WEBVTT - Money Monday with Brian James 0:00:01.050 --> 0:00:05.030 806-055-KRC-D Talk Station. It's Monday, which means it's time for 0:00:05.090 --> 0:00:08.090 Brian James Mall with Financial giving out some Money Monday 0:00:08.170 --> 0:00:11.990 tips and thinking in anticipation of retirement, which ultimately we'll 0:00:12.010 --> 0:00:14.460 get to in talking with Brian this morning about seniors 0:00:14.490 --> 0:00:17.050 taking Social Security early. I guess they're worried about the 0:00:17.500 --> 0:00:21.200 impending cuts to Social Security, which are scheduled to happen 0:00:21.220 --> 0:00:23.919 within the next several years unless Congress actually does something 0:00:24.000 --> 0:00:27.660 to solve the problem we have. Brian James, welcome back, man. 0:00:27.680 --> 0:00:29.570 Appreciate all our financial learning. You have to talk with 0:00:29.590 --> 0:00:30.670 my listeners and me this morning. 0:00:31.450 --> 0:00:32.650 Good morning, Mr. Thomas. 0:00:32.729 --> 0:00:35.330 And as always, I appreciate being handed the microphone to 0:00:35.370 --> 0:00:37.029 force people to listen to me for just. 0:00:36.850 --> 0:00:37.310 A little while. 0:00:37.409 --> 0:00:42.070 Hey, people pay to listen to you. That's what a 0:00:42.110 --> 0:00:42.550 financial planner is. 0:00:42.550 --> 0:00:44.089 I know, right? It's mind-blowing. 0:00:44.150 --> 0:00:45.750 Somebody's got to be the adult in the room. 0:00:45.810 --> 0:00:48.349 No, no, no, no. You need to stick with your plan. 0:00:48.370 --> 0:00:49.250 Yeah. 0:00:50.240 --> 0:00:52.870 Yes, that's the majority of my job. You just kind 0:00:52.890 --> 0:00:55.150 of summed it up right there. Listen, I've listened to you. 0:00:55.170 --> 0:00:57.550 I'm having a conversation with you like my listeners are 0:00:57.590 --> 0:00:58.190 listening to it. 0:00:58.330 --> 0:00:59.450 I understand. I get it. 0:00:59.450 --> 0:01:01.760 That's why I have a financial planner because I probably 0:01:01.800 --> 0:01:07.360 lack discipline. Anyway, this Trump-Xi Jinping summit, I guess the 0:01:07.400 --> 0:01:10.440 first state visit he has made Xi Jinping here to 0:01:10.459 --> 0:01:13.090 the United States since 2015. So there's only been two 0:01:13.130 --> 0:01:16.319 of them in over 11 years. I presume the U.S. 0:01:16.440 --> 0:01:20.530 and China maintain constant communications and discussions over these very 0:01:20.550 --> 0:01:23.850 important topics. So is his being here for this meeting 0:01:23.890 --> 0:01:27.500 in person, it's a symbolic gesture? Does it suggest that, well, 0:01:27.520 --> 0:01:30.100 there's going to be some cooperation between the U.S. and 0:01:30.680 --> 0:01:33.240 China on these important issues that they talked about? 0:01:34.190 --> 0:01:34.789 Oh, for sure. 0:01:34.870 --> 0:01:37.850 And obviously, the United States and China are not the 0:01:37.890 --> 0:01:41.690 best of friends, but sort of let's call let's say frenemies, 0:01:41.750 --> 0:01:43.670 I think is the best way to phrase that. There's 0:01:43.709 --> 0:01:45.930 plenty of countries we don't we don't interact with with 0:01:46.010 --> 0:01:46.789 pretty much at all. 0:01:46.910 --> 0:01:47.130 Right. 0:01:47.330 --> 0:01:51.520 Inexplicably, we engage with North Korea in the first Trump administration, 0:01:51.540 --> 0:01:53.120 got nothing out of it and haven't talked about it 0:01:53.160 --> 0:01:53.560 ever since. 0:01:53.880 --> 0:01:57.180 And nobody really cares about that. But now, yeah, we definitely. 0:01:56.800 --> 0:01:59.380 Got a bomb. They got a bomb after all. 0:01:59.620 --> 0:02:02.650 Well, that's true. And you know what? They haven't used 0:02:02.690 --> 0:02:05.910 it yet either. So anyway. That's progress. 