Thursday, June 9, 2011
I Peter 2:21-23
For you have been called for this purpose, since Christ also suffered for you, leaving you an example for you to follow in His steps, Who committed no sin, nor was any deceit found in His mouth; and while being reviled, He did not revile in return; while suffering, He uttered no threats, but kept entrusting Himself to Him who judges righteously.
Brothers and sisters in Christ, all who yearn to be numbered among the firstborn of God, please attend to this word from the Father.
Over the course of the last few months I have been observing that the Spirit of Christ is at this time leading many of His people to embrace the afflicted path that leads to life. A collapse of the economy, civil unrest, disasters, or political upheaval have not been that which has precipitated the beginning of this walk down the Way of the cross. Such things are coming, but they are not needed to lead the people of God to a full surrender. In each situation I have been made aware of, the circumstances have been different. In each case the saints are being called to yield their lives to God in an unusual way, to trust Him beyond what is commonly observed in Christianity today, and to accept whatever experiences Yahweh has appointed for them.
In recent days I have corresponded with sisters in Christ whose husbands are leaving them. These sisters face great disruption of their lives. They are put in a position of vulnerability. When facing divorce, all manner of issues arise, and fears are revealed. The threats are very real. In one instance a husband is selling the house that has been the home for both of them. He has hired a lawyer, has acted deceptively, and is seeking to wrest as much of the material gained from the years of marriage as possible.
The counsel of the natural man would be to exhort the wife to fight fire with fire, to hire a lawyer herself, and defend her “rights” with all available means. Carnal wisdom would urge her to do all in her power to make sure that the husband does not take advantage of her, or defraud her.
In another instance, the husband wants out of the marriage, though professing to be a Christian. Friends encouraged him to at least give marriage counseling a try. He finally relented. The husband met with the counselor alone. The counselor was not someone known to the wife, and she feared that her husband would have prejudiced the counselor against her. She was to meet together with the counselor and her husband later. She expressed that she felt certain it would be necessary for her to give a defense of herself before the marriage counselor in response to a negative mis-characterization by her husband. Inevitably, such defenses include making charges against the other spouse.
In another instance I have been corresponding with a man who has been held in jail for some time as charges against him have been slowly making their way through the court system. About fifteen years ago the man committed serious transgressions, repenting of them afterward with many tears and much sorrow. The man faces many years in prison. His accusers have exaggerated the claims, and painted his character and motives with the blackest brush strokes. He has felt compelled to defend himself, hiring a lawyer, to mitigate an excessive sentence.
In each one of these cases, and others, I have been led of the Spirit to give the same counsel. Do not defend. Be willing to be defrauded by others. Do not lean on the arm of the flesh to seek to deliver self. Entrust yourself to God. This is the pattern we find in the life of Christ. He is our pattern man. “For you have been called for this purpose, since Christ also suffered for you, leaving you an example for you to follow in His steps...” What was the example of Christ?
He was oppressed and He was afflicted, yet He opened not His mouth; He was led as a lamb to the slaughter, and as a sheep before its shearers is silent, so He opened not His mouth.
And the chief priests accused Him of many things, but He answered nothing. Then Pilate asked Him again, saying, "Do You answer nothing? See how many things they testify against You!" But Yahshua still answered nothing, so that Pilate marveled.
To the natural mind, the counsel I have given to these people is wrong-minded. Reason would object, “Don’t you know that if a spouse does not hire a lawyer in a divorce case when their spouse has hired one, they will be taken advantage of? Don’t you know that the spouse who presents no defense, makes no accusations, and presents no evidence on their behalf will be defrauded, that they will suffer loss?” Hear the words of the apostle Paul.
I Corinthians 6:7-8
Actually, then, it is already a defeat for you, that you have lawsuits with one another. Why not rather be wronged? Why not rather be defrauded? On the contrary, you yourselves wrong and defraud. You do this even to your brethren.
