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FedNow and the Digital Dollar

MoneyWise / Rob West and Steve Moore
The Truth Network Radio
May 12, 2023 5:44 pm

FedNow and the Digital Dollar

MoneyWise / Rob West and Steve Moore

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May 12, 2023 5:44 pm

A new instant payment platform announced by the Federal Reserve Bank has a lot of folks thinking it’s the dawn of a digital dollar. But what does this development really mean for Americans? On today's Faith & Finance Live, host Rob West will explain about “FedNow” and the digital dollar. Then he’ll answer your questions on various financial topics. 

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A new instant payment platform announced by the Federal Reserve Bank has a lot of folks thinking it's the dawn of a digital dollar.

Hi, I'm Rob West. It's called FedNow, and it will allow businesses and even individuals of participating banks to send and receive instant payments 24-7. But is it the camel's nose in the tent for a digital dollar? I'll talk about it today, and then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance Live, biblical wisdom for your financial future. Okay, before we get into this discussion of digital currency, I think it's important to remember Proverbs 15-14.

It reads, The heart of him who has understanding seeks knowledge, but the mouths of fools feed on folly. My point is, let's not panic about a digital currency that isn't here yet and would have to meet with approval by what is now an often hopelessly divided Congress. The Constitution gives Congress sole power over the currency of the United States. The Federal Reserve has no authority to create currency, digital or otherwise on its own. Now, what exactly would a digital dollar look like? Obviously, it would be an electronic form of the US dollar.

It would be fiat money as is the current dollar, meaning it's not backed by gold or silver. It would be similar to cryptocurrencies, but with one big difference. It would be regulated and backed by the Federal Reserve. And that's the major concern of many opponents of a digital currency. It would potentially give the Fed unprecedented power over our financial system. Theoretically, all transactions could be monitored unless strict limits are placed on the Fed's ability to snoop and share that information with other agencies.

Also, again, in theory, the Fed could use this power to actually shape society by allowing or restricting certain transactions. So fears of a digital currency are not without some foundation. However, since other countries are moving ahead with digital currencies, some at a rapid pace, it's likely that the US will have a digital dollar someday. When that might happen is anyone's guess, and it could be years away. You can expect a lot of debate in the House and the Senate before a digital currency is ever approved by those bodies. And you'll have a say in it, too, by contacting your elected representatives and ultimately in the voting booth.

So again, let's not panic. Now, it's true that last year the Biden administration charged executive agencies to explore the process of implementing a digital currency, and the Fed is cooperating in that effort. But the central bank is also warning that there are risks with a digital dollar that could leave customers vulnerable to theft and fraud.

Specifically, policymakers and the Fed have listed several requirements for a digital dollar that won't be easy to meet. It must provide benefits to US households, businesses and the overall economy that exceed its costs and risks. It must also yield those benefits more effectively than our current currency. It should complement, not replace, other forms of money.

And it must protect consumer privacy and prevent criminal activity. So at least at this point, the Fed is not exactly a cheerleader for a digital dollar. That should be welcoming news to people who fear the Fed is conspiring to take away their privacy and freedom. But it hasn't stopped opponents of digital currency from calling the FedNow platform the camel's nose in the tent, which means once the nose is in, the whole camel is going to be in there soon. Concerns about FedNow, set to launch in July, have spread like wildfire on social media.

One example is a tweet by Robert F. Kennedy Jr., who is a presidential candidate for 2024. He claimed that FedNow itself is a central bank digital currency that will allow the Fed to monitor and restrict people's financial transactions. Kennedy wrote, quoting now, the Fed just announced it will introduce its FedNow central bank digital currency in July.

CBDC's grease the slippery slope to financial slavery and political tyranny, unquote. Another Instagram poster wrote, quote, better get your money out of banks. CBDC has started meaning you will wake up one morning and all your U.S. paper dollars will be converted into U.S. digital dollars, unquote. Of course, the Fed flatly denies this. Testifying before Congress this month, Fed Chairman Jerome Powell said, quoting again, we'll have real time payments in this country very, very soon, unquote. But he also told lawmakers the Fed is nowhere close to having a digital dollar. So those are the facts about FedNow and a future digital dollar as we have them today. We hope they clear up some of your questions. All right. Your calls are next.

