Arrogance and Ignorance

There are $600 trillion worth of derivative contracts worldwide according to the Bank of International Settlements. In simple terms, derivatives are debt bets between two parties that are very hard to collect on.  According to the Office of the Comptroller of the Currency, the nation’s five largest commercial banks held 95 percent of the $291 trillion derivatives portfolio of the country’s 25 largest bank holding companies at the end of the first quarter. More than 90 percent of those derivatives were in unregulated trading.  See: http://www.huffingtonpost.com/sen-maria-cantwell/wall-street-has-a-gamblin_b_340252.html

Public pensions in the U.S.have a record $2 trillion deficit.  The U.S. debt load now at about $12 trillion will be at least $14.3 trillion by the end of the year.  This does not include unfunded liabilities in excess of $60 trillion.  Forty of the states are in fiscal deficits as well as municipalities within the states. 

Seven states of the forty are California, Florida, Illinois, Ohio, Michigan, North Carolina, and New Jersey. Each has a population above 8 million people and has had to borrow more than a billion dollars, so far, to pay unemployment insurance claims. Each state currently suffers with unemployment levels above 15% as measured by the U-6 measure for the States.  Also, each state is a large net importer of either oil, natural gas, electricity, or all three of these energy sources.  If you consider that true money is “production of human labor and resources”, these states will not fare well in the coming months.

Benjamin Graham’s (Bio) distinction between investment and speculation: investment is the discipline of buying any asset at a good price which protects you from an unknown future, buying with a margin of safety, while speculation, or trading, is the discipline of correctly predicting the future.  Speculation has taken over the markets.

Those in control promise to ‘fix the problem tomorrow’.  Finance ministers and central bankers are exhibiting the behavioral phenomenon of “overconfidence in their future self-control”.   Oscar Wilde said, “I can resist anything but temptation”.  Doing something you know you shouldn’t is easier if you can convince yourself that this will be the last time you indulge, that you won’t do it again.  So we convince ourselves that since we’ll be strong in the future, we can still indulge today thus we delude ourselves into thinking that we will take the more difficult path next time.  The current delusion of the debt problem becomes exponentially more complex when you add in the concept of dependence and addiction, not so much to a substance, but to an idea that we can always print more money.

Our Heavenly Father compels us to decide a direction TODAY, not tomorrow.  We live in the “now” and our actions today determine the direction or our lives.  All of this fiscal irresponsibility will produce death and destruction and the only question is how it will play out and affect each of us on the planet.  The arrogance and ignorance of those in charge believe their own “press”.  As they walk out their “god complex” in their minds filled with illusions of grandeur, the average person is placed in immediate peril without any knowledge or understanding.  Only by repentance will nations return to blessing and sustainable prosperity.

Joshua 24:15  And if it seem evil unto you to serve the LORD, choose you this day whom ye will serve; whether the gods which your fathers served that [were] on the other side of the flood, or the gods of the Amorites, in whose land ye dwell: but as for me and my house, we will serve the LORD.

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