About fifteen years ago there was a couple in our church that I knew well. My wife and I had been friends with them for many years. They had a business in the town we lived in, and devoted their lives to the business, often working 100 hour weeks.
This couple had a falling out after many years of marriage. They had recently built a new house, doing much of the work themselves. They had land, and a business. When the wife filed for divorce the property became uppermost in importance in their minds. They both hired lawyers. The wife’s lawyer sought to depict the husband as mentally imbalanced. The husband had a problem with anger, so the lawyer embellished this, claiming that he should be in a mental hospital.
The husband retaliated, seeking to throw some dirt on his wife’s character. His lawyer made much of the fact that the man’s wife had purchased some lingerie from Victoria’s Secret. He characterized her as a wanton woman, sexually promiscuous, when the husband had no reason to believe that his wife had ever been unfaithful.
Before all this went to court, I counseled the husband to not proceed in this direction. I told him it would be better that he lost his business and home and started over, than to proceed down such a carnal course that God could not bless. I shared many Scriptures with him, imploring him to entrust his life and welfare to God, but he did not heed. The court drama was truly shameful as each spouse sought to defame the other that they might receive the best possible ruling from the judge. Both spouses were professing believers. Their actions brought great reproach to the name of Christ.
In the end, the man kept the business and some land, while his wife got the house. The enmity between them continued, though they had spent many years together, and had a son and a daughter. The words of Christ resounded loudly in my spirit.
“For what does it profit a man to gain the whole world, and forfeit his soul?”
People of God, I do not deny that a man or woman may very well be defrauded, and taken advantage of, that they will get the short end of the stick, if they do not employ the methods of the world in presenting a defense of self. Certainly this was the end result of Christ’s silence. He mounted no defense. He answered none of the charges the Jews brought against Him. As a result He was scourged, beaten, mocked, and crucified as a transgressor between two thieves.
It is doubtful that you or I will meet with such an ignominious end as Christ, but there will be loss. There will be shame. There will be reviling. There will be false judgments. It is appointed to all disciples of Christ to follow in His steps. We are given the following words of consolation:
I Peter 2:19-20
For this finds favor, if for the sake of conscience toward God a person bears up under sorrows when suffering unjustly. For what credit is there if, when you sin and are harshly treated, you endure it with patience? But if when you do what is right and suffer for it you patiently endure it, this finds favor with God.
Who can put a price on what the favor of God is worth in the life of a child of God? There is nothing in this world that you or I could lose that could compare with the favor of God to be gained. Though we end up financially impoverished, and have to scrape by the rest of our days while others are living in comfort, we will not suffer any lasting harm. We should keep in mind the following words of insight and wisdom.
Listen, my beloved brethren: Has God not chosen the poor of this world to be rich in faith and heirs of the kingdom which He promised to those who love Him?
Will not a life of affluence tend to cause a man’s heart to become careless, while a life of poverty will encourage a man to daily seek God, and maintain a righteous walk that Yahweh might honor Him and supply all His need?
Yahweh has throughout my life caused me to practice this counsel I have given to others. I have repeatedly been brought into circumstances that Yahweh might prove me, test me, and lead me in the path of righteousness. The counsel I have given others is the counsel I have practiced and continue to practice.
I mentioned in the previous post that I am once more being brought before the court systems of this world. On May 24th I must stand before a judge I have stood before twice previously. I will not hire a lawyer. I have no defense planned. I will follow the pattern of Christ of whom it is said, “while being reviled, He did not revile in return; while suffering, He uttered no threats, but kept entrusting Himself to Him who judges righteously.”
I believe the entire matter revolves around how much we are willing to entrust our lives to God. If you do not perceive God to be intimately present in your life, having power and authority over every circumstance, ordering every experience of your life, then you will surely find it difficult to entrust your life to His care. You will find that the pressure to defend yourself is too great to resist if you do not rest in the confidence that there is a righteous Judge who is ruling in the heavens, and who cares for you.
