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Money Supply Timebomb and Fiscal Nightmare
Robert Murphy
Campaign For Liberty
Monday, Nov 2nd, 2009
Economic Outlook
The government has seized and spent so much in just the last year that it’s easy to focus on the issues of the day, losing track of the big picture. In this article I want to step back and survey the incredible growth, from the perspective of monetary policy and then fiscal policy. The situation is dire indeed.
The Federal Reserve and the Money Supply
Undoubtedly the biggest economic issue in free-market circles has been the extraordinary actions of the Federal Reserve since the onset of the crisis in the fall of 2008. To immediately get people to see what all the fuss is about, I like to show this chart from the St. Louis Federal Reserve:
The United States has a “fractional reserve” banking system, meaning that if you added up all of the checking account balances for the customers of a given bank, the total amount of deposits would (typically) far exceed the amount of cash reserves in the vaults of the bank. That’s why a bank run is so deadly: the bank doesn’t have enough cash on hand to satisfy its customers if they all try to withdraw their money at the same time.
Legally, banks must keep some reserves to “back up” their customers’ deposits. The exact amount depends on details that we can overlook; the rough rule of thumb is a ratio of 10 percent. Complicating things somewhat, a bank’s reserves don’t have to consist entirely of cash sitting in the vaults; a bank can also have its own “checking account” with the Federal Reserve itself, and those balances count as part of the bank’s reserves.
Now we can understand the chart above. In normal circumstances, banks will make new loans — and thus expand the total value of their customers’ checking account balances — until they are “fully loaned up,” meaning until they have hit the legal limit where their reserves are just sufficient to meet the legal requirements. This means that when a bank has “excess reserves” — namely, reserves over and above the legal requirement — the bank has an incentive to lend them out and earn interest. So that is why excess reserves historically have been very close to zero.
Yet the chart shows that starting last fall, excess reserves exploded, and are now at some $850 billion. (In a minute I’ll explain where all those new reserves came from.) But if Bernanke has created so much new money so quickly, why haven’t prices risen rapidly as well?
The answer is that we are in a fractional reserve banking system. For the most part, banks haven’t lent out the new reserves that Bernanke has injected into the banks. If and when they do start lending out their excess reserves, the money supply held by the public will grow very quickly. Using a back-of-the-envelope 10% multiplier, there are enough excess reserves in the system to support a total of $8.5 trillion in new loans.
In practice that is too much, because people will hold some of the new loans in the form of currency and so forth. Let’s be conservative and call it a mere 5 trillion new US dollars in the wallets and checking account balances of the public. To gauge how much new money this would represent, right now the monetary aggregate “M1″ (basically cash held by the public, checking accounts, travelers’ checks, and other liquid assets) is about $1.65 trillion. So an injection of an additional $5 trillion would mean a quadrupling of the narrowly defined money supply held by the public. Other things equal, then, current gas prices of about $2.50 a gallon would increase to $10 a gallon when everything settled down.
Yet even this is too optimistic, because the calculation assumes the worldwide demand to hold dollars stays constant, which it surely would not in such an environment. During an email exchange with Jeff Hummel, we came to the (very rough) conclusion that if the worldwide demand to hold dollars fell in half, that would be akin to a 30% increase in the domestic money stock (using the current levels, not the inflated one). To sum up, then, if Bernanke sat back and let the banks lend out their current stockpile of excess reserves once they felt comfortable doing so, there would be enough new money created to make $11 gasoline the new reality.
How Did Bernanke Increase Reserves?
Not only did Bernanke inject the financial system with hundreds of billions of new reserves, but the way he did it was also very troubling. In general, the Federal Reserve “injects liquidity” by buying assets in what is called “open market operations.”
This is where all the magic happens, and what separates the Fed from any normal entity in the marketplace. Simply put, if the Fed wants to engage in a “loose” policy and push down interest rates, it buys assets and adds them to the Fed’s balance sheet. To pay for the assets — here’s the magic part — the Fed simply writes checks on itself. There is no finite quantity of dollars that the Fed has in its account; it can write as many checks as it wants, and they never bounce.
Normally, the Fed’s open market operations involve Treasury debt. Traditionally, when the Fed wanted to cut interest rates and stimulate the economy, it would buy Treasurys from the private sector, thereby infusing new reserves into the banking system (when the Treasury sellers deposited their new checks, written on the Fed). The new reserves were then quickly lent out, expanding the overall money supply. Going the other way, if the Fed wanted to raise interest rates and suppress economic activity, it would sell Treasurys from its balance sheet, and the checks written by the buyers (drawn on private banks) would drain reserves from the banking system once the Fed deposited them.
