The Fed’s Inflation Dilemma: What’s Next for America?
Sept. 18, 2026
Host: Hon. Sam Rohrer
Guest: David McAlvany
Note: This transcript is taken from a Stand in the Gap Today program aired on 9/17/26. To listen to the podcast, click HERE.
Disclaimer: While reasonable efforts have been made to provide an accurate transcription, the following is a representation of a mechanical transcription and as such, may not be a word for word transcript. Please listen to the audio version for any questions concerning the following dialogue.
Sam Rohrer:
Hello and welcome to Stand in the Gap today, and it’s our focus today on economics, finance, and the biblical stewardship with David McAlvany. He is the CEO of the McAlvany Financial Group, and glad that he’s back with us. Now, yesterday, if you’re listening to news and you’re watching anything economically related, in a highly anticipated announcement, the Federal Reserve chairman, Kevin Warsh, on behalf of the Federal Open Market Committee, made the Fed’s most significant monetary policy move in years by unanimous 12-zero vote. The Federal Reserve raised what’s called its benchmark federal funds rate by a quarter percentage point, increasing the target range currently in place of between three and a half and 3.75% to a new range of 3.75% to 4%. Now, in announcing the decision, the committee stated that their words, “Inflation remains elevated,” and that this action, the raising of the rate, is intended to support a, what they say, “timelier return” to its 2% inflation objective.
Now, what makes this decision, I think, particularly significant, is that it comes after two years of persistent public pressure from President Trump on Federal Reserve to lower interest rates. And during that time, then Fed Chairman Jerome Powell was repeatedly criticized for refusing to do so. As a result, when Kevin Walsh was appointed to succeed Powell, many observers assumed that the new chairman would just move more aggressively toward lowering rates. But instead, the chairman, his first major policy went in precisely the opposite direction. So the reality of this raises questions, I think, that extend well beyond economics. There’s a lot of politics involved in this as well. In this decision, and the question is, is this decision evidence that inflation remains a more serious problem than what many are saying? Does it suggest that economic realities are proving stronger than political pressures? And perhaps does it tell us about the Fed’s traditional claims of independence from partisan influence?
So they just make that do what they did in order to say, “Hey, look, nobody’s telling us what to do.” Now joining me today again is David McAlvany. The last time he was with us, we spent much of that conversation challenging some of the common myths surrounding inflation and discussing the difference between inflation itself and its many consequences. And I’ve heard from many of you who really appreciated that program. So we’re going to link that discussion with that of today. Now, for many Americans, the questions now go far beyond yesterday’s headlines. For instance, why did the Fed act now? What’s it tell us about the true condition of the economy? What’s it reveal about inflation? And perhaps more importantly, where does America go from here? Are we looking at renewed inflation, stagflation, recession, or some entirely different economic outcome? And we’re going to talk about all of these today.
And with that, David, I welcome you into the program. It’s so good to have you back.
David McAlvany:
Thank you, Sam. Great to be back with
Sam Rohrer:
You. David, okay, let’s start here. What exactly did the Federal Reserve do yesterday? For instance, what reasons did it give for doing what they did? And what do you believe was behind the decision? Now we heard what they said, but what do you think was really behind the decision?
David McAlvany:
The reasons given were that inflation is still an issue that needs to be addressed. And of course that is kind of stating the obvious. We’ve had the inflation rate above the 2% target for over five years. So they’re missing the mark and that’s obvious. We didn’t get any improvement in the most recent CPI numbers and the PPI numbers. But what’s behind the decision? The bond market is no longer whispering. The bond market is shouting that we have fiscal issues, there’s too much debt outstanding, and you can see it as interest rates are creeping higher and higher. The bond market is sending a very clear signal and that leaves the Federal Reserve in a very uncomfortable position. If they lower rates or remain pat, it says they’re really not serious about inflation and the bond market will punish them accordingly. So he had to do something.
The question is prior to the midterms, can he do what was needed, which is probably a 50 basis point increase to really calm the bond market. I think he was threading the needle, the political needle, so to say. He did not want to offend the White House more than he did with the 25 basis point increase. But the bond market still has its concerns because we’ve got some major structural issues and behind all of this is just the massive quantities of debt which have not been addressed. And it’s certainly a US issue, but it’s a global issue as well.
