Successful Investing in Volatile Markets

Billionaire investment analyst Ken Fisher once said, whenever there's a buyer and seller, somebody is wrong. Make sure it's not you.

Hi, I'm Rob West. Fisher's point is that the market's always headed up or down. Which way?

No one knows, but you have to plan for either. I'll talk about that today with Rachel McDonough, and then it's on to your calls at 800-525-7000. That's 800-525-7000. This is MoneyWise Live, biblical wisdom for your financial decisions. Well it's always a treat to have Rachel McDonough on with us. Rachel's a certified financial planner and a certified kingdom advisor, and she's passionate about helping investors integrate their Christian values with their financial decisions. Rachel, welcome back to the program. Thank you, Rob. Thanks for having me. Absolutely. And I know you've been eagerly awaiting a chance to talk to listeners during this period of, well, let's call it market volatility.

So why don't you dive in? What would you have them to know right now? Well, I actually just got a call today from a client who told me that she had been awake at 2 a.m. and thinking about finances. And I just, you know, even though we've seen the market has come back a bit in the last month and a half, the first half of this year was actually the worst beginning to a year ever for a balanced portfolio. So I'm sure many of us have at one moment or another felt this strong emotional impulse that we have to be doing something different with our investments and maybe even selling them.

So if you've ever had that urge or that instinct, you're not alone. Volatile markets contest all of our results and our conviction and our strategy. It's easy to feel like the strategy is the right strategy when things are going up. It's harder to maintain that conviction when things get rocky.

So, you know, wealth that maybe took years to slowly accumulate can really just feel like it's evaporating off the page in times like that. Oh, Rachel, I know so many of our listeners are resonating with what you're saying right now. We hear from them every day on this program and that feeling is real. And there's actually been quite a bit of study that has gone into this in terms of behavioral finance, right?

Yes. Now, researchers in behavioral finance have really specifically studied not just what happens in markets, but what happens inside of the emotions of the investor, their biases, and even sometimes an irrational decision making process, especially relevant during times like this with excess volatility. And and what they've really concluded, Rob, is that our emotions oftentimes sabotage us financially and that following our instincts can and typically does lead to poor investment outcomes.

Yeah, there's no doubt that's the case. And that's, of course, why we talk about having wise counsel, having an advisor walking alongside you who can perhaps remove that emotion and take a more disciplined rules based approach to the investing. But talk about some of the data that has come with that research that really underscores this idea. Yeah, JP Morgan actually looked into this and found in their research that the average investor at the retail level, like our listeners, often experienced a two point nine percent average annualized return over the past 20 years, whereas just the S&P 500 without any human emotion attached to it had a seven point five percent return on average for that same period. Well, so while multiple factors can impact performance, the biggest factor was determined to be human interaction that was actually hurting performance. Poor timing of when the typical investor may decide to buy, sell or switch investments.

So irrational emotions are, of course, thought to be the culprit, triggering investors to sell low when they feel nervous and then buy back in higher when markets feel safer again. Yeah, well, that's exactly right. And that is so key.

And really, Rachel, and we have just about 30 seconds before our break. This is where an advisor can really help, right? I believe so, Robin, even more than just having an academic approach. I want to get into a little bit later here after our break that I don't think emotions are all bad. But the financial advisor approach, financial advisors are really trained to take a rational, academic and logical approach to how they advise their clients to invest. Yeah, well, we'll continue to unpack that just around the corner. Also, how are emotions actually good?

And what does the Bible say about all of this? That and so much more as we think about approaching our investments in these volatile times. Certified financial planner and certified kingdom advisor Rachel McDonough with us. Then it's on to your calls at 800-525-7000. Stay with us.

We'll be right back. Delighted to have you with us today on MoneyWise Live. Joining me today, Rachel McDonough, certified financial planner and certified kingdom advisor. And her passion is helping investors integrate their Christian values with their financial decisions. Today, specifically, we're talking about these volatile markets. What role does emotion play in your investments?

And can it actually hurt you? Just before the break, we were looking at some staggering data around the underperformance of the average investor when they're directing their own investments, because often emotions cause you to do the opposite of what you should do. Well, to counteract that, an investment advisor can be a great tool, a great resource that's, of course, supported by scripture that we need wise counsel. And in particular, Rachel said an advisor can take a more rational approach in terms of the investing.

