23 Be sure you know the condition of your flocks,
give careful attention to your herds;24 for riches do not endure forever,
and a crown is not secure for all generations.
Solomon, the King of Israel, was one of the richest men on the planet in his time. If anyone could reasonably expect that his kids should be just fine, that they should never get their shoes dirty, should never break a nail doing manual labor, it should have been Solomon. Yet..we have this record of Solomon giving his son advice to never get too far from the fields, to always know how the condition of his flocks. In effect, he was saying, no matter how secure your position and your riches make you feel, never surrender the means of production, instead retain the means and the knowledge to provide for yourself and your dependents.
But why? He explains in verse 24. It is because Solomon, in his God given wisdom, understands that neither crowns nor riches offer true security. Anyone who has studied history understands this. But then again..
“We learn from history that we do not learn from history.”
– Georg Wilhelm Friedrich Hegel
This is why Solomon made it a point to teach his son, it is also why I am writing this blog.
You, like Solomon, probably have many reasons to feel secure. The USD is the reserve currency of the world, meaning the rest of the world transacts business using our currency. When there is a flight to safety worldwide, our currency benefits because. Surely our riches are fine…Right?
“Mr. Strauss-Kahn of the IMF also said it would be “intellectually healthy to explore” the creation of a new global reserve currency.” 2/26/2010 NYTIMES
It turns out that our riches do not offer us dependable security after all.
In her book, “this time is different” which analyzes 800 years of economic history, Carmen Reinhart states that
“Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence-especially in cases in which large short-term debts need to be rolled over continuously-is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang!-confidence collapses, lenders disappear, and a crisis hits.”
According to the 2009 United States Financial GAAP reporting released in late Feb 2010 (which was over two months late), our ratio of obligations to annual economic output is nearly 500% when long term obligations such as medicare and social security are factored in. Perhaps this explains why in 2009, the Federal Reserve was the number one buyer of US debt, buying over 80% of the debt issued last year.
Many world renowned financial experts have said that the current economic crisis could turn out worse than the great depression
- Fed Chairman Ben Bernanke
- Investment advisor, risk expert and “Black Swan” author Nassim Nicholas Taleb
- Former Fed Chairman Paul Volcker
- Well-known PhD economist Marc Faber
- Former Goldman Sachs chairman John Whitehead
- Morgan Stanley’s UK equity strategist Graham Secker
Perhaps we should carefully re-consider Solomon’s wisdom and evaluate any false sense of security offered by our riches and economic system.
Discussion questions:
- What is the modern equivalent of knowing the condition of our flocks?
Should believers monitor the risk associated with the broader financial system and our currency?
Or should we just relax because it is different this time?