Yet this all changed during the financial crisis. Bernanke has been intervening not just to provide a general monetary stimulus, but has also been actively trying to resuscitate individual sectors. Look at the composition of the Fed’s balance sheet over time:
(The above chart was produced in May 2009. The most recent version is available here: http://www.clevelandfed.org/research/data/credit_easing/index.cfm.)
As the chart indicates, the Fed has been introducing programs at a pace that would have impressed a New Dealer. Some of the biggest (new) holdings are in mortgage-backed securities, Federal Agency debt (i.e. bonds issued by Fannie Mae and Freddie Mac), and longer-term Treasurys (the purchase of which has been called “quantitative easing”).
Even putting aside the specter of rampant price inflation, Bernanke’s bold innovations set a very alarming precedent. He literally has the ability to revive or destroy entire sectors in the economy, by choosing to write checks written on thin air and spend billions of dollars taking bad assets or dubious debt issued by floundering firms.
Although most commentators haven’t said much about it, I think Bernanke used the financial crisis to incredibly expand the power of the Federal Reserve, relative to traditional branches of government. Recall that the Fed itself is a dangerous mixture, giving us the worst of both worlds: It has government force backing up its privileged position, but it ultimately is a cartel of privately owned banks. Not only does Bernanke claim that the Fed has the authority to create new money on a whim and bail out whomever he wants, but he doesn’t even think he needs to tell Congress who the recipients were, let alone get their approval.
Can the Fed Unwind Everything Once Price Inflation Heats Up?
Mainstream financial analysts, as well as Fed officials, acknowledge the potential inflationary timebomb. Yet they insist that the Fed will be able to suck the excess liquidity out of the system, once the economy recovers. Right off the bat, that answer should be troubling, because it assumes that stagflation — high price inflation and high unemployment — is impossible. But we know from the 1970s — and from Zimbabwe more recently — that “excess capacity” is no guarantee of stable prices.
More specifically, Bernanke and his apologists aren’t thinking two steps ahead in their “exit plan.” The two main options at their disposal (to contain rising prices) are to (a) sell off assets from the Fed’s balance sheet, thereby reversing the initial actions, and (b) pay interest on excess reserves, in order to bribe banks not to make new loans to the public.
The problem with option (a) is that the Fed very likely paid much more for its new assets — they were dubbed “toxic” for a reason — than it will get from private bidders if and when it has to unload them. Just suppose that there is another crash in real estate, at the same time that prices begin rising at an annual rate of 8 percent. (This is certainly possible, despite media reports to the contrary.) In that case, even if the Fed sold off its entire holdings of mortgage-backed securities and debt issued from Fannie Mae and Freddie Mac, it would not collect as much from private bidders as the Fed originally paid for these assets. Therefore, it would not remove the same amount of reserves as it had originally injected into the financial system. Its moves would thus not only further wreck the teetering real estate market, but they wouldn’t even halt the escalating price inflation.
The other option, paying interest on excess reserves, at best would only postpone the day of reckoning. Remember, the problem is that there are enough excess reserves in the system to fuel an enormous increase in the money supply and hence the prices of goods and services. How can it possibly be considered a “solution” to simply allow those reserves to grow exponentially?! Yet that is the primary answer that Bernanke has given lately, on the issue of containing price inflation.
The Fiscal Nightmare
As if the monetary issues weren’t frightening enough, we’ve also got the fiscal (i.e. government taxing and spending) side to consider. The Congressional Budget Office (CBO) makes periodic long-term forecasts of these matters. Here’s the projection from their June Economic Outlook:
>
The two dotted lines represent different modeling assumptions concerning tax and spending policies. Notice that the top line (i.e. the more alarming one) captures the path if the Obama administration’s plans are enacted. The media has reported that “Obama would double the federal debt in a decade” — meaning that the debt as a share of the economy would rise from about 41 percent in 2008 to over 80 percent in 2019. That is what the top line in the chart above illustrates. Notice though that it keeps rising like a rocket after 2019.
A few more observations: Both trajectories in the CBO chart above make many unrealistic assumptions, in order to isolate the pure effect of various spending decisions. For example, the models assume that increasing levels of government debt will not affect interest rates or otherwise drag on economic growth. In reality, of course, as levels of federal debt accumulate, long-term interest rates will almost certainly rise and economic growth will be slower because of crowded-out private investment. Thus government expenditures will be higher than the models are forecasting (because of higher interest payments to service the debt), and government tax receipts will be lower. Finally, the CBO models assume that the present recession is basically ending. Yet if we really are just at the beginning of the second Great Depression, then the above CBO chart will seem incredibly optimistic in the years to come.
