• johned@aibi.ph

Moneychangers and Misery


A Simple Example Of Its Effects

To get a handle on the effects of currency trading lets look at a single scenario. I enjoy eating sardines and I generally buy the "Home Brand" supermarket specials that are made in Thailand. They cost me 49c and I suppose the supermarket pays say 40c a tin for them. Currency speculation has driven down the Thai currency called the Baht. The supermarket now pays perhaps 35c a tin and is happy. The sardine cannery gets the same amount of Thai currency - it looks like it should be happy too. But most international contracts eg for its loans and equipment will be in American dollars. The 14% drop in income in American dollar terms could seriously affect the company as it still has to make the same repayments.

This flows on...lets say the company retrenches some staff. A girl on the production line now needs a job and since there is no social security she soon joins Thailands flourishing sex industry. After a while she is paid in drugs and this reinforces the profitability of heroin growing in the so called "golden triangle". Instabilities multiply as evil networks itself in a very vulnerable environment. Currency trading destabilises the environments of developing nations making it very difficult for their people to survive.

Ethics, Evangelicals and Sins Of The System

Evangelical Christianity has long concentrated on personal sins such as immorality, prayerlessness and drunkenness. As well as these sins Scripture has long recognised the existence of "sins of the system". These are sins such as injustice, slavery, misuse of power, bribery, corruption and economic sins such as charging high interest. They are often entrenched as the culturally accepted forms of selfishness. Apart from idolatry which violates the basic relationship with God; these "sins of the system" are the main ones that the prophets such as Amos inveighed against. These latter sins palpably affect the daily lives of billions of people. People in Sudan are sold into slavery, child prostitution is alive and well in most large cities in the Western world, and usury is common with loan sharks apparently abounding without any real threat to their existence and so on and so forth. But what's so bad about them? Isn't that just how things are?

Most people shudder at rape or terrorism or child prostitution but financial and structural sins do not have a similar emotional impact. You probably think I am slightly bizarre for getting so worked up over currency trading. Strucural sins are at a higher level. Imagine a tall building that was carelessly built and its observation tower at the top had no handrails and a very slippery floor that sloped towards the edge. Visitors to the top might notice the lack of handrails and one in ten might think about it and one in a hundred might notify the management. After a few bodies hit the pavement in a visible and horrifying way then something would be done. Currency trading is like that. It is a structure that is tilted and slippery so that it causes immense pain and hardship. Its time we stopped picking up bodies and started putting in handrails and a non-slip floor!

One of the basic OT premises was (Proverbs 14:31 NKJV) He who oppresses the poor reproaches his Maker, But he who honors Him has mercy on the needy. Thus trampling upon the poor was seen as breaking the covenant and offending God while being merciful was seen as bringing joy, stability and blessing.

Micah sees the right treatment of others as absolutely central to proper piety. (Micah 6:6-8 NIV) With what shall I come before the LORD and bow down before the exalted God? Shall I come before him with burnt offerings, with calves a year old? {7} Will the LORD be pleased with thousands of rams, with ten thousand rivers of oil? Shall I offer my firstborn for my transgression, the fruit of my body for the sin of my soul? {8} He has showed you, O man, what is good. And what does the LORD require of you? To act justly and to love mercy and to walk humbly with your God. Thus the Christian life involves a movement out of selfishness into a passionate concern for mercy. You cannot love mercy without being passionate about it. The cold-hearted world of commerce is intolerable and unjust and unmerciful. But has it always been this way?

Moneychangers and Misery

Commerce is among the most spiritually dangerous of all human activities. The saints in Scripture include fishermen, kings, politicians, physicians, prostitutes, shepherds, priests, administrators, and tent-makers but very few merchants. People who buy and sell without producing anything such as money-changers, stockbrokers, bankers, money-lenders and investors in general are completely absent from the heroes in Scripture and in Church History. I cannot think offhand of a single banker or stockbroker or investor or merchant who has made a major impact for Jesus Christ at any time in the last 2000 years. The only honourable mention in Scripture is Lydia in Acts who was a seller of purple cloth and was converted. Merchants are generally portrayed as opposing the gospel and breaking the Sabbath and seen as defiling of religion in general and the temple in particular. Given the abundance of merchants in the Jewish nation the fact that they are portrayed in such a manner is salutary. This seems to bear out what Jesus said when he said (Matthew 19:23-24 NIV) Then Jesus said to his disciples, "I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. {24} Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

