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In one hour....
The financial calamity which has engulfed Northern Rock is the result of fundamental changes in the world, its monentary systems and international politics. The 'sudden' collapse is perhaps a foretaste of what God has set out in his Word.
The recent collapse in the price of Northern Rock shares has been a long time coming.
In the first half of the 20th century and during the course of the two world wars, oil became the means by which both military machineries and economic development were driven. And following the cessations of hostilities America (as the only superpower in the allied camp) came to an agreement with the Saudis (the main source of oil).
Although these countries are ideologically opposed on every significant front, they entered a mutually-supportive pact.
America would provide the protection that Saudi Arabia needed (witness the first Gulf War) and the Saudis would supply the oil to fuel the American economy and means of production.
Part of this deal involved Saudi Arabia agreeing to set and retain the dollar as the only currency it would accept in exchange for oil. (Hence the term 'petro-dollar'.) This arrangement worked well - at least for the parties concerned - for over 50 years.
However several major changes have taken place in the world's economies over the period...
First of all, while oil reserves have been found and exploited in lands beyond the Middle East, so also has the demand for oil rocketed as less-developed nations acquired the means to catch up with the manufacturing and service provision capabilities of the major producers and their economies.
This has brought us into a situation whereby the consumption of oil is now outstripping supply. And, while the supply of oil has peaked and is forecast to diminish in the near future, the demand continues to grow. So the 'supply/demand' gap is set to widen - very substantially and possibly very quickly and dramatically.
Most recently, and into all of this, along comes Iran - a nation bent on bringing down America.
Since he came to power, Iran's President Mahmoud Ahmadinejad has been working assiduously to establish an alternative 'bourse' (trading floor) for the buying and selling of world oil stocks. And he has set the currency-of-choice in this alternative market place as the Euro. (This has fitted very nicely into the agenda of the EU which benefits from the Euro gaining greater value and credibility, while at the same time threatening the dollar's supremacy as a world currency; and undermining the US in the process.)
And on 18 September 2007 Iranian Deputy Economy Minister Mohammad Zahedi Vafa affirmed: "We have taken measures and now 70 percent of Iranian assets are in euros, other currencies or gold."
As major economies move over to buying and selling oil using the Euro as a means of exchange, the solid link between oil and the dollar will increasingly dissolve.
The result, as more and more trading favours the Euro, will be the demand for (read 'value of') the Euro increase alongside an erosion in the value of the dollar. And, very significantly, there is now a report of the Saudis "breaking step" with the petro-dollar agreement.
'This is a very dangerous situation for the dollar,' said Hans Redeker, currency chief at major world bank BNP Paribas. The Telegraph considers the news as 'signalling that the oil-rich Gulf kingdom is preparing to break the dollar currency peg in a move that risks setting off a stampede out of the dollar across the Middle East.'
About 5 years ago the US economy was struggling, but the Federal Reserve allowed the country to 'spend its way out of it' by going even deeper into debt. As one American pundit remarked: 'To prevent the bubble bursting, we created an even bigger bubble.'
With the US leading the world in terms of national debt - the US National Debt has continued to increase an average of $1.41 billion per day since September, 2006! - it does not need a PhD in Economics to understand that the American economy could easily and very quickly collapse.
And, if it were to happen, America will not go down alone...
The fragility of the US economy was portrayed graphically on British TV as investors queued to withdraw their savings from Northern Rock - a direct effect of the serious problems in the sub-prime mortgage sector in the US. caused by reckless lending and borrowing.
Had the borrowing been used to build up the means of production and economic capability it might not be so bad, with the prospect of an eventual return to liquidity. However most of the spending has been on bigger homes, SUVs and new kitchens.
The rub of course is that here in the UK we (with the banks' encouragement) have behaved in exactly the same way. Britain is now in third place in the world rankings (behind the US and Spain) in terms of what we owe.
So the pictures we see of worried investors queuing at the doors of Northern Rock branch offices could be a prophetic foreshadowing of what could well happen in days to come '......for in one hour such great wealth has been laid waste!' (Revelation 18:17 - best read in the context of the whole chapter).
A Christian response
But how should the Christian respond?
Surely not in the 'siege/bunker' mentality that is the hallmark of some 'advice' emanating even from within Christian circles! A security based on stocks in barns and banks is no security at all.
God’s Word reveals that the pursuit of riches is always a snare: ‘Whoever trusts in his riches will fall, but the righteous will thrive like a green leaf’ (Proverbs 11:28)
The ‘riches’ we are urged to acquire are the riches of heaven: ‘Do not store up for yourselves treasures on earth, where moth and rust destroy, and where thieves break in and steal. But store up for yourselves treasures in heaven, where moth and rust do not destroy, and where thieves do not break in and steal. For where your treasure is, there your heart will be also.' (Matt 6:19-21)
The money that we each have is only by God's grace - and we are to handle it wisely: avoid debt, live simply and be generous in our giving. The disciple's (so-called "Lord's) prayer is: "Give us each day our daily bread." And it is always worth reminding ourselves that God promises to supply our needs, but He makes no promises whatsoever to respond to all our wants.
The Son of God said:
'No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.
'Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes?
Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?
Who of you by worrying can add a single hour to his life?
'And why do you worry about clothes? See how the lilies of the field grow. They do not labour or spin. Yet I tell you that not even Solomon in all his splendour was dressed like one of these. If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, O you of little faith?
So do not worry, saying, 'What shall we eat?' or 'What shall we drink?' or 'What shall we wear?'
For the pagans run after all these things, and your heavenly Father knows that you need them.
But seek first his kingdom and his righteousness, and all these things will be given to you as well. (Matthew 6:24-33)
A world of huge uncertainty, presents us with great opportunity to speak of the God of eternity.
It also presents us with a challenge. In 1857 America was going through a great economic slump. There were 30,000 men idle on the streets of New York. Drunkenness was rampant, and the nation was divided by slavery. Sunday 23 September 2007 is the 150th anniversary of the start of a great move of God through what is now called the Fulton Street Revival. Have a look at what God did then.
Sword magazine, 21/09/2007