Many will not entrust themselves to God for they have bought into the lie that this life is intended for “life, liberty and the pursuit of happiness.” They have not yet embraced the mind of Christ who testified, “For I have come down from heaven, not to do My own will, but the will of Him who sent Me” (John 6:38). It was the will of the Father that His Son suffer many things before He entered into glory. It is His will that you and I do the same.
For to you it has been granted on behalf of Christ, not only to believe in Him, but also to suffer for His sake...
Then Yahshua said to His disciples, “If anyone desires to come after Me, let him deny himself, and take up his cross, and follow Me. For whoever desires to save his life will lose it, but whoever loses his life for My sake will find it.”
People of God, how can we walk the path that Christ walked if we have adopted as our aim to please our self and to avoid suffering? If this is our aim we will always eschew the way of the cross. We will hesitate to entrust our lives to the Father’s care. We will not yield to whatever experience He chooses for us.
I have found that if I set my mind on finding some way of escape from the suffering I see before me, my mind will be consumed with anxiety, scheming, and carnal thoughts. I have found peace only in casting all over into the hands of the Father. Even if He should not deliver me according to my natural desire, there is peace in knowing that I have placed my trust and confidence in Him and in nothing else.
Eighteen months ago I stood before the courts. I had no lawyer. I made no counter charges. I had no petition to make before the courts of man. I was put in jail for sixty days, but like Joseph of old, I found great grace while there. Daily I was able to conduct Bible studies with a few men who were hungry for the word of God. When I was released my heart remained concerned for men who are incarcerated. I was led to create a series of newsletters to share the word of God with men in prison, to provide solid food, and spiritual meat, in a place where there is very little to be found.
The experience of being in jail is not something the natural man desires. I found that my flesh recoiled at much of the experience. There are many degradations. Upon entering one must strip naked before a guard, shower, and apply delousing solution to their hair. The inmates are issued no shoes, no socks, only a pair of shower slippers. The inmates are issued no underwear, only a pair of coveralls. The prison is kept very cool, and those who want socks or underwear must purchase them at the prison store when they are given the opportunity, and if they have the money to do so.
The men in the dorms are permitted to shower in the evenings. There are no shower curtains, just open stalls. Quite often the jailors on duty are women. They walk around the dorms as the men are showering, observing the men while naked.
The county jail I was in keeps the men locked down in their cells 20 hours a day. They are let out for meals and a few breaks a day. Some days these breaks were taken away due to some inmate acting out. The boredom is hard for many to bear. I took advantage of the time to read the Scriptures, write letters, and pray, or converse with my cell mates.
There were no windows in the prison wing. For someone accustomed to being out of doors, I experienced a longing for some fresh air and a view of God’s creation. Yet, in a myriad of ways the grace of God was present in my life. I knew Yahweh’s fellowship. I was not alone.
People of God, we are not assured that in entrusting our lives to the Father’s hands, looking to Him alone as our defender, that we will receive just treatment in this world. Indeed, the Bible reveals that ALL those who live righteously will suffer persecution (II Timothy 3:12). What does it mean to live righteously? Is it not to follow in the steps of Christ who is the Sun of Righteousness? When we follow in His steps, being silent before our accusers, we will experience suffering. Yet, God will use all of it for our good. It finds favor with God when we bear up patiently under such things.
If we are to walk through these days as overcomers we must adopt a mindset that is foreign to the natural man. We must seek to please the Father. It is the Father’s will that we suffer many things. We will find ourselves opposing His desire if our focus is to seek to deliver ourselves from all suffering. Yahweh would have us to demonstrate the attitude observed in the three Hebrew men who stood before the king of Babylon.
