Audio - 20 Jan 2018

Latest Audio - 2018-01-20

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World Tomorrow
by Mr Armstrong
Christ's Parable, continued
given 13 June 1979 played Wales 20 Jan 2018
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by Jon Bowles
Succeeding In The Doldrums
given Wales UK 20 Jan 2018
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News Review - 19 Jan 2018

Fractional Reserve Banking… Leverage… Financial Crises… A world in debt… Credit Card Debt… National debt… Late-cycle liquidity… Bubbles… Negative yields… Usury…
Are we living in the age of


“Children in a local school here in the UK are being taught the value of money. They have their own bank, their own currency and their own shop. They are being taught that they need to work to earn money, and then they are rewarded. They have a student ‘bank manager’, Lily, who explains what her job entails. ‘I need to look after everyone’s money to make sure that nothing goes wrong with it’!” (

If only it were true – that the banks are there to look after our money. As we look into how the banks operate, a different reality emerges. In his autobiography, Mr Herbert Armstrong quoted the then well-known statistician Roger Babson:

If I want to know what the temperature is, now, in this room, I go to the wall and look at the thermometer… But if I want to know what the temperature in this room is going to be, an hour from now, I go to the source which determines future temperatures – I go down to the boiler-room and see what is happening down there. (The Autobiography - Chapter 12)

So let’s go down to “the boiler room”, to see how our financial system operates.

The Magic Of Banking

What we find down in the “boiler room” is very interesting. The system of banking which we have today was apparently started by the goldsmiths and the money changers, as the following article points out:

‘The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented… The bankers own the earth. Take it away from them, but leave them the power to create money, and with the flick of the pen they will create enough deposits to buy it back again… If you wish to remain the slaves of bankers and pay the cost of your own slavery, let them continue to create money.’
Sir Josiah Stamp, Director of the Bank of England, 1928-41

“…the fact that the institutions involved, though they may have started as nefarious enterprises, have acquired great size and with it respectability. While the top executives of an investment bank may deceive and cheat on a global scale and exert silent power on elected governments, the line managers and rank and file have no awareness of this, and present to the public a face of helpfulness and integrity.

To understand what [Sir Josiah] is saying, one must first have a minimum knowledge of how banks function in creating money out of nothing.

Modern banking began almost accidentally, when goldsmiths realised that the receipts they had given for goods in their safekeeping were circulating commercially as money. Before this, there was no banking profession as such, for money changers would exchange money and goldsmiths would make things out of gold, and both would make loans on an individual basis, as a profitable sideline.

Once the money changers caught on to the fact that a goldsmith’s receipt was accepted as proof of ownership, whether or not there was gold in their strong room to back it, banking took off.

The essential magic of banking is unknown to the public, most of whom think that banks merely lend on to borrowers money that has been deposited in the bank by savers, but at a slightly higher rate of interest. The reality, and the very essence of banking, is the goldsmiths’ original deception of issuing money against assets that do not exist. As John Kenneth Galbraith put it, ‘The process by which banks create money is so simple the mind is repelled.’

On the basis of having a small amount of assets and a government licence, the bank effectively issues a phoney note, like the goldsmiths of old, although today, it is only a book entry, which is converted into a bank cheque which the borrower is able to exchange for anything he or she wishes.

If by some imagined stroke, all the loan money in circulation were paid back to the banks overnight, there would be virtually no money in circulation, and trade and business would dry up. That is the black magic side of banking, which is today sending the economic world into spasm.” (

Fractional Reserve Banking

“Fractional reserve banking, as it was taught to many of us in school, is a system whereby a bank can lend out a portion of the money it has on deposit, keeping only a fraction of it as a reserve, hence the term ‘fractional reserve banking.’ The reserve is intended to cover the occasions when people with deposits want to take the money back out of the bank.

To demonstrate fractional reserve money, we’ll look at a simple theoretical example. We’ll lump all banks into one and just work with ‘the bank’.

We start from zero and suppose that Alice comes into the bank and deposits $100,000 in currency. The bank now has $100,000 on deposit of which it can lend out 90% or $90,000.

