Economy goes down, Savings goes up?

Chuck Bentley recently mentioned an article from Bloomberg.com titled, “Turmoil may make Americans savers, worsening ‘nasty’ recession.”

The article gives statistics showing that for the first time since 1990, Americans are starting to save again. Before then, Americans had been saving an average of 9 percent of their income. In the 1990s, the percentage began to decrease, and it has been less than 1 percent for the last 3 years. We have relied on easy credit instead of saving for needs.

With the turmoil in our present economy, easy credit has become a thing of the past. This is causing Americans to begin to spend less and save more. The article presented the idea that this is a bad thing, that without the continued spending of our consumerist society, the troubled economy would only worsen.

We know from the Bible that saving money is a good thing. Proverbs 6:6-8; “Go to the ant, O sluggard, observe her ways and be wise, which, having no chief, officer or ruler, prepares her food in the summer and gathers her provision in the harvest.” God teaches us the biblical principle of not spending everything we have, but saving for future needs.

For those who have been following this biblical principle, these uncertain economic times may feel a little less frightening. It is a comfort to know that money is put aside for emergencies such as a broken appliance, a car repair, or medical bills.

FInish reading the article HERE.

Top 3 Fears about the Economy

Do you feel better about the economy now that the government bailout is in full gear?  Will it keep the country from sliding into a depression?  What effect will it have on your finances?

Well, a recent Bloomberg/Los Angeles Times poll shed light on how Americans are feeling about the economy.  We’ve got the top 3 findings:

1.  Financial disorder.  It’s not just Wall Street.  Almost 40% of those surveyed described their finances as shaky.  Over half of the respondents said they feel personally threatened by the current economic turmoil.

2.  Living paycheck to paycheck.  Nearly a third of the respondents—regardless of income—said it would be difficult—if not impossible to get their hands on $1,000 overnight.  That’s scary—and it shows that way too many people are living on the edge of financial disaster.

3.  Negative outlook.  Nine out of ten Americans rarely agree on anything, but a full 90% of those surveyed believe the economy is doing poorly—even after the bailout.  Not surprisingly, most low-income participants don’t feel good about the future.  The one bright spot—most higher income individuals felt the economy will do better in 6 months.

For more info or to gain insight please visit: www.moneylife.org.

The 2008 Economic Earthquake—Part II

(this is the second part of the blog entitled: “The Coming Economic Earthquake…It is Here.”)

The past three weeks have likely been tougher than President Bush expected following his September 19 announcement of a $700 billion bailout plan to buy bad debt and mortgages.

Two days after the announcement, Goldman Sachs and Morgan Stanley received approval from the Federal Reserve to change from investment banks to bank holding companies. The move allowed them to qualify for the Fed’s emergency loan program.

In the next several days, President Bush asked members of Congress, including John McCain and Barack Obama, to develop what would hopefully be a successful bailout plan. While this effort was under way, Washington Mutual, with $307 billion in assets, became the nation’s largest thrift failure.

More nerve-racking events followed.

September 29 — Citigroup said it would buy most of Wachovia’s banking operations for $2.1 billion in stock. But on this same day, the U.S. House rejected President Bush’s $700 billion rescue plan by a vote of 228-205. The Dow Jones Industrial Average suffered its largest one-day drop in history, falling 777.68 points.

October 1 — The U.S. Senate approves an amended version of the bailout plan.

October 3 — Wells Fargo announces that it will acquire all of Wachovia for $14.8 billion, and the House approves the amended bailout plan, which is signed by President Bush.

October 6 — Despite approval of the bailout plan just three days earlier, the Dow falls below 10,000 for the first time since 2004.

October 8 — AIG receives an extra $37.8 billion from the Federal Reserve—in addition to the $85 billion it received in September.

October 9 — For the first time in five years, the Dow falls below 9,000.

October 10 — Wells Fargo defeats Citigroup in its battle for Wachovia, but the Dow falls 700 points in the first five minutes of trading. It actually dips below the 8,000 mark but rises dramatically to close just 128 points down.

October 12 — Leaders of the European Union approve a proposal to help failing banks. Also during the weekend, there is talk of a merger between U.S. automakers Chrysler and GM, which had issued a statement on Friday saying that it was not considering bankruptcy. GM’s shares had fallen more than 30 percent on the previous day, closing at only $4.76.

October 13 — The nation’s financial picture brightens as the Dow ends the day 936 points higher. Experts are hoping that the stock market figures recorded on October 10 represent the bottom of the pit and that the market will now recover.

Help, Hope & Insight

Tomorrow (10/14) Crown is launching a movement to begin addressing the current economic situation.  It is called Help Hope & Insight.

This grassroots movement is to provide the help, hope and insight necessary to navigate through uncertain economic times. America is experiencing unprecedented economic events, and the answer is not in our government, our leaders, or money itself – it is in Christ.

Here you will find biblical perspective on what is happening in our economy and understand what God has to do with our finances. We pray this movement will turn hearts back to God through both repentance and generosity as those who join gain REAL HELP to refocus financial priorities, REAL HOPE for their financial pain, and REAL INSIGHT into the current economic events.

You can get the blog by clicking on one of the links above or by going straight to www.moneylife.org.

