Sunday, March 31, 2024

Good News

The good news is that Jesus totally and fully dealt with sin and defeated evil when he died on the cross.
He was raised from the dead and ascended into the spiritual realms where he was crowned as King of Kings and Lord of Lords.
He released the Holy Spirit to work in the world and clean up the dreadful mess caused by sin and evil.

Friday, March 29, 2024

The Cross

God forgave all our sins.
He redeemed us from death and sickness and gave us life.
In Jesus, he cancelled the charge that condemns us
by nailing it to the cross.
Jesus has disarmed the powers and authorities that control us
by triumphing over them on the cross.

Tuesday, March 19, 2024


I don’t have much hope in the church as it exists in New Zealand at the current time. I observe an unwillingness to change and do things differently that has become entrenched over many years. God will not force the church to change. He has been urging change for many years, but no one is listening.

The reality is that a church that is unwilling to change cannot be revived. It actually needs a radical reformation, but there are no leaders working towards that. I have described a few of the changes that need to take place in Twelve Big Ones.

The truth is that if a real revival came to New Zealand right now, the church would not be capable of discipling thousands of the new believers so many would eventually be lost. If 100,000 people chose to follow Jesus in Christchurch this year, the church would know what to do with them. God will not send revival now while it is too risky.

When people pray for revival, they don't think about what they will need to differently. They think about what they expect God to do, and perhaps what they expect other people to do. That is an ingredient for nothing happening.

I have heard people prophesying that God will send revival to New Zealand for fifty years, and these prophecies have failed. Prophesies about what God is going to do are pointless because he will not force himself on his church. We actually need more prophecies telling the church how it should change, but unfortunately, those are not so popular.

Friday, March 15, 2024

Money Developments (5c) Compulsory Change

The nature of money and banking would change dramatically if the government made it compulsory for people and businesses to use the CBDC for all transactions requiring payment of money. Such a change would be really concerning for everyone, as it would give the government much greater control over the buying and selling of both people and businesses. It would represent a significant loss of freedom.

If people and businesses were forced to use the CBDC for all transactions, the existing retail banks would probably fight hard to prevent it from happening, as it would be a serious constraint on their business. They would lose several very profitable activities. I am not sure how effective these institutions would be in preventing the government from making the change if it was determined.

Implanted Microchips
If a smartphone app is used to initiate CBDC transactions, security will be important. Processes for identification using fingerprints, voice prints, face recognition or iris scanning are already operational. These should provide sufficient security for a CBDC. Some Christians are suggesting that a microchip under the skin on the wrist or forehead will be introduced to increase the security of the CBDC, but this does not seem to be necessary, given that existing methods of security are effective.

The problem with an implanted microchip is that it could be accessed without authorisation. If a microchip can be read by an ATM or a terminal in a retail shop, criminals would be able to develop scanners that would be able to read the information on the microchip. They would also be able to write to the microchip and change the information on it. So having an implanted microchip would be less secure than using a smartphone.

If a person was kidnapped by criminals, the microchip under their skin could easily be removed by force. It is not hard to imagine groups of thugs mugging people and holding them down while they cut out their microchip so they could use it to make transactions.

An implanted microchip is a fairly useless technology. Without a power supply, its computing activity would be very limited, and its hardware would quickly get out of date. A chip under the skin cannot have a display screen or keypad for data entry. It would not be able to link to a mobile or wireless network, so it would be useless for communication or computing activities.

The flood of Christian books warning of the dangers of a microchip under the skin for financial transactions were written back in the days before smartphones when a microchip under the skin seemed like the only realistic way to make digital transactions. Now that most people have smartphones and they are accustomed to keeping them secure, a chip under the skin is unnecessary.

Government Control
Modern governments claim the right to control every aspect of life if they think they can do good. They claim the right to freeze the assets of people, companies and nations if they don’t approve their activities. They also claim the right to prevent people and businesses from buying or selling if they do not approve of their activities. This power is usually enforced through instructions to the banking system. Banks are dependent on the government for their license to operate, so they usually comply with government requirements.

A CBDC would make government control easier to achieve because they would only have to work through one agency. However, they are already able to achieve control through their influence on the banking system as a whole, so their ability to control would not be greatly enhanced if a CBDC was introduced. However, it could make their monitoring and control easier if they enforced the use of the CBDC for all payments.

