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Prepared ALHWays » Abundant Sustainable Living » Don’t Let It Be You

Don’t Let It Be You

1 May 2013, 15:38

Sam Townsend


Here we take a penetrating look behind today’s headlines as they relate to health, wealth, and sustainable living success by Abundant Sustainable Living advocate Sam Townsend, author of Time to Head for the Ark. Sam, a “recovering banker and economist”, businessman, consultant, investor, and author offers perspective and a helpful approach in improving your life and the lives of those you care about most in these turbulent “Harm’s Way” times.

 Don’t Let It Be You

By Sam Townsend

May 1, 2013


As a former banker and being a life-long student of economics, I’m appalled by the myths and outright lies that I see masquerading as conventional wisdom today in things economic. Most people, including many “experts”, misread or ignore the reality. They also miss historic opportunities as they attempt to cling to a fast departing status quo that in key ways has fallen short of God’s best for us.

Perhaps the best indicator of people’s grasp on reality and even of their need for self-preservation is what they choose to own as investments. How they allocate their investments, say, between stocks, bonds, annuities, different types of real estate and personal property or operating businesses, reveals a great deal. So does their choices of residences, as I discuss in Time to Head for the Ark (“The Ark”).

As the times grow still more difficult, many of those assets are for entertainment, luxury, or convenience and may be of little use in producing and maintaining essential lifestyles or real and enduring wealth.

How families choose to educate their children in order to prepare them for the future can also speak volumes. Today families still grasp for government-supported student loans to the tune of more than a trillion dollars so far – despite the fact that nearly half of current graduates are unable to find employment that requires a four-year college degree.

How do they expect to repay that debt – much of which is not dischargeable in bankruptcy – and which could make virtual serfs out of many our young adults? Yet, there are still jobs for both essential skills and for capabilities that may be in demand but which may require different knowledge and skills than are offered by academia.

 The Economy and Financial Markets

 Complacency of investors is near historic highs despite wretched economic fundamentals that include the largest debt bubble in recorded history. Legions of government and private sector promises cannot possibly be fulfilled.

Just look at interest rates near historic lows on high-risk debt of businesses and governments who are struggling with insolvency, especially corporate “junk bonds” and budget-challenged municipalities. Their yields are creeping higher but are still near historic low spreads against U.S. Treasury debt. And everyone realizes that interest rates on their bank deposits and on government debt provide only nominal returns. Any thinking person realizes those low rates cannot endure yet they ignore the “debt trap” implications of what they have bought into.

As in the U.S., populations of developed countries around the world also reflect remarkable optimism given threatening socio-economic and political realities.  Such complacency amidst a deteriorating economic and social scene along with increasing dysfunction and growing chaos in much of the world cannot and will not be sustained. This evidence of delusion and deception telegraphs historic market and social declines just ahead. Denial of objective reality has run amuck as fantasy, delusion, and greed reign.

Sustained advances in stock and bond prices since the 2008 Global Financial Crisis, though on weakening volume and other technical market measures and patterns, testify to the extraordinary degree of disconnect between the prevailing psychological mood and economic and social reality. Just ask people in the street or business operators who are struggling to make ends meet, especially those striving to live responsibly and who have true concern for others.

Whether it is a hopeful-sounding message of “recovering real estate prices and housing market” or “an improving labor market” the spin fails in comparison to the real level of positive activity in force before the Global Financial Crisis began in 2008. “Steady improvement” generally is little more than what market analysts call, “a dead cat bounce” – and this after a four-year rally in many markets that saw confidence return to pre-crash levels.

A leading analyst of investment markets who tracks the public mood that drives them recently commented on stock and bond prices returning to near or above their historic highs,

“It is an astounding and historic display of optimism relative to a collapsing economic reality . . . When asked about potential negatives such as high [and ‘unsustainable’] levels of public and private debt and a deleveraging [deflationary] economy, a CNBC buy-and-hold [of stocks] advocate said, ‘I just sort of ignore it’. . . An overwhelming societal urge to proclaim a new beginning after a long running rise is among the most bearish of sell signals.”[i]

Perhaps never in history has a generation been so ignorant and deceived about the reality and dangers of everyday living, especially as they relate to maintaining life’s essentials in historically dangerous times. God’s people, though, can still enjoy the freedom and blessing that comes from knowing and living in our Creator’s truth and provision. But we must know the signs of the times and be wise and obedient to God’s leading.