Why then don't the rich succeed in the things of the Kingdom? Why are they responsible for so much injustice and why do so few of them lead Christian lives of any power - particularly those involved in the finance industry. It seems to be a question of having divided loyalties and "two masters". They are pulled in two directions between profitability being "the bottom line" and God's commandments being non-negotiable. When you have two non-negotiiable things in conflict one must give way. Jesus saw this very clearly when He said. (Matthew 6:24 NKJV) "No one can serve two masters; for either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon.

This ability for finance to take over the territory in our lives that properly belongs to God was shown by Jesus' invasion of the Temple and His overturning of the tables of the money-changers - the first century Jewish equivalent of today's currency traders. (John 2:14-16 NKJV) And He found in the temple those who sold oxen and sheep and doves, and the moneychangers doing business. {15} When He had made a whip of cords, He drove them all out of the temple, with the sheep and the oxen, and poured out the changers' money and overturned the tables. {16} And He said to those who sold doves, "Take these things away! Do not make My Father's house a house of merchandise!" For them the pursuit of profit had completely over-ridden any sense of holiness, sanctity and godliness. Money is very persuasive and they were probably allowed to stay there because they paid their way handsomely. Not only were they corrupt but they were corrupting the temple system.

Finally in this section I would like to point out that greed tells lies. The common phrase you hear in the news "free trade in a competitive market" means that the rich - who can compete want unfettered access to the money that is still in the hands of the poor - who cannot compete and they want trade barriers removed so they can get it. The argument that everyone will be better off if "perfect competition in a free market economy" prevails is a whopping big lie. Free markets mean the rich get richer and the poor get poorer at a faster rate than otherwise. The Encylopaedia Brittanica in its article on Markets says "Thus the doctrine that the free play of individual interests in a competitive market maximises welfare for society as a whole has been demolished by its own exponents". The "free play of individual interests" is just a euphemism for unfettered greed. The Bible has been saying for millenia that greed is not good. Now the economists are waking up.

Back to Proverbs - greed creates injustice as the rich and powerful use their competitive leverage to their own advantage. Over time systems get put in place by the rich and powerful which help them achieve their ends. Such systems are often out of balance and end up destroying the poor. (Proverbs 13:23 NRSV) The field of the poor may yield much food, but it is swept away through injustice.

How Currency Speculation Works

You may wonder at why I include currency trading among such heinous sins. There is the legitimate buying and selling of currency such as you or I do on holiday when we exchange our Australian dollars for American dollars and back again or when a British corporation buys Deutchsmarks to make an immediate payment on a German deal. That is fine. In the currency trading world that is known as "spot trading". The money is for immediate and legitimate use.

What I am objecting to is "forward trading" or buying currency for purely speculative purposes. This trading generates nothing. Yet it is so large and so profitable that trillions of dollars are invested in it and whole nations such as Malaysia, Indonesia, Thailand and Korea can be brought low by it. Here's how I understand it works:

  1. A currency trader puts down a deposit (often less than 10%) on a "position" in a currency. For instance you might put a deposit of £200,000 deposit down to buy £2 million of Australian dollars at a price of say 0.4015 pounds to the dollar. This is their stake in the market. This ability of a deposit to "buy" ten times more than it is worth is known as "leverage" and can operate both for or against the buyer.
  2. The currency speculator then uses his or her "position" in the market to bargain with. Say the Australian dollar rises by 3% and the trader sells their position they receive £2.06 million pounds back. They then pay the remainder of the original £2 million they contracted for when they bought their position and walk away with £60,000 for a days work.
  3. Now look at what has really happened. The trader may never have had £2 million to begin with! They may have been relying on the market gains to enable them to pay back their position (the £2 million they contracted to purchase) when it was due. They could have started with only £200,000 in the world and walked away with £260,000 at the end of the day! What has been generated? Nothing! It is purely speculative and is profiteering off a country's temporary (or permanent) financial misfortune. Buy when a nation is down sell when it is up.
  4. A "future" is a longer term version. For instance you may buy a 45 day future on the American dollar. This is saying you will buy American dollars at such and such a price in 45 days time. You are relying on this price being a bargain. People often get caught out on the futures market. Some however become incredibly rich.
  5. A currency trader is really robbing Peter to pay Paul all the time. They are continually using the principle of leverage explained above so that as one deal is completed it is used to put a deposit on another deal. If the game was suddenly stopped and people asked to pay their committments there would not be the money to do it.

