A place for me to save a few thoughts

A Thought on Faith, Hope, and Charity

In our little MTC branch of 40 to 50 missionaries (The Missionary Training Center of The Church of Jesus Christ of Latter-day Saints), districts of 8 to 12 missionaries would rotate in and be with us for almost 9 weeks. To make things easier for us in the branch presidency, we would go through a cycle of 7 subjects for our talks in our Sacrament Meetings. With 7 topics, the missionaries never heard the same sermon twice. (We didn’t need 9, because during the 9 Sundays we would have at least two Fast and Testimony Meetings.) The topics were very basic—faith, repentance, baptism, the Holy Ghost, etc.

Although it would have been easier, I couldn’t give the same talk over and over again. If I didn’t prepare something new, I would get bored listening to myself. This meant I spent a lot of time thinking about and studying the same basics of the gospel over and over again.

For reference material we were allowed to use only the scriptures, Preach My Gospel (the missionary manual of the church) words of the living prophets (recent conference talks), and our personal experiences. Speculations, interesting tangents, and interesting ideas of non-prophets (like C. S. Lewis, for example) were forbidden. We taught Christ’s basic doctrine, since that was what the missionaries were learning to teach.

One of the topics was “Hope.” As I did my research, one of my sources was President Uchtdorf’s October 2008 conference address “The Infinite Power of Hope.” In the talk he said, “Hope is one leg of a three-legged stool, together with faith and charity. These three stabilize our lives regardless of the rough or uneven surfaces we might encounter at the time.”

Each time I prepared my talk (and also when preparing talks on faith or charity) I would come back to this statement and try to figure out how faith, hope, and charity fit together to create a stable, three-legged stool. I’m sure there are many good answers, but I offer my conclusion. It will take me a few paragraphs to explain.

Faith is a principle of action and power. When someone disagrees with the statement that “faith without works is dead,” I think that person misses the point of the scripture. The verse is not about faith versus works, or grace versus trying to earn our salvation. I think the statement tries to teach us that having faith and doing nothing is not faith. If we have faith, we are faithful. If we have faith, we act and we do. If we have faith in Christ, we try to be like him and to be faithful to his teachings.

Hope is about emotions and feelings. If we have hope, we are hopeful. We have confidence and enthusiasm. If our hope is centered in Christ, we have confidence in his Atonement, and we trust that eventually everything will work out for the best.

Charity is the pure love of Christ. If we have charity, we love unselfishly. It is never about what we need or want. We love selflessly, expecting nothing in return, and love as Christ would love.

So, how do the three fit together? Let’s assume that we feel prompted to visit someone who is sick. If we follow this prompting with faith, we go. Perhaps we grumble to ourselves that we are inconvenienced or that we won’t do any good, but we go.

If we have hope, we go with enthusiasm and confidence. Perhaps we won’t be able to do any good, but still we go with a smile and a happy heart. Perhaps we go to feel better about ourselves or to finish an item on our to-do list, but we go cheerfully.

Finally, if we have charity, we go with no thought for ourselves. We try to see the person as Christ would. Our concern is for that person, and our only desire is help in whatever way we can.

In the case of a missionary, if he knocks on a door, he shows faith. If she has a smile on her face when the door opens, she demonstrates hope. If the concern is only for the person opening the door, and how he or she might help that person, then he or she does it with love. He or she is not thinking about checking a box or meeting a goal.

If we have faith, we go. If we have hope, we go cheerfully. If we have charity, we go for the right reasons. These are my thoughts on the three-legged stool which is stable, even when the surface is rough or uneven. Life is much better when we do, when we do it cheerfully, and when we do it unselfishly.

NCIS and Alzheimer’s Disease

My favorite TV show by far is NCIS. (For those of you surprised by this, I admit to liking Glenn Beck a lot, but not as much as NCIS.) I didn’t start watching NCIS until the 6th season. I started by watching the older shows on a USA Network NCIS marathon on a vacation and was hooked immediately. NCIS stands for Naval Criminal Investigative Service, and the show solves crimes related to the Navy or Marines.

This week’s episode featured Bob Newhart as a retired NCIS Medical Examiner. His character suffers from Alzheimer’s disease (AD), and he made a visit to his old NCIS office in Washington, DC. While there he became confused. Once the staff solved this week’s crime, they helped Bob Newhart remember his time at NCIS by showing him a video of the people he helped during his career.

