WEBVTT - China Fires A Monetary Bazooka... Will It Be Enough? 0:00:00.400 --> 0:00:03.880 China just fired a financial bazuka, a move so bold 0:00:04.000 --> 0:00:07.320 it could send shockwaves through the global markets. But here's 0:00:07.360 --> 0:00:10.040 the real question. Will it be enough to save their 0:00:10.039 --> 0:00:13.560 crumbling economy? And more importantly, what impact will this have 0:00:13.640 --> 0:00:16.640 on assets around the world? What happens to US stocks, 0:00:16.640 --> 0:00:19.120 what happens to real estate, what happens to bitcoin. Now 0:00:19.280 --> 0:00:21.640 we know that in the past, what's happened when China's 0:00:21.640 --> 0:00:24.640 economy has seen similar crashes, and what's happened to asset 0:00:24.640 --> 0:00:27.560 prices around the world. And right now China's central bank 0:00:27.680 --> 0:00:30.640 is pulling out all the stops and literally pumping in 0:00:30.760 --> 0:00:34.840 trillions of dollars into their financial system. The monetary bazuka 0:00:35.040 --> 0:00:37.400 was loaded and it's been fired. So in this video, 0:00:37.400 --> 0:00:40.320 we're gonna dig into what does China's latest move mean 0:00:40.400 --> 0:00:42.760 for you as an investor. We're going to dive into 0:00:42.840 --> 0:00:45.320 the data to see how similar moves in the past 0:00:45.360 --> 0:00:48.800 affected stocks, real estate, and bitcoin, and of course, what 0:00:49.000 --> 0:00:52.000 you can do to position yourself to benefit from this. 0:00:52.240 --> 0:00:53.680 And by the end of this video, you're gonna have 0:00:53.720 --> 0:00:56.640 a clear understanding of whether this monetary bazuka could be 0:00:56.680 --> 0:00:59.960 your next big opportunity or a warning sign to state 0:01:00.120 --> 0:01:03.240 casts either way, Knowing how China's actions could impact your 0:01:03.240 --> 0:01:05.080 assets is going to give you a serious edge and 0:01:05.160 --> 0:01:08.279 navigating the market ahead and real quick. For do the Channel. 0:01:08.360 --> 0:01:10.280 My name is Mark Moss. I've been investing in my 0:01:10.360 --> 0:01:13.080 own money, and I've been building companies now through four 0:01:13.160 --> 0:01:16.200 economic crisises. I've been writing a financial newsletter and coaching 0:01:16.240 --> 0:01:18.720 thousands of investors for almost nine years, and I'm a 0:01:18.760 --> 0:01:22.240 partner in a leading bitcoin focused VC hedge fund, and 0:01:22.319 --> 0:01:24.479 a lot of the research that we use is going 0:01:24.560 --> 0:01:29.480 into this video. So let's go all right, So we're 0:01:29.480 --> 0:01:31.600 going to just jump right into this because this is 0:01:31.880 --> 0:01:35.840 hot news, and this is massive, it's drastic, It's something 0:01:35.840 --> 0:01:38.640 I've been talking about for a long time and it's here, okay, 0:01:38.640 --> 0:01:40.160 So hopefully you've been ready for this, and if you're not, 0:01:40.160 --> 0:01:42.319 don't worry. We're going to catch you up. So why 0:01:42.840 --> 0:01:45.280 why do we have a monetary bozuka in the first place? 0:01:45.319 --> 0:01:49.200 And of course it's because China is struggling. China's in trouble, 0:01:49.360 --> 0:01:51.880 and of course when China's in trouble, the rest of 0:01:51.920 --> 0:01:54.880 the world's in trouble. Maybe that's why the Federal Reserve 0:01:55.120 --> 0:01:57.120 is acting we'll come back to that in a minute. 0:01:57.200 --> 0:02:00.520 But basically, China has been in big, big trouble for 0:02:00.560 --> 0:02:04.960 a long time. It's nothing new. China has been goosing, 0:02:05.640 --> 0:02:09.320 faking stimulating their economy for a long time, which of 0:02:09.360 --> 0:02:13.560 course has adverse effects, and lately it's finally been catching up. 0:02:13.760 --> 0:02:18.000 So here is China's ten year yield that they pay 0:02:18.000 --> 0:02:20.359 out on their treasure. And look at that is what 0:02:20.400 --> 0:02:22.840 we call deflation. Now, if you follow my channel or 0:02:22.880 --> 0:02:26.640 you're paying attention to macroeconomics, you know that's central banks 0:02:26.760 --> 0:02:28.800 around the world. The entire system, because we're in a 0:02:28.800 --> 0:02:32.720 debt based monetary system, needs inflation to survive. It'sa ponzi. 