Saturday, April 06, 2024

Second Coming

My hope at this time is not the second coming. My hope is in the Holy Spirit. I believe that Jesus will return at the end of the age, but he will not return until the church has completed its work, cooperating with the Holy Spirit. He will not return to rescue a church that is failing. Many Christians are currently hoping that Jesus will return soon, but that is actually an escapist hope. It is a hope that Jesus will return and do what we can’t be bothered doing.

This type of hope is part of what is wrong with the church. Instead of doing what God is telling us to do, we would prefer that Jesus do it for us, either by returning, or by doing it for us by sending revival. An old lady that I once knew said that prophecies about revival are the hope of the lazy. I think she was right.

My hope is greater than the second coming. My hope is that the Holy Spirit will bring in the Kingdom of God by working through his body here on earth. That is a far greater task and will produce a far more beautiful kingdom than the ugly, brutal kingdom prophesied by those who hope for Jesus’ return.

I am absolutely certain that the Holy Spirit will do what he has promised to do, but it will take some time, because he will not force people to change. He is patient, but he will eventually get he work done.

Friday, April 05, 2024

US Commercial Real Estate

The US commercial real estate sector is under considerable stress. Will it become the next subprime?

  • Despite every effort, downtown businesses have not been able to get all their workers back because they liked foregoing the long commute.

  • Commercial real estate valuations are falling and properties are difficult to sell.

  • The number of properties with negative equity is increasing.

  • Commercial real estate delinquency rates have already jumped to 6 1/2 percent—up 30 percent in a matter of months. Rates of distress in office loans just hit 11 percent.

  • $929 billion of commercial real estate debt is coming due before the end of the year. That’s up 28 percent from the previous year.

  • National Bureau of Economic Research has estimated that up to 385 American banks could fail over commercial real estate loans alone.

  • The FDIC is essentially guaranteeing more than $20 trillion in deposits with just more than $100 billion in reserves.

Thursday, April 04, 2024

US Debt - Warning

Some disturbing financial information is coming out of the United States.

US budget deficits are having a huge effect on US debt levels.

  • The federal budget deficit, one source of increasing debt, is tracking at $1.7 trillion for 2024.

  • Federal debt has been recently increasing by $1 trillion every 100 days.

  • At the current pace, US federal debt will surpass $35 trillion by the end of April, and reach $40 trillion some time in 2025.

  • Projections indicate that federal debt could reach $60 trillion by 2034.

  • After hitting 1 trillion in late 2023, interest expense on US debt has risen to 1.1 trillion.

  • If debt continues to grow and interest rates continue at the current level, annual interest costs could rise to 1.6 trillion by the end of the year.

  • In 1970 the figure stood at $378 billion of public debt outstanding, which represented 34.9% of GDP.

  • On the eve of the 2008 crisis, U.S. federal debt to GDP was around 64 percent, the same level as in 1995. This allowed some flexibility. As of the most recent quarter, the ratio of debt to GDP is now nearly double that, at 122 percent. On this measure, the United States is now among the top 10 most indebted countries in the world.

Wednesday, April 03, 2024

Update on Digital Currencies

A few weeks ago, I published an article about money called Money Developments. Readers who want an update on what is happening around the world with digital currencies should read this article called On the Brink of Change: The Digitization of Money by Efrat Fenigson, an independent journalist.

I will give a few interesting quotes as a taste.

Stablecoins could be the way in which the US is further globalizing the dollar, spreading its adoption directly to the world’s general public in order to continue increasing its debt and encourage uptake and usage of the dollar”, says Mark Goodwin. He suggests that the politician’s outcry of de-dollarization and the weakening of the dollar are a distraction from perpetuating the dollar as the world’s reserve currency.

“While CBDCs are what people are becoming fearful and aware of, it may just be the red herring, and the real strategy of the US dollar's survival is highly regulated stablecoins (such as Tether), which can easily be programmable, even more than CBDCs, as well as seized, regulated and controlled indirectly by governments. 100 billion dollars in treasuries were already purchased by Tether, its subsidiaries and owners. Tether is positioned alongside the top 20 nation states buying debt from the US, with around one tenth of China or Japan that have a trillion dollars debt to the US”.

One to watch.
Ripple, a digital payment network and transaction protocol that owns the cryptocurrency XRP, is considered one of the most popular cryptocurrencies, and is strategically positioning itself at the heart of government financial innovation, aiming to be the cornerstone of future CBDCs. The company is in talks with about twenty governments around the world to develop their CBDCs using Ripple's technology. In May 2023, Ripple launched a dedicated CBDC platform to assist central banks, governments and financial institutions around the world in issuing CBDCs and stablecoins. To date, Ripple has partnered with six governments for CBDC pilot projects.

Promoting its platform as an infrastructure for a CBDC, Ripple advocates for government regulation of cryptocurrencies, and tries to position itself as the preferred solution for CBDC projects. Its claim to fame of being the ideal CBDC partner for governments is the combination of speed, efficiency, a sustainable and "green" blockchain network that uses little energy (compared to the Bitcoin network), and interoperability - the ability to communicate and work with CBDC solutions in other countries on the Ripple infrastructure.

In my article, I noted that governments do not have the skills to develop the technical infrastructure needed to support a digital currency. It had not occurred to me that large corporates would see this as a gap to move into and exploit, but I should have expected it. A large corporate could shift technology between countries to reduce the cost of CBDCs. Ripple is the first to have a go, but others will follow. Giving large multinational corporations authority to develop and maintain the computing infrastructure needed to operate a CBDC could create risks for economic security and privacy.

Privacy is related to anonymity.

In a discussion at the European Union Council in 2023, Christine Lagarde emphasizes a point: the digital euro will not be anonymous. Privacy will exist in the system, but not anonymity. Let’s break this up in a different way: for the banks, the key to surveillance and control is identification. The bank must know who the citizen is and verify their identity, in order to exercise law enforcement or regulations, through technological restrictions. Lagarde's claim that the technology will allow privacy but not anonymity is unfounded: apparently the central bank considers itself and the financial service providers some kind of god, since in front of them the citizen will be identified, and therefore it is not clear what kind of privacy can exist, without anonymity.