Eight hundred five two five seven thousand. This is Faith and Finance Live. Back with much more just around the corner. Well, great to have you with us today on Faith and Finance Live. We're taking your calls and questions now on anything financial. We'd love to hear from you. Eight hundred five two five seven thousand.

That's eight hundred five two five seven thousand. We'd love for you to give us a call. And we've got some lines open.

Our team is standing by. Let's begin today with Albert in Coral Springs. Albert, go right ahead. Good afternoon. Thank you for taking my call. Yes, sir.

Got a question. Maybe you can help me clear things up a little bit about a commercial property several years back. And last year I sold that commercial property, a commercial property under my name. And I sold the commercial property last year. And the money that I got out of that, I was advised to put them put that money into a 1031 exchange.

OK. So when I get that money there, I was able to use that money to invest in another property. When the money got there, I had a couple of the loans that I wanted to take care of it, pay that off.

So the amount would decrease. So I borrowed some additional fund to me under my name to help me purchase the next property. So the money that I borrow, some of that money went to the 1031 exchange to meet the need to invest in another property. But I bought more than I needed it. So $200,000 was left over. And I had another $100,000 on my personal account.

And I purchased a property. Now, my question is, they telling me that the property that I purchase, I cannot use as a personal use. It's for business only. That's right.

Yeah. So in order for it to qualify for a 1031 exchange, it cannot be your primary residence. So it has to be for business or investment purposes. Personal residences do not qualify as a like kind property, which is what's required for a 1031 exchange. Yeah, but the money that I that I got it out of the commercial account, I invested it. And I was just a person of the money that I needed it that I borrow from my loan that I took and put it to meet the requirements to pay it off the property that I invested on. Yeah. All right. Well, it sounds like clearly there's a number of moving pieces here. Do you have a CPA that you normally work with Albert to prepare your tax returns?

Yes, I do have it. And they telling me that, you know, that transaction, I cannot use that property for vacation two times or three times a year only. But I wanted to use it as a residence. If I wanted to invest more time in it, I could have, you know, since I borrowed the money under my name, and I use some of the money to invest in a commercial property that I purchased it, I figured that, you know, that money that I withdraw out of there, you know, was not going to be attached to the 1031. Yeah, well, unfortunately, I wouldn't be able to give you a definitive answer on that.

There's too many moving pieces here. And the IRS, the Internal Revenue Code here for a 1031 exchange is pretty specific. And I think you're going to have to kind of work through it with your tax professional. If they're telling you that it's not going to work, I would take that counsel. That would have been my initial thought as well, although I'm not a CPA. So I would trust their counsel more than my own.

So if that's what they're telling you, I would probably go with that. If you disagree, obviously, you could get a second opinion from somebody, you know, just given the number of moving parts here. Obviously, this wasn't a very straightforward transaction like it typically is. You typically sell an investment property within the time frame required, put that money into another investment property and therefore kind of kick the can down the road on the capital gains tax. And when it's sold, you pay the tax unless you do another 1031 exchange. But obviously, you have a lot of moving pieces here with money where you borrowed it and you used it. And now you want to convert it to a personal residence.

And that's complicating things. I can just tell you based at face value, the IRS is very specific about 1031 exchange rules that it excludes personal residences and therefore, you know, that would not apply here and you wouldn't be able to do that. But if you disagree with that, I would get a second opinion. But this is clearly something that needs the advice of a competent professional who can really look at the law, understand your situation, understand the IRS rules and regs and help you navigate it. So I would either go back to your CPA or some other CPA that can help you work through this. Unfortunately, I'm not going to be able to give you a definitive one way or the other.