Sam Rohrer:
Okay. And we’re going to talk, ladies and gentlemen, more about this whole matter of debt and all of that into the rest of the program. But David, let me come back and ask you this. Last time we specifically challenged what we called the myths surrounding inflation and the way you described it and how we discussed it was of great help to many, many people. But following up to that, how does yesterday’s actions or the decision by the Fed, how does that help us better understand perhaps what inflation really is and why it remains such a concern, particularly for them from a political perspective to go the opposite direction from what the president was urging them to go?
David McAlvany:
The Fed’s primary concern is, as it relates to inflation, that this becomes entrenched in consumer mindset. So the concern is that expectations of higher inflation becomes entrenched and it begins to change consumer behavior, at which point inflation becomes sort of a self-reinforcing dynamic in the marketplace and almost a self-fulfilling prophecy. Higher rates and higher expectations of higher rates actually begets higher inflation rates. So they want to sort of disabuse the market of this idea that inflation is going to come back or is going to be an issue going forward. And so they’re proving some muscularity by raising rates. But as I mentioned earlier, I don’t think it’s sufficient at this point. And of course the backdrop is really critical to understand. They can’t raise rates like Volcker did in the 1970s and early 80s, late 70s, early 80s, because of the massive quantities of IOUs that we have in the system.
We can’t afford it. As they raise rates, we’ve got the better part of $10 trillion, which is being rolled over this year and it is going to be at higher rates. The current average interest rate on the national debt is about 3.44%. Now anything that gets rolled over is going to be at a higher interest rate. So we’re already coming up on 1.25 trillion in interest expense. To see it stretch even higher, again, puts tremendous amount of pressure on the treasury department. So right now you’ve got sort of two departments, if you will, two entities that are at odds with each other. The treasury needs rates lower because they can’t afford interest expense. And the Fed has to sort of prove to the market that they can tame inflation. So they’re doing what they can do without doing too much. I think they’re going to be forced to pivot by the first quarter of next year.
Sam Rohrer:
And they in fact did let the door open for, I think an additional change, an increase coming up, which I think you alluded to. Ladies and gentlemen, all right, economics, rates, what we’re talking about, they’re all interconnected and we’re going to try and make some sense as we walk through the balance of the program because much of what we’re hearing is only portion of the truth and getting the truth on economics and all of that is very important. So stay with us. When we come back, we’re going to talk about is inflation really under control and can it be?
Well, if you’re just joining us today, my special guest again is David McAlvany. He’s the CEO of the McAlvany Financial Group. They have a website at mcelvany.com. And if you go back/stand in the gap, there’ll be something there that could be of help to you as a listener to this program. Our theme today is this, the Fed’s inflation dilemma, what’s next for America? And we’re building off of the Federal Reserve’s decision yesterday to increase what’s called at this point the rate. And we’ll explain more about that when in fact the president had been urging them for a long time to lower the rate. So there’s a lot involved. And that decision raises, I’m going to say a much larger question. For instance, if inflation is largely under control, and I’m going to say largely under control, and David will talk about it, is it under any control?
We’ll find out. But if inflation is largely under control, as many are saying, then why did the Federal Reserve find it necessary to raise the interest rate? After all, Chairman Kevin Warsh, the new chairman in the Federal Open Market Committee stated that, “Inflation remains elevated.” Now those are words that you have to define them because nobody knows what they mean really. And then he goes on to say, “And then they justified their action as necessary to support, again, a term, timelier return.” It’s all coded language often heard when anything is reported on economic type aspect. Now, many Americans continue to feel, they feel the effects of rising costs every day. We’re seeing it. Food, housing, insurance, healthcare, energy and other essentials remains significantly higher than they were just a few years ago. Again, despite what we’re being told that no, it’s not that bad. Now, while some economic indicators suggest improvement in some areas, many families at least are still feeling the loss of purchasing power.