Then Nebuchadnezzar in rage and anger gave orders to bring Shadrach, Meshach and Abed-nego; then these men were brought before the king. Nebuchadnezzar responded and said to them, "Is it true, Shadrach, Meshach and Abed-nego, that you do not serve my gods or worship the golden image that I have set up? Now if you are ready, at the moment you hear the sound of the horn, flute, lyre, trigon, psaltery and bagpipe and all kinds of music, to fall down and worship the image that I have made, very well. But if you do not worship, you will immediately be cast into the midst of a furnace of blazing fire; and what god is there who can deliver you out of my hands?" Shadrach, Meshach and Abed-nego replied to the king, "O Nebuchadnezzar, we do not need to give you an answer concerning this matter. If it be so, our God whom we serve is able to deliver us from the furnace of blazing fire; and He will deliver us out of your hand, O king. But even if He does not, let it be known to you, O king, that we are not going to serve your gods or worship the golden image that you have set up."
These three men knew God had the power to deliver them, but they did not know with certainty if it was His will to keep them from harm. I know that God could deliver me from further time in jail. He has all power and all authority. He graciously told me the last time I went before the courts that it was His will for me to experience jail like unto the experience of Joseph the son of Jacob. His grace was sufficient.
God does not always tell His people what the outcome will be of their entrusting their lives to Him. There have been many martyrs through the years whose lives were given freely as they entrusted their lives to Yahweh. Many of the saints of God have lost all their possessions. Others have been imprisoned.
But recall the former days in which, after you were illuminated, you endured a great struggle with sufferings: partly while you were made a spectacle both by reproaches and tribulations, and partly while you became companions of those who were so treated; for you had compassion on me in my chains, and joyfully accepted the plundering of your goods, knowing that you have a better and an enduring possession for yourselves in heaven.
Our Father has not altered the manner in which He perfects His sons and daughters. Such experiences are still be to endured today, even by the disciples of Christ who live in countries that many suppose to be Christian nations. How does a disciple in America “joyfully accept the plundering of your goods”? One way is when being divorced, or brought before the courts, to not follow the pattern of this world. Do not hire a lawyer. Do not mount a defense of self, or attacks against another. Walk in the pattern of Christ. While being reviled, return a blessing. Utter no threats. Pray for those who persecute you. Entrust yourself to the One who judges righteously.
This last statement is a very critical one. I have found that when a Christian takes up their own defense, they inevitably fail to press into the Father’s presence as they ought. They put their time and effort where their trust is. If they have chosen to defend self, then their focus is drawn to their efforts, or their lawyer’s actions, to deliver them. Their mind becomes consumed with their own efforts to bring forth the desired outcome. Often these thoughts are accompanied with great torment, and an absence of peace.
If the Christian has cast their life into the hands of God, then they will spend much time in the presence of God. He will truly become to them a refuge, a sanctuary, and a place of peace.
God is our refuge and strength, a very present help in trouble. Therefore we will not fear, though the earth should change and though the mountains slip into the heart of the sea; Though its waters roar and foam, though the mountains quake at its swelling pride.
Many of the people of God are being brought into experiences where they must choose to entrust their life to God, or seek through their own efforts to deliver themselves. Christ is our pattern. All grace will be made available to the one who casts his life into the Father’s hands. If you have not yet experienced such things, your opportunity will arise. Consider the following words of Christ.
Then the Lord said, "And shall God not avenge His own elect who cry out day and night to Him, though He bears long with them? I tell you that He will avenge them speedily. Nevertheless, when the Son of Man comes, will He find faith on the earth?"
The context of these words is Yahshua’s parable of the widow and the unjust judge. The widow kept coming before the judge, asking for his protection. Finally the judge yielded due to her persistence. Christ used this to illustrate the manner in which we should continually press into the presence of God our Father. Yahweh will render a righteous judgment. He will not delay, but will avenge His elect speedily.
Note carefully the closing words of this passage. Yahshua asks, “Nevertheless, when the Son of Man comes, will He find faith on the earth?” Will there be anyone who is entrusting their life to Yahweh in these last days? Will the saints be petitioning God, or making their petitions before the courts of man? Will the people of God be leaning wholly on the Father, or leaning on the arm of the flesh?