Other than to say, I would probably tend to agree just from what I'm hearing about this that because there's a personal residence involved, it's not going to be possible. We appreciate you being on the program, though, sir. I'm confident you'll sort this out in due time. Let's head to Washington.

Justin, go right ahead. Hey, how's it going? I am doing great.

I recently got I'm glad to hear it. I am recently coming to some debt. I just got married. My wife is in Texas. We just had a daughter and I I purchased my house a few years ago, just over two years ago.

And I'm just trying to find a way if I should sell the house, take the earnings, pay off a majority of my debt, or use me my HELOC loan as the supplement, this transitional has to go through and try to rent the house out to get to continue to build equity and appreciation and sell it later since I'll have about three more years before I'll have to pay capital gains since I've lived in it for two. Yeah. Why are you trying to hang on?

Well, let me back up. So you bought this two years ago. You're newly married. You've got a daughter.

Congratulations. Why are you selling it? Do you all need more space? Are you looking to relocate?

What? Why are you moving? Well, she is she's geographically down to Texas. So I have to come down there.

There's no option to bring her up here. Okay. All right. So you're relocating to be with your wife and you've got this property in another state, correct?

Yes. Okay. And does she already own a home there that you're going to be moving into? No, we're going to have to rent for a short period of time. Okay. So you're going to rent when you get to Texas and then in what period of time would you expect to buy a home together? It depends on the situation we're in and where rates are at. I'm more comfortable renting. Okay. What is this home worth that you own right now?

About two and a quarter and I owe roughly 160. The only appeal to keeping it because I'm locked into such a low rate, I won't really have an opportunity to invest in another rental property. Right. No, I understand that. Do you have other liquid savings? Not entirely.

Not really. My car, maybe I could sell my car at about 20 and it's worth 45 or so. Okay. But you all don't have an emergency fund or anything like that?

Not so much more than maybe two, three months of livable income and then... Okay. And are you contributing to a retirement plan or putting anything away for the long term?

Slightly. Just, you know, like just into a normal savings account. Okay.

But not a 401k or anything like that? Correct. Okay.

Yeah. I mean, just based on what I'm hearing, Justin, I'd probably go ahead and sell this pre-recession, which most economists think we're headed toward and the housing market will continue to come down slightly. Get your equity out and put that in savings and be ready to buy that next house at the right time.

I agree. Don't rush it. But I think as you're just starting out, based on what I'm hearing about your financial foundation, you're not quite in a position to be a landlord. I'd get this money out and when you're ready to buy, I'd use this for the down payment.

I wouldn't hang on to that house. We're going to take a break. We'll be right back on Faith and Finance Live. Stay with us. Great to have you with us today on Faith and Finance Live. I'm Rob West. We're taking your calls and questions today.

800-525-7000. We've got two lines open. Let's head, we'll stay in Washington State. John, go right ahead, sir. Yes. I had a couple of quick questions. One is, is it better to do your banking with a credit union as compared to a bank? And secondly, is holding gold very secure in a totally digital economy?

Yeah, let's deal with that first question first. You know, there's really no difference, in my opinion, on a credit union versus a bank. Both are going to be federally insured banks by the Federal Deposit Insurance Corporation, the FDIC, up to 250,000 backed by the full faith and credit of the United States government. Credit unions in the same way have backing through the NCUA, the National Credit Union Share Insurance Fund, which is again backed by the full faith and credit of the United States government, the same 250,000. So I don't really think it's beneficial to be in one versus another. Now, not every credit union is with the NCUA. Some of them are privately insured with a state charter. So you just want to check that.

I'd prefer you be with the NCUA, but I don't have a preference one over the other. In terms of gold, I mean, I think hard assets are always going to have value. It's a store of value. That's really what gold and the precious metals are versus our fiat currency, which is just backed by the credit of the United States.