Join in on this Cause and help Crown spread the Word and please be in prayer for the ministry as we reach out to those hurting and needing help during this unprecedented time.

Seven-Step Solution to the Economic Crisis

 

 

by Chuck Bentley, CEO, Crown Financial Ministries

In light of the massive amount of signs pointing to what some are calling the “economic crisis of a century,” an “economic Pearl Harbor,” or a “financial tsunami, including the collapse or near collapse of some of largest financial institutions in American history, I believe we all have reason now to ask: “What can I do to help solve this problem?” I for one believe it is time we stop looking to the federal government as the final solution and mobilize the grassroots of this nation to bring about the economic change that is desperately needed.Here are the steps I believe will solve this crisis by each of us doing our part to fight this on a personal, local level.Step 1: Ask God to HelpThe most glaring error in all the news reports, public debate, and political rhetoric is that I have yet to hear any leader make reference for our collective need to look beyond ourselves for a solution and turn to God Almighty. Yet, when I read of our political leaders identifying the root cause of this meltdown as “greed,” it is as if we have forgotten that greed and its resulting consequences is a heart problem, not a policy problem. The Scripture teaches that money is not the solution to money problems. In fact, it says that whoever loves money never has enough, and that the love of money is the root of all kinds of evil. Money problems are heart problems and can only be solved by a change of heart initiated by repentance. “When I shut up the heavens so that there is no rain, or command locusts to devour the land or send a plague among my people, if my people, who are called by my name, will humble themselves and pray and seek my face and turn from their wicked ways, then I will hear from heaven, and I will forgive their sin and will heal their land” (2 Chronicles 7:13-14, NIV). Step Two – A New American Dream I would call for an emergency economic recovery plan for American citizens to begin immediately. The plan would be for every American to get his or her personal house in order as quickly as possible. Throughout our history, we have shown that when leaders have called upon and trusted in the power and capacity of the voluntary efforts of the American people, we have risen to the challenge. We are a resilient people, willing to do our part in times of crisis. When there is a call to action, we will take up the challenge with great resolve. As followers of Christ we should be prepared if we must endure another Great Depression. We must show the world that what holds us together is not a political system, as great as it may be; it is not capitalism, as great as it may be; nor is it even the democracy that has made this nation great. It is the living out of our motto printed on our coins: In God We Trust. The real economic recovery needed is the recovery of the Biblical values we hold dear. Call it “The New American Dream – Living Within Our Means,” a concept as old as the Scripture itself. It was God who taught us to: Honor God with our wealth. Save but do not hoard. Get out of debt. Invest wisely and steadily. Simply put, God wants us to live within our means so we can be free from all financial bondage. I would call for churches, businessmen, and the educational sector to implement programs to lead the way.   Step Three  – Become Culture Contrarians Ask for the American citizens to show the way for the change we need. We have reversed the sense of order in our nation.   Support measures that create accountability for government officials to get our federal, state, and local governments fiscally responsible. How can we demand change when we reflect the same lack of self control demonstrated by the spending habits of our government? We must lead, not wait to be led. For steps 4, 5 , 6 & 7 please click HERE. Our motivation should be to get our own house in order and prepare to serve those around us who are neither prepared or expecting the challenges we will face. The real antidote to our economic woes lies in our heart…in our beliefs…in our values…in our faith in God.

The Coming Economic Earthquake…its here…

The Economic Earthquake of 2008
Implications, Vulnerabilities and Aftershocks

by Crown Financial Ministries CEO, Chuck Bentley

In 1991, our late cofounder Larry Burkett wrote The Coming Economic Earthquake, warning of the dangers of the ever-growing appetite for debt by our society and federal government alike. Although a best seller and helpful to many who heeded his advice, he received harsh criticism for his failure to peg the event to a date certain. Many dismissed his work as “too simplistic” and unsubstantiated by economic models. Others painted him as a “doom and gloomer,” especially in light of the robust economic growth of the 90s. Larry remained humble towards his critics, stating he was not attempting to be a prophet but was only making Christians aware of their need to apply God’s Word. He said that even if the events he outlined in his book did not occur, the reader would be better off for following the advice that God gave for our benefit. 

Interestingly, Larry also warned in his 1998 best seller Business by the Book that 2008 could be a “horrendous year” for the economy as the baby boomers began to retire. At that time, he had no awareness of the toxic shock that would be brought about by the massive run-up of household debt through sub-prime mortgage loans.

The simple advice about borrowing that Larry

referenced was based upon Proverbs 22:7, “Just as the rich rule the poor, so the borrower is servant to the lender.”  God’s Word has certainly proved to be true. Our recent economic woes have shouted loudly that biblical principles apply to individuals, families, Wall Street firms, and even governments.

Following a reduction of lending standards for the qualification of a home mortgage, millions of borrowers took on debt obligations they simply could not afford. These mortgages were packaged and sold throughout a massive, global network. A bubble of non-sustainable housing prices was created. This set the stage for some of the unthinkable events we have witnessed. Foreclosures escalated in 2006, 2007, and 2008, triggering a real economic earthquake, a financial tsunami, and a breathtaking, wild roller coaster ride as global financial stability teetered on the edge of a meltdown.

To read the rest of the article or to get tips click HERE.

Also, be sure to check out Crown’s new website in response to the current economic situation…Help,Hope&Insight