5 October 2001 - What is happening to the economy?

Across the Western world a big economic storm cloud is closing in. After a decade of the "New (virtual) Economy", the real economy is looking very precarious. Few people understand why. "We have the lowest interest rates for 40 years, and very low inflation" some people exclaim, confused at how this situation could correspond to a deep recession. Well the answer lies in an economic model and policy that is plain wrong. The basic problems lie with the laws concerning debt and the whole financial system. It is a system fundamentally flawed by the problem known as moral hazard. This causes an ever increasing tendency to more immoral use of finance. This can be checked occasionally by breakdown and bankruptcy of one financial institution or another. However, ideally the system would avoid this problem altogether by prohibiting usury and gambling. 

What has actually happened is that financial institutions have cooperated to hide each other's bankruptcy and bought influence over governments to protect them from their problems. This protection situation is now global. Dropping interest rates is not enough, the debt itself has become too big.

There is a huge mountain of bad debt built up like a house of cards. We may see it is an impressive building, but there are natural moral and physical laws decreed by God, which will demolish it. The only question is what will happen afterward? - We must build a just economic and financial and political system recognising God's natural laws both moral and physical.