So I think there's always a place for it. I think the concern is when folks in the midst of these conversations and there's a lot of fear and what ifs going on. And I realize there are some real challenges on the horizon with the debt levels in this country and where we started today and talking about digital currencies. I'm not a fan of a central bank digital currency because of the just loss of privacy and potentially controls over the currency when it's running, when every transaction is running through the Fed with a digital dollar.

So I'm not a fan. But when we start having those conversations and play out the what ifs, people start making rash decisions like pulling out of the bank, exiting the stock market, putting everything in gold. And I don't think personally that's the right approach. I would keep your money in the bank. I'd keep invested with a stock and bond portfolio and keep your allocation to gold maybe five to 10 percent. But beyond that, I think the gold will definitely have a place and real value regardless of whether we're in a paper or a digital currency.

Okay. You know, the reason I ask about credit unions is it's been my understanding that the credit unions don't tend to overextend themselves like banks do. And so they're more stable. I don't know how true that is, but that's been my understanding.

Yeah, I wouldn't say that that's necessarily true. I think it really just comes down to each institution. They're going to be banks that are very well managed and some that aren't like we saw with Signature and Silicon Valley Bank. The same will be true with credit unions. Some will be very well managed and others can certainly have mismanagement. So I think as long as you're not in a regional bank or credit union like Silicon Valley, where it's highly concentrated in one type of customer that happened to be very dependent upon liquidity and, you know, lots of free cash that and then they mismanaged their portfolio with regard to their Treasury holdings. You know, that's what led to that problem that, you know, has spilled over into few other regional banks but seems largely contained. But I wouldn't say that credit unions are necessarily more safe than banks.

It's really going to come down to each individual institution. Okay. Well, thank you very much. All right, John. Thanks for calling today. We appreciate it. 800-525-7000.

We've got two lines open to Naperville. Hi, Lisa. Go right ahead. Hello. Can you hear me? Yes, ma'am. Okay. Thanks for taking my call, Rob.

I just need some insight here. What I need to do. I just retired recently for about three months and started collecting my Social Security benefits. I don't have a mortgage. I own a home.

I'm debt-free. But I have these two retirements, 403b from my retirement from previous employer, about 335 and about another employer, which is 401k, also like about the same amount, 335. Now, I have this bank that I've been banking for a long time that's asking me if I would like to roll over into an IRA some of my money. And I what I'm thinking is I probably would need about 1500, you know, or 2000 a month on top of my Social Security just to live comfortably. Yeah. Do you think it's a good idea to pull out some of my money from my 401k?

Yeah, I do. I think that's that's why you saved it so that it could be converted to an income stream in this season of life. And I'm delighted to hear that you're debt-free and this really positioned you well to live modestly within your income and pursue whatever God has for you next. If you don't mind me asking Lisa, between the two retirement accounts, the 401k and they the 403b with your previous employers, what do you have in in both of those combined? We lost some money, you know, from the market about sure. 335, you know, in one about like, same 333 some in the other one. So about 650,000? Yeah. Okay.

And that's after the markets decline, correct? Correct. Yes. Yeah. Yeah. And you said you need about how much per month?

One 1500. Yeah. Okay.

Yeah. I mean, you're, you're in great shape. You're in great shape. Because here's the thing, that port, those portfolios are going to recover with the market and you need to take a long term perspective. You know, once you reach retirement, you're in good health and the Lord Terry's you need this money to last for decades. So we don't really care about the economy later, you know, the recession later this year, we're looking 1020 years out, this is a lot of money, you worked hard for it, despite the fact your bank has big plans for it, I wouldn't do that I would find an advisor to manage this for you.

And you will be able to easily take out 13 to 1500 a month, I'd say you could go up as high as 2000 2100 and you should be able to maintain that 650 that will grow probably back to 700. So I'd look for a certified kingdom advisor and stay on the line. I'll tell you how to do that off the air. We'll be right back. Well delighted to have you with us today on faith and finance live. I'm Rob West, your host. We're taking your calls and questions 805257 thousand by the way, coming up in the next segment of the broadcast, Jerry Boyer stops by Jerry joins us each Friday as he weighs in on the markets and the economy. Jerry will be with us just in the next segment and we always appreciate his insightful biblical analysis. Let's head back to the phones though in the meantime to Martha in Chicago, Martha, how can I help?