0:02:32.919 --> 0:02:36.760 If it doesn't continue to expand, it crashes. And deflation 0:02:37.200 --> 0:02:40.639 is the number one fear that all central bankers stay 0:02:40.720 --> 0:02:43.080 up at night worrying about. And this is what China 0:02:43.120 --> 0:02:46.600 has been seeing. Now. That is their bond, that's their yield, 0:02:46.680 --> 0:02:50.560 their ten year bond. Here we have this is their 0:02:50.600 --> 0:02:55.000 stock market going down compared to the S and P 0:02:55.200 --> 0:02:58.960 five hundred, the US market going up. This is a 0:02:59.240 --> 0:03:02.360 bad sign, and again not just for China before the 0:03:02.400 --> 0:03:05.240 rest of the world. Why, well, turns out the US 0:03:05.400 --> 0:03:09.000 needs the Chinese economy. Just like the Chinese economy economy 0:03:09.040 --> 0:03:10.960 needs the rest of the world. We can see this 0:03:12.080 --> 0:03:14.359 really in the real estate sector. You've probably been hearing 0:03:14.360 --> 0:03:16.160 about it. I've done videos on it. The real estate 0:03:16.560 --> 0:03:19.760 sector has been getting completely hammered. Here's real estate sales, 0:03:19.919 --> 0:03:24.200 here's real estate starts again, massive deflation again. This is 0:03:24.200 --> 0:03:27.080 what keeps central bankers up at night, and we can 0:03:27.160 --> 0:03:29.840 kind of keep going in. This is another big problem 0:03:29.880 --> 0:03:32.480 that China has. China's got a lot of problems. So 0:03:32.520 --> 0:03:35.160 while they're apparently to people that are not paying attention 0:03:35.440 --> 0:03:37.640 taking over the world, when you just kind of peak 0:03:37.720 --> 0:03:40.520 under the hood, you see they've got serious problems. This 0:03:40.600 --> 0:03:43.800 is the unemployment rate, China's youth unemployment rate. As a 0:03:43.840 --> 0:03:49.560 matter of fact, we're at greater than twenty percent. Twenty percent, 0:03:49.680 --> 0:03:52.040 I'm going to pause on that. The US, you hear 0:03:52.040 --> 0:03:54.800 about all these jobs being lost, unemployments going up, but 0:03:54.880 --> 0:03:58.760 we're like at four percent for twenty percent. It's a 0:03:58.800 --> 0:04:01.560 big deal, especially when it comes down to the youth, 0:04:01.760 --> 0:04:04.640 especially when it comes down to the men. So China 0:04:04.640 --> 0:04:06.640 has lots of men. They had a one child policy 0:04:06.720 --> 0:04:09.920 for about three decades where they didn't have girls. All 0:04:09.960 --> 0:04:11.760 they had was men, and now they have hundreds of 0:04:11.760 --> 0:04:14.840 millions of men, but no girls, and they have no jobs. 0:04:14.880 --> 0:04:17.480 It's a big problem for China, as you might imagine. 0:04:17.480 --> 0:04:19.200 So this is sort of the place that they've gotten 0:04:19.240 --> 0:04:21.520 the men. One more chart to show you the deflation. 0:04:21.880 --> 0:04:25.159 This is the money supply. This is M one and 0:04:25.279 --> 0:04:29.120 again look at that trend. It's big, big news. So 0:04:29.360 --> 0:04:32.120 China's been in a bad place for a really long time, 0:04:32.440 --> 0:04:36.719 which has caused drastic times, can for drastic measures. Okay, 0:04:36.760 --> 0:04:39.799 so now they've got the monetary bazuka boom. They shot 0:04:39.839 --> 0:04:42.719 this out into their economy, but of course it's the 0:04:42.720 --> 0:04:47.320 global economy now, the bazuka, it's massive. Before we get 0:04:47.360 --> 0:04:50.520 into the specifics of the bazuka, we also want to 0:04:50.600 --> 0:04:54.760 understand what happens as all of this goes through, and 0:04:54.800 --> 0:04:58.200 more specifically, what's happened in the past when we've seen 0:04:58.279 --> 0:04:59.480 China do This is not the first time, as a 0:04:59.480 --> 0:05:02.919 matter of fact, this is the fourth time in just 0:05:02.960 --> 0:05:06.280 the last several years. Okay, so what happened? So first 0:05:06.279 --> 0:05:08.839 of all, let's just break this down. Basically, they're doing 0:05:08.920 --> 0:05:11.160 every kind of monetary students they can basically trying to 0:05:11.200 --> 0:05:15.360 expand the money supply, how well. They've cut bank reserve requirements. 