Money is based on faith and trust. Money is inherently a religious issue. Money today is guaranteed in terms of the full faith and credit of men who control the federal government. Just step back and think about that for a minute! A society whose money is based upon deception and theft will hear its wake-up call some day. Cyprus is a good example. God is a righteous Judge. Men will reap what they sow.

 
Sorry, the Bank is closed! We can’t give you your money right now, even though we made a promise to give it to you whenever you requested it. You trusted us to make it available to you on demand (demand deposit) but honestly we cannot be trusted! Thus, most of the citizens of Cyprus received one of the biggest surprises in their lives. They are now learning the hard way about the real nature of money and banking.

Christians need to be as wise as serpents and as gentle as doves. From a Christian perspective there are four basic principles that we all need to learn from this fiasco if we are to be as wise as serpents.

1. The Fractional Reserve System. Banks do not have the money that they have promised to make available to their customers. They only have a fraction of that amount of money in reserve. This is why they must close the banks when all their customers want their money at the same time. It is called a “run on the bank.” This was the problem that George Bailey faced in the Christmas Movie, “It’s a Wonderful Life. “ The Cypriot government fears a run on the banks because all the money promised to the customers is not there. In one sense it could be called a form of deception.

2. Fiat Money. Fiat Money is money that can be created at will by those who control the money supply. There is no limit on how much money they can print (actually digitize). Gold (or gold backed certificates) at one time was money and there was a limit on the money supply because there was a limit on how much gold existed. Men could not create money arbitrarily. They could not create gold. Only God can create gold. Money was defined in terms of weights and measures of a commodity like gold. God is deeply concerned about the integrity of money. “A false balance is an abomination to the Lord, but a just weight is His delight (Proverbs 11:1). Few preachers today are concerned about it as much as God is. In America the nature of money has changed and there is no control over the creation of money. Therefore there is no control over the integrity of money. The modern equivalent of fiat money is called Quantitative Easing (QE). Cyprus is part of the European Union and cannot create Euros to bail itself out of its own troubles like the United States which can create its own dollars.

3. Inflation. The more dollar bills men print the less they are worth (inflation). The less money is worth, the more money you must have to buy the things you need. This is why the same gallon of milk that cost 99 cents fifty years ago costs $3.99 today. The quality of the milk has not changed. The value of the dollar has. Your money has declined in value. That decline in value has been planned by men who control the money supply. It is to their advantage. It does not happen naturally. It is a sophisticated form of theft.

4. Confidence. Since the creation of money is in the hands of men, our confidence in the integrity of money is dependent upon our confidence in the integrity of men. The President of Cyprus campaigned on the promise that he would never allow a tax (confiscation) on the deposits of the Cypriote citizens. His did not keep his promise. When men have their backs against the wall, they often break their promises. As Christians we call this depravity. Money is based on faith and trust. Money is inherently a religious issue. Money today is guaranteed in terms of the full faith and credit of men who control the federal government. Just step back and think about that for a minute! A society whose money is based upon deception and theft will hear its wake-up call some day. Cyprus is a good example. God is a righteous Judge. Men will reap what they sow.

The Cyprus debacle may soon pass and be forgotten. Hopefully, it will never happen here in the United States. However it would behoove each of us as Christians to understand the basics of our money and banking system from a biblical perspective. We need to be as wise as serpents. I highly recommend the book Honest Money by Dr. Gary North. I used this book at a textbook for the High School Youth Group at the Church where I was formerly the pastor. The Youth loved it, and I believe the youth of your Church will love it also. Maybe the adults will too!

Larry E. Ball is a retired Teaching Elder in the Presbyterian Church in America and a CPA. He lives in Fleming Island, Florida.