Today on MoneyLife

Chuck says he continues to get questions from people about The Coming Economic Earthquake written by Crown co-founder Larry Burkett in 1991. He uses this email as an example:

I am concerned the economic earthquake predicted by Larry Burkett will happen before my family can become debt free.  Unless God intervenes, there is no way for us to pay everything we owe in the next few weeks or months.  In light of that, should we buy a few gold coins and stock pile food? - Tara in Morehead, Kentucky

Chuck says he's going to answer that question today by going back through the contents of Larry’s book so you'll know what to watch for in the days ahead. Chuck says he'll give you some tools for evaluating the economic news you hear. He also tells what you'll need to do to be prepared.

Larry said there would be a series of warnings before an economic earthquake. He said it would be a period of time but never specified. He never gave a hard date, but he expected it to happen before 2000. Obviously, it didn’t happen that way. Chuck says he still doesn’t want to put a date on it.

Larry’s main point was that if the federal government continues to expand it would reach a point where it could not be sustained financially and would lead to an economic earthquake. We haven’t reach that point yet, but we’re still going in that direction.

Larry said to watch for three tremors, or warnings of an upcoming earthquake:

1. Banking crisis - new financial entities operating outside normal bank regulations would become financial product marketers and be open to abuse that would destabilize the economy in the long run; once the number of bad loans exceeds the number necessary to repay the depositors, the banks will fail without government intervention; if this happened, it would require at least $1 trillion dollars in government aid that would have to be paid for by higher taxes, additional borrowing, or printing more money; we’re there
2. Business failures makred by foreign investors pulling money out of America and a growing attitude in American that profit is evil and that successful businesses should be taxed out of fairness, businesses would leave, economy would further destabilize; (Chuck says the health of the nation’s economy is tied to the success of its entrepreneurs, when they’re discouraged the economy stops growing; that’s the tremor we’ll experience next, small businesses will suffer under the weight of federal taxes regulation)
3. The denial syndrome (political leaders would deny a foundational problem and try to convince people the economic problems were under control, safe to return to living normally; Chuck believes this period could start next summer after Congress has passed a second stimulus package; people would return to borrowing, spending, consuming)

If you know the warning signs and are looking for them, you can be prepared when the economic earthquake comes.

The U.S. currently owes $2.67 trillion to foreign governments and investors, which is 20% of our Gross Domestic Product (GDP). That debt continues to grow rapidly. We owe more to China than any other country, but we owe almost every nation in the world.

A big chunk of our country’s wealth is going to other countries to pay those loans. The outflow of cash likely will affect America’s standing in the world. God understands this and has a solution in His Word. He blesses obedience and curses disobedience.

How to prepare for the coming economic earthquake:

1. Get a Crown Money Map and follow the steps (save $1,000, then 3-6 months of living expenses, pay down consumer debt, etc; retirement funds don’t give you financial margin, because the money isn’t liquid, borrowing against your house doesn’t give you financial margin, puts your home at risk, credit cards don’t give you financial margin; tightening standards)
2. If you’re approaching retirement age, don’t cash in your retirement funds, move them into a low-risk investment like a money market fund; only withdraw the money if you’re in financial trouble and at risk of losing your home because you'll have to pay taxes and penalties
3. Rethink your purpose and walk by faith (God wants to use economic uncertainty to encourage you to trust Him alone and be a witness and help to others). God wants us to have a heart to get our financial houses in order so we can advance His kingdom and glory
4. Read Deuteronomy 28:43-45, Acts 4

Draw more lessons from the children's tale about the Three Little Pigs, discussed on the Nov. 13 MoneyLife program.

Christians need to find an urgency about getting their finances in order:

• Have at least one month’s living expenses in an FDIC-insured bank account. Try to increase emergency savings to 3-6 months living expenses
• Keep some cash at home in a safe place
• Keep one month’s worth of groceries at home
• Pay off all your debt as soon as possible
• Keep your 401(k) in a money market fund and avoid penalties for early withdrawal unless you’re upside-down in debt
• Don’t buy gold and other precious metals (if you have them, hold onto them, could be helpful if we have hyperinflation)
• Don’t be afraid, listen to God’s Word
• People who don’t obey God will make foolish decisions and suffer needlessly
• God isn’t obligated to rescue them
• Some people will suffer through no fault of their own
• We must face adversity with the fruit of the Spirit and accept that some things won’t work out well for us
• Some Christians will experience supernatural provision
• God will use all three groups to bring glory to Him
• In the final analysis, an economic crisis is really not about getting your finances in order, it’s about getting your heart right with God, and shifting your faith from your finances to the Lord Jesus Christ. When non-believers see that, they’ll want to know the God whom you serve
• See Proverbs 1:32-33

What Happened to the Economic Earthquake?

Although we may not be able to forecast when the forthcoming economic collapse will happen, God knows, and we can trust His guidance.

• Read More

The Economic Earthquake of 2008 Pt. 1

Our recent economic woes have shouted loudly that biblical principles apply to individuals, families, Wall Street firms, and even governments.

• Read More

The Economic Earthquake of 2008 Pt. 2

The past three weeks have likely been tougher than President Bush expected following his announcement of a bailout plan to buy bad debt and mortgages.

• Read More

Fearing the Future

Many financial decisions that Christians make are motivated by fear of the future rather than by trust in God and in His provision.

• Read More

Other Resources:

• ABCs of Money Package
• Career Direct
• God's Principles for Operating a Business
• Business By the Book
• Crown Mvelopes