0:05:15.480 --> 0:05:18.480 So basically, they're cutting rates and cutting the reserve requirements 0:05:18.480 --> 0:05:21.400 so the banks are able to lend out more money. Actually, 0:05:21.480 --> 0:05:24.560 I have a whole breakdown right here. Let's run through this. 0:05:24.839 --> 0:05:26.640 Before we run through that, let's just take a look 0:05:26.640 --> 0:05:29.400 at some of the things that we see in China. So, 0:05:29.480 --> 0:05:33.800 for example, this rollout shows this is a very big piece. 0:05:34.960 --> 0:05:36.480 But it's so big I want to come back to it. 0:05:36.760 --> 0:05:38.880 Let's look at this. Let's look at the specifics real quick. 0:05:39.200 --> 0:05:42.720 What we can see is that PBOC lowered reserve requirements 0:05:42.800 --> 0:05:46.039 by half a point, which doesn't sound like a lot, 0:05:46.160 --> 0:05:48.120 but it is. And the reason why is because by 0:05:48.160 --> 0:05:52.440 doing that they unfreeze, or they unleash about a trillion yuan, 0:05:52.760 --> 0:05:55.679 which is about one hundred and forty two billion dollars 0:05:55.680 --> 0:05:58.039 for the banks. That's massive. They did a seven day 0:05:58.279 --> 0:06:03.000 repurchase rate reduction from one point seven to one point five, 0:06:03.080 --> 0:06:07.559 again another massive drop. They changed or lowered the loan 0:06:07.640 --> 0:06:11.000 prime rates by twenty to thirty basis points, so basically 0:06:11.000 --> 0:06:14.040 they're making money cheaper. And again, right when money's cheaper, 0:06:14.440 --> 0:06:17.719 the goal hopefully people buy more of it right, increased 0:06:17.720 --> 0:06:20.440 loan amounts of in a debt based monetary system. They 0:06:20.480 --> 0:06:23.520 cut interest rates on existing mortgages by an average of 0:06:23.640 --> 0:06:26.720 fifty basis points. Imagine in the United States or whatever 0:06:26.760 --> 0:06:28.960 country you're in, if they just said, oh, everybody's rates, 0:06:28.960 --> 0:06:32.120 mortgage rates is half a point cheaper, or imagine what 0:06:32.160 --> 0:06:34.719 that would do. They lowered the minimum down payment for 0:06:34.800 --> 0:06:37.880 second homes from twenty five percent to fifteen percent. Imagine 0:06:37.880 --> 0:06:39.800 if they did that. Imagine how many more people would 0:06:39.800 --> 0:06:42.560 get those investment properties they always wanted. That's exactly what 0:06:42.560 --> 0:06:46.039 they're trying to do. The Central Bank introduced cheap loans 0:06:46.080 --> 0:06:51.120 to local governments for buying up unsold properties, covering one 0:06:51.200 --> 0:06:56.080 hundred percent of the loans. So China has this massive 0:06:56.080 --> 0:06:58.039 problem with all this real estate they built and hasn't 0:06:58.040 --> 0:07:01.800 been purchased, and they're basically saying, hey, local governments will 0:07:01.800 --> 0:07:03.280 just give you as much moneys you want to go 0:07:03.279 --> 0:07:04.680 buy all the properties, and we're going to give you 0:07:04.680 --> 0:07:07.040 a hundred percent of the money. If the government gave 0:07:07.040 --> 0:07:08.120 you a hundred percent of money to go buy a 0:07:08.120 --> 0:07:10.240 bunch of properties, do you think you do that? And 0:07:10.320 --> 0:07:13.440 you understand exactly what's going on. Liquidity for the stock market, 0:07:13.440 --> 0:07:15.720 This is a pretty big one. The PBOC has launched 0:07:15.880 --> 0:07:20.400 two new tools to boost liquidity for equity markets, one 0:07:20.480 --> 0:07:26.120 hundred and thirteen billion dollars swap program and to fund 0:07:26.320 --> 0:07:31.239 and access liquidity for purchasing stocks. The PBOC the Central 0:07:31.280 --> 0:07:34.760 Bank is literally giving hundreds of billions of dollars for 0:07:34.840 --> 0:07:37.960 them to buy stocks and prop up the market forty 0:07:38.040 --> 0:07:40.480 two point five billion in loans to commercial banks for 0:07:40.680 --> 0:07:45.200 stock market interventions or maybe we'd call them manipulations, whatever 0:07:45.200 --> 0:07:46.720 you want to call it. So this is sort of 0:07:46.720 --> 0:07:48.880 the specific is what's going on. You can understand it's 0:07:48.880 --> 0:07:52.200 a big deal, a really big deal. Why is this 0:07:52.360 --> 0:07:56.360 even a bigger deal. It's a bigger deal because it 0:07:56.520 --> 0:07:58.840 shows intent. If you've been following me for a while, 0:07:58.920 --> 0:08:01.120 you know that I say that since two thousand and eight, 0:08:01.200 --> 0:08:04.200 the market's changed, and you can't look previous to that 0:08:04.440 --> 0:08:06.960 to extrapolate a lot of information. One of the big 0:08:07.000 --> 0:08:09.600 things that's changed was the introduction of quantitative easying, but 0:08:09.640 --> 0:08:12.760 more importantly, it was a psychological shift. You can't really 0:08:12.800 --> 0:08:14.320 measure this. I mean you can, and we can go 0:08:14.360 --> 0:08:17.080 through that, but it's a psychological shift, and it shows 0:08:17.120 --> 0:08:20.800 the willingness that central banks and governments have to intervene 0:08:20.800 --> 0:08:23.320 in markets, and with quantitative VIASA, they've levered up the 0:08:23.320 --> 0:08:25.880 system so hard they can't allow it to unravel. Than 0:08:25.960 --> 0:08:28.320 in twenty twenty, we've seen that escalade. Right in the 0:08:28.400 --> 0:08:31.240 US it was about eleven trillion dollars of stimulus to 0:08:31.240 --> 0:08:34.079 prop up the markets. China was even bigger. The question 0:08:34.200 --> 0:08:37.200 you might ask yourself is if they did all that 0:08:37.240 --> 0:08:39.440 in twenty twenty, in two thousand and eight, and then 0:08:39.480 --> 0:08:42.360 did even more in twenty twenty, and then in twenty 0:08:42.400 --> 0:08:44.480 twenty three in the US, right with three banks collapse, 0:08:44.720 --> 0:08:48.040 hundreds of billions more to save the banks, why would 0:08:48.040 --> 0:08:52.680 they stop? Now ask yourself that question. And this exactly 0:08:52.679 --> 0:08:56.920 answers that. It says the publicistized roll out showed authorities 0:08:57.200 --> 0:09:00.880 are taking seriously. Authorities are taking s say, the warnings 0:09:01.040 --> 0:09:04.640 that China risks missing its growth target of around five percent, 0:09:04.840 --> 0:09:06.960 so they want to grow by five percent a year. 0:09:07.160 --> 0:09:09.520 That's their target, and they're afraid they're not going to 0:09:09.559 --> 0:09:12.360 make that target, and they're taking that seriously. They're doing 0:09:12.400 --> 0:09:16.360 everything they can to stay on track. The policy barrage 0:09:16.559 --> 0:09:19.480 likely puts that goal back within reach. So they want 0:09:19.520 --> 0:09:23.360 to maintain or sustain that growth rate at all costs, 0:09:23.559 --> 0:09:25.480 no matter what. Do you see what I'm talking about. 0:09:25.480 --> 0:09:27.960 This is a psychological thing. It's not just a data things. 0:09:27.960 --> 0:09:31.160 What a lot of analysts miss. Okay, yet to unveil 0:09:31.360 --> 0:09:34.520 more forceful measures to boost authorities have yet to unveil 0:09:34.559 --> 0:09:37.600 more forceful measures to boost demand among consumers, so they 0:09:37.600 --> 0:09:41.000 still have more in their back pocket, is basically what 0:09:41.040 --> 0:09:45.680 it's saying here. It says right here, more needs to 0:09:45.720 --> 0:09:48.400 be done in order to help solidify fourth quarter growth. 0:09:48.400 --> 0:09:51.480 So they still need to do more to stay on 0:09:51.520 --> 0:09:53.720 that five percent target by the end of the year. 0:09:53.840 --> 0:09:56.400 So what they're saying is that they are going to 0:09:56.400 --> 0:09:59.720 stay on target no matter what, whatever it takes. This 0:10:00.000 --> 0:10:03.800 baraj this bazooka that they fired is only just the beginning. 