Introduction — Chronological Underpinning
Aspects of this letter rely on an exact, chronological dating system that goes back to the very first year of creation. This comes exclusively from Daniel Gregg’s, The Scroll of Biblical Chronology and Prophecy. Daniel Gregg is a Jewish believer in Jesus Christ. His work of Bible chronology—a lifetime of work— is a masterpiece. He has simply nailed it. He has intuitively used the information in the Bible—God gave us just enough—to create an exact chronology. His chronology is exact because it was built with a master spreadsheet (“scroll”) where all subsequent Biblical and historical events and dates fit rightly into place. In other words, if various dates of the chronology were wrong, then the rest of it would not fit properly. Significantly, it proves, from a Biblical perspective, that God created the world in six days, 6,155 years ago.
The Sabbath Year
The focus of this letter is going to be on the implications of the Sabbath Year. The Bible also calls it the Seventh Year, the Sabbath of the Land, and the Year of Release. The Sabbath Year was the seventh year in a “week” of years. The Sabbath Year simply refers to God commanding the Hebrews to rest the land every seventh year and not collect debt payments. The Sabbath Year began in the Jewish month of Tishri (our September/October) coinciding with their civil New Year, which starts on Rosh Hashanah. (Rosh Hashanah falls on September 14 this year.)
Gregg’s chronology has helped me understand that this was not just an aspect of the Jewish Law, but part of a broader seven-year cycle that originated at creation. When Joshua led the Hebrews into the promised land in 1593 B.C., it was year 2,548 of the world and also a Sabbath year, dating from creation (2,548 / 7 = 364). The first Sabbath year that Israel was to observe fourteen years later (the first seven were for war), was perfectly aligned with the seven-year cycle dating back to creation.1 Joseph’s seven years of prosperity and seven years of famine were also in exact alignment with this cycle.
Using Gregg’s chronology I can tell you that we are currently in the first year of a seven-year cycle that goes back to creation. (Contrary to some currently popular, Christian musings—The Harbinger and Four Blood Moons—we are not in a Sabbath year right now! It was last year, September 2013 to September 2014.)
There are three passages of Scripture where God revealed to the Hebrews what He wanted in the Sabbath year. The first two focus on the agricultural aspects and the third on the debt release. Let us start with the Scriptures that explain the agricultural implications:
“For six years you shall sow your land and gather in its yield, but the seventh year you shall let it rest and lie fallow, that the poor of your people may eat; and what they leave the beasts of the field may eat. You shall do likewise with your vineyard, and with your olive orchard.” (Exodus 23:10-11)
The LORD spoke to Moses on Mount Sinai, saying, “Speak to the people of Israel and say to them, When you come into the land that I give you, the land shall keep a Sabbath to the LORD. For six years you shall sow your field, and for six years you shall prune your vineyard and gather in its fruits, but in the seventh year there shall be a Sabbath of solemn rest for the land, a Sabbath to the LORD. You shall not sow your field or prune your vineyard. You shall not reap what grows of itself in your harvest, or gather the grapes of your undressed vine. It shall be a year of solemn rest for the land. The Sabbath of the land [the Sabbath produce of the land] shall provide food for you, for yourself and for your male and female slaves and for your hired worker and the sojourner who lives with you, and for your cattle and for the wild animals that are in your land: all its yield shall be for food.” (Leviticus 25:1-7)
Here is a summary of what this meant agriculturally for Israel:
Every seventh year the Hebrews were supposed to let the land rest by not planting any crops or pruning any vines or trees.
Anyone could eat, in season, whatever crops happened to grow on their own during the seventh year, however, reaping or harvesting crops for storage was forbidden.
It is important to note that God said, “there shall be a Sabbath of solemn rest for the land, a Sabbath to the LORD.” The whole world is God’s, but Israel is especially His land.2 He demanded a rest for it every seventh year.