The bank lends $90,000 to Pete. Pete pays the $90,000 to Joe for a boat, and Joe, rather than carrying $90,000 around in a brief case or putting it under his mattress, deposits it in the bank.

Here’s where it gets interesting.

At this point the bank has $190,000 in deposits, and it considers the new deposit brand new money. Therefore it’s free to lend out 90% of this new deposit. It now lends $81,000 to Fred, which Fred pays to Lois for design and decorating services for his business office. Lois, of course, deposits the $81,000 in the bank. Once again, the bank considers it has brand new, fresh, debt-free money on deposit. Now we have:

  • Alice: $100,000
  • Joe: $90,000
  • Lois: $81,000
  • Total: $271,000

By these three steps, the money supply has gone from $100,000 to $271,000.

Note that Alice, Joe, and Lois all consider the money they have on account is their own money with no strings or debts attached. Pete and Fred may be making or not making monthly payments on their debts, but with regard to Joe’s and Lois’s deposits, that’s no concern of the bank and no concern of the account holders. As far as they’re concerned, that money is real money, free and clear.

If you continue this process until the re-deposited amount gets down to near zero, eventually $100,000 currency turns into about $1,000,000. The process creates $900,000 of debt money out of $100,000 currency. Thus we get a money supply that is 90% debt-based and 10% currency.

There are a few major problems with this method of creating money. The most obvious is that it requires that people be in debt in order for the economy to have any money. What if people get tired of being in debt and start paying it off?” (


Not only do the banks lend out money which they create out of thin air, they then charge interest on it! So if they charge 5% interest on $900,000 over one year, they make $45,000 profit! Up the figures to the kind of volumes which banks work with, if they create $90 million, then the profit is $4.5 million. Add to this fees for overdrafts and charges for exceeding your limit and banking is a very lucrative business!

Usury - Contrary To The Law Of God

Mr Armstrong explains:

“Then we have developed a human system of economy. Now the economy is in trouble all over the world right now; and man has nothing but problems and troubles with the economic system he’s developed, because it is false.

It’s man-devised and Satan-influenced.

God’s way denies interest or usury on loaning money; but the whole world’s system is based on usury and interest.” (Sermon - October 17, 1981)

Lethal Link: Leverage

“Borrowing and lending are as ancient as commerce, and leverage today is a key component of the toolkit for business. Leverage enables a corporation to make investments or incur expenses it would not otherwise have been able to undertake based on its owners’ resources.

Whenever a financial crisis erupts around the world, the fingerprints of leverage are always to be found. Society and its political and business leaders would do well to understand that crisis and leverage are closely linked, as history has shown us time and again, and that this link can be lethal if limits to leverage are not urgently evaluated and implemented.” (

Tracking Leverage

“In the day to day operations of a bank, transactions are happening all the time. Money is coming in and money is going out. People make deposits and withdrawals, and the bank makes loans. How then is the bank supposed to keep track of how much money they’re allowed to lend?

In reality they don’t exactly bother keeping track of it. The loan officers don’t sit watching a computer screen waiting for vault cash to reach a certain level before making a loan. They just lend money according to whatever plan or promotional offer they have going at the time.

At the end of the day or end of the week, the bank tallies up to see if they have reserves equalling the required percentage of their deposits. If they don’t have the required reserve amount to balance against the money they already ‘loaned’ that wasn’t there, what they do to fix that is they borrow it. They borrow it from another bank that has excess reserves or they borrow it from the Federal Reserve Bank. So really for all practical purposes, the banks are creating new deposits out of nothing and then making the numbers meet the rules.(

Leverage Lunacy 2007–2009

“Consumers in the United States and many other developed countries had high levels of debt relative to their wages, and relative to the value of collateral assets. When home prices fell, and debt interest rates reset higher, and business laid off employees, borrowers could no longer afford debt payments, and lenders could not recover their principal by selling collateral.

Financial institutions were highly levered. Lehman Brothers, for example, in its last annual financial statements, showed accounting leverage of 31.4 times ($691 billion in assets divided by $22 billion in stockholders’ equity). Bankruptcy examiner Anton R Valukas determined that the true accounting leverage was higher: it had been understated due to dubious accounting…” (

Germans Prefer Cash – Why?

