By the late 1920s, the stock market had inflated completely out of proportion. It was being used as a vehicle for “get rich quick” speculation, rather than long-term growth.

During the pre-depression era, the banking industry, in spite of the Federal Reserve System controls, was generally unregulated. Just as in Dan’s nail bank, few, if any, real controls were enforced. Banks made speculative loans backed by little or no security. They used credit to expand, just as Dan had.

Then, in 1929, the collapse came. First the stock market collapsed, followed by large-scale loan defaults and almost total economic devastation. Shortly thereafter, banks that were thought stable and had been so for decades, collapsed. Unable to recover their deposits, individuals lost their life savings, and companies lost most of their operating capital. Businesses that were heavily credit-oriented were forced out of existence.

The consumer credit boom generated trillions of dollars in new money. The post-World War II housing boom in the United States provided millions of houses on credit, and banking channels again expanded drastically. More supports were instituted by the government with more taxes being extracted to pay for welfare, Social Security, and government employment.

If we look back, we find that people were basically barterers. Unless every product needed could be grown on one farm, it was necessary for neighbors to trade products.

Let’s say, for example, that three individuals lived in a small community. One raised cows. The second raised corn, wheat, and barley. The third manufactured horseshoes and nails.

The dairyman decided he would like to build a barn for his cows. He had lots of timber on his property. He was able to cut down his trees and store his timber until it was cured and ready to use, but he was tired of using wooden pegs to put up his buildings—it’s so much trouble to drill holes, pound pegs and sand them down. Then he had an idea.

The dairyman used nails to build his barn and was so pleased he decided to get some more to repair his house.

He went back to the blacksmith to trade for some more nails.

Perplexed by the blacksmith’s refusal, the dairyman turned to his neighbor, the farmer, for help.

Trading his cow for some corn, the dairyman returned to the blacksmith.

The dairyman repaired his house and began to promote the virtues of using nails.

Soon other people began coming to the blacksmith to trade their products for nails.

Then the blacksmith had an idea! Why make horseshoes and other items? There seemed to be a good business in nails. So he began to specialize in manufacturing only nails!

As more and more people used nails, Dan developed a flourishing business. Everybody wanted nails to trade. Nails became what we call “money.” Money, in any system, must satisfy three basic functions: It must have value, it must be storable, and it must be divisible. Dan’s nails satisfied every one of these aspects and so they were used as money.

Dan had been in business several months when a farmer came by one afternoon with a large order.

When Dan wrote out a paper declaring that he had 100 bags of nails on hand for the farmer, he created a new medium of exchange—paper money. This paper money had to satisfy the same basic functions that our original money did to be called money, and it did. Nothing new was created by this paper money. It merely represented the nails in storage.

The distribution of paper money rather than nails continued as more and more people discovered that it was easier to carry pieces of paper than nails.

Dan began to notice that most of the nails remained in his warehouse. Although they belonged to somebody else, he always had surplus nails.

He began to think, “Why should I let these nails sit idle? No sense in making more nails when all these are here.”

Then one day a farmer needed some nails but couldn’t pay for them right them. So Dan loaned him some nails to be repaid later.

But this time, rather than making new nails, he simply issued paper on nails already stored in his warehouse. What had Dan become? A banker! He stored money (nails) for some and loaned it to others.

Dan had also created a new kind of money—credit!

Now credit seemed like a good thing. Without even knowing it, others were able to use this credit to build houses and barns. Dan’s business prospered through his use of credit—other people’s money.

Unfortunately, to keep his business growing, Dan was forced to expand using more and more credit. Then one day a depositor came to collect a large order of nails that Dan was supposed to be storing for him:

Quickly the farmers called a local meeting to compare nail receipts. One had 1,000 bags coming, another 500, etc.

It was obvious that something was wrong!

So they all rushed to Dan’s bank and demanded their nails back.

What happened? Dan went bankrupt. Why?

Credit was his downfall. When his depositors lost confidence in him, Dan was finished as a banker. He just loaned too many nails that belonged to others. You see, although credit looks like money, it isn’t. Credit is storable and divisible but it lacks one essential element—value. Credit cost nothing to create.

As we will see later, this same difficulty has occurred in real economics as well. Government, playing the role of world bankers, have issued credit until few people really believe they can ever repay their debts.

For the Christian, wealth is that which God entrusts to each of us. From the world’s perspective, the creation on wealth evolves around many things, including self-will—how much self-control and will power one has to devote to earning money.

As we will see later, that is not God’s perspective because, in every instance, individuals who spend their lives in the pursuit of money end up frustrated and miserable. They never really understand why they have money, and as they get closer to death, they realize how futile the attaining of wealth was.

There is a lot of worldly folklore surrounding wealth. Some of it states:

1. It takes breaks to get ahead. Whoever gets the best breaks or has he most influence is “the guy who gets ahead.”
2. It takes money to make money. In other words, the rich get richer.
3. You can’t be too honest and get ahead today. Why? You must be willing to shade the truth. If you’re extremely honest with people, then you will not be able to deal with the world system.