Much of the cause of these “improving trends” is due to either playing games with statistics or the result of creating even more fundamental dislocations in the economy, as I discuss in “Sam’s Blogs” at www.PreparedALHWays.com and in its “Wealth and Resource Management” section. Extreme stubborn optimism and a refusal to deal with the implications of “bad news” has set our society up for a crushing and bewildering – yet a popularly “unexpected”— decline that is already well underway.

Deceptions about the Economy Itself

Ponder with me these recent headlines and media themes . . .

Build wealth by destroying it” . . . Almost Perfect Storm Sandy that centered its destruction on lower Manhattan and the Jersey and Long Island shores was greeted by Wall Street as an economic windfall. After all, $60 Billion in damage losses would require massive clean-up, rebuilding and repairs, and millions of disadvantaged residents would need billions more in aid – largely paid for by insurance or government borrowing.

Considerable real wealth and lives were destroyed forever by Sandy, insurers took losses, and Washington borrowed still more wealth to cover lost property value and livelihood, That spending they concluded optimistically would add significantly to economic growth at a time when economies of many countries in the world were beginning to again reaccelerate their declines that began in 2008 with the first down-leg of the Global Financial Crisis. The financial and commodity markets briefly surged.

Spending is growth” . . . Are you surprised that, while your local economy may still be struggling, reported “GDP” (Gross Domestic Product) has held up? Multiple deceptions and misunderstandings are at work here.

True, GDP isn’t what it used to be. It has again turned negative in Europe and is shrinking everywhere, but, like unemployment statistics, “economic growth” is worse than it appears. Many now realize that the unemployed exclude those who have quit looking for work and also those who are underemployed. With those added, true unemployment is near the average for the Great Depression.

The main reason economic growth is overstated is because GDP measures spending and not the production of real and enduring value. It’s true that what one spends may be income to someone else, but today much of that spending is with borrowed money that cannot be repaid, and most tangible products are no longer produced in the United States. And much of that spending has been for consumption and other non-productive uses, such as expanding government that merely redistributes wealth and income produced by others.

Borrow your way to prosperity” . . . That’s the idea behind government and the banking system creating money out of thin air by borrowing so that households, businesses and governments have more to spend. That practice has been going on for many years but since 2008, “borrow and spend” has assumed catastrophic proportions as governments and their central banks have gone from spenders and lenders of last resort to spenders and lenders of first and only resort. Now one fourth of all spending is by government and about 35% of that is with borrowed money. The Federal Government borrows nearly half of what it spends, and its popularly reported debt that pays interest is only a small fraction of total government obligations.

And government doesn’t produce wealth; it can only confiscate, consume, or redistribute it or, of course, frustrate its production and enjoyment. Government has been harming people’s lives and running down their wealth in all of these ways for years.

The economy is getting stress fractures from trying to carry out-of-control government and mountains of debt and regulatory burdens on its back. It’s particularly difficult for ethical and truly productive and real-needs-meeting free enterprise to succeed when government tilts the playing field sharply against them and in favor of their parasitic political favorites.

David Stockman, Former Congressman and Budget Director under President Reagan before resigning, in part, because of a “loss of fiscal rectitude” assesses “bipartisan blame” – thereby adding credibility to his review of eighty years of economic history and its prospects – wrote in a March 30, NY Times article,

“. . . Over the last 13 years, the stock market has twice crashed and touched off a recession: American households lost $5 trillion in the 2000 dot-com bust and more than $7 trillion in the 2007 housing crash. Sooner or later — within a few years, I predict — this latest Wall Street bubble, inflated by an egregious flood of phony money from the Federal Reserve rather than real economic gains, will explode, too.

“Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually. Real median family income growth has dropped 8 percent, and the number of full-time middle class jobs, 6 percent. The real net worth of the “bottom” 90 percent has dropped by one-fourth. The number of food stamp and disability aid recipients has more than doubled, to 59 million, about one in five Americans.

