Seven Gray Swans

©2020 by Crown Financial Ministries, Inc.

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Paperback: 978-1-56427-354-3

First paperback edition December 2020

Research and portions of the writing by Ann W. Bentley

Edited by Elissa Cox and Courtney Dacus

Printed by Legacy Graphics in the USA

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Acknowledgements

Thank you to the one who has served as my researcher, script writer, and ghostwriter for more than three years, my wife, Ann. Your help with this project has made it possible. May our joint efforts help all those who read this work, and may you experience a blessing from its impact on others.

Thank you, Grant Webster, Gareth Paul, and Jay Hein, for helping me with insights and content refinement. Your collaboration made the work much stronger.

Thank you, Stephanie Anfinson and Dwayne Bassett, for your design work. You helped bring the book to a new level.

Thank you, Courtney Dacus and Elissa Cox, for your editing and proofing work.

Thank you to the great team at Crown, who not only helps me to have the time to look above the horizon and record my thoughts but who also provides insights and feedback that consistently shape my thinking.

Thank you to Julie Fairchild and Monique Sondag of 130A for your counsel and support.

Thank you to the members of the Christian Economic Forum who constantly improve my knowledge of the world and of God-inspired solutions to the world’s greatest challenges.

Thank you, Lord, for your love and mercy, without which I would be lost in eternal darkness. Your condescension to suffering and humiliation to redeem me from my sin is worthy of all my devotion.

TABLE OF CONTENTS

—

INTRODUCTION

CHAPTER 1
What is a Gray Swan?

CHAPTER 2
UBI: The Promise and Peril of Universal Basic Income

CHAPTER 3
Digital Currency / Electronic Economy: Is a Cashless Future Inevitable?

CHAPTER 4
MMT: The Upside-Down World of Modern Monetary Theory

CHAPTER 5
American Democratic Socialism: Why Can’t We All Just Be Equal?

CHAPTER 6
Social Scoring and Biometric ID: The Chilling Coming of Big Brother

CHAPTER 7
Fragile Networks: Insecurity in the Digital World

CHAPTER 8
Contra Mundum: Against the World

Introduction

One of my heroes is the late Chuck Colson. When he was awarded the coveted Templeton Prize in September 1993, he spoke of the four horsemen[1] that represent myths (lies) of modern society that threaten “free markets, free governments, and free minds.” He believed these freedoms are the essential needs for a society to flourish. I wholeheartedly agree.

The 21st century has ushered in paradigm-changing economic developments through rapid advances in technology, economic philosophies, and global interdependent networks. It is difficult to keep up with the speed of change, much less the issues created by the myriad of developing threats to our free markets, free governments, and free minds.

In this quick read, we will review the threats of Universal Basic Income, Digital Currency, Modern Monetary Theory, American Democratic Socialism, Social Scoring, Biometric ID, and Fragile Networks.

As I write this work in the Fall of 2020, it has not been the year representative of “perfect vision.” Rather, it has been quite the opposite. It has been a year of extreme uncertainty with limited vision for how we will navigate our way through a global pandemic and its economic consequences.

You know, I know, we all know that our risks are great related to the pandemic and the economic damage that it has done. I want to rise above the present and look at these seven developing issues that will present ongoing risks far beyond a recovery from the pandemic and its ripple effects.

My hope is that, by sharing insights into these seven trends, you will begin to look beyond the present in order to be more informed about and prepared for future risks.

While I typically provide financial advice, this work is more from a macro perspective, and, thus, it is non-specific for what to do with your investments or long-term financial plans. I trust you will make those decisions carefully and seek the counsel of many before reacting unnecessarily quickly. I will share my plans and ideas in the concluding chapter.

Prudence

My publicist advised me to avoid “fear mongering” in a time when so many have been overwhelmed by fear. I take that to heart. My intent is not to alarm you or to stoke the fears in the headlines in order to manipulate. Rather, I have written this to assist you to see the obvious threats on the near-term horizon and to make plans to avert their impact. I have also written this to bring hope from a Biblical perspective.

The Bible advises us to do scenario analysis and to take reasoned action. Proverbs 27:12 makes this very clear in the New Living Translation:

“A prudent person foresees danger and takes precautions.

The simpleton goes blindly on and suffers the consequences.”

In his book, Virtues Work, Alexander Cummings helped me to grasp the importance of that oft overlooked and undervalued virtue, prudence. He defines it as choosing the best path to a worthy goal. It is putting reason and reality, as opposed to your emotions or wishful thinking, in charge of your decision making. Prudence avoids impulsivity, shallow thinking, and quick decisions, which are foolhardiness. On the other end of the spectrum, it avoids the paralysis of indecisiveness, which leaves you at the mercy of your circumstances.

In my view, this proverb is instructing us to use our minds to do the right thing at the right time in order to avoid needless suffering. May this work help each of us to be more prudent.

Please note that while I speak of gray swan events, the term is used more for illustration purposes. Some of the issues are not simply one-time events but are a growing movement or program that seeks to be broadly embraced and, thus, delivers a negative impact on our finances and future freedoms.

Chuck Bentley
Knoxville, Tennessee
November 2020

CHAPTER ONE

WHAT IS A GRAY SWAN?

I was bored in my college economics course. Studying models, trends, and supply-and-demand curves seemed like death by academic torture. In spite of having Dr. Ray Perryman, a brilliant, practicing economist, for a professor, I did not engage to the level I should have; thus, my grades suffered. I was happy to escape the required course with a B-, or, possibly, it was a C. Let’s say B-.

Around that time, the global price of crude oil skyrocketed from $57/bbl to a record high of $126/bbl. Since my father made his living in the oil business, a Texas oil boom was underway that changed the direction of my life. I decided to forgo attending law school and to join the family business in oil exploration. Reflecting back, I now understand the power and significance of black swan events.

Just as I was preparing to graduate college in 1979, the Iran hostage crisis unfolded, where 52 Americans were taken hostage from our Embassy in Tehran. President Jimmy Carter imposed an oil embargo against Iran. The price of gasoline began to rapidly increase as shortages developed. Gas lines formed at stations for the first time in my memory. By 1986, the oil embargos were lifted, the global price of crude oil dropped to $26/bbl, and I was laid off.

I was suddenly getting a real-life lesson in economics. It was no longer boring.

Economics[2] is defined as “the branch of knowledge concerned with the production, consumption, and transfer of wealth.” That seems narrow to me since economics also impacts politics, marriage, art, education, sports, war, entertainment ... and whether I get laid off or not. Everything we do impacts economics, and everything is impacted by our economic choices.

The financial term gray swan is a by-product of black swan,[3] a term popularized by finance professor, writer, and former Wall Street trader, Nassim Nicholas Taleb. Taleb authored a best-selling book, The Black Swan, in which he described an extremely unpredictable event that is beyond what is normally expected of a situation and that has potentially severe consequences.

He outlined the three core attributes of a black swan as:

1. An outlier because nothing in the past can convincingly point to its possibility.

2. Carrying an extreme impact.

3. Something that can be rationally explained after it occurs.

So, a black swan is something that we do not see coming and for which we cannot be prepared. It likely never showed up in financial forecasts as a threat offset by a contingency plan.

On the contrary, gray swan[4] is a term used to describe a potentially very significant event that is considered unlikely to happen but is still possible. Because there is a slight chance that the event will occur, it should be anticipated, particularly as it could shake up the world, the economy, and the stock market. It could, therefore, greatly impact our personal economics or the direction of our lives.

In the simplest of terms, a gray swan is an obvious danger that we tend to ignore. By the way, the British spell it grey; both spellings refer to the same event.

Are Gray Swans Real?

Let me give you a classic gray swan by looking in the rear-view mirror of the not-so-distant past at the Great Financial Crisis (GFC) of 2008–2009.

In January 2011, the US Financial Crisis Inquiry Commission, formed by the US government to examine the near collapse of our financial system, issued its final report with 8 key conclusions. Here is their number one finding:

“The financial crisis was avoidable — it was the result of human action and inaction. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand, and manage evolving risks …”

Two key admissions in that statement, “it was avoidable” and “it was ignored,” classify this event as a gray swan. Although very dangerous, a threat to the collapse of the entire US economy, and world-shaking to everyone else, many warning signs making it avoidable were ignored. Looking back, we should have known, we should have been able to avoid it, or, at a minimum, we should have prepared for it.

One of my friends describes the Great Financial Crisis as “the year the financial gurus died.” In other words, most of those on whom we relied to keep us informed did not do their job. They missed it completely! There were a few notable exceptions chronicled in Michael Lewis’ book, The Big Short.

It is a retelling of those who saw the gray swan, repositioned their portfolios, and cashed in with extraordinary profits.

Yes, gray swans are real.

Although opportunities will abound during any disruptive economic event, my purpose and great hope for this book is more defensive in nature; I want to point out some current gray swans and give you some advice on how to protect yourself. I have little doubt that some of you will also look at the opportunity to go beyond a defensive posture and look for ways to profit as well.

Was COVID-19 a Black Swan or a Gray Swan?

It is a debatable question whether the pandemic we currently find ourselves in was a black swan or a gray swan.

I believe the health crisis was a gray swan, and the economic crisis it caused was a black swan. We have known for centuries that pandemics occur; thus, it falls into the classification of a known risk that was largely ignored. However, the reaction by governments across the world to shut down their non- essential sectors of the economy for months on end would qualify as a black swan event: nothing in the past pointed to this happening, and its impact is extreme.

Can an Average Person Recognize a Gray Swan?

Yes, I think anyone who is paying attention can recognize the risk of a gray swan. This is by no means prophecy or some extraordinary skill of observation. By definition, these are “obvious dangers.” However, simply observing a gray swan does not mean the average person will do anything about it. Again, by definition, we tend to ignore them or feel paralyzed as to what to do or how to respond.

As Christians who are instructed to be guided by divine wisdom that gives us prudence, we should each aspire to be like the sons of Issachar, who both understood the times and also knew what Israel should do. — I Chronicles 12:32

Are There More Than 7 Gray Swans We Should be Concerned About Right Now?

Yes, there are more than you or I or a fleet of the most astute economists could identify and all agree upon. My list is in no way exhaustive. In fact, if helpful, I may want to expand my list or reshape it year to year. Trends, such as government control of health care, “soft totalitarianism,” the global decline in birth rates, restrictions on religious freedom, cancel culture, Big Tech acting like Big Brother, and the rise of Scientism,[5] are significant, and they concern me. As of late 2020, I have pared my list down to the top seven on my radar. Some on my list are global in scope, while some are primarily concerning for Americans. Regardless, all could likely impact the world.

Seven Gray Swans on My Radar Now

Universal Basic Income – Endorsed by the Pope, Bernie Sanders, Elon Musk, and Andrew Yang, what could possibly be wrong with it?

Digital Currency/Electronic Economy – Online banking, internet commerce, digital currency, and financial tools combined with biometric identification are rapidly reshaping the global economy. Is a cashless future inevitable?

Modern Monetary Theory – Evangelists for the disruption of traditional economic orthodoxy believe they have found the golden key: Deficits no longer matter for issuers of currency. Uh, really? When do we reach the end game, and what will happen then?

America’s Democratic Socialism – Departing from traditional liberal, democratic policy, this philosophy of centralized economic control is being pushed by high-profile politicians as well as a younger generation of Christians, even though it cannot be supported by the teachings of Jesus.

Social Scoring – Already being used in China, a social score is a policing tool to evaluate good citizenship based upon a number of factors including personal and public social media posts. Combined with the credit score, it offers a powerful source of control over free speech. Is it coming to a country near you soon?

Biometric Identification – Do you open your phone or computer with a fingerprint or facial scan? Welcome to the world of biometric identification. Will this ID control your access to flights, public events, or government funds like a tax refund?

Fragile Networks – Do you store documents in the cloud? File your taxes online? Bank online? Buy things from Amazon or from Alibaba? Has your confidential data ever been compromised? Are all those networks really safe and secure?

In the following chapters, I will address each of these threats. If you would like to join me in tracking them, share your feedback, or even collaborate with me on my list in some way, please stay in touch. If you have researched or written about other threats, I would be honored if you are willing to share your work with me. My email is chuck@crown.org.

CHAPTER TWO

UBI: THE PROMISE AND PERIL OF UNIVERSAL BASIC INCOME

Lurking fully outside the shadows is the very publicly-promoted philosophy of providing the world with supplemental income to close the income inequality gap and make the economy grow. This is a gray swan that should be on your radar.

