Latest / Financial Survival Network / The Economic Rollercoaster: Government Spending, Debt, and Inflation - Brad Williams #6051

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The Economic Rollercoaster: Government Spending, Debt, and Inflation - Brad Williams #6051 · Financial Survival Network

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  Okay, your son and daughter in law just came to you and they're asking
• 0:04
  you advice on their finances. This is what they make, this is what
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  they spend, this is what they have in debt, this is their debt
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  service and all that. And it was done in the size numbers that most
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  people can wrap their arms around. And what people said was, why tell
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  them they got some problems, they need to cut spending and all that.
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  And then I flipped the page after going through a lot of that, it
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  showed them all we did was at a bunch of zeros. This is a
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  national dint. This is the federal government, and they're all like miles of
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  gate going. I didn't realize it was that bad. And Carrie, that's
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  the problem. People don't realize how bad it is. You were listening to
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  Carrie. Let'sa's financial survival network where you get valuable information you just can't find
• 0:41
  anywhere else to thrive in today's trying times. You need the Financial Survival Network
• 0:48
  now more than ever. Go to Financial Survivalnetwork dot com and get your free
• 0:53
  newsletter and gift. Financial Survival Network now more than ever, and welcome.
• 1:03
  You are listening to the Financial Survival Network. I'm your host, Carrie Lutz.
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  Well, the economy, what's it going to be? We in recession?
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  Our rates coming down, inflation? Is inflation going to stay up there
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  and get worse or is it going to improve? And what are your alternatives?
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  What do you do when your dollar just isn't going as far as you
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  wanted it to and how's that going to affect your retirement? Well, our
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  good friend Brad Williams, financial expert, is with us now. Brad,
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  it's great to have you back. So, first, economy, recession,
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  is it here? Is it coming? If it's coming, when is it
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  coming? You often point to a little blue glass globe that I have on
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  my desk and tell my clients that that's the closest thing to a crystal ball
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  I have. But our government and the Fed has gotten so good at this,
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  uh, this dance around everything that it's murky because of the policy prescriptions
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  they always put in. I think we're seeing indications. You know, people's
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  people may be getting raises in their paycheck, but they're not commensurate with what
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  their increases and expenses are. So you know, as we see fuel maybe
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  go down, we've seen it come down. What a lot of people don't
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  realize is is that's also it's not just the cost of the fuel. That's
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  an indicator that maybe people aren't using as much of it. And if they're
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  not using as much of it, then they're not getting out and about and
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  doing things and buying things and all those things required for a consumer driven economy
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  life we have all right, So demand is down, well, it's it's
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  hidden by inflation by the cost of everything going up, isn't it. Yeah,
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  it is. And we see we see gold going up. It's you
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  know, it's hitting new eighs and that is an indicat too, of people's
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  fear bitcoin. You know, we're starting to hear some things in bitcoin.
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  I'm getting people asking me more and more about bitcoin. And I don't recommend
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  investing in that. I'm not saying you shouldn't. That's just not something that
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  that I'm licensed to recommend. So you know, I just tell people you
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  do what you do, what your heart tells you. But you know,
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  I'm not sure you know how how bitcoin works. But a bitcoins and indication
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  that people are losing faith in the dollar, and you know, we are,
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  we are the world power because we are ostensibly the richest nation. We
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  have the military power, and so a lot of people will pay our interest
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  rates for our dead instruments, our bonds and treasuries because it's cheap insurance for
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  the for the defense umbrella we provide. Well, the question we got to
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  ask ourselves is you know what happens when our military gets too expensive. Our
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  interest rates this year are going to cause our service on the national debt to
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  exceed our defense budget. And that's a scary thought, certainly is. And
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  the only alternative is to monetize QE to infinity right exactly. And you know,
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  and then we have all these We're in an election years, so we
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  get all these ridiculous proposals, like you know, the president that was doing
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  a speech, I think it was yesterday, we was talking about he wanted
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  to give free community college to all and you're not gonna have to pay for
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  it. Well, yeah, you are, your kids, your grandkids.
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  We have lived in a society that has been so affluent for so long that
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  we've forgotten that somebody's going to have to pay the credit card bill at some
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  point in time. You can't just take cash advances and put things on the
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  credit card for infinity yeah, sometimes you got paid back. Well, that's
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  what we've and doing, right. And you know, and with bitcoin,
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  they have this thing every couple of years called the having where right, the
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  amount of the bitcoin that can be mined is cut in half from like nine
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  hundred and fifty coins a day now to like four hundred and seventy five.