Hi, Rob, thank you for taking my call. My brother took a loan from his 401k and he just got the check a couple of days ago, but he changed his mind. Can he return that money to the 401k without any kind of penalty?

Yeah, you would need to contact the plan administrator. So it was a loan, correct? Not a withdrawal.

No alone. Okay, so I mean loans from a 401k can, you know, can be repaid early with no prepayment penalty of any kind. And so he would generally pay that back through regular payroll deductions, but he may be able to work with his 401k administrator to pay it back with a lump sum.

So I would have him call his plan administrator and describe what he's trying to accomplish and they can tell him how to do it. We were just concerned about any kind of penalties like the IRS, any kind of taxes because he's not 59. Well, he didn't take a withdrawal. He just took a loan. So until he separates from the company and then that loan becomes a withdrawal, or he actually takes a distribution, it's not taxable. And so then he wouldn't be subject to taxes or penalties.

At this point is just a loan and he's repaying the loan. Okay, thank you so very much. Okay. I love your program. Well, thank you, Martha. I appreciate it. Thanks for calling. Have a great weekend. To Calhoun, Georgia.

Hi, Sonia, how can I help you? Hi, Rob, we are we have a rental house, a house that we've had for about 11 years that we've used as a rental property. And we're going to be selling it.

And we're just I've listened to you a lot. And I think I know the answer. But we were wondering about the capital gains, especially on our federal tax form, if those will be added and taxed as along with our ordinary other income, or they taxed differently. It is taxed differently. Yeah. So how long did you own this rental property? 11 years.

Okay, yeah. So if it's more than a year, it would be a long term capital gain. So if you're married filing jointly, the long term capital gains rate if your income is between 89,000 and 550,000 would be 15%.

So whatever the capital gain is, you take the selling price minus the cost basis, minus any improvements that you made to the property, that would be your gain, that gain would be subject to a 15% capital gains tax, not ordinary income, but a capital gains tax, if you had income between 89,000 and 550. If you're below 89,250, the capital gains long term capital gains rate is zero. Okay, we are you're below that we're retired and living on a sort of fixed income. So we are and I thought that that was the way it was understood. But then something made me think that they were going to add the gains to our income, then determine our income, then use the tax rate. So I just wanted to know, man, yeah, completely separate from your taxable income so that the capital gains rate is determined by your income, but the gain itself is not income. So that will not be factored into your your taxable income for the year.

That's perfect. Do you know right off the top of your head being from Georgia? If the Georgia taxes how it taxes those capital gains. So the state of Georgia for capital gains on the sale?

Yes. You will let's see in the state of Georgia, you will have capital gains. And I'm not sure what the current rate is. I think it's somewhere below five and three quarters percent, but there would likely be the same kind of income thresholds there.

So I would suspect you may be under that, but I don't know offhand, I would check with your CPA on that. Okay, that sounds great. Thank you so much. All right. Thank you so much for calling today. We appreciate it. Let's head to Colorado. Hi, Nancy. Go ahead.

Hi. Yes, we own our own home. And lately there's been advertisements to say you need insurance like lifelock because people are taking loans out against your house. Like identity theft.

Yeah, so you're wise idea. Yeah, you're talking about what's generally called title theft insurance, which really isn't insurance at all. What they're saying is that folks can fraudulently retitle your deed in their name, then take out a loan against it. And then they would have no ability probably or willingness to repay that loan. And so then the bank would attempt to foreclose on your property because of nonpayment. The problem is that's not enforceable because it was a fraudulent deed transfer. And so nobody can really protect you, quote unquote, or provide insurance against this possibility that somebody could fraudulently, you know, to transfer your deed. So what you would probably just want to do is monitor your deed status on your own. Most counties allow you to do that, either electronically, some counties will even let you set up alerts.

