Written by Jeffrey M. Herbener |
Tuesday, April 4, 2023
At least one former Federal-Reserve insider recognizes that our central banking system has made moral hazard a way of life. What’s needed is fundamental reform. When will we abandon the foolish path of enacting policies that extend the scope of moral hazard? If we refuse to abandon the foolish path, we risk burning our house to the ground.

Moral hazard occurs when an agreement people make to act in concert for their mutual benefit results in an incentive for one of them to act immorally. The classic case is insurance. When an insurance company contracts with a homeowner to provide fire insurance, the homeowner now has incentive to pay a few premiums and then burn his house down and collect a full insurance payout. In committing arson, not only does the homeowner harm the material well-being of the owners of the insurance company and the innocent homeowners who are abiding by their promises, he injures his own spiritual well-being. He has defrauded those who trusted him to keep his word. In response to the possibility of arson, the insurance company assembles an arson investigation team to detect such immoral behavior. Mitigating moral hazard is a wise course of action because it limits the harm to all involved. It would be foolish for the insurance company to overlook the harm of moral hazard or, even worse, to arrange its affairs in a way that augmented moral hazard.
The potential for moral hazard permeates human relationships. Wisdom councils us to look for ways to mitigate the damage of moral hazard and avoid acting in ways that create moral hazard. In one area, regrettably, moral hazard has become a way of life.
Moral hazard is endemic to a banking system regulated by a central bank. Consider the current banking crisis. As reported by Dr. Peter St. Onge on March 19, total unrealized losses in the banking system are between $1.7 trillion and $2 trillion. The capital buffer for the entire system is $2.2 trillion. The banking system, therefore, is on the verge of insolvency. Furthermore, there are 186 banks in distress and hundreds with losses bigger and capital buffers smaller than Silicon Valley Bank.
The main culprit in these losses is the Federal Reserve’s more than decade-long policy of suppressing interest rates. Cheap credit has given an incentive to investors and entrepreneurs to pour funding into all kinds of projects and practices that will prove to be financially unviable. Monetary inflation is the fuel needed to increase the supply of credit and keep interest rates suppressed. The unwinding of the quantitative-easing policies of the Fed after 2014 was quickly abandoned in the repo crisis of 2019. But it was the monetary inflation of the Fed to fund the fiscal explosion of the federal government during the Covid lockdown that has resulted in the current return of significant price inflation. In turn, higher price inflation rates are now causing interest rates to rise. Rising interest rates on newly issued Treasuries have collapsed the market prices of the low-interest-rate Treasuries that banks acquired in the past and are holding now because regulatory bodies consider them safe. Of the nearly $17.5 trillion in bank credit in the banking system, roughly $4.4 trillion is Treasury and Agency securities and another significant but unknown portion of bank credit is now unprofitable loans undertaken during the period of cheap credit. Clearly, the Fed’s policy actions have led to the current crisis.
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Satan is the god of this world. But that does not mean he is in any way equal to the one true God. And the world is a mixed bag. Because we are all fallen and sinful, our world is fallen and sinful, and Satan exploits that to the max. But still, the world is God’s world. He made it and pronounced it good. Although tarnished and stained now, it will one day be recreated for us to enjoy forever.

