About the financial crisis we currently find ourselves in: the government does not run its finances according to biblical principles, and banks also do not run their finances according to biblical principles. Anytime biblical principles are ignored or actually rebelled against, negative consequences are sure to follow.
Fractional reserve banking is not a biblical financial principle. Let’s say a bank has $1,000,000.00 in deposits. They figure not every depositor is going to withdraw all the money on the same day. Maybe they think they will only need to pay $10,000.00 of that $1,000,000.00 on any given day. So they will “use” the other $990,000.00 of the depositors’ deposits in various ways, usually through loans. They make money by charging bank fees to their depositors and interest on their loans. But what happens when people stop making payments on their loans, and depositors want their money? Since the bank has only kept a fraction of its reserves on hand, they cannot pay their depositors, and the bank fails.
If we as a nation returned to biblical principles in handling money, and to biblical business principles, the economy would run along like gangbusters. And here is a collection of interesting articles I have read about the financial crisis:
Guess again who’s to blame for the US mortgage meltdown
Fannie Mae, Freddie Mac execs now offering advice to Obama
Rules bent to provide Obama advisers loans
White House warned about Fannie and Freddie
Ron Paul: This bailout won’t be the last
With Wall Street in turmoil, some turn to religion
America’s founders financial advice