer.

First Gideon is hiding when the angel visits him, then he freaks out when he realizes that he met with the Angel of the Lord, the because he was afraid he destroyed the idols at night time… and on and on.

But God uses him, smashes his fear and performs a mighty miracle.

2). The weak

Genesis 25:27-28 – Jacob was the ultimate momma’s boy.

Jacob’s name is ‘the deceiver’

God used the deceiver, the weak, turned his life around and changes his name to Israel.

3). The barren

Some of the greatest men were born to barren women: Isaac, Jacob, Joseph, Samuel, John the Baptist …

4). The age deficient

The ‘too old’ and ‘too young’.. God uses all ages to accomplish His purposes.

Hebrews 11:12 “Therefore from one man, and him as good as dead, were born as innumerable…”

Even the feeding of the 5000 by Jesus, a child provided a seed for that miracle to happen.

Jeremiah, Abraham, Zechariah, Timothy

5). The disconnected

Two disconnected women: Rahab and Ruth, both of which were not Israelites, disconnected, but they ended up being connects to the lineage of Jesus.

6). The Failed

King David is a great example, who commits adultery and murderer, but David repents and he is restored.. Known as a man after God’s own heart.

Psalm 51 – Read it all (David’s repentance prayer)

Everyone has failed, but God still wants to use us.