God commanded His people to rest themselves on the seventh day and His land every seventh year. God was establishing a relationship of ownership with His people and ownership of the land they would serve Him in. More subtly, He was revealing the existence of cycles to His people.
Recall that when God notified Adam and Eve of the consequences of their sin, He told Adam:
“cursed is the ground because of you; in pain you shall eat of it all the days of your life; thorns and thistles it shall bring forth for you; and you shall eat the plants of the field. By the sweat of your face you shall eat bread, till you return to the ground, for out of it you were taken; for you are dust, and to dust you shall return.” (Genesis 3:17b-19)
The sin that entered the world through Adam and Eve changed the natural environment. The whole process of growing nuts, fruits, and vegetables became one fraught with difficulty. And so it remains until today. Every serious gardener or farmer is fully aware that successful food production requires constant vigilance and work.
Now consider the plight of the ancient Hebrew farmer who received these new laws from God (through Moses) in the wilderness of Sinai. Over the last several hundred years God called your ancestors (Abraham, Isaac, and Jacob) out of the world and is now preparing to give your people (or nation) the land that He promised. As a farmer, He is providing you with a solution to the cursed ground; however, there are important distinctions. He makes the rules, the land is His, and it must be rested.
God was pointing His people toward a greater rest that was yet to come. It would be a rest that He would provide, His way and in His time. For everyone of us today, God offers us rest when we cease from our own life and give it to the Lord Jesus Christ. Joshua led the Hebrews into the promised land. The Hebrew rendering of our English translation, Joshua, is Yĕhowshuwa`. Likewise, Yĕhowshuwa` or Jesus, (Jesus and Joshua are the same name in Hebrew) made the way for us to enter another promised land—the place of eternal fellowship with God. The apostle Paul wrote:
Christ redeemed us from the curse of the law by becoming a curse for us—for it is written, “Cursed is everyone who is hanged on a tree”—so that in Christ Jesus the blessing of Abraham might come to the Gentiles, so that we might receive the promised Spirit through faith. (Galatians 3:13-14)
Allow me to reiterate what the promised land, or eternal inheritance, is. Jesus’ death on the cross made possible for you an intimate relationship with the living God through His Spirit dwelling in you. This is not a theological concept. This is Christ in you and you in Him, as Jesus foretold His disciples: “Because I live, you also will live. In that day you will know that I am in my Father, and you in me, and I in you.” This is God speaking to you and you speaking to Him. God says to the believer in Jesus Christ today:
“I have given you a new life in Christ. This place—“in Christ”— is mine. I own it. My Son Jesus opened the door to it through the cross. You will have rest in it if you obey my voice, and do things My way.”
Many readers are probably aware that it is beneficial for farmers (or gardeners) to let their land rest (usually done by rotating a portion of the crop), because it restores nutrients in the soil. I do not know if the Hebrews were even aware of this, but this was one practical benefit of obedience.
Picture yourself as a farmer in the agrarian society of ancient Israel. God is telling you to take the entire year off, every seventh year. He is saying, trust me, you and your whole household will have enough to eat, because there will be enough in the sixth year for two years. This is a step of faith with a blessing for obedience.
How ironic that economic success came through rest. This leads to a greater understanding. We live in a created world. Its cyclical functions have been finely tuned by the Creator. The sooner we discover that our success here comes from finding our place in in it (in Him), instead of trying to fashion our place, the better off we are.
Seeking and receiving God’s direction is the opposite of many who decide for themselveswhat direction the market must go in to fit their preconceptions. They do not “hear” but continue to “fashion” information to fit their design. The real solution for those of us who claim the name of Christ must not come from us, but from the One Who is in control.
