Debasing the Currency
The Westminster Shorter Catechism is a historic document that has helped shape many Christian’s thinking throughout the last several hundred years. The structure of a catechism is to ask a question then give an answer. This was a common learning curriculum tool for children in America for the first few hundred years of settlement. One of the questions in the catechism has to do with the Bible and its teachings, “What do the Scriptures principally teach?” The answer summarizes why the Bible is the most important book that has existed throughout all of humanity, “The Scriptures principally teach what man is to believe concerning God, and what duty God requires of man.” This short answer gives us a framework to understand why the Bible was written. It was written to teach us about God and how we can have a personal relationship with Him. Second, it teaches us about what God requires of us. He clearly spells out His requirements in His law. As the wisdom of Solomon continues to remind us, “What has been is what will be, and what has been done is what will be done, and there is nothing new under the sun” (Ecc. 1:9). The Bible speaks into every contemporary problem that we are facing today including the debasing of our currency in America.
To read and apply the Old Testament requires diligent study, prayer and logical thinking. We, in America, like to be entertained and to have google think for us today; therefore, we have a hard time applying the principles of the Old Testament. The book of Isaiah talks about a principle of the debasing of currency, “Your silver has become dross, your wine mixed with water” (Is. 1:22). This verse is describing how unethical silversmiths debased the currency during this time (around 700 B.C.) in the nation of Judah. The word dross means cheap or base metal. The silversmiths tampered with the precious metal silver and it was no longer pure silver. Essentially what was taking place was silver was being combined with other less expensive metals and sold as if it was pure silver. The silversmiths (a private business much like the Federal Reserve Bank today) were tampering with the money supply. These base metals were then passed off as currency. Eventually those counterfeits were spent into circulation in the economy doing a couple of things. First, if the dross in the new ingots (the silver made into a shape like the coins today) is undetectable, the market price of all silver ingots will fall: more supply (more of these in circulation), lower price per ingot. They are then not worth as much. Second, if the dross-filled ingots are detectable (inexpensively), then the price of phony silver ingots will drop in relation to pure silver ingots. This means there will be two separate price-quote systems in the economy: a pure silver price per good or service, and a dross filled silver price per good and service. This will exist until the government eventually gets involved (as they always do) and demand that the real silver and the phony silver are to be treated as if they are equal value. This puts a government sanction on the moral corruption.
Winners and Losers
Those who win in a rigged economy like this are the ones who make the phony silver and get access to the phony silver early on and spend it into circulation as rapidly as possible. The losers are the ones who get access to the phony silver later, after the prices in general have risen (inflation). The main problem is no new wealth has been created. It appears more wealth has been created as there is more silver in circulation when in actuality only corrupt debased silver have been circulated into the economy by a deceiver or a group of deceivers. No new wealth only then creates the illusion of wealth.
This debased money impacts the people greatly. It impacts the small business owner, like the winemaker in this example, who is attempting to justly maintain a profitable business. He is attempting to create a good product and sell it at a fair price. Since the silver is now debased he has to make some decisions. He is no longer receiving a full silver coin but half a silver coin. Here are his options: 1) Keep trying to compete by maintaining the same standard product at the same price and now lose half of his profit; 2) Double the price in order to receive the same amount of silver per item sold; 3) Or embody the principle of Rome, “When in Rome do as the Romans” by debasing his product with cheaper quality materials, but maintain the fiction that each unit is worth one silver coin. Unfortunately when people are faced with providing for their families and the families of their employees they often embody the Roman ethic. The employee wants to keep providing for his family so he becomes part of the scheme by accepting raises that these false profit’s temporarily create. The business owner mirrors the same corrupt practices. That is the example we see in this verse. The silver has been debased unethically and unjustly. Now the person that makes the wine applies the same unethical principle. It is a long process to make wine. In order to make a greater profit while still spending the same amount of time, the winemaker adds water to his wine. If he adds 20 percent of water to all of his wine, he makes a 20 percent profit which is now needed since silver is no longer as valuable. It is only a matter of time until all businesses either go out of business, double their prices, or debase their product to compete in the market. Gary North points out in his book 'Honest Money' how important it is to stop this process early on, “Once the process of moral debasement begins to spread, it is very difficult to stop it. People must take a stand in principle against this spreading moral corruption. The more that people see that corruption seems profitable, at least in the short run, the more difficult it is to persuade people to change. The corruption is contagious, almost like a disease. But it isn’t a disease; it’s a moral condition.”