None of these are God’s principles. They are nonsense put out by those who seek to rationalize their behavior. The creation of wealth is both a gift and a talent. For some, acquiring wealth is easier than it is for others. But it is possible for anyone who is willing to sacrifice and to achieve by setting and reaching goals.

I’m not suggesting that this is good, because as we will see in God’s plan, it’s attitude, not aptitude that He honors. The gaining of wealth as an end in itself is a very poor investment of a life. Because, first, it requires a great deal of time—to the virtual exclusion of everything else including family, friends, hobbies and relaxation.

Second, there is no correlation between wealth and happiness. That is an important key! Many Christians are inwardly disturbed by the prosperity of some non-Christians. Yet we should recognize that Satan is the prince of this world, and it would be an extremely poor recruiting practice if he recruited only the impoverished.

But there is a great difference between God and Satan in our finances. “It is the blessing of the Lord that makes rich, and He adds no sorrow to it”. This establishes the foundation for the remainder of our study—how to have wealth without worry (wealth being everything that we own: our money, our family our creative ability—everything we have acquired since we arrived and everything we must leave when we go).

Thus we should remember that money is temporary. The importance of money to God is that for this small sliver of time in which we are living. He wants to use it to help determine our usefulness to Him throughout eternity. Our commitment to God’s Word on this earth is proportional to our use of money.

Second Peter 3:11 says, “Since all these things are to be destroyed in this way, what sort of people ought you to be in holy conduct and godliness.

I believe that initially each individual will be issued a number of digits (or units) for the amount of money held in the bank and proportional to earnings. A master credit card will be used to make most or all purchases. Eventually, as the system progresses, there will be no money, only a credit card per individual. The card will be checked through the electronic cash register at the store and also against a central computer to determine allocation of credit so that no one will be able to borrow beyond his ability to repay, nor will anyone be able to accumulate excessive amounts of money. It is conceivable that each individual will have a definite accumulation limit so that no large surpluses will exist. Profits may be allowed in business, but they will be contained within the maximums that the government prescribes.

Additionally, crime could be drastically reduced through this system, since crime prevention will become one of the major goals of the government. As the economy continues to slip, the cashless system will be an important tool in the battle against criminals. Money thefts will become a thing of the past because there will be no money. It will be fruitless to rob banks because they will only store computer tapes. It will make no sense to kidnap someone, because the criminal could only have his account credited. Retail store thefts will be reduced to product losses only. Thus, two major problems could be solved at one time—crime reduced and a common medium of exchange established throughout the world. I believe that whatever system is enacted, it will have to be worldwide, thereby creating a common medium of exchange.

During the recessions, more individuals will become unemployed as basic industries contract. Many of these people will be added to the government payrolls in an effort to appease those being hurt by the system. I believe we will develop what might be termed “shear economy.” In a shear economy, one segment will boom while another will suffer. Workers in the boom industries will be able to demand higher wages, while those in a lagging industry will be laid off. The unemployed will then demand compensation from the government, which will step in with subsidies, welfare and job supports, thus creating the need for more money to be put back into the system.

It is easy to envision shortages in industries involving fuel, food, and shelter. As other nations such as oil countries, demand higher levels of affluence for their people, we must begin to relinquish some of our affluence to compensate.

In this situation, more people will depend on the government for the answers—perhaps even a national hysteria in which the government is expected to make virtually every decision.

Pressure groups will chastise government leaders whenever they make wrong decisions. Consequently officials will become less prone to make any decisions, but when forced to act, they will be more likely to just treat the symptom to pacify the people, whatever the cost. During the recessions, they will spend all the money necessary to reverse the cycle. In inflationary spirals, leaders will try to appease the people by giving them something “for nothing.” The attitude will be to deal with whatever happens to exist at that time. It will become almost a necessity for the government to have total control of the money supply through some form of nationalization of the banking interests.

Will we ever have another great depression or collapse? I don’t know. But I do know that we are evolving into a new system, perhaps precipitated by a collapse. No matter what happens, we will have another “new deal”—one that people will ask for because of devastating problems (high prices, high unemployment, money almost worthless because of inflation and the prospect of a crime epidemic).

If the economy is in an inflationary spiral, the controls choke off the money supply (primarily credit) in an attempt to stop the increases. This stifles those segments of the economy that are dependent on credit, as most are. The economy then plunges into a recessionary period, and it takes greater quantities of money to reverse that trend. Each time the economy inflates, it generates higher prices. Each time it deflates, it picks up higher unemployment. What does the future hold for us economically? We will explore this in the next chapter.

The value of the US dollar is shrinking on the world market. Consequently, most other countries that have depended on our stability in the past are pushed to virtual bankruptcy. The economic balance has shifted to the Mideast cartel where little money is actually necessary. What does all this mean? Where are we headed?