What is Universal Basic Income (UBI),[6] you might ask? Although known by many other names — citizen’s income, citizen’s basic income, basic income guarantee, guaranteed annual income, or universal demogrant[7] — this is how its most ardent supporters would answer that question: “It is a regular income paid to everyone without any conditions. Everyone would automatically receive a regular income paid into their bank accounts.”

Notice the key phrases: regular income, everyone, and no conditions. Yes, you have it right; you do not need to work, meet any qualifying standards, or experience any humiliating scrutiny whatsoever to get paid money for nothing. You, every last one of you, qualify for universal basic income, even if you don’t need it or want it, by the actual definition of this economic philosophy.

The Promise

Proponents of the plan believe it helps resolve inequalities; eliminates humiliating welfare programs, economic crises, and austerity; and aids people who prefer to use their creativity in other ways than traditional employment.

Andrew Yang hung his Democratic presidential bid on this as a central promise of his campaign; if elected, everyone would receive $1,000 per month. He called it the Freedom Dividend. And, he is certainly not alone. Former President Barack Obama, Richard Branson, Mark Zuckerberg, and even Pope Francis have endorsed the idea as a winning plan to bring economic fairness and mutual benefit to the world. Interestingly, my name appeared in a Polish blogger’s article earlier this year as a known evangelical against the great idea that the Pope supports. He referred to me, or rather those like me, as hypocrites for not caring about other people’s welfare and for lacking compassion.

Much of the support for UBI is driven by a dystopian view coming from Silicon Valley leaders who believe that artificial intelligence, robotics, and other disruptive technologies will cause massive job loss and economic chaos if there isn’t a plan to keep unnecessary people happy when they don’t have a job. Speaking of hypocrites, this sounds like they want someone to build a moat around their castles so the peasants cannot climb the walls.

The Peril

For starters, proponents believe that the program should be paid for by a combination of taxes and “sovereign money.” Sovereign money is the code word for printing money by nations that issue their own currency. This takes us into the nonsensical economic theory called Modern Monetary Theory (MMT), which is another gray swan I am tracking and will cover in chapter four. Essentially, you have to swallow the MMT pill before you can swallow the UBI pill.

Income without work is similar to holding a lottery, declaring everyone the winner, and dividing the pot among the citizens equally, yet with one big difference: nobody even has to purchase a ticket to win. That means the money being distributed must be created out of thin air. What is really gained from this? The history of lottery winners proves Proverbs 13:11 (ESV) true:

“Wealth gained hastily will dwindle, but whoever gathers it little by little will increase it.”

The dystopian view that technology will displace the need for people who presently perform millions of jobs and will, therefore, create social unrest through permanent job displacement is unfounded. For every technological advancement, there is an offsetting demand for new education, new job skills, and new problems to be solved by entrepreneurs. The proponents of UBI view man as simply a consumer who will need to be appeased while out of work versus a creative, capable producer that can add value to any enterprise.

God created man to work, and in exchange for that work, his needs will be supplied. This gives meaning to our lives as well as deep satisfaction for earned achievement. UBI removes both of these benefits.

“Those who work their land will have abundant food, but those who chase fantasies will have their fill of poverty.”

— Proverbs 28:19 (NIV)

“In the name of the Lord Jesus Christ, we command you, brothers and sisters, to keep away from every believer who is idle and disruptive and does not live according to the teaching you received from us. For you yourselves know how you ought to follow our example. We were not idle when we were with you, nor did we eat anyone’s food without paying for it. On the contrary, we worked night and day, laboring and toiling so that we would not be a burden to any of you. We did this, not because we do not have the right to such help, but in order to offer ourselves as a model for you to imitate. For even when we were with you, we gave you this rule: ‘The one who is unwilling to work shall not eat.’ We hear that some among you are idle and disruptive. They are not busy; they are busybodies. Such people we command and urge in the Lord Jesus Christ to settle down and earn the food they eat. And as for you, brothers and sisters, never tire of doing what is good.”

— 2 Thessalonians 3: 6–13 (NIV)

Apart from the devastating effects of a non-productive population, an inefficient government, or the potential for corruption, empowering the government over a source of our income, however small or large, is dangerous and is fraught with political and economic risks.

Can’t Happen Here?

While you may scoff at the idea that this could ever happen in the United States, did you just receive a stimulus check in the mail? My guess is yes. My other guess is that you did not return it to the government who sent you money simply for existing. Free money is seldom declined.

“But, but, but,” you may be objecting right now, “This money was necessary to prevent a disaster! We were doomed without it!” Exactly. That is why this gray swan is so pernicious. It is an easy trap to fall into and difficult to get out of. What government programs have you ever seen that were stopped because they were foolish?

I prefer to derive my income from work and to give private charitable support to those who are unable to work. This is the way God designed us to flourish; otherwise, He would not have put man in a garden to work and manage it but rather simply to eat from it.

We will cover some general defensive strategies in the closing chapters, but this is one to watch. I believe there is a low probability of UBI becoming policy in America in the short term; however, the probability increases with certain political and economic scenarios. A healthy Biblical worldview, a healthy growth of entrepreneurs and faithful stewards who create jobs, as well as private charity for those who cannot work will slow the growth of this gray swan.

CHAPTER THREE

DIGITAL CURRENCY / ELECTRONIC ECONOMY: IS A CASHLESS FUTURE INEVITABLE?

Whether we will see UBI enacted on a broad scale or will see it fade away as a failed experiment, no one knows yet. However, another gray swan that should be on our radars since the rise of electronic banking, digital payments, and cryptocurrencies is the movement towards a cashless society.

This is not an easy question to answer as there are many strong, differing opinions; some say that it absolutely is going to happen, and others say that it absolutely will never happen. Prior to writing this book, I took a very informal survey of my Facebook friends and asked them if they thought the US would be cashless within ten years. The young people overwhelmingly responded that they were hoping it would happen! The older respondents felt it would not happen in their lifetime and hoped it never would.

A 2019 Harvard Business Review article[8] points out that 30% of all transactions happen with cash. They don’t think cash is likely to ever be eliminated as a form of payment. On the other side of the argument, a BBC article[9] suggests it will get here sooner than we think. I fall somewhere in the middle as to the probability of it happening. Regardless, we do need to be informed and prepared.

A cashless society means absolutely no cash. That means transactions will be fully digital and fully controlled. While many young people welcome it since they are almost there already, the idea deeply concerns me.

Some Context

The most used form of payment today is debit cards, followed by cash. The coronavirus caused many to fear using cash because of possible transmission of the virus, even though there is no proof that paper money carries the virus any longer than plastic cards.

On July 14, 2020, an article from Bloomberg CityLab[10] stated:

“A June report from Square[11] showed that at the start of the pandemic in March, 8% of U.S. sellers were effectively cashless, meaning that at least 95% of their sales were made through credit or debit card. That figure jumped to 31% by the end of April and has since leveled off at 20% in mid-June as cities reopen. In the U.K., cashless sellers jumped from 10% to 60%, according to the Square analysis, and dropped just slightly to 57% in June.”

Cash carries more emotion for buyers. The loss when making a purchase is felt immediately. As CEO of a ministry that tries to help people steward their money, I’ve seen people improve their spending habits due to the psychological effect of using cash.

We’ve seen the use of cash discouraged and even refused by certain vendors. However, cashless stores were banned in San Francisco, New Jersey, and Philadelphia on the grounds of discrimination.

These factors could either propel or delay the push towards going cashless, so don’t make a determination too quickly one way or the other.

Benefits of a Cashless Society

• Provides convenience

• Lowers crime

• Reduces the cost of printing and storing cash

• Eases international payments

Disadvantages of a Cashless Society

• Sacrifices privacy

• Causes hacking risks, technology issues, and impaired access in a natural disaster, power outage, etc.

• Allows for overspending and management issues

• Provides susceptibility to imposed fees and a lack of control

• Requires the likely use of biometric identification

Cash Alternatives

• Debit and credit cards

• Payment apps, like PayPal, Venmo, and Zelle

• Mobile payments, like Apple Pay

• Cryptocurrencies

International Outlook

GlobalData predicts the following countries are poised[12] to go cashless this decade: Finland, Sweden, China, South Korea, the United Kingdom, and Australia.

• Sweden: 80% of the population in Sweden pays primarily by card, and only 1.3% of their GDP is circulated in cash. In January, a law went into effect that requires banks to keep offering cash to those who need it. The elderly and disabled have struggled with the transition. It is difficult to access cash in rural areas because most ATMs are located in major cities.

• China: A year ago, the People’s Bank of China said it was close to launching a digital yuan. There is currently a war on cash.[13]

• India: India experienced a cash crisis when demonetization was enacted in 2016.

• S. Korea and Kenya: South Korea and Kenya both report rising mobile payments.

Obtaining cash is getting more expensive. About 2 million Britons use cash[14] day-to-day. However, 9,000 free-of-charge ATMs have closed[15] over the last two years, but cash machines that charge a fee for withdrawals have increased 40% within a year. Negative interest rates will have an impact as well.

The International Monetary Fund (IMF) blog[16] posts articles that reveal interesting data and political leanings.

This one pushes the cashless[17] move. However, the assistant director of the National Consumer Law Center, Lauren Saunders,[18] says, “The cashless movement is a dangerous movement.”

Although disturbing, some are concerned with the government “unbanking” political enemies.[19] Government control would also eliminate those who hoard cash or drop out of the financial system. The idea of the government being in control of all citizen money is concerning.

Protection is important.[20] Supposedly, digital wallets are more secure than debit and credit cards because only the wallet providers see your information. Passwords, biometric authentication (retina scans and face, fingerprint, and voice recognition), and auto-lock screens will be imperative to protect phones and accounts. This leads to even less privacy and, ultimately, less freedom once your biometric ID is used for all online access. More about this gray swan in chapter six.

Prophetic Concerns

In Revelation 13, John describes the second beast that rises out of the earth:

“Also, it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom…” — v16–18a (ESV)

Many believers see this verse pointing to a one-world government, headed by the Antichrist, that has absolute control over the entire global economic system. A global cashless society would be a step in making that control possible.

In 1975, while on staff with Campus Crusade for Christ (CRU) and one year before he founded this ministry, Larry Burkett wrote his first best-selling book, Your Finances in Changing Times. In this foundational work, now 45 years old and written before the personal computer, the mobile phone, or the rise of electronic banking, we can see that this concern was already on Larry’s radar of possible trends that the believer needed to track. Here are key excerpts:

“I believe we are going to see ever-intensifying recessionary and inflationary spirals. During the inflationary periods, Americans will experience higher and higher prices. These prices will be caused by more and more money being created and disbursed into the market, with fewer and fewer products being produced to offset this new money. Government controls will expand, causing increased subsidies with fewer people contributing. Combined with the higher prices will be higher taxes.

During the recessions, more individuals will become unemployed as basic industries contract. Many of these people will be added to the government payrolls in an effort to appease those being hurt by the system … In this situation, more people will depend on the government for the answers (perhaps a national hysteria in which the government is expected to make virtually every decision) ... It will become almost a necessity for the government to have total control of the money supply through some form of nationalization of the banking interests.

I believe that, ultimately, we can look for a new, cashless system. I believe that, initially, each individual will be issued a number of digits or units for the amount of money held in the bank and proportional to earnings. This cashless system may seem farfetched to those unacquainted with monetary trends (...aka gray swans), but even a cursory investigation clearly establishes the fact that systems similar to the one presented here are now being tested throughout the United States and Europe in contemplating a totally cashless system of banking. This is the kind of system that must exist prior to the Age of Apostasy in the last days. It must be a system so subtle that people will ask for it, and, unless they are aware, even the “elect” may be deceived.”

Prepping for Cashless

There are a number of ways to be prepared for a cashless society. One is to grow in wisdom.

“If any of you lacks wisdom, let him ask God, who gives generously to all without reproach, and it will be given him. But let him ask in faith, with no doubting, for the one who doubts is like a wave of the sea that is driven and tossed by the wind.” — James 1:5–6 (ESV)

Wisdom allows you to look at the facts and make appropriate decisions. We do not know if this trend is going to take us into a true cashless society or not. That means we do not need to waste time in fear and the needless use of energy to protect ourselves from it. At the same time, if we do head that direction, it will be wisdom which proves of greater value than our money.