The Moral Oppression
Since most business owners out of necessity opt for the second or third option to stay in business, it is the customers who get hurt. The customers pay the same price for less quality or double the price for the same quality. The group of people that find themselves crippled the most in this debased economy are those who are on fixed incomes. Often people who are pensioners and widows. They are the most vulnerable in society, often not able to go out and work, creating the wealth necessary to survive anymore, so they have to continue to spend the same money for less quality goods and services. Here, then, a nation becomes greatly unjust, grieving the God of justice, “You shall not afflict any widow, or fatherless child. If you afflict them in any way, and they cry at all unto Me, I will surely hear their cry; and My wrath will wax hot, and I will kill you with the sword; your wives shall be widows, and your children fatherless” (Ex. 22:22-24). Woe to the person that mistreats the least of these in our culture as they will face the vengeance of God, “Vengeance is mine, I will repay, says the Lord” (Rom. 12:19b). In this scenario, due to corrupt silversmith,s these people suffer. They are not loving their neighbor but rather oppressing them. Their actions have consequences and they answer to God for them.
In America there is a private entity that is debasing the currency just like the silversmith did in Isaiah’s time. This organization is called the Federal Reserve Bank. The interesting thing is they are not a Federal agency but private. Also, they have no reserves. This is part of their propaganda machine. Just like the corrupt silversmiths, the currency is being debased by a private organization in America. This has inevitably lead to the devaluing of our dollar. The phony money has caused inflation meaning a dollar is worth drastically less than it once was. There is more money in circulation giving the illusion of wealth building when in fact nothing new has been created, except for debased currency. This has lead to business owners to have to make decisions of: 1). Trying to maintain the same same goods and services at the same price and quality losing profit; 2). Doubling the price of their goods and services; 3). Debasing their product by producing lower quality goods and services. Again, it is the customers who suffer. In particular the pensioners and the widows are suffering in our economy, making us a very unjust nation. Here we see history is repeating itself once again and until we repent of this sin as a nation we will continually find ourselves under the judgment of God.
Contributor / Eric Stewart
Eric Stewart is the Lead Pastor of ONElife Church in Flint, MI.
2/1/2017 02:19:40 pm
Really Good! Total disreguard for God's Law. We need to repent as a Nation.
2/1/2017 05:09:20 pm
2/2/2017 08:18:22 pm
I get where you are getting at. I know that debasing the currency would help out every country's economy and welfare by leaps of amounts. However, it might also bring some harmful effects. If we debase the currency, then we won't have a unique identifier for each country's monetary aspect. It has both positive and negative effects in all kinds of fields.
3/6/2017 06:05:40 pm
Did you use North's book "Honest Money" for a reference? Love that book!
3/7/2017 07:33:12 am
Hey Matt! Good to hear from you. Yes "Honest Money" is one of the references and is a great book. North is by far one of my favorite authors to read.
8/4/2021 11:19:27 am
Wow! Brilliant writing and linking it to religious teaching gives it so much legitimacy. A well known finance guru, Peter Schiff has been talking about the need to buy gold and silver for more than 20 years. During that time, the purchasing power of the dollar has been decimated, people have flocked to to Dollar General and gold has soared by over 400%. We are now very close to becoming a "2 Class society": the uber-rich and the poor. People who THINK they are middle class are actually not!
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