Is This the Start of the End or a Prelude?

There are only a few musicians whose works can move my inner emotions in a unique way: Johann Sebastian Bach and some of the visually stunning songs of Bob Dylan. 

IIn particular, Bach’s organ Sonata No 4 in E Minor (BWV 528) and the Toccata-Adagio-Fugue reminds one of long forgotten Bach’s organ pieces which I used to listen in my thirties. 

“Listen here,” Bach seems to say, “Look over here, my fellow man, when our beloved Creator made up his mind to create the world. The horizon is totally dark for some time and then suddenly the Creator lifted his hands slowly to the horizon with these words: “Let there be light.” And this primeval time was way before man was created.”

With the creation of man, the trouble in the Heavens started. It was said that the archangel Luciel was so jealous about God’s new creation that he tried to stage a coup against the Father and was naturally evicted from Heaven.

Even since, Lucifer (his more well-known name) has been plotting and creating havoc on earth, agitating man to fulfil his tireless hunger to kill, steal and destroy. 

And here we are in 2020, the first year of a new decade. Before the year could even get going, an epidemic in China quietly morphed into a pandemic across the hemispheres within four harrowing months. 

Rarely has any year started with a heavy sense of foreboding. By April, the new IMF chief declared that the world economy will enter an unprecedented recession not experienced since the Great Depression of the 1930s. Nearly 3 million virus-related deaths and 203,922 infected cases, rising each day so says the worldometer.

This brings one to the music of JS Bach. One evening in lockdown at home, I came across by accident, a piece that hailed from my childhood in Paris: the organ version of the Adagio in D minor which Bach transcribed from Allesandro Marcello’s Oboe Concerto. This one speaks of the human emotions of sadness, love and the passage of time.

Why does the lockdown in our nation and across the silent cities of the world bring so many memories & thoughts as if they were locked up in time? 

When I drive through the deserted streets of KL with only one or two passer-by wearing face masks, anxiously rushing into a building or a corner, it reminds me of the sepia-colored paintings of surrealist Giorgio de Chirico. 

The melancholia induced from looking at these city streets and listening to Bach is strangely beautiful. As if the world has came to a stop, not from governmental edict or royal decree but from the powers of Providence. 

These deserted streets have the look of a city bereft of all residents or one where people are sheltered in their homes to escape from the coronavirus.

There is such a thing in music called a prelude. It is usually a short composition that precedes another composition that is broader in scope and of higher importance. 

So the coronavirus pandemic, in all its mysterious origins and associated conspiracy narratives, could well be a prelude to a more major event. 

In these months of lockdown, we are given time to ponder, reflect, pray and take stock of a new way of life. 

The whole crisis and official health warnings are giving one clear message to every citizen: the world is no longer safe to gather together. Every stranger, every door knob and foreigner is a potential source of infection.

All these thoughts and images resonate for me in Dylan’s 1989 classic “Ring Them Bells”, a song so filled with Biblical imagery that many verses probably sailed pass me when I was not a Christian yet in my late 20s.   

Dylan says time is running backwards and so is the bride, which is symbolic of the church ( bride of Christ in scripture). We will be taken to Heaven and reign with Christ "who will judge the many when the game is through.”

Jesus is coming soon to judge this world, which in the last verse is one of total chaos similar to the current situation: people waiting in long lines, wars and rumors of wars among nations and the distance between right and wrong being broken down. 

The last verse is so ironical and prophetic as we are now told to keep social distances.

Ring them bells, ye heathen

From the city that dreams,
Ring them bells from the sanctuaries
Cross the valleys and streams,
For they're deep and they're wide
And the world's on its side
And time is running backwards
And so is the bride.

Ring them bells St. Peter

Where the four winds blow,
Ring them bells with an iron hand
So the people will know.
Oh it's rush hour now
On the wheel and the plow
And the sun is going down
Upon the sacred cow.

Ring them bells Sweet Martha,

For the poor man's son,
Ring them bells so the world will know
That God is one.
Oh the shepherd is asleep
Where the willows weep
And the mountains are filled
With lost sheep.