Conclusion
The federal government and Federal Reserve have thrown all caution and discretion to the winds during the financial crisis. It is entirely possible — some would say even likely — that the US dollar will not be the reserve currency of the world within five years. Ben Bernanke and other officials have painted themselves into a corner, and unfortunately they will end up knocking out a few walls to make their escape. Those of us forced to use Federal Reserve notes, and pay federal income taxes, can only hope that they don’t take down the entire house with them.
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48 Responses to “Money Supply Timebomb and Fiscal Nightmare”
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November 2nd, 2009 at 5:22 am
http://www.truth-it.net
Gold is leaving the US at an ever increasing rate, for 2007 and 2008 combined, the U.S. exported 22 million ounces of refined gold and over 154 million ounces of “compound gold.”
This is more than 11 times U.S. gold mine production during those two years, and is in fact, higher than global gold mine output.
When the USSR invaded Afghanistan and collapsed, it sold 96% of its gold stockpiles, since the J’s controlled the Soviet Union and similarly control the US, suspect that they are similarly the buyers, and that they are using stolen US dollars to achieve their ends, witness the trillions missing from Pentagon accounts revealed September 10 2001!
It does one need a degree in economics to realize that the Jews that run the Fed are printing worthless money, and that they have in fact cornered the gold market.
The paper money is good if they say it is, however when they decide to “dump the paper,” no one will have anything of any value at all except them.. the rumor mill says that there is no gold in Fort Knox!
Patriotgal Reply:
November 2nd, 2009 at 8:54 am
MT- PLEASE BE QUIET!!!!! Saying that there is NO GOLD IN FT. KNOX might start a panic!!!
It is probably even a terrorist act. So be careful, or you might find yourself “dissapeared”.
NOT that that kind of thing happens in AmeriKa, today.
Of course, since Osama, er Obamao is no fan of Isreel, perhaps we could just go get it.
Yeah, like that is gonna happen!
stephen Reply:
November 2nd, 2009 at 9:53 pm
In the next few months or a year or two gold will have no value either. The only commodity that will have any value is food. Nothing else will matter.
But there is a solution, and fumbling about within the old paradigms of thought will serve to exasperate the matter.
Reestablish the National Bank, a bank for the people and by the people. Outlaw the Federal Reserve and lets start rebuilding this nation.
Motherbrain Reply:
November 3rd, 2009 at 12:29 am
There was already a national bank, which was even worse than what we have now. Because then the politicians would be completely unrestrained from the banker’s interest of self survival. Bankers will not implode to the point of their own destruction. A government will. The national bank was killed twice, because it created huge inflation. Just because theft is done in the people’s name doesn’t make it good for the people.
The Transmogrifer Reply:
November 3rd, 2009 at 8:49 am
Dear Motherbrain, your point is well taken and the first of its kind that I’ve read.
There used to be talk of a “money trust” and the key concept is “trust.” It is getting extremely difficult to trust the US government from the domestic or foreign side.
The power to print money gives the printer almost absolute power, and what is the use of having power if you can’t abuse it?
When the ethical integrity of a system dissolves, so does the system. Greed has become the main feature of American political life.
Guess the next question is: can we nuke our way out of this mess?
wildcat Reply:
November 2nd, 2009 at 11:19 pm
Gold-plated steel bars for sale – available only from the Bank of Ethiopia – a collectors item. This limited edition gold bar consists of solid steel electroplated with 24-carat gold. Each gold-plated steel bar comes with an certification of authentication.
http://news.bbc.co.uk/1/hi/wor.....294665.stm
November 2nd, 2009 at 6:17 am
http://www.KeepTheTruthAlive.com
Shattering The Hypnotized State Of Mind
November 2nd, 2009 at 6:28 am
Interestingly, when speaking of gold, it seems that a certain bullion dealer in the UK was recently caught out issuing more than on gold certificate for a given ounce of gold etc.
It would seem the practice of (Fractional Reserve.) issuing more certificates than there is gold is alive and well and causing many to demand physical delivery.
Patriotgal Reply:
November 2nd, 2009 at 8:56 am
LOL!!! The ENTIRE reason for buying Gold is to HOLD THE PHYSICAL METAL!!!!!