The limits on government will always be legal, not capability. A CBDC would just make it easier to do things that governments mostly already have the legal authority to do.

Modern governments believe they have a responsibility to manage everyone’s behaviour, and they have a variety of technologies to control people effectively. Whatever their money system, modern governments have the power to prevent people from buying and selling. There are risks to digital transactions, but there are risks with all aspects of life. Holding wads of notes would provide very little protection.

This full series can be read on Substack in an article called Money Developments

Wednesday, March 13, 2024

Money Developments (5b) Problems for Central Bank Digital Currencies

Developing, implementing and maintaining a digital currency presents central banks with several problems. The following are just some of the issues that need to be considered and remediated.

  • Hacking and tampering – If the CBDC increases in popularity, huge amounts of important data will have to be managed and kept secure by the central bank. Hackers and thieves will be tempted to penetrate the system to steal funds or manipulate the accounts of people they dislike. Keeping the system secure will be costly for the central bank.

  • Monetary policy transmission mechanism – Modern central banks attempt to control the supply of money available in their economy. Most do this by controlling interest rates. Experts are concerned that the growth of CBDCs will restrict the transmission mechanism for monetary policy.

  • Interoperability with existing payment networks, including commercial bank and e-money networks and ATM machines. – Money is important for the operation of an economy. If the CBDC becomes the dominant currency, the central bank will be responsible for ensuring interoperability with all the other computer systems that use money transactions. This interoperability is currently maintained by banks and other private businesses. A central bank might not want to take this responsibility over from them.

  • Money laws and regulations, including data protection laws – if a CBDC is introduced, the central bank must ensure that all laws about money and credit will continue to function effectively. This might be a big task.

  • Resilience – The design of all aspects of the CBDC system will need to exceed the established resiliency and security standards of financial market infrastructures. It will need to provide instant transaction settlement around the clock all year long and be able to recover quickly from any disruption.

  • Scalable – CBDC systems will need to be developed with scalability in mind and be able to handle rapidly increasing volumes of transactions without running into operational difficulties.

  • Upgradable – A CBDC system will have to be easily upgradable to take account of developments in the software and hardware used by the various computer systems that need to interact with it. The system would need to be future-proofed to handle all technological developments. It will need to be upgraded continually. Most central banks do not have the skills to do this.

  • Two-tier system – Most central banks will adopt a two-tier approach in which they maintain the central system, but leave many other functions to other businesses. This might be a more practical solution, but the central bank will need to maintain relationships with a range of private-sector intermediaries.

  • Privacy – When developing a CBDC, the central bank will comply with all the existing standards for protecting privacy and the use of personal data.

  • Capital Flow Management – Many governments choose to control capital flows in and out of the country. These measures are mostly operated by the banks that organise international payments and receipts. If the CBDC can be used for international transactions, the central bank will need to build software constraints into the CBDC system to implement the government’s capital flow management measures. This may be quite complicated to achieve.

Credit Creation
If the role of the CBDC accounts at the central bank is extended to paying interest on deposits and making loans to businesses and households (mortgages), the situation changes significantly. Under the existing monetary system, commercial banks create money by giving loans to their customers. They can do this because the money they loan is eventually deposited in an account within the banking system. I describe how this “money creation” process operates in Credit Creation.

If the central bank gets involved in lending and borrowing by paying interest on deposits and lending money to businesses and households, they will get the ability to create credit in the same ways as commercial banks are currently doing it. If the central bank makes a loan to a customer (business or personal) the money will eventually be paid into the recipient's account at the commercial bank. They end up with a loan and a matching deposit, which balance each other.

The only limit on credit creation by the central bank would be supply and demand at the prevailing interest rate. Modern central banks control interest rates, so they would be able to manage interest rates and the volume of loans to achieve their goals.

Tuesday, March 12, 2024

Money Developments (5a) Central Bank Digital Currencies

Many central banks are worried that changes in the use of money will make it more difficult for them to control the money supply in their nation. In response to these developments, they are establishing central bank digital currencies (CBDC).