0:10:04.120 --> 0:10:08.520 They have more, more forceful measures and more needs to 0:10:08.520 --> 0:10:11.080 be done, and they're willing to do whatever it takes. Now. 0:10:11.840 --> 0:10:15.000 It's something called the sunken cost fallacy. Once you've gone 0:10:15.040 --> 0:10:19.040 so far, it's harder and harder to quit, right. Once 0:10:19.120 --> 0:10:21.640 they've pumped in hundreds of billions of dollars, why would 0:10:21.640 --> 0:10:25.000 they stop now? And you're starting to understand where this 0:10:25.080 --> 0:10:27.640 world is going, which direction we're heading. I want to 0:10:27.640 --> 0:10:29.640 take a second, just real quick, to just give you 0:10:29.679 --> 0:10:34.360 a reminder. The reminder is take control of your bitcoin. Look, 0:10:34.480 --> 0:10:35.920 for the first time in history, we have a way 0:10:35.960 --> 0:10:39.200 to preserve our property, take custody of our property and 0:10:39.200 --> 0:10:41.760 protect it with no cost. You can't do that with gold, 0:10:41.800 --> 0:10:43.840 you can't do it with your stocks, and so we 0:10:43.880 --> 0:10:46.120 can do it with bitcoin, and you should. Now don't 0:10:46.160 --> 0:10:48.040 store it on an app on your phone that can 0:10:48.080 --> 0:10:50.160 get hacked. What you want to do is use a 0:10:50.240 --> 0:10:53.720 hardware device something like this Treasle right here. So basically 0:10:53.760 --> 0:10:55.880 your private key sits here. When you want to do 0:10:55.920 --> 0:10:58.840 a transaction, you plug it into your computer, sign the transaction. 0:10:58.840 --> 0:11:00.760 When you're done, you unplug it and put it back 0:11:00.760 --> 0:11:02.880 into your safe. I've used treasure for now, I don't know, 0:11:02.920 --> 0:11:05.079 six seven years, because I think it's the easiest one 0:11:05.120 --> 0:11:07.160 to use I've tried I think pretty much all of them. 0:11:07.520 --> 0:11:10.360 And it's also open source, so you can trust the code. 0:11:10.679 --> 0:11:14.359 And again it's easy. Why easy because if it's too complex, 0:11:14.520 --> 0:11:16.520 it makes me think of how many potential holes and 0:11:16.600 --> 0:11:19.080 risk there could be, not just in the device, itself, 0:11:19.080 --> 0:11:21.080 but even in my own ability to secure it. So 0:11:21.160 --> 0:11:23.599 I want something fast, I want something easy, and I 0:11:23.600 --> 0:11:25.840 don't want something safe. That's why I use Treasure. And 0:11:26.240 --> 0:11:28.719 if you don't use Treasure, use something. Please get your 0:11:28.720 --> 0:11:32.480 bitcoin off the exchange, use a hardware device to secure 0:11:32.520 --> 0:11:34.679 your private key. And if you like Treasure, check out 0:11:34.679 --> 0:11:38.160 the link down below. Okay, now I want to just 0:11:38.240 --> 0:11:40.520 jump back in time, not that far. We're going to 0:11:40.559 --> 0:11:42.679 jump back in time too, about six weeks ago, and 0:11:42.720 --> 0:11:45.240 I made this video right here talking about a meltdown 0:11:45.360 --> 0:11:48.200 or magic setup. And I was talking specifically at this 0:11:48.280 --> 0:11:50.560 time about what was going on with the jap the 0:11:50.640 --> 0:11:53.920 Japanese markets and the carry trade was blowing up. If 0:11:53.960 --> 0:11:55.800 I remember that video, where let's go ahead and put 0:11:55.840 --> 0:11:57.320 it right here. We'll link to it in the show 0:11:57.320 --> 0:11:59.520 notes down below as well. You should probably go watch 0:11:59.559 --> 0:12:02.200 it now. I remember at that time, the whole world 0:12:02.720 --> 0:12:05.760 was calling for this is it, This is the final 0:12:05.800 --> 0:12:08.440 prick in the liquidity bubble. The whole world's going to crash. 0:12:08.679 --> 0:12:11.120 Of course, I made a video calming you down, and 0:12:11.200 --> 0:12:14.560 I talked about global liquidity and again how this always 0:12:14.559 --> 0:12:18.480 continues to expand. Now, at that time, I showed you 0:12:18.520 --> 0:12:20.040 this chart. I've used it many times. If you watch 0:12:20.080 --> 0:12:22.320 my channel, you're familiar with this chart. And this basically 0:12:22.360 --> 0:12:25.680 shows that all the debt in the world, about seventy 0:12:25.720 --> 0:12:28.240 five percent of it, seventy five percent of the world, 0:12:28.480 --> 0:12:31.520 has a maturity rate of about one to five years. 