Part 2 – The Sins of our Financial System

The first part of this series described what money is and how our modern financial systems work through fiat money, fractional reserve banking, and inflation.  This second part continues, showing these things to be sin when looked at through the light of scripture.

The 8^th Commandment states Thou Shalt Not Steal (Ex. 20:15). This commandment, written by God on stone tablets, presupposes and establishes the right of personal property. Without the existence of personal property, the prohibition of taking something that does not belong to us would be nonsense.

The Reformed exposition of this short four-word command is much deeper than a simple prohibition of taking that which is not ours. The Westminster Divines recognized that each commandment included duties required and sins forbidden (see WLC question 99). In expositing the 8^th commandment (WLC Q140-142), the Westminster divines state:

Q142: “. The sins forbidden in the eighth commandment, besides the neglect of the duties required, are, theft, robbery, man-stealing, and receiving any thing that is stolen; fraudulent dealing; false weights and measures; removing landmarks; injustice and unfaithfulness in contracts between man and man, or in matters of trust; oppression; extortion; usury; bribery; vexatious lawsuits; unjust enclosures and depopulations; engrossing commodities to enhance the price [monopolies or cornering], unlawful callings, and all other unjust or sinful ways of taking or withholding from our neighbor what belongs to him, or of enriching ourselves; covetousness; inordinate prizing and affecting worldly goods; distrustful and distracting cares and studies in getting, keeping, and using them; envying at the prosperity of others; as likewise idleness, prodigality, wasteful gaming [gambling]; and all others ways whereby we do unduly prejudice our own outward estate, and defrauding ourselves of the due use and comfort of that estate which God hath given us.” (Westminster Larger Catechism, 1647)

From the opening discussion, how many of the sins summarized in the 8^th commandment do fractional reserve banking and fiat money commit? How many more do our modern economic and monetary system violate?

Theft… receiving anything that is stolen…fraudulent dealing… false weights and measures…injustice and unfaithfulness in contracts…usury…bribery…engrossing commodities to enhance the price…wasteful gaming.

Fiat money is a false weight and measure while inflation and fractional reserve banking creates injustice and unfaithfulness in contracts and are designed to drive us and our fellow citizens into perpetual debt slavery which is man-stealing.

There are no federal usury laws in America. Under a federal system, this should not be an issue, with that power being delegated to the states. However, the states are not doing their responsibility either. For undocumented loans, interest rates are limited to 5-15% Annual Percentage Rate. For documented loans, those agreed to in writing, there is no limit because it is assumed the debtor has read the terms, understood and agreed.

Under the auspices of protecting the consumer, the Truth in Lending ACT mandated Annual Percentage Rate (APR) in a standardized format. But is not enough information and shifts attention away from what is important. A 5.3% APR over one year is not usurious. However, 5.3% over 30 years means paying $300k for a $150k house and that is usurious interest when considered by volume. Would the American consumer still pay the same prices if they understood the true cost? At the very least, those making $50,000 a year would not be buying $50,000 cars on 84-month notes.

The demand side economics encouraged by Keynesians discourages frugality and encourages debt slavery, which is the opposite of good stewardship taught in scripture.  The fallacy of the paradox of thrift is central to the Malthusian, pro-eugenics, anti-Christian philosophy of John Maynard Keynes and the economic theory he developed. The government, enraptured by these foolish ideas, gives out stimulus checks and reduces interest rates in order to “stimulate” the economy. Both of which cause inflation, transferring wealth from the people to the bankers and their mercantilist colleagues and insiders.

Inflation is not the only theft perpetrated by our nation’s financial system. Our modern welfare state takes from one, by threat of force or intimidation, and redistributes it to another. Some of it as individual welfare, some of it as corporate welfare. That taxes are imposed by force and intimidation is underscored by the fact the IRS owns 4,600 firearms and 5 million rounds of ammo for enforcement of its regulations (Pavlich, 2021). In unjust taxation for purposes outside its authority, the state commits robbery against its citizens and those receiving the welfare receive that which is stolen.

Much of our confiscatory taxes are wasted in wealth transfers from the citizens and sold as a withholding of money set aside for our future benefit.  Social Security tax is nothing more than a Ponzi scheme.  The “trust fund” is expected to be insolvent by 2035. (Paul, 2025)  This is because there is no “trust fund.”  The Social Security tax that is withheld is not set aside in an account against our social security number, growing at interest, to provide for our future needs.  Money is fungible.  These tax dollars are spent on any and every government program as legislators decide.  Instead, benefits are provided not by withdrawal from a fund but through direct transfers of wealth.  Today, for every person receiving social security benefits it takes the “withholding” of 2.8 workers to provide the benefits.  This is down from 5.1:1 in 1960 and expected to reach 2:1 by 2050 (Peterson Foundation, 2022)

Social Security and every other form of government welfare amounts to “withholding from our neighbor what belongs to him, or of enriching ourselves” by the power of the vote.  All while encouraging “idleness and prodigality” instead of responsible stewardship for our own future provision. It also encourages “inordinate prizing and affecting worldly goods” discouraging us in our Christian duty of charity because the government is taking our money and redistributing it, individuals feel the mandate of charity is fulfilled.  As James Madison said “charity is no part of the legislative duty of government.”

