Archive for the ‘Central Banking’ Category

Jeroboam sacrificing to his idol, Claes Corneliszoon Moeyaert, 1641.
“Jeroboam Sacrificing to Idols” by Claes Corneliszoon Moeyaert, 1641.

And this thing was the sin of the house of Jeroboam, so as to exterminate and destroy it from the face of the earth.

  • 1 Kings 13:34

So just how is the Federal Reserve like the sin of the house of Jeroboam?  For that matter, what is the Federal Reserve and who on earth is Jeroboam and the sin of his house of which I write? 

Well, you won’t have to wait long.  Those questions, Lord willing, I aim to answer in this post.

Jeroboam and the Sin of His House

Jeroboam was the first king of Israel, the Northern Kingdom, which split from the House of David after the accession of King Rehoboam, the son of King Solomon.   The proximate cause of the split was a tax revolt of the norther tribes due to their unhappiness at Solomon’s policy of heavy taxation and the arrogant response of Rehoboam, Solomon’s successor, when Jeroboam and other representatives from the north asked him for relief.  The split of the United Kingdom into warring Northern and Southern Kingdoms is recorded for us in 1 Kings 12.

The ultimate cause of the split was the will of God.  Solomon had rebelled against God, having his heart drawn aside into idolatry by his many foreign wives, and the splitting of the kingdom was God’s punishment for Solomon’s unfaithfulness.

In 1 Kings 11, the prophet Ahijah had prophesied to Jeroboam that God he would tear the kingdom out of the hand of Solomon and give him ten tribes, leaving one for David’s successor.  The Lord even promised Jeroboam that he would build him an enduring house provided he did what was right in the Lord’s eyes.

But disbelieving God, Jeroboam quickly fell into the sin of idolatry, as had Solomon. 

In Jeroboam’s case, he was concerned that if residents of the Northern Kingdom kept going to Jerusalem to worship, their hearts would be turned from following him and return to the house of David.  To prevent this, Jeroboam invented a whole new religion.  He made two golden calves, putting one in Bethel and the other in Dan, “made priests from every class of people, who were not of the sons of Levi,” and made sacrifices at a time, “which he devised in his own heart.” 

Jeroboam was confronted by a prophet of the Lord, who in dramatic fashion denounced the king while he was in the act of sacrificing.  When Jeroboam stretched forth his hand and called for the prophet’s arrest – this was the Old Testament version of cancel culture – his hand withered, “so that he could not pull it back to himself” and the altar split in two and the ashes poured out of it. Jeroboam then asked the prophet to restore hi hand, which the prophet did. 

Now one would think that such a powerful demonstration of God’s power and anger would have moved Jeroboam to repentance.  But this did not happen.  In 1 Kings 13:33, 34 we  read, “After these event [the withering of Jeroboam’s hand and the altar splitting in two] Jeroboam did not turn from his evil way, but again he made priest from every class of people for the high places; whoever wished, he consecrated him, and he became one of the priests of the high places.  And this thin was the sin of the house of Jeroboam, so as to exterminate and destroy it from the face of the earth.”   

The Sin Didn’t Stop with Jeroboam

Jeroboam reigned as king of Israel for twenty-two years.  Scholars differ on the dates of his reign, one putting it at 922-901 BC, while another gives the dates 931-910 BC.  Samaria , later the capital of the Northern Kingdom, fell to Assyria om 722 BC, so in either case the Northern Kingdom would continue for another 179 – 188 years after Jeroboam.  But although Jeroboam was succeeded by many other kings of Israel, none of them departed from his sin of establishing a false religion in the kingdom right at the outset.  One could even say that the sin of Jeroboam was endemic to the Northern Kingdom.

You can see this from reading through the remainder of the books of 1 and 2 Kings.  A search using the term “sin of Jeroboam” on BibleGateway yielded 24 occurrences in these two books. 

  • And He will give Israel up because of the sins of Jeroboam, who sinned and made Israel to sin (1 Kings 14:16)
  • He did evil in the sight of the LORD, and walked in the way of Jeroboam, and in his sin by which he had made Israel sin (1 Kings 15:34)
  • For he walked in all the ways of Jeroboam the son of Nebat, and in his sin by which he had made Israel sin (1 Kings 16:26)
  • But Jehu took no heed to walk in the law of the LORD God of Israel with all his heart; for he did not depart from the sins of Jeroboam, who had made Israel sin (2 Kings 10:31)

“Walked in the way (or ways) of Jeroboam” also returned several results.  For example, King Ahaziah, Ahab’s son, “did evil in the sight of the LORD, and walked…in the way of  Jeroboam the son of Nebat, who had made Israel sin.” 