I do have a petition to present. I do have words that I wish to be heard, but not here on earth, nor before an audience of fallen men. There is a Judge that I will present my case before. He sits enthroned in the heavens. To Him will I raise my voice. To Him I will entrust my life.
May Yahweh be glorified by many sons and daughters who demonstrate the faith and obedience of Christ as they too choose to entrust their lives into His hands.
The neighborhood of Maaleh Zeitim, below the Temple Mount, continues to make a name for itself, with its third public gala event in recent weeks to be held this evening.
For apparently the first time in 2,000 years, a Torah scroll will be publicly escorted amidst gala singing and dancing through the streets at the foot of the Mt. of Olives. The scroll, donated by the Rennert family in memory of terrorist victim Ido Zoldan, will be marched from a synagogue near the Western Wall to the new Maaleh Zeitim neighborhood – which is all but surrounded by Arab residents.
Some 100 families live in the six-building complex, on land purchased by Dr. Irving Moskowitz and built by Ido Zoldan’s contractor father, Nachman. The neighborhood is located just around the corner from a former Israel Police station, which is awaiting its first occupants after having been recently purchased by Jews and turned into residential apartments.
Ido Zoldan, father of two small children, was murdered at the age of 29 in a Palestinian terrorist ambush shooting attack near Kedumim. The Al-Aqsa Martyrs Brigades of Fatah, the wing of the Palestinian Authority run by Mahmoud Abbas, claimed responsibility for the attack as "an act of protest against the Annapolis conference."
The U.S. is approaching a financial crisis worse than 2008, Jim Rogers, chief executive, Rogers Holdings, warned CNBC Wednesday.
"The debts that are in this country are skyrocketing," he said. "In the last three years the government has spent staggering amounts of money and the Federal Reserve is taking on staggering amounts of debt.
"When the problems arise next time…what are they going to do? They can’t quadruple the debt again. They cannot print that much more money. It’s gonna be worse the next time around."
The well-known investor believes the government won't shut down in August if agreement isn't reached on raising the debt ceiling, but he did say "draconian cuts" are needed in taxes and spending, especially military spending.
"We’ve got troops in 150 countries around the world. They’re not doing us any good, they’re making enemies. They’re costing us a fortune," he said.
Rogers said he is "not long anything in the U.S." and short on American tech stocks. He owns Chinese stocks as well as commodities and would love the world price of silver and gold to come down so he could "pick up the phone and buy more."
He said he owns Chinese stocks, currencies and commodities, adding the Chinese yuan will be a safer currency than the dollar.
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It snowed in Hawaii on Saturday — yes, this Saturday. In June.
Hot air met cold above Mauna Kea, one of several volcanic island mountains that make up the Hawaii island chain, causing a powerful thunderstorm that, in the presence of the cooler-than- normal air, dropped roughly 6 inches of snow on the mountaintop. "The ground coverage was significant, mostly above 12,000 feet," Ryan Lyman, a forecast climatologist at the Mauna Kea Weather Center, told Life's Little Mysteries, a sister site to LiveScience.
One might wonder: how is late spring and summer snow in the tropics even possible?
June snowfall on Mauna Kea is rare but not unheard of, experts say. "It's the first June snow event we've had in probably close to 30 years," Lyman said, "but there have been episodes in July and August as well as late May."
"[The snowstorm] was associated with a pool of cold air in the upper atmosphere that came down from the mid-latitudes," said Steven Businger, chief meteorologist at the Storm Evolution and Energetics Research group at the University of Hawaii Manoa.
"As the land heated up throughout the day, the surface air started to rise," Lyman said, and when the warm surface air encountered the pool of cold air in the upper atmosphere, that produced a thunderstorm — and the snow.
The Bilderberg Group, a controversial invitation-only gathering of the world’s power brokers, is set to meet in the Swiss resort of St Moritz on Thursday.
Critics denounce the four-day conference, which is closed to the prying eyes of the media and doesn’t issue any press releases, for having a deleterious influence on world politics.
