How to Preach Against the Federal Reserve System

Gary North  (www.garynorth.com), May 26, 2014
I want to talk to you about a problem that exists in every society, in every era, and will exist forever. This is the problem of making decisions today, based on conditions and possibilities today, which will positively affect the future.

Here is the problem. To the extent that you want to get from here to there, you have to deal with the institutional arrangements that exist today. This is the starting point. You also need a theory of what is going to happen along the pathway from here to there: the journey. Also, you had better have a clear theory of why there is better than here. This is about motivation.

Almost nobody combines these three skills. There are guys who can spin marvelous theories about what a terrific world it will be after the great reform. But, because they are theoretical types, they don’t talk about how you get from here to there. They also are not skilled in dealing with institutions as they exist today. They are not practical people.

On the other hand, the practical people don’t have any real theory of what it is going to be like at the end of the process. They only have a few guesses as to how we are going to get from here to there. They are skilled, however, at figuring out how the institutional arrangements work today. They are power brokers, or want to be. They know the limits of what we can do, or at least what we can expect to achieve, in the near term.

In other words, getting from here to there is not as easy as it sounds.

EAT, MEET, BUT DON’T RETREAT

About a month from now, I am going to go to a meeting of fewer than a dozen Christian leaders. You have probably not heard of any of them. They do have large organizations. They are not mainstream leaders. They are charismatics. Their connections tend to be based on personal contacts. They are big on meetings, but low on footnotes.

I, on the other hand, am big on footnotes, and low on meetings.

There are two of us who will be the primary theorists at the meeting. The other guy is very good on the present situation. He is a specialist in the Federal Reserve System. He knows high-level people in the Federal Reserve. He also knows how bad the situation is today. Even more important, he reports back that most of the people within the Federal Reserve who are in second-tier positions below the Federal Open Market Committee also know how bad it is. That is why he is coming to the meeting. But he doesn’t want to tamper with the existing system. He is content to let the Federal Reserve go about its business. He wants to reform it.

I want to abolish it.

My suggestion is simple: pass a law abolishing the Federal Reserve Act of 1913. I cannot tell you how we are going to get from here to there, but “there: is a place in which there is no central bank. So, my attitude is get to rid of it now, and see how it pans out.

This will not happen anytime soon.

My fallback position would be this: Congress passes a law that says the Federal Reserve can neither buy nor sell additional assets. Second, it is not allowed to change reserve requirements. The Federal Open Market Committee will be abolished, since there will be nothing for it to do. In other words, make that Federal Reserve predictable, and let us spend our time trying to predict what the market will do in response, not what central bankers do in response to what the market does. This is consistent with the economics known as rational expectations. That economic system is simple to describe: set the policy, and don’t change it.

This will not happen anytime soon.

So, these pastors are going to get two different sales pitches. The other guy is going to have some recommendations on how to make the present system work. The present system cannot work. The goal should be to get rid of the present system. He will say that there is no possibility that we can abolish the Federal Reserve System today. I agree with him. But, after the Federal Reserve has ruined the hopes of 80% of Americans, there will be possibilities for criticizing the Federal Reserve and abolishing the Federal Reserve Act. In other words, I think we must prepare for the crisis that the Federal Reserve is going to create, and then we abolish it.

He really doesn’t want to abolish it. I really do. He thinks the situation is bad today. So do I. He thinks it is going to unravel unmercifully, and so do I. But he doesn’t want to chase rainbows, and he regards the abolition of the Federal Reserve as chasing a rainbow. As for me, I regarded it as the pot of gold at the end of the rainbow, which I mean literally. I think Congress should give the gold back to Americans in the form of 1-ounce coins, and thereby strip the Federal Reserve all of its (our) gold. That’s my idea of a solution. Give the gold back to Americans. At worst, sell it back: one coin at a time.

So, we will get in front of these pastors. They have never studied economics. They have never studied monetary policy. They have never studied monetary theory. They are goodhearted souls who want to believe that the Bible speaks to every area of life, but they have spent their entire careers avoiding any detailed study of the areas of life to which the Bible supposedly speaks. As I said, they are long on meetings, but short on footnotes.

The man who is organizing the meeting knows that I have been involved in discussing Federal Reserve policy in relation to the Bible for the past 45 years. He invited me to speak to one of his meetings back in 1987, and after that I received no more invitations. I did not speak on the FED. He invited me to speak again last fall. That’s a considerable time in between.

He is my age. He has come to the realization that the Christian world is completely ignorant about anything regarding economics, social theory, and a biblical world and life view. There is nothing theoretical that his organization has published on these issues. Yet now he wants to mobilize American churches to begin to deal with the crises that Federal Reserve is going to produce.

How?

