We look forward to the Van Mueller newsletter every month. It's chock-full of sound bites, sales tips, and eye-opening statistics. Here are our favorite parts of the May 2023 edition. We're sharing the full introduction, and 2 of the 7 monthly sales ideas. If you like what you read, we encourage you to click here and become a subscriber.
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May 2023 – 7 Ideas and Views Newsletter by Van Mueller
Currently the world we live in is filled with dichotomies, opinions of conservatives versus the opinions of liberals? Man made climate change versus natural occurring climate change? Urban living compared to rural living? Electric vehicles versus gasoline powered vehicles? Is being a vegetarian healthier than not being a vegetarian? Should we dramatically reduce the size of government? Should we develop more technology or is increasing technology a threat to mankind? Are we facing a young people versus old people challenge? What about the rich versus the poor?
In financial services we are currently dealing with a multitude of dichotomies. Are we going to have a recession or not? Is inflation under control or are we about to lose control of inflation? Will interest rates continue to increase or decrease? Should I take risk, or should I eliminate risk? Should I build retirement income or retirement assets? Will volatility continue to rise, or will stability return to the markets? Should I invest in stocks, bonds, and real estate or safe money strategies that include CD’s, annuities, and cash value life insurance? Are the banks safe or should I be concerned? Are we about to have a crash of investments or is that concern being overblown? WILL TAXES BE HIGHER OR LOWER IN THE FUTURE?
I could go on and on. There are so many issues where Americans have become very POLARIZED!
In my speeches, I share one of Tom Hegna’s famous phrases with agents and financial professionals. What I just shared with you is “scientifically, mathematically and economically correct.” I then raise my voice and share that GOD comes down from the heavens and says that if what Van just shared with you is scientifically, mathematically, and economically correct! What is interesting is that half the people in this country would still not agree with me or God.
Based on that kind of polarization do you think it would ever be wise to TELL anyone anything? Shouldn’t we be asking about all the dichotomies and listening to our customers to help them build strategies that they believe in? Wouldn’t that make all our lives easier?
Shouldn’t we be asking about all the dichotomies and listening to our customers to help them build strategies that they believe in?
The great life insurance agent from New York Life, Ben Feldman used juxtaposition. "Do you want to pay your taxes with the big check or the little check?" The big check was the actual taxes. The little check was the premium for life insurance to pay the taxes.
Here’s another. If you can’t afford 3 or 4 percent per year now, how will your family or business afford 100 percent later when you are gone? If you make money won’t the politicians always be eager and ready to take it? Who do you want to be in control of how much they take? The government or you?
Ben Feldman also shared a couple of other thoughts that I believe are pertinent to this conversation.
First, the key to a sale is an interview and the key to an interview is a disturbing question.
Finally, most people buy from us not because they believe, but because the sales person believes.
Every month in this newsletter I share as many questions as I can. The greatest salespeople that have ever lived, not only in our industry, but every industry encourages us to stop telling our customers anything and invest everything you do in developing powerful questions that you can ask in a conversational, not presentational manner. They ask us to understand that these questions allow our prospects and clients to use their own common sense to reason out what the best course of action is for themselves, their families and their businesses regardless of what financial celebrities and social media analysts tell us what we should be doing.
Every agent asks me what the secret to success in our industry is. It is essentially ONLY TWO THINGS! Having enough appointments and using interesting and powerful questions to inspire our prospects and clients to take action.
Every agent asks me what the secret to success in our industry is. It is essentially ONLY TWO THINGS!
One more thing. If you want to develop real, interesting, and authentic questions, start by pretending that you are the customer. What questions would you ask yourself that would cause you to search for an answer or a solution? Your authenticity is verified by your prospects and clients by your believability. What better way is there to become more powerful? Then ask about issues that would inspire you to take action. Most of you think you are miles away from the success you desire. That is the furthest thing from the truth. You are only a few questions and a few processes that are well practiced and rehearsed from seeing a dramatic increase in your appointments and production.
Now I would like to review a few economic bits of information that are vitally important for you and your customers to understand.