So when you go to the store, you don’t get as much as you used to. And I think we all sense that. Now the last time David joined us, we spent considerable time examining, said earlier, the myths surrounding inflation, and we discussed the critical difference between inflation itself and the higher prices that people experience. So if inflation is more than rising prices and of yesterday’s rate increase by the Federal Reserve is evidence that the Fed still sees inflation as a threat, then perhaps the bigger question is not what prices are doing today, but whether the underlying causes of inflation have ever been truly addressed and even as of this day. So David, the Federal Reserve says inflation remains elevated. You can define that. Yet Americans have repeatedly been told inflation has largely been brought under control. Here’s the question. Does yesterday’s rate hike indicate that inflation is proving more persistent and difficult to tame than policy makers are saying?
And if so, why?
David McAlvany:
Absolutely. In his comments, he brought up geopolitics as one of the factors that are sort of out of their control and are serving as an influence to the inflation statistics. So we have multiple things that cause inflation. You can have supply chain disruption, you can have energy shocks, you can have a radical increase in the money supply. What we had following COVID was massive fiscal stimulus, which was just, again, a different version of money supply. You give money to households, they spend it, and if there’s more money circulating than there are goods and services out there, the cost of those goods and services moves higher. So what they’re saying is that geopolitics is certainly a factor and it’s not something that we can necessarily control. Kind of states the obvious, but what was supposed to be a multi-week engagement in Iran is proving to be multi-month, maybe even a forever war.
And with the closing of Bab el Mandab, we had the Houthis take and squeeze the supply coming through the Red Sea. We had that as sort of a relief valve. Since Hormuz has been closed, the Red Sea has been a way that they could still provide oil to the markets and that is now being strained as well. The East West Pipeline in Saudi Arabia temporarily shut down and these are all factors that are pushing the energy cause higher. So again, if you talk about supply disruptions, energy shocks, money supply, the energy shock is generally something that monetary policy guys and gals look through. They don’t pay attention to because they know it’s going to be temporary. Maybe it’s a few weeks, maybe it’s a month. Now we’re coming up on five, six months and there’s no end in sight for the conflict. Even if we pulled out and we’re not engaged, it doesn’t resolve these choke points around Bab el Mandab, which is again closer to the Red Sea or the Strait of Hormuz.
And the biggest issue for us is that you’re dealing with refined product constraints. We’re running at 98% of capacity in terms of our refineries here in the US and you’ve had 34 of the 39 refineries in Russia damaged by the Ukrainians. Don’t know how many of those are back online. So diesel is something that is extraordinarily high. It’s trading at $100 over the price of a barrel of oil. So we look at the crude price, it’s a hundred. We’ll add another hundred to that after you refine it. And jet fuels between 50 and $70 higher. These are refinery capacity constraints too. It’s a different version of an energy shock. But I think ultimately you’re looking at something that’s even more fundamental and insidious in our financial system. And this started many decades ago when we redefined money to include credit. When we came up the gold standard in 71, the end of the Bretton Woods period, disconnected the US dollar from any reference to gold as a backing, it allowed us to create unlimited quantities of debt, of credit.
And we’ve redefined money to include that credit as a part of the money that we use and works its way into the financial markets. We have too much now and actually an addiction to credit as a means of growing the economy. We have a president that has no problem with that, not opposed to credit growth, not opposed to. And in fact, would say the only thing that’s keeping us from growing as an economy is that rates are too high. We just need to lower rates and everything will be fine. Cheap credit is as close to a free lunch as you get in the capitalist system. Trump is comfortable as a risk taker, as a risk taking capitalist. So many more risks actually pencil out. The math works when rates are low. I don’t disagree with that, but low rates, while they add to growth, it’s the quality of growth that matters.
And there’s a lot of sloppy bets that are made when money is cheap, what we would call mal investment. So I think what we’re now tempting fate with is what Von Messes called a crack up boom, a super inflationary runaway market. Asset owners love it. That would include the Trump family, but households get crucified on an inflationary cross. And I think this is what we’re dealing with now is a lot of social divisiveness, bipartisan bickering, which is trying to respond to a voter base, which is very unhappy. Why are they unhappy? Because inflation is an issue. They’re having a hard time paying their bills and the cause of that, too much money in the system, too much credit in the system is not something that Trump wants to solve. In fact, he’d like cheaper money and more of it. That’s his solution, which is actually a part of the problem.
