Speaker 1: The Bank of Japan versus the Federal Reserve and how
Speaker 1: their battle crashed the market, and of course what this
Speaker 1: means for you now in today's over financialized world, the
Speaker 1: battle between major central banks can change the asset prices
Speaker 1: in the blink of an eye, and today the stakes
Speaker 1: have never been higher. Japan and the Federal Reserve are
Speaker 1: locked in a battle that sent shockwaves through the entire
Speaker 1: global markets, and the.
Speaker 2: Aftermath could change everything.
Speaker 1: Now what happened, Well, just a few days ago, Japan
Speaker 1: took an unexpected and very bold step that nobody thought
Speaker 1: that they could or that they would do this, and
Speaker 1: basically they raise interest rates against all odds. Now, this
Speaker 1: was a direct challenge to the Federal Reserves dominance and
Speaker 1: has thrown markets into complete chaos. But why did they
Speaker 1: do it and how does this impact you?
Speaker 2: Now?
Speaker 1: In this video, we're going to dive deep into the
Speaker 1: economic chess game that's being played on a global scale.
Speaker 2: We're going to look at.
Speaker 1: How Japan's strategic move against the Fed isn't just about
Speaker 1: saving their currency, it's about redefining global financial power. We're
Speaker 1: going to look at the hidden strategies that traders around
Speaker 1: the world were using and how they're all now unraveling,
Speaker 1: and of course what all this means for your investments
Speaker 1: and your financial future. Now, having this information is going
Speaker 1: to make sure that you're ready to capitalize on the
Speaker 1: risks and the opportunities at play, and if you want
Speaker 1: to protect and grow your wealth.
Speaker 2: The two doesn't. So let's go real quick.
Speaker 1: If you're new the general, my name is Mark Moss,
Speaker 1: and I've been investing my own money in these turbulent
Speaker 1: markets for decades. Now, you know the same smooth sea's
Speaker 1: never made a skilled sailor.
Speaker 2: Well, I've swim in the most turbulent waters.
Speaker 1: Now today, on top of making these investing educational videos
Speaker 1: and coaching thousands of investors on navigating these markets, I'm
Speaker 1: also a partner in a global hedge fund. In this morning,
Speaker 1: we are really busy understanding all of this and of
Speaker 1: course making the corresponding moves. So you're going to get
Speaker 1: the research fresh right now so you can go make
Speaker 1: the same moves that you need to make as well.
Speaker 2: All right, let's get into this.
Speaker 1: All right, we are talking about Japan's desperation, Japan's unexpected move.
Speaker 2: Now, we talked about sort of this global supremacy over
Speaker 2: monetary order.
Speaker 1: And really when we think about this, we have to
Speaker 1: understand that there are just well there's central banks and
Speaker 1: then there's major central banks. So there's I don't know,
Speaker 1: one hundred and sixty one hundred and seventy central banks,
Speaker 1: but there's four major central banks, and they are, of
Speaker 1: course the Federal Reserve the United States the top of
Speaker 1: the heap, right, the reserve currency of the world.
Speaker 2: Then below that we have the Bank of Japan, which
Speaker 2: we're talking about here.
Speaker 1: We have the ECB, the European Central Bank, and we
Speaker 1: have the PBOC, we have China. So those are the
Speaker 1: major central banks. Now, the dollar is a reserve crency
Speaker 1: the world, so the FED sort of drives the market,
Speaker 1: but not every country likes that, and so there's this
Speaker 1: battle for supremacy.
Speaker 2: We're going to talk about that. And they did a
Speaker 2: desperate move.
Speaker 1: Now when I say desperate, they did something that nobody
Speaker 1: thought was possible. Basically, Japan has been the last couple
Speaker 1: decades of what we call stagflation, the lost decades as
Speaker 1: they call it in Japan, where basically the markets crashed,
Speaker 1: everything crashed, and they haven't been able to get any grow.