Anyone who would buy a “certificate” for Gold, might as well hold onto FRN’s. Idiots!
meanjean Reply:
November 2nd, 2009 at 4:38 pm
How do you translate the physical gold into “cash” for purchases when needed? Are you mainly into coins?
stephen Reply:
November 2nd, 2009 at 9:58 pm
It is more important to forget about coins, gold or silver. We are facing massive food shortages when the dollar collapses. No fuel, and the harvests rot in the fields. This could happen now at any moment, seemingly without warning.
But there is a solution, reestablish the National Bank, a bank for the people and by the people. Put up tariffs to protect our industries and lets get all those idle and unemployed hands back to work.
Motherbrain Reply:
November 3rd, 2009 at 12:34 am
Unless we truly become educated to the economic reasons behind the current crisis, we will be doomed to repeat it. Your plan is a different flavor of the same thing we have now. A destructive fiat system that causes rampant inflation and a protectionist policy which rewards inefficient modes of production at the cost of normal citizens. it is no better than what we have now. The only way we are going to recapture the wealth America once had is through free markets.
November 2nd, 2009 at 6:31 am
“There is an Eastern tale which speaks about a very rich magician who had a great many sheep. But at the same time this magician was very mean. He did not want to hire shepherds, nor did he want to erect a fence about the pasture where his sheep were grazing. The sheep consequently often wandered into the forest, fell into ravines, and so on, and above all they ran away, for they knew that the magician wanted their flesh and skins and this they did not like.
“At last the magician found a remedy. He hypnotized his sheep and suggested to them first of all that they were immortal and that no harm was being done to them when they were skinned, that, on the contrary, it would be very good for them and even pleasant; secondly he suggested that the magician was a good master who loved his flock so much that he was ready to do anything in the world for them; and in the third place he suggested to them that if anything at all were going to happen to them it was not going to happen just then, at any rate not that day, and therefore they had no need to think about it. Further the magician suggested to his sheep that they were not sheep at all; to some of them he suggested that they were lions, to others that they were eagles, to others that they were men, and to others that they were magicians.
“And after this all his cares and worries about the sheep came to an end. They never ran away again but quietly awaited the time when the magician would require their flesh and skins.
November 2nd, 2009 at 6:35 am
Or, to simplify, all scenarios where we are able to pay both the interest on the loans and give SS, Medicare, Medicaid to the people whose votes were bought with the programs, assume an incredibly rosy income picture; a recovered and thriving economy. Since that’s unlikely, they’ll inflate to pay the bills (already are) and your savings are worth nothing if in currency. The manipulators like George Soros, who know how to play the system and provide no value to society while claiming that it’s those darned “other guys” that provide no value to society, will clean up big time. The world’s biggest hosing is coming.
Patriotgal Reply:
November 2nd, 2009 at 9:01 am
Yes, it is. If your savings are in a bank, in FRN’s, you are screwed. Take ALL of your money out of the bank, NOW!! Buy whatever Gold and Silver you can get. And a year’s supply of dried beans, rice, and spices. THAT is cheap insurance. Of course, MOST Americans are too stupid and lazy to do even this. So, they doom themselves.
Biker Reply:
November 2nd, 2009 at 11:29 am
Patriotgal,
Buy beans? Are you crazy? Don’t you know you will get a carbon debt for all of that gas? Don’t have enough money in the bank to worry about, that feels kind of good in a weird kind of way! Good luck in the coming turmoil…. Biker
MT Reply:
November 2nd, 2009 at 6:48 pm
It is all very fine to say buy gold, however the logistics of exchanging precious metals for food and accommodation, medical care and education expenses etc, have precluded that as an option which is why paper money was invented in the first place!
meanjean Reply:
November 3rd, 2009 at 12:29 pm
Thanks MT; that’s the answer I was looking for. Intelligent and short.
November 2nd, 2009 at 7:59 am
CAN you say ULTRA-MEGA INFLATION?
EAT THE RICH!
Patriotgal Reply:
November 2nd, 2009 at 9:06 am
What rich, exactly? People who have worked, hard, all of their life, to get ahead, achieve some part of the American Dream???? Or thieves, like B.Gates???? B. Ayers????
There is a difference, you know. I have provided hundreds with jobs over the last 19 years. NOT ONE of my employees, ever hired anyone else. (FYI- I have paid more than ANYONE else in my county. People WANTED to work for me- they have the best working conditions in the area, and the best pay. But I will be damned if I will run my businesses at a loss. The gravey train ends in December.) Good luck.
My Proofreader Died Of Swine Flu Reply:
November 2nd, 2009 at 1:57 pm
It’s easier to say Hyperinflation, which the first chart shows is pretty much bought and paid for.