In his blog, secular market forecaster Martin Armstrong has rightfully pointed out that this was the wisdom of Pharaoh in Joseph’s day. He received the fourteen year forecast from God and prepared accordingly. He did not ignore it and instead try to fashion policy to get the economy to go where he wanted it to go. This is what our Socialist leaders today constantly try to do and the deceived populous just eats it up. The same thing happens in the visible church. The false prophet tells the people they can ignore the Word of God and have it their way. Christians just eat this stuff up like zero calorie cake. Nothing has changed since the garden of Eden. The land is cursed. Man has no rest. Man still thinks he can be God. Many false prophets have gone out into the world.
Finally, we come to the third passage of Scripture on the Sabbath year involving debt release (the Hebrew word translated here in English as “release” is shemittah):
“At the end of every seven years you shall grant a release. And this is the manner of the release: every creditor shall release what he has lent to his neighbor. He shall not exact it of his neighbor, his brother, because the LORD’S release has been proclaimed. Of a foreigner you may exact it, but whatever of yours is with your brother your hand shall release. But there will be no poor among you; for the LORD will bless you in the land that the LORD your God is giving you for an inheritance to possess—if only you will strictly obey the voice of the LORD your God, being careful to do all this commandment that I command you today. For the LORD your God will bless you, as he promised you, and you shall lend to many nations, but you shall not borrow, and you shall rule over many nations, but they shall not rule over you. (Deuteronomy 15:1-6)
If among you, one of your brothers should become poor, in any of your towns within your land that the LORD your God is giving you, you shall not harden your heart or shut your hand against your poor brother, but you shall open your hand to him and lend him sufficient for his need, whatever it may be. Take care lest there be an unworthy thought in your heart and you say, ‘The seventh year, the year of release is near,’ and your eye look grudgingly on your poor brother, and you give him nothing, and he cry to the LORD against you, and you be guilty of sin. You shall give to him freely, and your heart shall not be grudging when you give to him, because for this the LORD your God will bless you in all your work and in all that you undertake. For there will never cease to be poor in the land. Therefore I command you, ‘You shall open wide your hand to your brother, to the needy and to the poor, in your land.’ (Deuteronomy 15:7-11)
Here is a summary of what this meant economically for Israel:
At the end of the Sabbath year, creditors were not supposed to collect from their debtors. This was necessary because the debtors had no farm income that year.
This was not a debt cancellation, only a temporary, one year exemption (“release”) from having to make repayments. (The jubilee year was not a debt cancellation either.)3
The Jews were to lend to their poor neighbors and not hold back when the Sabbath year was approaching because they would have to wait a year longer for repayment.
God promised to bless those who did lend liberally to their poor neighbor(s).
These scriptures in Deuteronomy on the Sabbath Year were essentially just secondary, administrative guidance for the people. The heart of the Sabbath Year law was that found in Leviticus. Without this further guidance, Israel would have been faced with all sorts of unnecessary hardships as people faced debt repayments without income and lending to the poor was avoided.
Over the course of this year, I have been thinking about this seventh year and the effect it would have on pruning economic excesses. The farmer who was greedy for gain would have been forced to take an entire year off, if he was obedient to the Law. The land would undergo a Sabbath rest, but he would also undergo a rest. Likewise for the moneylenders, a full year without income, having to trust God’s promise.
If the whole Hebrew society obeyed, it would lead to a general curbing of economic excesses and a more thoughtful reflection on God as the source of all. The Hebrews would have plenty of time to reflect on their place in God’s creation and eternal plan. Interestingly, the Sabbath year was also to climax with all Israel assembling in each town to hear the Law:
And Moses commanded them, “At the end of every seven years, at the set time in the year of release, at the Feast of Booths, when all Israel comes to appear before the LORD your God at the place that he will choose, you shall read this law before all Israel in their hearing. Assemble the people, men, women, and little ones, and the sojourner within your towns, that they may hear and learn to fear the LORD your God, and be careful to do all the words of this law, and that their children, who have not known it, may hear and learn to fear the LORD your God, as long as you live in the land that you are going over the Jordan to possess.” (Deuteronomy 31:10-13)
If Israel obeyed this command, they would then begin each new seven year cycle right after hearing and reflecting on the entire Law (their Bible). Through this they were to learn to fear the Lord, an appropriate foundation for their next cycle of life.