Why The Trade Is So Evil

Up to this point it just seems like the share market. There is one difference - the "stock" is in entire nations. Currency trading has reached such a huge size that even if a nation goes in and starts buying its currency to keep the price up it often cannot counter the effects of the currency traders. Even strong industrial nations like Korea and to a lesser extent Japan have been affected. Developing nations and smaller developed nations such as Australia, New Zealand and Canada no longer have any substantial degree of control over the value of their currencies.

So you see that a few greedy currency speculators can create conditions that tip the balance against survival for those in developing nations. A few factors make the trade so dangerous.

  • Firstly the complete pervasiveness of international trade. None of us are unaffected by currency fluctuations. For instance the price of the goods we buy - we buy computer memory made in Japan, web advertising from the USA, a shirt made in China and so on. These prices will fluctuate with the exchange rates.
  • Secondly few modern businesses now operate in only one currency. The magazine operates in three main currencies and it is only a very small business! Once upon a time it was rare to have to change currencies. Now we are all exposed to it.
  • Thirdly the enormous size of the trade means its impact is beyond the control of central banks.
  • Fourthly modern technology means that literally trillions of dollars an hour can be traded via computers. It also means that a nation will find it very hard to put the brakes on undesirable transactions.
  • Fifthly the complete deregulation of the market allows it be a haven for the unscrupulous.
  • Sixthly it is almost impossible to get any real information on it. It is very quiet and the main players disclose nothing. It is not accountable to the World Trade Organisation or the IMF (International Monetary Fund).

As currency speculation increases the value of a nations currency has increasingly little to do with its GDP or its productivity but only the value it has to currency speculators for making a quick profit. This is grossly unjust to the producers within that nation and to its population who deserve to be paid fairly for their efforts.

What Can You and I Do?

The first and paramount priority is powerful intercessory prayer. This stronghhold will not fall easily but it will fall. God opposes the proud and exalts the humble and He hears the cry of the poor. This immense evil is surely not going unnoticed by God and the trade is "storing up wrath" for itself until God judges it. Psalm 18 deals with a spectaular victory against an evil enemy. Read it as you pray. Some pertinent verses are: (Psalms 18:24-29 NIV) The LORD has rewarded me according to my righteousness, according to the cleanness of my hands in his sight. {25} To the faithful you show yourself faithful, to the blameless you show yourself blameless, {26} to the pure you show yourself pure, but to the crooked you show yourself shrewd. {27} You save the humble but bring low those whose eyes are haughty. {28} You, O LORD, keep my lamp burning; my God turns my darkness into light. {29} With your help I can advance against a troop ; with my God I can scale a wall. "To the crooked you show yourself shrewd". The record of devious people opposing God had been one of utter defeat eg the satraps opposing Daniel, wicked Haman in the book of Esther, the high priests Annas and Caiaphas in Jesus' day, and so on. The proud and the devious will be defeated by God when His people cry out to Him.

Secondly you can write to your local politician giving reasons why you think currency trading needs to be strongly regulated. This may not seem like much but God may cause your letter to arrive at a critical moment and to really influence things. Pray as you write and as you post it.

Thirdly you can research this issue and related issues like the Third World debt crisis and become an informed spokesman in your local church. There are some very good Christian thinkers on this issue and organisations like TEAR fund who will approach it from an evangelical bible-believing perspective and give you the information you need.

Fourthly you can join Christian initiatives to combat this problem. Many denominations are currently working towards the realistion of a "Year of Jubilee" in 2000 A.D. with the aim of getting all Third World debts to be forgiven. You will find friends and be part of a very worthy cause.