Hey, like they can say nice things and the economy is doing this or
that, but they're going to have to lower rates. That's the upshot.
The pivot's coming, right, Yeah, the pivot's coming. I think though,
if they indeed, if the bezz indeed treat the balance sheet, continue
to shrink the balance sheet, which I suspect they're going to continue doing,
decrease the monetary supply them too. I think that great decreases most likely could
occur somewhere out about a year from now. You're listening to Carrie Let's Financial
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Well, well, all the Fed hath spoken, and as it's spoken clearly,
do you know what the Fed did yesterday? Sometimes doing nothing is a
lot more than doing something. And here to discuss it with us right now
is David Wright financial expert and proprietor of the Right Financial Group. You find
him at Right Financial Group dot com. Hey, questions comments for myself or
David or anything else about the economy, stocks, etc. Just shoot me
an email kl at carry Lutz dot com. David, it's great to have
you on the show. So the Fed has spoken, or shall we say
they haven't spoken. They didn't raise hikes where you surprised, not at all.
I think most of the economists predicted it would be a nothing for or
this time. The big question is, you know, what are they going
to do with the remaining two meetings of this year. Carry they've kind of
gotten themselves into this predicament that if they raise rates anymore than they do right
now, they risk even more demand destruction and bank stress, you know,
things that are going on. They felt right now that the economy is in
a good enough place. Things are kicking along. We had a recent IPO
of ARM that came about that went pretty well. Doing well. The economy
right now in and up and down state. As far as consumers look concerned,
I think they're looking at the auto strike. I think they're looking at
consumer debt. I think they're looking at a host of bigs carry that are
of concern to them. Raising rates right now could just break the backs of
banks and consumers as well as companies. And there are future rings right all
right. So it's better to do nothing than to keep pushing it. What
of the banks, the regional banks, past few days, we're getting hit
pretty hard. Seems like maybe they're bouncing back now, but they seem to
be a key indicator. The other indicator is that the FIDS emergency discount,
the window borrowing program to keep the banking sector afloat every week has been going
up. So to this uneducated eye here, David, it really looks like
things maybe aren't that good in the banking financial sector. Well, they certainly
are, because you know, a base at to mark their books, mark
to mark with their loans really are worth at any given time. And with
mortgage rates being doubled up the read they were two and a half years ago,
mortgage activity is greatly slowed down. I don't think my own situation where
either we're trying we're trying to downsize, Ryan size unintended, but we're trying
to size and we want to make it a cash deal from our house to
another house so if we want to upgrade a little bit more from where we're
at right now. And finally, as any of it, who wants to
finance it at seven point two nine percent? Right, So all those things
are playing into bank profits. Profitability of banks are under question. But I
think the bigger question is, you know, how will the FEDS continue to
manage the sticky inflation. Inflation has made progress, Gary Almanta. Progress has
come from nine point one last year, as I'm sure your notes will indicate
down to you roughly now. I think on the CPI aadline c guy was
three point seven core CPI drop a little bit, but the bends really a
little bit more pc which comes out at the end of September, but it's
it's still pretty sticky. I think what the feats they're going to have to
do is this. I don't see them raising hypes in November or even raising
anything in December. Oh way you see them doing is shrinking the balance sheet.
I think what they're going to have to do is all this four point
by trillion they print it during COVID stimulus, all of those treasury bonds they
purchased to inject cash into the autonomy as those treasuries start to mature, they're
not going to reissue them. They're going to let them roll off. They're
going to diminish the monetary supply from all the federal reserve banks, which in
effect will cause inflation, I think, to drop just by tidening the money
supply. So I think that's going to be how they regulate the inflation and
the future, not buying, you know, war rate hikes. But there
are plenty of people on the other the other side, and say, I
think you're wrong. I think they're going to have to continue to addie because
you look at oil right now, over ninety around ninety a barrel. You
know that's going to get all the American silvers with gas prices next year when
they go to the blow, that's gonna shrink their budget. It's gonna end
companies. It's gonna hit the trickle down board all manufacturing and retail when gas
prices go back up. And no, he started on this find that change
in ev movement. It just all this stuff works in in this one big
ball that it's going to be hard to get out of. Right. Well,
yeah, and not to mention the deficits running a couple trillion a year,
and we got a surplus of the treasury debt on the market, and
the dollar keeps going up. We got war is a war in Europe and
potentially in other places. So this balancing act, it seems like the Feds
balancing a lot of plates. They're like that guy the contortionist, spinning a
quickly all over the place. But in some points the plates are going to
break, right, Yes, I think so. And in this part of
it, you know the by toonomics of the presidential stance on a lot of
the things that are going on right now with climate change. I'm not against
climate change, amount against that movement, but to completely transition over to evs
in California by twenty thirty two, it just isn't reasonable to do that.
We need fossil fuels to create arts for those evs. And if if we're
under a situation where the current administration says they're pro union, if they're really
pro union, but they're back at the EV market, we know that forty
percent less workforce is required in EV manufacturing and that trivial down effect to all
the suppliers of EV vehicles. So all of this stuff is going to contribute
to I think a lot more unappointed demand to structure. So you know,
we're we're, we're I think, in an heap of trouble for the moment.
It's a balancing act, for sure, it's a balancing act. So
M two. All right, velocity of money keeps going down, that's generally
a bad thing because it's as a deflation. Yeah, inflation was at nine
point something percent, but you and I both know, David, the actual
inflation rate, the real inflation rate substantially higher in double digits, right,
of course, well into double digits. I don't have the exact number,
but I can prove it to you. I mean, when the fetus has
made that uh what I want to call it a brain fart of saying that
the inflation is transitory. Come on, ATA is never transitory. It's permanent.