Ring them bells for the blind and the deaf,

Ring them bells for all of us who are left,
Ring them bells for the chosen few
Who will judge the many when the game is through.
Ring them bells, for the time that flies,
For the child that cries
When innocence dies.

Ring them bells St. Catherine

From the top of the room,

Ring them from the fortress

For the lilies that bloom.

Oh the lines are long

And the fighting is strong

And they're breaking down the distance

Between right and wrong.

Why God First Created The World & The Final Timeline

While no human mind can imagine how and why God created mankind and this universe, I can only conceive through my limited mind the great awesomeness and mystery of His purposes.

Still, I think every believing Christian should, at one time or another, consider the Creator’s plan when he decided to create the world. And it is not simply a battle between good and evil.

There are five truths which I can draw upon based on my Bible knowledge. There could well be a sixth truth hinted of in the final book of Revelation and I believe it will be fully revealed in our lifetimes.

1. He created man in His image. This means man has an inner conscience and has the qualities of creativity in him. 

  

2.    He gave man Free Will: This is the most perplexing and frustrating part of his creation. If he did not give us free will, then the first man and woman would not have sinned. By giving us free will, it is as if we were being tricked by our creator. If man can be free to do as he wills, why punish him for using his free will to commit moral sins (lust, adultery, hate, rage, envy, theft, etc some of which are punishable by civil law whilst others are not) ? 

So the problem, which God himself had most probably foreseen, is that man did commit the original sin and paid the price of eternal death for it. Before we go to the third truth, let us digress a bit on this free will dilemma.

Isn’t this like some kind of unfair trick? Not exactly. It is somewhat like a chess grandmaster who invites you to play chess with him for a 100 games as he wants to train you to be a champion player. If you win, He will reward you with a grand prize the value of which is beyond anyone’s imagination. 

You know quite well that its a tough challenge and you have a choice to walk away to live a humdrum life. In this metaphor, there are three kinds of amateur chess players:

(a) Those who just play the 100 games without much enthusiasm for the game. They go about life one day at a time, year in, year  out, without asking deep questions about their purpose on earth. For them, what is is "what it is". Life is just something to experience and we are to make the best of it. (These types of people make up about 30% of the world's population)

(b) Those who take up God’s challenge to be champions. They train themselves with each game and learn their mistakes from every defeat. To them, it is not just an intellectual challenge but a moral responsibility to win the game and collect the prize. (20% of the world)

(c) Those who decide not to play at all or who give up after a few defeats. These are the ones who think that since God gave them a free will to walk away, they choose a self-made life which has little meaning (apart from their own achievements) until the day they die. They even invent their own games in which they reward themselves. (50% of the world)

Now the third group of people (atheists, agnostics or New Agers) do have a strong argument against playing according to the rules set by God. 

Despite the fact that the Creator has gently whispered to man's conscience, given His Word as set forth in the Bible over centuries telling how and why the world was created, there is still the problem of free will. We have a Hobson's choice to walk away and not accept His rules nor His invitation. 

More precisely, the argument of the non-believer posed to God is this: “How do we know it is not all a trick of Yours, that we are not mere pawns in Your game of chess, that the contest is actually between You and Satan, your arch enemy angel who was kicked out of Heaven on account of his rebellion? 

And if we won this game, how do we know the prize is as good as you promised?"

These existential questions have been asked by the most intelligent minds who are outraged and critical of God’s seeming silence in the face of not only cosmic injustice but the gross injustice of man’s cruelty towards the innocent. If God exists, how can a loving God allow massacres of helpless women and children to happen, how can He allow crimes of senseless brutality at the individual and the genocidal level? 

Does the Creator need to respond in words or does he have an ultimate answer?

In Dostoevsky's masterpiece The Brothers Karamazov, Ivan asks his younger brother Alyosha the ancient question (If God exists, whence evil?):

"If the suffering of children goes to make up the sum of suffering needed to buy truth, then I assert beforehand that the whole of truth is not worth such a price." 

3. The savior Jesus Christ: And this brings us to the greatest act of God in His creation plan. God's reply is simple and profound as encapsulated in John 3:16: "For God so loved the world that He gave His one and only Son, that whosoever believe in Him shall not perish but have eternal life."
   