Speaker 1: They've had no inflation in the market. So Japan had
Speaker 1: rates basically at zero. As matter of fact, they had
Speaker 1: rates negative for a really long period of time. Just
Speaker 1: recently we're going to go through this, but just recently
Speaker 1: they were ady to get them back up to zero
Speaker 1: and a little bit above zero. Nobody's out they could
Speaker 1: actually raise them, and they did. They caught everybody off guard,
Speaker 1: and that's what's causing the whole world to panic right now.
Speaker 1: And what we can see here, we can see it
Speaker 1: in this chart right here. You can see how big
Speaker 1: of a panic, how big of an abrupt move this is.
Speaker 1: So the Japanese gen priced in the US dollar have
Speaker 1: been going down, down, down, down, down, down down for
Speaker 1: a long period of time, and out of nowhere, look at.
Speaker 2: This, it just took off. It top fifteen percent.
Speaker 1: When you're looking at currencies, that is a massive move.
Speaker 1: I know, if you're still looking at bitcoin fourteen percent nothing.
Speaker 1: That is a big deal for the Japanese inen. And
Speaker 1: we can really see how big of a move this
Speaker 1: was made specifically by Japan obviously not just from this
Speaker 1: chart right here, but if we look at the Dixie chart,
Speaker 1: So the Dixie the Dollar index is basically measure the
Speaker 1: dollar against a basket of currencies. So when we look
Speaker 1: at the dollar overall, of course the dollar goes up
Speaker 1: and down. Everything's traded against each other. And we can
Speaker 1: see that the dollar, the Dollar index that Dixie has dropped,
Speaker 1: but it's down two percent. Now that's a pretty big candle,
Speaker 1: two big candles in a row right here, but you
Speaker 1: could see it sort of within this range. So it
Speaker 1: all came from Japan. Like I said, in this very
Speaker 1: desperate attempt that they have all right now, understanding the
Speaker 1: impossible situation that Japan is in means that you have
Speaker 1: to understand the impossible trilemma. Now trilemma is different than
Speaker 1: a dilemma. Dilemma means that you have, you know, to
Speaker 1: choose between one or the other. Trilema it means you
Speaker 1: have to choose two over one. And so the impossible
Speaker 1: dilemma that not just Bank of Japan has, but every
Speaker 1: country with a central bank and policy has, is these
Speaker 1: three things. Number one, free flow of capital. So now
Speaker 1: a country wants to have capital counts, capital markets, they
Speaker 1: want to attract capital, investment, capital businesses to be there,
Speaker 1: people to invest in the country. But then people also
Speaker 1: need to get money out of the country. It is
Speaker 1: one of the problems with China. China is like a
Speaker 1: black hole where money can come in after to come in,
Speaker 1: but it can never leave, which is why people don't
Speaker 1: want to invest there. So you need to have a
Speaker 1: free flow of capital in and out. But you also
Speaker 1: want to have a fixed exchange rate. And then third
Speaker 1: you need you want a country would want to have
Speaker 1: an independent monetary policy. You mean they can adjust their
Speaker 1: monetary policy, they can tighten an ease whenever they want.
Speaker 1: The problem is that if you get two of these,
Speaker 1: you're going to get less of another. So, for example,
Speaker 1: if you want to fix your exchange rate like what
Speaker 1: China does, and you want to have independent monetary policy
Speaker 1: like China, then you can't have an open capital account.
Speaker 1: If you want to have an open capital account and
Speaker 1: monetary policy, then you can't have a fixed exchange rate.
Speaker 2: The market will dictate what that is.
Speaker 1: And so that's sort of the situation that of Japan
Speaker 1: has found themselves in. Now why is that, Well, Well,
Speaker 1: first I want to say is that they want to
Speaker 1: have an independent policy. That's one of the legs of
Speaker 1: the trilemma. But independent from who would be a question
Speaker 1: that I'd want to ask, well, independent from.
Speaker 2: Of course, the reserve currency of the world.