0:02:05.950 --> 0:02:07.750 You know, they made something new that they haven't pulled 0:02:07.770 --> 0:02:09.990 the trigger on. So I suppose that's progress if we 0:02:10.030 --> 0:02:13.010 prevented them from using something that they weren't thinking about 0:02:13.030 --> 0:02:15.799 in the first place. But anyway, that's our new form 0:02:15.820 --> 0:02:19.700 of diplomacy. But yeah, as far as China goes, yeah, 0:02:19.740 --> 0:02:21.400 this is something we do need to get along with 0:02:21.440 --> 0:02:23.240 China one way or another. Doesn't mean we need to 0:02:23.260 --> 0:02:24.860 be best of friends. Doesn't mean we need. 0:02:24.760 --> 0:02:27.400 To sell them arms. That's a whole other topic. 0:02:27.930 --> 0:02:30.290 That's a brand new headline that we saw overnight. I 0:02:30.510 --> 0:02:32.609 don't understand that one, honestly. 0:02:34.120 --> 0:02:37.320 All I can think is anything that's not nailed down, 0:02:37.360 --> 0:02:39.580 let's see what somebody will pay us for it. Sometimes 0:02:39.620 --> 0:02:43.190 this administration scares me to death with the monetization of 0:02:43.270 --> 0:02:45.090 absolutely everything we can possibly monetize. 0:02:45.130 --> 0:02:47.390 Yeah, I'm with you on that. But maybe if they 0:02:47.430 --> 0:02:50.530 buy our missiles and our arms, we can have some 0:02:50.590 --> 0:02:52.450 say over what's in them and what they're used for. 0:02:52.570 --> 0:02:54.390 And maybe we can control them and monitor them like 0:02:54.430 --> 0:02:56.840 they do with, I don't know, the Wi-Fi systems that 0:02:56.880 --> 0:02:57.780 we bought from China. 0:02:57.800 --> 0:03:01.140 Yeah. There's something to be in that, right? Okay. Yeah. 0:03:01.180 --> 0:03:03.179 Hopefully there's a backdoor in there somewhere, you know, tit 0:03:03.200 --> 0:03:04.880 for tat, what goes around comes around. 0:03:04.900 --> 0:03:08.790 Stop it from hitting its target. That would be nice, 0:03:08.830 --> 0:03:10.030 wouldn't it? Yeah. 0:03:10.050 --> 0:03:12.030 So more to come on that. That was a very 0:03:12.090 --> 0:03:15.190 recent headline as to that comment being made. But anyway, 0:03:15.210 --> 0:03:18.910 I think the more important headlines coming out of this 0:03:18.970 --> 0:03:22.030 summit here, China did agree to import at least 10 0:03:22.030 --> 0:03:26.260 million metric tons of U.S. coal annually in 27 and 28. 0:03:26.260 --> 0:03:27.419 So we sold some more stuff. 0:03:27.440 --> 0:03:27.760 That's good. 0:03:28.240 --> 0:03:32.400 Both sides agreed to lower tariffs on $ 30 billion worth 0:03:32.419 --> 0:03:35.120 of goods, and that covers U.S. exports to China of 0:03:35.280 --> 0:03:40.570 agricultural products, seafood, timber, medical devices. And then coming our direction, U.S. 0:03:40.630 --> 0:03:45.890 imports from China of small appliances, toys, holiday decorations. There's 0:03:45.910 --> 0:03:48.380 a big difference in what's going one way versus all 0:03:48.410 --> 0:03:50.300 the plastic junk coming our way. 0:03:50.340 --> 0:03:50.800 But whatever. 0:03:51.140 --> 0:03:52.880 The tariffs were agreed to be lowered, so at least 0:03:52.900 --> 0:03:56.480 we got along a little bit. And somewhat importantly– Yes, 0:03:57.140 --> 0:03:57.560 that's right. 0:03:58.060 --> 0:03:58.880 It's the holidays, right? 0:03:58.920 --> 0:04:03.570 It's time for plastic garbage on container ships. But more importantly, 0:04:03.610 --> 0:04:05.930 the two sides did come together, and there's now a 0:04:05.950 --> 0:04:10.350 communication to discuss handling these AI-related incidents, because obviously we're 0:04:10.370 --> 0:04:12.590 going to plow forward on this, and we're going to 0:04:12.720 --> 0:04:15.380 learn by making mistakes, I think is pretty much what's 0:04:15.420 --> 0:04:17.900 already put in place here. China and the United States 0:04:17.960 --> 0:04:20.220 have agreed that, you know what, we should probably