“So the Main Street economy is failing while Washington is piling a soaring debt burden on our descendants, unable to rein in either the warfare state or raise the taxes needed to pay the nation’s bills. By default, the Fed has resorted to a radical, uncharted spree of money printing. But the flood of liquidity, instead of spurring banks to lend and corporations to spend, has stayed trapped in the canyons of Wall Street, where it is inflating yet another unsustainable bubble.

“When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.

“THIS dyspeptic prospect results from the fact that we are now state-wrecked. With only brief interruptions, we’ve had eight decades of increasingly frenetic fiscal and monetary policy activism intended to counter the cyclical bumps and grinds of the free market and its purported tendency to underproduce jobs and economic output. The toll has been heavy.

“As the federal government and its central-bank sidekick, the Fed, have groped for one goal after another — smoothing out the business cycle, minimizing inflation and unemployment at the same time, rolling out a giant social insurance blanket, promoting homeownership, subsidizing medical care, propping up old industries (agriculture, automobiles) and fostering new ones (“clean” energy, biotechnology) and, above all, bailing out Wall Street — they have now succumbed to overload, overreach and outside capture by powerful interests. The modern Keynesian state is broke, paralyzed and mired in empty ritual incantations about stimulating “demand,” even as it fosters a mutant crony capitalism that periodically lavishes the top 1 percent with speculative windfalls.

“The culprits are bipartisan, though you’d never guess that from the blather that passes for political discourse these days. The state-wreck originated in 1933, when Franklin D. Roosevelt opted for fiat money (currency not fundamentally backed by gold), economic nationalism and capitalist cartels in agriculture and industry.”[ii]

Fiscal and monetary policy intrusions, delusions, and thefts of wealth have taken a heavy toll. More remains in prospect, and it is useful for each of us to consider what losses are involved and who bears them.

A Key Debt Question – Who Bears the Loss?

Unlike the Keynesian economics still taught in schools and advanced in Washington, we’re past the point where government borrowing and money creation adds to growth – and that debt still has to be serviced. I think back to my early days in bank lending where the head of our commercial loan department observed about a borrower – “The quality of their assets doesn’t match the quality of their liabilities.”

As with banks today here and around the world, their liabilities are real but their reported asset values and prospects have become highly suspect. Sheila Bair, the immediate past head of the FDIC warned in a recent piece that our megabanks are required to hold little or no capital against derivatives, and loans to themselves and governments while they must maintain capital to support well-capitalized loans to small businesses.[iii]

The “debt trap” into which modern civilization has fallen is inescapable without considerable lifestyle adjustment. In the U.S. alone, the Federal Government and its agencies owe or guarantee future payment obligations approaching $200 trillion or maybe more. This is besides immense banking system debts and derivatives that Warren Buffet once referred to as “Financial Weapons of Mass Destruction”.

Like a bunch of drunks trying to hold one another up, these “portfolio insurance bets” by banks and insurance companies, such as “credit default swaps”, (the real reason AIG had to be bailed out back in 2008) to guarantee against losses on loans, interest rates, etc – to each other – total more than 700 trillion dollars. This incomprehensible number is more than 10 times the size of the global economy and may be larger than the market value of all the world’s assets – even at current elevated prices.

Saying that these financial institutions are “too big to fail” may be one of the most crucial delusions of all. More precisely, they are “too big to bail” – and so are modern governments trying to prop them up.

Just imagine what rising interest rates on U.S. Treasury debt from near zero will do to the economy’s stress fractures and government’s ability to fund itself with other people’s money. Just ask Greece and Spain.

Unimaginably great debt burdens and rash promises hover menacingly over our heads like a gigantic Sword of Damocles. When will struggling economies and crushing debt burdens overwhelm us?

John Mauldin recently wrote, “… the experience of over 250 debt crises over the past few hundred years tells us that there is no specific point when the markets lose confidence in a government’s debt. When it happens, though, it is ferocious in its intensity.”[iv] Mauldin calls such a moment a “bang moment”. I am fond of describing such a “bang moment” by likening the exposure to a puffed-up soufflé when the oven door slams shut, thereby causing its collapse.