Another way to be prepared is to be sure that our lives are not defined by or controlled by money. The Bible tells us over and over to keep our lives free from the love of money. This allows us to avoid hoarding or the emotional fallout from losses. Our treasures have never been on Earth; therefore, whether we are cashless or not, we will never lose our true riches which are stored in Heaven.

A common strategy will be to convert paper/electronic assets into tangible assets such as precious metals. While it may be a good financial strategy, remember, James 5:3 (NIV) offers a sobering warning that we are not to place our security in gold or silver: “Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days.”

If we are ever forced to make a decision between operating in a cashless system and serving God, we will need to be prepared to lose all that we have to honor Christ above money.

CHAPTER FOUR

MMT: THE UPSIDE-DOWN WORLD OF MODERN MONETARY THEORY

Remembering that a gray swan is a concern that should be obvious but that is often ignored or denied that it is a real danger, Modern Monetary Theory may be (or should be) the top concern on many of our radars right now. Whether you believe or not, it is happening, not only in the United States but also in every developed nation that prints its own currency.

Dr. Stephanie Kelton is an economics professor and author of The Deficit Myth. She has also served as economic advisor to Senator Bernie Sanders during his Presidential campaigns. Although others have joined her of late, she is the most identifiable champion of this unorthodox economic philosophy known as the Modern Monetary Theory or MMT. Some refer to it as unflatteringly as the Magic Money Theory or Monopoly Money Theory — for good reason.

Dr. Kelton believes the following to be true of nations that issue their own currency:

• Currency issuing governments operate as “the bank,” just as we think of “the bank” in a Monopoly game, which is not limited by the supply of money that can be printed or created. It can print as much money as it needs, even to pay interest on its loans, without consequence.

• Deficits do not matter. Since the currency-issuing government can pay its interest on loans by printing more money, why put a limit to it? She argues that double-entry accounting should calm our fears. On the government’s books it says Deficit, but on the public’s invisible ledger it says Surplus.

• Taxes are only essential for controlling the money supply and inflation.

So, even before I tell you more about this upside-down thinking that has never been voted upon or formally adopted as government policy, my belief is that this theory is being put into practice not only in the United States but also in many other countries of the world — simultaneously! So, whether we agree with it or not may be irrelevant. We are living with it and may be testing it to the extreme limits sooner than later. Let me explain.

Astronomical Numbers

The most alarming part of the Modern Monetary Theory is not the fact that some academics believe it to be true but that we are already practicing it! Without a vote along party lines or even a national debate, I believe MMT is now woven into the thinking of those governing the printing presses of our nation. We just experienced a Presidential and Vice- Presidential Debate prior to the election on November 3. The topic of our dangerous fiscal situation was notably absent from either side of the platform! Spend more, borrow more, and print more seems to have bi-partisan consensus. The only real debate on the topic is who gets the money!

For example, did you receive a check in the mail as a part of the stimulus for the CARES Act? Millions of Americans received $1,200 or more in their mailbox, even many who were long since dead. Did your business, school, church, or charity receive a loan/grant as a part of the Payroll Protection Program or PPP? All-in, the US government created and distributed more than 2 trillion dollars to stave off an economic collapse due to COVID 19.

You and I agree that we have a long-term problem with federal debt in America. We are currently carrying almost 27 trillion dollars in national debt. We produce approximately $20 trillion/year in GDP (gross domestic product), so our debt is more than 130% of our annual economic output. It is significantly greater than the annual income of the federal government. Orthodox economic thinking says that the danger zone for any government is reaching 130% of Debt-to- GDP. We may skate past that soon if more bailouts are issued related to the COVID pandemic and the economic damage that has been done.

Adjectives and descriptions once reserved for counting the stars such as “astronomical” or “ad infinitum” now appropriately describe the American national deficit and money supply.

Monopoly Money Created Out of Thin Air

We like to play Monopoly at our house. We can get very competitive. A number of years ago, we did an experiment with our classic version of the game of Monopoly. We allowed anyone to borrow as much money from the bank as needed (zero-interest loans) and to create as much debt between players as they wanted.

Essentially, nobody could go broke, so the game went on and on and on. Property prices got crazy and rents inflated, and it took a spreadsheet and calculator to keep track of all the debits and credits. It was all fun and games until somebody got tired of it and wanted to be paid with something other than another paper entry (magic money created out of thin air). People began to lose properties, houses, hotels, utilities — everything they had — to pay back debt. So, the suspension of the classic rules worked until one player no longer wanted to go along with the scheme or lost confidence in one of the other player’s ability to ever really pay them back.

If a player owned hard assets like Boardwalk and Park Place, they were much better off leveraged to the gills than owning Baltic and Mediterranean Avenue. Confidence in the ability to repay became one of the key factors in the fiat money version. Even if playing the banker (the issuer), it only worked to the point that people retained confidence in the fiat money (i.e., the true value of the currency).

Some argue that we should have adjusted the interest rate or the tax rate of the revised game to keep the bank healthy and that we should have regulated the money supply. There was resistance to that idea (taxpayers like lower taxes), and neither modification could counterbalance the total amount of funds being issued. Players begged for bailouts when they were in a pinch and wanted to keep playing. The bank became way over-extended and was swamped with bad loans.

This version of the game, although an imperfect example, makes a simple economic point.

Fiat Money Only Works as Long as People Have Confidence in It.

Without constraint in the money supply, fiat money loses its value because people stop believing in it. History is replete with nations who destroyed the “good faith and credit” of their own currency. I own a 100 trillion Zimbabwe dollar bill. It reminds me that $100,000,000,000,000 could not buy toilet paper in Zimbabwe in 2008.

Not Just My Opinion

Consider this from a 2010 article titled The Trouble With Modern Monetary Theory[21] at the Business Insider:

“Thus, the government cannot just spend and spend and spend, or the extra dollars in the system will chase too few goods and drive up prices. It’s important to understand that the government cannot just spend recklessly. This is important, so I’ll say it again. This does not give the government the ability to spend and spend and spend. If they spend too much and tax too little, they can create mal-investment and inflation.”

“Turns out that billionaire-investor Warren Buffett[22] doesn’t love Modern Monetary Theory either. ‘I’m not a fan of MMT — not at all,’ the Berkshire Hathaway Inc.[23] chief executive officer said Friday in a telephone interview, adding that the deficit spending that’s part of the theory could risk “spiraling” inflation. ‘We don’t need to get into danger zones, and we don’t know precisely where they are,’ he said.”

Inflation, Austerity, Deflation, or Worse?

Economist Thomas Sowell[24] framed out our dilemma perfectly, saying, “There are no easy solutions, only painful tradeoffs.” When examining the consequences of believing that MMT will work without serious consequences to come, we really have only a few known ways to navigate our way out of this, which are, in fact, painful tradeoffs.

Austerity is Unlikely

We could choose to go the route of austerity, which means to tighten the government’s spending belt, shut down bloated programs, limit spending beyond our approved budget, and actually begin to pay off debt. This option is normally imposed upon a small nation that has borrowed too much money from a larger nation. It sometimes happens when the International Monetary Fund comes knocking at your door. I believe it is unlikely that the US government will have the will or discipline to take this highly unpopular path. Do you know any nation that has voluntarily or successfully implemented an austerity plan in modern times?

Deflation is Possible

Deflation is generally when prices in an economy are falling versus inflation, when they are rising. When debt bubbles pop, a crisis occurs as money supply contracts and asset prices begin to decline. This is the orthodox view of economics. But, remember, we have entered the upside-down world of MMT.

The last time the American federal government had a balanced budget, meaning that it did not spend more than it took in, was during the Clinton administration in the early 90’s. Since then, we have seen exponential growth in the long- term liabilities of Uncle Sam.

If there is one thing Republicans and Democrats can agree on, it is borrowing or printing more money! It is my opinion that MMT was implemented during the Great Financial Crisis of 2008–2009, and we have not been able to return to a policy of fiscal or monetary restraint since.

1981–1989

Ronald Reagan/Republican

Debt to GDP 50%

1989–1993

George H.W. Bush/Republican

Debt to GDP 61%

1993–2001

Bill Clinton/Democrat

Debt to GDP 55%

2001–2009

George W. Bush/Republican

Debt to GDP 68%

2009–2017

Barack Obama/Democrat

Debt to GDP 104%

2017–

Donald Trump/Republican

Debt to GDP 131%

As a point of comparison and to give this mountain of debt some perspective, it is compared to the annual Gross Domestic Product. Here is where we are right now:

There are those who believe that federal debt doesn’t matter since they can just print more money to pay their debts. MMT is actually a contributing factor that makes this challenge worse, not better. It is a deceptive form of rationalizing away our lack of fiscal discipline.

When Do We Reach the End Game, and What Will Happen Then?

Assuming other factors (gray swan events) remain constant, such as the US dollar remaining the global reserve currency, oil prices remaining in a profitable production range, and political instability not inhibiting our ability to manage our fiscal and monetary policy, I have a positive outlook that the end game can be avoided — meaning a collapse of the US currency and global economy. I do believe that the jolting reality of this problem will manifest when widespread confidence in the US dollar declines and begins to spread virally. Emergency options, or should we say tradeoffs, will begin.

Mauldin vs. Dalio - MP3 OR VAT?

My best advice is to recommend that you make yourself familiar with the public exchange, or debate, that took place in 2019 between two of the world’s most influential economic thinkers: Ray Dalio, the founder of the legendary hedge fund Bridgewater Associates, and John Mauldin, the publisher of “Thoughts from the Frontline,” one the world’s most widely read financial newsletters.

Dalio advocates for MMT, while Mauldin advocates for VAT (Value Added Tax). Mauldin believes in a Value Added Tax to balance the government’s budget deficit as a better alternative to MMT.

This debate[26] on Mauldin Economics’ website will get you on the right path to locating the various articles that constitute this fascinating exchange.

A Few Other Plausible Scenarios

Adam Baratta, bestselling author and co-owner of Advantage Gold, believes that the US Government may choose to follow the path of Japan. Writing in The Great Devaluation, Baratta says, “Some are calling for America to copy Japan’s accomplishments. Before getting too excited, keep in mind that the Japanese stock market collapsed 30 years ago and still hasn’t gotten back to where it was then. These policies have failed. A central-bank-managed economy is nothing to leap for joy about. Through manipulation, Japan has been able to steadily cancel out their own debt at an incredible rate of $720 billion per year. They are accomplishing this feat by selling their debt to their own Central Bank. Negative interest rates allow the Japanese to roll over their debt at no cost, which allows the Central Bank of Japan to literally erase government debt. It also increases their balance sheets.”

The premise of his book is summarized in a few short sentences: “Can the Fed continue to liquidate the world indefinitely? … My argument is yes, it can. And, it will do so …

So, if you are looking for a surefire bet, bet on one thing: the Fed will print more money. It will add trillions and trillions of dollars to the system. This is why every investor must own gold. Don’t fight the Fed. I believe the Fed will win. The dollar will devalue, and gold will soar.”

Baratta obviously believes that a strong devolution of the US dollar is inevitable, and, thus, a move to gold will create wealth in the days ahead. Although I am always hesitant to accept research of one who has a pony in the race, there are valuable insights to be gained from his book. Full disclosure, I do own a small amount of gold.

Of course, negative interest rates turn economic orthodoxy inside out. Debts turn into an assets, and savings become a liability. The idea, as practiced in some European countries, is to get consumers to spend their money instead of hoard it. However, it has many unintended consequences, such as creating ultra-low mortgage rates (effectively zero) and rapidly increasing the price of real estate.

Others believe the way out of this debt trap is through hyperinflation. The government can flood the market with currency to enable them to pay off their debt with less expensive dollars. The money supply is increasing exponentially with more than 2 trillion dollars pumped into the economy via the CARES ACT in 2020 alone. More is likely on its way to save struggling industries during the pandemic. If the money supply spirals out of control, then, again, debt becomes an asset and savings a liability.

It is my opinion that our political leaders have shown that they will do everything possible to postpone or delay a painful, prolonged recession or depression. That is why I believe they will use all fiscal and monetary levers to attempt to avoid either of these. There remains the option that we can experience economic growth to the extent that we create GDP growth to overcome the growth of our debt. Most sources that I read do not see that as a likely scenario.

My friend, David McAlvany, has an excellent podcast on precious metals and the global economy, McAlvany Weekly Commentary.[28] He, too, believes that Solomon’s advice[29] to diversify is timeless advice for any economic environment.