  So this life is clearly not a game. There possibility of losing eternal life after death is too much to bear if it is true. 

Two thousand years ago, God brought His son Jesus Christ, supernaturally borned of a virgin, to live as a man on earth, teaching us how to live and overcome our struggles with evil and finally giving us the salvation of our souls through belief in His divinity who gave His life as a penalty for our sins.

Confronted with this narrative, the intellect of man may or may not accept it wholeheartedly. 

It is a logical and awesome story but the full weight of this truth is in the power of the Holy Spirit to convict a man’s inner being, to spiritually awaken us to see the truth of Jesus as our saviour and redeemer of our fallen souls.

But how do people get convicted? It is different for each person: most are convicted through a tragic or traumatic event, others are convicted by the reading of the Word or the power of a sermon.

For me personally, I have always sought for the meaning of life and this search through philosophy, books and religion prepared me for my conversion in my late 30s. There were clearly people who prayed for me along the way and finally my wife who was a Christian brought me to Christ.

4.   The battle for man’s soul heats up in the End times: We are now in the endgame as the world is beset by great chaos created by pandemics, economic turmoil and geopolitical tensions that raise the prospects for a third world war. 

 This is the end of the timeline of the world when everything reaches a climax in the return of Christ to judge the world, separating the good from the wicked. It is a time of great tribulation as the enemy of both God and man makes his final stand to battle for our souls that we be condemned and evade the salvation offered by God.

According to the book of Revelation, this battle will finally end with Satan ending up in the lake of fire. But his modus operandi of destroying man is like a self-mutating computer program that evolves with increasing complexity and cunning. 

Despite his cunning, his intellectual flaw is he is an amateur con-man philosopher: he has nothing to offer mankind beyond this life except damnation. So he attracts only those who are drawn to darkness, to the hedonistic pleasures that cause countless pain to others. In effect, he draws the spiritually lost in man.   

But it seems that the ordinary Christian, myself included, is not totally spiritually prepared for this end time even though we mentally know we are living in this stage of God’s timeline.  

The toughest part of being a Christian is to be sanctified, totally dedicated to the will of God and the indwelling of the Holy Spirit. For though our spirits are redeemed, our flesh and soul are not completed redeemed. 

We need to continually be separated from all worldliness, from the occupations of the mind and rely completely on the Lord, hearing His voice and spending time with Him.

5.  The Rapture of the Bride: Just as the Creator gave a way of escape from the sins of the world by giving us His Son as a the Truth, the Way and the Life, God will also offer a way out of the darkest part of the tribulation when the Anti-Christ comes to rule the world and enforce his system of control. And I believe the escape plan is the Rapture, the catching away of the Bride, the remnant marked by God to be taken out of the earth.

So in conclusion, when we look at these five truths in God’s creation agenda, the question still remains: why is it so important for the Creator to allow mankind to go through these events? Is God so demanding that He puts us in harm’s way, faced with the evil of the Anti-Christ, who has yet to emerge on the world scene but is said to be waiting in the wings?

As I said earlier, this is a test of faith and spiritual strength. 

It will be the toughest test we shall ever have to take and we all have to go through it, like gold being melted in the furnace to bring out its purity. 

Everything else does not matter except that we are pure in the sight of God. And why does he want us to be Holy as Jesus is holy? The answer is that we are to be betrothed to Jesus, our bridegroom.

And this brings us to the pandemic virus that has shaken the world since January 2020. Some say it was released in a bio lab in China or originally created in America, others say it came from bats or from sea creatures. 

Whatever the origins, it is clear to me that God allowed the pandemic as a warning, a wake-up call to stop the cycle of sin in our lives and among nations. 

We are to be woken up from spiritual slumber and be prepared for greater upheavals. We shall soon know as the events of the year continue to shake our lives.

How are we to respond to what the prophets say about this year, that everything that can be shaken by God will be shaken? 

From the limited knowledge that we can gather from God's creation purposes, we can only respond by preparing ourselves to His calling, keeping our eyes on the heavenly crown and the highly anticipated marriage to the Lamb of God. 