Previous guests include kings, presidents, captains of industry and heads of international organisations. United States Secretary of State Henry Kissinger has attended, as have Microsoft founder Bill Gates, German Chancellor Angela Merkel and current Chairman of the Federal Reserve Ben Bernanke.
Another regular is Dominique Strauss-Kahn, former head of the International Monetary Fund, currently facing criminal charges.
“The Bilderberg Group is like a restricted circle of guests from the World Economic Forum (WEF) meeting in Davos,” said Sergio Rossi, economics professor at Fribourg University.
He said the regulars at Bilderberg – named after the original conference held at the Hotel de Bilderberg in the Netherlands in 1954 – find the WEF a “hectic beanfeast”.
At Bilderberg, “one is at Hermès”, noted Pascal Lamy, director-general of the World Trade Organization, referring to the French luxury goods maker.
Invitees appreciate being able to discuss “openly and freely” the issues facing the world, such as the health of the euro or the greenback.
Pascal Couchepin, a former Swiss cabinet minister who regularly attended Bilderberg meetings, proudly compared the annual get-together to a “university seminar for people with experience”.
But not all Swiss politicians are so welcoming. Dominique Baettig from the rightwing Swiss People’s Party has filed a motion denouncing the “opaque supranational governance”.
“This type of meeting, between powerful global players, is contrary to our principles of sovereignty,” he said. “What’s more, they don’t publish the costs for the taxpayer.”
SINGAPORE/WASHINGTON — The possibility that the United States could default on its debt — if only for a few days — is starting to alarm the global community even as the idea gains favour among Republicans as a way to force Washington to cut runaway spending.
Fitch Ratings agency warned Wednesday that U.S. treasury bonds, seen worldwide as a risk-free investment, could be labelled “junk” if the government misses debt payments by Aug. 15.
Meanwhile, an advisor to China’s central bank said U.S. Republican lawmakers are “playing with fire” by contemplating even a brief debt default while a prominent Fed official said the reverberations in global markets would be “very severe.”
The idea of a technical default — essentially delaying interest payments for a few days — has gained backing from a growing number of mainstream Republicans who see it as a price worth paying if it forces the White House to slash spending.
But “even a so-called ‘technical default’ would suggest a crisis of ‘governance’ from a sovereign credit and rating perspective,” Fitch said in a statement.
“Clearly the political signals which are coming (from Washington) are a source of concern,” David Riley, head of sovereign ratings at Fitch, said in an interview.
Fitch said the ratings would go back up once the government fulfills its debt obligations but probably not to the current AAA level, Fitch said.
President Barack Obama is trying to win congressional approval to raise the borrowing authority before an Aug. 2 deadline.
The Republicans’ theory is that bondholders would accept a brief delay in interest payments if it meant Washington finally addressed its long-term fiscal problems, putting the country in a stronger position to meet its debt obligations later on.
But even Fed officials are starting to get worried about the game of chicken. St. Louis Federal Reserve Bank President James Bullard said “the U.S. fiscal situation, if not handled correctly, could turn into a global macro shock.”
by Peter Schiff
THE DOLLAR'S TERRIBLE FATE
My readers are familiar with my forecast that the US dollar is in terminal decline. America is tragically bankrupt, unable to pay its lenders without printing the dollars to do so, and enmeshed in an economic depression. The clock is ticking until the dollar faces a crisis of confidence like every other bubble before it. The key difference between this collapse and, say, the bursting of the housing bubble is that the US dollar is the backbone of the global economy. Its conflagration will leave a vacuum that needs to be filled.
Mainstream commentators often discuss three main contenders for the role: the euro, the yen, or China's RMB (known colloquially as the "yuan"). These other currencies, however, each suffer from a critical flaw that makes them unready to carry the reserve currency role in time for the dollar's collapse. When it comes to fiat alternatives, it appears the world would be going out of the frying pan and into the fire.