Speaker 1: So we can see in this chart right here, the
Speaker 1: reserve currency, the US dollar, makes up sixty two percent
Speaker 1: of foreign reserves, so of course it's going to dictate
Speaker 1: what the world does. And so Japan has been stuck
Speaker 1: in this situation where they've been again sort of at
Speaker 1: the whims of the United States the dollar, and they
Speaker 1: want to change this. That's the trilimit that they've been in.
Speaker 1: But how can they try to get all three? Get
Speaker 1: that proverbial free lunch. And that brings us to the
Speaker 1: next part, and that is that the FED has been
Speaker 1: fighting back. Now, the FED isn't really so much fighting
Speaker 1: back against Japan or China. Maybe they are a little bit,
Speaker 1: but really the FED just wants to control its own
Speaker 1: independent monetary policy. So the FED can set the interest rates,
Speaker 1: although that's a whole other topic.
Speaker 2: If you want me to make a video on that,
Speaker 2: let me know.
Speaker 1: But really the FED is sort of adjusting to what
Speaker 1: the market wants the rates to be.
Speaker 2: That's a whole different topic.
Speaker 1: But the FED does or is independent and in force
Speaker 1: of the United States has open capital accounts. But the
Speaker 1: problem is that again, because the FED has the dollar,
Speaker 1: which is sixty two percent of the world's reserve currency,
Speaker 1: it's dictating the rest of the market. So what happened is,
Speaker 1: if you remember, the FED started hiking rates. Remember that
Speaker 1: we were on this monetary easing cycle for so long.
Speaker 1: Rates had been basically at zero since like two thousand
Speaker 1: and eight. They went up a little bit, came back down,
Speaker 1: and was it November October of twenty twenty one, the
Speaker 1: FED announced they're going to start raising rates. Then about
Speaker 1: March of twenty twenty two, they went on the fastest
Speaker 1: most aggressive rate hiking cycle in history. Now what does
Speaker 1: that mean for us? Well, if we look at this
Speaker 1: chart right here.
Speaker 2: We can look at Japan.
Speaker 1: We can see in this chart right here, this is
Speaker 1: the Japanese yen again priced in the US dollars. And
Speaker 1: what I'm showing you in this box right here is
Speaker 1: at the price the stability between the yen and the
Speaker 1: dollar had been pretty stable. This is about I think
Speaker 1: about twenty fifteen right here to twenty twenty two. Yeah,
Speaker 1: twenty fifteen to twenty twenty two, it had remained very
Speaker 1: stable in this box. But right here where I put
Speaker 1: this red arrow is drum roll please, it's March of
Speaker 1: twenty twenty two. It's when the FED started going on
Speaker 1: that aggressive rate hiking cycle.
Speaker 2: And so as they started raising rates in the US,
Speaker 2: it started making the dollar.
Speaker 1: Much stronger, and it plunged the Japanese uo all the
Speaker 1: way down, and it plunged the Japanese yen all the
Speaker 1: way down. Now, this blip right here is where we're
Speaker 1: at today. This is what we're talking about. But what's
Speaker 1: important to understand is that this had been a very
Speaker 1: stable monetary policy for Japan during this whole period. And
Speaker 1: during this period about seven year period, people got.
Speaker 2: Lulled to sleep.
Speaker 1: They thought that Japan would never change, Japan would just
Speaker 1: stay in the zone. But of course, as the yen
Speaker 1: started to plunge, then it opened up another trade, a
Speaker 1: trade that we're going to talk about right Now'm gonna
Speaker 1: break it down and then you can see this.
Speaker 2: Pop right here.
Speaker 1: But what happened during that time the yen was plunging.