chat 0:04:20.260 --> 0:04:21.480 about this from time to time. 0:04:21.800 --> 0:04:23.200 That makes sense. I understand that. 0:04:23.220 --> 0:04:26.370 I mean, we've got the quote-unquote hotlines for nuclear activity 0:04:26.380 --> 0:04:31.410 between warring or otherwise enemy countries like we had during 0:04:31.430 --> 0:04:34.210 the Soviet Union days. But, you know, insofar as this 0:04:34.690 --> 0:04:36.950 liability is concerned, I made the point earlier today, I 0:04:37.010 --> 0:04:40.240 am just worried as I can be all day long 0:04:40.250 --> 0:04:43.740 with these AI, artificial intelligence principles like Bill Gates. Oh, 0:04:43.760 --> 0:04:45.300 my God, we're all going to die. A billion people 0:04:45.339 --> 0:04:49.260 are going to die. Humanity is going to be eradicated. Please, 0:04:49.660 --> 0:04:53.790 elected officials... Save us from ourselves. We need legislation. We 0:04:53.830 --> 0:04:57.150 need some sort of legal roadblocks or whatever put into this. 0:04:58.310 --> 0:05:00.010 I don't think our elected officials are in a position 0:05:00.040 --> 0:05:02.540 to even deal with this legislatively. But as I turn over, 0:05:02.620 --> 0:05:06.539 I look at the liability market. Civil liability is alive 0:05:06.580 --> 0:05:10.280 and well. TikTok just paid Alabama $ 100 million. They have 0:05:10.380 --> 0:05:13.529 thousands of lawsuits that have been filed by parents who 0:05:13.570 --> 0:05:16.830 say that these social media apps have corrupted their children. 0:05:17.279 --> 0:05:20.839 And lo and behold, in addition to just paying cash settlement, 0:05:21.380 --> 0:05:25.599 they also are changing the platform to give people controls 0:05:25.640 --> 0:05:28.289 and protections to shield their children from the dangers. They 0:05:28.330 --> 0:05:31.029 have default settings in there that don't allow perverts out 0:05:31.050 --> 0:05:32.830 in the world to have access to their children. So 0:05:33.370 --> 0:05:38.039 that's progress. They made a product. Apparently it's defective because 0:05:38.100 --> 0:05:41.120 it impacts our children. So they've changed the product to 0:05:41.160 --> 0:05:43.600 deal with the allegations and wrote a big fat check. 0:05:43.890 --> 0:05:46.510 That's how liability works. If they're subjected to it, then 0:05:46.529 --> 0:05:47.430 they'll change their tune. 0:05:48.690 --> 0:05:49.060 That's right. 0:05:49.130 --> 0:05:52.180 And to me, it also it's a big indicator of 0:05:52.240 --> 0:05:53.980 where our priorities are. And I'm not saying this is 0:05:54.020 --> 0:05:56.920 a bad thing, but we very much want to sell 0:05:56.960 --> 0:05:58.839 things for more than we pay to make them. Right. 0:05:58.880 --> 0:06:00.279 That's business. That's capitalism. 0:06:00.580 --> 0:06:03.300 That's pretty much how the world turns nowadays. We are 0:06:03.360 --> 0:06:06.740 very much more concerned with that than we are. And 0:06:06.779 --> 0:06:09.990 I say that because. The evidence of that is that 0:06:10.050 --> 0:06:12.830 we don't put the rules in place beforehand. We don't 0:06:12.870 --> 0:06:14.909 spend a lot of time thinking about what might happen. 0:06:15.210 --> 0:06:17.410 We basically say, let's fix it when it's a problem. 0:06:17.470 --> 0:06:19.570 And that's the cycle we go through. Again, neither good 0:06:19.620 --> 0:06:21.800 nor bad. I mean, that's how we create economic activity. 