EURO: FRAYING AT THE EDGES
The euro is a ten-year-old experiment in uniting divergent political, economic, and cultural interests under one monolithic fiat currency held in the hands of one very powerful central bank.
If managed correctly, such a currency could serve to keep its member-governments honest - but that is not the world in which we live. Instead, the fiscally irresponsible members are discussing ditching the currency at the first sign of trouble. That is, they'd rather have their own national currencies to inflate in order to cover over their burdensome public debts. So, in order to keep the euro together, creditor states have been strong-armed into bailouts of the debtors - even though such measures violate the compact that created the common currency.
The question becomes: how long do Germans - still wrought with the memory of Weimar hyperinflation and the rise of the Third Reich - want to keep printing euros to pay the debts of the spendthrift Greeks? How many German politicians will ride to electoral victory on promises of unending bailouts and higher prices across Europe? This is the fundamental flaw of the euro.
And, of course, Greece isn't the only problem. Ireland and Portugal are vying for second-worst debt crisis in Europe. Spain, representing over 12% of eurozone GDP, saw sovereign yields jump from 4.1% at the beginning of 2010 to 6.6% by the end of the year. Yields on most other eurozone countries have been rising as well - a clear indication that the eurozone is an increasingly risky bet.
While a euro secession by the PIGS could actually leave a stronger currency region at the end, it would be a traumatic event. That prospect is undermining confidence in the euro at just the time when the world is considering where to go next.
Perhaps a mature currency that didn't falter so easily amidst the recent global financial crisis would be a good contender for the world's reserve. The euro, by contrast, is both young and in serious trouble. If less than two-dozen nations are too immense a burden for the euro to shoulder, should we expect better results when it's stretched across two hundred?
YUAN: CAPITALIST COUNTRY, COMMUNIST CURRENCY
The investment community is slowly coming around to my long-held excitement about the miraculous growth of China. This is no frenzy. In fact, if anything, I think many are still too skittish when it comes to this market. Yet, those that are jumping on the bandwagon are now proclaiming the Chinese yuan as the logical successor to the dying dollar. But while China is becoming an immense economic force, the yuan itself is hobbled by the country's communist past.
Foremost, China enforces stern capital controls on the yuan. A reserve currency must be freely and easily exchangeable with other currencies. Even within China's borders, one cannot exchange large amounts of yuan for dollars or any other currency.
China is slowly undertaking reforms to relieve these controls, but remember they were not put there arbitrarily. The controls allow China to suppress the value of the yuan, thereby maintaining artificially high exports, among other consequences. If China allowed the yuan to trade freely, it would lose the power it maintains over its money - and by extension, its people.
Let's remember that all fiat currencies are routinely manipulated and inflated. The People's Bank of China has reported M2 growth of over 140% in the past five years - almost entirely to maintain a stable exchange rate with a depreciating dollar. Given rampant inflation, combined with exchange restrictions and a serious lack of transparency, the yuan is simply not ready for prime time.
YEN: BLACK HOLE OF DEBT
The Japanese yen is the third amigo at the international fiat fiesta. While it doesn't suffer the structural risks of the euro, the yen is subsisting in an environment of massive sovereign debt. Japan's debt-to-GDP ratio is the highest of any developed country at 225%, meaning there is a perpetual impetus to print more yen to pay it back. The yen must endure this debt-noose, making it a poor alternative to the USD, which suffers the very same problem.
While I believe Japan is in a much better position because it generally maintains a net trade surplus and because most of their debt is held domestically, it's still not a stable unit with which to conduct world trade.
Perhaps more importantly, with a world seeking yen reserves, the price of yen would increase drastically. This is politically unpalatable in Japan, where the export lobby is constantly trying to push the yen down to boost their sales overseas.
These two factors combine in such a way as to make the yen a plainly infeasible reserve currency. The appreciation in yen value would simultaneously make Japan's debt problems worse and cause its export industry to suffer greatly, meaning that Japan probably doesn't want this role any more than we want her to have it.
