There is increasing talk among traders and financial analysts that the latest slump in global share markets, the euro zone crisis, the US debt crisis and credit rating downgrade and the weakening dollar reflects a second instalment of the financial crisis drama. Morgan Stanley’s global developed markets strategist and renowned forecaster of the last global crash, Gerard Minack, said what started as a market correction may be morphing into something more severe.
“I think it’s starting to change. I think we’re starting to see broader growth concerns, we’re starting to see some leading indicators of growth wobble a little bit and, as a result, we’re now seeing the more severe losses spread to other markets, so I do think this is starting to change from a Europe problem to a global problem.”
In the previous crash, stock markets crashed around the globe, large financial giants collapsed. The lucky few have been nationalised. Even some economies hang on the brink of collapse. Now we’re facing a possible second global financial crisis in less than 5 years. How does a global financial meltdown affect us? Are things going to get worst? Or are they going to get better? Some have even asked: “Is this the end?”
Well, not exactly. To understand what’s happening around the world, we need to grasp the concept of birth pangs. The financial crisis may ease, growth will take place once again, but the following financial crisis will be longer, more intense, more painful – just like birth pangs. About ten years ago in 1997, there was the Asian Financial Crisis. In the 1980s, there was double digit inflation. In fact, you can trace the ups and downs of the global economy throughout the ages. The collapse of the German Deutsche Mark. The Black Monday. The Great Depression.
In any case, financial planning must take place under God’s sovereignty. The Bible teaches us to plan for any economic situation. The Scriptural principles that are found in Scriptural Financial Freedom are financially and Biblically sound, no matter what takes place in the economy. God has called every Christian to a unique role in our uncertain economy – to be financially free. For that, we must apply those Biblical principles.
The first key to riding any financial crisis is to be debt free. The only absolute way to become debt-free, in the first place, is to have a financial plan prepared at the beginning of each year that does not allow for the use of debt, and that you will stick to through self-discipline.
The major problem most people face is how to get out of the debt that they are already in. there are only two ways to get out of debt after making the decision to avoid the use of debt: Examine the assets you have to see which ones could be sold in order to reduce debt; and in the absence of assets to sell to eliminate debt, set up a repayment schedule and strictly adhere to it.
Whatever debt you have, its time to start taking action. Of course, Not everyone has the luxury, however, of selling assets to repay debt. Many of you are perhaps deeply in debt and have no assets at all. In fact, statistically, 80% of Americans owe more than what they own; therefore, selling assets is not an option. The only option, then – other than receiving an inheritance or striking oil – is the slow, painful, and difficult process of making monthly payments. You must decide, first of all, not to take on any more debt, and second, to set up a schedule of debt repayment.
The Bible does show many ways to overcome any financial crisis. Many of these principles are laid out in our successful course, the Scriptural Financial Freedom series. To learn more, you can download the Financial Freedom Small Groups kit from our Store.