Sam Rohrer:
And David, I think that’s interesting because as somebody like myself having been in office for a long time and dealing with policy, I look at what’s taking place and saying, all right, fine. What an individual as an individual chooses to do, for instance, the president, he’s making big decisions, so we’ll pull him out here. He personally has used bankruptcies and credit to gain a lot. Now, what you do in a case like that as an individual, well, you bear the consequences of that risk, but moving that same risk to national policy, fiscal policy, the type that actually puts at risk everybody else’s savings, as an example, and everybody else’s purchasing power of the dollar, to me, that’s immoral and that’s a part of what is a real problem here. So let’s get to about the last minute and a half of this segment. You’ve mentioned, for instance, we’re talking about debt here.
You talked about energy, which we’re seeing right now driving, but if you look at what’s taking place right now, what are the largest, more fundamental drivers, causes of the inflationary pressure that the Fed is trying to control a little bit? Kind of prioritizing, name a number there.
David McAlvany:
Yeah. Well, I think again, we’re addicted to growth. We have to have year-on-year growth to feel good about the economy, and that growth is being driven by credit. The whole world has adopted this growth model. And so you look at governments and corporations, the OECD estimates for 2026 that we’ll see $29 trillion in new borrowing globally. That’s a lot of money. The Institute for International Finance now puts total debt globally at $353 trillion interest. Just the government interest on that debt is going to cross the two trillion mark this year. This is debt levels that relative to global GDP, 305%, 305%, 90% is considered destabilizing. So it’s a system that’s broken, but no one wants to acknowledge it. And so what the Fed is trying to do is convince that they are serious about inflation while not raising rates so high that the interest component ends up bankrupting the treasury.
And this is a very difficult thing to navigate. I think frankly, the Fed is stuck. Maybe they raise rates under the 25 basis points, but as they do that, they compound the fiscal strain and the bond market, as I said, the bond market’s no longer whispering on this. The bond market is yelling and so is the gold market. The gold market is saying there is massive fiscal issues which are not going to be resolved in the next two years, maybe even the next 20 years. And Bessen’s idea that 3% economic growth is going to solve the problem is a pipe dream. It’s a total pipe dream. So I think that’s what we’re dealing with is too much debt. And again, debt is the same thing as money in the modern era, and that’s why we have inflation. Inflation comes in two waves, always has…
Sam Rohrer:
Okay. And hold that. And ladies and gentlemen, stay with us because the next segment we’re going to logically progress through this consideration today and ask this question. America’s economic crossroads. We’re at a crossroad inflation, debt, what comes next? We’re going to talk about what could come next. All right, we’re moving into the program further. Last segment we answered the general question, is inflation under control? And in reality, the answer’s no, but moving on because it puts what happens, a lot of things are going to change as a result of what happened yesterday and special guest David McElvany, who’s the CEO of the McAlvany Financial Group is bringing his expertise to this and I appreciate him being with me again, but it’s kind of like what happens next because if yesterday’s federal reserve action tells us anything, it’s at the inflation story, whether they say it’s where we are exceeds a little bit of what they wanted.
And in the last time David was with me, we talked about that aspect. Well, there frankly is no good level of inflation. All right, so there’s a whole lot of things factored into this, but the Fed’s decision to not raise interest rates because it believes inflation remains above their target and requires additional restraint. What that means is higher interest rates and so forth. Yet every rate increase comes with consequences and David talked about some of that in the last segment, but higher rates increase, well, a number of things as extended, borrowing costs for consumers and businesses. And obviously as we talked about before, with such gigantic debt that our nation has, it puts interest payments now well above a trillion dollars a year, the largest single line item in the federal budget and only going higher. So those are some. And so for that reason, the implications of yesterday’s decision extend far beyond inflation alone and far beyond yesterday.
Higher rates do affect housing and investment and economic growth and financial markets. They also impact, as David said, the treasury market, the bond market and the federal government’s ability to finance an already enormous national debt. That means having other nations buy our debt so we can continue to spend. But as borrowing costs increase, the cost of servicing that debt, as we’ve alluded to, also rises. And another important question that involves the buyers of that debt. For decades, foreign governments and investors have played a significant role, as David said, in funding US borrowing through the purchases of treasury securities as they’re called. And now those nations are saying, wait a minute, we’re no longer going to do it unless you pay us more. That’s an increase in rates. Okay. So as we connect the dots between inflation, interest rates, debt and economic growth, where does the economy go from here?