Obviously, inflation is growing. In recent years it has increased at an alarming rate, whereas real production has dropped off. Major industries are pursuing a self-preservation attitude—some of them to the brink of disaster. Prices continue to soar while real production declines. Thus a new term has been coined, “inflationary recession” (prices increase while output declines).

Inflationary recession is not unique in the world economy, but it is unique in the United States. For years we touted our fiscal controls in the belief that it couldn’t happen here. It was believed inflation could be halted simply by reducing the money supply and recession could be controlled by the opposite technique. This is no longer credible. If we enter an inflationary period and begin to control the money supply, the economy immediately slips into a recession. Then, in order to get out, it is necessary to flood the market with additional money which in turn fans the fires of inflation even further.

2. God will never use money in a Christian’s life to corrupt him. Naturally, God would not use money to corrupt us. But many Christians have fallen into Satan’s trap and are being corrupted. They fail to realize that God cannot be in control when they are becoming corrupted. “For the Lord knows the ways of the righteous, but the way of the wicked will perish” (Psalm 1:6). A Christian whose financial life is characterized by greed, ego, deceit, or any of the many other worldly snares is not God’s ally.

3. God will never use money in a Christian’s life to build his ego. Frequently, Christians are trapped by financial ego. Most people cater to the wealthy in our country (Christians included). Read through the book of James. It makes very clear the admonition not to fawn over the wealthy.

In Christ we are all financially equal. The things of this world will quickly pass away. Death will remove all wealth from us. And, when we as Christians meet again, there are going to be many surprises. Those who will have the crowns of heaven and are placed in charge of the cities of God will not be those using money to build egos. “And let the rich man glory in his humiliation, because like flowering grass he will pass away. For the sun rises with a scorching wind, and withers the grass; and its flower falls off, and the beauty of its appearance is destroyed; so too the rich man in the midst of his pursuits will fade away” (James 1:10-11).

4. God will not allow Christians to hoard money. There is a distinct difference between saving and hoarding. Solomon said (in paraphrase), “Lord, I ask but two things from You: first, help me to never tell a lie; second, give to me neither riches nor poverty because in my poverty, I might steal, and in my riches I might become content without You.” The wealthy have a great responsibility to understand why God gave them money and to avoid hoarding.

I believe that as the economy crumbles, it will not be possible to hoard. Those who have been storing up wealth in contemplation of things unknown, retirement, or the better life, will be greatly disappointed when it is all consumed like so much chaff and fodder.

A Christian cannot be within God’s will and hoard money. “For he sees that even wise men die; the stupid and the senseless alike perish, and leave their wealth to others. Their inner thought is, that their houses are forever, and their dwelling places to all generations; they have called their lands after their own names” (Psalm 49:10-11). That is an important spiritual lesson.

Those who hoard large sums of money to leave to their children or for “security” are fooling themselves. It cannot be done. It is important that Christians understand and believe that. Scripture speaks very strongly about true values; “I advise you to buy from Me gold refined by fire, that you may become rich, and white garments, that you may clothe yourself, and that the shame of your nakedness may not be revealed, and eye salve to anoint your eyes, that you may see” (Revelation 3:18).

Hoarding can evolve into a trap. It is possible to see others in need and ignore them rather than abandon a hoarding plan. Unfortunately, those trapped by hoarding can rationalize their behavior with arguments that contradict God’s Word.

5. God will not use money to allow us to satisfy our every whim and desire. It is important what we begin to adjust to lifestyles compatible with a Christian commitment. That means something less than lavishness. God does not want us to live in poverty; we have discovered that there is nothing inherently spiritual in poverty. Neither is there any sin in wealth. However, God does not desire for a Christian to live in worldly lavishness while His work needs money and other Christians go without food and clothing. So, while we can live well—and in this country we live very well—it is important that there be a difference in our commitment as compared to that of the nonbeliever.

What kind of commitment is it to be? It must be one for you personally, brought on by a conviction of the Holy Spirit. But you must ask yourself, “Is there a difference between my lifestyle and the nonbeliever’s?” If not, you need to seed God’s direction. First Timothy 6:6-8 says, “But godliness actually is a means for great gain, when accompanied by contentment. For we have brought nothing into the world, so we cannot take anything out of it either. And if we have food and covering, with these things we shall be content.”

God does not supply money to satisfy our every whim and desire. His promise is to meet our needs and provide an abundance so that we can help other people. It is when we accept this principle that God will multiply our abundance as well.

The government first attempted to fund the increase in money by confiscating private stocks of gold and reissuing paper money. When that was exhausted, the treasury began printing credit-money for the first time (known in monetary circles as “funny money”). This new credit expanded the money supply, but without restoring something with sound value. During this period the national debt was established.

During the 1940s and World War II, the great national debt was firmly entrenched. Additional capital was created to fund the war effort, while products were consumed by the billions of tons.