A deflationary contraction began in 2008 and is poised to accelerate to historic depths despite furious efforts by governments and central banks, including the U.S. Fed, to re-inflate debts and currencies. Japan has been struggling against deflation since 1990.

History repeatedly shows that such deflations, once begun, continue until the “excess” debt is purged from the system, so that this deflationary depression should be of larger degree than the two decade-long deflation of the The Great Depression. Efforts by today’s governments and their central banks to borrow their way to prosperity in the face of unsustainable debt loads must fail and will only worsen their eventual consequences, even as they seek to postpone them.

The most recent financial and investment crisis is Cyprus, and it was a game changer on the crucial investment question,

Who bears the loss?

Holding large amounts of defaulted Greek government debt, over-financed and illiquid real estate loans, and large amounts of reportedly laundered money fleeing taxes and controls from Russia and elsewhere in Europe, the Cyprus banking system would have failed but for a Euro bailout that required uninsured bank depositors and other creditors to take losses estimated to be 40-80% for the two banks involved – losses which were very large in proportion to the smallish Cyprus economy.

All depositors saw their withdrawal rights restricted, and even insured depositors may ultimately experience losses as well if the second largest bank later fails as did Cyprus’ largest. That bank is in a liquidation that may take years for depositors to realize anything. The clock continues to tick for the dissolution of the Euro Zone and its common currency with its uncommon government – an economy about the size of the United States.

 A Small … but Important … Dose of Reality

In an overstressed and overleveraged global financial system, prudence suggests transitioning from excessive reliance upon “claims” against wealth into tangible assets and into producing wealth of real and enduring value. This is particularly important as people question, “Where do we go and what do we do as the bubble bursts?”

Global deleveraging from an historic debt binge began in 2008 with the Global Financial Crisis and is beginning to again re-intensify. The most talked about examples are in Europe, but it’s occurring around the globe – including in the United States.  Japan has just announced a desperate gamble to create inflation in the world’s most indebted major economy (the third largest) which has been unsuccessfully battling deflation for more than two decades and whose national debt is twice the size of the economy threatens to implode. Of course, the markets responded positively to this news, even as Japanese investors begin to move assets out of Japan.

Financing spending by borrowing and then having the Fed and other world central banks “print money” to buy that debt doesn’t create real and enduring wealth. That “money” itself is debt, and all debt merely represents “claims” upon real wealth and future assets and services. Those claims may prove impossible to satisfy sooner rather than later.

Intangible assets, such as stocks, bonds, bank deposits, and annuities, also represent claims upon either other intangibles or upon real tangible wealth. Intangibles are typically managed, not by their owners, but by others. In other words, they are “passive” investments, and typically their ownership and subsequent transfers are by solely electronic means. They are blips in cyberspace and subject to the risks of living in “virtual reality” instead of tangible reality. This makes such “assets” that under constant threats, including cyber attacks, easier to lose or to steal. Sustaining such intangible assets, especially when their existence depends upon servicing unmanageable debts, also encourages large-scale speculation and gambling, dishonesty, and outright theft.

Instead, we advocate – as does our Lord – sound tangible assets that either are life’s essentials or which are useful in acquiring, producing, or maintaining life’s essentials, even as the wheels fall off of modern society.

Intangible assets and the debt claims that helped create them have exploded in popularity and amount across the, so called, “developed world”. Alarmingly, they constitute the predominant assets, reserves, and capital of, not only banks, insurance companies, and many other businesses and private investment portfolios . . . but also of national, state, and local governments and their agencies. Those governments and agencies now provide all or a significant portion of life’s physical necessities for a majority of the U.S. population as they do also in most other “developed economies”.

Those governments and large financial institutions constitute the presumed backstop for the global economy and financial system. They are also “counterparties” on the other side (and often on both sides) of hundreds of trillions of dollars of contractual loans, derivatives, and other intangible investment assets and performance guarantees.