0:12:31.520 --> 0:12:33.840 So let's call it a four year average. So about 0:12:33.880 --> 0:12:35.480 seventy five percent of the debt in the world has 0:12:35.480 --> 0:12:37.559 about a four year average. And remember, the debt can't 0:12:37.559 --> 0:12:40.840 get repaid, it can't get destroyed, it gets rolled over. 0:12:40.920 --> 0:12:43.440 We need more debt to pay the existing debt, so 0:12:43.480 --> 0:12:45.680 you might remember this. So every four years we have 0:12:45.760 --> 0:12:48.200 to create more debt to continue to roll it over, 0:12:48.480 --> 0:12:51.120 which is why we end up on these four year 0:12:51.280 --> 0:12:54.440 cycles that look like this. This is what it's supposed 0:12:54.480 --> 0:12:57.120 to look like. Of course it doesn't match perfectly, but 0:12:57.160 --> 0:12:59.960 it pretty much does. Now you can see that right now, 0:13:00.320 --> 0:13:04.640 the global equity is turning up right on pace. Now again, 0:13:04.800 --> 0:13:07.800 these four year cycles started in two thousand and eight, 0:13:07.880 --> 0:13:09.560 because that's when the whole world went to zero rates, 0:13:09.760 --> 0:13:13.560 and they just so happened to coincide with the four 0:13:13.640 --> 0:13:18.880 year business ism cycle and the four year election cycle. 0:13:19.080 --> 0:13:21.840 Oh yeah, and the four year bitcoin having cycle at 0:13:21.880 --> 0:13:24.600 the same time. Pretty interesting, isn't it. But you might 0:13:24.760 --> 0:13:26.880 remember this video if you saw it. Let me just 0:13:26.920 --> 0:13:30.160 play you this clip from this video from six weeks ago. Now, 0:13:30.240 --> 0:13:32.280 the problem is that and what we've seen going on 0:13:32.559 --> 0:13:34.040 is that we're in this what we call like a 0:13:34.120 --> 0:13:37.240 liquidity pocket. There's debt that needs to get rolled over. 0:13:37.559 --> 0:13:39.840 The world needs the FED, the central banks, the FED 0:13:39.880 --> 0:13:42.120 in the United States, but other major central banks. Other 0:13:42.120 --> 0:13:44.960 major central banks are the ECB European Central Bank, the 0:13:44.960 --> 0:13:48.240 boj Bank of Japan, and the PBOC, the Chinese Central Bank. 0:13:48.240 --> 0:13:50.080 Those are sort of the major ones. And what we 0:13:50.080 --> 0:13:53.360 can see is that they need liquidity because they need 0:13:53.400 --> 0:13:55.800 to keep their markets or their debt rolling over to 0:13:55.840 --> 0:13:58.920 keep their markets going. But the problem is that we 0:13:59.200 --> 0:14:01.240 have been the world world has been The FED has 0:14:01.280 --> 0:14:04.120 been in a tightening cycle, so they wanted to tighten 0:14:04.200 --> 0:14:06.560 up the monetary supply, but right now the other nations 0:14:06.559 --> 0:14:08.280 of the world needed to start easing so they can 0:14:08.360 --> 0:14:11.080 get that liquidity they can roll that debt over. Now 0:14:11.080 --> 0:14:14.520 what's happening is China desk really needs this, but they 0:14:14.559 --> 0:14:17.400 can't go into an easing right now while the FED 0:14:17.480 --> 0:14:19.920 is still in the tightening. All right, So what did 0:14:19.960 --> 0:14:22.320 I say there that was so prophetic? I said that 0:14:22.440 --> 0:14:26.000 all the central banks need to ease in sync. And 0:14:26.040 --> 0:14:28.360 what happened is that two of the most important central 0:14:28.400 --> 0:14:31.880 banks in the world, Japan and China, they really needed 0:14:31.920 --> 0:14:35.880 to ease, like really really bad. Japan couldn't wait anymore, 0:14:35.960 --> 0:14:38.480 so they moved without the FED and it almost crashed 0:14:38.480 --> 0:14:40.760 the entire globe. So the Japan said, well, whoa, Okay, 0:14:41.040 --> 0:14:43.680 we'll wait for the FED. So we needed the FED 0:14:43.880 --> 0:14:47.240 to announce easing, which they just did. And just like 0:14:47.280 --> 0:14:49.720 we talked about six weeks ago, the FED announced they 0:14:49.720 --> 0:14:53.560 would ease, and now the PBOC is doing it because 0:14:53.600 --> 0:14:56.560 all this needs to be done in sync. They were waiting, 