But it's even more than that, Rachel. Share with us a bit more on the role of the advisor in all of this. Yeah, let me just give you a little sneak peek into the financial services industry, because I was brought up in this industry for 20 years. And I would say it's sort of been an indoctrination in this analytical mindset, right? There's almost this glorification of the purely analytical, non-emotional mindset when it comes to investing for those who are trained up as financial advisors.

They look at software, they look at historical data. There's this idealization of a purely academic approach to investing that doesn't allow investors to be sabotaged by their emotions. And in fact, inside the financial services industry, anytime someone uses the term emotion in the context of investing, it's largely assumed that a very poor decision was made. But I just want to say emotion became an undesirable term, because it was narrowly referring to a couple of negative emotions, specifically, really, it's fear and greed. And we all experience these to some degree or another, even Christians, and last unchecked, they most certainly can sabotage one's financial future.

Well, that's fascinating. I'd love to unpack that a bit more, especially in light of a biblical worldview. So how can our emotions actually work for us in this area of investing? Yeah, my conclusion is a little bit countercultural for the financial services world, because I believe that emotions can be a very good thing. So if we look to the biblical narrative to understand our design and our nature, as made in God's image, I believe we can find some guidance there on how to get our emotions working for us, instead of against us, in a way that can actually lead to more successful investment outcomes.

So let's go back to the very beginning. Genesis 1 26 and 27 says that all people, regardless of their faith, are in fact made in the image of God, and part of God's nature is logical and orderly. But there's this other attribute to God where he is, in fact, emotional and passionate. And back in the Garden of Eden, God pronounced his design of everything in creation as good. But when he describes human beings, he said they are very good. And so as a starting point, let's acknowledge that the complex and intricate design of our human soul is good, even the sometimes messier, more emotional part of who we are. Hmm. Yeah, fair enough. But now we have to then reconcile those two parts of the human soul.

That's right. It's the head and heart approach. So we can also glean from Scripture that our emotions need to be governed by self-control, which is one of the fruits of the Spirit listed in Galatians 5. But rather than forcing a good part of our nature, our emotional nature to be silent, so that we can presumably make savvier decisions, let's explore how positive and productive ways we can actually include our emotional selves in our investing.

Now, we talked previously, Rob, about the J.P. Morgan research. There's been a lot of research done on the behavioral finance side that talks about the negative impact of emotions. Unfortunately, there hasn't been any research that I know of that's really been done on the effect of virtuous emotions on our investing outcomes. So when you think of things like compassion, joy, humility, contentment, or patience, those, I think, can also have an impact on investor behavior. And so while it maybe hasn't been quantified by research, I think it's very worth exploring. Well, I agree, it is worth exploring. I'd love to know your experience, Rachel, in the absence of the real hard data in terms of helping your own clients see how this could come to pass.

That's right, Rob. After 20 years of working with real people, real clients who are investing, experience has shown me what the research hasn't. And that's that emotional engagement and buy-in can be incredibly helpful to investors, especially, I want to say this as an encouragement, those who are motivated by their faith. It really allows them to develop a strategy to which they have a higher degree of conviction and loyalty, which allows them to in turn stay the course more easily in moments of stress, in times of volatility, when they understand how their investments align with their values and fit with who they are as people, it can be incredibly supportive of them staying the course. And this in turn can mitigate the risk of selling during down markets, locking in losses and then subsequently missing out on the recovery.

Yeah. So let's take that even further. In your experience, how can then using emotional intelligence lead to a better decision in the long run? By tapping into your heart for successful investing in a volatile market, it helps you consider factors that a merely rational numbers only type of approach might overlook. And investing actually has many outcomes in the world other than the numbers on our financial statements.

So let me tell you what I mean by that. Investing choices lead to many different real world impacts. So some examples would be enabling businesses to innovate, care for their customers, meet basic human needs.

It could allow businesses to address slave labor in their supply chains and move and provide equitable benefits for their employees. So these are outcomes that are based on essentially doing something positive in the world for our investing capital. And when we apply compassion in our investing, we may choose to avoid partnering with companies who have products and services that are really harmful to humanity.