Heads or Tails?

Moses instructed the nation of Israel in Deuteronomy 28 that, by following God’s principles, they would lend to others but borrow from none. The lender is described as the “head,” while the borrower is the “tail.” The Bible also says in Proverbs 22:7 (NLT) that the “borrower is a servant to the lender.”

We cannot stop the practice of government overspending and of ever-increasing deficits other than by our votes for elected officials. Even then, both parties have been responsible for reckless spending for years and years. What we can do is to save and prepare for more challenging economic difficulties in the years ahead. Someone will have to pay for this via taxes, or the government will inflate their way out of it and, thereby, punish the saver.

Be watchful. Be prepared. Be prudent. This is a troubling danger that should concern us all.

CHAPTER FIVE

AMERICAN DEMOCRATIC SOCIALISM: WHY CAN’T WE ALL JUST BE EQUAL?

Chuck McKnight, a self-described “democratic socialist” and author of Jesus Was a Socialist,[30] believes that Christ Himself was a socialist and that socialism is not at odds with the Christian faith. He says that he believes that this philosophy is well aligned with what Jesus taught, which is “the fair distribution of wealth.” He is grateful for folks like Alexandria Ocasio-Cortez and Senator Bernie Sanders for leading the charge in public consciousness of a better way than capitalism and ends his article with, “Thanks, comrades!”

I am not writing on this topic to debate in favor of a liberal or a conservative or in favor of a Democrat or a Republican, nor am I asking you to declare yourself to be Red or Blue, but we all must address a philosophy that is a radical departure from the historic belief and practice of capitalism in the United States.

Before you dismiss this position as preposterous, remember that ignoring gray swans is what makes them more dangerous. This is a philosophy that has broad support among younger generations, and many in Christian circles are ill-equipped to defend a Biblical position on the issue.

What is Democratic Socialism?

Here is the actual definition: Democratic Socialism is “a political philosophy supporting political democracy within a socially-owned economy.” The platform is contrasted to Marxism-Leninism, which socialists perceive as being authoritarian or undemocratic in the implementation of their ideas. Their great ambition is to replace the greed, excess, and concentration of wealth, which are perceived to be the key drivers and outcomes of capitalism.

To get to the meat and bones, we need to drill deeper to what a “socially-owned economy” will look like.

Professor and political scientist, Lyman Tower Sargent, author of Contemporary Political Ideologies: A Comparative Analysis[32] (2008), breaks down the primary characteristics of what we could expect to see from the implementation of this philosophy:

• Much property held by the public through a democratically-elected government, including major industries, utilities, and transportation systems

• A limit on the accumulation of private property

• Government regulation of the economy

• Extensive publicly-financed assistance and pension programs

• Social costs and the provision of services added with purely financial considerations as the measure of efficiency

As a footnote, Sargent explains that publicly held property would not extend to personal property, homes, and small businesses. Thank you for that kind assurance that we could keep our personal property.

A Better Way

The public argument driving the popular support for democratic socialism is that capitalism is not only inherently evil because it rewards the greedy and powerful, but it also has failed in delivering equality — the rich have gotten richer, and the poor have gotten poorer. It appeals to our compassion for the poor, the weak, and the disenfranchised, and it causes us to examine whether or not there is a better way. My view is that the Bible gives clear, proven, and superior principles to govern a healthy economy.

Jesus Was Not a Socialist; The Bible Does Not Support Socialism

Many well-meaning Christians tend to confuse the role of the church and the role of government when they advocate for socialism as a means to serve the poor. Serving the poor is a right, responsibility, and joy of the individual and the Church. Governments are responsible for protecting individual rights to allow the people to flourish. It is from their flourishing that poverty is eliminated, and for those who cannot work, charity is needed from individuals and the Church.

The fascination with socialism comes in part from a lack of understanding of how it really works within a society. Considering the impact of different forms of government, it’s important to understand the fundamental issues of ownership and responsibility — and this is something that the Bible addresses directly.

I’m not a fan of socialism or communism and neither was Jesus or the Bible. Throughout the Scripture, from the first pages of Genesis, God gives men and women resources for their use — for their good and the good of others.

“Anyone who does not provide for their relatives, and especially for their own household, has denied the faith and is worse than an unbeliever.” — 1 Timothy 5:8 (NIV)

The responsibility was given to the individual, not delegated to the government. This upends the very premise of democratic socialism for collective, centralized control of solving the wealth gap.

“The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.” — Milton Friedman

Under capitalism, people own their property and businesses and are mostly free to use them as they see fit. But, in today’s politically correct environment, a person’s use of his or her own property is often mocked as selfish or greedy. Sadly, too many educators today undermine the confidence of our young people in our country’s economic systems, insinuating that freedom to use one’s own property isn’t “fair” to those without.

Under socialism, people have limited ownership of property and businesses, which must operate under government control and regulation, and the government determines how all profits and property can be used. People who embrace the use of governmental power to suit their own social ends argue that this can create a kinder, gentler society, as the government decides who gets what, all in the name of helping the less fortunate. This assumes that good-hearted people, i.e., the government, are seizing the assets of less worthy people to give to the more deserving. And, it matters “who” gets to decide the definition of “deserving.” It sets up a system in which the government picks winners and losers, sometimes to gain the favor of voters.

Under communism, there is no veneer of personal ownership. The government owns and controls the property, and the people exist as workers for the state, which controls all of their lives without pretense. In truth, it is the political leadership who controls the power and property, and there is little access to opportunity for most people.

Having traveled around the world many times, I’ve seen the devastation of socialism and communism. People struggle to overcome barriers that their governments impose, and they suffer since much of their resources are taken from them.

But, in the Bible, God clearly gives resources to people and, then, holds them accountable for their use of the resources (their stewardship).

Consider the story in Matthew 25[33] of the master going on a trip. He calls his servants to him and gives one servant 5 bags of silver to invest, the second servant 2 bags of silver, and the last servant one bag. They did not have the same resources, but they all had the same responsibility — to do their best with what they had. When the master returned home, he found that two of the servants had worked hard, and he rewarded them for their effort — not their outcomes. Even his praise for a job well done was the same, “Well done, my good and faithful servant. You have been faithful in handling this small amount, so now I will give you many more responsibilities. Let’s celebrate together!”

— Matt. 25:23 (NLT)

What happened to the servant who did nothing with what he was given? He was punished.

Throughout the Bible, the sluggard — the one who does not work or is lazy — is condemned and observed to experience disaster.

“A little sleep, a little slumber, a little folding of the hands to rest — and poverty will come on you like a thief and scarcity like an armed man.” — Proverbs 24:33-34 (NIV)

But, for those whose work yields a profit, sharing with those in need is expected and not something we can delegate to the government. The Apostle Paul was a great example of this — paying his own way as a tentmaker and urging others to work to pay for themselves and others.

In Acts 20:35 (ESV), Paul wrote, “In all things I have shown you that by working hard in this way we must help the weak and remember the words of the Lord Jesus, how he himself said, ‘It is more blessed to give than to receive.’”

Socialism insinuates that the person who works is not deserving of the reward. It breeds resentment against those who have success, and it also weakens the connection between work and reward. Fundamentally, it violates the 10th commandment, “Thou shalt not covet,” by encouraging people to look at what others have and decide what should be taken away. But, to build lasting wealth and resources, labor is required.

As Christians, we are called to work to the best of our ability to care for our families and those in need around us. Our work is one way that we communicate to the world around us what a life submitted to Christ can be. We want to honor God with our efforts.

Colossians 3:23 (NIV) puts it well: “Whatever you do, work at it with all your heart, as working for the Lord, not for human masters.”

We should come together to consider a Biblical perspective on economics. Governments and economic philosophies are separate but intertwined. Governments exist to uphold the economic philosophy of a nation and to create laws, protections, and policies that support the economic, political, cultural, and structural choices of a people. Capitalism, socialism, and communism — these economic philosophies become reality when governments make laws to carry these ideas forward, and it’s a good idea for a nation to consider whether or not it wants to go where those ideas will take it.

My own concerns with socialism have been fine-tuned as I’ve traveled around the world for the past 15 years visiting nations often in economic collapse, where people are truly suffering. In an American context, some of these hardships are not as well known, but I appreciate that so many have taken time to think about this lately in the context of the presidential primaries where socialism is in the headlines.

Capitalism is based upon free enterprise and the empowerment of the individual to operate in a just society, make choices of where and how to invest capital, and reap a just reward for his or her labors. Thus, a democracy is established to ensure that free enterprise is protected and that the people can flourish.

Socialism and/or communism by definition are economic philosophies that embrace centralized control of resources with the idea that wealth is redistributed by political leadership not based upon merit or achievement or personal rewards but based upon a government’s definition of what is “fair.” Sadly, in actual practice, governments often think it is “fair” to take from political adversaries or from those who don’t support them in order to give to their own constituencies or even to keep the resources for themselves. Socialist structures can become a means of coercion that provide a way to take from the producers and give to the non-producers. And, usually those whose resources are taken are first attacked, denounced, and defamed as unworthy and flawed.

Another of my concerns with socialism is the way it separates work from reward. God always intended us to work. Consider that in a perfect world — a world without sin — God gave men and women work. Genesis 2:15 (NIV) noted, “The Lord

God took the man and put him in the Garden of Eden to work it and take care of it.”

Work is not a punishment or a failure of imagination. It is one of our primary purposes here on earth. God sent a message to Asa when he was told he needed to lead the people of Judah, in 2 Chron. 15:7 (NIV): “But as for you, be strong and do not give up, for your work will be rewarded.” Consider Proverbs 12:11 (NIV), “Those who work their land will have abundant food, but those who chase fantasies have no sense.”

The Bible is clear that we must work as unto the Lord if we are able, and, with the rewards we earn, we should be generous with those less fortunate. But, a socialistic structure turns that on its head. Those who work and achieve can be demonized as unworthy; those who contribute nothing can be rewarded for merely being associated with those who have power.

I reached out to my friend and noted economist, Jerry Bowyer, for his help. He added, “Christians who have fallen prey to socialist ideas tend to fall for the lie that the love of money is to be equated with free markets. In other words, anyone who prefers free markets is deemed to be implicitly endorsing the love of money. Freedom=Greed. This is a lie, a dangerous one.”

Jerry also added this important insight: “Every system of political economy (which is what we call the study of the proper relationship between the state and the economy) involves money. Capitalist countries have money. Socialist countries have money. Both systems have rich people. Both systems have poor people. The difference is that under socialism, it is the politically connected who become rich.”

Don’t Ignore This Gray Swan

Jeffery Ludwig, writing for the American Thinker,[34] offers this warning, “No matter what an uninformed, inconsequential figurehead like Alexandria Ocasio-Cortez or her mentor, the ever-bloviating Bernie Sanders, may say, on one tiresome Marxist point, there is continuity from 100 years ago. Although they are running as democratic socialists with the Democratic Party, their emphasis on socialism warrants our looking at the platform of the Socialist Party 2018-2019: ‘We call for social ownership and democratic control of productive resources, for a guarantee to all of the right to participate in societal production, and to a fair share of society’s product, in accordance with individual needs — an axiom of Marxist theory.”

Further, Ludwig warns, “They state, ‘Socialism will establish a new social and economic order in which workers and community members will take responsibility for and control of their interpersonal relationships, their neighborhoods, their local government, and the production and distribution of all goods and services.’ This is nothing less than a restatement of the Leninist-Stalinist idea of workers’ councils (soviets), but it throws in the words community or neighborhoods to make their vision sound less centralized than it really is. They want it to sound more “Christian” (sic) as though it somehow is constant with “love your neighbor as yourself.”

Fortunately, according to a 2020 Gallup survey,[35] most Americans continue to look unfavorably on a Presidential candidate that supports socialism.

More than nine in ten Americans say they would vote for a presidential candidate nominated by their party who happened to be black, Catholic, Hispanic, Jewish, or a woman. Such willingness drops to eight in ten for candidates who are evangelical Christians or are gays or lesbians. Between six and seven in ten would vote for someone who is under 40 years of age, over 70, a Muslim, or an atheist.

Just one group tested — socialists — receives majority opposition. Less than half of Americans, 45%, say they would vote for a socialist for president, while 53% say they would not.

It is entirely appropriate for politicians to declare their economic philosophy so that voters understand what is at stake. Elected leaders will govern according to their philosophies, just as individuals are controlled by their own ideas about money and how to use it. It’s important to ask questions of those who want to lead us about where they want to take the country. Elections do have consequences.