Most CBDCs will be established by allowing people and businesses to open an account at the central bank (for example, the Reserve Bank of New Zealand here, or the Bank of England in the UK). People could get their wages or salary paid into this account. Using a digital wallet of some kind, they can also use the digital currency to make or receive payments when buying or selling, in the same way as they now use debit or credit cards.

The digital wallet could be an electronic card or other portable token, but these would not be very secure. Most people and businesses would be more likely to use an app on a smartphone to make economic transactions with money in their digital account at the central bank of their nation. They mostly know how to keep their phones secure, so this should be safe.

At this stage, it is unclear how great the demand for central bank digital currencies will be. From what I have read, the experts in the central banks developing these currencies are not sure that people and businesses will use the digital currency they create. Many will prefer to continue using the payment services and bank accounts provided by their existing retail bank. There might be a lack of trust in a service provided by the government. (I note from the discussion papers issued by the Reserve Bank of New Zealand that they don’t seem to be very enthusiastic about a CBDC. They seem to be uncertain if there would be widespread take-up).

Some nations are establishing a CBDC to facilitate international transactions for people who are travelling, or businesses trading with businesses in other countries. If a CBDC makes international transactions simpler and cheaper than the service offered by existing banks and credit card companies, they are more likely to switch to using it.

CBDCs are the fastest and easiest way for nations wanting to use their own currencies when conducting international trade to operate currency swaps. These swaps will become more important because they eliminate the need to hold reserves of currencies that a nation uses for trade.

Payment Service Only
Most central banks seem to be planning to limit their CBDC offering to a payments service. They are not planning to provide all the other services that are typically offered by retail banks. The transactions account they are offering will be like a cheque account that does not pay interest, but can be used to make payments to other people and businesses. Most central banks do not intend to get into competition with retail banks by offering to pay interest on deposits. If they offered interest returns that are greater than those offered by retail banks, the flow of money into the CBDC would increase significantly.

Most of the accounts at the central bank will not provide overdrafts, mortgage-based loans, business loans, seasonal finance or insurance services. This means that most people and businesses will have to maintain their relationship with their existing retail bank. That would change dramatically if the central bank offered loans that are cheaper and easier to access than those offered by retail banks.

If there is uncertainty about the stability of a retail bank, causing depositors to fear a bank run, they might believe that their money is safer as a CBDC in their account at the central bank. However, if the government is guaranteeing deposits in the retail banks, then this advantage might not exist.

I will look at the problems with CBDCs in my next post

Saturday, March 09, 2024

Money Developments (4) Cryptocurrencies

A big development over the last few decades is the emergency of cryptocurrencies. The main feature of these is that they are created without any involvement of a government, so they cannot be traced or controlled by governments. The best-known cryptocurrency is Bitcoin. It uses a technology called Blockchain to record transactions.

Bitcoin is a digital currency that operates free of any central control or the oversight of banks or governments. Instead, it relies on peer-to-peer software and cryptography. A public ledger records all Bitcoin transactions, and copies of it are held on computers around the world. Anyone with a spare computer can set up one of these servers, known as a node. Every transaction is publicly broadcast to the network. Consensus on who owns which coins is reached cryptographically across these nodes rather than relying on a central source of trust like a bank.

In much the same way you would keep traditional coins in a physical wallet, virtual currencies are held in digital wallets and can be accessed from client software or a range of online and hardware tools. A private Bitcoin key is a 64-character string of letters and numbers. It might look something like this: E9873D79C6D87DC0FB6A5778633389F4462313303DA61F20BD67FC233AA. Most of us could not remember a number like that, so would have to record it in some way. Owners of Bitcoin addresses are not explicitly identified, but all transactions are public.

A cryptocurrency like Bitcoin has numerous benefits.

  • Financial transfers between two accounts are fast.
  • International transfers are a lot cheaper than using banks.
  • The Bitcoin ledger is public; anybody can store it on a computer.
  • Bitcoin is pseudonymous because funds are not tied to real-world entities but to Bitcoin addresses.
  • Bitcoin is decentralized, so it does not have a central controlling authority.
  • The Bitcoin network is peer-to-peer, so it does not have central servers that can be hacked.
  • Anybody can send a transaction to the network without needing any approval; the network merely confirms that the transaction is legitimate. 
  • Buying and selling is as simple as scanning a QR code and sending an email.
  • The additions to the ledger are maintained through competition. 
  • The issuance of new bitcoins is decentralized via an electronic mining process.
There are some problems with cryptocurrencies.
  • Users of a cryptocurrency must keep their address key secret. If they lose it, it cannot be recovered. If someone steals it, they have access to all their victims’ Bitcoin. Tools are available for storing an address key, but the process depends on users being diligent.