Since my dad has AD, the episode hit very close to home. Recently I put together a video for of our 2010 Thanksgiving dinner. I made sure to take a short clip of each of my children, each of their spouses, and each of their children. I edited the whole thing down to 20 minutes and added labels for each person. Like the NCIS episode, I thought I could help my dad remember and get to know his children and grandchildren. Unlike the NCIS episode, when I showed my dad the video, he couldn’t concentrate on it enough to watch it. A little too much of him had already slipped away.

His AD started with what seemed like normal senior forgetfulness. We realized something was wrong, when he would ask the same question more than once or make the same statement more than once. At first he would remember that he had already asked that question. Once he was diagnosed with AD, he knew enough to be depressed and frustrated.

We try to visit my folks every two or three months. Living with him everyday, my stepmom doesn’t notice the changes as much as we do. We notice with each visit that he has lost interest is something he used to like and has lost a skill he used to have.

In the early stage of AD he still liked the news and sports. Slowly he has lost interest in both. He would try to follow and participate in conversations. Now he mostly listens. He still knows his wife, his dog, his children, and his brothers and sisters, but he can’t remember much about them. He is always surprised to learn we have six children and that they are all married with children. Lately he has been discouraged with me when he rediscovers that I don’t have a job.

From what little we knew about AD, we expected him to lose things, to wander around looking for things, and to become confused at times. This seems to happen to all of us at one time or another. What I didn’t understand or expect was that so many other things would be erased from his memory.

We notice especially how he loses skills one by one. Throughout his life he could fix anything and could do just about anything with wood, glass, or electronics. On one visit we noticed he stopped fixing things. For example, a door latch needed oil, but he couldn’t remember to do it or how to do it. On another visit we saw that he couldn’t remember how to work the thermostat. This last visit he had forgotten how to shave. He can still read, but he doesn’t, because he can’t hold on to the context. Now when he looks at a tool, he can’t remember why or how he would use it.

I finally bought a couple of AD books so I would know what to expect. It’s not good. Far from just losing short-term memory or becoming confused more often, AD erases everything. In the end a person has no skills at all, and may even lose the ability to talk and and to walk.

It would be so nice if life were like a TV show and a short video would bring everything back to mind. It is sad, but not every problem can be solved in 42 minutes. Pete

Forget Bond Funds

I guess I’m mostly finished with all the talk of the end of our financial world, so I’ll summarize.

During periods of deflation, especially with increasing FUD (fear, uncertainty and doubt), you want to be in cash. During times of low inflation and decreasing FUD, you might want to carefully be in stocks. During times of high inflation, especially with increasing FUD, you want to own stuff.

Cash means currency (the US dollar or something stronger), bank certificates of deposit (because they have very small penalties if you cash them in early), very short term bonds (US treasury bonds and perhaps the municipal bonds of states in good financial shape), and money market funds.

Be careful not to think of bond funds, especially medium or long-term bond funds as cash. The value of bonds goes down when interest rates go up. With interest rates at historical lows, you don’t want to own bond funds or long-term bonds. (I’m trying not to give advice, but, if you are in an intermediate to long-term bond fund or treasuries due in 5 to 30 years, get out quickly.)

If your 401K lets you choose between a stock fund, a bond fund, and a money market fund, then right now you probably want to be in the money market fund. If you think the US economy is improving or showing signs of improvement, then you’d want to choose a stock fund. If you think interest rates are going down, then, and only then, would you choose the bond fund.

So, for now, forget bond funds. Pete

We know how this ends. Part 4

Deflation means the value of stuff goes down (deflates) and the value of money goes up. Especially when people are fearful, they want to hang on to their money. Because money is dear, the demand for the stuff money buys goes down. When the demand for stuff goes down, the prices drift down. In other words, with deflation you can buy more stuff for the same amount of money. For example, the Deseret News recently published a price comparison of various consumer goods. The cost of a grocery cart of 15 items was $119.74 this time last year and only $116.08 this year. Money was worth more at the grocery store this year.

Inflation means the value of stuff goes up (inflates) and the value of money goes down. In other words, money buys less and less stuff. The same grocery cart of 15 items might cost $125.00 after a year of inflation. For most of us, inflation is what we know. When I was a child, a candy bar was a nickel. When I was a teenager, a Taco Bell burrito was 19 cents. Our first home was only $36,000, and we sold it a year later for $39,000.