So think of as an example here, tobacco industry. And we can instead intentionally choose to channel our capital into positive companies that are serving humanity well. These are the valuable types of outcomes that resonate deeply with our souls and are supportive of our emotional buy-in. They can lead to this sense of emotional satisfaction and contentment when we see them directly connected to our investment choices. That's so good. You know, Rachel, we don't often think of Jesus' second commandment in terms of investing, but maybe we should.

That's right, Rob. Love your neighbor is a very specific and practical command that Jesus gave us. And knowing that we're investing in alignment with Jesus' teachings as we love our neighbor through investing can give us a sense of confidence as we are proactive with the decisions we can control and then trust him with the outcomes. So the bottom line is that the right emotions aren't necessarily bad for investing.

And while we don't want to time our trading around our emotions, we can benefit from an emotional engagement when we develop our investment strategy. Oh, that's so good. Great advice, Rachel. Thanks for stopping by. It was my pleasure. Rachel McDonough has been our guest today.

She's a certified kingdom advisor, a certified financial planner and the founder of WealthFluence.com. Your calls are next, 800-525-7000. We'll be right back. Thanks for joining us today on MoneyWise Live. I'm Rob West, your host, taking your calls and questions today on anything financial, 800-525-7000.

That's 800-525-7000. We'd love to hear from you today. We're thankful to have Rachel McDonough with us in our first two segments of the broadcast today. By the way, in addition to Rachel's interview today, we're also featuring an insightful article from her on MoneyWise.org titled, Tapping Into Your Heart for Successful Investing in a Volatile Market, where she's exploring the strong emotional impulse that many of us are feeling during this financial season to sell our investments.

Well, if that's what you're experiencing, believe me, you're not alone. So head over to MoneyWise.org. It's featured right there on our homepage. Again, it's called Tapping Into Your Heart for Successful Investing in Volatile Markets. You can also read, listen and watch from 15 content partners, articles, videos, podcasts on biblical finance.

It's all there at MoneyWise.org. All right, we've got some phones open today. We'd love to hear from you. Perhaps you have a financial question you'd like to weigh in on or have a part of the conversation.

We'd love to hear from you. The number to call today, 800-525-7000. All right, let's head to the phones.

We'll begin in Ocala, Florida. Scott, thanks for calling. Go right ahead. Hi there. Thanks for taking my call.

I appreciate it. Sure. I have a question for you. I was talking to a friend the other day and he's planning on retiring in a few years and he has a theory of investing and his theory of investing is investing exclusively in blue chip stocks that produce dividends and live off of the dividends, thereby sort of avoiding the volatility of the market. As an example, he was saying, OK, so we have a million dollars, say, invested. If you can make 50 to 60 thousand dollars in dividends off of that, you know, is that is that is there wisdom in doing that? I guess the question is in the long run. And does that really avoid the volatility of an up and down market? Yeah, well, you would have to, you know, kind of set that piece aside in the sense that, you know, a lot of folks have trouble kind of disconnecting with the market ebbs and flows and just staying focused on, you know, only the dividend.

But if you could do that, certainly. I mean, that's that's the benefit of buying dividend paying stocks is that not only do you benefit from the appreciation of the stock over time, if you're looking at the long term trend, but you have the income. And usually the idea would be that we would take the dividend income plus the the market appreciation of the investment itself. And the two of those would really offset, you know, what you need to pull out on an annual basis. But certainly if you are looking at, you know, higher than average dividends, you're targeting a four or five percent dividend yield.

And, you know, that could suffice. Certainly you could take that approach. You know, obviously, depending on what investments you select, you know, the market action would have a bearing on your portfolio as well. And that's why a lot of folks will use rather than picking individual companies. You know, they'll build a portfolio to be even more highly diversified using ETFs and mutual funds and so forth. But the strategy at face value, I don't think has any flaws as long as you've got a skilled person who's going to select the right investments that are going to perform well over time. And, you know, you can live off the dividend yield. I like income, you know, stocks a lot just because, you know, they tend to be not as growth oriented. But, you know, you've got that stable income being pumped out each year.

Now, obviously, they can change the dividend along the way. And so that's another factor you have to consider. But overall, Scott, I think there's some wisdom in what you're describing. Okay, thank you. Yeah, appreciate you checking in with us. God bless you, sir. Eight hundred five to five seven thousand is the number to call.

