For a gentle introduction to the financial crisis, see Ann Pettifor‘s The Week that changed Everything and Why the Bail-Out would not Work.
For longer-term reasons for the crisis see Spengler‘s US Shrinking wealth
Why didn’t these overseas investors buy mortgages in their own countries, instead of scraping the bottom of the credit barrel in the United States? It is because there aren’t enough Germans, or Italians, or Frenchmen or Japanese starting families and buying homes. The aging pensioners of Europe and Asia must find young people to pay interest into their pensions, and they do not have enough young people at home.
There is nothing complicated about finance. It is based on old people lending to young people. Young people invest in homes and businesses; aging people save to acquire assets on which to retire. The new generation supports the old one, and retirement systems simply apportion rights to income between the generations. Never before in human history, though, has a new generation simply failed to appear.
The monster is not the financial system, crooked and stupid as it may have been. The monster is the burgeoning horde of pensioners in Germany and other industrial countries. It is easy to change the financial system. The central banks can assemble on any Tuesday morning and announce tougher lending standards. But it is impossible to fix the financial problems that arise from Europe’s senescence.
For more views, here are Becker & Posner, and here are the FT economists’ blogs. On the earth’s impending Sabbath see Andrew Simms Final Countdown – One Hundred Months to a climate change tipping-point and there’s more on the link between other people’s poverty and our carbon expenditure at the New Economics Foundation.
It looks as though our bishop has got some more fasting to do. In fact it looks as though we may all be about to join him. Come, friendly Poverty.
Christians have a relationship of direct and personal familiarity with the Church and the saints. The relationship is personal and involves our entire being, not merely our minds or feelings. Yet when someone lights a candle or makes an offering, you will often hear someone remark that such an action is meaningless if that person is not thinking the right set of thoughts or experiencing the right set of feelings.
However, we must be clear that it is not our thoughts or feelings that make everything what it is: what is significant is that we have left home and come to Church to meet the saints. The liturgy is simply the realisation of our relationship to God, the whole communion of his saints and the entire world. Its purpose is not simply to grasp something intellectually or emotionally or arrive at some particular state of mind. When the congregation signs themselves with the Cross each time a saint is mentioned this shows that, even if they are not thinking the right thoughts or experiencing the right emotions, they enjoy a living relationship with that saint simply by being there together with the other members of the community.
The day humanity starts eating the planet
On September 23, humanity will have used up all the resources nature will provide this year, according to the latest data from Global Footprint Network and its member organisation NEF (the new economics foundation) who devised the concept of Ecological Debt Day. Just like any company, nature has a budget – it can only produce so many resources and absorb so much waste each year. The problem is, our demand on nature’s services is exceeding what it can provide. Since the 1980s, humanity has been in ecological overshoot, using resources faster than they can be regenerated and putting carbon into the air faster than it can be reabsorbed. Globally, we now demand the biological capacity of 1.4 planets.
Our bishop is leading the fast today. There is more fasting to do on 19 October.
In 2000 we made a commitment to the poor amongst us. World leaders signed up to the Millennium Development Goals – 8 goals to halve global poverty by 2015. Those same leaders are making decisions right now which determine whether these goals will be met. On October 19 stand together with thousands of churches worldwide in prayer that the firm commitments we’ve made won’t become broken promises.
Be a part of Micah Sunday.
Meanwhile, Father Tim Finigan finds that our masters at the Treasury appear to be out to lunch.
The reason why the Lehman Brothers collapse is historic is that this institution expected until a very late stage to be saved by the state-run Korea Development Bank (KDP). But Seoul looked at the books and had other ideas: on 9 September 2008 – to the astonishment of Lehman’s shareholders and investors – this ever-so-reliable ally of Washington refused to fund a bail-out.
The fact that such sovereign wealth funds as the KDP are no longer willing to finance reckless US institutions is of itself of the greatest significance. It implies a lack of confidence in the solvency of US financial institutions, and indeed of the United States as a whole. This will lead to a fall in the dollar, which will have profound economic implications for the global economy, and for globalisation as a whole.
The billionaire investor Warren Buffett wrote a letter to shareholders in March 2005, in which he predicted that by 2015 the net ownership of the US by outsiders would amount to $11 trillion. “Americans … would chafe at the idea of perpetually paying tribute to their creditors and owners abroad. A country that is now aspiring to an ‘ownership society’ will not find happiness in – and I’ll use hyperbole here for emphasis – a ‘sharecropper’s society’.”
Buffett was and is right. The collapse of banks and investment funds, and of the international financial system – a consequence of the unpardonable folly of the powerful – is serious and dangerous enough. But what is even more to be feared is the emergence of a sharecropper society, angry at its downfall. Thus will America’s problem become the world’s.
