Failure of Money

In the Book of Beginnings (Genesis) Chapter 47 we find that Joseph had been made Governor over Egypt and the famine was in full swing.  When times are tough our priorities change dramatically.  Our perceptions now align with reality for the illusions evaporate with amazing speed.

In the Tech bubble of 1999-2000, money evaporated in terms of perceived stock values in the various technology stocks.  I remember that the valuations of various Internet stocks were astronomical.  Typically, stock prices are valued on current and future earnings.  During the bubble, prices were based on a pipe dream of future earnings… a pure illusion that was totally disconnected from reality.  Once men and women returned to reality, the bubble burst and money effectively evaporated.  A portfolio valued at $10,000 could have easily dropped to $500 and some did.  I knew a young man without any finance background or experience who lost $10,000 of his $15,000 investment when the bubble burst.

Fast forward to the bubble of 2007-2008.  Once again asset valuations had increased.  Housing had become a bubble.  Liar loans were packaged as high quality investments and insurance was taken out on these instruments.  Leveraged investments were the gambling devices of the financial industry.  Once again, mania and illusion replaced common sense.  When the bubble burst, the Federal Reserve and other central banks came to the rescue for the “too big to fail” institutions.  Vice President Biden revealed that the U.S. was close to marshal law at one point.

Seven years later, we are at another inflection point.  This time the bubble is the biggest of all- a global currency bubble and a bond market bubble.  Investment managers have purchased “insurance” in the form of derivatives as a perceived backstop to any loss.  The problem is the same as it was in 2008.  If the issuer of the derivative insurance is unable to pay, the insurance is no good.  So you have losses on all sides.  The current levels of “insurance” exceed anyone’s ability to pay off if the current bubble bursts.  What would happen if an adverse economic event occurs?  The failure of money.  Is this unprecedented?  No.  Back to Genesis 47:

15 So when the money failed in the land of Egypt and in the land of Canaan, all the Egyptians came to Joseph and said, “Give us bread, for why should we die in your presence? For the money has failed.”

16 Then Joseph said, “Give your livestock, and I will give you bread for your livestock, if the money is gone.” 17 So they brought their livestock to Joseph, and Joseph gave them bread in exchange for the horses, the flocks, the cattle of the herds, and for the donkeys. Thus he fed them with bread in exchange for all their livestock that year.

Failure of money does not mean the end of civilization.   It simply means the end of a perceived and accepted medium of exchange that has failed.  People will find tangible value to exchange for food.  When money fails, food becomes the most important medium of exchange.  Expensive cars and homes dramatically decline in value.  The non-essential items become worthless.  Only those assets that promote life are of value.

This coming fall is a potential culmination point when illusion meets reality.  The central banks have been propping up the markets by printing more money with declining value in hope of maintaining the illusion of growth and prosperity.  The middle class is not responding and is now trying to save rather than consume.  The poor as a percentage of the overall population is increasing and need greater financial assistance.  The wealthy (top 1%) are busy bidding up prices on collectibles.  The overall productiveness of society is declining and cannot support the current massive bubble.

When will the current money fail?  It could be as early as today but it could somehow be postponed for months or a few years.  Mathematically there is no way out of the bubble except for hyperinflation which is the precursor to monetary failure.

Joseph was given the mandate to store food in anticipation of the famine.  By responding to his calling, his family made it through the famine and the great reset of the monetary system of Egypt.  Gold and silver ultimately became the medium of exchange after the famine ended.  A few days ago, former Congressman Ron Paul issued a warning.  He spoke about the reality of where we are at today and I believe his assessment is “spot on”.  You can watch his presentation at:  He gives you the eminent warning signs at the end of the presentation.

If we ignore the potential for failure of the reserve currency of the world, it is at our peril.  The current financial system is plagued by lawlessness and I personally don’t believe that FATHER let it continue much longer.  Of course, the central bankers think they are the smartest and wisest people on earth.  Their attitude will be their downfall.  Only FATHER knows the timing!

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