First, there is a much larger crisis than the current banking crisis.
Federally insured banks have around $18 to $20 trillion in assets. Almost half of those assets are uninsured or over the $250,000 limit of coverage provided by the Federal Deposit Insurance Corporation. Treasury Secretary Janet Yellen has explained that making depositors whole who are over the $250,000 limit would be done on a case-by-case circumstance with priority given to banks which are systematically important to the banking system. That would only be around 10 banks out of over 4,200 banks.
The real danger comes from non-bank banks. Non-bank banks are financial firms other than banks, that provide all manner of financial services, including lending to households and businesses. These non-bank banks include pension funds, mutual funds and high-risk hedge funds.
According to the Financial Stability Board, a group of global non-bank banks hold about $239 trillion on their books. Let me say that again. The number is $239 TRILLION of uninsured assets. That number accounts for almost HALF of the entire world’s assets.
According to the Financial Stability Board, a group of global non-bank banks hold about $239 trillion on their books. That accounts for almost HALF of the entire world’s assets.
You may have heard the term “shadow banks.” These are non-bank banks, and they make loans to riskier borrowers without the same oversight and transparency as banks. The risks to this nonbank sector are actually too numerous to list in this newsletter. If I were you I would Google “non-bank banks” and “shadow banks.” This is such a serious issue because of the enormous volatility of the underlying assets that are supporting these institutions. $239 TRILLION! Can you even imagine the devastation if we lose control of this particular sector?
Another discussion that I would like to have with all of you pertains to all the artificial interference to our economy which has prevented the markets from doing what they must do, temporarily. I am going to share a list of these interferences with you; however, I want to share with you how I explain to prospects and clients that I have been wrong for a while, especially about the direction of the stock market.
When I meet with a new client, I always start this way. I share with them that if we were meeting 5 or 6 years ago, I would have shared that I believe that a stock market crash was imminent. Then I declare that I have been wrong for 5 or 6 years.
If it is one of my existing customers, I ask them this question: Haven’t I been sharing with you for 5 to 6 years now that a crash was imminent? Haven’t I been wrong for 5 to 6 years? It seems like I am talking myself into trouble.
When you are in trouble in a sales situation, what should you do? Isn’t asking a question the correct answer? So, I ask them this question: WHY HAVE I BEEN WRONG? And then I wait a little bit. Some will come to my defense and share all kinds of reasons why I have been wrong. Some won’t care and some won’t know why. I then ask another question or multiple questions. Isn’t it because we have had zero percent interest rates for over a decade? Isn’t it because the government has been printing money like it's going out of style? Isn’t it because companies are no longer providing accurate accounting information? I then ask, did you know it’s a very long list of government and Federal Reserve interference? I ask them if they would like to see the list. I am now going to share with you the list of fiscal and monetary manipulations that have occurred. You Will Be Amazed And Stunned!
When you are in trouble in a sales situation, what should you do? Isn’t asking a question the correct answer?
Please pay close attention to the list I am now providing. Our monetary system needs artificial interference on average every 40 days for the past 40 years.
1980 to 1999 - One Major Program Every 3.33 Years
1. Discount Window
This program provides short term loans to depository institutions, including commercial banks and credit unions, to help them manage their liquidity needs.
2. Monetary Targeting
A monetary policy strategy that focused on targeting a specific growth rate for the money supply in order to achieve price stability and promote economic growth.
3. Open Market Operations
The Feds purchase and sale of U.S. Treasury Securities in the open market to influence the money supply and interest rates.
4. Banking Supervision and Regulation
The Fed is responsible for supervising and regulating banks and other financial institution to ensure their safety and soundness.
5. Reserve Requirements
Banks are required to maintain a certain amount of reserves with the Fed to ensure they have sufficient liquidity to meet their obligations.
6. Money Market Mutual Fund Liquidity Facility
A program that provides loans to banks to purchase assets from money market mutual funds to stabilize the market during times of stress.
2000 to 2009 - One Major Program Every 1.25 Years
1. Interest Rate Cuts
The Fed lowered the federal funds rate in response to the 2001 recession, the September 11 attacks, and the financial crisis in 2008.