  • A growing economy needs a growing supply of currency. The electronic process for generating new Bitcoin mimics the process for mining gold. New bitcoins are generated in a process that those who do the most work get the most new bitcoins.

  • The process for generating new Bitcoin is very energy intensive.

  • The changing relationship between supply and demand for Bitcoin caused the price to increase dramatically when it was first introduced. Many people saw it as an investment that could produce rapid returns. These people did very well in the early days, but more recently, the value of Bitcoin has dropped significantly.

  • Many people have invested in companies promising to make cryptocurrency easier to use. Unfortunately, these companies have carried all the usual risks, because they are usually controlled by a few people, eliminating the distributed security provided by the cryptocurrency. Many investors have got into financial trouble and lost their wealth. The best-known example is perhaps FTX, which operated a cryptocurrency exchange and crypto hedge fund. It eventually went bankrupt.

  • Price fluctuations can be a problem for some uses. A stablecoin is a type of cryptocurrency where the value of the digital asset is supposed to be pegged to a reference asset such as the US dollar. They have been developed to provide stability, long-term purchasing power and the predictability of a fiat currency along with the benefits of cryptocurrencies. Unfortunately, many companies that have developed a product and called it a stablecoin have crashed to zero due to inadequate design, inadequate collateral or bad management. The stablecoin with the highest market capitalization value is Tether, which is pegged to the U.S. dollar as its fiat-backed currency.

If Christians are worried about being persecuted by their government and losing their ability to buy and sell (I am not currently in that situation), cryptocurrency is a practical option. However, they should be careful about a couple of the problems.
  • Christians holding a cryptocurrency for security reasons should not expect to make massive returns. If they are holding to ensure they can buy and sell when they want to, this should not matter to them. The value of their account will go up and down, but they will have the benefit of always being able to spend it when they choose. This problem is unavoidable, as notes and coins also lose value with inflation.

  • Christians should probably buy the cryptocurrency themselves rather than relying on companies that buy them on their behalf. These companies are only as good as the people who run them, so they cannot provide real security. If Christians purchase a stablecoin to gain the benefit of price stability, they should monitor its financial viability very carefully.

Friday, March 08, 2024

Money Developments (3) Private Payment Methods

In the last few decades, a range of new tools for making payments when buying products have been developed. These have changed the way that we buy and sell. Many of these options allow people to borrow money to pay for their purchases.

  • Credit Cards are the best-established and most widely accepted method for making payments by carrying a small plastic card. Many people are content to pay a fee to their credit card company for the benefit of paying for goods and services all over the world. Credit cards allow people to buy on credit, but their interest charges are high.

  • PayPal is a multinational financial technology company that operates an online payments system in a large number of countries. It provides an electronic alternative to traditional paper methods such as checks and money orders. The company operates as a payment processor for online vendors, auction sites and many other commercial users, for which it charges a fee.

  • Smartphones are already being used for buying and selling using NFC (Near-field Communication) or QR codes in many parts of Asia and Africa. In China, most people don’t have credit cards, so phone payments are more common. WeChat Pay has become a part of daily life.

    With WeChat Pay enabled on a mobile phone, users can make transaction payments anywhere. It is supported almost everywhere, such as in ordering taxis, supermarkets, and hospitals. In the largest cities, residents pay, on average, 80% of their monthly expenditures through mobile payment services, while in smaller cities, residents use these means for 90% of their monthly expenditures.

    In Africa, the use of smartphones for buying and selling is growing rapidly. It is making it easier for people to operate businesses and start new ones. M-PESA is Africa's most successful mobile money service. Making payments with a smartphone is far more secure than carrying around wads of cash, so it is facilitating economic development. For example, Somalia is an impoverished, war-torn country, yet 70% of adult Somalis use mobile money services regularly.

    Most of the mobile payment systems in Africa and Asia are operated by companies. Of course, governments can intervene and prevent people from trading if they choose, regardless of what payment method is used. They can also confiscate cash if they choose.