During times of deflation, cash is your friend and debt is your enemy. You don’t want to owe money in times of deflation, because it costs more and more to repay a loan. During times of inflation, cash is better spent or invested in stuff and debts are generally easier and easier to pay down.

These definitions suggest you would want to own money (currency, treasury bonds, and government-insured bank CDs) during times of deflation, and own stuff during times of inflation. “Stuff” is things that are not measured in dollars, like real estate (acres or square feet), precious metals (ounces or bars), wheat (bushels), fuel (gallons, barrels, or BTUs), or stock (shares in a company).

Fear, uncertainty, and doubt complicate this simple picture. Stocks in general do poorly when FUD is high, no matter the inflation rate. When FUD is high precious metals may behave more like currencies, going up when logic suggests they should go down.

In summary, during times of deflation you want to own money and be free of debt, especially high-interest debt. During times of low-to-moderate inflation, you want to own stuff. If FUD is low, you could include stocks in your list of stuff. If FUD is high, you almost always don’t want stocks. During times of hyper-inflation, when FUD is bound to be high, you want to own stuff that people really need, like food, fuel, water and dry goods. Pete

We know how this ends. Part 3

Freedom Fest, mentioned in a previous post, got me thinking about scenarios. As I understand it, “scenario” comes from the Italian word for scenery and refers to an imagined or projected sequence of events. So, while I’m thinking about how to survive between now and the end of the world, I’m imagining a few scenarios.
In these imaginings, I assume as true the following:

1) The USA is already spending much more money that it takes in. In fact, about 30 cents of every dollar we spend right now is borrowed.

2) The USA has made a lot of promises to pay for things without knowing how we will pay for them. These promises are the so-called “unfunded liabilities” for social security, healthcare, government-guaranteed mortgages, and government-guaranteed pensions.

3) Higher tax rates, which is viewed by some as a way of getting out of this mess, leads to lower tax revenues. As tax rates go up, taxpayers work harder to lower their taxes, mostly by using government-approved loopholes. As taxes go up, GDP tends to go down, which means the higher tax rates are offset by lower earnings.

4) Fear, uncertainty, and doubt (FUD) are bad for business. The many new regulations and pending tax hikes are producing more and more FUD.

To these assumptions we have to consider a lot of variables. How many seats will conservatives win in congress in November? Will a lame duck congress pass even more regulations and tax hikes? Will congress repeal Obamacare or the latest financial reform bill? Will the courts find Obamacare unconstitutional? Will President Obama win re-election? When will the Iraq and Afghanistan wars end? When will Iran attack Israel? How soon will congress tackle the unfunded liabilities.

Each different set of answers produces a different scenario. For example, one scenario might be that conservatives gain seats in the House and the Senate, but not enough to repeal Obamacare, that the courts invalidate parts of Obamacare but leave us wondering what to do next, that the wars go on indefinitely, that President Obama loses to Hillary Clinton in 2012, that Iran holds off on an Israeli attack, and that congress does very little to limit spending. Another could be that conservatives take back both houses of congress, Mitt Romney wins the presidency, Obamacare is repealed, the wars go on, Iran threatens an attack, and congress keeps on spending.

As I think through the possibilities, the results of each scenario are not as complicated as you might expect. In the short term, especially because of the FUD factor, the economy will sputter and flounder and recover a little and sputter again. Even though the government is spending, printing and borrowing like crazy, people are afraid to spend money. They hang on to the dollars they have. Employment remains high. In the short term, we can expect very low inflation or even deflation. In the short term, we would want to put our savings into things that increase in value during deflation.

In the medium term, the economy will continue to struggle along, but the bigger deficits will force interest rates higher. In any scenario I can dream up, I don’t see the government solving the spending problems quickly. As interest rates go up, inflation will start up again. In the medium term, we would want to put our savings into things that do well with moderate inflation. By “moderate inflation,” I mean 5 to 10 percent inflation per year.

In the long term, there is the chance the government could tackle its spending, but, if it did not, moderate inflation could turn into high inflation (10 to 20 percent) or hyper-inflation (20 percent per year up to 100% per day). If the government did not tackle spending and continued to print more and more money, we could go from moderate inflation to hyper-inflation almost overnight. In the case of hyper-inflation, investment decisions are the easiest. Pete

More to come.