2. Quantitative Easing QE
The Fed purchased trillions of dollars in government bonds and mortgage-backed securities to stimulate economic growth and keep interest rates low.
3. Term Auction Facility TAF
A program that provided short term loans to banks to help them meet their liquidity needs.
4. Commercial Paper Funding Facility EAFF
A program that provided loans to companies to issue short term commercial paper in order to increase liquidity in the commercial paper market.
5. Primary Dealer Credit Facility PDCF
A program that provided overnight loans to primary dealers to ensure the availability of credit to the financial system.
6. Term Asset Backed Security Loan Facility TALF
A program that provided loans to investors to purchase asset backed securities, such as auto and credit card loans, to increase lending.
7. Foreign Currency Liquidity Swap Lines
Programs that provided foreign central banks with U.S. dollars to stabilize financial markets during the global crisis.
8. Money Market Mutual Fund Liquidity Facility MMLF
A program that provided loans to banks to purchase assets from money market mutual funds to stabilize the market during times of stress.
2001 to 2019 - One Major Program Every 8 Months
1. Quantitative Easing 2 QE2
A monetary policy in which the Federal Reserve purchases long term Treasury bonds and other securities in order to increase the money supply and stimulate economic growth.
2. Operation Twist
A monetary policy in which the Federal Reserve buys long term treasury bonds and sells short term bonds to flatten the yield curve and lower long term interest rates.
3. Mortgage-Backed Securities Purchase Program MBS
A program in which the Federal Reserve purchases mortgage-backed securities from banks and other financial institutions to increase liquidity in the market and support the housing market.
4. Term Deposit Facility TDF
A tool used by the Federal Reserve to offer interest bearing deposits to banks in financial institutions in order to drain excess reserves from the banking system.
5. Term Auction Facility TAF
A program that allows banks to borrow funds from the Federal Reserve at auction in order to improve liquidity in the short-term lending market.
6. Money Market Mutual Fund Liquidity Facility MMLF
A program in which the Federal Reserve provides loans to financial institutions to purchase high quality assets in the money market, in order to prevent a run on money market funds.
7. Primary Dealer Credit Facility PDCF
A program the allows primary dealer, which are banks and financial institutions that trade with the Federal Reserve, to borrow funds as a discount rate in order to improve liquidity in the market.
8. Asset Backed Commercial Paper Money Market Mutual Find Liquidity Facility AMLF
A program in which the Federal Reserve provides loans to financial institutions to purchase asset backed commercial paper in order to improve liquidity in the market.
9. Commercial Paper Funding Facility CPFF
A program in which the Federal Reserve purchases commercial paper from issuers in order to improve liquidity in the market.
10. Term Asset Backed Securities Loan Facility TALF
A program in which the Federal Reserve lends money to investors who purchase asset backed securities n order to support the market for these securities.
11. Central Bank Liquidity Swaps
Agreements between the Federal Reserve and other central banks to exchange currencies in order to provide liquidity to financial institutions and improve the stability of global financial markets.
12. Discount Window Lending
A tool used by the Federal Reserve to lend funds to banks and other financial institutions at a discount in order to improve liquidity in the market.
13. Overnight Reverse Repurchase Agreement ONRRP
A tool used by the Federal Reserve to temporarily absorb excess reserves from banks and other financial institutions by lending them Treasury securities overnight.
14. Standing Repo Facility
A tool used by the Federal Reserve to offer overnight repurchase agreements to primary dealers on a standard basis, in order to improve liquidity in the markets.
2020 to 2023 – One major program Every 40 Days
1. Paycheck Protection Program Liquidity Facility – PPPF
Provided loans to financial institutions to support small businesses under the Paycheck Protection Plan.
2. Secondary Market Corporate Credit Facility SMCCR
Purchase corporate bonds and bond ETF’s to support credit markets.
3. Money Market Mutual Fund Liquidity Facility MMLF
Provided liquidity to money market funds.
