Archive for December, 2008

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Even the Chinese Can See It – Why Can’t We

December 19, 2008

For the past three years, I have been telling people to put away their copies of “Rich Dad, Poor Dad” and come to realize that the advice is not biblical and also doesn’t work for most people. People have scoffed at me and said I was backward in my thinking.

My reasoning for why “Rich Dad, Poor Dad” is nonbiblical is this:

1. It is based upon greed.

2. It is based upon a false ideal that the future is in any way predictible. We are told repeatedly in the Bible that you should not count on the future being there.

3. It proposes that we should make money off the misfortunes of others. I won’t attempt in this post to explain how leveraging does that, but it certainly does.

My reasoning for why it doesn’t work is this:

1. There is only so much wealth. You cannot have everyone leveraging their investments. If they do that, then the whole system will come crashing down as real value will become submerged in paper value. This is exactly what we have today.

2. In a falling economy, cash is king. And all economies fall from time to time. And there is little way to predict when your leveraged investments will be called in.

3. Leveraged investing, which is at the heart of “Rich Dad, Poor Dad” is what caused the Great Depression and the Great Tulip Futures Crash of the 1700s (history’s greatest Depression).

Now the Chinese are trying to tell us to stop doing this. In a fascinating article from “Atlantic Online” one of China’s most successful bankers tells the United States what we don’t want to hear: That they will soon own our country. And believe it or not, he doesn’t want to own our country. He wants us to get on our feet again so China can trade with us.

In his analysis of our economy, he has some fascinating points. But the one that intrigued me was this quote:

Think about the way we’ve (i.e. Americans ) been living the past 30 years. Thirty years ago, the leverage of the investment banks was like 4-to-1, 5-to-1. Today, it’s 30-to-1. This is not just a change of numbers. This is a change of fundamental thinking.

People, especially Americans, started believing that they can live on other people’s money. And more and more so. First other people’s money in your own country. And then the savings rate comes down, and you start living on other people’s money from outside. At first it was the Japanese. Now the Chinese and the Middle Easterners.

We—the Chinese, the Middle Easterners, the Japanese—we can see this too. Okay, we’d love to support you guys—if it’s sustainable. But if it’s not, why should we be doing this? After we are gone, you cannot just go to the moon to get more money. So, forget it. Let’s change the way of living. [By which he meant: less debt, lower rewards for financial wizardry, more attention to the “real economy,” etc.]

As an amateur economist, I love to read comments from smart people. This article should cause all of us to sit up and take notice.

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Hearing God When Making Decisions – 3

December 17, 2008

For the most part, the only television show I watch regularly is “House”. I like the medical mysteries and the interplay of warped psychological profiles. In another post I will give my rationale for why I think the lead fictional character, Gregory House, suffers from a disorder called Aspergers. But in this post, I will use a typical House plot twist to explain how anyone can begin the process of hearing God when making difficult or important decisions.

During most episodes of House, the diagnostic team usually comes to a dead-end with their patient. They cannot figure out what the symptoms are telling them. At that dead-end point, they always go back to their assumptions and question every one of them. In one case, they had assumed the person was female and by questioning their premise, realized he was a male. Another time, Read the rest of this entry ?

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Hearing God When Making Decisions – Part 2

December 5, 2008

Our son was diagnosed with Juvenile Rheumatoid Arthritis – he was only 10 months old. No Canadian child had ever been diagnosed with JRA that young. My wife and I believe that God heals and we immediately followed the biblical command to “call for the elders of the church and have them lay on hands in prayer”. We did this in full faith, believing that God could and would heal. The JRA had affected one of John’s knees, ballooning it three inches larger than the other one. Within an hour of praying, his knee began to decrease in size. Within a day, it was almost the same size as the other one, and the telltale heat of inflammation on the knee was now gone. We cried and laughed and told everyone we knew.

However, within a week the knee was swollen badly again and even warmer than before.

Now what were we to do? Read the rest of this entry ?

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Hearing God When Making Decisions – Part 1

December 3, 2008

Ryan thought he knew what to do. They offered him the biggest promotion of his life into a position he coveted. The salary and prestige would be everything he hoped for. But now, three different people in the church had cautioned him about taking this job. One didn’t know why, but that was their gut feeling. Another one gave him some logical reasons why he should reject the promotion. The new job would mean moving about 500 miles to the regional office headquarters. The kids were all doing well at school and Ryan had just joined the Governing Board of the church. So this person said it didn’t appear to be good timing to make the move. The third person said they heard God say this job would not turn out as well as Ryan hoped.

While Ryan pondered the input of these people, he and his wife received their latest Netflix movie in the mail; it was titled “Fun with Dick and Jane”. The story featured a guy Read the rest of this entry ?

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