Even the approved forms of saving – stock market participation – fall short, reflecting another sin: ‘wasteful gaming.’ Far from prudent investing, this system ensnares individuals in speculation.

Conventional financial wisdom promotes plans like 401(k)s, IRAs, and 529s as tax-advantaged “savings” for retirement or education. Yet, these benefits come at a cost: the government taxes earnings later, offsetting initial relief, while inflation erodes what remains. Individuals surrender control, locking funds into vehicles they cannot access without penalties and taxes, leaving many reliant on credit for emergencies.

Gerhardus Vos, in his commentary on the Westminster Larger Catechism, writes that “by ‘wasteful gaming’ the catechism denotes all forms of gambling, which are inherently sinful”  due to the reliance on chance over stewardship. Gambling involves “an activity characterized by a balance between winning and losing, governed by a mixture of skill and chance,” whereas investing entails “allocating resources, typically money, with the expectation of generating income or profit over time.” Stock market participation, despite being framed as investing, often aligns more with gambling’s dependence on unpredictable outcomes than with the diligent, controlled resource management scripture demands.

Many equate stock market participation with saving, yet every prospectus warns, “Past performance is not indicative of future results.” This disclaimer underscores its speculative nature. Contrary to the advice of Warren Buffet, who recommends buying businesses not stock, retail investors buy stocks hoping prices rise, driven by market sentiment rather than company fundamentals. Instead, many may opt for mutual funds, believing expert management makes it less speculative. There is an air of science behind the allocation of stocks in the fund, a psychological buffer that it is not them doing the speculation, an expert is, and they give that expert a fides implicita (implicit trust). If someone gives their equestrian expert friend $100 to bet on races on their behalf, they are still gambling despite not personally placing the wager. 

Further, there is “a myth popular among…non-Austrian economists…that investing can be reduced to an automated, mathematical exercise in diversification and statistical measurement of cyclical risks (e.g., the capital asset pricing model).” (Cook, 2025).  Monte Carlo simulations for portfolio performance and “probability of success”, calculated by a financial firm’s proprietary software, are nothing more than the gambler’s fallacy wearing a lab coat.  It is marketing designed to make the client forget the previously mentioned disclaimer.

There is one rule regarding gambling. The house always wins. With the stock market, the house is the financial industrial complex, aided and abetted by politicians, government agencies and, of course, the Fed. In a 2009 interview with Steve Forbes, founder of Vanguard Investments, John Bogle, noted

“It turns out that you [the retail investor], who put up 100% of the capital, you took 100% of the market risk, are getting about 25% of the market’s return. And the croupiers, who of course put up 0% of the capital and took 0% of the risk are getting 75% of those compounded, long-term returns.” (Bogle, 2009)

The stock market was created to allocate capital, not to provide growth of wealth for the individual or provide passive income and allow us to become rentiers.  The financial industrial complex, aided by the government, encourages using the market for purposes other than it is designed.  Individuals tethered to this system see their access to capital shrink and their dependence on banks increased.

If these things harm ourselves and our neighbor, is it loving our neighbor to participate? Are those who participate not complicit in these things? If there was a way to resist these evils, would it not be our Christian duty to do so?  

Our Christian Duty

What is the standard our financial system and stewardship should be measured against?  What is our Christian Duty with regard to economics and what should we be striving for?

Before considering the solution, a wiser system that is consistent with Christian values and Biblical principles, let us return to the Westminster Divines exposition of the 8^th commandment, specifically the duties required.

Q141: “The duties required in the eighth commandment are, truth, faithfulness, and justice in contracts and commerce between man and man; rendering to everyone his due; restitution of goods unlawfully detained from the right owners thereof; giving and lending freely, according to our abilities, and the necessities of others; moderation of our judgments, wills, and affections, concerning worldly goods; a provident care and study to get, keep, use, and dispose of those things which are necessary and convenient for the sustentation of our nature, and suitable to our condition; a lawful calling, and diligence in it; frugality; avoiding unnecessary law-suits, and suretyship, or other like engagements; and an endeavor, by all just and lawful means, to procure, preserve, and further the wealth and outward estate of others, as well as our own” .” (Westminster Larger Catechism, 1647)

“The general scope of the eight commandment is respect for the sanctity of property… Property or wealth is created by God and entrusted to man for his use in glorifying and serving God.  It is therefore a stewardship committed to man and for this reason must be respected.  Thus, the eighth commandment requires not only that we refrain from stealing our neighbors property, but that we acquire and take care of our own” – Gerhardus Vos (Vos, 2002)

In question 141 we find a comprehensive list of what it means to “love our neighbor as ourselves” (Matthew 22:39, Mark 12:31, Luke 10:27) in the context of money, private property, and providing for our needs.

It is not just enough to not steal; we have a duty to protect our neighbor’s property as well as our own.  We have a duty to be charitable and not miserly and selfish.  We have a duty to procure, preserve and further the wealth and outward estate of others as well as our own.  This means we have a duty to not work against them contributing to their loss of purchasing power through inflation caused by fiat money and fractional reserve banking.

If our current construct is inherently sinful as the Reformed tradition posits, then an alternative is to be sought if not demanded. And this is what will be proposed in the third and final part of this series.

If you’re ready to secede from the evils of central banks and fractional reserve banking, or just want to learn more, click to book a free call with an advisor today.

Semper Reformanda

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