Implications For Today
It is important to keep in mind that when the Sabbath Year started, Israel had just completed harvesting all their crops at the end of the sixth year, so there was plenty of food stored in the pantry to last through the seventh year. It was actually the upcoming first year in the seven year cycle when there was no harvest from the previous year (the seventh year). The implication was that God promised an extra bountiful harvest in the sixth year so there would be enough food left for the first year of the next seven year cycle. This process was similar to when the Israelites were wandering in the wilderness. God would give them a double portion of manna on the sixth day so they would have enough to eat on the Sabbath day (seventh day) when they were forbidden to gather it.
Bible teachers often mention that God promised Israel an extra bountiful harvest in the sixth year so they would have enough for the seventh year, but this is not altogether accurate. As I just mentioned, it was to be the first year when the extra harvest from the previous sixth year would really be needed, because there was no produce in storage from the seventh year. In this regard, the Sabbath Year process was slightly different than the Sabbath day process. Manna was gathered in the morning for that day, so it hypothetically would have been gathered at the beginning of the seventh day. Most of the produce harvested by Israel each year would come near the end of the year, so even if they did not have an extra bountiful harvest in the sixth year there would be enough to eat in the seventh year. It was the first year of the seven year cycle when God’s extra provision was especially needed.
If the people were obedient to God, they would begin this first year, in the next seven year cycle, with (1) their land rested (and thus their economic base refreshed), (2) their economic excesses curbed, and (3) the Word of God fresh in their hearts and minds. In a sense, their lives would have just completed a cleansing process. Because of their past obedience, they would have the vital provision needed for that first year.
I think the implication for the nations of our fallen world today is that periodic economic excesses—usually fueled by debt—constantly build up. They lead to crises and then the process repeats again. If these national excesses are not cleansed through the peoples’ relationship with God, they will get out of control and end in tears. Perhaps the lesson for us is that it takes about six years to build an economic process (six is the number of man), and if it continues through the seventh, it leads to excesses overflowing in the eighth year that cause trouble. It is simply a Biblical approach to understanding the business cycle in our fallen world that most secular economists and market observers acknowledge exists.
These seven year cycles seem to be happening in the world’s economy today, being generally anchored in the United States with its dominant economy, currency, technology, and the source of leading monetary and financial thought. Let us go back and look at some of the excesses in the recent past which became manias that subsequently fell apart.
What was the excess of the seven years from September 16, 1993 to September 29, 2000 that culminated in a disaster in 2001? It was primarily the internet stock boom that got way out of hand and led to a market crash beginning in the seventh year and culminating in the eighth year (or first year of next seven year cycle). Chart 1 shows how the technology stock laden NASDAQ Index climbed over 600% from trough to peak during this period. Chart 2 shows the remarkable collapse of the NASDAQ Index in the following year (eighth year or first year of next seven years), which ended six days after September 11, 2001. Chart 3 shows the broader stock market boom that took place during this period, as represented by the Wilshire 5000 total stock market index (not just the NASDAQ which was predominantly technology stocks). Chart 4 shows the broader stock market falling in the following year.
Chart 1: NASDAQ Index: September 16, 1993 to September 29, 2000 (full seven year cycle)
source: NASDAQ OMX Group, St. Louis Fed
Chart 2: NASDAQ Index: September 30, 2000 to September 17, 2001 (first year of next seven year cycle)
source: NASDAQ OMX Group, St. Louis Fed
Chart 3: Wilshire 5000 Total Stock Market Index: September 16, 1993 to September 29, 2000
source: Wilshire Associates, St. Louis Fed
Chart 4: Wilshire 5000 Total Stock Market Index: September 30, 2000 to September 17, 2001
source: Wilshire Associates, St. Louis Fed
What was the excess of the seven years from September 30, 2000 to September 12, 2007 that culminated in a disaster in 2008? It was primarily the real estate boom that was exacerbated by out-of-control subprime lending. The underlying demographic and economic fundamentals did not justify such a dramatic increase in house prices in such a short period of time. Chart 5 shows how the S&P/Case-Shiller U.S. National Home Price Index rose about 70% in just a little over five years. The subsequent decline in house prices began near the end of this seven year period. Chart 6 shows this downward trend accelerating in the eighth year (first year of next seven year cycle).