0:14:56.760 --> 0:14:58.560 and so we have all the major central banks of 0:14:58.560 --> 0:15:01.480 the world easing. We also have Switch easy, Canada easying 0:15:01.560 --> 0:15:05.360 Sweden easying the Eurozone easy. UK is easy, and again 0:15:06.080 --> 0:15:07.680 the US is easy, and that means the rest of 0:15:07.680 --> 0:15:11.840 the world is okay. Now let's jump back in history 0:15:11.960 --> 0:15:14.480 because or again, we don't invest in the markets as 0:15:14.480 --> 0:15:16.200 we want them to be, or as we think we can, 0:15:16.360 --> 0:15:18.400 as they as they should be, or what our gut 0:15:18.480 --> 0:15:20.280 or emotion tells us we need to get the emotion 0:15:20.360 --> 0:15:22.040 out of it. Let's look at the data, all right, 0:15:22.080 --> 0:15:24.240 So let's go back in history to see when this 0:15:24.280 --> 0:15:27.160 happened before. Now, we know in twenty fifteen to twenty 0:15:27.200 --> 0:15:31.480 sixteen the Chinese stock market crashed really really hard. Right. 0:15:31.600 --> 0:15:34.720 We know that in twenty eighteen to twenty twenty it 0:15:34.920 --> 0:15:37.880 also crashed as well. There was this trade war going on. 0:15:37.960 --> 0:15:40.000 You might remember Trump and the tariffs and all of 0:15:40.000 --> 0:15:43.720 those things happening, which again crashed the market. And again 0:15:44.080 --> 0:15:46.960 the Chinese market has been trying to de leverage for 0:15:47.000 --> 0:15:48.920 a long time. That's what crashers are. They're trying to 0:15:49.000 --> 0:15:51.520 de lever the system, which of course we can't have. 0:15:52.440 --> 0:15:54.400 We saw it happen in twenty twenty one, if you remember, 0:15:54.400 --> 0:15:57.960 in twenty twenty one, they cracked down hard on technology 0:15:57.960 --> 0:15:59.880 and real estate as well. They're trying to kind of 0:16:00.160 --> 0:16:02.400 low the bubble in real estate down and they crack 0:16:02.480 --> 0:16:05.800 down too hard. You might remember that. Now. What's interesting 0:16:05.840 --> 0:16:09.120 about this is you might remember I made this other 0:16:09.200 --> 0:16:12.040 video about six months ago, and I talked about this 0:16:12.320 --> 0:16:17.360 phenomena called the Imperial circle. Now it's the George Soros 0:16:17.360 --> 0:16:19.720 Imperial Circle. A lot of you guys might not like 0:16:19.840 --> 0:16:23.320 George Soros. I certainly don't. Just forget about his name 0:16:23.320 --> 0:16:26.120 for a minute. It's about the secret circle, the imperial circle. 0:16:26.120 --> 0:16:29.880 And basically what this tells us is that money moves globally. 0:16:30.440 --> 0:16:33.280 And the irony of what happens is when the United 0:16:33.320 --> 0:16:36.040 States goes into a rate hiking cycle where they're trying 0:16:36.040 --> 0:16:39.320 to slow or tighten the economy down by raising rates, 0:16:39.600 --> 0:16:42.320 it pulls liquidity from the rest of the world, and 0:16:42.360 --> 0:16:44.760 so it sort of negates what they're trying to do, right, 0:16:44.800 --> 0:16:47.120 So they raise rates and then it makes it more 0:16:47.160 --> 0:16:49.640 attractive for money from other countries to come in. And 0:16:49.680 --> 0:16:52.040 so what we're seeing. You have to remember that money 0:16:52.080 --> 0:16:56.120 moves globally. So when the Chinese market becomes restrictive or 0:16:56.120 --> 0:17:00.640 money starts leaving, where do you think it goes? If 0:17:00.640 --> 0:17:04.640 you guess the US markets, global commodities, yes, you might 0:17:04.680 --> 0:17:06.560 be right. So we can see this. Let's take a 0:17:06.560 --> 0:17:09.680 look at these three data points in time. Let's take 0:17:09.680 --> 0:17:12.240 a look at this is the Let's look at this 0:17:12.320 --> 0:17:15.000 chart here. First, this is the S and P five hundred, 0:17:15.160 --> 0:17:17.320 all right, so this is the US stock market. It's 0:17:17.359 --> 0:17:19.440 like the main index, the benchmark that we look at 0:17:19.480 --> 0:17:22.600 so during the first period that China had the same 0:17:22.600 --> 0:17:25.760 situation happening. During the same period, we saw the S 