Confession of an Atheist: Africa Needs God, US Bonds; No Longer Safe

If an English atheist can reason that the Gospel of Christ makes all the difference in the lives of Africans on the "Dark Continent", how much more should we as believers realize Christ makes all the world of difference to the lost in America?

Bonds & treasuries have nearly always been considered the milquetoast safe-haven of investment; low-risk, low-yield. The place reserved for retirees and faint of heart. Harshly enough, the dam of false hope which held up Wall Street, the finance & credit markets, and the rest of our nation, has developed too many cracks & ruptures even to keep these from leaking.
As our nation's government infrastructure, federal & state, begins to unravel financially, we will observe the collapse of bonds & treasuries as an investment & retirement nest-egg as well. We are already seeing this across certain cities & states, and with the recent interest rate set by the Federal Reserve. It is becoming a ludicrous proposition to place any faith in our government system on any level; bonds, treasuries, Social Security, Medicare, Medicaid.
America, the nation which once boldly proclaimed, "In God We Trust", does no more. Ergo, America's faith has no foundation anymore, and we see & feel the effects now. How can our future hold anything but despair as long as we turn our back & deny the Living God?

____________NEWS_______________

From The UK Times

December 27, 2008

As an atheist, I truly believe Africa needs God

Missionaries, not aid money, are the solution to Africa's biggest problem - the crushing passivity of the people's mindset

Matthew Parris, UK Times

Before Christmas I returned, after 45 years, to the country that as a boy I knew as Nyasaland. Today it's Malawi, and The Times Christmas Appeal includes a small British charity working there. Pump Aid helps rural communities to install a simple pump, letting people keep their village wells sealed and clean. I went to see this work.

It inspired me, renewing my flagging faith in development charities. But travelling in Malawi refreshed another belief, too: one I've been trying to banish all my life, but an observation I've been unable to avoid since my African childhood. It confounds my ideological beliefs, stubbornly refuses to fit my world view, and has embarrassed my growing belief that there is no God.

Now a confirmed atheist, I've become convinced of the enormous contribution that Christian evangelism makes in Africa: sharply distinct from the work of secular NGOs, government projects and international aid efforts. These alone will not do. Education and training alone will not do. In Africa Christianity changes people's hearts. It brings a spiritual transformation. The rebirth is real. The change is good.

I used to avoid this truth by applauding - as you can - the practical work of mission churches in Africa. It's a pity, I would say, that salvation is part of the package, but Christians black and white, working in Africa, do heal the sick, do teach people to read and write; and only the severest kind of secularist could see a mission hospital or school and say the world would be better without it. I would allow that if faith was needed to motivate missionaries to help, then, fine: but what counted was the help, not the faith.

But this doesn't fit the facts. Faith does more than support the missionary; it is also transferred to his flock. This is the effect that matters so immensely, and which I cannot help observing.

First, then, the observation. We had friends who were missionaries, and as a child I stayed often with them; I also stayed, alone with my little brother, in a traditional rural African village. In the city we had working for us Africans who had converted and were strong believers. The Christians were always different. Far from having cowed or confined its converts, their faith appeared to have liberated and relaxed them. There was a liveliness, a curiosity, an engagement with the world - a directness in their dealings with others - that seemed to be missing in traditional African life. They stood tall.

At 24, travelling by land across the continent reinforced this impression. From Algiers to Niger, Nigeria, Cameroon and the Central African Republic, then right through the Congo to Rwanda, Tanzania and Kenya, four student friends and I drove our old Land Rover to Nairobi.

We slept under the stars, so it was important as we reached the more populated and lawless parts of the sub-Sahara that every day we find somewhere safe by nightfall. Often near a mission.

Whenever we entered a territory worked by missionaries, we had to acknowledge that something changed in the faces of the people we passed and spoke to: something in their eyes, the way they approached you direct, man-to-man, without looking down or away. They had not become more deferential towards strangers - in some ways less so - but more open.

This time in Malawi it was the same. I met no missionaries. You do not encounter missionaries in the lobbies of expensive hotels discussing development strategy documents, as you do with the big NGOs. But instead I noticed that a handful of the most impressive African members of the Pump Aid team (largely from Zimbabwe) were, privately, strong Christians. “Privately” because the charity is entirely secular and I never heard any of its team so much as mention religion while working in the villages. But I picked up the Christian references in our conversations. One, I saw, was studying a devotional textbook in the car. One, on Sunday, went off to church at dawn for a two-hour service.

It would suit me to believe that their honesty, diligence and optimism in their work was unconnected with personal faith. Their work was secular, but surely affected by what they were. What they were was, in turn, influenced by a conception of man's place in the Universe that Christianity had taught.