November 2nd, 2009 at 8:17 am
I thought the banks put their “excess reserves” in the stock market. Why? Because they are dead and if they make money there, good for them, but if not it doesn’t matter.
This creates our present day nonsensical situation — a rising stock market in a bad economy — and banks don’t want to take loan risks anyway because of the bad economy. Basically we are all waiting for someone to start spending which can’t happen without a production increase and jobs.
But the job creation here IS severely hobbled by offshoring and H1B visas in many sectors:
http://www.njbiz.com/weekly_ar.....amp;page=1
So I just don’t see anything good coming from the government to help the unemployed or the economy, but plenty to help government insiders and Wall Street, which is bluntly a total rip-off.
Patriotgal Reply:
November 2nd, 2009 at 9:10 am
The American economy is dead. It may flop around for another year or so, but the DOLLAR IS DEAD! The globalists have planned well. Over half of the US population will be dead in 5 years. I just wonder which half?
I’ll be willing to bet (Gold- no paper, please) that the massive city populations, that gave us Obamao, will be the first to starve. I’ll give 2:1 odds….
meanjean Reply:
November 2nd, 2009 at 4:41 pm
They could starve us now if they cut off our food supplies.
stephen Reply:
November 2nd, 2009 at 9:48 pm
There is a solution, eliminate the Federal Reserve, cancel all fictitious debts and place a moratorium on foreclosures. Reestablish the National Bank, a bank for the people and by the people.
Tax all speculation out of existence. This move alone will wipe out nearly 40% of the deficit overnight. Loan money directly to massive infrastructure repair and new projects such as irrigating the deserts of the USA and Mexico, build high speed maglev rail coast to coast and from Siberian to Argentina. Build on a massive scale new 4th generation nuclear power plants and make it a national driver project to bring fusion power on line.
If this is not done then your above prophesies will come true and mass starvation will set in all over this planet in the New Age Dark Age.
meanjean Reply:
November 3rd, 2009 at 12:30 pm
stephen, do you really think the Illuminati and their NWO will let us do that????
November 2nd, 2009 at 8:20 am
today they they artificialy boost the markets and post bogus stats intime for the elections..
November 2nd, 2009 at 9:13 am
Just as countless people have sheepishly allowed their minds to be enslaved within the ridiculously narrow confines of the false “left-right” paradigm, countless more have allowed their minds to be enslaved within the equally false Austrian School-vs.-Keynesian School paradigm — see: http://propagandamatrix.com/fo.....084.0.html — and hence within the false gold-money-vs.debt-money paradigm.
If there’s one thing that Austrian and Keynesian propagandists have in common, it’s their mutual fear that tens of millions of Americans will become aware of the “Greenback” alternative promoted by such monetary reformers as Ellen Brown, Richard C. Cook, Byron Dale, Stephen Zarlenga, and the producers of the documentary film, The Money Masters.
– http://propagandamatrix.com/fo.....012.0.html
That’s why Austrians obsessively attack Keynesians, and vice versa, because each group relies upon the other’s fatally flawed agenda as comparative foil against which to define its own, lest the masses they’re trying desperately to dupe notice the respective flaws in EACH!
william b travis Reply:
November 3rd, 2009 at 1:23 am
hey sorta like the dems and repubs
November 2nd, 2009 at 10:00 am
Inflation is a function of money supply times the velocity of the money. Right now, money doesn’t have much velocity. It isn’t moving much. So there isn’t much inflation.
stephen Reply:
November 2nd, 2009 at 10:13 pm
Whoa! Money used to represent productive labor and the physical goods produced per capita inflation results. The Bailout is already in the process of hyperinflating to dollar, which likely will occur suddenly and will blow the world economy to smithereens.
The bail out money strictly went only to physically non-productive speculative bankers which the Federal Reserve is too ashamed to reveal their identities.
stephen Reply:
November 2nd, 2009 at 11:01 pm
Something weird happened to my above post. So I’ll correct myself:
Whoa! Money used to represent productive labor and the physical goods produced per capita. When money does not represent productive labor and physical goods, it then represents non-productive speculation and inflation results.
The Bailout is already in the process of hyperinflating the dollar, which likely will hit suddenly and will blow the world economy to smithereens.
The bail out money strictly went only to physically non-productive speculative bankers which the Federal Reserve is too ashamed to reveal their identities.
November 2nd, 2009 at 10:56 am
Surprise will be the whirlwind that destroys many.
Speed of dictatorship and technology will engulf.