Let's see Kenosha, Wisconsin. Hey, John, thanks for calling. Go right ahead. Hi.

A few weeks ago, you had a Bob Doll on. He said to invest and he said, if you can hold your money for over 10 years, you know, you're going to come out a little bit better in stock market. But if you don't have 10 years to wait, you're already in retirement and you might need that money. Where do you suggest you put that money? That's one half the question.

The other half is and I was listening today to a guy named Brandon House and Andy Woods. And they're saying that they're going to be a huge government takeover of some of the bank accounts, which would include some of the stockbrokers. So what would you suggest a person does with the money in the meantime?

Yeah, well, a couple of thoughts here. Number one, in terms of where to put the money. I mean, keep in mind, you know, once you reach retirement, you still have, you know, if you're in good health and the Lord Terry is a decades long need for that money to grow. Now, it doesn't mean you stay, you know, you're as risky with the money if you're in your working years versus in retirement. But I think, you know, even once you hit retirement, 60, 70 years old, because folks are living longer, you know, you could still need that money to last another 20 years. So I think there's a case for still being a long term investor. Even in that season of life, the question is just what's the proper allocation between the fixed income type assets and the equities.

And I think that's where we tend to shift more toward, you know, perhaps a 30% allocation to stocks and maybe 70% toward fixed income to kind of stabilize the portfolio to still but then still to bring long term appreciation into the equation. So I think that's the first thing just in terms of, you know, the any kind of government takeover of our accounts. There's nothing like that that's that's really being talked about. You know, we certainly have plenty of conspiracy theories out there. I think we have to be on our guard against that. You know, obviously, we need to show up and vote and, you know, policy matters. And we need to make sure that folks, you know, who were voting into office believe in the free markets and, you know, hands off by the government. But in terms of anything that's, you know, right around the corner, there's nothing, you know, that's being even discussed that would give the US government access to seize any kind of accounts in the way that you're describing. So I think the best opportunity for us is to stay properly diversified with a long time horizon.

That's still the very best way to overcome the effects of inflation and build wealth on a conservative basis. Thanks for your call, John. We'll be right back on MoneyWise Live. Great to have you with us today on MoneyWise Live. I'm Rob West, your host. We've got some lines open today taking your calls and questions. The number to call, 800-525-7000. Let's head right back to the phones to Columbia, Ohio. Hey, Mike, thanks for calling. Go right ahead. Hi, Rob. How are you?

Very well. Hey, I have a question regarding, I have a 529 plan for my children and my oldest is in college. And I was wondering, because the market is down, should I get a student loan and use a student loan to pay the tuition and then pay that student loan back in the future with the 529?

I talked to my broker and I was told that I can only use a certain amount of money to pay back a student loan with the 529. Is that correct? Yeah. So give me a sense of, you said the investments are down.

So even though he's in college or nearing college, were you still kind of fully invested in stocks? Yeah, it's an American fund, 529 plans. Okay. And is it? It's a mutual fund.

Okay. But there's not a fixed income bond portion, correct? I do not know.

I honestly don't know what it's invested in other than it's American funds, 529. Yeah. And how much are you down at this point? I think it's, it's about 25%. Okay. From a year ago from September of last year. Okay, very good.

Yeah. So the SECURE Act established a lifetime limit of $10,000 from a 529 plan that can go toward any kind of loan. So there is going to be a limit there on what you can do. The other issue is you've got origination costs on these student loans as well. So they can be upwards of 4% with the Parent PLUS loans plus a very unattractive amount, I think 7% plus right now. So as much as I don't like that this is down and I'd probably hold off as long as you can, you're going to be limited in what you can do just in the way of the ability to pay off student loans out of the 529. And when you kind of put all the costs together, if in fact you're taking Parent PLUS loans, they're pretty expensive. So I think the idea would be to pay this as slow as you can and hopefully the majority of what's in there is able to recover with the market into early next year. But obviously whatever you have to pay, you have to pay even though it's down, which is why typically we get more conservative with the investments as you get closer to the college age, kind of like you do with retirement. But if you were still fully allocated to stocks, I can see how you would have that downside that you're experiencing right now. And I think because of the added costs and the limitation to the $10,000, there's really only going to be so much you can do there. Okay, so I should either draw from the 529 or fine.