At no time did any of the kings who reigned in the Northern Kingdom break the pattern of the sin of the house of Jeroboam.  They all walked in his “original sin,” and the whole nation went into captivity because of it.

The Sin of the Federal Reserve

The sin of the Federal Reserve (and all other central banks) has at least one thing in common with the sin of the house of Jeroboam.  Once established by Jeroboam, his idolatrous religious system proved impossible to get rid of.  Even zealous King Jehu, the only king of the Northern Kingdom about whom God had anything good to say, could not bring himself to end the Jeroboam’s false religion.  In like fashion, the Federal Reserve, although manifestly a corrupt, unchristian, and unconstitutional system from its founding in 1913 right up to the present, has so far proven impossible so much as even to audit, let alone get rid of. 

The Federal Reserve was corrupt from the beginning.  Just as with Jeroboam’s false religion, there was no point at which the Federal Reserve (henceforth, the Fed) was not corrupt and dishonest and sinful.  According to Fed critic G. Edward Griffin in his book The Creature from Jekyll Island – I highly recommend this very readable critique of the Fed – the founding of the Fed was quite literally a conspiracy, with some of the most powerful bankers and politicians in America along with Paul M. Warburg of the Rothchild banking dynasty meeting under secretive circumstances on Jekyll Island in Georgia in November 1910 to hammer out the details of what would become the Fed.  Griffin describes this meeting as the, “birth of a banking cartel to protect its members from competition.”

Of course, that’s not how it was sold to the public. Taking pains not to use the term “central bank,” the conspirators sold the Fed – even the name Federal Reserve is a con, for the Fed is not owned by the federal government, it is a private bank owned by the Fed’s large member banks and it has no reserves apart from money it creates out of thin air in a sort of twisted version of creation ex nihilo – to the American people as a way of stabilizing the banking system which had been rocked by a major crisis in 1907.  In truth, the Fed was conceived as a  way of transferring the risk of a banking crisis from the bankers themselves to the American people, but of course the Jekyll Island crowd wasn’t about to let that cat out of the bag. 

Once established by the Federal Reserve Act, passed by Congress in 1913, the Fed set up shop and his been operating ever since.  During that time, the dollar has lost 98-99% of its purchasing power.  It’s important to note that this loss of purchasing power of the nation’s currency is not some unforeseen bug, but a feature, of the system.  The depreciating currency – and in a debt based fiat currency system such as we have in America the currency must be debased otherwise the system would collapse – is essentially a giant transmission belt that serves to strip mine purchasing power from the wages and saving of ordinary Americans and deposit that stolen wealth into the pockets of the wealthiest of the wealthy.

It should be said here that as Christians we do not criticize the wealthy because they are wealthy.  If a man become rich by honestly serving his fellow man, very well.  There is no sin in earning a lot of money.  But it’s quite another matter to steal a lot of money.  And this is what the Fed was set up to do from the very beginning. 

Just as Jeroboam’s false religion was corrupt and idolatrous from the very beginning and at no time had God’s sanction, so too is central banking – whether conducted by the Fed, the Bank of England, the European Central Bank, the Reserve Bank of Australia, or the People’s Bank of China, it matters not which one we speak of; they are all corrupt – a fraud and a curse upon the nations in which it is practiced, and this includes nearly all nations on earth. 

But there is at last another way in which the Fed is like the sin of the house of Jeroboam.  Not only was the Fed, like Jeroboam’s false religion, corrupt from the beginning, but it has persisted from presidential administration to presidential administration. 

It matters not whether the president is Republican or Democrat, conservative or liberal, a man who promises to cut the size of government or vastly expand its powers, the Fed keeps running in the background, churning out dollars with a click of the mouse.  At the present time, the Fed is committed to buying at least $120 billion (that’s right, $120 billion) per month in federal government debt and mortgage backed securities.  To put that in some perspective, Jeff Bezos, whom Forbes Magazine named the richest man in the world for the fourth consecutive year in 2021, has a fortune listed at $177 billion.  In less than two months’ time, the Fed prints another Jeff Bezos sized fortune. 