Perhaps that will be the sixth truth that we shall only know either in the thick of the battle or in the aftermath. The winner will ultimately be the Creator Himself and we, his cherished soldiers, shall decide how well we battle along with Him.

A Tale of Two Kings in the Year of the Pandemic

To resolve one of the great mysteries of 2020, let's do a thought experiment from ancient times (paraphrasing a true incident):

There was once a king who seduced the beautiful wife of his own general and had him killed by "accident" in a battle.

His old mentor knew about it and one fine day asked him: "O wise king, how  would you judge a rich man who stole a poor man's farm because he liked the apple tree in the man's garden? He also plotted to have the man arrested and die in prison.

The king got up in a rage and said "I would have that scoundrel hanged. Where is he? Bring him to me!"

The mentor changed his expression and said sternly," God told me that man is none other than you. You stole an innocent man's wife and had him killed. You shall pay a dear price as you yourself have passed judgement on this matter."

The king was shocked and on that very night, his only child died. He tore his clothes and collapsed in grief. That king was king David, a good hearted and wise king who truly repented of his sin.

Among lesser kings, they would have the mentor imprisoned or banished for speaking out.

In the same way,  we, citizens of the world, faced with the tragedy and daily threat of the coronavirus, can apply the same test on two powerful kings:  the Presidents Donald Trump and Xi Jinping.

Let us put these two men in front of world television and, on the pretext of interviewing their life philosophy, suddenly ask this question out of the blue:

"Assuming your officers have found the criminal who leaked the bat virus to kill thousands worldwide, what would you personally do to that man or woman?"

Now listen to each of their replies carefully and watch how each of them respond when caught off guard.

President Trump replies without skipping a beat:

"When I find the son of a #%@ I would personally feed him to the lions.....you ll need many law enforcers to restrain me from getting him."

President Xi, also without much hesitation, says:

"First, I would make sure he is indeed the criminal. He'll have to confess to the world what, why and how he did this awful thing. 

Then I would send him to be charged in the international tribunal in cooperation with other affected governments. 

Finally, China will take measures to prevent this type of people from plotting  and endangering our peaceful society. "

What a contrast between the two characters: one an intuitive extrovert and the other a rational introvert. But personalities rarely reveal a person's ethics except under tremendous pressure.

So there you have the riddle 50% solved  by their very words.  After listening to their voices and looking deep into their faces, you may probably, with luck and without a lie detector, solve the other half of the mystery.

Now we must keep in mind, that while King David was a man of passion who really fell in love with Bathsheba (the woman he seduced and later married), the two modern day kings are presently leaders of the world's two largest nations.

And in a geopolitical contest to be top superpower, they would not hesitate to try all ways to beat the other nation into a weaker place.

So while the world is just starting to breath a sigh of relief that the worst of the pandemic may be over, we will have to deal with the after-effects of economic costs in terms of unemployment and recessions for the next six months at least.

But the underlying mystery remains with conspiracy theories ranging from complex geopolitical schemes to simple cover up. Yet, the blame game between the two nations currently at play seems a futile exercise. 

There may never be any hard evidence as the masterminds would have wiped away all traces. (Hard evidence will be tough to find and may take years like the JFK murder or 9/11).

So in this existential dilemma, the only true test is one of human behavioural analysis with a thought experiment. 

A Fistful of Lessons For A Troubled Nation

1. When I kept silent in the midst injustice, the crooks took over my world

2. When we were too busy to care where our lives were heading, now we are locked down by law or fear in our very homes.

3. When our friends were beaten up and threatened in the streets of Hong Kong, we stood aside and shook our heads at their brazen protests. Now their turmoil is strangely passed on to the world: as the China mystery virus whispers from the Forbidden City gates.

4. When we shouted against the injustice of our government but condoned the greater cruelties of another foreign government, how can our hypocrisy not be repaid? See who is ruling over us now.

5. When we closed one eye on an old leader who insulted any nation he disliked, now we are trying to mend broken bridges with our former foes. Should they trust us now?

6. When we celebrated our democratic change of government but forgot our core ideals, why be surprised when the opposition quietly brokered hidden deals to kick out the incumbent?