Jesus did not directly engage in politics. He is above it. His kingdom transcends the temporal kingdoms of men. But, the Bible directly warns of the dangers of the philosophies of men.

“See to it that no one takes you captive through hollow and deceptive philosophy, which depends on human tradition and the elemental spiritual forces of this world rather than on Christ.” — Colossians 2:8 (NIV)

Many are ignorant of their beliefs with regard to money and how those align with God’s Word. Crown has a free assessment which can help you think about how to connect your values with your actions when it comes to money.

As we all consider and pray about who should lead our country, ask tough questions of them. Be discerning of their economic philosophy. We should also be praying about our own lives and how God wants us to handle our resources.

“And whatever you do, whether in word or deed, do it all in the name of the Lord Jesus, giving thanks to God the Father through him.” — Colossians 3:17 (NIV)

CHAPTER SIX

SOCIAL SCORING AND BIOMETRIC ID: THE CHILLING COMING OF BIG BROTHER

When it comes to gray swans #5 and #6, I have made a decision to combine these into the same chapter. Although they do not necessarily interrelate as a combined threat at this time, I believe they are likely to become part and parcel of each other. Ultimately, any threat to economic privacy is a threat to economic freedom.

Do you open your mobile phone using your fingerprint? Have you ever boarded a plane using your eye to generate a unique personal ID? Do you access facial recognition software to open any technology? These rapidly advancing technology- based threats cannot be ignored.

First, let’s look at China’s “social credit” rating system and, then, at India and China’s utilization of biometric identification methods.

What is China’s Social Credit Rating?

In May 2018, President Xi Jinping rolled out his plan to use technology to enforce a principle by which he intends to govern his massive population: “Once untrustworthy, always restricted.” According to multiple press reports, those found committing financial wrongdoing, spreading false information about terrorism, causing trouble on flights, using expired train tickets, smoking on trains, or failing to pay fines would be subject to restrictions from travel by flight or train — sounds innocent enough, but not so fast.

The Global Times[36] reported that by July 2019, China prevented 2.56 million people from purchasing plane tickets and 90,000 from buying high-speed rail tickets in July alone! Independent sources now report that the system is far broader than the expressed, public intent. Chinese citizens are being punished by lower social credit scores for a vast number of unacceptable behaviors:

• bad driving

• buying too many video games

• buying too much junk food

• buying too much alcohol

• calling a friend who has a low credit score

• having a friend online who has a low credit score

• posting “fake news” online

• criticizing the government online

• visiting unauthorized websites

• walking a dog without a leash

• letting a dog bark too much

The ultimate goal, according to government officials, is to use the technology-enabled, surveillance-based program to “allow the trustworthy to roam everywhere under heaven while making it harder for the discredited to take a single step.” The truth is, they have taken a page from the playbook of credit scoring and expanded it in a way to punish those with whom they disagree politically, socially, or religiously. Because the score is shared with other organizations and technology platforms, some kids might not be accepted into an elite school, or a family could be blacklisted from entering public buildings.

Is it any surprise that the Chinese government reports that 80% of the Chinese citizens surveyed either “somewhat or strongly approve” of the social credit system? Reminds me of the purported approach of naval commanders of old seeking to get sailors in line, “Beatings will continue until morale improves.”

Happening in the Land of the Free and Home of the Brave

It is easy to spot the problem in this picture. China is taking complete Orwellian control over their citizens by monitoring all online activity and punishing those that are politically incorrect.

This is not an original thought, but it is clear that in China, “Authoritarianism is being gamified.” Big Brother is hitting chillingly close to home. It does not take much imagination to recognize the dangers of our privacy and rights being compromised with the proliferation of technology.

An extensive report in 2019 in Fast Company[37] magazine draws the parallel between China’s social scoring program and the activating of US companies that are increasingly doing something similar, outside the law. Here is my summary of the trends they highlight:

Social credit systems are end run around the US legal system that are enforced by private companies with rules for “privileges” related to transportation, accommodations, and communications, and the rates we pay for services (like insurance) are controlled by technology companies. In other words, Silicon Valley is building a “corporatocracy” within our democracy where we are controlled more and more by end-user license agreements — those pesky little contracts where we click AGREE before ever reading them.

• New York State Department of Financial Services approved that life insurance companies can base premiums on what they find on your social media posts.

• PatronScan, a Canadian company, helps bar and restaurant owners spot fake IDs, troublemakers, and objectionable customers.

• Airbnb can disable your account for life for any reason it chooses, and it reserves the right to not give you the reason or hear an appeal.

• Uber has the driver rate the passenger. If your average rating is “significantly below average,” Uber will ban you from its service.

• WhatsApp (owned by Facebook) can ban members for sending spam, for too many blocks by other users, or for threatening messages. In many countries of the world, this would be as bad as being banned from the telephone system in America.

Beyond the report in Fast Company, we know that Twitter and Facebook are more aggressively banning posts as well as monitoring or identifying what they label as “fake news” to posts made by everyone from me or you to the President of the United States.

My selection of social scoring as a gray swan only becomes exponentially more of a concern when combined with biometric identification, which is gray swan #6.

Useful Convenience Becomes Omnipotent Presence

I hope it is obvious by now that I am only skimming the surface of the depth of knowledge, awareness, and insight needed on each of these topics. All to say, biometric identification and the associate capacity for full-time tracing and activity profiling merits a much greater level of insight than I can provide. I am only dipping my toe into the water that is a deep and profound development before our very eyes.

Reading an insightful article on this topic from The Washington Post,[38] I found a statement that allowed me to understand the profound threat of facial recognition software, one of many forms of biometric id in use around the world.

40- year-old Mao Ya explains that the facial recognition camera that allows her access to her apartment house is simply a “useful convenience.” She said, “If I am carrying shopping bags in both hands, I just have to look ahead and the door swings open. And, my 5-year-old daughter can just look up at the camera and get in.”

This “useful convenience” is being integrated into our daily lives by governments and private industries across the world at alarming speed. With few concerns about privacy or civil rights, from China and India to the United States and points beyond CCTV footage, private and public security cameras are building a nationwide system using facial recognition software.

Law enforcement agencies, banks, airports, hotels, doctors’ offices, travel agencies, and more are collecting records and linking everyone to the identity of his/her face, iris, or fingerprint. For some nations, it is a stated goal. For others, it is yet to converge into a public realization that all of these interlocking data points will or can be used to track where people are, what they are up to, what they believe, and who they associate with, and they can ultimately assign people a social credit score to determine if they are a “good guy” or a “bad guy.”

On the backend, a vast database is being built with unfathomable data on every single person. Adrian Zenz, a German academic who has researched ethnic policy and the security state in China’s western province, Xinjiang, said “The government craves omnipotence over a vast, complex, and selective population.”

“These surveillance technologies combined with our use of the multiple sources that freely allow our personal data and activity to be collected is giving the government (in China) a sense that it can finally achieve the level of control over people’s lives that it aspires to,” he said.

Some call this process “deep learning.” It is not some vague conspiracy theory happening under an evil regime. Biometric ID is now legal in India and is required by anyone wanting to receive government payroll or welfare benefits. It is not optional, and, by many, it is viewed as a “useful convenience.”

Are You Ignoring This Gray Swan?

From Tik-Tok, to WeChat, to mobile apps that allow people to have fun “beautifying” or transforming their faces for a good laugh, artificial intelligence is used to now be able to identify you in a crowd of people. As the technology improves, cameras can automatically identify your gender, clothes, hair length, and suspicious activity.

How do you access your phone or your ATM, or have you been through a security check at the airport that required your picture to board a plane or to enter a foreign nation? Do you use Facebook, Twitter, Instagram, WhatsApp, YouTube, or any online tools by Google or Microsoft? Some restaurants in China now allow customers this “useful convenience” — they simply look into the camera and “smile to pay.” DNA collection and iris scanning add extra layers of sophistication.

Mastercard and Microsoft are in partnership working to create universal “digital identities.” They, too, see this as a “useful convenience.” Their actual announcement reads: “Voting, driving, applying for a job, renting a home, getting married, and boarding a plane: What do all of these have in common? You need to prove your identity. In partnership, we are working to create a universally recognized digital identity.”

This is the kind of gray swan that engulfs almost every aspect of our lives. It is difficult to deny that it provides both a “useful convenience” and an Orwellian nightmare.

We have volunteered essential details of our lives assuming that it is all harmless or useless information. I have friends push back on my concerns with, “Who cares what they know about me? I am not doing anything wrong!”

Some Good News

As ambitious and ominous as this gray swan seems, at the moment, facial recognition is not foolproof. There have been so many false positives in a number of cases that the technology is facing constitutional challenges or even bans in the United States. The New York Times[39] reports in a 2019 story,

“San Francisco, long at the heart of the technology revolution, took a stand against potential abuse on Tuesday by banning the use of facial recognition software by the police and other agencies. The action, which came in an 8-to-1 vote by the Board of Supervisors, makes San Francisco the first major American city to block a tool that many police forces are turning to in the search for both small-time criminal suspects[40] and perpetrators of mass carnage.”

The article presents both sides of the argument including legal challenges in America:

“‘It is ridiculous to deny the value of this technology in securing airports and border installations,’ said Jonathan Turley, a constitutional law expert at George Washington University. ‘It is hard to deny that there is a public safety value to this technology.’

Similar bans are under consideration in Oakland and in Somerville, Mass., outside of Boston. In Massachusetts, a bill[41] in the State Legislature would put a moratorium on facial recognition and other remote biometric surveillance systems. On Capitol Hill, a bill[42] introduced last month would ban users of commercial face-recognition technology from collecting and sharing data for identifying or tracking consumers without their consent, although it does not address the government’s uses of the technology.

Matt Cagle, a lawyer with the A.C.L.U. of Northern California, on Tuesday, summed up the broad concerns of facial recognition: The technology, he said, ‘provides the government with unprecedented power to track people going about their daily lives. That’s incompatible with a healthy democracy.’”

A Biblical Perspective

The reality for most of us is that our biometric data, or significant pieces of it, may already be in the hands of government agencies or multinational corporate giants. It is, however, unlikely that it has been used against us or has been curated to form a comprehensive social credit score. And, should that day come if and when we are subject to Big Brother’s control of our lives, how do we respond?

Scripture gives us important insights to the question: How, then, should we live?

It would be easy to fall into a defensive posture and simply try to avoid doing anything that might cause you unwanted notice or that might be a violation of a code of conduct that would diminish your “social credit.” When evil men devise systems of control and desire for “omnipotence,” they are attempting to replace God’s authority over our lives. They have opposed the One who bought and paid for us so that He could set us free. I Peter 2:16 (NIV) instructs us, “Live as free people, but do not use your freedom as a cover-up for evil; live as God’s slaves.”

The Bible gives us more instruction in I Thessalonians 4:9–12 (NIV) when Paul wrote these directives: “Now about your love for one another we do not need to write to you, for you yourselves have been taught by God to love each other. And in fact, you do love all of God’s family throughout Macedonia. Yet we urge you, brothers and sisters, to do so more and more, and to make it your ambition to lead a quiet life: You should mind your own business and work with your hands, just as we told you, so that your daily life may win the respect of outsiders and so that you will not be dependent on anybody.”

• Love each other

• Do so more and more

• Be ambitious to lead a quiet life

• Mind your own business

• Work with your hands

• Win respect of outsiders

• Don’t be dependent on anybody

Regardless of the outcome of either of these gray swans, we are God’s servants, capable of living our lives filled with love and dignity because this is not our home nor the authority that has the final say over our freedom.

CHAPTER SEVEN

FRAGILE NETWORKS: INSECURITY IN AN INTERCONNECTED WORLD

About four years ago, Ann and I “froze” all of our personal accounts with the three major credit bureaus. A freeze prevents anyone from having access to your credit score or report, thus preventing the opening of an account in your name that involves more credit. This is the do-it-yourself way in the United States to take measures to protect yourself against the potential misuse of your credit via identity theft. In the process, we were issued a lengthy PIN (personal identification number) with the instructions that we must have it to unlock our accounts in the future.

I store those three separate PINs very securely in our vault. No matter how complex my login credentials (my unique name and complex password with my lengthy PIN stored under lock and key) were, my data was very insecure. Equifax was hacked.

