[English Translation] How to solve "The disasters brought by the interest compounding effect in artificial financial market "?

In the previous article, CROSS Capital Group mentioned about “Never taught at school, Never mentioned by financial institutions and Never aware by government: The interest compounding effect of the artificial financial system will bring down the real economy” Many people have asked that how the government or the world is going to solve “disasters brought by the interest compounding effect?

There are either stopgap solutions or root solutions for the problem. When it comes to stopgap solutions, many countries have been taking actions, such as printing money, raising new debts to repay old ones; besides they plundering resources or wealth to earn more capital than others; furthermore it may have battles in financial market or start currencies wars to make collapses of creditors or cause debts devaluation. However, all stopgap solutions will eventually bring in catastrophe in financial market and financial shuffles, even could bring in wars in real world, some countries could make money by having wars on the one hand; the wining parties could have more control over physical resources to meet the needs in their financial market and to relief debts on the other hand. Stopgap solutions are selfish, it could only solve self problems, but could cause disasters to others.

When it comes to root solutions, GOD has provided answers in the Old Testament, but because of the selfishness in human world, it can never be achieved. However, we still could have some descriptions about it. During the history in the Old Testament, it was so popular for money lenders to charge interest in the Middle East, especially usury. In this way, the rich are getting richer and the poor getting poorer, and debts could never be paid under the interest compounding effect. Therefore, debts may be accumulated across generations, and debtors become the slaves for creditors. Under the interest compounding effect, debts can never be finished

GOD had told Israelis the solution, and required them to comply it. GOD said, the seventh year of every seven years is called “the LORD's release”, that is creditors been asked to write off debts if debtors were not able to pay it back until “the LORD's release”. In this way, it can stop and avoid the economic and social problems that been brought by the interest compounding effect.

At the same time, GOD said the rich should not have a thought that “the LORD's release” is near and so looking coldly on the poor countryman and give him nothing. On the contrary, debtors should try their best to pay back debts instead of prolonging it until the coming of “the LORD's release”. In the fact, this is what we had mentioned in the previous article "Cooperation" economy. Please refer to "The JUST Economy with MERCY: Way to solve the gap between rich and poor - the biblical economic structure” Therefore, if human society is still selfish, off the wealth plundered, the financial and economic system will eventually be controlled by few people, and eventually be collapsed.

[English Translation] The Perfect Biblical Economic Cycles

As per the economy of today, it is often either in the situation of "overproduction" or "insufficient supply” and in turn causing the "economic depression" or "economic overheating". The gaps between economic peaks and bottoms are usually large, which therefore brings in some difficulty for people to adapt the variations and result in the gaps between rich and poor. However, consortiums often can have a better understanding about the signals of economic cycles than general people, and they can be immune from violent economic fluctuations. On the other hand, those general people who cannot immune from violent economic fluctuations, whose wealth might be transferred to those have escaped from violent economic fluctuations. Furthermore, if the consortium people are heart misconduct, they can also use their ability of foreseeing the business cycles to plunder other people’s wealth. For example, if some consortiums were facing the issue of overproduction, they might try to stimulate more customer demands to consume the excess supply. However, the consumptions which were over stimulated are often beyond the ability of the consumers, so they have to borrow to do the consumptions. Unfortunately, while the economy reverses down quickly, those who are not able to pay their debt will lose their assets at the same time.

CROSS Capital Group believes that if we can reduce the gaps between economic peaks and bottoms, and prevent it from excessive and over fluctuations, we can in turn reduce the chance of improper wealth transfer or wealth plunder. In such way, general people can also have a better endurance against economic swings and won’t fall into the flood of wealth plunder. But, how could we reduce the economic gaps between Peaks and Bottoms? The Bible has provided the best solution!! Let’s see if human beings can do it.

Business cycles/economic cycles in Bible start with the micro-circulation of every 7 days, a small cycle of every 7 years, and a large cycle of every 50 years. At the 50^th year all things have a new start and all property (wealth) reset; automatically return to the fair allocation of the initial state, an equality status in the starting point. This circulation was designed by GOD. In each cycle, GOD commanded human beings to obey some important rules, which you might think unrelated to economic at the first glance, but after further considerations, you can find they have significant economic implications.

To avoid excess or insufficient supply: GOD said “After you have been working for 6 days, you should have a rest at 7^th day instead of producing. Furthermore, after you have been working for 6 years, you should have a rest in the 7^th year, not working (But GOD will help humanity to have doubled harvest in the 6^th year, so that humans would still have enough food in the 7^th and 8^th year). When it comes to the 50^th year, you should have a rest for the whole year, and not working (thus the 49^th and 50^th year are years for rest, no working).