Pray for Wisdom and Courage in Christ’s name, Amen…
stephen Reply:
November 2nd, 2009 at 10:05 pm
The dictator won’t make it either, they won’t be able to keep the mess together. There is nothing wrong with technology. Technology is a gift, a gift of our own abilities to reason and understand scientific principle. Reason is what separates us from the Breasts, it is the Power of God given to us who were created in HIS image.
Ron Reply:
November 3rd, 2009 at 11:06 am
ROFL “Reason is what separates us from the Breasts.” Freudian slip, eh? Unless you’re suggesting that those with breasts have no reason (chauvinist! haha).
meanjean Reply:
November 3rd, 2009 at 12:32 pm
Thanks you two. I’ll be laughing all day:)
November 2nd, 2009 at 12:32 pm
Without gold and silver coins in payment would you work if ” Cash ” was worth nothing? Everybody needs food and water at least. Prepare, If you are wrong you lose nothing,
November 2nd, 2009 at 4:33 pm
This article overlooks one significant factor – debt service requirements. There is so much US total debt (private, corporate, financial, government) that servicing it now costs more than any new debt thrown into the system. In fact if you print one more dollar of debt money it collapses the GDP by about 14 cents. So loan out that 8.5T, and there would be more collapse of GDP and deflation, not inflation.
November 2nd, 2009 at 6:36 pm
I have an urgent message for you, more important than any message you can hear. God is Holy and cannot accept sin(honor thy mother and father…, thou shall not kill, thou shall not commit adultery, thou shall not steal, thou shall not bear false witness against thy neighbor, thou shall not covet..etc…Exodus 20:12-17). Here are some verses that show examples of sin:
“Ye have heard that it was said of them of old time, Thou shalt not kill; and whosoever shall kill shall be in danger of the judgment: But I say unto you, That whosoever is angry with his brother without a cause shall be in danger of the judgment: and whosoever shall say to his brother, Raca, shall be in danger of the council: but whosoever shall say, Thou fool, shall be in danger of hell fire.” Matthew 5:21-22
“Ye have heard that it was said by them of old time, Thou shalt not commit adultery: But I say unto you, That whosoever looketh on a woman to lust after her hath committed adultery with her already in his heart.” Matthew 5:27-28
“It hath been said, Whosoever shall put away his wife, let him give her a writing of divorcement: But I say unto you, That whosoever shall put away his wife, saving for the cause of fornication, causeth her to commit adultery: and whosoever shall marry her that is divorced committeth adultery.” Matthew 5:31-32
“For ALL have sinned, and come short of the glory of God;” Romans 3:23. Your good deeds cannot cover up your bad deeds.
“But we are all as an unclean thing, and all our righteousnesses are as filthy rags; and we all do fade as a leaf; and our iniquities, like the wind, have taken us away.” Isaiah 64:6
“As it is written, There is none righteous, no, not one: There is none that understandeth, there is none that seeketh after God. They are all gone out of the way, they are together become unprofitable; there is none that doeth good, no, not one.” Romans 3:10-12
You could be perfect in all the law and stumble at one point and it is as if you broke all of them:
“For whosoever shall keep the whole law, and yet offend in one point, he is guilty of all.” James 2:10
“Therefore to him that knoweth to do good, and doeth it not, to him it is sin.” James 4:17
God wrote the law on each man’s heart so they are without excuse on judgment day when we will ALL stand before Christ(”Which shew the work of the law written in their hearts, their conscience also bearing witness, and their thoughts the mean while accusing or else excusing one another” Romans 2:15). The penalty of sin is death and eternal punishment in the LAKE OF FIRE. I am warning you about hell because I love you! You are dead in your sins and headed for hell which is described in the Word as a FIRE THAT QUENCHES NOT(”…the fire is not quenched” Mark 9:44). It is a horrible and terrible place of everlasting torment that people will go because of their sins.
“And it came to pass, that the beggar died, and was carried by the angels into Abraham’s bosom: the rich man also died, and was buried; And in hell he lift up his eyes, being in torments, and seeth Abraham afar off, and Lazarus in his bosom. And he cried and said, Father Abraham, have mercy on me, and send Lazarus, that he may dip the tip of his finger in water, and cool my tongue; for I am tormented in this flame.” Luke 16:22-24
“In flaming fire taking vengeance on them that know not God, and that obey not the gospel of our Lord Jesus Christ: Who shall be punished with everlasting destruction from the presence of the Lord, and from the glory of his power;” 2 Thessalonians 1:8-9
But God has provided a way for each to escape the lake of fire. He sent his Son Jesus(God manifest in the flesh-1 Timothy 3:16) who was conceived by a virgin by the Holy Spirit of God,lived a sinless life, and suffered a horrible death/shed blood and rose again 3 days later to take the penalty of YOUR sins so you dont have to pay for them in hell for eternity! He loved you so much which is why he did it! He is the only one to have fufilled the law perfectly(sinless) and paid the price of the entire world’s sins so that man could be saved on the merits of His perfection(see Romans 5:19). All you must do to be saved is BELIEVE in Him(trust in Him to save you as a sinner). You must admit your lost sinful condition to Him/that you’re worthy of hell, and ask Him to save you by placing complete trust in Jesus ALONE for salvation(an example in the Word of someone doing this- “And the publican, standing afar off, would not lift up so much as his eyes unto heaven, but smote upon his breast, saying, God be merciful to me a sinner.” Luke 18:13).It is not even partly by yourselves that you can be saved, but only by the merits of Jesus Christ!