7. When we accept and digest every lie and myth of the new emerging empire soon to fall into the trap that has been awaiting us.

8. When we demand proof and logic to rationalise the human heart, trusting in the good of mankind, why cant we imagine it takes only 1% of people to destroy humanity with their evil schemes.

9. So now that our currency and paper wealth has crashed with a future as bleak as an empty street, have we learnt our lessons well ?

10. When the cities are besieged by the silence of fear and the news channels are filled with nothing but sad statistics and lies. 

The only recourse is to walk alone to the mountains and be refreshed by the silent beauty of nature.

The Mystery Coronavirus & The Wake-Up Call to Nations

While the world is reeling with a present danger and tragedy (10,000 deaths and counting), the actual source and origin of the virus is still an unsolved mystery.

Can this new strain of  coronavirus be transmitted from animals to humans? Why this time in Dec 2019 when certain Chinese have been eating bats for ages?

Clearly, there is no proof it jumped from bats into humans (even if it is via an intermediate animal like the civet cat or snake).

We can only find out if patient zero is found (though there are reports patient 1 was not linked to the Wuhan market).

This brings us to a very stunning narrative that has been corroborated by an American Christian called Tracy Cook. Through a revelation from God, he said the coronavirus was created in a lab in Wuhan by certain agents in collusion with American double agents.

The whole modus operandi is to scuttle the re-election of Donald Trump, who poses great political and economic hurdles to the ambitions and plans of the global elite (the deep state).

It is a well known fact for those who study the history of U.S. elections that no incumbent President can get elected when the economy tanks.

And in today's case, a reversal from 3 years of buoyant growth into a 1-2% growth in 2020 may be enough to turn voters against Trump by 3rd November. 

So China and even Russia (who incidentally has minimal infection cases and whose President is engaged in a scary oil price war with Saudi Arabia) appears deeply involved in the agenda.

While this narrative is highly plausible, in the absence of concrete proof, we can only connect the pieces as in a jigsaw puzzle. There will be missing pieces but the overall picture (or mosaic) is quite cohesive.

I am certain we shall find out more perhaps by next year after the U.S. elections in November. Once the truth is exposed, I reckon there will be a huge turbulence in geopolitics between the superpowers.

From a spiritual perspective, the chaos unleashed this year is a wake up call from God (or Providence for agnostics)  to nations and individuals as He allows everything that can be shaken will be shaken this year.

Like in the ancient times when Israel turns away from godliness to sinfulness, God allows a tide of foreign enemies to besiege the nation. And He did save Israel after they cried out in prayer and repented of their sins.

To the existential question posed by a non-believing colleague, why does a just God allow innocent people to be slaughtered in massacres like the Japanese invasion of China?

My answer is this: God is a loving God but He knows what will bring His children to their senses only after great tragedies (which are usually part of their ancestral sins, their own spiritual blindness or worldly distractions).

Shutdowns & Time Eternal

Similarly, during this period of global shutdowns and lockdown when families and individuals have to stay home, it is a time to reflect on our lives: look into our fragile mortality, our fears and the storehouse of inner resources to withstand the prospect of a new, uncertain world filled with dangers and death.

Most of all, we will hopefully spend days and weeks reviewing  our purpose on earth. The wake-up call has come early at the start of a new decade. But not too soon in God's perfect timing.

Which Small Asian Nation Can Navigated out of The China Crisis ?

Just as the 2020 decade was about to start, the Coronavirus outbreak, now clinically called Corvid 19, has shaken the economic and social foundations of China and reverberated throughout the region. 

This is indeed a Black Swan event that caught the world by surprise just when the global economy was about to strengthen in late 2019 with global manufacturing indicators stabilising, the Brexit issue being resolved and warmer U.S.-China relations amid the phase one trade deal on 15 January 2020.

China's top-down communications and public health care systems have come under intense scrutiny and pressure both internally and world-wide. Out of the nation's 1.4 billion people, an estimated 50-60 million people are in a lock-down mode, meaning their movement between urban centres have been curtailed. 