0:06:21.820 --> 0:06:23.800 But that is the decision that we make. Let the 0:06:23.839 --> 0:06:25.660 bad things happen. We will clean them up on the 0:06:25.700 --> 0:06:28.440 back end versus the opposite, which is let's not do 0:06:28.580 --> 0:06:31.359 anything at all. There's probably a happy medium in there somewhere. Okay. 0:06:31.420 --> 0:06:33.400 I'm sure, you know, we have Dave Hatter on every 0:06:33.460 --> 0:06:36.160 Friday at 630 for his, you know, the Tech Friday 0:06:36.180 --> 0:06:38.480 with Dave Hatter. And he has been every single week 0:06:38.520 --> 0:06:41.000 for years now talking about Internet of Things devices and 0:06:41.050 --> 0:06:43.550 how they are designed to get the product as immediately 0:06:43.589 --> 0:06:45.790 as they can into the market so they can engage 0:06:45.830 --> 0:06:48.710 in capitalism, right? But there are all kinds of failures 0:06:48.750 --> 0:06:50.750 in the back doorways that people can hack in. We 0:06:50.790 --> 0:06:53.170 have compromised systems as a consequence of these Internet of 0:06:53.190 --> 0:06:56.790 Things devices. So that's something else. So it's put it 0:06:56.870 --> 0:06:59.200 out there. get it out there. And as soon as 0:06:59.230 --> 0:07:01.810 someone figures out a problem, then fix it. This is, 0:07:02.330 --> 0:07:05.630 I mean, it's just the way the technology works because 0:07:05.690 --> 0:07:07.589 it changes and it evolves so rapidly. 0:07:08.690 --> 0:07:11.910 Yeah. And, you know, I compare that to the pharmaceutical industry, right? So, 0:07:11.950 --> 0:07:14.420 you know, it takes, well, I don't know, 10, 15, 0:07:14.400 --> 0:07:16.590 20 years for an idea to become a drug that's 0:07:16.630 --> 0:07:18.930 available on the market because of all the careful testing 0:07:18.950 --> 0:07:19.430 that we do. 0:07:19.970 --> 0:07:22.100 Obviously, that's probably a good thing, but. 0:07:23.500 --> 0:07:26.370 Unless COVID comes along and they have emergency use authorizations 0:07:26.380 --> 0:07:30.470 to get vaccines onto the market that maybe aren't battle-tested, right? 0:07:30.790 --> 0:07:34.369 Sorry. Yes, those are the downsides. 0:07:34.410 --> 0:07:36.990 But imagine if we did that for every single drug 0:07:37.010 --> 0:07:37.970 that came out there. 0:07:38.290 --> 0:07:38.710 Think of this. 0:07:38.930 --> 0:07:41.770 Let's learn about the side effects of drugs as we go, 0:07:41.850 --> 0:07:43.750 and we'll fix it on the back end after enough 0:07:43.810 --> 0:07:45.750 people have been impacted. We don't do that with other products, 0:07:45.770 --> 0:07:47.310 but we definitely do it with medical. 0:07:47.330 --> 0:07:50.840 I realize that, but going back to my point, Do 0:07:50.880 --> 0:07:53.480 you think that the pharmaceutical companies would have been able 0:07:53.500 --> 0:07:56.220 to put the COVID vaccine out there in the absence 0:07:56.260 --> 0:07:57.740 of emergency use authorization? 0:07:57.820 --> 0:07:58.460 I think not. 0:07:58.500 --> 0:08:00.580 We found out a lot of problems associated with that 0:08:00.660 --> 0:08:04.020 shot that they would have been held liable for. So 0:08:04.180 --> 0:08:06.560 take that part out and just have them be liable 0:08:06.600 --> 0:08:09.679 for anything they do by way of problems caused, death, 0:08:10.680 --> 0:08:13.000 whatever the harm is, and they're responsible for it. They 0:08:13.080 --> 0:08:15.900 still would be very, very cautious about just throwing any 0:08:15.940 --> 0:08:17.040 random drug out on the market. 0:08:18.090 --> 0:08:18.990 Right, yeah. 0:08:19.070 --> 0:08:22.520 To me, what's indicative of what we're talking about here 0:08:22.580 --> 0:08:24.780 is how quickly they did. The medical companies or the 0:08:24.800 --> 0:08:26.000 pharmaceutical companies. 0:08:25.720 --> 0:08:27.610 Agreed to it. Cool, we're not going to be liable 0:08:27.650 --> 0:08:29.470 for this. That's great. Let's crank it out and throw 0:08:29.490 --> 0:08:30.410 it out there and see what happens. 