4. Term Asset Backed Securities Loan Facility TALF
Provided loans to investors for purchasing asset backed securities.
5. Paycheck Protection Program Liquidity Facility PPPLF
Provided loans to financial institutions to support small businesses under the Paycheck Protection Plan.
6. Main Street New Loan Facility MSNLF
Provided loans to small and medium sized businesses.
7. Main Street Expanded Loan Facility MSELF
Expanded the scope of MSNLF to include larger businesses.
8. Primary Market Corporate Credit Facility PMCCF
Purchased bonds directly from eligible issuers.
9. Foreign And International Monetary Authorities FIMA
Provided foreign central banks with access to U.S. dollars in exchange for their own currency.
10. Commercial Paper Funding Facility CPFF
Provided loans to companies issuing commercial paper.
11. Self-Liquidating Loans Facility SLF
Provided loans to banks against collateral such as car loans and credit cards receivables.
12. Primary Dealer Credit Facility PDCF
Provided loans to primary dealers (large financial institutions) in exchange for collateral.
13. Overnight Indexed Swap Facility OIS
Provided loans to foreign central banks in exchange to U.S. treasury securities as collateral.
14. Fed’s Liquidity Provision To Support Lending To Consumers And Businesses FLP
Provided liquidity support to financial institution to support lending to consumers and businesses.
15. Bank Term Funding Program BTFP
And emergency lending program created by the federal reserve in March 2023 to provide emergency liquidity to U.S. depository institutions.
Where did the Federal Reserve get all the money to do all these things? Didn’t they just print it?
Can you even believe how much the government has been interfering with the natural occurrence of the economy? We even interfered globally. That really means that we do not know what is going to happen or when it’s going to happen. The only opinion that matters is the opinion of our customer. You cannot illicit that opinion unless you ask questions.
Now you know the secret to a successful career. What are you going to do about it?
Idea #1: Will Taxing the Rich Reduce Our Deficit?
The information in this article can be used with Social Security’s Wage Statistics to inspire both rich people and middle-class people to take action to reduce or eliminate future income liabilities on all qualified money and all gains on tax deferred annuities.
The Congressional Budget Office is predicting $2 trillion-dollar annual deficits for the government for as far as the eye can see.
Approximately 917,000 taxpayers have incomes over one million dollars. If we confiscated every dollar that they earn, we would barely cover the deficit. If we took 76 percent of all the income of the 2,753,000 who make over $500,000, we could eliminate the deficit. I hope you see that anything even approaching 50 percent is a non-starter.
The article goes on to explain that the 43 percent of Americans who earn $50,000 or less pay a negative 4.8 percent in taxes.
This information verifies that we will have to get more revenue from everyone both rich and poor because we will not even be close to covering the deficits. Wow! This is an important article.
Title: Are the Rich Paying Their Fair Share?
https://suindependent.com/ (The Independent of Southern Utah, April 13, 2023)
https://suindependent.com/are-the-rich-paying-their-fair-share/
Idea #7: No Growth for the Next 10 Years
This article warns of another lost decade like 2000 to 2010. It sounds terrible, however as insurance and financial professionals we should be jumping for joy. In 2000 to 2010 there was lots of VOLATILITY. This allowed index products to perform wonderfully. It allowed the real allocation of safe money strategies into aggressive strategies and then back to safe money strategies.
We are about to have that opportunity again. It will be better this time. Volatility is increasing and is occurring more and more often.
The safest investment on the planet, U.S. government bonds, are all over the place. In the last 18 months we have seen interest rates as low as 1.17 and as high as 4.30 percent. That Is Not Supposed To Happen! That is severe volatility. We have many strategies that allow us to take advantage of that volatility. Use Them!
Title: World Bank Warns Of ‘Lost Decade’ As Potential Growth Slows
https://www.fa-mag.com/ (Financial Advisor, March 27, 2023)
https://www.fa-mag.com/news/world-bank-warns-of--lost-decade--as-potential-growth-slows-72567.html#:~:text=The%20global%20economy's%20potential%20growth,and%20the%20conflict%20in%20Ukraine
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