If the 2000-2010 decade was the decade of China's rise, will the 2020s decade be vastly different? Every economist and strategist seem to expect China to be the world's largest economy (and possibly No 1 superpower) by this decade while America's economy settles to a 1.5%-2.0% range. 

Or will this decade be one of small nations growing more resilient compared to the superpowers? Resilience of a nation in this decade would be more than just the economic sense. 

It encompasses a nation overcoming both internal and external challenges to emerge stronger after a crisis, which in the current case, is the high interlocking of small nations's economies to the China trade. 

For instance, as a measure of the growing affluence of Chinese tourists, many Asian nations are exposed to China as shown in the table below with Thailand and Hong Kong having the highest GDP exposure. 

Annual Tourist Arrivals* (mil)

Chinese Tourists/ Total Tourists

Tourism Share of GDP 

Thailand

35.6

28.0%

13.9%

Hong Kong

27.9

78.0%^~

11.1%

Singapore

13.9

19.0%^#

5.8%

Malaysia

25.9

12.0%

5.7%

Philippines

6.6

18.0%

3.0%

Indonesia

14.0

4.0%

1.5%

South Korea

13.3

34.0%

1.1%

Japan

28.7

30.0%

0.8%

China

60.7

n.a.

0.3%

* Worldbank, data based on 2017      

^ Economist Intelligence Unit (EIU), 2018   

# EIU, data based on the first 11-month of 2019

There will be a lull in Chinese tourism to the region pending the containment of Corvid-19. Even if the outbreak eases in the summer, an effective vaccine wont be available until at least a year to 18 months. 

This suggests Asian policy makers would have to come up with fresh reforms and policies to rebalance and diversify their economies from China during this period.

Despite some fiscal constraints and the ineffectiveness of interest rate cuts (which have been done in the past year), they are in a good position to review their economic and political future. 

Clearly, this is a critical time for China as the health and economic crisis will either result in smart reforms for the country's information control and centralisation laws or, in a dramatic way, a collapse and replacement of the Chinese communist regime. 

The latter scenario, albeit at a 20% odds, cannot be ruled out and this means Asian governments, especially the ASEAN nations will have to become more integrated before their giant northern neighbor sails into a political storm.

Incidentally, from a wider perspective, China's geopolitical influence and ambitions in the Asia Pacific is currently held in check by the policies of President Trump (whose re-election on 3 November is highly likely provided the American economy doesn't tank).

Therefore, this decade is a great window of opportunity for small nations in Asia to shine in terms of the vibrancy and health of their political, economic and cultural societies.   

So the question is, if this unusual hypothesis pans out by the end of the 2020s decade, which Asian nation will be the one that emerges the most resilient and strongest after the China crisis? 

Singapore ? (too globalised and small)
Indonesia ? (possible but still too insular)
Malaysia ? (internally lacking in visionary and coherent leaders)
South Korea ? (too large and Korean-centric in outlook)
Thailand ? (too engrossed in domestic political tensions)
Vietnam ? (a potential powerhouse that is watched closely by all)

Nonetheless, despite my reservations (in bracket), all these nations need is a double dose of optimism, courage and an intellectual renaissance to rise above the geopolitical chess games played out between the giant nations (i.e. China, America and to a lesser extent India and Europe) in this part of the world.

A Letter To British Voters from A Commonwealth Citizen

Dear Citizen of the United Kingdom, 

From a non-expert outside observer & a Commonwealth citizen (who had lived in England/France in the 1960s-1980s), the upcoming 12 December U.K. General Election is a landmark event that can either resolve a politically complex dilemma for Britain or be another prolonged crisis that overshadows a major economic region in the Western Hemisphere.

In view of the uncertain and complex permutations of how pro-Brexiters and pro-Remainers vote among the four key parties, a hung Parliament may be a potential outcome. This prospect has been raised by several political analysts.

At the end of the day, if you believe that you are rational-thinking citizens who seek a closure to the Brexit limbo situation (already three years plus), a hung Parliament will be the worse outcome for either Brexiters or Remainers. 