The reason why I got the loan too is so that he has skin in the game. He doesn't need to know how much is in the 529. Yeah, well, that's part of the plan that he was going to have a portion of this. Maybe that's what you use right now as long as I think you communicate clearly to him the expectation of what he's going to have coming out of college so he has that understanding. Obviously the timing is up to you as to what portion of the payment comes out of the 529 early in his college education versus late and how you handle the student loans that you had already planned on. So if you had already planned on getting some student loans, then perhaps now is the time to do that and hold off on pulling out of the 529 as long as you can.

I think the market will recover ahead of the economy, but we could have more down leg here and it could be well into next year. So I think it's just really a function of timing at this point. But at the end of the day, you are limited to $10,000 towards student loans. Okay, so that was correct information and then I was given. That's exactly right. It's a good buffer, right? It's a good hedge towards waiting for the market to come back then. I think that's right. Yeah. I mean, I wouldn't do it if you weren't planning on taking on the loans anyway for the reasons I mentioned.

But if that was going to be a part of the plan anyway, then I think, you know, perhaps now is the time to do it and give yourself a little time on the market recovery. We appreciate you checking in with us, Mike. God bless you, my friend. To Orlando, Max, you're next on the program. Go ahead.

Thank you so much. I'm a retired teacher, have a 403B, I guess it is, retirement account. There are a couple of guys locally on talk radio down in central Florida here that keep talking about how you can avoid taxes on your RMDs from your retirement account. And the only thing I can figure because they're not real straightforward and what they're talking about is they want you to buy some kind of annuity or something and turn your account into that. So I don't know, I just don't understand the deal. I talked with one of my sons who's very knowledgeable of financial programs. He said he had absolutely no clue how it would work.

I'm curious what your take is on it. Yeah, it does get somewhat complicated. And there are specific ways to reduce or eliminate a required minimum distribution, because with annuities, RMDs are not required.

And so, you know, that is a strategy. You could check with a professional in this area, an insurance professional who really understands this, because it does get quite complicated with some of these annuity products. One of my favorite ways, Max, to reduce the amount of RMD potential tax implications would be through a qualified charitable distribution, where essentially you're giving directly from your IRA what would be an RMD that would normally have to be recognized as income. But because it's going straight to the charity or ministry or your church, it satisfies the RMD. It's not added to your adjusted gross income. And you could even use it to replace the giving you would have been doing out of cash. And so it doesn't mean you're even having to give anything extra. Would that be a possibility in your situation? I'm familiar with that strategy.

We have not explored it yet, but these guys are not. They're on a secular station, so I doubt they're pushing giving to the church. I know you can't do it that way, but that's the only way I know of to avoid it. Yeah. Well, the other way is through an insurance product. There's something called QLAC, which is a deferred income annuity. Basically, it provides you a guaranteed source of income when you buy into this annuity product. And then it is a way to avoid taking the required minimum distribution.

When you invest, you can put in up to 25% of your IRA or $125,000, whichever is less. So that would be another strategy that a lot of folks will use in this particular situation. So I'd recommend, Max, you have somebody who can take a deeper dive look at this and tell you what strategies you might consider.

The only other one perhaps is converting to a Roth IRA, but you'd have to pay the tax, so that doesn't avoid the tax bite. But if you'd like to connect with an advisor, Max, head to our website, moneywise.org, click Find a CKA, and do some retirement planning, looking at your assets, your income needs, and some tax planning as a part of it. I think that would really benefit you. We appreciate you calling today. God bless you, my friend, and we'll be right back on Money Wise Live. Thanks for joining us today on Money Wise Live, biblical wisdom for your financial decisions. Hey, before we head back to the phones here in our final segment, it's Friday, which means Jerry Boyer stops by. Jerry's our good friend, president of Boyer Research.

He's a frequent contributor and columnist at the Christian Post, and he joins us regularly with his market insights. Jerry, quite a bit different this week than last, as last week we were talking about the fact that things were looking up, whether it was the labor market, the prospects of recession, inflation, some good news in the Ukraine-Russia war, and yet now here we are a week later, market's still under quite a bit of pressure. What do you make of all of this? Yeah, well, things are, they kind of skipped the normal pattern that we've had for about a month and a half last week, so this week was a lot like, you know, kind of the trend that we've had. But remember, last week, you know, a lot of what was driving that wasn't that things were really that great here, it's just a sense that, oh, the Europeans are really going to have a recession, and China's really having a serious slowdown. So there was a little bit last week of, well, the US has its problems, but the world's problems are worse. So what happened this week?