0:08:30.670 --> 0:08:34.150 But if it's Viagra or something that is not– uh 0:08:34.170 --> 0:08:36.480 you know not mandated by the federal government then we 0:08:36.510 --> 0:08:38.390 have to take 10 15 20 years to get that 0:08:38.410 --> 0:08:40.040 rolled out there again i'm not saying that's a bad 0:08:40.100 --> 0:08:42.839 thing it's just very interesting that's the one industry where 0:08:42.860 --> 0:08:45.600 we really hold feet to the fire over get the 0:08:45.640 --> 0:08:47.920 testing done get it right phase one phase two phase 0:08:47.960 --> 0:08:50.700 three trials and all that stuff versus the other things 0:08:50.740 --> 0:08:53.679 where now we maybe we're realizing that social media kind 0:08:53.740 --> 0:08:56.120 of needs to be treated the same way because of 0:08:56.160 --> 0:08:58.420 the way it apparently affects our minds even though it's 0:08:58.440 --> 0:08:59.920 just a device in our hands. 0:09:00.080 --> 0:09:01.540 No doubt about it. Brian James, we've got to talk 0:09:01.559 --> 0:09:03.120 about the price of oil in the next segment. Plus, 0:09:03.140 --> 0:09:05.370 we're also going to be talking about rate hikes going 0:09:05.910 --> 0:09:07.690 up again. Is another rate hike possible? 0:09:07.850 --> 0:09:08.310 Is it right? 0:09:08.730 --> 0:09:11.770 Plus, again, seniors taking Social Security early because they're. 0:09:11.590 --> 0:09:13.130 Fearing the impending cuts. 0:09:13.490 --> 0:09:15.230 More with Allworth Financial's Brian James. 0:09:15.250 --> 0:09:15.670 Don't go away. 0:09:16.010 --> 0:09:16.250 55KRC. 0:09:16.290 --> 0:09:20.979 Ladies and talk station. 0:09:20.980 --> 0:09:24.720 818 at 55KRC, the talk station. Money Monday. Brian James 0:09:24.860 --> 0:09:26.880 on the phone talking about money tips here. And real 0:09:26.900 --> 0:09:30.920 quick on the Xi Jinping-Trump summit meeting. Um, you pointed 0:09:30.960 --> 0:09:34.170 it out, $ 30 billion worth of, uh, tariff reductions. That's a, 0:09:34.160 --> 0:09:37.300 I view that as a positive, but, and you also 0:09:37.330 --> 0:09:39.270 mentioned the sale of coal. I guess China didn't get 0:09:39.309 --> 0:09:41.170 the memo that we're not supposed to burn coal anymore. 0:09:41.230 --> 0:09:44.330 Ha ha ha ha ha. Anyway, they, I doubt we 0:09:44.350 --> 0:09:46.210 sent them that memo. Yeah, I know we did. 0:09:46.230 --> 0:09:48.610 And in the Eastern Kentucky, uh, coal, coal miners are 0:09:48.650 --> 0:09:50.990 very happy about that probably. And China has continued to 0:09:51.010 --> 0:09:53.410 build coal plants at a very rapid pace all throughout 0:09:53.460 --> 0:09:55.960 this whole existential threat to the world that people have 0:09:55.980 --> 0:09:58.880 been fed. In terms of Al Gore's message, we're all 0:09:58.900 --> 0:10:01.300 going to die if we exhale. Anyway, don't have to 0:10:01.340 --> 0:10:05.020 entertain my comments, they're mine. But no country or institution 0:10:05.080 --> 0:10:09.199 can be allowed to impose tolls on international waterways. That's 0:10:09.240 --> 0:10:11.420 a quote that apparently U.S. and China agreed on. So 0:10:11.500 --> 0:10:13.950 I view that as a step, at least lip service 0:10:13.970 --> 0:10:15.970 to to a step in the right direction with regard 0:10:15.990 --> 0:10:18.270 to the Strait of Hormuz, among other straits. But does 0:10:18.309 --> 0:10:21.170 that suggest China is no longer going to help the 0:10:21.230 --> 0:10:23.589 Iranians in any way, shape, or form? Does it signal 0:10:23.610 --> 0:10:25.750 that maybe the Chinese would be interested in opening up 0:10:25.770 --> 0:10:28.860 the strait, thus freeing us from the onerous problems we 0:10:28.920 --> 0:10:33.580 face with the price of oil right now? Because oil 0:10:33.840 --> 0:10:35.439 is going up again, I understand. 0:10:36.190 --> 0:10:38.510 Yeah, I think that comment is much more of an 0:10:38.570 --> 0:10:42.720 attention getter apparently than dropping billions of bombs on the 0:10:42.760 --> 0:10:45.340 country of Iran because we're still in that situation and 0:10:45.380 --> 0:10:47.880 have been since the late first quarter. 