Those of you who do not strongly belong to either camp are presumably a substantial number and who, wishing for decisive action, will most likely choose to take the risk with the party leader who wants to move the nation on to other important issues (e.g. how to make Britain more competitive and restructure its economy outside of the deflationary problems of the Eurozone).

A second referendum (not to speak of another Scottish one for independence) without proper economic and political analysis will be just another useless exercise undermining the democratic purpose of the first referendum.

So for the sake of global economic and political stability (regardless of any strong emotions you may have towards the satirical personalities of Johnson, Corbyn or Farage), I think you should make a wise decision to bite the bullet and get Brexit (as agreed with the EU) done without further delays. In my view, a hung Parliament is the worse conceivable outcome for the UK, EU and global markets.

There are many new opportunities and fresh challenges coming into the new decade of the 2020s. Take a firm stand as a sovereign nation and focus your attention on your economic and political renewal.

Jeremiah Liang

Negative Interest Rates & The Deflationary Mindset

The preponderance of negative interest rates in the global bond market, comprising US$17 trillion in value and rising. This represents about one third of all high grade bonds, mostly prevalent in the Eurozone, Denmark and Japan.

 

The phenomenon of negative interest rates makes no economic sense as it means that banks (lenders) will pay consumers (borrowers) for lending them money. So instead of the borrower paying an interest on loans, the bank pays the borrower to borrow.

 

There are a few reasons for this situation to have arisen:

 

(1) The goal of the central bank in pushing down interest rates is to encourage consumers to spend instead of saving at the bank during a slowing economic climate. Commercial banks which have excess reserves with the central bank earn a certain interest rate known as the Interest on Overnight Excess Reserves (IOER) in the U.S.. By lowering this rate, the central bank will compel the commercial banks to lend out the excess cash. for the commercial bank, it is better to lend it out as the interest earned on holding excess cash is too low.

 

(2) Bond yields are negative as investors speculate that central banks will continue to engage in monetary easing policies such as Quantitative Easing and cutting interest rates. The bonds may be bought at a premium to par value and holding it to maturity will entail a capital loss. But bond investors will continue to buy these expensive bonds in the expectation that their prices will rise further and their yields will become even more negative (eg from -0.30% to -0.50%)

 

(3) Reflationary policy of central banks to encourage investors to borrow to buy assets such as equities and properties. The intended transmission mechanism is to reduce the cost of money so that people will go out to buy financial and physical assets. When asset markets appreciate, it will creat a wealth effect.

(4) There are simply too few places for large investors (pension funds, insurers and financial institutions) to store their wealth entrusted to them. Some investors are willing to pay a premium and ultimately take a slight loss because they need the reliability and liquidity provided by governments and high quality corporate bonds. 

 

Unfortunately, among these three key reasons, policymakers have failed in their objectives as negative interest rates have encouraged more saving as savers and pensioners anticipate a worse economic future and save more to fund their current and future needs. Asset bubbles engineered by reflation policies may have sustained stock markets (eg like QE in America's Wall Street) but it has failed to ignite economic growth. In Europe, negative rates hasn't helped the European economies to recover and sustain growth to above 2.0%. 

 

But more worrying is that negative interest rates and bond yields is symptomatic of a deflationary mindset among economic agents. The central bank as a key policy maker that launches negative interest rate policies is actually confirming to the public - both consumers and companies - that the economy needs drastic unorthodox measures to revive itself.

 

The two key questions facing the world economies currently are (1) will Europe and Japan continue their negative interest rates policy when their economies continue to stagnate especially in a slower global trade environment ? (2) Will the U.S. Federal Reserve bank also adopt negative interest rates assuming it hits the zero bound in an economic crisis?

 

The answer to these two question depends on the other key macroeconomic policy tool, fiscal policy. If fiscal spending can be increased (with or without regard to any self-imposed fiscal restraints), then there might be a way to push their economies out of a deflationary spiral.

 

However, fiscal spending, in many ways, is a short-term fix. It does not enhance the productivity of an economy unless the people actually benefit from better roads, more efficient public transport systems, better airports, etc. In cases such as China, how many additional highway tunnels can they build if the traffic flow in the next new tunnel is getting diminishing? So the multiplier effects of fiscal spending may be strong in six months to a year, but the long term impact will be limited. 