Christians do not believe in metaphysical dualism. That is, we do not believe there are two equal and two eternal spiritual forces in the universe. There is just one living God – end of story. Satan happens to be a created being. He is not omnipotent and so on.
And we believe that while God allows him to do some dirty deeds on planet earth, all this is limited. Just as Satan was allowed to torment Job only as much as God allowed or permitted (see Job 1:12 and 2:6 eg.), so too in other areas. God has Satan on a leash in other words. And that is good news indeed.
God is on the throne – not Satan. God is working out his purposes – not Satan. God is sovereign – not Satan. But yes, Satan and the demonic hordes can do great damage indeed, which is why we must always have on our spiritual armour (as in Ephesians 6:10-20, eg.), and why we must keep praying and engaging in spiritual warfare. Let me offer a quote from the commentary by George Guthrie on this:
In calling Satan a “god,” the apostle does not ascribe divine status to the evil one but rather speaks of the functional status given him and the subordination of the fallen world to him. The phrase is comparable to John’s “ruler of this world” (John 12:31; 14:30; 16:11). Ever since the fall, this “god” has beclouded the Word of God (Gen. 3:1), blinding the minds (1 John 2:11) of those who do not believe. Thus peoples’ minds constitute one very significant battleground in the cosmic conflict between God’s gospel and the twisted machinations of the god of this world (2 Cor. 2:11; 3:14; 4:4; 10:5; 11:3).
And Judith Diehl stresses the limits of Satan’s ‘rule’:
The “god of this age” is a unique phrase, as it occurs only here in the NT. It refers to Satan and the dominion that he has over those who reject God and his agent, Jesus Christ (see 2:10–11). Here, Satan represents lawlessness, darkness, unbelief, moral depravity, and the worship of idols (see 6:16, especially apparent in polytheistic Corinth). Paul is fully aware of Satan as his personal adversary and Satan’s attempts to impede Paul’s mission and his unique calling to ministry. We can notice, too, that in Paul’s view, the power and influence of Satan are limited to “this age.”
See here for more on the reality of Satan.
And see here for more on the need for spiritual warfare and protection.
Consider also the matter of the world and our involvement in it. When we read about how Satan is the god of this world, we need to be clear on just what is being said. The Greek word for world – cosmos – is used in different ways in the New Testament. Often it can just mean the globe that we all happen to inhabit.
But at other times it refers to the current evil system that we must have nothing to do with. Thus, we all LIVE in this world, but believers are not to take part in the evil, worldly system that is all around us. That we can do both simultaneously is made clear by Paul when he said this in another context:
“I wrote to you in my letter not to associate with sexually immoral people—not at all meaning the sexually immoral of this world, or the greedy and swindlers, or idolaters, since then you would need to go out of the world” (1 Corinthians 5:9-10).
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My heart becomes filled when I reflect upon the lyrics of this hymn! But it should also be remembered that lyrics are meant to be sung to a melody or tune. I don’t mean this as a slight to any of the tunes – past or present – to which For All the Saints have been sung, but the tune now most associated with this hymn, Sine Nomine (without name), is part of what has made this song so meaningful to me. This tune was written by Ralph Vaughn Williams at the beginning of the 20th Century. I cannot really explain why a certain tune sounds to my ear as if it so well fits a given lyric, but I cannot imagine a better tune. It sounds to me as if it is a victory march, so that when one imagines countless host from all places streaming through gates of pearl while singing to Father, Son and Holy Ghost – the earthly soul is spiritually elevated.

Hebrews 12 begins by proclaiming:
Therefore, since we are surrounded by so great a cloud of witnesses, let us also lay aside every weight, and sin which clings so closely, and let us run with endurance the race that is set before us….
Certainly, the cloud of witnesses portrays saints who have left this earthly life and whose souls are now found in heaven with the LORD. Perhaps the number includes all those named in Hebrews 11 – and perhaps we are meant to know it includes even more. Yet, the designation “witnesses” could be considered in two different ways. The saints could be thought of as witnesses in the sense that they are looking upon believers in this present world who are running with endurance their own earthly races. Or, it could be the other way around. Perhaps, readers could be looking heavenward themselves, to those prior saints who “witness” in the sense of giving us the testimony of their former lives. In that manner, the “cloud” would be testifying or witnessing to us as to what running the race of life with greater endurance as a Christian should look like. They witness to us about how our faith should be demonstrated in the manner in which we live.
That second way of understanding “the cloud of witnesses” is how I tend to read Hebrews 12:1 – and though Hebrews 12:1 might not have been planted in the mind of Anglican Priest William Walsham How when he penned the lyrics to For All the Saints in 1864 – to me, that sentiment permeates his words. The lyrics beckon singers to consider for themselves how to serve the Lord best in their own day, as a part of the church militant, to the glory of God, through the encouragement of looking upon those citizens already enrolled in the church triumphant.
The hymn begins by directing our voices to bless the name of Jesus for those saints who now enjoy their eternal rest – saints who had confessed the name of Christ to the world during the time of their mortal lives:
For all the saints who from their labors rest,Who Thee, by faith, before the world confessed,Thy name O Jesus, be forever blest.
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