But paying someone for this quote unquote, title theft insurance doesn't make sense to me because they're really not providing any insurance at all. And it's something you can do yourself. Okay, thank you very much. Love your program. Well, thank you. We appreciate your call today. God bless you, Nancy.

To Florida. Hi, Gloria. How can I help you?

Oh, please. Thank you for taking my call first. God bless you, too.

You know, I am trying to do some research for long-term care. When you're getting older, you know, have insurance, you know, be prepared for that time. You know, I trust in Jesus, and I know he's with me all the time. I know he's going to take care of me until I am with him.

And I don't know, I am not sure if that's good to do it or not. Yeah, I like long-term care insurance, Gloria. If there's going to be something that, you know, erodes your assets in this season of life, it's most often going to be the need for long-term care. Seventy percent of Americans 65 years and older will need long-term care. Around 20 percent of those will need it for longer than five years. And it's very expensive. You know, the average cost for a nursing home stay in the United States is about seventy seven hundred and fifty dollars for one month. And that number rises to about nine thousand dollars for a private room per month.

So that can erode your assets in a hurry. And so long-term care insurance obviously is the way that you offset that. Now, premiums can be expensive. I mean, they vary widely based on your health and your age. I mean, it could be, you know, for a fifty five year old man, seventeen hundred dollars a year for a three year policy that covers a daily max of one hundred and fifty dollars.

And then they kind of go up from there. A couple fifty five might pay three thousand dollars a year for a combined policy. You know, I would say up until age sixty five, it might make some sense. But I think the key is to make sure that you can afford it, including premium increases down the road, because if at some point you can't afford it and you have to drop it, it's done you no good. But if it fits into your budget, I think it can be worthwhile to offset what could be a major expense in this season of life.

So what I would recommend is you find a long-term care insurance agent, somebody who specializes in this, who could find a policy and see if it fits your budget. Thanks for calling, Gloria. God bless you. And we'll be right back with Jerry Boyer. Stay with us. So thankful to have you with us today on Faith and Finance Live.

I'm Rob West. We've got some phone lines open. And here in just a minute, we'll have time for one or two more questions before we round out the program. Eight hundred five two five seven thousand.

That's eight hundred five two five seven thousand. But before we do that, it's Friday, which means our good friend Jerry Boyer stops by. Jerry is president of Boyer Research. He's our resident economist and he joins us with his insightful biblical analysis of the economy and whatever else we decide to chat about each Friday. Jerry, good afternoon.

Good afternoon. Eggnomics frequently. Yeah, that's exactly right. Yeah. We were talking about eggs in your chickens just just a few weeks ago. Hey, Jerry, let's start with the economy. I've got several things I want to talk about today, but, you know, obviously most folks think we're headed for a recession.

You and I chatted this morning and you made a good observation. And that was, you know, whether we spill over into the technical definition of a recession or not, the bottom line is the economy is slowing and we can pretty much guarantee that. In fact, we're already seeing it play out, right? Yeah. So technically, to be in a recession, you have to have six months in a row of negative economic growth or two quarters. But if it's negative point one, it's negative point one for two quarters in a row.

All right. That's a recession. But let's say it's positive point one and then, you know, and then positive point one for the next quarter. Well, that's not a recession. But, you know, the difference is a tiny you know, it's a it's a fifth of a percent difference. You don't feel that.

It still really feels bad. It's a slowdown. So people call that a growth recession.

So we really get hung up on whether you can use the R word or not, because the R word is political kryptonite. Whereas if you're really looking at this from the standpoint of economics, anything near zero, whether it's slightly below or slightly above zero is problematic. And we're heading in that direction. That's what the markets say. I think the markets are right. I think markets know more than experts, even though I'm an expert, enough of an expert to know how little experts like me know, and that most of the knowledge about the economy isn't with the experts. It's not with the Fed.