Speaker 1: It was getting weaker and weaker and weaker. Now, I
Speaker 1: like to use if you remember when FTX, the cryptocurrency
Speaker 1: exchange collapsed, I did several videos on that and I
Speaker 1: used the fall of FTX sort of as a proxy
Speaker 1: to understand what's going on in Japan. Something revived that
Speaker 1: story here real quick so you can understand this. So
Speaker 1: you remember FTX was a cryptocurrency exchange, and if you
Speaker 1: remember what happened during that time, I made a video
Speaker 1: about it where they had their own token and the
Speaker 1: problem is that they used that token for collateral, for
Speaker 1: a lot more debt and to buy other things. But
Speaker 1: the problem is that their token started to drop in value,
Speaker 1: and so what FTX was doing is selling all their
Speaker 1: other assets and buying their token in the market to
Speaker 1: try to prop up that token. Eventually, CZ the head
Speaker 1: of buyinand said, hey, that token's not worth it. We're
Speaker 1: going to sell that token. We don't want it anymore,
Speaker 1: and then it started plunging rapidly. FTX was selling everything
Speaker 1: they couldn't try to buy it at market to keep
Speaker 1: it from following, but they couldn't. Nobody wanted the token,
Speaker 1: and this is exactly what's going on with Japan. The
Speaker 1: japan token stayed relatively stable, but once the FED started
Speaker 1: to raise raids, the Japanese token started plunging. Now Japan
Speaker 1: has been aggressively selling anything they can to buy their token.
Speaker 1: The Japanese en to prop it up, and that's where
Speaker 1: we're at now. We can see this happening in real time.
Speaker 1: The yen weakness persists despite Tokyo's sixty two billion dollar intervention.
Speaker 1: So the Japanese government is selling the US treasury, selling
Speaker 1: whatever they can and buying billions, tens of billions of
Speaker 1: dollars of their own currency at market, trying to prop
Speaker 1: it up. But the problem is, just like with the
Speaker 1: fall of FTX, nobody really wants it, and so we
Speaker 1: can see it plunging, plunging, plunge as a matter of
Speaker 1: fact right here. So it went up and came down.
Speaker 1: This is the first intervention shortly after Yueida is the
Speaker 1: press conference that saw Japanese rip to one sixty. So
Speaker 1: they did an an an intervention.
Speaker 2: It went up up temporarily.
Speaker 1: It worked for a minute, and then it plunged down again,
Speaker 1: and then they did another intervention. They got it back
Speaker 1: up again, but it plunged again. So no matter how
Speaker 1: much they intervene, it has like a sugar rush. It
Speaker 1: gets up really quickly and then it just falls back down,
Speaker 1: sort of like where FTX found themselves. But here's the problem.
Speaker 1: They realizes the problem, and they realize that they're going
Speaker 1: to have to do something drastic in order to get
Speaker 1: this to be fixed. So the end is under pressure
Speaker 1: even as Japan steps up its verbal warning. So then
Speaker 1: Japan's like, well, we're dumping tens of billions of dollars.
Speaker 1: We can get it temporarily. The problem is is all
Speaker 1: these short sellers, these short sellers are piling in and
Speaker 1: pushing the price down.
Speaker 2: So what we're gonna do?
Speaker 1: Japan said they're ready now verbal warning, they're ready to
Speaker 1: take action on currency if needed. So this is after
Speaker 1: this was in June twenty thirds, about a month ago, month,
Speaker 1: a little over a month ago. They're ready to take
Speaker 1: action on currency if needed. What does that mean, Well,
Speaker 1: any action that they have to take. They've been trying
Speaker 1: to buy it back up, and they have about one
Speaker 1: point two trillion dollars of assets they could sell to
Speaker 1: continue to prop up their currency. But they could also
Speaker 1: just try to shake out all the people that were
Speaker 1: shorting the market.
Speaker 2: Now what do we mean by shorting the market?
Speaker 1: This is what you'vebably been hearing about, which is called.
Speaker 2: The carry trade.
Speaker 1: And so the carry trade was opened up because Japan
Speaker 1: was stuck in this trilema situation, and so basically the
Speaker 1: shorts had opened up a carry trade of.
Speaker 2: About twenty trillion.
Speaker 1: Dollars against the Japanese en. They were selling it short.