To take 50 years as a large cycle, we will find human beings are having a rest during 28% of the 50 years, instead of producing. Under such environment, supply and demand could perfectly match, won’t be excessive or shortage, and naturally there won’t be overproduction problem.

If all people could comply with these regulations in current economic system, it is believed the economy will definitely be very stable without having over fluctuations in the business/economic cycles.

In addition, GOD plans to construct a "mutual cooperation" economic system, so 10% output of every 3^rd year should be donated to disadvantaged groups, and the natural harvest of every seventh year (which is outputs of non-human work, because every 7^th year is a resting year, there will be only natural output from the land) should all be reserved for disadvantaged groups too. To sum up, about 18% of everyone's income will be used to help disadvantaged groups. Imagine that if a country can implement those policies, it must be a peaceful and prosperous country.

For other Biblical economic rules for a cooperation economic system, please read other articles of CROSS Capital Group listed below:

• The JUST Economy with MERCY: Way to solve the gap between rich and poor - the biblical economic structure
• " 行公義、好憐憫 " 的新經濟結構
• 房地產非理性飆漲問題要如何解決？聖經中上帝已經告訴我們答案了!!
• 如何解決 " 人造的金融市場的複利災難 " ? (Part 1)

[English Translation] The JUST Economy with MERCY: Way to solve the gap between rich and poor - the biblical economic structure

CROSS Capital Group view that mainstream economic theory has been developed based on maximizing individual’s profits, and is assumed that all humans are always responding with "profit maximization”. Such concepts are continuously reiterated in textbooks and introducing us "people of rational reactions are based on maximizing individual’s own profit". Therefore we are taught to maximize our own profit as a starting point, whenever we are making a decision. This brought in tragedies for human beings such as "Selfishness" and "Competition".  We are taught "to be outstanding, to be the strongest in order to survive; never be a loser at the starting point ". On the other hand, none teaches us "mutual cooperation" is the therapy for the society to survive. ”Selfishness and Competition" only bring in disputes among different groups and making resources been monopolized by a minority.

Continually financial crisis are due to the greed came along with "Selfishness". However, the governments of many countries attempted to save the economy based on the theory been built on selfishness, and are unaware that this will only make the poor even poorer and the rich get richer.

To solve the today’s economic problems, it needs an economic theory based on "mutual cooperation”: The most valuable reference for the economic system is in the old testament of Bible. Lord of Israel has enacted laws for Israel people to comply with, which also includes the economic structure and rules, from which can be observed that GOD has provided equal opportunities for his people’s development, but still the results will have rich and poor respectively (For there are many reasons and cannot be explained in short discussions here); this is also the idea of "Not being a-treated to achieve equality, but rather to provide equal access to development opportunities", which is proposed by China’s national father Sun Yat-sen who used to read Bible diligently.

Even provided equal opportunities of development, it still will have rich and poor. But GOD said "The rich are responsible for taking care of the poor ", which is more important. And when Jubilee (the fiftieth year) comes, all resources are reset, people are returned to their original points (that is land should return to original sellers, wealth will be restarted, and all return to equality), to develop the next 50 years. GOD has specified a period of time (per fifty years) when the wealth will be reset for all. Everyone becomes the same, to re-develop, to let the poor have a chance to get back resources and to restart.

This economic system has not only the characteristics of free development in "Capitalism", but also the principle of even distribution of resources in "Socialism". In other words, at the beginning, all people are distributed with equal resources (the principle of Socialism); once the distribution has been finished, it then comes to the stage of free development, some people might become rich while the others might become poor (the characteristics of Capitalism), but the rich has "obligations" to take care of the poor (the principle of Socialist), therefore it has both the “Free development opportunities in Capitalism” and “Obligations to take care of the weak in Socialism" during the period of free development. After 50 years of free development, wealth for all will be reset and back to the equality and bring in a restart. While people have accumulated some experiences from the previous 50 years, everyone will be enhanced and improve in next 50 years. When people learned experiences from previous 50 years, the gap between rich and poor will become smaller and smaller naturally in following 50 years, and it continues so on and so on. Please look at the below diagram for illustration:

However, in today’s world, human beings are not able to achieve the rules enacted by GOD. Do we have other close approaches to narrow down the gap between rich and poor? Yes!! We can start from each individual, and to play a role of "resource distributor", namely to make a good allocation of our wealth to help other people in order to build a Justice Economy with Mercy: a biblical economic structure with “to do justly, and to love mercy ".

As for how to properly allocate the wealth of individuals, please read the next article:  Just Economy with Mercy - a biblical economic structure with “to do justly, and to love mercy".