Carlos and Bob continue with their 3-part series explaining Austrian economics and IBC specifically for the business owner. The series is tied to the upcoming IBC Business Owner Seminar to be held on May 10, 2019, in Nashville, TN. In this episode, Bob explains the significance of the inverted yield curve, and ties it to standard Austrian business cycle theory. Carlos explains why the business owner would typically want to own an IBC policy in his or her own name, rather than being owned by the company.
Carlos and Bob begin a 3-part series explaining Austrian economics and IBC specifically for the business owner. The series is tied to the upcoming IBC Business Owner Seminar to be held on May 10, 2019, in Nashville, TN. In this episode, Bob and Carlos discuss the Fed’s recent guidance on its bond roll off schedule. They also explain entrepreneurship in the Austrian vision (with reference to Bob’s recent interview of Peter Klein), and Carlos relays statistics on business ownership in the US.
Carlos and Bob discuss the economic outlook for 2019, from the perspective of Austrian business cycle theory. The yield curve is close to inverting, and if it continues we should expect a recession by the end of 2019 or, failing that, almost certainly in 2020. There are two types of Fed tightening during this recovery, namely interest rate hikes and a rolloff of the Fed’s bonds. Powell can’t indefinitely postpone the bond rolloff because as interest rates rise, the Fed is paying ever more billions in interest to the commercial banks.
Carlos and Bob discuss the Fed’s actions with interest rates and its balance sheet, and how they are behind the recent stock market volatility. They also use media reports to get inside the minds of Bernanke, Yellen, and Powell.
Carlos and Bob tackle a friendly bet that two listeners submitted. The controversy concerns two apparently conflicting goals: On the one hand, Nelson Nash says in BYOB that you should pay more against your policy loans than the insurance company requires, effectively buying more paid-up life insurance. But on the other hand, shouldn’t you aggressively fund your IBC policy up to the MEC limit right away, meaning there wouldn’t be any room left to pay more on a loan?
Carlos and Bob reiterate their longstanding critique of Fed policy to help frame the recent plunges in the stock market. They explain that the Fed has painted itself into a corner and will have no choice but to continue with rate hikes.
Mentioned in this episode:
“How to Weather the Coming Financial Storms” video.
Carlos and Bob explain to the average listener why it’s important to learn at least the basics of Austrian economics. It’s not the same as other free-market schools, and it’s not the boring curves you remember from college.
Mentioned in this episode:
The next IBC Seminar for the General Public on October 13, 2018 in Fort Worth, TX. Details at IBCSeminar.com.
Carlos and Bob tackle a question from Twitter: Why is using IBC preferable to just “paying cash” for large purchases? This seemingly simple question actually raises many issues.
Mentioned in this episode:
The next IBC Seminar for the General Public on October 13, 2018 in Fort Worth, TX. Details at IBCSeminar.com.
Nelson Nash joins Bob and Carlos to explain why he encourages IBC users to establish a system of policies (rather than just one). The discussion covers several nuances of policy design.
The sound engineer for this episode was Chris Williams. Learn more about his work at ChrisWilliamsAudio.com.