And to say the Fed prints the money really isn’t accurate.  It would be better to say that it clicks the money into existence, because all the newly created money is brought into existence on a computer.  They don’t even bother running a printing press.

But back to the notion that the Fed is much like Jeroboam’s sin.  No presidential candidate in my lifetime – with Ron Paul being the one exception – has ever seriously talked about ending the Fed. 

When Donald Trump and Hillary Clinton were running for president in 2016, Clinton criticized Trump’s comments on the Fed saying, “You should not be commenting on the Fed actions when you are either running for president or you are president.”  Clinton couched her remarks as protecting markets, but one suspects there was more to it than that.  Presidents aren’t supposed to talk about the Fed, because the Fed is supposed to be independent.  But while Fed supporters like to speak of the Fed’s independence from the political process, a more honest word to use would be “secretive.” Those who run the Fed act more as if they belonged to a secret society than public servants.  And that’s not surprising given that their labors are directly damaging to the legitimate interests of the American people.  Because of this, they must keep the hoi polloi in the dark about all their money printing schemes, the real reason for rising prices [rising prices are not inflation; inflation is Fed money printing which results in rising prices, but you’re not supposed to know that], corporate bailouts and the rise in wealth disparity. 

But even populist Donald Trump did not lay the axe to the root and call for an end to the Fed.  When Trump complained about the actions of then Fed Chairman Jent Yellen, he was upset only because he believe that the Fed was acting to help Hillary Clinton, not because Trump himself had any objection to the Fed. 

The Fed engaged in massive money printing under George W. Bush, Barak Obama, Donald Trump and is engaging in massive money printing under Joe Biden.  And not only does the Fed print massive amounts of new currency under all administrations, Democrat or Republican it doesn’t matter, but it does so at a faster and faster pace.  Indeed, because of the debt-based nature of our monetary system, cash must be borrowed into existence at a faster and faster pace to pay the growing interest on the existing debt.  It’s a bit like having tiger by the tail.  Once you grab that tail, you can’t let go.  Once you begin a debt-based financial system, which America did with the creation of the Fed, you can’t stop adding debt.  Such systems are a sort of cul-de-sac, a dead-end road to financial perdition.       

To sustain the unsustainable system of debt increasing at a faster and faster pace just to service the interest on the existing debt, central banks the world over have suppressed interest rates to near zero and even below zero.  That’s right, in today’s world of central banking, you get paid to borrow and punished to save.  This is a financial version of what Isaiah warned about, calling good evil and evil good.  This cannot continue indefinitely.

End the Fed

In his recent column “The Woke Fed,” Ron Paul wrote once again about the coming economic crisis and that the crisis would, “either be precipitated by or result in the rejection of the dollar’s world reserve currency status.”

But more disturbing than this is that Paul noted that the inevitable collapse of our current monetary system result in it being replaced, “with a government even more authoritarian than the current one.”  Paul doesn’t say so explicitly, but he’s likely referring to the creation of a new system of Central Bank Digital Currencies (CBDC’s) by which the monetary elites will hope to remain in power once the current system implodes. 

Just as Israel desperately needed to repent of its idolatry by removing the false religions system of Jeroboam, so too does the United States need to repent of our monetary sins, end the Fed and allow the free market to determine what monetary system we should have going forward.  Note well, I do not say the government should institute a system of sound money, but rather the government should get out of the way wan allow the free market to determine what money is best. 

The idea that the government should not be involved in the manufacture of money may stride some readers as odd.  After all, don’t all governments manufacture money.  Most all of the them do, or use money manufactured by other governments, but this does not mean they are right in so doing.  To say that all governments print money simply is a descriptor of what they do.  But this is not to say they ought to do it.  Only that they do it.   

According to the Bible, there are only two function os government, punish evildoers and reward the good. There’s nothing there thay says anything about printing money, or in the case of the United States, chartering a private bank, the Fed, to regulate the money. 

Just as idolatry is always wrong, so too is it always wrong for politicians and central bankers empowered by them to regulate a nation’s money supply.  The bankers and politicians will always abuse their position.  Just as idolatry is evil and cannot be reformed, so too is central banking both evil and irreformable.  For the health of the nation, both must be done away with entirely   

Let us, therefore, end the Fed.    