As an aside, if you type "yen as reserve currency" into Google, it will ask, "Did you mean: yuan as reserve currency?" I guess even the world's smartest search engine doubts the yen could fill that role.
THE SIMPLEST ANSWER IS OFTEN THE BEST
As J.P. Morgan famously said to Congress in 1913, "gold is money and nothing else." Morgan meant that gold was unmatched in its effectiveness as a store of value and medium of exchange.
Given that his namesake bank started accepting physical gold bullion this past February as counterparty collateral, why should the trend of a widespread return to gold be considered only a remote possibility? On the contrary, it should be expected - if for no other reason than every other currency is fundamentally dismal.
Markets are powerful things, and require a reliable medium of exchange. The call for sound money is not just philosophical; it is derived from the market itself. Throughout human history, merchants have always turned to pure gold and silver over every pretender. This is not the first experiment in a paper money system, nor is it the first widespread debasement of money. In fact, the lessons of history were impressed upon our well-read Founding Fathers to the point that they included the following clear language in the Constitution: "No state shall... make any Thing but gold and silver Coin a Tender in Payment of Debts."
While it has always been possible that another fiat currency would rise up to take the dollar's place, and thereby keep this irrational experiment in valueless money going awhile longer, the particular circumstances that abound today make it seem less and less likely to me. Instead, I'm seeing signs that the world is moving back to gold at a breakneck speed.
This is a return to normal and has many positive implications for the global economy. It's certainly a trend we can all welcome, and profit from.
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Iranian Foreign Ministry spokesman says both countries are conspiring against Iran in an effort to 'destroy the Islamic Republic' and maintain U.S. hegemony in the area.
Iran blames Israel and the U.S. for trying to provoke a military conflict in the region, Israel Army radio reported on Wednesday. According to the report, Iranian Foreign Ministry spokesman Ramin Mehmanparast said that the two countries are conspiring against Iran.
"The Americans believe that the immediate result of a military conflict in the area will be saving the Zionist regime," he said, adding that the U.S. and Israel are trying to "weaken the popular uprisings in the area, in order to stop the spread of Islam to their regional allies."
"Obama wants to continue the Western hegemony in the Middle East and destroy the Islamic Republic of Iran," he said.
On Monday, Iran announced it had sent submarines to the Red Sea. "Iranian military submarines entered the Red Sea waters with the goal of collecting information and identifying other countries' combat vessels," reported the semi-official news agency Fars.
Iran defended the deployment of the submarines, saying "this kind of military presence is support for Islamic countries, especially those with strategic ties with Iran."
New Hamas representative to Tehran told in an inaugural interview that the ultimate goal of the movement was to free the entire Palestinian land, destroy the Zionist regime and rescue the revered Quds from the claws of the Zionists.
Khaled al-Qoddoumi said Hamas would not pay any attention to the negative propaganda of the western media that Hamas should or would withdraw from the path of resistance.
In a first interview with Iranian media after arriving in Tehran, Qoddoumi, who replaced Osama abd al-Mo’ti early in May, said Israel has no belief in living alongside the Palestinian nation.
The senior Hamas member refuted any option of compromise with Israel and underlined resistance as the only way of struggling with the occupiers and restoring the rights of the Palestinian nation. He predicted that one day, the Quds would return to the lap of the world of Islam.
Asked about the status and position of resistance in Palestine and its destiny, the Hamas envoy said the Palestinian resistant people has stood fast to the way of resistance while the form of such resistance have varied from stone throwing to military confrontation to missile firing to popular demonstrations. “Today, the nation has kept the path alongside the Arab world, Muslims and all free people of the world,” he added.
Asked whether the Palestinian nation considers the option of compromise with Israel as legitimate, he said the Palestinian nation sees no reason to approve the option as it sees compromise as a futile and useless way. “The Israeli side has never sought peace. They have no belief in living alongside the Palestinian nation or other Muslim nations. The Zionist regime is a cancer and cancer must be uprooted,” he said.
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