There's long been a fashion among Western academic sociologists for placing tribal value systems within a ring fence, beyond critiques founded in our own culture: “theirs” and therefore best for “them”; authentic and of intrinsically equal worth to ours.

I don't follow this. I observe that tribal belief is no more peaceable than ours; and that it suppresses individuality. People think collectively; first in terms of the community, extended family and tribe. This rural-traditional mindset feeds into the “big man” and gangster politics of the African city: the exaggerated respect for a swaggering leader, and the (literal) inability to understand the whole idea of loyal opposition.

Anxiety - fear of evil spirits, of ancestors, of nature and the wild, of a tribal hierarchy, of quite everyday things - strikes deep into the whole structure of rural African thought. Every man has his place and, call it fear or respect, a great weight grinds down the individual spirit, stunting curiosity. People won't take the initiative, won't take things into their own hands or on their own shoulders.

How can I, as someone with a foot in both camps, explain? When the philosophical tourist moves from one world view to another he finds - at the very moment of passing into the new - that he loses the language to describe the landscape to the old. But let me try an example: the answer given by Sir Edmund Hillary to the question: Why climb the mountain? “Because it's there,” he said.

To the rural African mind, this is an explanation of why one would not climb the mountain. It's... well, there. Just there. Why interfere? Nothing to be done about it, or with it. Hillary's further explanation - that nobody else had climbed it - would stand as a second reason for passivity.

Christianity, post-Reformation and post-Luther, with its teaching of a direct, personal, two-way link between the individual and God, unmediated by the collective, and unsubordinate to any other human being, smashes straight through the philosphical/spiritual framework I've just described. It offers something to hold on to to those anxious to cast off a crushing tribal groupthink. That is why and how it liberates.

Those who want Africa to walk tall amid 21st-century global competition must not kid themselves that providing the material means or even the knowhow that accompanies what we call development will make the change. A whole belief system must first be supplanted.

And I'm afraid it has to be supplanted by another. Removing Christian evangelism from the African equation may leave the continent at the mercy of a malign fusion of Nike, the witch doctor, the mobile phone and the machete.

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Older Investors Should Examine the Risks in Bonds

By TARA SIEGEL BERNARD

For people in or near retirement, bonds were supposed to provide a sense of security.

But for some investors, they did precisely the opposite. Bonds of all stripes have taken sizable hits this year. The losses have not been as agonizing as the 40 percent decline in the stock market, of course, but any loss is particularly painful for people who count on these investments as a safety net.

“There haven’t been any safe places to hide, with the exception of Treasuries,” said Miriam Sjoblom, a mutual fund analyst at Morningstar. “That has been a surprise to some investors.”

Several diversified bond funds have held their own — largely because they contained a healthy helping of Treasuries — which underscores the importance of diversification.

But for some older Americans, even that relative safety is not enough to allay their concerns. Lehman Brothers and Washington Mutual were top-rated bonds — until they were not. Even some money-market funds have run into trouble.

“Fixed income should be ultrasafe,” said Steve Podnos, a financial planner in Merritt Island, Fla. “The return of principal is more important than the return on principal.”

That is a popular mantra, especially now. Ultrasafe comes at a cost, however, and there are not many bulletproof investments that yield more than 2 or 3 percent, experts said. For the risk-averse, that might be plenty when you just do not know what might lurk around the corner.

And because conditions may worsen before they improve, older investors should check that their bond investments are indeed what they thought they were — and that they fit their tolerance for risk. “We are in a 2 to 3 percent world, and if they want to earn more than that they need to proceed cautiously,” said Gary Cloud, a bond manager at Financial Counselors in Kansas City, Mo.

Several advisers and bond experts recommended that investors maintain higher cash reserves than they might in more normal times. Keeping two to three of years of living expenses in extremely safe investments, like a certificate of deposit or a money market account at a large financial institution, can provide some breathing room. That way, investors will not be forced to sell investments at an inopportune time.

Investors also need to remember that bond funds and individual bonds work a bit differently. With an individual bond, investors are guaranteed to receive their original investment back after it matures, as long as the company does not implode. With bond funds, there is no such guarantee because the value of the bonds inside will fluctuate with market conditions. That means the value of the investment will vary, too.

Of course, a sizable pile of money is needed to build a portfolio of individual bonds as opposed to simply purchasing a bond fund. Opinions vary widely — from $50,000 to $500,000 — on the amount needed to be properly diversified, though several experts agree it can be done with about $100,000 to $200,000. It is probably best to sit down with an adviser, preferably a fee-only adviser or one that charges by the hour, to go through the pros, cons and costs of each.

Some advisers have strong feelings about both instruments. Some refuse to use bond funds because they say they do not know what they own, though that problem can be addressed by using index funds, whose investments remain relatively static. Other advisers say they cannot attain the level of diversification with individual issues. Whatever you decide, knowing what you own and understanding the risks involved are what really matters. And if a bond investment promises high returns, a little mental bell should go off as a warning signal.