And are we moving toward stability or stagflation, you may have heard that term, recession, definitely have heard that term, or some other challenge that many Americans may not yet fully recognize. So David, into that equation, as you assess current economic conditions in yesterday’s Fed decision, what concerns you the most over the next 12 to 24 months? Renewed inflation, stagflation, recession, or some entirely different risk that many Americans may not even yet see?
David McAlvany:
Well, I think inflation is near the top of the list, and I look at the history of inflation here in the United States in each episode of inflation that we’ve had going back to the 19 teens, there’s a consistent pattern which emerges where you have an inflationary push, you have a policy response, the market reacts, and then reality still remains because typically the policy response was not severe enough to fully deal with the inflation. So 1916, we’ve got an initial inflation spike and by 1919 it’s back. 1941, we’ve got an initial inflation spike, by 1949 it’s back. 1974, we have an initial inflation spike, 1980, it’s back. The second wave is typically higher than the first. 2022, we’ve got an inflation spike and yes, we’ve had a policy response and no, inflation is not gone. The policy response was not vigorous enough. And I think 2026, 2027 is that resurgence, the second wave of inflation that has massive implications for asset prices.
And as rates go higher to match the inflation rate, we’ve already got the 30-year fixed rate mortgage at 7%. Could it be at 8% by the end of next year? I mean, that is very material for the impact that it has for the price of the average home in America. Certainly higher rates dampens the ability of Wall Street firms or publicly traded companies rather to make money. So you’ve got pressure in stocks, obvious pressure in bonds, pressure in real estate. All of these things have been really critical. The elevation of those asset prices have been critical to a wealth effect, which has kept us from recession. And so as inflation re-emerges, the possibilities of recession emerge and stagflation being sort of one of those expressions. Stagflation is kind of the simultaneous occurrence of economic slowing, stagnation, weak real growth with continued inflation. I think that’s likely what we’re
Sam Rohrer:
Going to
David McAlvany:
Have. Could it become worse? I think some of that depends on how the AI narrative continues. If it continues with strength, great, because as you look at the input from AI CapEx spending, Bridgewater Associates tabulates that 50% of GDP growth came from AI CapEx spending and other analysts put it higher, as much as 67 to 75%. The Bureau of Economic Analysis in the first quarter of this year said that looking at economic growth, 74% of it came from AI related investments. So if that narrative begins to falter, you’re losing the primary input for economic growth in this particular period. So if you ask who’s in recession, average middle class families are already in recession, but the stock market doesn’t register that. You need the AI narrative to fade or crumble. And then I think you’re talking about massive recession, stagflation’s best case scenario.
Sam Rohrer:
Okay. Let me ask you a quick question on that because if the president and other members of the cabinet have made this statement one time, they’ve made it a thousand times, and that is you want proof that everything is economically running fantastically, just look at the new level set in the market. Is that the factor to watch and does that mean economic gains as we would want broad-based in economy to see the market go up? Compare and contrast that.
David McAlvany:
Yeah. When they’re looking at the level set in the stock market as a litmus for economic health, what that doesn’t account for is how much of this money is going into something that is yet unproven as a profit center. What is the return on investment from AI? So far, we’re spending trillions and getting a few billion in revenue, but you can’t spend trillion. That’s just not sustainable. And on top of that, a lot of the spending is in the debt market. So for instance, your AI companies have $1.5 trillion in new debt that they’ve added to build out data centers and things like this. They’ve got another $3 trillion in off balance sheet liabilities. That’s four and a half trillion dollars. Of course, the economy’s going to look great when you’re jetting it up with this sort of artificial infusion. Again, I think is the narrative sustainable into 2027 or has it already run its course?
I’m concerned that we’ve seen capacity expansions like this in the past. We had the dot-com investment binge and we also had the railway binge back in the 1800s and both of them ended in tiers. And again, a part of this is that you get enthusiasms which just stretch beyond what is actually viable ultimately. So I do think that we have an opportunity with AI for the economy to be transformed. Railroads obviously expanded the United States and the ability to grow the economy across the West. The internet has been massively transformative, but you have to look at what investors were paying when you had all time highs in the stock market in the 1800s. When you had the stock market at all time highs in the late 1990s and early 2000s, they were paying for a perfect world, which ended up being too much. They paid too much and their returns were terrible for the next decade, two decades, three decades.