“For God so loved the world, He sent his only Begotten Son, that whosoever believeth in Him shall not perish, but have everlasting life” John 3:16.
“And he is the propitiation for our sins: and not for ours only, but also for the sins of the whole world” 1 John 2:2
“…Unto him that loved us, and washed us from our sins in his own blood,” Revelation 1:5
“For I delivered unto you first of all that which I also received, how that Christ died for our sins according to the scriptures; And that he was buried, and that he rose again the third day according to the scriptures:” 1 Corinthians 15:3-4
“Then he called for a light, and sprang in, and came trembling, and fell down before Paul and Silas, And brought them out, and said, Sirs, what must I do to be saved? And they said, Believe on the Lord Jesus Christ, and thou shalt be saved, and thy house.” Acts 16:29-31
“But to him that worketh not, but believeth on him that justifieth the ungodly, his faith is counted for righteousness.” Romans 4:5
“That if thou shalt confess with thy mouth the Lord Jesus, and shalt believe in thine heart that God hath raised him from the dead, thou shalt be saved.For with the heart man believeth unto righteousness; and with the mouth confession is made unto salvation.” Romans 10:9-10
No works or anything you do can save you! May God open your eyes, that one day I may see you in heaven. Read the Word of God(the 1611 King James version- NOT the modern versions, they are corrupt) before rejecting it! Death is fleeting. You may NOT have tomorrow! For death comes when we least expect it! Make sure you are saved TODAY! The Bible condemns the rich, the wealthy, and those who take advantage of the poor, so it CANNOT have been made up by the elite. Because the Word clearly CONDEMNS people such as those! It declares all mankind as sinners(myself included).
I am a Christian, and love you enough to warn you of the dangers of hell. Beware, the Roman catholic church is NOT Christian! The church CANNOT save you but only Christ! Just because someone says they are a Christian does not necessarily mean they are one(remember the crusades in history? Many were murdered in the name of Christianity. These were no Christians at all by their testimony). Please email me to inquire more. I would be glad to help you out in your search for truth!(my email- livingwaters705@hotmail.com)…To those who slander/mock me, I pray for you and love you anyways and hope you will trust Christ before its too late!
I call upon my fellow Christians on here to return hate posts with love and blessings. The Lord commands us to love them:
“Ye have heard that it hath been said, Thou shalt love thy neighbour, and hate thine enemy. But I say unto you, Love your enemies, bless them that curse you, do good to them that hate you, and pray for them which despitefully use you, and persecute you; That ye may be the children of your Father which is in heaven: for he maketh his sun to rise on the evil and on the good, and sendeth rain on the just and on the unjust.” Matthew 5:43-45
Salvation is not found in good works, rituals, church, the pope, water baptism, good lives, etc….But ONLY found by faith in Jesus Christ the Savior!
If you need prayer or anything, just let me know! I would be glad to help! I love and care for you, and I have prayed that every person that reads this who do not know the Lord, would one day turn to Christ in faith for salvation for their sins. I beg you to turn to Christ in faith before it is too late! You get ONE chance while living and then it is too late forever:
“And as it is appointed unto men once to die, but after this the judgment:” Hebrews 9:27
“And ye shall know the truth, and the truth shall make you free.” John 8:32
“Jesus saith unto him, I am the way, the truth, and the life: no man cometh unto the Father, but by me.” John 14:6
“…there is no God else beside me; a just God and a Saviour; there is none beside me. Look unto me, and be ye saved, all the ends of the earth: for I am God, and there is none else.” Isaiah 45:21-22
“And the Spirit and the bride say, Come. And let him that heareth say, Come. And let him that is athirst come. And whosoever will, let him take the water of life freely.” Revelation 22:17…….
stephen Reply:
November 2nd, 2009 at 10:19 pm
Good grief, a mind obsessed with religion ain’t much good for anything else. But sin is the root cause of this economic catastrophe. A nation of torn families, torn cities, states and torn nations caused by our own immortality has destroyed us from within.