He wants to make a principled statement regarding present monetary policies. But there is no agreement on what the policies ought to be. He wants to do something, but he has ignored these issues for at least a quarter century. How do you play catch-up when the Federal Reserve has bought $4 trillion of federal debt?

WHERE SHOULD A PASTOR START?

He should start with the original preacher against monetary inflation the prophet Isaiah. He came before a corrupt society and said: “Thy silver is become dross, thy wine mixed with water” (Isa. 1:22). The debasement of money led to the debasement of product quality.

He tied it to the moral debasement to the people.

The political leaders were murderers and thieves, he said. But the people accepted this. They were no better than the rulers.

Here are my five rules of successful preaching.

1. Start with a text.
2. Stick to the text.
3. Get to the point.
4. Call them to commit.
5. Give them legitimate hope.

This isn’t easy. Giving people legitimate hope when it comes to the abolition of the Federal Reserve is not easy. But it will be easier after the Great Default.

The goal is to start now. Lay the foundation now.

ON-THE-JOB TRAINING

The pastors don’t know what to do. They must learn on the job, just like the FOMC does. But there is no incentive for learning on the job today. If they go into pulpit to preach this, they’re going to alienate a lot of their listeners. Members are going to want to hear about this when the crisis hits, but right now, they don’t.

So, my position is this. Train the pastors for several years in terms of what the issues and theories are. Train them in how to speak to these issues from the pulpit. They don’t want to speak of these issues at the present time. They are going to want to speak to these issues when the crisis hits, but when it hits, they’re going to be in panic mode. So are their congregations. So is the country in general.

There will be enormous noise. Every crackpot will have a solution. None of the solutions are likely to work.

Christians have no influence anyway. There is no reason for politicians to pay any attention to them. But, if pastors pay attention to the details now, they can begin to prepare their congregations for the bread-and-butter issues of an economy in a crisis. They can begin to make a difference when the crisis hits. But they are not in a position to analyze the crisis now, because they had paid no attention to these issues for the last hundred years.

The Federal Reserve System was started in 1913, and it opened in 1914. Where is there a systematic analysis of the Federal Reserve, in terms of the Bible, that anybody in the pulpit today has heard of? There isn’t. I have written them, but I stand almost alone. We are trying to catch up for 100 years of bad policy, and if we count the foundation of the Bank of England in 1694, the origin of all this, was over 300 years ago. The Christians had nothing to say about any of this. Now, my friend wants to be in a position to say something authoritative to the world, in the name of the church, in the name of Christianity, when the church has been systematically silent on these matters for over three centuries. How do you play catch-up? How do you train pastors in the ways of going about analyzing these questions? How do you train the pastors to teach the people in the pews? How do you train the people in the pews in terms of political action, to get something changed?

My point is this: you can’t catch up for 300 years of inaction in five years.

My hope is to produce a series of Sunday school zombies issues. They will be online for free. They will be YouTube videos. But I’ve got a lot of work to do in between today and then. That’s the problem. Getting from here to there is not easy. There are lots of things that need to be done, and finishing the Ron Paul Curriculum is one of them.

When I began all this back in the mid-1960s, I recognized the following two facts. First, economists are not interested in Christianity. Second, pastors are not interested in economics. Yet the largest single voting block in the country is the Christians. They have not only the swing vote; they are the basic core of the country. But they don’t know anything about economics. They barely know anything about the Bible. They have been content to stay out of such issues since the abolitionist movement of 1840s and 1850s. After 1865, they went catatonic on social issues. The liberals got busy, but the conservatives basically said that the way to fight liberalism is to do nothing. “Don’t say anything. Don’t raise these issues.” So, by default, they left the field of battle.

Now a handful of them are trying to get back on the battlefield. They have no boot camps. They have no training manuals. They had no trainers. If they say something specific, they’re going to alienate a percentage of their members, and those members may leave, taking their money with them. Pastors have no big incentive to raise these issues today. They will in a crisis, but they don’t now.

CONCLUSION

So, how do you get from here to there? In my opinion, we have no say politically at this point. We will when the disaster takes place, but not until then. Until then, the status quo will dominate. The existing Establishment will dominate. The existing Establishment is tied to central banking, massive debt, and oil. Nothing is going to be allowed to interfere with that tripartite arrangement.

The goal now is to get basic theoretical materials into the hands of the leaders. This will include short books. It will include articles. It will surely include YouTube videos. The leaders have to know what is coming, and why it is coming. They will then have to get this material translated in such a way that members of the congregations will understand the principles, but even more important, will take steps to begin to prepare for the crises to come. Preparations have to be local. They have to be personal. They have to be in terms of people’s economic futures. The strategy should be to prepare people to do what they are to do anyway, such as get out of debt, get household budgets, and participate in various local church charities.

If the deacons don’t know what’s up, there’s nothing much the churches can do. I think training deacons is crucial. They are the ones who write checks.

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