What happened this week is, now remember, we just kind of put this in context again. We're used to thinking, like, good economic news must be good, right? And good economic news is good for markets, because that's the kind of a way it's designed to be.

If the economy is doing well, then the businesses in the economy are doing well. But we live in a situation now where our central bank, the Fed, is so gigantic, $9 trillion worth of assets that it owns, it is now the single biggest investor in financial markets. So when it buys, it's the biggest buyer, and when it sells, it's the biggest seller. And what happened this week is the inflation numbers, they did come down a little bit, inflation peaks a couple of months ago, but they're higher than expected, and that sent a signal, oh, wait, inflation's 8% year over year, it's better than 9.5% like it was before, but it's still high, so the Fed is going to have to fight inflation. And so what the Fed is going to do is it's going to pull money out of the system.

It's going to be a seller, not a buyer. So the single biggest investor in the economy, because of the market economic news this week, was widely interpreted, I think correctly, as it's going to do a lot of selling, it's going to announce a lot of selling next week, and so markets go down in reaction. So this is this weird world where good economic news is bad financial news because all of this is really not about how the economy is doing, but about what the Fed's going to do. It's not the way things are supposed to be, but it's the way things operate now.

Yeah, really interesting. Jerry, you commented on the rest of the world, we've talked about this a bit, but there are some real problems with regard to energy and the continued lockdowns in China related to COVID. This is going to result in perhaps a much deeper recession than we're expecting here in the U.S., correct?

It looks that way to me. In fact, arguably, we had our recession first half of the year and are out of it. I mean, that's a reasonable point of view, looking at the data. Now, maybe we're going into another one, but our third quarter growth will almost certainly be higher than the first half of the year. So in that sense, we're coming up slowly, but the rest of the world is going down. So what's happening is capital is fleeing those places and coming here because for all our problems, we're probably better than the rest of the world. And the other thing is, to the degree that the Fed is fighting inflation, now it risks creating another recession, but to the degree that it's fighting inflation and raising rates, that also means investors want to come here because the dollar at 8% inflation, why would anyone want to be invested in the dollar? Well, the United Kingdom has 12% inflation and Europe is likely to have higher inflation. So we have high inflation, but a lot of the rest of the world has higher inflation. So we might be the safest safe deposit box compared to the rest of the world, even if your safe deposit box leaks 8% a year.

Yeah, great point. Alright, Jerry, on to another topic that's getting a lot of attention today in particular. As we know, in March, President Biden signed an executive order calling on a variety of agencies to look at ways to regulate digital assets. As a part of that, they looked at the possibility of what's called a CBDC, a central bank digital currency, a digital currency equivalent to one-to-one for the US dollar to keep us quote-unquote competitive and for security purposes. Today, it's back in the news because the White House has announced that these agencies have issued a series of reports covering cryptos and their impact on financial markets, the environment, innovation, and so forth. What do you make of this and what's the prospect of this moving forward in terms of the implications of this coming to pass? Well, it's an interesting point of view the government has, which is that cryptos are absolutely terrible, that they're extremely dangerous, that they have no inherent value, and that they're a really bad thing, and we should create one.

So, you know, I mean, choose a lane, please. Part of what's going on is it doesn't have a logic logic to it, but it does have a self-interest logic, which is if the Fed is going to create a cryptocurrency, if the government is going to create a cryptocurrency, then it seems to me they have a lot of interest in regulating the other cryptocurrencies out of existence because they're competitors. You know, Friedrich Hayek talked about the fact that currencies should have competition, just like anything else, there should be competition. So if we debase our currency, people have some other currency to use, and states used to do that.

Under the Constitution, they even now have that right. We've been debasing our currency, and the more we've debased our currency, the more cryptos have gone up. Now, it's volatile. It's not all the way up.