  • GooglePay and ApplePay are payment systems operated by two of the largest multinational information technology companies in the world. People are using them to make payments from their bank accounts or credit card accounts with their phones, often with NFC technology.

Thursday, March 07, 2024

Money Developments (2b) Cash and Security

Cash does not provide people with security from a hostile government, as it still has to be withdrawn from a bank or ATM, and the government can easily put a stop to that for a particular person. The only alternative would be to stash away a large volume of notes and use them as needed, but that is risky because they can be stolen, or destroyed by flood or fire. And of course, inflation slowly erodes the value of stored cash over the long term.

Whatever the form of the money system, modern governments have the power to prevent people from buying and selling. Holding cash provides very little protection. If people really want to store money for their support while living under a hostile government (I don’t see the need at this stage), a cryptocurrency like Bitcoin is probably the safest option because accounts are decentralised, and transactions can be made without anyone knowing and without leaving any paper or digital record of the transaction. However, it might be difficult to find businesses that will trade with a cryptocurrency.

A simpler option might be to store gold coins or gold jewellery, as they retain value, although the risk of theft remains. I read once about a person who travelled through Nazi Germany with a gold chain necklace hidden in their shoe. They used links from the chain to pay for things that they needed.

Jesus told his followers to seek his kingdom and find his security in it. He warned the people not to rely on money for their security.

Do not store up for yourselves treasures on earth, where moth and rust destroy and where thieves break in and steal. But store up for yourselves treasures in heaven, where neither moth nor rust destroys, and where thieves don’t break in and steal (Matt 6:19-20).
No wealth stored on earth is fully safe, regardless of the form in which it is stored. Cash can be stolen. Notes can get wet and mushy and be destroyed. The only safe place for storing wealth is in the kingdom of God. But only spiritual wealth can get in. Luke’s account of Jesus’ teaching makes the promise clearer.
Seek his kingdom, and these things will be given to you as well. Do not be afraid, little flock, for your Father has been pleased to give you the kingdom. Sell your possessions and give to the poor. Provide purses for yourselves that will not wear out, a treasure in heaven that will never fail, where no thief comes near and no moth destroys (Luke 12:31-33).
The safest place to be in a crisis is part of what Jesus calls a “little flock”, ie a community of people who are committed to following Jesus by serving each other and providing support for each other.

A fellowship of believers can support each other by giving and sharing during a season when the government is persecuting those who stand for Jesus. Their love for each other will be a purse that does not wear out. In Jesus’ kingdom, they will find treasure that will never fail. No powerful, political thief will be able to rob them of the security that they love one another as Jesus commanded.

Wednesday, March 06, 2024

Money Developments (2a) Declining Use of Cash

Some Christians are concerned that the decline in the use of cash represents the emergence of a cashless society in preparation for the Mark of the Beast. However, the decline of cash is a normal societal change that occurs when technology changes and new needs develop. Cash is disappearing in the same way that cheques have already disappeared. The reason is that they are inefficient and tend to be insecure, so the change is sensible.

  • People have stopped using cash. Young people here never use it all. I rarely carry cash. Carrying around wads of cash is risky because it is easy to steal, and notes are almost impossible to trace. Buying with a smartphone is simpler.

  • Retailers are not interested in selling their products for cash. Maintaining a stock of cash in every till to facilitate payment of change is inefficient. Paying out change encourages mistakes and pilfering by staff. Taking cash to the bank deposit is risky. Getting out coins in bulk to provide change is also an unnecessary risk. Storing cash overnight is a problem for many small businesses. The choice is to leave it in an unsupervised store or take it home. Neither is ideal. In view of these concerns, it is not surprising that businesses are avoiding cash, just as they stopped taking cheques long ago.

  • Retail banks are not interested in handling cash. They have to clean notes and sort out damaged ones and return them to the central bank. Holding large reserves of cash to meet uncertain demand for notes and coins is inefficient and unprofitable because it does not earn interest. Operating ATMs is a significant security risk as they are vulnerable to ram raids and scammers. Loading ATMs is expensive because strong security is needed when cash is being shifted around. Banks get no payment for providing an ATM service, so it is not surprising that they are trying to reduce both the number of sites where cash is available and the amount of cash that people can withdraw.