So there is something unique being built, but I think people today are overpaying for it.
Sam Rohrer:
We
David McAlvany:
Have a bubble in AI and when that bubble bursts, which it inevitably will, that’s where I think you’re going to see vast disappointment with investors. They just paid too much for a good product, paid too much. Anytime you pay too much for an asset, a positive rate of return is hard to get.
Sam Rohrer:
Okay. And that makes sense. Okay. We’re about a minute left here. Quick question you won’t be able to answer fully. What do you see happening in terms of foreign demand for our US treasury securities at the bond market as a result of what happened? What do you think is going to take place? Well,
David McAlvany:
What a great question. We have a crowding out in the debt markets because again, people are able to put money into AI debt, they’re able to put it into agency securities, mortgage-backed securities, and earn more than they do in treasuries. And so you have people looking at our fiscal position and saying, “This isn’t a great bet. Inflation’s on the rise and these guys haven’t managed their house well at all.” So what we see in real time, the most recent Z1 report, we had $79 billion of liquidations in US treasuries from foreign holders. We have central banks with a bias to liquidate their treasury holdings. Most recently, June, July, and August, the Bank of Japan is liquidating treasuries in order to support the yen. And we’ve got the Norwegian Sovereign Wealth Fund, which is proposing a liquidation of $80 billion in their treasury holdings. So people are still interested in US assets, but the appetite for treasuries is going away even while the US Treasury Department is issuing two trillion more per year just to fund the deficit and has to roll over nine to 10 trillion this year into an environment where the appetite isn’t there.
That’s an environment where rates go higher regardless of what the Fed wants.
Sam Rohrer:
Okay. And ladies and gentlemen, stay with us because we’re going to go in the next segment and basically deal with this question. So what comes next in terms of biblical stewardship and uncertain time? Just before we go into our final segment for some summary thoughts on basically what do we do with what we have heard? Let me just give you the website again for special guest David McAlvany. And their website is mcelvany.com. And if you go back/stand in the gap, there’ll be something there that perhaps would be of interest to you. Now, throughout today’s program, we’ve jumped off and springboarded off of yesterday’s action by the Federal Reserve in which they made, in some cases, a surprising increase, quarter of a point increase in interest rates. And we’ve talked about what that decision may reveal about inflation and some of the possible economic paths that may lie ahead.
We talked about that in the last segment. We’ve also considered broader concerns involving the US Treasury and America’s growing debt burden. We’ve had discussions about that and we are all aware, way over $40 trillion. We talked about it before. We are spending now as we speak faster than we have ever spent in the history of the country. And even though we have heard so many things to the contrary, this administration has spent more and faster than any previous one. It’s really kind of an ironic thing. Bottom line though, our debt is going up and up and up. And when that goes up, so does interest rates and interest costs. Interest on our debt now, it’s the single largest line item, bigger than the military budget. And that brings in with it as well the willingness of whether you say investors, those who buy our debt, other nations, both domestic and foreign, to continue financing these unprecedented levels of federal spending.
And when people look at it and they are and they’re saying, “You’re not doing anything about it.” And I’ve seen nothing done about it. And I’ve talked about it before. And that’s not the focus of today’s program, but it’s been 50 years since Congress has actually adopted a constitutionally required budget. So this is not a Republican issue alone. It’s not a Democrat issue alone, regardless of the Democrats blame it on Republicans, Republicans blame it on the Democrats. It’s that we have an addiction to spending and the politicians love to spend other people’s money. So we got a problem. Yet after all the economic analysis, the most important questions are not ultimately about the Federal Reserve or interest rates or Washington or even financial markets. It really comes down to what do we do about it? How do we respond? So scripture reminds us that while God calls us as people who fear God to understand the times and exercise wise stewardship, he never calls us to fear.