0:10:48.280 --> 0:10:50.200 So China, yes, making that comment. 0:10:50.800 --> 0:10:53.760 Basically, Iran has to be hearing that, OK, our erstwhile 0:10:53.830 --> 0:10:56.250 partner in this seems to be disagreeing with what we 0:10:56.309 --> 0:10:59.209 are planning to do. And I'm a little disappointed it 0:10:59.230 --> 0:11:02.470 does apparently have to be China to kind of introduce some. 0:11:03.270 --> 0:11:05.530 Reality to all of this, which is this just can't 0:11:05.570 --> 0:11:06.030 go forward. 0:11:06.050 --> 0:11:07.429 But I don't think the United States is going to 0:11:07.470 --> 0:11:09.850 have a ton of credibility right now with Iran in 0:11:09.910 --> 0:11:12.130 saying what they should or should not do. So I'm 0:11:12.170 --> 0:11:14.690 glad there is a voice out there that supports what 0:11:15.090 --> 0:11:18.180 ultimately needs to and will happen. The world as a whole, 0:11:18.640 --> 0:11:20.520 no matter what team, what side you're on, the world 0:11:20.559 --> 0:11:22.240 as a whole is not going to function. 0:11:21.940 --> 0:11:24.319 Very well if we can't move oil through that part. 0:11:24.200 --> 0:11:24.540 Of the world. 0:11:24.720 --> 0:11:26.460 True. But, you know, China's been one of the few, 0:11:26.520 --> 0:11:29.000 if only lifelines to the Iranians. They have been buying 0:11:29.059 --> 0:11:31.620 up whatever oil the Iranians can get out, even though 0:11:31.660 --> 0:11:33.920 I understand that they're running out of oil to sell 0:11:33.960 --> 0:11:37.680 to the Chinese. But, I mean, if they want the 0:11:37.710 --> 0:11:40.450 Strait open and they're serious about that statement, then we 0:11:40.470 --> 0:11:42.710 need to get the situation concluded. And that means the 0:11:42.770 --> 0:11:45.130 Iranians have to allow the Strait to be opened up. 0:11:45.190 --> 0:11:47.610 And we seem to be a stalemate on that right now. 0:11:47.650 --> 0:11:50.850 It's the only leverage the Iranians have to our blockading 0:11:50.870 --> 0:11:53.630 their ports and preventing them from engaging in commerce worldwide. 0:11:54.370 --> 0:11:57.100 So. For sure, for sure. 0:11:57.160 --> 0:11:59.800 But something needs to bring them to the table with 0:11:59.860 --> 0:12:02.439 a willingness to actually think about it. And again, bombs 0:12:02.480 --> 0:12:03.570 on their heads didn't do it. 0:12:03.679 --> 0:12:05.190 We're still in the situation that we are. 0:12:05.290 --> 0:12:09.089 Perhaps this minor pivot back to some sort of whatever 0:12:09.130 --> 0:12:12.449 diplomacy is now might urge them to the table. But again, 0:12:12.490 --> 0:12:15.069 it had to come from somewhere else to get that done. 0:12:15.130 --> 0:12:17.530 But that's a step in the right direction of two 0:12:17.590 --> 0:12:20.220 entities that don't really get along coming together to say, hey, 0:12:20.260 --> 0:12:22.220 maybe we need to set this aside just for a minute, 0:12:22.540 --> 0:12:23.520 fix the immediate problem. 0:12:23.559 --> 0:12:25.950 Then we can go back to arguing about normal things. True. 0:12:26.270 --> 0:12:26.910 War is bad. 0:12:26.929 --> 0:12:34.050 And I know, obviously, the price of oil, profound impact 0:12:34.150 --> 0:12:34.770 on the economy. 0:12:34.809 --> 0:12:36.370 We all know that. It's just a given. 0:12:36.910 --> 0:12:38.880 So the price of oil going up, of course, diesel's 0:12:38.900 --> 0:12:42.140 through the roof and creating inflationary pressures across the board. 0:12:43.040 --> 0:12:46.300 Is this going to lead to another rake hike, Brian James? 0:12:46.320 --> 0:12:48.060 Because I know people who want to buy a house 0:12:48.100 --> 0:12:49.140 would not like to hear that. 0:12:50.740 --> 0:12:51.080 Yeah. 0:12:51.220 --> 0:12:54.730 And the reality is we are in a rising rate environment. 