Chart 5: S&P/Case-Shiller U.S. National Home Price Index: September 30, 2000 to September 12, 2007
source: S&P Dow Jones Indices LLC, St. Louis Fed
Chart 6: S&P/Case-Shiller U.S. National Home Price Index: September 13, 2007 to September 29, 2008
source: S&P Dow Jones Indices LLC, St. Louis Fed
This brings us to the most recent seven year cycle from September 13, 2007 to September 24, 2014. If this pattern remains consistent, then we should be able to identify an economic excess during this seven year period that led to trouble in the (just completed) eighth year—September 25, 2014 to September 13, 2015.
What was the excess of these seven years? In the United States and throughout much of the developed world it may have been the 0% short term interest rates (courtesy of the Federal Reserve) and government borrowing. Chart 7 shows how unprecedented, in a historical context, the Federal Reserve’s policy of 0% short term interest rates has been. Chart 8 shows how the U.S. government debt almost doubled during this seven year period. Chart 9 shows the same rapid increase in U.S. government debt as a percentage of Gross Domestic Product (“GDP”) during this period. GDP is a commonly used measure for a country’s total economic output in one year.
Chart 7: U.S. Effective Federal Funds Rate Since the 1960’s
source: Board of Governors of the Federal Reserve, St. Louis Fed
Chart 8: U.S. Federal Debt: September 13, 2007 to September 24, 2014
source: U.S. Department of the Treasury, St. Louis Fed
Chart 9: U.S. Federal Debt as a Percent of GDP Since the 1960’s
source: Office of Management and Budget, St. Louis Fed
The government debt to GDP ratio climbed about 35 percentage points in the United States. Increasing government debt was actually much worse in several other major world economies. From calendar year 2007 to 2014 (roughly the same time period) the government debt to GDP ratio increased by 38 percentage points in France, 47 in Italy, 50 in the United Kingdom, 63 in Japan, and 92 in Spain. My final chart (chart 10) shows what appears to be a longer term bottoming of interest rates in these major economies. Furthermore, the Bank of England recently published a chart of interest rates going back to 3,000 B.C. which shows that interest rates are essentially as low as they have ever been in the world’s advanced economies.
Chart 10: A Long-Term Bottoming of Interest Rates in Major Advanced Economies (through March 2015)
source: St. Louis Fed
It is clear that government debt and low interest rates have reached extremes, however, they did not unravel in the eighth year (first year of the current seven year cycle). Perhaps this expansion of government debt over the last seven years is just part of a longer term super-cycle that will still take years to play out.
I can think of one other important economic item that almost doubled during this seven year period. Its influence on the market did lead to a dramatic price collapse. U.S. crude oil production increased from 4.9 million barrels per day in September 2007 to a peak of 9.6 million barrels per day in April 2015. This surprising U.S. production increase accounted for almost all of the world’s net production increase during this seven year period. The ability of U.S. producers to raise capital over this cycle was juiced by the ultra-low interest rate environment.