Economic uncertainty is not new. Nations rise and they fall. Markets expand and they contract. Currencies strengthen and they weaken. That’s just the nature of the way things are, but God’s principles never change. So for believers, the challenge is to balance wisdom with trust, prudence, with peace, preparation with faith. And so as we conclude today’s discussion, I want to move from economic analysis to practical application. What should families, investors, and business owners and retirees and all God fearing people be thinking and doing right now? So David, based on all these things we’ve talked about, and I really appreciate the simplicity of how you take the complex things and we’re trying to do that on this program, what do you believe comes next now and what indicators should Americans be watching for and most closely over the coming months? And wrap into that, what practical principles you would encourage people to apply right now in these days of, well, for lack of a better word, uncertainty.
David McAlvany:
Yeah. Well, just to kind of put a bow on what we’ve talked about to this point, Federal Reserve raises interest rates 25 basis points. It’s largely window dressing. Imagine being given a 200 milligram ibuprofen after a cancer diagnosis. Might make you feel a little bit better, but it’s not really doing anything. Inflation is a symptom and just like having a fever of 104 degrees, that is a symptom. It suggests that there is a sickness, there is something else going on, and at 104 degree temperature, you’re going to get some answers. So I think you’ve got to look at what is going on? How do I understand how the system works? So we’ve talked about growth dependent on credit expansion. We’ve talked about the system of fiat currency, which is inherently unstable and cheats the saver. So I think what you can do, what you should do is first educate, educate, educate.
At our website, you mentioned it earlier, we do a curated daily news feed. We also have weekly written and audio commentaries. I’ve been doing a podcast for 19 years every week just to try to pack 10 pounds of mud into a five pound sack, help people understand what’s going on in the financial markets so that they can make wise decisions. I think one of the practical things that you have to consider is how do you protect your purchasing power? Inflation is an ongoing concern. How do you protect your purchasing power? I personally have zero concerns with inflation because I own enough gold and silver to not care what the inflation rate is. I know that my savings will buoy with those inflation rates. They will be repriced. You basically have. And this is what you’re seeing in the grocery store. A gallon of milk costs more.
A dozen eggs costs more. A loaf of bread costs more. All you’re seeing is inflation showing up, repricing real goods. Gold is one of those things that you can buy and resell. Loaf of bread, you can’t. It’ll grow mold in two weeks. So gold doesn’t grow mold. It is a way of preserving purchasing power, stabilizing your reserve assets, and I think that is absolutely critical. Other practical considerations don’t play the same game that the government is. If you’ve got a lot of debt, you should be paying it off. If you have too much market exposure, specifically stock and bond market exposure, consider trimming that back. I mean, it was a radical suggestion last November when the chief investment officer of Morgan Stanley said, “You should not have 60% in stocks and 40% in bonds. Bond market is impaired. Your bond position should be 20% bonds, 20% gold.” He said nothing about the risk that he was still recommending in equities, which I think is too high at this point.
You should trim that back as well. But it was an interesting tell that a Wall Street giant, Morgan Stanley, and their chief investment officer is saying that the 60 / 40 portfolio is dead, 60 / 20 / 20 is now necessary. What he’s getting at is we’re dealing with a system that has major illness. The cancer is there. It is a debt cancer and you have to approach this differently. Investing and stewardship has to be done with a different mindset. You can’t do this sort of in a rear view mirror. What worked over the last 30 to 40 years in a declining interest rate environment, in a declining inflationary environment is now moving the opposite direction. If you’re not clued into that, understanding how the system works, continue to educate yourself and make some mid-course corrections in terms of your portfolio, unfortunately you will be fodder.
Sam Rohrer:
David, that’s just excellent. Let me go ahead and get his website again for more information is McElvany.com and you can find good information there. Let me go ahead and just close this in prayer here, David. We’ll do the Heavenly Father, thank you for the ability to be able to communicate to people literally across the world on this program. I would ask that the information shared today would be of help to those who are listening. Lord, you’ve told us if any of us lack wisdom, let us ask of you and you will give it. Lord, we all lack wisdom. We all need wisdom, particularly in these days, but you tell us some basic fundamental financial principles and I pray that we would go to the word of God, get that first and then apply it. We pray this in Jesus’ name. Amen. David McElvany, again, thank you so much for being with me.
Always a wealth, pardon the pun, of information that’s shared when we get together. Thank you ladies and gentlemen for being with me today and would encourage you to join me again tomorrow. Dr. George Barna will be my guest as we talk about some recent research dealing with voting and how people actually cast their votes.
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