The hack,[43] the largest in US history (as of 2017), exposed sensitive information, including names, Social Security numbers, drivers’ license numbers, and addresses. Equifax first disclosed the hack[44] in September 2017, three months after the company discovered the breach. Hackers leveraged a security flaw in a tool designed to build web applications to steal customer data. Equifax admitted it was aware of the security flaw a full two months before the company said hackers first accessed its data.

This is a classic gray swan event. Of course, my personal data was vulnerable, but having taken the extra precaution of freezing my account and locking the PIN away, I ignored the real risk. Fortunately for us, we were not among the 150 million names that were compromised.

In March of this year, Sina Weibo, China’s version of Twitter, lost sensitive information of 538 million accounts. This included the real names, site usernames, gender, and location as well as phone numbers for 25% of the accounts. The data turned up for sale on a dark web market for just $250 USD.

In our office, we have experienced the failure of Zoom during a morning meeting. Every one of our remote staff was prevented from logging on as Zoom was “down” for a few minutes. The thought crossed my mind of how many millions of people could not conduct their business or daily conferences should the system go down for an extended period of time.

Far beyond simple data breaches, our daily lives are now dependent upon the reliable functioning of a system of fragile networks in almost every sector, such as mobile phone networks, our electric grid, and, of course, the infrastructure that powers the internet.

How Fragile Are the Networks We Rely Upon?

• Mobile Networks – Never Say Never

This year, T-mobile, one of the nation’s three largest cellular carriers, had a near complete system outage disrupting their ability to deliver calls and text messages for almost an entire day.

The short version,[45] if we’re reading this correctly, says: a fiber-optic circuit failed, and its backup circuit also failed, which caused a chain reaction that strained the network to the point that many calls and texts couldn’t make it through.

It’s not clear which third-party provider’s fiber circuit failed.

“The whole thing was triggered by a common garden fiber outage,” Neville Ray said, adding that it, “exposed an issue in a routing issue configuration which led to one of these IP floods across the network,” which in turn, “created all kinds of capacity and protection measures in the core architecture.”

“Never say never, outages are always part of being a technology company, but we apologize and we’re in a better place,” he said.

• Electric Grid Failure and Interconnected Effects

Millions of people were impacted by the Northeast Blackout of 2003,[46] when a software bug caused an alarm system for overload warning to fail to deploy. A series of rolling blackouts shut down the source of power for almost 7 hours for much of 8 US states and parts of Canada. What is interesting about this example is the cascade effect:

• Nuclear power generators had to be placed in “safe mode.”

• Water plants did not have enough pressure to properly pump to customers.

• Train and airline travel had to be halted.

• Gas stations were unable to pump fuel.

• Communications were disrupted including some cellular towers, television stations, and internet routing systems.

• Factories had to be closed.

• Verizon’s[47] emergency generators failed several times, leaving the emergency services number 9-1-1[48] out of service for several periods.

• Wall Street was closed.

• Over 100 deaths were attributed to the power-grid failure.

• A Worm Shuts Down the Internet

Consider the reason for this widespread disruption in multiple industries when the internet went down. Sanity Solutions reports that the solution was known but ignored.

In January 2003, the SQL Slammer Worm[49] ravaged the internet, overloading routers and bringing communications to an absolute crawl for most internet users. The worm attacked through a security hole in Microsoft SQL Server and propagated itself like wildfire through the Internet, affecting over 90% of vulnerable hosts, at least 75,000, in 10 minutes. Financial services, airline systems, and government election systems, among others, suffered significant disruptions. To make matters worse, the attack was completely avoidable — a security patch for the vulnerabilities had been available for six months.

• Tesla’s Outage

Just September 23, 2020, Tesla, one of the world’s most valuable automobile manufacturers because of their state-of-the-art electric cars, had a total system failure.[50]

Sources familiar with the matter told Electrek that Tesla’s internal systems are currently inexplicably down, with staff not able to process deliveries and orders. On the customer-facing side, Tesla owners couldn’t connect to their cars through the mobile app starting at around 11:00 AM EDT. As for the website, it was returning an error beyond the main page with no configurator working at the moment. It appeared to be one of the most wide- ranging network outages of Tesla’s systems that we have seen to date.

Although short lived, besides potentially stranding their customers worldwide, it created a nightmare scenario for the company on everything from sales, delivery, and service since the cars are accessed via a mobile app. The outage also caused a temporary crash in Tesla’s stock price.

Most of us don’t drive an electric car; but, have you ever been driving and lost connectivity to your GPS? We have, right near our home, in the Great Smoky Mountains. Although I grew up without a GPS and learned to read a road map, we do not even carry a map in our car anymore! We were stuck when we lost our connection.

Understanding the Risks of Cloud Storage

(excerpts and paraphrases from: Should you store your data in the cloud?[52])

Do you use Google Docs, Dropbox, or Microsoft Teams? Do you store your pictures from your laptop or iPhone in the cloud? Does your company store data in the cloud?

At its most basic level, “the cloud” is just technical- speak for a network of connected servers. (And, a server is simply a computer that provides data or services to other computers.) When you save files to the cloud, they can be accessed from any computer connected to that cloud’s network. The cloud is not just a few servers strung together. Instead, it’s a system of thousands of servers typically stored in a spaceship-sized warehouse — or several hundred spaceship-sized warehouses. These warehouses are guarded and managed by companies capable of housing massive loads of data, including the likes of Google (Google Docs), Apple (iCloud), and Dropbox. So, it’s not just some nebulous concept. It’s physical, tangible, and real.

This service is supposed to protect against a malware infection[53] on your home computer which could expose all of your personal data to cybercrooks and even leave your files vulnerable to ransomware threats.[54]

As I finish this final chapter, my neighbor and friend who practices law, contacted me to let me know that the document I was expecting from him would be delayed. His entire law firm had their private servers taken captive by ransomware, which means that a hacker locked them out of all of their digital files, billing records, the historic documents of their clients … everything. They paid the ransom to get their data back and move everything to the cloud! But, is it more secure?

Why Are People Concerned with Cloud Security?

Using cloud storage means that the data is physically out of your hands. You aren’t saving files to a hard drive at your house or small business. You are sending your data to another company, which could be saving your data thousands of miles away, so keeping that information safe is now dependent on them, not you. “Whether data is being sent automatically (think apps that sync to the cloud) or driven by users uploading photos to social media, the end result is that it’s all there somewhere being logged and stored,” says Jérôme Segura, Senior Security Researcher at Malwarebytes. And, that somewhere is a place that’s not in your direct control.

Risks of Cloud Storage

Cloud security is tight, but it’s not infallible. Cybercriminals can get into those files, whether by guessing security questions or bypassing passwords. That’s what happened in The Great iCloud Hack of 2014,[55] where nude pictures of celebrities were accessed and published online.

However, the bigger risk with cloud storage is privacy. Even if data isn’t stolen or published, it can still be viewed. Governments can legally request information stored in the cloud, and it’s up to the cloud services provider to deny access. Tens of thousands of requests for user data are sent to Google, Microsoft, and other businesses each year by government agencies. A large percentage of the time, these companies hand over at least some kind of data, even if it’s not the content in full.

“Some people argue that they have nothing to hide, that they’re not doing anything wrong, and that they couldn’t care less if their private information is accessed, especially if it helps in the effort to track down terrorists,” says Segura. “While there is no doubt that ready access to data is an invaluable asset for intelligence agencies, it is really important to remember that each individual has a fundamental right to privacy,” he adds.

Benefits of Cloud Storage

On the flip side, the data you save to the cloud is far more secure than it is on your own hard drive. Cloud servers are housed in warehouses offsite and away from most employees, and they are heavily guarded. In addition, the data in those servers is encrypted, which makes hacking it a laborious, if not formidable, task for criminals. In fact, we recommend backing up your files to a cloud service as a hedge against ransomware.

Another benefit to storing data on the cloud is cost effectiveness and ease of access. You can store tons of data, often for free, using the cloud. Measure that against the number of external hard drives and USBs you’d have to purchase and the difficulty of accessing data once you’ve stored to multiple other devices, and you can see why cloud storage has become a popular option for businesses and consumers alike.

Final Verdict

Yes, your data is relatively safe in the cloud — likely much more so than on your own hard drive. In addition, files are easy to access and maintain. However, cloud services ultimately put your data in the hands of other people. If you’re not particularly concerned about privacy,[56] then this is not a significant issue for you. But, if you have sensitive data that you’d like to keep from prying eyes, it is best to store data in a hard drive that remains disconnected from your home computer. If you’re ready to store data on the cloud, follow best practices to help keep your data on the cloud secure.

Practical Steps You Can Take to Protect Yourself Digitally

Here are a few best practices that can help reduce your vulnerability to digital attacks:

Choose Strong Passwords – It’s tempting to make simple passwords that are easy to remember using family names or numbers, such as your address, anniversary, or birthdates. Unfortunately, hackers have access to this information because names and many dates are part of the public record, and they have programs that automatically try combinations of names and numbers that are likely to be associated with you.

It’s also important to never reuse passwords across multiple websites. When one online service has a customer data breach, every site you use with the same password also becomes vulnerable. One of the funniest suggestions on the internet is to choose the name of any place in Poland for the perfect password.

Turn on Two-Factor Authentication Whenever Possible – Most online services provide a feature called two-factor authentication. This is a safety measure that requires you to login with a password as well as to input a one-time code that is sent to you, typically via text or email. Having two-factor authentication turned on dramatically decreases the likelihood of you getting hacked because a hacker would need not just your password but also the one-time code you are sent.

Be Aware of Phishing Attacks – A “phishing attack” is a fraudulent attempt to obtain sensitive information, such as usernames, passwords, credit card information, and banking details. Phishing attacks are often cleverly disguised in emails that appear to be from an individual or company you know.

Our office regularly receives emails that, on the surface, appear to be from me or a member of our executive team requesting a certain invoice be paid or money transferred, etc. In reality, these are cleverly disguised phishing attempts trying to trick our staff. We have a policy to always confirm any internal financial requests with one another through more than one communication channel to reduce our risk of being tricked by a cleverly disguised email.

To protect yourself from phishing, you need to be alert. Double check any requests for private information that you receive over email or text. Be extremely cautious when clicking a link or downloading an attachment in your email. When you are visiting websites, double check the URL displayed in your browser window to ensure that it is truly the website you are intending to use and not a cleverly disguised duplicate.

One of my friends recently saw a $50,000 wire transfer evaporate as their young accountant fell for this scam.

Keep Physical Backups – If possible, make regular physical backups of your hard drive and login information, and store them securely in your home. Also, keep secure physical copies of important documents such as passports, drivers’ licenses, bank account numbers, etc.

Ensure Your Software Is Updated and Security Settings are Turned On – Keep your computer and phone software up to date. New security patches are released frequently, and hackers deliberately target systems that are out of date. You should ensure that basic security settings, such as a network firewall, are turned on. You can do a web search to find instructions on how to verify that your computer’s firewall is turned on.

You may also want to invest in a well-reviewed virus- and-malware software that scans for threats and can help remove them.

Vulnerability of Smartphones

A group of ethical hackers, those who are able to access systems to show companies how to better protect their data, discovered that the iCloud once had a security vulnerability via the “Find My iPhone” feature. They innocently presented their findings at a 2014 technology conference only to learn, too late, that it set off a string of malicious breeches of the Apple iCloud before it was repaired. You can read about it here: “iCloud Keychain and iOS 7 Data Protection.”[57]

The presenters had to publish a public apology for their mistake, where they also noted that our smart phones are a source of greater vulnerability than we imagine. Note their warning[58] below:

“For everyone who was involved in this incident, I want to remind you that, today, we are living in a Brave New Global World, when privacy protection wasn’t ever so weak, and you have to consider, that all you data from “smart” devices could be accessible from internet, which is the place of anarchy, and, as result, could be source of undesirable and unfriendly activity.” (sic)

Are We Spiraling Towards Complete Digital Dependency?

Global interconnectivity is filled with potential for a better world, while it is simultaneously fraught with disaster. We assume that, for now, when we access networks directly or indirectly, not only are the systems that support them safe and reliable but also the people that manage or control them are “the good guys” that we can trust. However, our lives are vulnerable on both levels. Not only could the networks fail to operate as needed, but bad actors could gain control of these systems and use them against us.