The global financial system has become systemically challenged to the extent that when banks and governments in Greece, Cyprus, Spain, Italy, China, etc, etc, etc become hospitalized, our citizens could also suffer abrupt and life-threatening events. If this concern is not real and widely understood even by our politicians, why do you suppose that DHS and other Federal agencies are stockpiling military hardware, weapons, and billions of rounds of anti-personal ammunition within our borders even as it shrinks our defenses against foreign enemies?

Ours has become a paper and confidence-based financial economy, instead of being an economy that actually produces what we consume. Indeed, now in the global economy, much of the food and most goods consumed by U. S. citizens are the result of physical labor by others around the world but outside of our borders. How much longer do you suppose that we will be able to continue living by the labors and good will of foreigners?

Being funded by debt and passively managed intangible assets, rather than by real tangible assets which must be managed, also encourages people to assume still less personal responsibility and commitment to sustain and advance their own lives and those of their families, communities, and the larger society. The majority of our people now live off of the industry and wealth of others, many of whom live outside of the United States and are hostile to our national sovereignty, well being, and way of life.

With the majority of our citizens now addicted to support from the State and from the debt-based financial system and its institutions and economy, democratic government is likely no longer a viable candidate for needed political reform. A series of real and manufactured crises tighten bondage of our citizenry to increasingly totalitarian and godless government.

In a Nut Shell

 In a nut shell, the reasoning for why the damage done to our economy is irreversible without horrendous pain being suffered over many years is this:

At the core of global finance and trade is a dishonest currency that masquerades as “money”. No empire in recorded history has survived with money that fails as a reliable standard and store of value and as a sustainable medium of exchange. Neither has an empire or society survived with our unimaginable debt burdens, including its “money” that is borrowed into existence.

Perhaps the most surprising flight from reality that menaces our society is a perverted understanding of what real and enduring wealth actually is.

Real or Illusory Wealth?

This misunderstanding about real tangible wealth has brought life in the so called “developed world” to the brink of disaster. Ignorance is also keeping many from enjoying a peaceful, healthful, economically viable, and sustainable existence in the freedom God created us to enjoy.

Dictionaries define “wealth” as “money or property, worldly possessions; riches . . . value of assets owned by a person or community.

God in the Bible has more to say about wealth – what it is and how to manage it – than anything but His love and redemptive plan. The valuable property which Scripture repeatedly describes includes water, land, livestock, crops, tools, weapons to defend life and property, shelter, and clothing. All of these valuable assets have always been and remain essential to living in healthy, tangible, and renewable ways anywhere on Planet Earth.

Today, most of us don’t personally produce and manage these physical life essentials beyond household incidentals but instead acquire them as needed from others.  That reality brings us to the other major historic form of wealth which I didn’t list just above – “money”.  There’s good reason I didn’t list it. “What we know as ‘money’ is not real money.” David Stockman calls it, “phony money”. Its generic name is “fiat currency”, i.e. it has value because government says it does and because people accept it.

Money in God’s Economy

“You must have accurate and honest weights and measures,

so that you may live long in the land the LORD your God is giving you” (Deuteronomy 25:15)

To be useful and of enduring value, history proves that money must serve reliably as the basic standard and store of value and as a medium of exchange. Modern currencies are tragically wanting as money. What should we expect from “money” that has been borrowed into existence and created out of thin air by a government and banking monopoly and has value only because people are willing – at present – to accept it?

The only money God spoke of in His Word was gold and silver. For thousands of years those precious metals have served that purpose well.  God in His Word repeatedly warned of “dishonest scales, but accurate weights are his delight (Pro 11:1, etc). As had civilizations for millennia, gold and silver had been “real money” and God repeatedly warned against dishonest standards for measuring them out in a culture (eg. Lev 19:35-36, Deut 25:13-16, Pro 16:11, 20:10-11). The prophets also condemned such sin as dishonest theft (Amos 8:5, Micah 6:10-11).

Modern movements and philosophies which are opposed to God and His standards of fairness and justice may try to convince people that gold and silver are not up to the task of supporting a modern global economy, but that ignores proper use of credit and other prudent and sustainable means of basing an economy upon sound money and principles.

The extent of unsound practices which are violations of these and other biblical principles and warnings are – after failure to trust in God and rest in His provision –  root causes of assuring the demise of the U.S. and global financial and socio-economic systems. This is true even where the participants aren’t being greedy, dishonest, or inept – man’s base nature.