Ann Pettifor America’s financial meltdown
And see Pettifor The coming first world debt crisis (2003)
We now know that on 9 August 2007 central bankers and regulators finally woke up to the scale of bad debts on the balance-sheets of banks and other financial institutions. On that day blindfolds were removed and scales fell from the eyes – of at least some of the key players in the finance sector. The “guardians of the nation’s and the world’s finances” finally began to emerge from a long period of stupid and unforgivable denial of the havoc wrought on the international economy by the privatised, deregulated and globally integrated finance sector.
But it has taken more than a year for the wider public to realise that “debtonation day” was but the prelude to a terrifying prospect: large-scale and prolonged economic failure of a globalised, highly integrated economy, built on a financial house of cards… The demand is that losses be socialised or nationalised. The alternative, they warn, is global financial armageddon.
Until recently the vast bubble of debt these private institutions created was regarded by orthodox economists, regulators, politicians and investors as representing real, and possibly eternal wealth. Their delusions fed on the economic mantra that asset prices (such as property, commodities, works of art, racehorses, or commercial brands) were rising because of a shortage of supply and an excess of demand for assets: not because they were being powered upwards by the availability of “easy money” or credit.
Ann Pettifor Global financial mess: blaming the victims
The texts for all his future sermonsâ??which God knows were not manyâ??were constantly taken out of the gospel for the day; and he did as constantly declare why the Church did appoint that portion of scripture to be that day read; and in what manner the collect for every Sunday does refer to the gospel, or to the epistle then read to them; and, that they might pray with understanding, he did usually take occasion to explain, not only the collect for every particular Sunday, but the reasons of all the other collects and responses in our Church service; and made it appear to them that the whole service of the Church was a reasonable, and therefore an acceptable sacrifice to God.
We begin with â??Confession of ourselves to be vile, miserable sinners;â?? and that we begin so, because, till we have confessed ourselves to be such, we are not capable of that mercy which we acknowledge we need, and pray for: but having, in the prayer of our Lord, begged pardon for those sins which we have confessed; and hoping, that as the priest hath declared our absolution, so by our public confession, and real repentance, we have obtained that pardon; then we dare and do proceed to beg of the Lord, â??to open our lips, that our mouth may show forth his praise;â?? for till then we are neither able nor worthy to praise him. But this being supposed, we are then fit to say, â??Glory be to the Father, and to the Son, and to the Holy Ghost;â?? and fit to proceed to a further service of our God, in the collects, and psalms, and lauds, that follow in the service. And as to the psalms and lauds, he proceeded to inform them why they were so often, and some of them daily, repeated in our Church service; namely, the psalms every month, because they be an historical and thankful repetition of mercies past, and such a composition of prayers and praises, as ought to be repeated often, and publicly; for with such sacrifice God is honoured and well-pleased.
Izaak Walton The Life of George Herbert
(Who is George Herbert?)
The Battle for Truth, God and the Universe, Stories of Evolution, Body and Soul
Four Public Dialogues in St Paul’s Cathedral
Tuesday 7, 14, 21, 28 October 6.30 – 8.00pm
I might pop along to hear David Burrell – he might have something to say about truth, mystery and human identity.
Third Annual National Theology of the Body conference – in Dublin
For Theology of the Body in the UK, it is off to London Colney (25-26 October) with Faith and Family.
Resources for Natural Family Planning Awareness Week are available from the US Conference of Catholic Bishops. Our own Robert Colquhoun offers some resources of his own. Meanwhile we wait for St Patrick’s Soho to announce its term card.
Scripture and Liturgy in the Theology of Benedict XVI
at the Catholic Chaplaincy, Oxford, Saturday 1 November 2008
and our very own Stratford Caldecott – details are here
And Scott Hahn is in London on Friday 31 October.
Now wait a minute, I had a little paper on Benedict on the liturgy somewhere, oh yes, here it is.
The UK now has a de facto blasphemy law which protects Allah, Mohammed and mosques more than it did in during the modern era the names of Jesus and YHWH or the Church of England. It is ironic that whilst Parliament was legislating to abolish the crimes of blasphemy and blasphemous libel as they related to Christianity, that the vacuum was being filled by politicians, police and the judiciary increasingly taking the view that Islam had to be treated with kid gloves, and blind eyes had to be turned to those professing Muslims who threatened murder and called for ‘Jihad’ against the apostate and the infidel.
But this UN resolution is now becoming a global blasphemy law by stealth. It is titled ‘Combating Defamation of Religion’, and is sponsored by the 57-nation Organization of the Islamic Conference (OIC) and has been approved by the world body annually since 2005. It comes up for renewal again later this year. Whilst it lacks the force of law, it has been used to provide diplomatic cover for Islamic regimes that wish to deny speech that is critical of them.
Cranmer Global Blasphemy Law