First we eat and they we can have the time to worry about our salvation. Lets stop the pontifications and start working on ourselves mending our hungry and broken households.
william b travis Reply:
November 3rd, 2009 at 1:28 am
i have nothing against religion but please stop posting the same message over and over
we re all getting tired of it
are you the same guy who wants to be first post all the time
The Transmogrifer Reply:
November 3rd, 2009 at 9:04 am
dear truther, quoting the Bible makes you nothing but a Bible quoter. Millions of folks walking around banging on Bibles, never ask themselves who King James was and why the thing was mass produced in the first place. So the Bible does not make you an authority on anything except an old version of the English language, nor does it make you a good person here, or in the ” afterlife.”
One thing that I can see is being improved with these biblical entries: your typing skills.
The Bible is nothing more than one of a thousand manuals on how to be blindly obedient to a nebulous authority. God as depicted in the Bible merely represents a cosmic mass murderer of those who will not blindly obey his “graven image”: the word.
“Sacred” merely means: unavailable for intelligent discourse.
meanjean Reply:
November 3rd, 2009 at 12:33 pm
Typing skills? He’s nothing but a cut and paste fool.
November 2nd, 2009 at 7:34 pm
please deliver me from urgent religious messages.
November 3rd, 2009 at 12:29 am
I’m pretty sure “Truther” departed weks ago to a religious retreat somewhere, and las left his little sisterincharghe of the computer in his bedroom, to keep posting the same thing on every topic.
November 3rd, 2009 at 12:46 am
Over many years we have all been lied to by our Governments, but not just our Governments but many religous leaders. Many things we have been taught are not even in Scripture and millions have swallowed so many lies by these false prophets. If you are a truth seeker please visit the following web site and take the time to read some of the articles, you will be shocked.
http://www.2besaved.com
Blessings
Ben
November 3rd, 2009 at 9:07 am
As long as people blindly adhere to any doctrine, book or logo mass murder will be the order of the day.
America stands with one hand on the Bible, and the other on a button for nuclear war and a fool between them.
God bless the bomb!
November 3rd, 2009 at 10:43 am
Congressman Paul will offer an amendment to restore the provisions contained in H.R. 1207 to audit monetary policy and activity with foreign central banks. Thirteen of the 41 Democrats and all 29 Republicans on the Committee have cosponsored H.R. 1207, and if they hold the line, we will have the votes to win and restore our audit.
Dr. Paul has shot a YouTube video for Campaign for Liberty explaining the situation in more detail. Click here to watch the video.
Pressure on the Democrat House Financial Services Committee members is critical! Below is a list of Democrats who have cosponsored. Please call them and urge them to vote “Yes” on the Paul Amendment. Click on their names to get their web contact information.
1. Rep. John Adler, NJ (202) 225-4765
2. Rep. Travis Childers, MS (202) 225-4306
3. Rep. Steve Driehaus, OH (202) 225-2216
4. Rep. Alan Grayson, FL (202) 225-2176
5. Rep. Rubén Hinojosa, TX (202) 225-2531
6. Rep. Suzanne Kosmas, FL Toll Free: 1-877-956-7627
7. Rep. Dan Maffei, NY (202) 225-3701
8. Rep. Brad Miller, NC (202) 225-3032
9. Rep. Walt Minnick, ID (202) 225-6611
10. Rep. Ed Perlmutter, CO (202)-225-2645
11. Rep. David Scott, GA (202) 225-2939
12. Rep. Brad Sherman, CA (202) 225-5911
13. Rep. Jackie Speier, CA (202) 225-3531
When contacting these members, remember that up to this point, these members have been allies on this issue. A civil yet firm tone should be kept during these calls. They should be thanked for their cosponsorship, told that Mel Watt’s changes to the bill are unacceptable, and urged to hold the line and honor their promise to support transparency at the Fed by voting “Yes” for the Paul amendment.
It is also important that we contact Financial Services Chairman Barney Frank and House Speaker Nancy Pelosi and urge them to schedule a standalone, up or down vote on the real Audit the Fed bill.
Rep. Barney Frank: (202) 225-5931
Speaker Nancy Pelosi: (202) 225-0100
Now is a crucial time for Audit the Fed. If these 13 Democrats hold the line, Ron Paul and C4L can win this battle. But, they must vote “Yes” on the Paul amendment when the full committee votes.