Our Founding Fathers knew and understood God’s Word and the lessons of history regarding sound and productive economies and their money. John Adams said in 1826, “There are two ways to enslave a nation. One is by sword. The other is by debt.”

So what has happened to us since the days of our founding?

“Celebrating” a Century of an Unsustainable Financial System

Perhaps as a sign of our own future, 200 years after beginning to reduce the precious metal content in its gold and silver coins, the Roman Empire, whose capital was Rome, collapsed. Please note that the Eastern Roman Empire in Constantinople (now Istanbul in Turkey), which did not debase/inflate its money, lasted another thousand years until it was overrun by militant Islam. Islam, by the way, has been making a comeback on its global conquest trail, and our financial system on life support greatly weakens our defenses against them and other multiplying threats.

The various multi-trillion dollar “Stimulus” borrow and spend programs of government and “Quantitative Easing, by the Federal Reserve and other world central banks are temporary “fixes” which have failed to shore up struggling economies and which move us closer to system collapse.

This year marks the 100th anniversary of three legislative acts which greased the skids of that vulnerability to collapse:

  1. The 1913 Federal Reserve Act creating the banking system to manufacture cheap credit for business and government. Ostensibly the central bank (the “Fed”) would eliminate financial panics, but, in reality, it aggravated business cycle declines by encouraging debt, speculation, big government and so much more.
  2. Ratification of the 16th Amendment in 1913 which gave the majority the ability to confiscate the fruits of the productive via the Federal Income Tax. The productive are now finally in the minority.
  3. Ratification of the 17th Amendment in 1913 which gave the majority, instead of the state legislatures, the right to elect Senators. As with ancient Rome, this helped “the mob” become the political masters of what had once been a Republic.

These measures combined to give a majority the right to vote themselves spoils from the public purse filled with wealth confiscated from others. These measures also gave the politically powerful both the opportunity and the necessity to keep our citizens from escaping growing government control of their lives.  I discuss that necessity and the financial system that requires our bondage to it in Time to Head for the Ark.

With soundness of the money supply and, ultimately, of the financial system based upon “real money” having been lost with the confiscation of gold from private hands during the deflation of the Great Depression and near the 1933 stock market bottom, governments, bankers, and businesses became free to gamble with an increasing abundance of seemingly unrestrained paper “debt money”.

The global financial system has become history’s greatest economic “confidence game” and a financial bubble of historic proportions. Our Federal debt is likely to be the last great bubble.

“Real money” for thousands of years, Gold has been effectively demonetized since the 30’s as has silver since 1965. In 1971, the last accountability to a solid standard of value and financial store of value finally evaporated with President Nixon being forced by inflation to prevent even other governments from demanding gold in exchange for our Federal debts. Since then, all of the world’s currencies have become floating abstractions whose value depends upon somehow maintaining public confidence in a doomed fraudulent system.

The “U.S. Survival Clock” has actually been running for many more than 100 years. To finance the Civil War and create a national currency without chartering a central bank, the National Banking Act proliferated both paper currency and other debt.

The Founders had stipulated in Article I of the Constitution of the United States that Congress be authorized, “to coin money, regulate the value thereof….” The Constitution authorized the Post Office, but not so a central bank. They also denied to the States authority to ”coin money, emit bills of credit (issue paper money that was not redeemable in gold or silver); make anything but gold and silver coin a tender in payment of debts”.

Thomas Jefferson had warned in 1802: “I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property – until their children wake-up homeless on the continent their fathers conquered.”

Precisely this feared massive transfer of wealth is occurring now just as Jefferson warned, and the threat of homelessness is becoming epidemic. In a century, the inflating Dollar has lost about 95-98% of its purchasing power, depending upon how it is measured. The threat of a crushing historic deflation faces us today, wherein mountains of unserviceable debt of over-inflated value will be repaid or defaulted. Then we should expect widespread plunging asset prices and wages.

Inflation is an increase of money and credit in proportion to the amount of goods and services available, whereas, deflation is the opposite – a decrease. In our modern credit-based financial system, the “monetary aggregates”, including all sorts of near-money debt of which coin and currency are a tiny part, effectively serve as “money”.