0:12:54.770 --> 0:12:55.770 That's just the way it is. 0:12:55.929 --> 0:12:57.990 And there are a number of indicators out there that 0:12:58.010 --> 0:13:01.890 would say that the economy probably can absorb more rate hikes. 0:13:01.910 --> 0:13:04.290 You know, nobody wants to hear that. You know, one 0:13:04.380 --> 0:13:07.239 individual person's wallet may not do so well with those 0:13:07.300 --> 0:13:10.480 rate hikes. But the economy overall isn't built of one 0:13:10.520 --> 0:13:15.000 wallet on top of another. It's basically a much larger 0:13:15.340 --> 0:13:18.500 animal that needs to be tamed at some point. And 0:13:19.000 --> 0:13:22.110 so that's why we have to look at making these 0:13:22.130 --> 0:13:24.729 sacrifices now. How do we slow things down to slow inflation? 0:13:25.230 --> 0:13:26.849 And how much of that can we take before it 0:13:26.870 --> 0:13:30.650 really causes pain? The Fed is firmly focused on inflation. 0:13:30.670 --> 0:13:33.480 That's the number one goal. Nearly all of them, including 0:13:33.510 --> 0:13:35.620 the four members who spoke at the meeting last week, 0:13:35.900 --> 0:13:39.240 they all signaled that additional tightening may still be needed 0:13:39.300 --> 0:13:42.179 even after September's hike. Markets are paying attention to that. 0:13:42.300 --> 0:13:44.750 Now the chance of another October hike is about 64%, 0:13:44.750 --> 0:13:49.170 two out of three. Silver lining, though, for investors, the 0:13:49.250 --> 0:13:52.270 bonds that are coming out have the most compelling starting 0:13:52.309 --> 0:13:55.580 yields we've seen in a very long time. That's historically 0:13:55.620 --> 0:13:59.300 been a strong guide to longer-term bond returns. Remember, we're 0:13:59.320 --> 0:14:02.500 going back to 2004, 2007 for the kind of interest 0:14:02.520 --> 0:14:05.040 rate environment that we're in right now. Not that we're 0:14:05.080 --> 0:14:08.000 rooting for bonds necessarily, but again, silver lining for investors. 0:14:08.040 --> 0:14:10.030 If you've got that balanced portfolio out there, then hopefully 0:14:10.050 --> 0:14:12.390 you've got something on that fixed income side. You do 0:14:12.429 --> 0:14:14.530 have something that's going to benefit from this. Do we 0:14:14.590 --> 0:14:15.650 all want lower mortgage rates? 0:14:15.770 --> 0:14:16.390 Absolutely. 0:14:16.429 --> 0:14:18.010 But at the same time, we also have to be 0:14:18.050 --> 0:14:21.430 seeking lower inflation, which is another role, you know, the 0:14:21.470 --> 0:14:22.330 pretty important. 0:14:22.030 --> 0:14:22.880 Job the Fed has. 0:14:22.930 --> 0:14:24.880 So that's the sacrifice that's going to have to be 0:14:24.900 --> 0:14:26.300 made in order to get us there. 0:14:26.500 --> 0:14:29.700 Well, does this not increase our borrowing costs, our deficit 0:14:29.720 --> 0:14:31.000 costs when the bond. 0:14:30.840 --> 0:14:33.880 Rates goes up, Brian? Of course it does. It does. 0:14:33.920 --> 0:14:35.140 But that's what I was saying. 0:14:35.460 --> 0:14:38.540 The indicators we're seeing from the economy are that it 0:14:38.600 --> 0:14:39.960 can absorb higher interest rates. 0:14:40.000 --> 0:14:41.020 I'm not saying this is a good thing. It's going 0:14:41.040 --> 0:14:41.220 to hurt. 0:14:41.740 --> 0:14:43.920 No matter what, it's going to hurt. It's going to 0:14:43.960 --> 0:14:46.180 cost more to just do our... That's already been happening. 0:14:46.590 --> 0:14:48.410 And the point is that there's probably a little more 0:14:48.490 --> 0:14:50.790 coming before we can actually see the other side of this, 0:14:50.830 --> 0:14:53.370 because the efforts we have made so far simply have 0:14:53.410 --> 0:14:55.350 not had that much of an impact on inflation. 0:14:55.370 --> 0:14:56.110 We've been stuck. 