It's not within the universities. It's not with talking heads. It is out there distributed in the markets where people are making decisions all the time, investment decisions, and they're signaling that the economy is likely to slow down. And this week they continued signaling that they nudged a little bit more towards pessimism. You and I talked this morning, by the way, everything's changed this this morning. It's been a long time. I mean, it's been eight hours.

It really has. And one speech from one head of one regional Fed, Kansas City Fed changed everything. That's how powerful the Fed is.

That one, let's say, junior member. Hey, look, no, you know, no aspersions on Kansas. But the Kansas City Fed is not as influential as the New York Fed, for example. I actually like the Kansas City Fed more than I like the New York Fed, but that they don't seem to carry the same weight.

And so the Kansas City Fed, kind of speaking for Middle America, said, oh, no, no, you know, we're talking to our people. They're still inflation. So we need to fight inflation. Whereas the New York Fed, which is more tied into the banks that are dependent on easy money.

Oh, no, no, no. There's been enough tightening. Inflation is not so bad. Or the San Francisco Fed, where the tech companies love those high valuations and easy money.

Oh, no, no, no. Inflation is basically beaten. You know, we need to get the money pump going again. And it's really odd to see the politics of this, because if you have a just weights and measures standard for monetary policy, then it shouldn't matter where the Fed head is from. Shouldn't matter whether it's the Philadelphia Fed or the New York Fed or the Kansas Fed.

Or, you know, it should just be just weights and measures. The dollar should not fluctuate in value. But instead, we have different parts of the economy that represent different interest groups. And some coastal, for example, financial and tech benefit from easy money, whereas flyover country is hurt more by inflation. And so we saw a hawkish statement from the head of the Kansas City Fed today, which means we need to tighten more.

We inflation is still a problem. That's what hawkish means. I don't know where the Dub Hawk thing came from. I don't know where the bull bear thing came from either.

But I'm a little disappointed, Jerry. Usually, you know, all the intel on where these things I guess, I guess bulls, they kind of they kind of move up with the with the with the horns, maybe, and bears kind of pulled down with the claws. That's that's my wild guess. OK, so, you know, everything changed. And now the markets this week are ending up saying, all right, the Fed is acknowledging inflation is still a problem, which it is. They're going to keep fighting it, maybe. So maybe they're not going to cut so soon, which means that we're more likely to have a recession.

And that's why markets are going down and stock markets are going down more than bond markets. Yeah. Yeah.

No, that's helpful, Jerry. We appreciate that. Let's turn our attention to the corporate earnings and more specifically, the corporate engagement work you've been doing as a part of the recent shareholder meetings. What are you learning? I think, well, what we're learning this year is that the big move so far this shareholder meeting season, which is going on about a month, that the big move has been more conservatives are engaging than ever before. The fastest growing category of proposals on the ballot are coming from conservative groups, not liberal groups. That's interesting.

It used to be about a 10 to one ratio and now it's maybe a five to one ratio. So the conservatives haven't caught up yet. But that's you know, that the trend is kind of in that direction.

Because I think the reason it's a reasonable point of view, which I happen to hold, things really went too far in the other direction. So that's one of the things we've seen so far. The other thing is, the groups who are coming more from the progressive side are really pushing the envelope. Their biggest category of engagement now is pro abortion engagement, which is really a stretch. It's really a stretch to say, hey, Coca Cola or PepsiCo, isn't it risky to do business in a in a state that restricts reproductive freedom like North Carolina or Georgia? That might that must be risky, you know, because if women can't get abortions, then they're going to have babies. And if they have babies, they're going to stay home and they can't come into the cubicle anymore. And that's going to hurt your workforce.

Of course, that's nonsense. First of all, the states that are pro life states generally have population inflow. So it's the New York's where we ought to be worrying about the population about workforce issues. Right. And of course, abortion is, you know, the biggest workbook work worker shortage that we've ever seen.

That's the least important thing about it. But one of the bad things is workers. And the other thing, of course, is when you have babies, babies are customers. I don't think we ought to feed them Coca Cola. But Coca Cola also sells milk and yogurt. Right.