“In 2013, only 18% of payments in Germany were made via cards, compared to 59% in the UK - and this is why. With endless payment options from contactless to instant payments available in the western world, why is it that Germans insist on managing all their transactions in cash?

Compared to Australia, the US, France and Holland, wallets in Germany and Austria hold nearly twice as much cash - on average $123 more - and roughly 80% of all transactions in Germany are conducted in cash.

But what’s the obsession with cash all about?

Managing in cash helps protect you from debt - if you don’t have it, you can’t spend it - and unsurprisingly, statistics show that levels of consumer debt in Germany are remarkably low, compared to that of Europe. Just 33% of Germans said they had a credit card back in 2011 - the majority of which were left untouched.

But an aversion to debt is not necessarily positive. The German population’s risk adverse attitude towards mortgage debt is part of the reason why the country has some of the lowest home ownership rates in the developed world.

But is there a deeper explanation? Other explanations attribute the cash phenomena towards a greater value of privacy, however take a look into the financial history of Germany - and other factors come into play.

Hyperinflation over the Weimar-era saw prices in Germany rise roughly a trillion-fold, to the extent that a loaf of bread cost 428 billion marks and a kilo of butter 6 trillion.

Circulation of money rocketed, and banknotes were being overprinted to a thousand times their nominal value and every town produced its own promissory notes; many banks and industrial firms did the same.

It’s not hard to understand why people in countries that have suffered a banking crisis quite sensibly prefer to save in cash - rather than put money in the bank.

For much of the last century, Germany has been either on the brink of, in the midst of, or struggling to recover from disaster - and such trauma could understandably lead to such an attitude towards money.” (

The Real Bubble – The Global Financial System

“This leviathan now stands at around $233 trillion, or 318 percent of global GDP. Even more troubling, an estimated $11 trillion of government debt now trades at negative yields. This means whoever is buying this paper is doing so despite the fact they are guaranteed to lose money on the ‘investment.’

Much of this buying has been propelled by central banks which can print their own currency and buy debt indiscriminately. This is not characteristic of a healthy financial system (particularly so many years into a global recovery), but rather a zombie one that’s been artificially propped up since the financial crisis.” (

Who Scores?

Total world debt is a staggering $233 trillion. At 5% interest, that’s around $11.65 trillion in interest. And that goes mainly to the banks!

We ARE living in the age of financial insanity…

And there is a price to pay!

Insanity is a legal term pertaining to a defendant’s ability to determine right from wrong when a crime is committed. It is referred to as: “…a mental illness of such a severe nature that a person cannot distinguish fantasy from reality”. (

The banking industry seems to have a hard time sorting out right from wrong, fantasy from reality. This world’s financial system appears to be a mammoth criminal cartel. To create money out of thin air is a crime – it’s theft – plain and simple. To then lend that money out and charge interest, or usury, compounds the crime.

The money you have in the bank is simply a number. If we all go to the bank to claim our cash back – the bank will be bankrupt!

Modern banking might present to the public a face of “helpfulness and integrity”, but it is possibly the biggest criminal cartel – ever!

God warns modern day Israel through the prophet Ezekiel…

“You have despised My holy things and profaned My Sabbaths …you take usury and increase; you have made profit from your neighbors by extortion, and have forgotten Me, says the Lord God …I will scatter you among the nations, disperse you throughout the countries, and remove your filthiness completely from you” (Ezekiel 22:8,12,15 New King James Version).

Pastors Report - 12 Dec 2018

Frail Men - Leading Nowhere!

For the leaders of this people cause them to err; and they that are led of them are destroyed." (Isaiah 9:16)

Who is This?

I wonder if you can guess who was the writer of the following rather traditional 'christian' explanation? It was written by a well known individual in his early youth under the rather untidy title, "Unity of believers in Christ according to the Gospel of John 15:1-14: Unity’s meaning, unconditional necessity, and influence." ....