It's what the rate of acceleration is. Yeah. Now, maybe the
rate of acceleration has decreased from nine to three point seven or four percent.
But the reality is I have clients that are doing very well, and i'd
ask some clients that are just getting by following no one's an issue inflation being
the problem for them and the monetary supply shrinking. Just yesterday, I'd had
somebody walk in with their four oh one K account and they said, I
need to cash this in. I have a house of bayment I gotta make
I got to cash this in. I had somebody else I had an appointment
with on Zoom yesterday, Carrie. There is something that is ready to retire
there. They're they're near their retirement and they've got over fifty thousand credit card
goals and no way of getting out of that unless they use their retirement accounts
to pay them all. Consumer debt four oh one K loans and credit card
increasing credit card debt is it's gonna kill everyday Americans. So people really need
to wise up and get lean and mean right now if they want to have
any kind of a hold of a happy Yeah. No, it couldn't agree
animal or couldn't agree with you more. I mean, they like they can
say nice things and the economy is doing this or that, but they're going
to have to lower rates. That's the upshot. The pivot's coming, right,
Yeah, the pivot's coming. I think though, if they indeed,
if the BEZ indeed treat the balance sheet continued to hrink, the balance sheet,
which I suspect they're going to continue doing decrease the monetary supply them too.
I think that great decreases most likely could occur somewhere out about a year
from now September twenty twenty four. Although the big five hundred down elephant in
a room is holm. Is this new aw strike gone this tomorrow? Horany
at noon is when it's supposed to be, you know, some sort of
it's being resolved that I don't see it being anywhere near it are my hometown
where right financial group is located to leo is Homemost Stilantis, which is your
company of largest you've done? Why out? Yeah, they're nowhere near every
mid year nowhere near all right? So what are you supposed to do as
an investor, as a saver all these things? How do you short a
course for survival and even prospering in these uncertain times? Here, David,
great question, Carrie, and I think the number one thing that to do
in their own because it is look at what the purpose of your money is,
for purpose over performance, Because if you shoot for Gormans, you're going
to try to find that stock that can appreciate what you may guess long.
So what you need to do is decide not the money's for if it's or
going most of my clientsy, or which is for income. We find things
right now that because inflation is still steady and the treasury one year treasuries are
at by plus percent, we have people taking advantage of walking in higher short
duration things that can get them through this time frame where their money can be
you know, have some principal protection and have some interest paid, also using
things that generate interest and dividends from bond, bond like securities or birds,
things like that of that nature that even if there's shifts, if the fence
at bind wand and the bets do raise intertras if bond and bondelike instrum istumus
drop in value, the same income, so the process can survive financially survived
through that type horizon where the bond drops in value but they still get the
same payment of income through that time variated the bond matures at its value and
the bond like securities act similar to that. And then the third thing is
to take advantage of any long term plays of money. You know, you
don't meet for income. You know, look around and some of the mega
tech stuff and see if there's anything they need. Can buy out a data
because this idea, that arm that just came out showed the market that ideas
aren't dad. It's been about sixteen months since they've been any sort of IPOs
in the market. So those are the three tips. Money you need for
income and stability, short buried securities, treasuries, short term accounts in bond
bond like instruments to provide you dividends and interest. Also, one I didn't
mention dividend stocks. There's a lot of dividends spots out there now. Dividend
stocks haven't done as well this year next to new probo stocks because of the
AI movement, but the dividends stocks normally will outperform in this sort of an
environment because you're getting paid everywhere. You're really a nice quogly dividend cha that's
going to go back into your checking accounts. So those are the best stits
that I can give. And you know what, I've been in the business
long enough with this gray or you can tell that I know it works.
All right, here's a question for you. We don't recommend stocks here.
I'm not a financial advisor like you. But I've been watching Verizon. It's
yield is up to eight percent. It's got really healthy cash flow. I
mean, they're the number one or number two cell phone provider in the United
States. Right market maybe is not as much of a growth market as it
was, but they've also got their fiber network in the Northeast. Do you
go for that dividend there? What are your misgivings about it? Put it
that way, I would not be a layer necessarily in Verizon fullheartedly, although
I would probably hold a smaller position. I think we old a smaller position
in Verizon. Got to be careful purity that you don't chase a dividend.
But sometimes you might get yourself into a you know, a dividends trap or
you're you're just going for a eye dividend. But I think Verizons one of
those companies, like some of the megattacks said. You know, I think
they're got a too big to fail. I think they're going to be fine
long term, but the eight percept dividend is a Sir Lincoln Colling, do
you think they'll cut the dividend? I mean, they really can't cut the
dividend, can they? Well, that's what rate hikes do. Right,
every two money and more above its out of this every time interest free try
the value of all financial assets degrees. So obviously, if if there's no
rate of heights, all of these cumpanies not does Verizon, They're gonna have
to cut their their rage. They already did it. That's the mist.
A year ago they cut dividends so that the fear of able could come in
and look like, you know, oh we in our dividend, we're on
darket. Yeah, but you cut the dividend last year, you know,
by several or sin so that you knew you'd be able to match it this
year. So on yesterday, Gary, those things will you know, have
to all self adjust if rates go ar, APO cancer produce all right,
I like it all right, So it's a right Financial group dot com.
Make sure you click the link in the show notes of this interview on Financial
Survival Network dot com. While you're there, sign up for your free newsletter.
Got one going out any moment now, David, Always a pleasure,
Thanks for stopping by, as always a pleasure. Thanks for listening to carry
Lets's Financial Survival Network your solution to today's trying times For the latest, go
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