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The_Phillip_Medhurst_Picture_Torah_122._Abraham_purchasing_Ephron._Genesis_cap_22_v_16._Hoet (2)
Abraham purchasing the cave of Machpelah from Ephron by Phillip Medhurst. Courtesy of Wikimedia Commons.

Abraham weighed out the silver for Ephron which he had named in the hearing of the sons of Heth, four hundred shekels of silver, currency of the merchants.

  • Genesis 23:16

In his lecture “Money, Freedom and the Bible,” John Robbins argued that the manufacturing of money was not a proper function of government, because there is no warrant for this in Scripture.  The Bible charges the civil magistrate with the duty to punish evildoers and reward the good.  There is no mention of anywhere in Scripture of God granting civil governments the right to manufacture money.

The first time I heard this many years ago, I was shocked by this idea.  “But all governments manufacture money,” I thought to myself.  “If the government didn’t supply money, who would?” I continued.

Of course, my initial objection can be answered by pointing out that simply because a thing is done does not logically imply that it ought to be done.  In the 18th century, David Hume famously made this point.

Secondly, concerning who would supply money in the absence of governments, the answer to this is the market would take care of this.  As Robbins noted in his lecture, there is such an example of this in Genesis 23, where Abraham pays for the field to bury Sarah by weighing 400 shekels of silver, “currency of the merchant.”  Note that it was not the currency of Pharaoh, nor the currency of the King of the Hittites that Abraham weighed out.  It was the currency of the merchants.  That is to say, it was a unit of money that arose from the common practice of the free market.  Importantly, it was not a government issued currency, neither was it the product of a government licensed central bank.

For that reason, that it arose in the marketplace and was privately managed by the merchants who used it, the shekel weighed out by Abraham was an honest unit of money.  The same cannot be said for sovereign currencies of our day.  Not only do they fail to maintain purchasing power, but they are deliberately designed to lose value over time.  To this author’s knowledge, there is not one honest currency in use today, including, and perhaps especially, the U.S. Dollar.

Last week’s post titled “This is Going to Hurt, Part 1: Honestly Facing our National Bankruptcy,” discussed the disastrous economic numbers coming out as a result of the government’s response to the coronavirus pandemic.  Please note, I did not write, “the disastrous economic numbers coming out as a result of the coronavirus pandemic,” but, “the disastrous economic numbers coming out as a result of the government’s response to the coronavirus pandemic.” It is not the Chinese coronavirus that caused over 30 million Americans to lose their jobs in the past six weeks, it is decision, more accurately decisions, of various government officials that have led to this disaster.

But oddly, as I also noted, the stock market has rebounded even as economic activity has made record declines.  How can this be?  The short answer to this question is money printing on a mind-blowing scale by the U.S. Federal Reserve, the central bank of the United States.

My purpose in this post is to lay out in non-technical language what a central bank is and what it does.  In subsequent posts, I shall illustrate the unbiblical, immoral nature of central banking by looking in detail at the origin, the workings and the disastrous effects Federal Reserve (the Fed) policy has had on our nation.


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The Eccles Building, the main office of the Federal Reserve in Washington, D.C.

And this is the condemnation, that the light has come into the world, and men loved darkness rather than light, because their deeds were evil.  For everyone practicing evil hates the light and does not come to the light, lest his deeds should be exposed.

  • John 3:19-20

The words from John at the top of this post are readily recognized by Christians as coming from Jesus’ dialogue with Nicodemus, the Pharisee who came to inquire of him one night.  The immediate application of Jesus’ words is, of course, to himself as the light who came into the world and was rejected of men, for they loved evil and feared lest their deeds should be exposed.

But while Christ said these words in the context of explaining his person and purpose for coming in the flesh to Nicodemus, his comments have a wider application.  They are a specific case of a broader principle we see in Scripture, that of the Christian principle of openness and honesty.  Those who love the truth do what they do in the open.  They let their light shine before men that others may see their goods works and glorify their Father in heaven.  On the other hand, those who practice evil, those who have something to hide, they do their work in the dark, fearing to be seen by men.

One application of the principle of openness and light is the Christian idea of government as a servant of the people, not as their master.  When the disciples argued about who was the greatest, Jesus explained the Christian concept of leadership, which was radically different from the model the world offered.  Christ explained that the rulers of the Gentiles “exercised lordship” (lorded it over) them, but such was not to be the case among his followers.  Following Jesus example, those who would be first in the Kingdom of Heaven were to be servants of all.


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