"Union with Christ is found in a close and living fellowship with Him and in the fact that we always have Him before our eyes and in our hearts. And at the same time that we are possessed by the greatest love of Him, we direct our hearts to our brothers, with whom He bound us closely, and for whom He sacrificed Himself. ... Therefore, unity with Christ internally exalts, comforts in trials, and makes the heart open to love people, not because of our pride or thirst for fame, but because of Christ."

Although you would not think it, the author of the above passage was actually Jewish in ancestry – the son of two Jewish parents – with rabbis on both sides, going back many generations. However, at the time it was written he was attending a 'christian' school. His father had nominally converted from Judaism to the Protestant denomination of Lutheranism just before the writer was born, to continue working as an attorney in Prussia after an edict excluded Jews from the legal profession in the early 1800s. The name of the writer was Karl Marx. And as you almost certainly know, he later went on with Friedrich Engels to write a political manuscript that has influenced several billion people across the world for well over a century: The Communist Manifesto. Yet, as you can see, it seems he was not always such a virulent atheist!

Human Ideas Change:

The thing to keep in mind when reading the above example, is just how transitory our frail human ideas really are. As Heraclitus – a Greek philosopher of around 500 BC – observed, "You cannot look twice at the same river; for fresh waters are ever flowing in." For it is only when we firmly grasp the truism – that in this physical world the only thing constant is change – do we begin to see through so many firmly held, but merely human, beliefs and practices. From Hitler's Mein Kampf, to Chairman Mao Tse-tung's Little Red Book, to the ideas of Sigmund Freud and the economics of John Maynard Keynes to Charles Darwin's book, "On the origin of species" – they all hold one thing in common: they remain founded on the shifting sands of concepts of men.

Yet that does not lessen their influence and effect. For example, there have been – and are today – some incredibly detrimental changes that are taking place within our western society – orchestrated very much by the ideas that flow from Marx and Engels' Communist Manifesto. The level of change here has been absolutely astounding - destroying our families, business and culture at an unprecedented rate. But, as we can see from the above quote, Karl Marx's ideas must have undergone some quite profound destruction themselves - compared to his original thinking – before arriving at the conclusion in 1843 that, "Man makes religion, religion does not make man. ... Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people."

Traditional Religion:

It appears that Marx saw through the shell of traditional religious thought. Traditional religion – as practised by the world – is indeed the opium of the people, and it's understandable that it is rejected by thinking individuals. Such religions are largely man-made – to the degree they divert from the Biblical standard – but in just the same way, so is Marxism. Marxism too is just one more failed human system. Note what Lenin expressed about the Soviet state – run entirely on Marxist lines – in his Report to The Central Committee Of The The Eleventh Congress held in Moscow 27th March 1922:...

"Well, we have lived through a year, the state is in our hands; but has it operated the New Economic Policy in the way we wanted in this past year? No. But we refuse to admit that it did not operate in the way we wanted. How did it operate? The machine refused to obey the hand that guided it. It was like a car that was going not in the direction the driver desired, but in the direction someone else desired; as if it were being driven by some mysterious, lawless hand ..."

His Personal Life:

Did Marxism give Marx what he was looking for? We only need peek at the personal tragedy in his life to see it did not. Of his 7 children, only 3 daughters survived to adulthood .... and then two of them and a son-in-law ended their lives in suicide. When his young son, Musch, died, Marx told Engels, “I’ve already had my share of bad luck, but only now do I know what real unhappiness is. I feel ­broken down.” Having left his "opium of the people" what was left? His helpless feelings can be seen in stark clarity when he finally faced his own death: He then wrote to Engels in March 1883, "How purposeless and empty life is, but how desired". A futile end based on a futile philosophy that over the past century has caused untold suffering across the world – and still does today - even here in our own societies. Well did God write:

  • Hath a nation changed their gods, which are yet no gods? but my people have changed their glory for that which doth not profit.
  • Be astonished, O ye heavens, at this, and be horribly afraid, be ye very desolate, saith the LORD.
  • For my people have committed two evils; they have forsaken me the fountain of living waters, and hewed them out cisterns, broken cisterns, that can hold no water. (Jeremiah 2:11-13)
The World's True Rock:

And yet, there is hope. Marx was a Jew and as the One who became Jesus Christ – the Eternal – says to the Jewish nation:

  • For I know the thoughts that I think toward you, saith the LORD, thoughts of peace, and not of evil, to give you [a future and a hope].
  • Then shall ye call upon me, and ye shall go and pray unto me, and I will hearken unto you.
  • And ye shall seek me, and find me, when ye shall search for me with all your heart.
  • And I will be found of you, saith the LORD: and I will turn away your captivity, and I will gather you from all the nations, and from all the places whither I have driven you, saith the LORD; and I will bring you again into the place whence I caused you to be carried away captive. (Jeremiah 29:11-14)

What these people will need at that time – and what we in God's church should now be learning – is something radically different from any ideas of mere men. After all, a slightly modified version of Marxism, Republicanism, Liberalism – or any other 'ism – would remain rooted in the sands of human frailty with the only constant being change. This is why Christ says what He does – not mincing His words – as He closes the sermon on the Mount:

  • Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock:
  • And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell not: for it was founded upon a rock.
  • And every one that heareth these sayings of mine, and doeth them not, shall be likened unto a foolish man, which built his house upon the sand:
  • And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell: and great was the fall of it.
  • And it came to pass, when Jesus had ended these sayings, the people were astonished at his doctrine:
  • For he taught them as one having authority, and not as the scribes. (Matthew 7:24-29)
The Spirit of the Law:

What He had been saying just prior to this section of Scripture was to outline the new covenant application of God's law. It was to convey the principal, the very spirit behind the word of God – that would then apply to every facet of our existence – indelibly writing those words in the inward parts, on the very heart as is described in Jeremiah:

  • Behold, the days come, saith the LORD, that I will make a new covenant with the house of Israel, and with the house of Judah:
  • Not according to the covenant that I made with their fathers in the day that I took them by the hand to bring them out of the land of Egypt; which my covenant they brake, although I was an husband unto them, saith the LORD:
  • But this shall be the covenant that I will make with the house of Israel; After those days, saith the LORD, I will put my law in their inward parts, and write it in their hearts; and will be their God, and they shall be my people.
  • And they shall teach no more every man his neighbour, and every man his brother, saying, Know the LORD: for they shall all know me, from the least of them unto the greatest of them, saith the LORD: for I will forgive their iniquity, and I will remember their sin no more. (Jeremiah 31:31-34)

The application of these words into daily life is likened by Jesus Christ to a rock-solid foundation – because the words involved are not from any human source. Anything less is no better than Marx. But these words are not merely another 'ism rooted in the sands of human frailty as the myriad of alternatives are. The Source itself is utterly rock-solid. It doesn't change. It remains the same yesterday, today – and forever (Hebrews 13:8) And it is THAT word that not only needs to be found within our hearts – as God's people – but its application clearly evident in our daily lives as well ... ready within our mouths to be effectively taught when the time comes, because being called at this time is for that incredible responsibility, and not merely for our own benefit.

Teaching God's Words:

From the very beginning, God's desire and plan was for His way of life to be taught within the family, from generation to generation. This can be clearly seen in Deuteronomy chapter 6 – and remember, that the words being referred to here have not come from a man. Once again they have been generated by that rock-solid Source that, unlike man, does not need to change:

  • And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might.
  • And these words, which I command thee this day, shall be in thine heart:
  • And thou shalt teach them diligently unto thy children, and shalt talk of them when thou sittest in thine house, and when thou walkest by the way, and when thou liest down, and when thou risest up.(Deuteronomy 6:6,7)

The priesthood also was raised up for that very purpose – to guide and teach the people – once again using this rock-solid Source of God's word. And what are we, in God's church today, but kings and priests in training:

  • And ye shall know that I have sent this commandment unto you, that my covenant might be with Levi, saith the LORD of hosts.
  • My covenant was with him of life and peace; and I gave them to him for the fear wherewith he feared me, and was afraid before my name.
  • The law of truth was in his mouth, and iniquity was not found in his lips: he walked with me in peace and equity, and did turn many away from iniquity.
  • For the priest’s lips should keep knowledge , and they should seek the law at his mouth: for he is the messenger of the LORD of hosts. (Malachi 2:4-7)
A Kings Responsibility:

King David realised, that as a king, one of his primary responsibilities was to teach his people – using not his own words, but once again this rock-solid Source:

  • Sacrifice and offering thou didst not desire; mine ears hast thou opened: burnt offering and sin offering hast thou not required.
  • Then said I, Lo, I come: in the volume of the book it is written of me,
  • I delight to do thy will, O my God: yea, thy law is within my heart.
  • I have preached righteousness in the great congregation: lo, I have not refrained my lips, O LORD, thou knowest.
  • I have not hid thy righteousness within my heart; I have declared thy faithfulness and thy salvation: I have not concealed thy lovingkindness and thy truth from the great congregation. (Psalm 40:6-10)

Old Testament Israel would have benefited incredibly, albeit just physically, if they had indeed passed on the law, the statues and judgements to their children. But their hearts were not in tune with God ... they were unconverted. But to us today, spiritual Israel, we have been given the promise that if we receive the love of the truth, then not only will we be teachers in the coming Kingdom of God, but so will our "seed"...our children and grandchildren:

  • As for me, this is my covenant with them, saith the LORD; My spirit that is upon thee, and my words which I have put in thy mouth, shall not depart out of thy mouth, nor out of the mouth of thy seed, nor out of the mouth of thy seed’s seed, saith the LORD, from henceforth and for ever. (Isaiah 59:21)
The White Throne Judgement:

Each year we close the Holy Day season with the Last Great Day. This final festival pictures the time when the majority of this world will have their first chance to understand God's Truth – yes, including the followers of Marxism and Leninism ... and every other 'ism in the world – including those today who are being led by the nose to their end-time destruction. All will eventually rise in the Judgement and at long last be given their real God-designed hope and purpose in life. It's then that they will at last be shown the only true hope and purpose they have been searching for in futility – taught finally by the teachers God is currently training through His Plan:

  • Then he said unto me, Son of man, these bones are the whole house of Israel: behold, they say, Our bones are dried, and our hope is lost: we are cut off for our parts.
  • Therefore prophesy and say unto them, Thus saith the Lord GOD; Behold, O my people, I will open your graves, and cause you to come up out of your graves, and bring you into the land of Israel.
  • And ye shall know that I am the LORD, when I have opened your graves, O my people, and brought you up out of your graves,
  • And shall put my spirit in you, and ye shall live, and I shall place you in your own land: then shall ye know that I the LORD have spoken it, and performed it, saith the LORD. (Ezekiel 37:11-14)

Teacher training – it is a job that starts in the family....teaching our little children the right way of life, so they can teach theirs, and then, if our hearts are right, we are then able to teach within the millennial rule, then the Judgement Period ... and eventually out into eternity and to whatever reality God determines there will be. But the word being taught – the word found within our mouths – must not be our own, nor those of any mere man, but those words that form the rock-solid foundation of Almighty God, and words that will bring – at long last – real stability to mankind.

  • The LORD is exalted; for he dwelleth on high: he hath filled Zion with judgment and righteousness.
  • And wisdom and knowledge shall be the stability of thy times, and strength of salvation: the fear of the LORD is his treasure. (Isaiah 33:5,6)
  • And I have put my words in thy mouth, and I have covered thee in the shadow of mine hand, that I may plant the heavens, and lay the foundations of the earth, and say unto Zion, Thou art my people.(Isaiah 51:16)
Transcript - 12 Nov 2017
Mr Armstrong

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“Just what is an APOSTLE?”
Just what is an Apostle?

Today we find the Church of God in a “wilderness of religious confusion!”

The confusion is not merely around the Church – within the religions of the world outside – but WITHIN the very heart of The True Church itself!

Read online or contact email to request a copy

Listen to Me, You who know righteousness, You people in whose heart is My Law: …I have put My words in your mouth, I have covered you with the shadow of My hand, That I may plant the heavens, Lay the foundations of the earth, and say to Zion, “you are My people” (Isaiah 51:7,16)