“Countries don’t go out of business,” Walter Wriston, chairman of Citicorp, has famously said. And most of the time they don’t. But recent developments in a number of countries, including several in the European Union, suggest that they soon could.
As US legislators took the US economy to the brink of financial meltdown in August 2011 over the extension of the government’s credit limit, economic bloodshed ensued and confidence in the US dollar shattered. Financial markets plummeted and investors lost billions in just a few days. And the markets have been see-sawing since. Who knows where it will end?
“Sound as the dollar”
In the past, in times of economic uncertainty, investors fell back on the world’s safest currency—the US dollar. But credit rating services have warned that the rising US debt (and falling value of the greenback) may cause a shift in this sentiment. US Treasury bonds may be downgraded. And the euro isn’t an option. Since so many investors (including countries) hold US Treasury bonds, the effects would be global and severe.
The United States would still exist, along with its workforce, natural resources and industry. But it would have lost the single most important support of its currency and economy: Trust. Saying that US debt was backed by “the full faith and credit of the US government” made US bonds valuable, because everyone trusted the US to pay its debts. But when debt grows too large in comparison with national income and legislators play games of political brinksmanship with it, trust dissipates and markets fail.
The current economic situation sounds like that predicted in the Bible, in Revelation 18, where “Babylon” is described as falling, and with it, world commerce is thrown into disarray.
It sounds like a doomsday message: “Woe! Woe to you . . . you mighty city of Babylon! In one hour your doom has come! The merchants of the earth will weep and mourn over her because no-one buys their cargoes anymore—cargoes of gold, silver, precious stones and pearls; fine linen, purple, silk and scarlet cloth; every sort of citron wood, and articles of every kind made of ivory, costly wood, bronze, iron and marble; cargoes of cinnamon and spice, of incense, myrrh and frankincense, of wine and olive oil, of fine flour and wheat; cattle and sheep; horses and carriages. . . . In one hour such great wealth has been brought to ruin!” (Revelation 18:9–13, 16, 17).
In one hour? Perhaps in previous years, it would have been reasonable to question whether such complete economic ruin could take place so quickly. But look at recent history.
On October 19, 1987, stock markets around the world crashed. Beginning in Hong Kong, the contagion spread. Wall Street fell by more than 20 per cent in a day and by month’s end Australia had lost 42 per cent of its value and New Zealand nearly 60 per cent from its 1987 high point.
Then, in September of 2008, the Global Financial Crisis almost halted the world’s financial system. And trust (or lack of it) was at its core: too many risky home mortgage loans had been made, and debtors began defaulting on these mortgages. But many of these risky loans had been bundled in with more reliable loans, and these bundles were then sold as single units, bought by banks, insurance companies, pension and superannuation funds, and state and local governments in many countries. When a business needed to borrow money, it offered these bundles as security. That’s what caused the credit crunch: investors no longer knew which bundles were good and which were bad. They didn’t know which to trust. And since these bundles were so large and so many, the entire financial system was suspect.
When investment giant Lehman Brothers declared bankruptcy due to the toxic assets, no-one knew who would be next. Lending simply stopped. In a few hours, the crisis went global.
Not the Revelation 18 collapse
So, do these continuing financial crises represent a fulfilment of Revelation 18? Probably not. The book of Revelation contains predictions of other events that will occur prior to the events described, many of which have yet to come to pass. But recent events demonstrate that the sudden collapse of world commerce depicted in Revelation 18 can easily come to pass. Financial markets linked electronically around the globe now react instantaneously. It would be nice to recommend a place where your life’s savings will be safe. I know of only one.
In the Sermon on the Mount, Jesus said, “Do not lay up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal; but lay up for yourselves treasures in heaven, where neither moth nor rust destroys and where thieves do not break in and steal” (Matthew 6:19, 20).
Ultimately, there’s no security on this earth. Eventually, the events portrayed in Revelation 18 will take place. But even before then, as we’ve seen, the notion of earthly security is illusory. Does this mean we should withdraw our savings and send it all to some charity? No, but Jesus did recommend that in one notable case. We have a duty to be faithful stewards of the wealth God gives us and He expects faithful servants to invest wisely (see Matthew 25:14–23). It isn’t money that’s the root of evil, but the love of it; it isn’t riches that are evil, it’s trusting in them (see 1 Timothy 6:10; Psalm 49:6; Proverbs 11:28).
Perhaps never in Earth’s history have so many enjoyed such material wealth. But it’s ironic to realise that our “material” wealth grows less and less material with each day.
In Jesus’ day, wealth consisted of material things: gold, silver, wool, silk—the list of Revelation 18. Moth and rust might degrade them. Today’s “treasure” exists as magnetic digits in a bank’s computer. While literal moths cannot touch them, they are capable of being eaten away. They’re vulnerable to riots half a globe away, a decision by a foreign central bank or the US Senate. Countries may not go out of business, but neither can they provide security. Only God can.