I have had a few deep conversations with some Christian business leaders in Silicon Valley about the general dissonance that we feel as technology seems to be controlling us versus us controlling it. Tech elites tend to have a dystopian view of the world, meaning they see it spiraling towards extinction without their god-like intervention to save it. We should obviously reject such a non-Biblical philosophy. On the other hand, these fellow believers expressed their dismay that more Christians do not see global interconnectivity as an opportunity to be embraced versus an invasive revolution to be feared.

Fragile networks are nothing new. Nations are fragile; corporations are fragile; people are fragile. Christ declared that only the Church is non-fragile. By His declaration, it cannot be killed, and its followers cannot be separated from the gospel promises. The benefits are eternal.

We are, in fact, created to be interdependent beings. We need God, we need family, we need community, and we need connections to our natural environment and its abundant resources. To that end, when we allow technology to replace any of those God-given networks with artificial ones, we do become dependent on that which God never intended.

CHAPTER EIGHT

CONTRA MUNDUM: AGAINST THE WORLD

An interesting behavior of an actual swan is they will aggressively charge intruders who encroach upon their space. If you turn your back and run, then at that point, they are in complete control. We have all probably seen those hilarious videos of the person who simply wants to feed the swans, the geese, the ducks, or even the chickens and who is suddenly frightened out of their wits, throws their cup of food in the air, and makes a dash for safety. If you haven’t, well, check out the link in this endnote.[59]

Time to Flee?

Ann and I met a couple recently while on a short stay at a nearby Bed & Breakfast. Due to COVID, we were the only two customers in the establishment. Although perfect strangers, we were near the same age as the owners, and it was obvious both couples had a desire to engage in human conversation. No Zoom calls, texts, or WhatsApp messaging allowed for just good, sincere, face-to-face chatting.

We learned that they are prepared to leave America and live in another country if one of the gray swans that I have listed here were to happen. Their concern is that Democratic Socialism will take root in all three branches of our government. They are in advanced planning stages — not just talking about it. They have sold their home, are renting a small place, and are in a “wait-and-see” mode. They are highly educated, well- traveled, and love their family. They are not “odd balls.” They are prepared to respond.

“Ideas Have Consequences. Bad Ideas Have Victims.”

I like this quote from John Stonestreet of Prison Fellowship because it is true. Meeting this couple made it perfectly clear that gray swan events will have significant long-term ramifications.

Democratic Socialism will hurt millions of people by creating a terrible condition known as a “capital flight” or a “brain drain,” as those with the resources and options to flee will seek to escape becoming the object of punitive policies. Doctors with excellent skills who are rewarded in private practice will look to escape to places to maintain their freedom. Business owners will seek to escape ever-increasing tax burdens. Investors will move their resources to places where upside growth is not capped. Workers will follow the companies. The number of makers will decline as the number of takers increases. Ultimately, everyone suffers when bad ideas are put in motion.

There are a few things significant about that brief encounter that have stayed with me:

We are all feeling uneasy about something that is happening in the world. – In some ways, that chance conversation with strangers helped me to understand that I am not an outlier and that I need to keep these gray swan events in the front of my mind. Risks are real. We need to be informed. Others are staying informed, and we benefit by sharing our insights with each other.

Be aware of signs and trends. – I do not know if they were people of faith; they never indicated one way or the other. But in our exchange, they mentioned that the Jews were given many signs to leave Europe as persecution became more intense. Those that failed to see the signs (gray swans) suffered horribly. She referenced the terrible event in Germany known as Kristallnacht.[60]

Kristallnacht, or the Night of Broken Glass, also called the November Pogrom(s), was a pogrom[61] against Jews[62] carried out by SA paramilitary[63] forces and civilians throughout Nazi Germany[64] on November 9–10, 1938. The German authorities looked on without intervening.

The name Kristallnacht (“Crystal Night”) comes from the shards of broken glass that littered the streets after the windows of Jewish-owned stores, buildings, and synagogues were smashed. Historians view Kristallnacht as a prelude to the Final Solution[65] and the murder of six million Jews during the Holocaust.[66]

Our friends encouraged us to look for a similar turning point event which is the trigger to flee.

The Bible encourages us to be fully aware of danger and to have a plan of how to manage challenging events. Remember, we started this book with a stated goal to be prudent, which is taking the right path to avoid needless suffering.

No matter where you go, gray swans will always be present. – As we talked about all the options that did not involve leaving the country, they had considered them thoroughly. They did not want to leave the country that they loved, but they also did not want to endure what they thought would be the destruction of it either. They realized the locations they had chosen to flee also had challenges.

I don’t think the solution is to flee a gray swan event. It is always a temptation to think that the grass is greener, or safer, or better, or more favorable … on the other side of the fence. No place on Earth is without vulnerability to economic problems, to social challenges, or to disasters. For most of us, we should confront the problems where we are with wisdom, courage, and faith in God to protect us.

No matter where you go, God will always be present. – “If I go up to the heavens, you are there; if I make my bed in the depths, you are there. If I rise on the wings of the dawn, if I settle on the far side of the sea, even there your hand will guide me, your right hand will hold me fast.”

— Psalm 139: 8–10 (NIV)

We cannot escape risks, evil, or threats. Many of the gray swans that I am tracking may never happen, and even if they do, they will impact our lives regardless of our location. We need to carefully consider our very best approach to these and/or the myriad of so many other potential threats to our lives, our livelihoods, and our freedoms. It is good to act upon the knowledge we have and to do so with courage. In Joshua 1:9 (NIV), Joshua was told to “be strong and courageous” as he walked step- by-step towards the Promised Land with known “giants.”

Some Practical Steps to Protect Against Gray Swans

Increase Your Capacity to Weather Storms

Save, and keep 15 months of annual income/funds in emergency savings. This is money that is not at risk of loss and is easily accessible without a penalty. This was God’s advice to Pharaoh through Joseph to prepare for the Great Famine of Egypt.

Keep one month of cash on hand. Store it in a waterproof/fireproof location in your home. These funds will carry you through a disruption in online banking or any emergency that requires that you flee.

Keep a small amount of gold coins on hand as insurance against a currency collapse.

Get Free of Encumbrances

Be debt free and in a position of financial freedom in order to avoid entrapments or obstacles that limit your freedom, mobility, and choices.

Be as liquid as possible in order to have access to resources if quickly needed.

Liquidity means having sufficient cash on hand to meet financial responsibilities. Maintaining liquidity above the bare minimum is considered wise in order to guard against unexpected expenses.

Liquid assets may be cash or property that can readily be converted to cash without substantial loss in value. Illiquid or fixed assets are possessions of value that are held long-term, such as real estate or equipment.

Reduce Vulnerability to Loss by Diversification

Diversify investments into different asset classes via publicly traded companies or funds that perform well in scenarios of deflation or inflation.

Hedge for downside risk by holding a small position in ETF funds that run contrary to market downturns.

Don’t Conform to the World’s Philosophies

Live as if you will lose everything; it all belongs to God and is only temporarily trusted to you. Our treasures are not on Earth but are laid up in Heaven where they cannot be lost. This is a promise of God to those who love Him and who build His kingdom, not their own.

Live as if loving people is more important than loving money because it is. What we invest in others will pay eternal dividends. Gray swan events may not cause pain or loss for you, which means you will be in position to serve others who have been hurt. When the famine spread throughout the Roman world as prophesied by

Agabus, the disciples agreed that their best response was to send help, in spite of their personal risk. — Acts 11:27–30.[67]

Live as if you will die soon, because you will — no matter how long God allows you to live. In light of eternity, life is a vapor. If you make it your goal to serve others and be a fruitful disciple, you will live with purpose and joy no matter what happens to the economy. It is liberating to realize that we have been freed from fear of death, so nothing can interrupt our relationship with God Almighty.

Find good and godly purposes for any pain or suffering that you may experience. Nothing is wasted in God’s economy, especially loss. God turns it all to good when we love Him and are called to His purposes.

Replace any fear or stress of the future with confidence in God’s faithfulness. Eleanor Roosevelt said,

“Yesterday is history. Tomorrow is mystery. Today is a gift.”

Hebrews 10:35 (NIV) tells us not to “throw away our confidence, it will be richly rewarded.” Live in the moment. Shed the shame of the past and the paralyzing fear of the future.

Contra Mundum

We admire those who, history records, turned and faced the gray swan as opposed to turning and running from it.

The last letter that John Wesley wrote was to William Wilberforce, a man who had been converted under Wesley’s ministry and who was a member of Parliament. The letter concerns his opposition to slavery[68] and encouragement for Wilberforce to take action for change.

February 24, 1791

Dear Sir:

Unless the divine power has raised you to be as Athanasius contra mundum, I see not how you can go through your glorious enterprise in opposing that execrable villainy, which is the scandal of religion, of England, and of human nature. Unless God has raised you up for this very thing, you will be worn out by the opposition of men and devils. But, if God be for you, who can be against you?

Are all of them together stronger than God? O be not weary of well doing! Go on, in the name of God and in the power of His might, till even American slavery (the vilest that ever saw the sun) shall vanish away before it …

That He who has guided you from youth up may continue to strengthen you in this and all things, is the prayer of, dear sir,

Your affectionate servant,

John Wesley

Athanasius was the 20th Pope of Alexandria and one of the defenders of the early Christian Church. The term “athanasius against the world” refers to the fact that he successfully and repeatedly defended church dogma against the Arian heresy, which at times would become very popular.

History records that William Wilberforce stood against the forces of hell that protected and advanced human slavery for most of his lifetime, only to finally see victory. He was Wilberforce contra mundum. Parliament finally outlawed England’s participation in the slave trade in 1807, 16 years after Wesley’s letter was written.

God has declared that each of us should stand “against the world” regardless of the challenges we may face. You, too, are to be “(Your Name) contra mundum.”

Each of these gray swans may become passing threats — fleeting dangers that evaporate and are forever behind us — while it is also possible that some or all will, in fact, come to pass. We are not people to lose our bearings but rather to be contrary to the world, like the men of Issachar, who understood the times and acted prudently — they chose the best path forward and took action.

My hope and prayer is that this work will open your eyes to the reality of our time. We must stand against the tide of culture by making a stand to be salt and light.

In the end, we will be glad we did not ignore the obvious truth that Jesus Christ is greater than the world and all of its treasures. Faith is truly of greater value than diamonds, gold, bitcoin, precious jewels, or all the financial security we could ever dream of.

Thank you for reading this book.

Don’t forget to share feedback or ideas about gray swans at Chuck@crown.org. If you’re looking for practical ways to prepare for these possibilities, to seek to grow in wisdom, and to manage money God’s way, Crown offers many online studies, videos, and more on our online platform, https://crownonline.org.[69] I hope we can stay connected.

You can learn more about the Christian Economic Forum at https://christianeconomicforum.com.[70]

Endnotes

1 Acceptance Address by Mr. Charles W. Colson. Templeton Prize. (2020, March 17). https://www.templetonprize.org/laureate-sub/colson-acceptance-speech/.

2 Economics. Dictionary.com. https://www.dictionary.com/browse/economics?s=t.

3 Staff, I. (2020, October 26). Black Swan. Investopedia. https://www.investopedia.com/terms/b/blackswan.asp.

4 Liberto, D. (2019, July 31). Grey Swan Definition. Investopedia. https://www.investopedia.com/terms/g/grey-swan.asp.

5 Wikimedia Foundation. (2020, October 17). Scientism. Wikipedia. https://en.wikipedia.org/wiki/Scientism.

6 Crocker, G. Basic Income Frequently Asked Questions (FAQ’s). UBI. https://www.ubi.org/51/basic-income-faq.

7 Wikimedia Foundation. (2020, October 18). Citizen’s dividend. Wikipedia. https://en.wikipedia.org/wiki/Citizen’s_dividend.

8 Santana, S. (2019, July 23). Is the U.S. on Its Way to Becoming a Cashless Society? Harvard Business Review. https://hbr.org/2019/07/is-the-u-s-on-its-way-to-becoming-a-cashless-society?fbclid=IwAR0C_aC7yyC9B_nAWAjLp_neLJI-HvD3UMejyLAzUSrprtQ2xyY-1JdOr84.

9 BBC. Why cash is no longer king article | Where the world is moving | BBC StoryWorks. BBC News. http://www.bbc.com/storyworks/where-the-world-is-moving/cashless-australia?fbclid=IwAR2aYBtAMRn9aw5pnJhf-hWl28r7GsJ_jRaAgvkGXtd6N8IhucrASyKOrxA.