There are three big users of cash in the modern economy.
  • Criminals doing drug deals and funding other illegal activities. It is interesting that the largest volume of notes on issue is $100 notes. These are preferred by criminals.

  • People active in the black economy, who avoid GST by paying tradespeople and others with cash, or buying cars and other expensive products with cash.

  • People keeping a stash of money for a rainy day. It is interesting that there are still $500 million worth of £10 pound notes and $150 of £100 notes on issue, even though New Zealand switched to a decimal currency more than fifty years ago. I presume that many of these pound notes have been stashed and lost.

Here in New Zealand, I see no evidence that the Reserve Bank is pushing a cashless approach. The value of notes in circulation has actually increased, particularly in the larger denominations. The central bank earns good money through the seignorage it gets when issuing notes and coins. In the case of notes, it is almost money for nothing, so the bank is unlikely to push a cashless society.

The reality is that the Reserve Bank would have a great deal of difficulty in gathering up all the notes and coins in circulation if they wanted to do so. Cancelling their status as legal tender would create a great deal of anger, so it would be unlikely to take that action. Rather, the bank is more likely to wait for the use of notes and coins to continue to decline.

Tuesday, March 05, 2024

Money Developments (1) Digital Money

Because they misunderstand Revelation 13, many Christians become concerned when they read about changes to currencies and the emergence of a cashless economy. They don’t seem to realise that persecution of Christians does not begin with the Mark of the Beast and is not limited to it. The New Testament explains that persecution is normal for Christians (1 Peter 4:12). Actually, the lack of persecution of Christians in the West over during the last century is what is abnormal, perhaps due to our lack of zeal.

As society changes and new technologies emerge and are accepted, changes naturally follow in the way that people use money. This gradual economic change is normal. At this time, several big developments are changing the nature of currencies and the way people buy and sell. These changes are related and happening at the same time, so we need to think about each one in a coherent way to understand how they will affect us. The five big changes that are happening are:

  • Banking is digital.
  • Cash (notes and coins) are disappearing quite quickly.
  • Private payment tools have been developed.
  • Cryptocurrencies that are not controlled by governments have emerged.
  • Central banks are planning to offer digital currencies.
These changes are related, but I will examine each separately.

1. Digital Money
Fifty years ago, all bank records were on paper. When you entered a bank to withdraw cash, you went to the ledger counter first, and a person checked your identity and your account and recorded the transaction. You then went to a teller with the stamped form, and they handed over your money. That has now changed.

These days, all bank records are digital. The money in our savings and cheque accounts is recorded as digital records on the bank's computer systems. If you go up to a bank teller, they complete transactions by accessing these digital records through a computer terminal. There are no bars of gold backing this money that we have put in our bank account. The payment of wages or salary is recorded as a digital transaction. Likewise, the money that we use to buy food, pay the rent and buy things is a digital record on a bank’s computer. This means that we are already using digital currency.

Banks no longer keep paper records of our accounts and transactions, although they can be printed out if necessary. This change brings risk. Digital records can be hacked by criminals, whereas paper records are hard to change. More seriously, a powerful electromagnetic pulse from the sun or a military weapon might wipe out a bank's electronic records. I am not sure if they have plans to deal with this problem, but it would be an enormous disaster if it occurred.

The disappearance of cheques was the last step in the move away from paper transactions. They are quite inefficient because the paper cheque has to be transported from the bank of the person banking it to the bank of the person who had issued it. Here in New Zealand, many retailers will no longer accept a cheque, and many people rarely use them. I can’t remember the last time that I wrote a cheque.

Monday, March 04, 2024

Economic Confusion

Our leaders seem to be confused about the state of the New Zealand economy.

The Prime Minister says the economy is fragile, but he has the policies to turn the economy around. He says that too many people are unemployed and that he will get them working again. His Finance Minister wants to introduce tax cuts so that household can afford to increase their consumption.

The Governor of the Reserve Bank of NZ says that the economy is still over-heated, causing inflation, so interest rates will have to remain high for a longer to cool it down. He says that unemployment will have to increase. He says that household consumption will need to be reduced to remove inflationary pressure.

The only certainty is confusion.