It's up and down and up and down. But essentially, the general rule is that like this week, because we believe the Fed's going to fight inflation, gold dropped and the cryptos dropped. So they are a bet outside the Fed. I don't think the Fed should be regulating them. It's a conflict of interest. So if the Fed's going to do a cryptocurrency, but we're allowed to say, no, thank you, we prefer Bitcoin or Ether. Well, that's one thing. But if the Fed is going to say we've got a cryptocurrency and it's the only one you're allowed to use because we're going to regulate the other ones to death. Well, that doesn't quite seem fair.

Yeah. Jerry, is there a benefit to having a digital dollar backed by the central bank? Well, there's a benefit to them in the sense that they are easier to surveil. So it depends on the benefit to whom.

I'd be a little concerned, right? Because they're not going to make a non-surveillable version of it. I suppose it's a little bit efficient. I guess paper costs a little bit of money. So there's some transaction, you're getting rid of a little bit of friction. But to me, the big story of cryptocurrencies isn't to create. Cryptocurrencies were created because people didn't trust the central bank and they don't trust the dollar. So a crypto dollar doesn't really solve the problem. It's not really addressing the issue that cryptos were created to address, which is that paper currencies tend to go to zero, that we have been debasing our currency and the people need some other option.

So crypto dollar, there's kind of a contradiction in that. Yeah. Well, the whole idea behind crypto is decentralized and this would be a centralized currency, right?

Yes. The whole idea is decentralized. The other whole idea is that it's not infinitely expandable. Something like Bitcoin, you can only create a certain amount of it per year. And once they reach 20 million, then there's no more of it.

So you can't just infinitely expand it. We've quadrupled our money supply in the past 10 years. You can't do that with crypto. There are limits to that, like there were on the gold standard. So cryptos are basically a software imitation of a gold standard. And they did that because the dollar doesn't have a gold standard anymore.

Believe me, if we had never gotten off the gold standard, we never would have seen the rise of Bitcoin or ether, all the rest of them, because what they pointed out, that's why they were started, because they didn't like fiat currencies. Yeah. And the reality is, Jerry, the executive branch can issue all the reports it wants, but the president can't do this on his own. It would take an act of Congress, right?

Yeah. And I would not expect that act of Congress. I mean, honestly, I think people do not trust authority right now. I can't blame them for not trusting authority. You know, Republicans are pretty likely to take the house. And yeah, that's the small government party to some degree. I mean, not taking sides here, just talking about divided government. It would really shock me to see something like this getting through both houses of Congress. So it's the sort of thing that will make a lot of noise on social media and there'll be a lot of blogs about how the coming global currency is coming and they're going to force this on you.

And it's a scary prospect, but it does not seem like something that's likely to happen. All right. Very good. Jerry, final question today. As you look at the US versus the rest of the world and you grade how we're doing through the lens of what you call principled reasoning, adherence to principles found in God's word, what would you say about how we're doing? I would ask, are we grading on an absolute standard or are we grading on a curve? Remember, you always in college, you chose that you want to show the professor who grades on a curve compared to the other students.

And then the one who gets an A plus, everyone's mad because it just throws off the curve. If you're talking about an absolute standard, we're not doing very well. And not only are we not doing very well, but we're also trending. We were already not doing very well and we're doing even more not very well.

That wasn't very good grammar, but again, things are getting worse, trends in the wrong direction. But if you grade on a curve, if you say, well, how are we compared to the United Kingdom? How are we compared to France, Germany, Spain, Italy, Japan, India, China, et cetera, we're actually doing better than most of the world.

So graded on a curve, yeah, we're doing pretty well, but we shouldn't depend on that. That bails us out in the short run because if we're moving in the wrong direction and violating principles, a lot of the world will say, yeah, but I'm still going to put my money in the United States. And that's kept our inflation lower than it would have been.

I know it doesn't seem low. It would have been higher. If the rest of the world were operating properly, there would have been a flight from the dollar and it would be worse.

Our recession would have been worse. So the comparative non-principaled behavior, non-biblically influenced behavior of the rest of the world kind of bails us out a little bit and gives us a little breathing room, which I hope is breathing room to repent, to have a revival, a reformation and a renewal from the bottom up and get back on track. Well, well said. Jerry, we'll leave it there. Thanks for stopping by today, my friend. Always a pleasure.

All right. God bless you. Folks, that's going to do it for us today. So thankful for my team.

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