10 Poon, L. (2020, July 14). Coronavirus Hastens the Rise of the Cashless Economy. Bloomberg.com. https://www.bloomberg.com/news/articles/2020-07-14/the-costs-of-an-increasingly-cashless-economy.

11 Square. Cashless Payments & the Pandemic. Square. https://squareup.com/us/en/making-change/covid.

12 Top countries moving towards a cashless society by 2022. GlobalData. (2020, August 20). https://www.globaldata.com/top-countries-moving-towards-a-cashless-society-by-2022/.

13 Is China Becoming the Newest Front in the War on Cash? SchiffGold.com. (2019, November 19). https://schiffgold.com/key-gold-news/is-china-becoming-the-newest-front-in-the-war-on-cash/.

14 U.K. to Protect Future for Cash Amid Digital Payment Onslaught. Bloomberg Law. (2020, March 6). https://news.bloomberglaw.com/banking-law/u-k-to-protect-future-for-cash-amid-digital-payment-onslaught.

15 Hickey, S. (2020, February 7). Quarter of All UK Cash Machines Now Charge Fees. The Guardian. https://www.theguardian.com/money/2020/feb/07/quarter-uk-cash-machines-charging-fees.

16 Homepage. IMF Blog. (2019, January 16). https://blogs.imf.org/.

17 Agarwal, R., & Krogstrup, S. (2019, February 12). Cashing In: How to Make Negative Interest Rates Work. IMF Blog. https://blogs.imf.org/2019/02/05/cashing-in-how-to-make-negative-interest-rates-work/.

18 Moore, M. K. (2020, June 25). Why America Won’t be Going Cashless Anytime Soon. MSN. Why America won’t be going cashless anytime soon. https://www.msn.com/en-us/money/personalfinance/why-america-wont-be-going-cashless-anytime-soon/ar-BB16JyDj.

19 Roff, P. (2020, June 12). Cashless Society Will Enable Left To Unbank Political Enemies. Townhall. https://finance.townhall.com/columnists/peterroff/2020/06/12/cashless-society-will-enable-left-to-unbank-political-enemies-n2570551.

20 Ford, D. (2020, July 2). COVID-19 Speeds the Cashless Transition. Yahoo! Finance. https://finance.yahoo.com/news/covid-19-speeds-cashless-transition-155412530.html?guccounter=1.

21 Trader, M. (2010, December 19). Weekender: The Trouble With Modern Monetary Theory (MMT). Business Insider. https://www.businessinsider.com/weekender-the-trouble-with-modern-monetary-theory-mmt-2011-1?op=1.

22 Chiglinsky, K., & Dmitrieva, K. (2019, March 15). Buffett Joins Scorn of Modern Monetary Theory and ‘Danger Zones.’ Bloomberg. com. https://www.bloomberg.com/news/articles/2019-03-15/buffett-no-fan-of-modern-monetary-theory-with-its-danger-zones.

23 Bloomberg. Berkshire Hathaway Inc. Bloomberg.com. https://www.bloomberg.com/quote/BRK/A:US.

24 YouTube. (2018, January 6). TOP 20 Thomas Sowell Quotes. YouTube. https://www.youtube.com/watch?v=BK-adW1VkYo.

25 Federal Debt: Total Public Debt as Percent of Gross Domestic Product. FRED. (2020, September 30). https://fred.stlouisfed.org/series/GFDEGDQ188S.

26 Mauldin, J. (2019, June 28). Ray Dalio-John Mauldin Discussion, Part 4. Mauldin Economics. https://www.mauldineconomics.com/frontlinethoughts/ray-dalio-john-mauldin-discussion-part-4.

27 M2 Money Stock. FRED. (2020, November 27). https://fred.stlouisfed.org/series/M2.

28 McAlvany Weekly Commentary. Weekly Commentary on Monetary, Economic, and Geopolitical news and events. McAlvany Weekly Commentary. https://mcalvanyweeklycommentary.com/.

29 Bible Gateway passage: Ecclesiastes 11:2 - New International Version. Bible Gateway. https://www.biblegateway.com/passage/?search=Ecclesiastes+11%3A2.

30 Chiglinsky, K., & Dmitrieva, K. (2019, March 15). Buffett Joins Scorn of Modern Monetary Theory and ‘Danger Zones.’ Bloomberg.com. https://www.bloomberg.com/news/articles/2019-03-15/buffett-no-fan-of-modern-monetary-theory-with-its-danger-zones.

31 Saad, L. (2020, November 23). Socialism as Popular as Capitalism Among Young Adults in U.S. Gallup.com. https://news.gallup.com/poll/268766/socialism-popular-capitalism-among-youngadults.aspx.

32 Kahle, B. Contemporary political ideologies : Lyman Tower Sargent : Free Download, Borrow, and Streaming. Internet Archive. https://archive.org/details/contemporarypoli00sarg_0.

33 Bible Gateway passage: Matthew 25:14-30 - New International Version. Bible Gateway. https://www.biblegateway.com/passage/?search=Matthew+25%3A14-30.

34 Homepage. American Thinker. https://www.americanthinker.com/.

35 Gallup. (2020, November 24). Gallup’s 2020 Presidential Election Center. Gallup.com. https://news.gallup.com/poll/267905/gallup-election2020-center.aspx.

36 Global Times. (2019, August 18). China to improve, prevent abuse of social credit system: NDRC. Global Times. https://www.globaltimes.cn/content/1161784.shtml

37 Elgan, M. (2019, August 26). Uh-oh: Silicon Valley is building a Chinese-style social credit system. Fast Company. https://www.fastcompany.com/90394048/uh-oh-silicon-valley-is-building-a-chinese-style-social-credit-system.

38 Elliott, C. (2020, January 23). Perspective | As use of facial recognition expands, travelers worry about privacy. The Washington Post. https://www.washingtonpost.com/lifestyle/travel/as-use-of-facial-recognition-expands-travelers-worry-about-privacy/2020/01/23/ee6d7650-3d59-11ea-baca-eb7ace0a3455_story.html.

39 Conger, K., Fausset, R., & Kovaleski, S. F. (2019, May 14). San Francisco Bans Facial Recognition Technology. The New York Times. https://www.nytimes.com/2019/05/14/us/facial-recognition-ban-san-francisco.html.

40 Harwell, D. (2019, April 30). Oregon became a testing ground for Amazon’s facial-recognition policing. But what if Rekognition gets it wrong? The Washington Post. https://www.washingtonpost.com/technology/2019/04/30/amazons-facial-recognition-technology-is-supercharging-local-police/.

41 Bill S.1385 191st (Current). Bill S.1385. https://malegislature.gov/Bills/191/S1385.

42 S.847 - 116th Congress (2019-2020): Commercial Facial Recognition Privacy Act of 2019. Congress.gov. (2019, March 14). https://www.congress.gov/bill/116th-congress/senate-bill/847.

43 Fung, B. (2019, July 22). Equifax exposed 150 million Americans’ personal data. Now it will pay up to $700 million. CNN. https://www.cnn.com/2019/07/22/tech/equifax-hack-ftc/index.html.

44 Larson, S. (2018, March 1). Equifax says hackers stole more than previously reported. CNNMoney. https://money.cnn.com/2018/03/01/technology/equifax-impact-more-customers/index.html.

45 Hollister, S. (2020, June 18). T-Mobile explains why its network went down hard, claims only a fifth of calls were lost. The Verge. https://www.theverge.com/2020/6/17/21293950/t-mobile-outage-june-explainer.

46 Wikimedia Foundation. (2020, November 26). Northeast Blackout of 2003. Wikipedia. https://en.wikipedia.org/wiki/Northeast_blackout_of_2003.

47 Wikimedia Foundation. (2020, November 28). Verizon Communications. Wikipedia. https://en.wikipedia.org/wiki/Verizon_Communications.

48 Wikimedia Foundation. (2020, November 7). Emergency telephone number. Wikipedia. https://en.wikipedia.org/wiki/Emergency_telephone_number.

49 8 of the Worst Network Failures and How You Can Avoid Them. Sanity Solutions INC. (2017, September 22). https://www.sanitysolutions.com/8-of-the-worst-network-failures-and-how-you-can-avoid-them/.

50 Lambert, F. (2020, September 23). Tesla suffers complete network outage, internal systems and connectivity features down [Update: connectivity returning]. Electrek. https://electrek.co/2020/09/23/tesla-suffers-complete-network-outage-internal-systems-and-connectivity-features-down/.

51 Elliott, J., & Jenkinson, N. (2020, December 7). Cyber Risk is the New Threat to Financial Stability. IMFBlog. https://blogs.imf.org/2020/12/07/cyber-risk-is-the-new-threat-to-financial-stability/?utm_medium=email.

52 Should you store your data in the cloud? Arboleas Home Watch. https://arboleashomewatch.com/index.php/personal-security/29-should-you-store-your-data-in-the-cloud.

53 Zamora, W. (2018, September 24). How to tell if you’re infected with malware. Malwarebytes Labs. https://blog.malwarebytes.com/101/2016/05/how-to-tell-if-youre-infected-with-malware/.

54 Zamora, W. (2018, July 24). How to beat ransomware: prevent, don’t react. Malwarebytes Labs. https://blog.malwarebytes.com/101/2016/03/how-to-beat-ransomware-prevent-dont-react/.

55 Lewis, D. (2014, September 22). iCloud Data Breach: Hacking And Celebrity Photos. Forbes. https://www.forbes.com/sites/davelewis/2014/09/02/icloud-data-breach-hacking-and-nude-celebrity-photos/.

56 Matthews, K. (2018, June 13). The Internet of Everything and digital privacy: what you need to know. Malwarebytes Labs. https://blog.malwarebytes.com/101/2018/04/the-internet-of-everything-and-digital-privacy-what-you-need-to-know/.

57 Troshichev, A. (2014, September 1). iCloud keychain. SlideShare. http://www.slideshare.net/alexeytroshichev/icloud-keychain-38565363.

58 Official comment on iCloud leak. (2014, September 1). Hackapp. http://blog.hackapp.com/2014/09/official-comment-on-icloud-leak.html.

59 Petaculartv. (2018, August 24). FUNNIEST Geese Attack Compilation - MUST SEE Angry goose video [NEW HD]. YouTube. https://www.youtube.com/watch?v=XS4edlvY-ks.

60 Wikimedia Foundation. (2020, November 28). Kristallnacht. Wikipedia. https://en.wikipedia.org/wiki/Kristallnacht.

61 Wikimedia Foundation. (2020, November 28). Pogrom. Wikipedia. https://en.wikipedia.org/wiki/Pogrom.

62 Wikimedia Foundation. (2017, September 10). Jew. Wikipedia. https://en.wikipedia.org/wiki/Jew.

63 Wikimedia Foundation. (2020, November 24). Sturmabteilung. Wikipedia. https://en.wikipedia.org/wiki/Sturmabteilung.

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65 Wikimedia Foundation. (2020, November 19). Final Solution. Wikipedia. https://en.wikipedia.org/wiki/Final_Solution.

66 Wikimedia Foundation. (2020, November 25). The Holocaust. Wikipedia. https://en.wikipedia.org/wiki/The_Holocaust.

67 Bible Gateway passage: Acts 11:17-30 - New International Version. Bible Gateway. https://www.biblegateway.com/passage/?search=Acts+11%3A17-30.

68 Thoughts on Slavery – John Wesley; Published in the year 1774. What Time Is It. http://whattimeitis.org/ComingEvents/Wesley%20-%20slavery.htm.

69 Homepage. CrownOnline. https://crownonline.org/.

70 Homepage. CEF. https://christianeconomicforum.com/.

About the Author

Chuck Bentley is the CEO of Crown Financial Ministries, a global Christian organization, founded by the late Larry Burkett. He is the host of two daily radio broadcasts, The Crown Money Minute and My MoneyLife, featured on more than 1,100 Christian music and talk stations in the U.S. He is also a co-author with his wife, Ann, of Money Problems, Marriage Solutions, written in 2017.

Chuck is the founder and executive director of the Christian Economic Forum, a global community of Christian leaders and experts who are passionate about advancing God-inspired solutions to the world’s greatest challenges. CEF is best known for its annual Global Event that accelerates the collaboration of Christian leaders from more than 30 nations.

He and his wife, Ann, both graduates of Baylor University, have been married since 1978. They can be found reading and spending time outdoors with their family at their home in Knoxville, Tennessee, when they are not traveling the world together to advance Crown’s mission.