The reason the rates of, alternatively, inflation and deflation that Jefferson warned about can be so extreme today is because, in our modern system, “money” which has been created out of thin air by immense amounts of borrowing goes to “money heaven” when loans are repaid or defaulted. Meanwhile, under deflation, prices of assets and services, including wages, collapse from artificially created levels. The defaults have barely begun and people are already preferring to hold cash rather than what they might buy with it.

Commodity price declines have resumed. Gold and silver prices recently have been crushed. Many who have cash are sitting on it, keeping it from circulating in the real economy. Some question whether to sell assets and take losses. If so, what to buy?

Millions of people are beginning to understand from historic levels of foreclosures and bankruptcies, and especially from their personal experience, God’s wisdom in warning us against the evils of debt and borrowing – eg: “The borrower is servant to the lender” (The rich rule over the poor, and the borrower is servant to the lender, Pro 22:7). This is true, even if they don’t realize that God’s Economy is not based upon debt.

God’s Word also warns against presuming upon (boasting of) the future (Proverbs 27:1, James 4:13-16). That’s what borrowing and intangible asset investing do – invite speculation and default.

We are rapidly on our way to becoming serfs or slaves of feudal masters as occurred during the Dark Ages following the collapse of the Roman Empire. But God has provided better ways for us to proceed. Will we finally choose to again follow them?

Floating Abstractions of Value . . . or Real Sustaining Wealth?

Modern financial planning and management denominate assets, liabilities, wealth, and services in terms of “money” – in “dollars” here in the U.S. and in much of the world’s transactions – though many important nations are working to replace the U.S. Dollar’s role in their own economies. Most people assume that life’s necessities can continue to be acquired as needed with appropriate amounts of “money” – either with their own dollars or someone else’s.

Completing that cycle of converting investments into cash in order to then acquire what we need sometime in the future is becoming problematic in our time. Doing so is likely to become even less assured in an unstable and unsustainable modern society and financial system.

There will surely be record numbers of “deer in the headlights” as fear and panic return to the markets, the economy, and our society with a vengeance. Reality appears even more ugly and abruptly when people’s eyes are glazed over.

I pray that you and yours are not among them. Knowing the truth and being prepared while trusting in the Lord’s provision are the antidote.

Some observers warn that we are on our way to being a “third world” economy as “the wheels fall off” of the society and life to which we’ve grown accustomed. I would add, however, that most of us are not prepared to maintain an existence in an undeveloped “third world” society.

Each of us faces a long list of threats to our accustomed lifestyles that could bring disaster with little warning. Each of these key life “issues” could result in devastating suffering and death with little warning, but an unsustainable global financial system would surely cause widespread societal devastation. Widespread financial and economic catastrophe is a certainty. And, apart from divine judgment for our disobedience to God, perhaps no crucial threat is as certain to befall today’s world.

As I explain in Time to Head for the Ark and in our various web sites and other multi-media, we report, analyze and demonstrate the systemic vulnerabilities and failings of globally interdependent modern living – but also how to facilitate people enjoying life abundant even in these increasingly dangerous times when the “status quo” could be interrupted with little or no additional warning.

There I wrote, “ALL problems and threats that we face today really are a consequence of mankind failing to live as God designed and revealed in His Word and in Creation. These problems and threats reveal that the foundations of modern society are tragically flawed. However, we have His promises that He will guide and sustain us in rebuilding them if we embrace Him and His ways.” Do you hear society’s foundations cracking and feel them giving way?

To succeed in transitioning to an abundantly sustainable way of living requires that we return to living God’s way – not just spiritually and relationally but also with respect to producing, preserving, and enjoying life’s physical essentials. That’s our core PreparedALHWaysTM message.

Abundant Sustainable Living in Harm’s Way

The survivalists “get it” about many of the threats. You may also, but even survivalists and “doomsday preppers” may not fully grasp what it takes to produce and maintain wealth that preserves and builds future value during these increasingly problematic times.