“We see a lot of retirees come in and they have a lot of their fixed-income investments in aggressive funds,” said Richard Rosso, a financial planner with Charles Schwab in Houston. “They have gotten seduced by the yield of the fund and didn’t look at how that yield was being derived.”

Instead, investors should anchor their portfolios with a fund, or combination of funds, that hold wide swaths of high-quality government-backed, corporate and mortgage-backed bonds — with short- to intermediate-term maturities, experts said. (Shorter-term securities are less sensitive to changes in interest rates; when rates rise, bond prices fall). Low expenses are extremely important because bond funds do not yield much to begin with. The Vanguard Total Bond Market Index fund fits that bill. It is up nearly 5 percent this year and charges a rock-bottom 0.07 percent of assets. Two actively managed options, Harbor Bond, managed by Bill Gross of Pimco, and FPA New Income — up 2.2 percent and 4.03 percent, respectively — are considered strong choices where capital preservation is a top priority, Ms. Sjoblom of Morningstar said. But, of course, they are more expensive.

Beyond a fund like the Vanguard Total Bond Market, advisers also recommend adding a dose of international bonds as well as Treasury inflation-protected securities, or TIPS, whose interest payments and underlying principal keep pace with inflation. Deflation fears are trumping inflation fears, at least for the moment, which has caused the price of TIPS to drop. But the government has printed a lot of new money and is expected to keep doing so, experts said.

“There is a possibility that inflation will heat up in the future, so why not add money as a hedge for future inflation?” said Mr. Rosso, especially now, when TIPS are attractively priced. He recommends limiting allocation of these to no more than 10 percent of bonds in a portfolio. They can be purchased directly (but keep those in a tax-deferred account) or in a fund or exchange-traded fund.

Meanwhile, high-quality municipal bonds — or funds — may be appropriate for certain investors. Because municipal bonds are generally tax-free, they tend to pay less in interest than their taxable counterparts, and normally make sense only for people in the highest tax brackets. But many top-rated municipal bonds are now yielding more than taxable bonds, which makes them attractive to a broader population, experts said. Despite budgetary troubles in places like New York and California, and the economic headwinds all municipalities face, advisers said sticking with the highest-quality short- and intermediate-term general obligation munis — or those backed by a municipality’s taxing power — are a reasonably safe bet.

“You can make the argument that anyone will do better owning that,” Mr. Podnos said. Long-term municipal bond funds have lost 10.5 percent for the year as of Wednesday, and shorter-term funds are up 0.5 percent, according to Morningstar. Short- and intermediate-term funds are not subject to as much volatility, he said, and will produce a combined tax-free yield of 3 to 4 percent, the equivalent of a 5 to 6 percent taxable yield.

For investors with even less tolerance for risk, advisers recommend the following:

C.D.’S Certificates of deposit, which pay a fixed interest rate but lock up money for three months to five years, are guaranteed by the government for up to $250,000 for each depositor at each bank. Guarantees are scheduled to drop to $100,000 for each depositor at the end of next year. Callable C.D.’s may offer even higher yields, but remember that you are being paid more to take on extra risk: the bank can return your money before the C.D. matures, so you may have to reinvest at a potentially lower rate, Mr. Rosso said. And keep in mind that C.D.’s will penalize you, sometimes substantially, if you withdraw before maturity.

F.D.I.C. BONDS These government-backed bonds come with variable or fixed rates. They tend to pay more than Treasuries, with several batches of three-year bonds paying slightly more than 3 percent, though newer bonds have been paying slightly less. They have largely been issued by large financial institutions — like JPMorgan and Wells Fargo, participating in the government program that was created in October to help bolster the credit markets. The debt will be sold through next June and must mature in less than three years. Before you consider these, check whether there are comparable deals in C.D.’s.

GINNIE MAE Not to be confused with Fannie or Freddie, Ginnie is owned by the government and issues securities that are backed by federally guaranteed or insured mortgages. Translation: these are safe. Several advisers recommend Ginnie Mae funds — or the actual securities — as a higher-yielding alternative (about 2 percent) to money-market funds. But there is a big caveat: If interest rates move higher, the value of these securities will drop, Mr. Podnos said.

PRE-REFUNDED MUNIS Pre-refunded municipal bonds, along with escrowed-to-maturity municipals, are solid options because the payments the bond issuer must make to investors over the life of the bond are held in an escrow fund, usually comprising United States government securities. The yields tend to pay about two percentage points above Treasuries with a comparable maturity, said William Larkin, a fixed-income manager at Cabot Money Management. Just be sure the collateral is Treasuries. “It’s the safest of the safe,” added Marilyn Cohen, president of Envision Capital Management.