The Christian Life: Money and Banking
You’re probably wondering what “Money and Banking” has to do with a church blog. Well, Jesus talked more about money (treasure) than you’d think. He knew how critical a correct understanding of wealth was to our spiritual well-being. He said, “…for where your treasure is, there will your heart be also” (Matt. 6.21). In other words, the heart (our emotional/psychological life) goes where the priorities are.
If God and His will is high in your priorities then your heart will be favored to good, but if money is your god, then Paul writes, “For the love of money is a root of all sorts of evil, and some by longing for it have wandered away from the faith…” (1 Tim. 6.10).
I remember taking an introductory economics course in Junior College. Our professor Dr. Shocket impressed us with how important money and banking are to a thriving culture. He noted that human society is about making wealth, storing wealth, using wealth and keeping that wealth. His observation has proven true over the years and especially now as we see an economic crisis growing up around us. Lo and behold, it’s all about “money and banking.”
So, we gain wealth by working; we store that wealth in a bank; we use that wealth to pay our bills, and throughout, we try to keep our wealth by investing. If any part of the system fails ethically/morally the system fails.
When Lehman Brothers (investment bankers) went belly-up on September 15, 2008, it sent shock waves through the whole business community. Soon other banks, all mesmerized like deer in the headlights of a Mac truck, seeking profits in subprime mortgages, followed Lehman Brothers into bankruptcy. Basically, they all had taken advantage of relaxed rules and lended more money than assets held. The name for this is “derivatives.” Derivatives have no value of their own, but rather, their value is built on something else upon which contracting parties agree. So, the “investment banks” were making loans of fantasy money that only had value in the inflated prices of houses for which they held mortgages. Then these mortgages were sold again to other banks, who in turn loaned money on them and this created the allusion of wealth where there was none.
This is what’s also known as a Ponzi scheme (named after Charles Ponzi, 1920, an Italian emigrant who juggled coupons and postage stamps to create false value.). Some know it as a “money pyramid,” where you pay older investors with newer investors’ money. There is no value added; there is only the allusion of wealth. That’s what happened with the current banking crisis and subsequent collapse from derivatives in 2008-2009.
The lust for wealth was driving all this deception. The most famous player in the scheme was Bernie Madoff, who defrauded his clients of $21 billion. He literally “Made-off” with their wealth. The love of money destroyed him.
The bottom line issue is real value. How much is your house really worth, and how much is the “dollar designation” for that worth, really worth? This can be illustrated with a one dollar bill. Printed on the bill are the words “Federal Reserve Note.” What this means is that there is no real value standing behind that dollar. The Federal Reserve can print money day and night, which it is doing right now, and that money has no real value. The only value is what the consumer adds to it in faith. Contrast this with the American dollar prior to 1964. Then the dollar said “Silver Certificate.” It had real value, i.e., a dollar’s worth of silver which was kept in reserve by the government.
Man has used some form of money from the beginning. The Maya culture, for instance, used cocoa beans on strings as money. The beans had an intrinsic value. They could be made into a popular drink. Commodities, like gold, silver, petroleum, and food products, all have a utility (can be used for life and well-being). So, in principle, which would you rather have: 1) a briefcase full of $100 bills, or, 2) and equal amount in gold? Or, fuel? Or, food?
It’s been put this way: the Roman Empire started out striking gold and silver coins. As time went on and money and banking stepped in, they started striking copper and lead coins, then they went to paper money, and from there, they went out of business.
Well, how does this all roll back on personal wealth and, more importantly, on our spiritual lives?
Jesus said, “Do not lay up for yourselves treasures upon earth, where moth and rust destroy…but lay up for yourselves treasures in heaven, where neither moth and rust destroy…” (Matt. 6.19.20). Our Lord understood the importance of real value in a monetary system. He was not teaching against money, rather, he was teaching us to consider the real nature of wealth.
The Scottish economist and moral philosopher Adam Smith in his book The Wealth of Nations wrote that man is led as if by “an invisible hand” to pursue a just end. It was his Christianity that caused Smith to get the full picture. Those things that we prize the most, like God’s mercy, loving relationships, liberty, peace, security, meaningful work, etc., are all valuable beyond price. So, Jesus says, “What will a man profited, if he gains the whole world, and forfeits his soul” (Matt. 16.26)?
Maybe, just maybe, the value of a soul at peace is greater than a “fist full of dollars” any day.