0:14:55.910 --> 0:14:59.310 At 3% for, what, four or five years now, something 0:14:59.350 --> 0:14:59.690 like that. 0:15:00.190 --> 0:15:03.120 Well, and In my lifetime, I remember multiple times when 0:15:03.140 --> 0:15:06.040 the bond rates have gone up and inflation has been 0:15:06.080 --> 0:15:08.680 a pesky problem. We all seem to have survived it 0:15:08.720 --> 0:15:10.080 in the past, Brian. I think that's one of the 0:15:10.100 --> 0:15:11.750 things a lot of people lose sight of. Like, oh, 0:15:11.760 --> 0:15:14.370 my God, this is terrible. This has never happened before. 0:15:14.630 --> 0:15:16.450 I can't believe 7% mortgage rates. 0:15:16.470 --> 0:15:17.210 Well, you know. 0:15:17.230 --> 0:15:18.670 They were a hell of a lot bigger than that 0:15:19.070 --> 0:15:21.390 in the early 90s, and they were way, way bigger 0:15:21.410 --> 0:15:24.030 than that in the 1970s during stagflation. You were paying 0:15:24.070 --> 0:15:25.360 double digits to buy a house. 0:15:26.410 --> 0:15:29.400 And the average is in the 6% to 7% range 0:15:29.440 --> 0:15:32.300 if you look over the long term. So all we've 0:15:32.360 --> 0:15:34.700 done is return to the mean. We were spoiled with 0:15:34.740 --> 0:15:37.280 our 2% and 3% mortgages. We'll probably never see those again. 0:15:37.300 --> 0:15:40.080 And arguably, maybe we never should because of what has 0:15:40.120 --> 0:15:42.470 resulted from it. So yeah, you're right. We will get 0:15:42.530 --> 0:15:45.430 back there. This too shall pass and so on and 0:15:45.470 --> 0:15:45.930 so forth. 0:15:47.110 --> 0:15:49.890 Thank you for allowing me that point, Brian James. Need 0:15:49.930 --> 0:15:53.380 to make it. And the historical rates, you're right. This 0:15:53.430 --> 0:15:56.490 is kind of what it's always been. 825 right now. 0:15:56.510 --> 0:15:58.010 Don't go away because a lot of people are starting 0:15:58.030 --> 0:16:00.850 to take Social Security early, fearing the inevitable or the 0:16:00.910 --> 0:16:04.790 impending cuts that are coming. 22% clip. Can you survive that? 0:16:04.850 --> 0:16:08.490 Brian James on whether that's a good idea. Don't go away. 0:16:08.570 --> 0:16:10.820 55KRC. The Talk Station. 0:16:12.820 --> 0:16:15.180 It's 828 at 55KRC. The Talk Station. Brian Thomas with 0:16:15.220 --> 0:16:18.210 Brian James from Allworth Financial. He's a financial planner. I 0:16:18.210 --> 0:16:20.510 always like to think about retirement. We're talking with Brian James, 0:16:20.610 --> 0:16:23.010 and retirement may not come with as big a Social 0:16:23.050 --> 0:16:25.860 Security check as you might anticipate, unless you haven't gotten 0:16:25.880 --> 0:16:28.380 the word. It's been spread widely for a long time. 0:16:28.880 --> 0:16:31.479 We're running headlong into a problem with Social Security, and 0:16:31.500 --> 0:16:34.700 they're expecting to have to reduce your monthly payment by, 0:16:34.780 --> 0:16:37.720 is it 22%, Brian James, within the next several years? 0:16:38.940 --> 0:16:42.020 It depends on the report you look at, but I've 0:16:42.040 --> 0:16:44.820 done this for 30 years, and that report comes out 0:16:44.840 --> 0:16:46.780 a couple times a year, and it has always been 0:16:46.800 --> 0:16:50.310 in the range of about 20% to 25%, depending on 0:16:51.050 --> 0:16:53.350 whose math we're using. The point is, Brian, that the 0:16:53.390 --> 0:16:56.250 math don't math anymore, speaking of the math. And there's 0:16:56.290 --> 0:16:59.770 not enough flowing in to support what needs to come out. Now, 0:16:59.830 --> 0:17:03.030 the interesting thing is we are about to, in November, 0:17:03.450 --> 0:17:05.709 elect some of the people who will look us in 0:17:05.730 --> 0:17:08.129 the eyes and decide what exactly we're going to do 0:17:08.190 --> 0:17:08.590 about this. 0:17:08.730 --> 0:17:09.350