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  What if the Federal Reserve did a halving and they said every six months,
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  the amount of dollars that we create, we're going to cut in half.
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  What do you think that would? Oh? Well, and you go back
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  to when we came out of that high inflation time. You know, whenever,
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  whenever the government does something to solve a problem, they oftentimes exacerbate the
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  problem. I was old enough to remember that the WIN program, I think
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  it was under fool quip inflation now now, yeah, and all the things
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  that you know, the government did, Like you know, they wanted to
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  freeze the cost to certain cuts of meats. Did what did the butchers do?
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  Well? They created new cuts of meats. They weren't regulated, you
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  know. I mean, so the one thing you got to say about our
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  economy and our people is that typically we figure ways around the government. I
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  mean, oftentimes people say, well, the government did good under this president.
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  Well, the question is, did they do good under that president because
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  we figured out ways around his policies, or did he take barriers down to
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  allow us to So government either puts barriers up to the economy or they take
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  barriers down. And what Rayan did was he took barriers down. Now,
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  it also started with Walker, you know, really really tightening up. Interest
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  rates went up, you know, and the money supply decreased. But what
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  happened was they stayed the course and we're able to come into the eighties with
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  a strong economy after the first couple of years. And that took discipline,
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  It took adults in the room. The problem we have in Washington now is
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  we got no adults in the room. Yes, how do we get some
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  back in the room, that's the question, that's right. Well, so
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  when you look at it, some of the indicators, you know, even
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  China is starting to worry about gold. You know, they're limiting, uh,
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  the mar or they've raised the margin requirements, they're limiting price swings.
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  They're doing the same on silver because they're afraid of precious metals and uh,
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  because that that's always been the store of wealth. Now I'm not telling everybody
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  to go out and buy a bunch of gold. I'm just saying you probably
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  ought to have a little in your portfolio as an offset. And I'm talking
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  about the hard metal, not the paper. You know, maybe some silver,
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  that type of stuff. It's a good hedge. But you don't look
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  at those as investments. You look at them as a store of wealth.
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  And and that's where a lot of people I think go wrong is they watch
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  the they buy gold, and they watched the price of it go up and
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  down. They get nervous. We didn't buy it for that reason. You
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  bought it to stick in your safe and forget about it. And that's the
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  reasonable way to look at it. But if our government doesn't start getting it
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  spending in line, then we're going to go the way of Britain. You
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  know, they exhausted themselves in World War Two and came out of World War
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  two being taken down from the throne of the world power. Yeah, well,
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  all empires eventually die, right, That's exactly right. And we've been
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  blessed for a long period to be a strong, a strong government in spite
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  of all our flaws. And you know, one of the beauties of our
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  government is that our founding fathers when they wrote that document, they made it
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  hard to make hard shifts in either direction. You had to go through legislative
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  process and all that. Well, now you know, the executive branch is
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  figuring out how they just say, Okay, we're just going to do an
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  executive order and get around that. Then we don't have to you know,
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  then we don't have to pass that law. And that's danger, yes it
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  is. And that's led to all sorts of imbalances and government power between the
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  courts, the executive and the legislature. And well we all know that.
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  So so what are you supposed to do here? Well, what I what
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  I tell people is and because I deal primarily with retirees, it's all about
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  income and you know, looking at at at bonds and things like that to
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  provide you that retirement income that's consistent because you're you're not gonna be able to
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  count on growth, you can't. I guess the way I put it is,
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  we want to look at how we can live off the eggs and not
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  the chicken. And as we're in these volatile markets, these people that are
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  that are counting on their portfolio to grow a certain amount so they can take
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  a certain amount of income. Are creating a cancer that's going to ultimately eat
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  their portfolio. So people have when they switch into that retirement mode, they
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  need to switch their thinking and their investment strategy. Now, you know,
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  somebody like my daughter, who is who's my oldest daughter, thirty two,
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  she should have a long term approach to investing. In fact, I tell
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  a lot of young people like that, it's you know, buy an S
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  and P five hundred five and don't even open the statements. Just keep funding
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  it and then you know, twenty years from now, start paying attention.
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  You know, do the right things, but don't watch the markets go up
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  and down and try to time it. You're in there for the long run.
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  But when you get to retirement, you can't play that game. And
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  so because you don't have the time. So when I counsel people about what
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  next is, let's look at things that provide income. You know, maybe
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  like I said about gold, having a little store goal for for you know,
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  things get really bad, but you know it's it's really hard to predict
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  what's coming because we're in unprecedented times. We've never had this much debt and
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  it's it's kind of scary because it creates a lot of instability in the world.