And mom and dad need the energy drinks and the coffees. So it's it's a silly argument, but that's what's been going on. They've really what they always do. They push too far. Next week, in terms of more conservative proposals, there's one before J.P. Morgan Chase from a Christian financial adviser named David Bonson that is looking at the banking of Christian groups, particularly the deep the cancellation of the of a bank account by Sam Brownback, who used to be the governor or senator from Kansas, who's Fed chairman is right.

That's flyover country, Wizard of Oz country. And, you know, they canceled his account, didn't give a satisfactory explanation. Bonson put a proposal on the ballot that says, listen, we really need to understand how you make these decisions because it sure looks like you don't like religious freedom. So just let's have transparency. That's going to be voted on on Tuesday. And that's not just Bonson, a group of a dozen state treasurers have joined in, you know, voicing concerns.

A group of attorney generals have weighed in voicing concerns. And there have also been a number of statements filed with the FCC in support of this. So it's likely to lose.

These things almost always lose, but it's likely to win the debate, even if it loses the vote. Yeah, makes sense, Jerry. And obviously, the big idea here, as you said, is that we are present in these conversations, which every shareholder has a right to do. They have a right. I'm not sure that we as Christians knew that we had that right. We came to believe that the only way that we had to express our displeasure was to sell the stock or to boycott the product. And I think what I found is and if your conscience calls you to do that, absolutely do that. But what I found is when Christians are told, Oh, wait a minute, you have a vote.

And you have not just do you have a vote, you can show up, by the way, it's just logging on usually, and you can ask a question. And by the way, if you have enough shares, and it's not that many, you can put your own proposal on the ballot. When they understand that they realize we can be salt and light more by engaging than by divesting. Yeah, that's a great reminder, Jerry, we need to be present in those conversations.

And perhaps the boardroom is one of the most effective ways to let our values be known and have an impact. Jerry, I always appreciate you stopping by, my friend. God bless you. God bless you.

All right. That's Jerry Boyer, president of Boyer Research and our resident economist. All right, back to the phones to round out the broadcast today. We'll finish in Lombard, Illinois. Doug, go ahead, sir.

Yes, a quick question. I'm taking care of my father's finances. He's 95 years old. And he is getting probably about $50,000 or $60,000 in RMDs every year and giving away maybe a third of that. If it makes sense from a tax perspective to move those monies, or can I move those monies into a donor advised fund of some kind and then draw out of that, try to reduce the taxation on it?

No, you can't put it into a donor advised fund, but you can do what's called a qualified charitable distribution. Have you heard that term? Yeah, yeah, I do. I am familiar with that. And we've tried that a little bit in the past with a bit of problems with the particular corporation we were working with.

They didn't do a very good job of it. But anyway, I'm aware of that. That's really the only way to do what you're describing. So and it's perfect for somebody in your dad's situation. He's got to take the RMD, he doesn't need the money, but he wants to give. Well, the qualified charitable distribution takes the money straight from the IRA to the charity or your church or ministry, they get the full amount, there's no tax paid, it's not added to his taxable income for the year, and he gets to count it toward his required minimum.

So you wouldn't be able to use a donor advised fund, but you could use a qualified charitable distribution, and it will accomplish exactly what you're looking for. Okay, thank you. Appreciate it.

All right. You are welcome, Doug. We appreciate your call today. God bless you, my friend.

Well, folks, that's going to do it for us. We covered a lot of ground today. So appreciate you being along with us.

I'm Rob West. And on behalf of my team, Charles, Amy, Dan, and Jim, we want to thank you for tuning into Faith and Finance Live. This program is a partnership between Moody Radio and Faith Phi, and I hope you have a great weekend, enjoy church on Sunday, and then come back and join us on Monday. Lord willing, we'll be here and we'll do it all over again. We'll see you then. Bye bye.
Whisper: medium.en / 2023-05-12 18:37:48 / 2023-05-12 18:54:17 / 16

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