Consider this: If life’s essentials cannot reliably be acquired, produced, or distributed and then protected near where people live; or if available ”money” is insufficient, for whatever reason, to acquire needed essential assets or services in the global marketplace, then wealth for most people can fail on a practical level regardless of its definition.

This is why we help people assess their circumstances and options for developing and maintaining more abundantly sustainable lives.

Don’t Let it be You

Woe to those who call evil good and good evil,

who put darkness for light and light for darkness,

who put bitter for sweet and sweet for bitter.

Woe to those who are wise in their own eyes

and clever in their own sight

(Isaiah 5:20-21 NIV).

 The Apostle Paul prophesied in 2 Timothy 3:13 ESV, “While evil people and impostors will go on from bad to worse, deceiving and being deceived.” God promises woe to those who habitually lie, steal, and deceive. Please don’t let it be you or your family . . . or me or mine . . . who deceives or who are deceived. That’s my prayer.

I have joked for years that the quickest way to figure out what God’s best is for any aspect of living is to look at what the world’s practice is here in Modern Babylon … and then figure out what the opposite way is. More often than not, that’s the way God has given His creation and beloved children to function. It’s a poor joke. Maybe it’s because the thought is too close to painful reality.

My colleagues and I call the means of gaining and maintaining Abundant Sustainable Living in this life, not just in Heaven when God delivers us from the trials and challenges of this life – “Harm’s Way Solutions”.  We seek to engage people personally in order to connect them with the expertise and other resources of “God’s Economy” that will help them develop solutions tailored to their unique needs and circumstances.

PreparedALHWaysTM and its related sites, media and growing network of colleagues, associates, and business and ministry partners are coming together to help people live and work well in communities of local economies, especially as our Creator designed and provides.

www.PreparedALHWays.com, published by ALHWays LLC – ALHWaysTM is our acronym for “Abundant Living in Harm’s Way – always and in all ways”. This portal Web site features multi-media publishing and programming and reports related to the rapidly growing sustainable living movement. It explains how families, businesses, and individuals can benefit right where they live and work.

PreparedALHWaysTM and its related sites, such as consulting and “on-the-ground” project-driven Harm’s Way Solutions (www.HarmsWaySolutions.com) for households, providers, communities, and for the Church and its ministries.

My book Time to Head for the Ark explains Abundant Living in Harm’s Way, why it’s the best way to live, why it is now both necessary and urgent, and how to gain and maintain it, emphasizing its three key aspects:

  • Health and Wholeness – physically, relationally, and spiritually;
  •  Wealth and Resource Management – especially “sustainable investments” which preserve asset values and lives and provide meaningful returns in diverse economic conditions;
  •  Abundant Sustainable Living in local communities and economies – in good times and bad and under a wide variety of circumstances.

Sam is also president of Be In Wholeness, Inc. (“BIW”), a 501c3 healing and wholeness ministry that published Supernatural Health, “The Cure for the Healthcare Crisis”. BIW describes and supports wholeness ministry that is at the core of vital and abundant sustainable community

Additional Radio, TV, and other Internet programming is in development. If you have interest in being a part of these exciting ways to reach people with life abundant through successful Kingdom living renewably and sustainably – or we might somehow be useful to you and yours – please let us hear from you.

Feel free to share this in its entirety with others. You may also quote portions of this so long as credit is given.

I appreciate your interest and pray that you and yours will enjoy life abundant in Christ and His provision – now and always.

Sam Townsend












[i] The Elliott Wave Financial Forecast, published February 8, 2013 by Robert Prechter’s Elliott Wave International, www.elliottwave.com, phone: 770-536-0309.

[ii] “State-Wrecked: The Corruption of Capitalism in America” by David A. Stockman in March 30, 2913 New York Times Sunday Review. Mr. Stockman, a former Congressman from Michigan and Budget Director for Ronald Reagan (1981-1985) and author most recently of The Great Deformation: The Corruption of Capitalism in America, released April 2, 2013.

[iii] “Regulators Let Big Banks Look Safer Than They Are” by Sheila Bair, Chm FDIC from 2006-2011, Wall Street Journal, April 2, 2013.

[iv] “An Infinite Amount of Money”, an e-mail post by John Mauldin Mar 06, 2013.