0:17:25.760 --> 0:17:28.240 and P five hundred up about nine percent, not major, 0:17:28.400 --> 0:17:30.240 but it didn't lose money. It went up. That was 0:17:30.280 --> 0:17:32.920 actually pretty good for US stocks. The second time, twenty 0:17:32.960 --> 0:17:34.919 eighteen to twenty twenty, we saw the S and P 0:17:34.960 --> 0:17:38.000 five hundred go up by almost twenty percent. That's pretty 0:17:38.000 --> 0:17:40.240 good in a short period of time. We averaged what 0:17:40.320 --> 0:17:42.840 eight percent over a fifty sixty year period, it's pretty good. 0:17:43.080 --> 0:17:45.560 The third time it happened, the S and P five 0:17:45.600 --> 0:17:49.960 hundred went up over twenty percent. Again. So as China 0:17:50.040 --> 0:17:52.399 is restricting the market, so the markets are stumbling, the 0:17:52.480 --> 0:17:54.760 money's come into the US. Now that's the US market, 0:17:54.840 --> 0:17:57.119 that's S and P five hundred. What about a global 0:17:57.160 --> 0:18:00.600 asset like commodity like bitcoin. We can see in the 0:18:00.600 --> 0:18:03.560 same period the first time, bitcoin went up by three 0:18:03.680 --> 0:18:06.760 hundred and sixty five percent, pretty good, better than the 0:18:06.760 --> 0:18:08.800 eight percent the S and P five hundred did. The 0:18:08.840 --> 0:18:12.280 second time it happened, bitcoin went up by ninety two percent, 0:18:12.560 --> 0:18:15.760 again almost double your money. Not bad. And the last 0:18:15.760 --> 0:18:19.040 time it happened, bitcoin went up another ninety percent. So 0:18:19.080 --> 0:18:23.600 you see what happens is as they're easing, they're bringing 0:18:23.640 --> 0:18:26.000 out the monetary bozuka so to speak. Right, they're going 0:18:26.040 --> 0:18:29.400 to be putting billions trillions of dollars in an economy. 0:18:29.560 --> 0:18:32.400 How much of that goes into other assets like bitcoin, 0:18:32.600 --> 0:18:34.639 other commodities, as well as how much comes to the 0:18:34.760 --> 0:18:38.600 US market, And now you have an idea all right, Now, 0:18:38.680 --> 0:18:41.240 the important thing to understand is that a rising tide 0:18:41.240 --> 0:18:44.159 lifts all boats, so to speak. And so we're not 0:18:44.200 --> 0:18:47.159 seeing the asset in the bubble in assets. What we're 0:18:47.200 --> 0:18:49.639 seeing is the bubble in the denominator or in the 0:18:49.720 --> 0:18:51.679 US dollars. So really what we want to do is 0:18:51.680 --> 0:18:54.840 we want to follow the money. Right, so just because 0:18:55.040 --> 0:18:57.880 the Bank of Japan or the Bank of China or 0:18:58.000 --> 0:19:01.560 the ECB European Center Bank they're printing money, doesn't mean 0:19:01.600 --> 0:19:03.679 that it's going to stay in that region or in 0:19:03.680 --> 0:19:05.560 those banks, right, It's going to go around the world's 0:19:05.600 --> 0:19:08.200 we want to follow the money. We want to understand 0:19:08.240 --> 0:19:14.760 that easing, these easing policies, lowering rates, lowering reserve requirements, 0:19:15.200 --> 0:19:20.240 lowering down payments, things like that, it's increasing the money supply. 0:19:20.320 --> 0:19:22.919 When money gets cheaper, people buy more of it. Just 0:19:22.920 --> 0:19:25.359 like if Apple announced that the new iPhone sixteen was 0:19:25.400 --> 0:19:29.399 on sell for ten dollars, would they sell more of them? Yes, 0:19:29.440 --> 0:19:33.840 of course. We want to understand that different assets have 0:19:33.960 --> 0:19:39.000 different sensitivity to the rates and the increasing liquidity, right. 0:19:39.040 --> 0:19:40.840 I go over this all the time. So we know 0:19:40.880 --> 0:19:43.000 that the S and P five hundred and the US 0:19:43.040 --> 0:19:46.280 real estate goes up at about the rate of monetary increase. 0:19:46.720 --> 0:19:49.880 We know that gold goes up about one point five 0:19:50.040 --> 0:19:52.840 times that. We know bigcoin goes up at a nine 0:19:52.880 --> 0:19:56.560 times sensitivity, So not all boats go up at the 0:19:56.560 --> 0:19:59.320 same speed. We want to understand that different assets have 0:19:59.359 --> 0:20:02.720