The price of brent crude oil peaked during the summer of 2014 around $115 per barrel, shortly after ISIS announced their caliphate in Northern Iraq and Eastern Syria. Oil prices were climbing at the time due to the concern that they could seize Iraq’s main producing fields in the Southeastern corner of the country. Brent crude prices subsequently fell to about $80 per barrel in November 2014. This initial price decline during the second half of 2014 was driven by the final climax of surging U.S. production. Then on Thanksgiving Day, OPEC (i.e., Saudi Arabia) announced they were going to continuing pumping crude all out to increase market share. Brent crude subsequently collapsed, falling into the high $40s per barrel in January 2015. It is likely that Saudi Arabia pursued this policy to hurt Iran and influence the nuclear negotiations that were ongoing at the time. The U.S. may have also “suggested” this to Saudi Arabia to hurt Russia, the economy of which is heavily dependent on the price of oil.
The collapse in oil prices has severely hurt U.S. shale oil drillers. The U.S. Energy Information Administration (“EIA”), has recently reported that U.S. onshore oil producers are collectively spending over 80% of their operating cash flow on servicing their debt. This is up from a little over 40% in early 2012. If oil prices remain at current levels, there will be more bankruptcies amongst the weaker U.S. shale operators.
Here is one situation where the excess during the seven year period clearly lead to a market collapse beginning during the seventh year and climaxing during the eighth year. The impact of the oil price collapse was not just limited to U.S. oil producers, but has extensive global implications. It has effected many oil producing nations around the world, such as Canada, Russia, Iran, Brazil, Mexico, and Norway. Some of these countries are now in an official recession. The collapse in oil prices also helped push the U.S. dollar higher, leading to other economic dislocations around the world.
I do not think this oil story is over yet. There are events in the Middle East yet to play out, which may ultimately impact oil prices in the other direction. Saudi Arabia’s action may lead to a subsequent reaction that causes oil prices to spike higher. A temporary inflation scare from a spike in oil prices could be enough to send government bond yields higher. This would link this U.S. crude production excess back to the government debt excess. It could also mean that each seven year period is characterized by a particular economic phenomena (e.g., internet stocks, housing, shale oil) that leads to some sort of market crisis due to its connection with increasing debt burdens. In other words, continued debt expansion serves as the fuel for the unique economic fire in each successive seven year period.
Time will soon tell whether or not the shale oil "bubble" represents "the" significant excess of this most recent seven year period. The evidence is inconclusive at this point. We will have to wait and see what the fallout is over the coming months. If the evidence becomes conclusive that this was indeed an important trigger for a economic crisis, then I will officially record it. Such a scenario may also lead me to go back and examine prior historical seven year periods.
Joshua S. Hall, ChFC
Endnotes:
* If you came here by an endnote link, click the same number link below to return to the nearest subtitle in the letter.
1. Israel did not actually observe the Sabbath year until their return from Babylonian exile in 528 B.C. God exiled them to Babylon for seventy years, and let the land rest for seventy years, because they did not observe the Sabbath year seventy times when they were in the land.
2. God calls Israel “my land” in 2 Chronicles 7:20, Isaiah 14:25, Jeremiah 2:7, 16:18, Ezekiel 36:5, 38:16, Joel 1:6, and Joel 3:2.
3. It is fine (and generous) if someone wants to forgive a debt, but it is not just to force someone to forgive loans that they risked their capital on. Forced debt cancellation is the work of Socialists and the promise of false prophets deceiving Christians who run up their credit cards with no intention of repaying.
Disclaimer:
The True Vine Letter is a publication of True Vine Investments, the investment advisory business of Joshua S. Hall, ChFC, a Registered Investment Adviser in the U.S.A. The information presented in The True Vine Letter is provided for educational purposes only and not to be used or considered as an offer or a solicitation to sell or an offer or solicitation to buy or subscribe for securities, investment products or other financial instruments, nor to constitute any advice or recommendation with respect to such securities, investment products or other financial instruments. The True Vine Letter is prepared for general circulation. It does not have regard to the specific investment objectives, financial situation, and the particular needs of any specific person who may read this letter. You should independently evaluate specific investments and consult a professional before making any investment decisions.
Positive comments made regarding this article should not be construed by readers to be an endorsement of Joshua S. Hall's ability to act as an investment adviser.