Fiat Currency
Is it Biblical?
Q. Is “fiat money” mentioned in the Bible? If it is what does it say about it? Should Christians be worried about fiat money in our country? Why are so many other countries putting a lot of their government money and dollar holdings into gold and silver or oil, like China? I would appreciate your thoughts and opinions on this.
Answer:
Educational Blind Spot
Thanks for your questions. Most Americans are woefully ignorant about money matters and I don’t think this is an accident. Children don’t even learn how to balance a checkbook or learn how to use credit cards judiciously in their high school classes – let alone anything else about money management. Almost no one even knows what the word “fiat” means anymore.
Why?
Ask yourself why this is so? Is it possible that large corporate interests, government and money center banks don’t want us to think about these things? Could they fear that if we understood economics better we might take action against them?
What would happen to them, for example, if we all refused to go so far into credit card debt and deprived them of extortionary practices and usury interest and fees?
Possible Revolution?
Consider what old timer Henry Ford said about all of us:
“It is well that the people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning” (Griffin 1994, 190).
Fiat Money
Fiat money is paper money that has no value by itself. Paper is only worth what it costs to create the “paper.” Instead, the government declares that this essentially worthless paper is legal tender by government decree (“fiat” means “by decree”) By law we have to use it to pay bills, own homes, rent, buy consumer products and engage in business practices.
Almost all paper currencies worldwide are “fiat” money. Their paper is not backed by gold or silver. Even most coins are “fiat” coins and possess little value for any gold, silver, nickel, copper or other metals used to produce these coins.
Wherever fiat money is used as a currency, the term “fiat” currency is used. The primary US dollar, the Euro and the GBP (British pound) – are all fiat currencies, for example (Wikipedia).
The Gold Standard
We used to be able to exchange our paper dollars for gold or silver at the local bank. However, President Nixon removed us completely from the gold standard – even refusing to pay back France with gold as once promised to them. Even our valuable dimes and quarters had silver removed from them in 1967. So they, too, are not worth what they used to be.
The Oil Standard
For a long time our government arranged for all oil sold worldwide to be transacted in American dollars, instead. That created demand for dollars and was a brilliant move by our government.
But, recently we are witnessing country after country declaring they will no longer require dollars for selling oil – they prefer euros or other currencies. This means our dollar will continue to decline in value worldwide. It means U.S. citizens must find other ways to preserve the purchasing power of their dollar-based savings.
Inflation or Deflation
When a government makes too much of this “funny money” it causes inflation – which eventually results in prices rising for just about everything. When a government withdraws some of the money in the system we eventually experience deflation.
Our country is experiencing a strange, temporary bout of deflation right now. This is because as people default on debt (like declaring bankruptcy and not paying off mortgages or credit card debt) then that money disappears. The effect is as if the government were withdrawing extra cash from the country’s economy. However, given enough time we will eventually experience terrible inflation as money supply increases at a scary rate.
Biblical View of Fiat Money
The Bible has a lot to say about “fiat” money although you won’t find this word in the Scriptures. There was no such word in biblical times.
Instead, Proverbs 11:1 notes, “A false balance is an abomination to the LORD” (NASB).
Proverbs 20:23 tells us, “Differing weights are an abomination to the LORD, And a false scale is not good.”
Proverbs 20:17 mentions that “Bread obtained by falsehood is sweet to a man, but afterward his mouth will be filled with gravel.”
Biblical Monetary Transactions
In Bible times business was often transacted through the use of “scales” and “measures.” Sometimes thieves conned or swindled people out of their money by deliberately rigging false scales and by using differing weights and measures. Their measurements would deviate from normal standards. These are practices the Lord abhors. Any bread gained by dishonesty is an abomination.
Heart’s True Treasure
Sometimes we assume it’s unspiritual to think about money. But, surprisingly there are over 2,000 verses containing references to money and possessions.
This is because how we use our money or possessions and the attitude with which we do it reflects our stewardship of the Lord’s provisions for us. This is why Jesus said “for where your treasure is, there your heart will be also” (Matt 6:21).
False Measurements Today
So what would “false weights and measures” look like today? Consider these possibilities:
Is Fiat Money a False Measurement?
As Jerry Robinson points out, “Fiat currency systems, where the currency is backed by nothing and its value can be manipulated at will, is by definition an unjust weight. And so therefore, by biblical definition, fiat currency systems are clearly unjust systems (Robinson 2009, 51).
Using Dollars & Reserves for Resources
Countries like China who are buying up oil, land, and other valuable resources are simply doing a wise thing with their currency and dollar reserves. Instead of holding dollars that are losing value steadily, they are putting those dollars into things they know they will need in the future.
Smart, Honest Investments
I never thought I’d say this. But, smart Americans might want to follow China’s example and begin to purchase needed things now that will cost much more in the years to come, too.
These supplies may include things like toilet paper, canned goods, powdered milk, garden seeds, clothing, jackets, coats, shoes, matches, firewood and other necessary supplies.
We don’t need to necessarily collect gold or silver coins – although these would be more honest purchases, sadly, than our government’s Treasury Bills, Notes or Bonds or even savings accounts that no longer pay much interest.
A New Gospel?
Shockingly, several prominent Christian financial counselors teach consumers that large bank accounts of “fiat” government-money are “good” while stocking up on necessary supplies is “hoarding.” Go figure…
I think it’s best we try not to listen to financial advisors who continue to worship at the altar of the almighty dollar. I think we can safely assume that God is not an American who has planted the American flag beside the New Jerusalem river. God is not partial to any one country or nation and He tells us that all nations will be judged (Zech 12:3, Rev 16:14).
Gospel of Greed
Please remember that we have all been infected by the gospel of greed and consumerism in our country. This needs to change. But, change will be painful to us as we learn we cannot maintain the living standards we are accustomed to. Christians, especially, can help one another to refocus our priorities upon those things that really count.
Justice Will Come
Justice will come to those who abuse us. The corporate glutton “who oppresses the poor to make more for himself, Or who gives to the rich, will only come to poverty” (Prov 22:16).
Meanwhile, we need to pay off our debts and live frugally. This is because the “rich rules over the poor, and the borrower becomes the lender’s slave” (Prov 22:7). That advice is Biblical.
Singing Songs in a Pagan Land
Then, we must not become depressed and fearful as we witness the decline of our American Empire. In Babylonian exile the Israelites cried: “But how can we sing the songs of the LORD while in a pagan land?” (Ps 137:4, NLT).
We can do so because God is in Heaven. He controls everything and He loves us. The psalmist David probably “sang” this verse:
“Though I am surrounded by troubles, you will protect me from the anger of my enemies. You reach out your hand, and the power of your right hand saves me” (Ps 138:7, NLT).
No power or corporation here on earth controls the Christian believer. We belong to Christ and He will supply all our needs (Phil 4:19). We just need to remember to appropriately change our definition of “needs” to things that are vital “necessities” for our survival.
“You will keep him in perfect peace,
Whose mind is stayed on You,
Because he trusts in You.”
(Isaiah 26:3)
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References:
Griffin, G. Edward. 1994. The creature from Jekyll Island. Westlake Village, CA: American Media.
Pegues, Deborah Smith. 2009. Financial survival in uncertain times. Eugene, OR: Harvest House.
Robinson, Jerry. 2009. Bankruptcy of our nation. Green Forest, AR: New Leaf Press.
Fiat money. Wikipedia. Available from: http://en.wikipedia.org/w/index.php?title=Fiat_money&printable=yes. (accessed 11/4/09).