Financial Frustration

If you feel that everything has gotten more expensive, you’re not wrong. Americans are shelling out more money for their essentials, from gas to groceries. According to economists, the inflation rate recently crept above eight percent. You may be asking what inflation is? We hear about it on the news or read about it in the newspaper, but many were never taught in school.

Inflation is the rise in prices over time. Have you ever heard your parents complain about what something cost when they grew up compared to the cost now? That’s an example of inflation. You may find yourself doing the same thing to your children. Understanding inflation is a concept that’s essential to personal finance.

Why should Christians be worried about inflation? Because it’s taking from the poor and middle class in the most significant way possible. An eight percent inflation rate means that eight percent of your income was taken for buying less food, gas, clothing, etc. So who’s to blame for the increased inflation rate? President Biden blamed Russian President Vladimir Putin, saying, “Your family budget, your ability to fill up your tank, none of it should on hinge on whether a dictator declares war and commits genocide a half a world away."

On the other hand, Senator Elizabeth Warren blamed the pandemic and greed, focusing specifically on greed. She explained, “What has also happened is that now that we’re living in America where there’s a lot more concentration in certain industries, look at the oil industry, look at the meat industry, look at groceries generally. What’s happened is that these companies have said, ‘you know, we’ll pass along costs, but while we’re at it and everyone’s talking about rising costs, let’s just add an extra big dollop of cost increases to expand our profits.”

The real cause of price inflation is the tidal wave of new money the Federal Reserve let loose on the economy over the past several years. In some studies, the maximum impact on that flood of cash prices can come as late as five years from the policy implementation date. In other words, today’s price increases may result from policy changes that took place years ago.

So, how does the Federal Reserve control the price of eggs? They start price inflation to accelerate economic growth by lowering the interest rate it charges banks or purchasing securities from banks with more money to lend. However, banks must reduce their interest rates on loans to persuade more people to borrow. Finally, businesses, the government, and individuals borrow and spend the new money. Most of the borrowing and spending today comes from the federal government.

In the economic world, spending increases the demand for goods and services. When you hear reporters and journalists say higher prices come from demand and not an increase in the money supply, you must understand that you can’t separate the two. Monetary policy works by boosting demand. Supply chain bottlenecks can aggravate inflation, but they are self-reversing and temporary.

Inflation is damaging because prices direct production and consumption by signaling companies to produce more when higher and lower prices. Consumers buy less when prices are high and more when they are down. However, coordination only happens when prices accurately reflect supply and demand, and exact costs require a somewhat fixed pool of money, like one that the United States enjoyed during the years of the gold standard. When the Fed fabricates money to build out the supply, it creates a false demand for cars, houses, and eggs. Because the supply of eggs hasn’t risen, but their prices have increased.

What the Bible Says About Inflation

The Federal Reserve’s money creation process disregards the Biblical commands disallowing false weights and measures. Leviticus 19:35 tells us, “You shall do no wrong in judgment, in measures of length or weight or quantity. Proverbs 11:1 also reminds us, “A false balance is an abomination to the Lord, but a just weight is his delight.” You can also read about it in Deuteronomy 25:13-16, which reads in part, “You shall not have in your bag two kinds of weights, a large and a small. You shall not have in your house two kinds of measures, a large and a small.”

During the history of the Hebrew Bible, money was a weight. The shekel was the same weight as 180 barley grains. In Genesis 23, when Abraham bought a cave to bury Sarah, he paid 400 shekels of silver for it and would have used a scale to weigh the amount of silver. The dollar, pound, and most units of money were originally weight measures. So, when new money created out of thin air floods the United States, it corrupts the money as false weights did in the Hebrew Bible.

Christian faith inspires us with the good news that our troubles won’t always last. Genuine Christian hope isn’t built on a phony escape from life’s frustrations and torments. However, it promises that no weapon formed against us shall prosper. Evil, deprivation, and heartache won’t have the last word. At the end of his Chronicles of Narnia, C. S. Lewis depicts heaven as the ultimate deliverance from the contingency of experience.

In his description of heaven, creatures cannot feel depressed, deprived, or anxious. Trauma doesn’t exist because happiness is continually expanding. Here is “the Great Story, which no one on earth has read: which goes on forever: in which every chapter is better than the one before.” This resurrection hope does not eliminate the ups and downs of day-to-day life, but it does offer a liberating cosmic perspective from which to view them.

Inflation is a problem that will affect everyone. Sadly, it will only adversely affect the middle class and the poor. Not knowing how to pay your bills or buy your food can be scary and stress-inducing. However, we must trust that this too shall pass and the Lord will provide. We must trust that He will sustain us no matter what comes our way and thank Him in advance for the blessings we’re about to receive.

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