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  Look at what's going on with a lot of these countries that are looking
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  to create their own basket of currency. So far hasn't worked. But if
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  look, the IMF is warning, the warning of the United States, they're
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  warning Congress, they're warning the president, and how long can they go unheeded
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  for? And you're exactly right. I did a I did a presentation once
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  at a client event where I took the federal budget and I took a lot
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  of zeros off of it and put it in terms of, Okay, your
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  son and daughter in law just came to you and they're asking you advice on
• 11:41
  their finances. This is what they make, this is what they spend,
• 11:43
  this is what they have in debt, this is their debt service and all
• 11:46
  that. And it was done in the size numbers that most people can wrap
• 11:50
  their arms around. And what people said was, why tell them they got
• 11:54
  some problems they need to cut spending and all that. And then I flipped
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  the page. After going through a lot of that, it showed them all
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  we did was at a bunch of zeros. This is a national this is
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  the federal government, and they're all like mouths of gate going. I didn't
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  realize it was that bad, and Garry, that's the problem. People don't
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  realize how bad it is. Yeah, yeah, yep, unbelievable. They
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  see those zeros and you know, you can pull up the deck clock.
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  I'm sure you have. You know that website that keeps clicking, But those
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  numbers, there's so many zeros there that people just they just they blank out.
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  They just blank out, you know. But if we just you know,
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  and we got a presidential election coming up, people need to quit voting
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  based on what somebody on some network is telling them, which most likely is
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  not even true anyway, or it's an exaggeration. And look at Okay,
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  what is this person really going to do? You know, if they're in
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  office now, what have they done? Are things better? You remember that?
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  When when was it? Ronald Ray said? Are you better off than
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  you were four years ago? Okay? He got what forty nine states?
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  And uh he lost one state in the district of Columbia. Totally changed the
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  electoral man because people felt it and they understood it. I think we're getting
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  close to that, but I'm not sure if we're very here, it looks
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  to me like we could be. But hey, you know, and Trump
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  was in office last time, he ran up the deficit by six trillion,
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  So you know, is he going to be a born again fiscal conservative and
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  really cut this the stuffing out of the budget. I mean kind of you
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  like the guy that they just got in Argentina and mule Yeah. Yeah,
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  yeah, he's he's really taking the knife to it. Yeah, and you
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  saw his speech. Cut cut cut, cut, yeah, grat you know
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  what to understand that that's that's right. And so what happens You're sitting there
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  at the table with your wife and you're going over your bills and you're paid,
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  and you know, and things are not moving in the direction you want
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  them to go. What do you do? You say, Okay, we
• 14:07
  don't need the cable, all right, let's get rid of the cable.
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  You know, we don't need this, we don't need that. Okay,
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  you know, we need to confine eating out once or twice a month.
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  You start cutting things and being realistic based on the cash flow you got coming
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  in. You don't go now, we can just float some bonds. Oh
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  yeah, easy, easy to be easy, right, that's right. Yeah,
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  all right, So hey looking ahead, so gold we like, is
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  there anything else? I mean, do you trust any other currency, any
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  other foreign the stock market here? I think, you know, it's always
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  good to have some in an international as long as they're good companies. You
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  know, I'm a I believe in a balanced portfolio in that respect. I
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  think right now what people ought to look at is looking at good quality company
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  that pay dividends, because even in a down market, if they got a
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  consistent history of paying dividends, they're going to get paid, they're going to
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  get rent on their money. Okay, and so at least and in reality,
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  when you look at it long term, check out the dividend performers versus
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  just a straight growth, you'll get a surprise. Yeah all right, hey,
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  Rot, appreciate you coming on talking about these issues with us. Where
• 15:24
  is the best place to find you these days? Well, the best place
• 15:28
  is my website, which is www dot ask Bradwilliams dot com. If you
• 15:33
  got a financial question, just ask Brad Williams. All right, Brad,
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  well, well, certainly keep that in mind when we get a question coming
• 15:41
  up, and you guys out there should also you've got a question for Brad
• 15:45
  myself. The email address is kl Atcarrie Lutz dot com. You'll find a
• 15:50
  link to brad site in the show that to this interview on Financial Survival Network
• 15:54
  dot com and will you there. Please sign up for your free newsletter,
• 15:58
  Brad Pleasure. We'll talk to you again real soon. Always a pleasure.
• 16:02
  Thank you, thanks for listening to Carrie Letz's Financial Survival Network, your solution
• 16:07
  to today's trying times. For the latest, go to Financial Survivalnetwork dot com.
• 16:14
  Financial Survival Network now more than ever,