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Preserving the Free Market

Dan Smithwick
Nehemiah Institute
Topics of presentation

Overview of money- what is it?

Overview of banking

State of economy- why the mess?

Overview of Free Market Course


Wealth vs. Money
Wealth- 1) Accumulation of natural assets

OR, 2) Conversion of raw assets into objects of perceived value.

Freedom to respond to gifting and calling of God


Money

A convenient commodity to facilitate ease of trading


wealth between consenting individuals

Commodity: Physical object of perceived value

Not currency!
Characteristics of money (commodity)-
1. Divisibility

2. Durability

3. Recognizability

4. Transportability

5. Scarcity
Types of Money (Commodity)

Over 30 objects have been used


Creation of Banks
Duty-

Hold commodity and issue notes (currencies) to


depositors which could be passed between
consenting individuals for free-market exchange of
goods and services.

Bank “banca”
Creation of Central Bank
(Federal Reserve System – 1913)
Creature From Jeykll Island

Gang of 7 met with undisclosed purpose

Devise secret plan to:

1. Create ‘money’ out of nothing

2. Loan it out to public for interest

3. Become super wealthy


Creation of ‘Fractional Reserve Banking’

 Customer deposits $1,000


 Bank is required to keep 10% on reserve ($100), can
loan other $900, for interest
 Recipient of $900 loan deposits funds in his acct
 Bank must keep 10%, $90, can loan $810
 Repeat, repeat,---
 Can ultimately result in $9,000 of new “money”
Result of ‘Fractional Reserve Banking’

$9,000
 Called: Fiat money

 Fiat- “let it be”

$1,000
And God said,
“Let there be--.”
New commodity-

R.I.P.

X
1900-1973
Historical review--
wealth money currency
Modern-day practice-
wealth Removal of
commodities Currency as money
Paper as commodity-

Yes Divisibility
____

Yes Durability
____

Yes Recognizability
____

____
Yes Transportability

No Scarcity
____

What is the result of ‘paper money?’


Currency inflation
Doctrine of ‘money’

Biblical doctrine of ‘just weights and measures.’

 Lev 19:35,36
You shall do no wrong in judgment, in
measurement of weight, or capacity. You shall
have just balances, just weights, a just ephah,
and a just hin; I am the LORD your God, who
brought you out from the land of Egypt. 
Doctrine of ‘money’

 Proverbs 16:11
A just balance and scales belong to the LORD; All
the weights of the bag are His concern.

 Proverbs 20:10
Differing weights and differing measures, Both of
them are abominable to the LORD.
Doctrine of ‘money’

Deut. 8:18

But you shall remember the LORD your God, for it is He who
is giving you power to make wealth, that He may establish
His covenant which He swore to your fathers, as it is this
day.

Point:
Sound money comes only with sound theology.
Financial crisis

State of Future of
U.S. Economy U.S. Economy

1913 2020?
Worldview of youth

Biblical Theism
Two choices

“Obama” Plan Nehemiah Plan

Print more money Study/obey God’s Word


Course: Preserving the Free Market

Biblical Principles of Economics

Biblical Principles of Government

Course of Action- Where do we go from Here?


The end--

“Come, let us build—”


Neh. 2:17