 

Besides, excessive fiscal stimulus will lead to higher debt burdens as governments incur ever rising fiscal deficits, which will push up the cost of borrowing and very likely result in currency depreciation as foreign capital exits the country.

 

Added to this dilemma of policy tools, is the emergence of new technologies (AI, robotics, digitalisation and business disruptions) which are gradually and steadily changing the labour market, making many people redundant and fresh graduates unemployable. These trends are by nature deflationary as overall wages will decline or not rise as fast as before. Companies may widen their profitability by employing labour saving and productivity enhancing technology. But in the end, the rising level of structural unemployment will reduce the revenues of companies.

 

These tough economic issues, apart from the ongoing trade and tech war between the U.S. and China, are keeping economists and investors awake at night as the next major economic crisis looms amidst an era of heightened uncertainties. Perhaps, deglobalisation and unilateral protectionism could be a temporary solution for countries to insulate themselves from the deflationary trends of globalisation. Or rather is it the globalisation of the deflationary mindset?     

Empathy & Breaking The Golden Rule

Quite often the educated, professional man-in-the-street has no opinion or concern over current world problems (economic, political & spiritual). This Mind-My-Own-Business (MMOB) attitude is due to 4 common reasons:

(1) they dont see any link between the world outside and their own well-being

(2) they think it is none of their business and even if it is, there is nothing one person can do about world problems (esp outside their community)

(3) they have enough of their own problems/issues to handle much less be concerned about others

(4) they think that by having a religion (as opposed to genuine faith in godliness) they have done all that is needed to help the world. Like belonging to a boys scout club.

But Mr MMOB is quite mistaken to be completely indifferent to the problems of society: the reason is simply that it shows a deep lack of empathy.

In essence, it signifies a violation of a golden law of life: that man is to love his neighbor as he loves himself. He is to love people as he loves his own people. While many religions prescribe the same thing in principle, their impact on mankind is ambiguous.

What happens when we dont love (not the sentimental, passive, premeditated type) our neighbors as ourselves but instead hate them?

This deep rooted problem, sometimes crystalised in childhood, when left unresolved in later years, invariably leads to multiple problems in the psyche: racism, mental illness, tribalism, greed, envy and hate.

The least endemic and most common sin seems to be the self-preoccupation of the MMOB. (He may care about himself or his family but he cares not a hoot for others outside his sphere.) But lack of empathy is the seed of a tree of spiritual isolation.

That said, there is a big difference between being intellectually concerned about the world's sorrows on the one hand and loving your neighbor on the other.

Does it matter, from the human point of view, whether the enquiry starts from genuine empathy for others less fortunate than us or from intellectual idealism?

It is my opinion that there is a difference as love is a key axiom. Idealism may lead to an utopian society that subjugates individual freedoms to the welfare and the good of the community.

The other problem with starting from intellectual idealism rather than genuine conscience is that we are not mentally well equipped as well as economically incentivised to navigate through all the intellectual issues and counter arguments.

Indeed, the modern psyche has become so spiritually unbalanced and atrophied that  mere intellectual differences in political, economic and cultural values bring out the worst in people.

So what is the solution to the MMOB's empathy deficit in this age of fake news and multiple social media platforms of communication?

Should anyone care for people, especially grown, rational adults, who dont care? Should they not deserve what they get once reality bites into their lives ?

The answer lies in understanding the truth that we, as individual creations of our Creator, can and do impact the destiny of  man's affairs (poverty, starvation, Brexit, Hong Kong civil unrest, political and psychological oppression and bondages).

Our personal action and responsibility is not through political campaigns nor private meditation but through simple, heart-felt prayers to our Creator.

We are created to exist in this world for a purpose and that is to co-create with God to carry out His plan and desire. Every soul, weak or strong, poor or rich, is enshrined with this purpose and each one's life, thoughts and action matters.

Perhaps, a new version of Saint Francis's prayer is called for given the urgency of a world on the edge of collapse:

"Pray God give me the courage to change the things I have to change,  the fortitude to bear the things I cannot change according to Your will, and the wisdom to know the difference."