Speaker 1: I'm gonna break down how this works for you, and
Speaker 1: what we can see is that created a massive risk
Speaker 1: for the market. As a matter of fact, it says
Speaker 1: is the Japanese carry trade the next big risk in
Speaker 1: the market.
Speaker 2: This was in January.
Speaker 1: People have been talking about this, We've been doing videos
Speaker 1: on this for a long time.
Speaker 2: This has been a big risk.
Speaker 1: Japan's government is engaged in a massive twenty trillion dollar
Speaker 1: carry trade. I mean, imagine how massive that is for
Speaker 1: a small country like Japan. It says here that is
Speaker 1: could bring unexpected risks if the central bank titans policy hmmm,
Speaker 1: which is.
Speaker 2: Exactly what just happened.
Speaker 1: So the Japanese couldn't buy enough of their token to
Speaker 1: prop it up. All these short sellers were selling and
Speaker 1: short putting that downward pressure. Like when cz from Binance
Speaker 1: they is gonna sell the FTX token and Japan is
Speaker 1: trying to prop it up, and they're like, well, we
Speaker 1: may have to do something unexpected unexpected like what well,
Speaker 1: this in January says right here it could bring unexpected
Speaker 1: risks if the central bank titans policies, and that's exactly
Speaker 1: what happened. We can see right here that the Central
Speaker 1: Bank of Japan started to do that. So this is
Speaker 1: going back to two thousand and eight. Right here, the
Speaker 1: red line is CPI, the yellow line is the Japanese
Speaker 1: Central banks interest rate policy, and you can see that
Speaker 1: it was basically flatlined from two thousand and eight. It
Speaker 1: went down into negative territory right here around twenty sixteen,
Speaker 1: and it's remained in negative territory.
Speaker 2: Just here. In twenty twinty four it.
Speaker 1: Got above positive territory and now they raised it just
Speaker 1: zero point two five percent.
Speaker 2: Now, to put this into perspective, the Federal Reserve.
Speaker 1: Of the United States raise rates five points. This is
Speaker 1: only a quarter of one point. And look how much
Speaker 1: damage this is done. All right, So that's exactly what happened.
Speaker 1: They raise rates and got unexpected results. Let me show
Speaker 1: you how this carry trade works.
Speaker 2: And why this matters.
Speaker 1: So here's how the carry trade works. It's basically arbitrage.
Speaker 1: What this means is that in the US market, US
Speaker 1: treasuries let's say that we can earn five percent, okay,
Speaker 1: over here in Japan.
Speaker 2: As I just showed you rates were zero.
Speaker 1: So let's say that in Japan I could borrow for
Speaker 1: let's say zero point eight percent. So I go borrow
Speaker 1: money in Japan for zero point eight percent. I bring
Speaker 1: it over to the United States and I park it
Speaker 1: in treasuries, and I make the difference five.
Speaker 2: Percent minus is zero.
Speaker 1: Point eight Or I put it into the US stock market,
Speaker 1: and let's say I put in the SPFI fund, her,
Speaker 1: I put in the mag sevens, I put it in Vidia,
Speaker 1: and now I'm making twelve to fifteen to twenty percent
Speaker 1: minus the eight.
Speaker 2: And so more and.
Speaker 1: More money kept getting borrowed. Selling the end short and
Speaker 1: all that money was finding its way into stronger markets,
Speaker 1: mostly into the United States and the stock market, into Nvidia,
Speaker 1: into US treasuries.
Speaker 2: It's been great.
Speaker 1: But here's the problem. A lot of this money was
Speaker 1: put in there on margin. So that means that they
Speaker 1: would borrow one thousand dollars from here, and they would
Speaker 1: take it over here and they would buy let's say
Speaker 1: five thousand dollars worth of stuff, or maybe maybe more,
Speaker 1: it depends on what their credit is maybe ten thousand
Speaker 1: dollars worth of stuff. But the problem is is this
Speaker 1: unwinds very quickly for two reasons. As long as this
Speaker 1: Japanese rate kept getting lower lower, lower, lower, lower.
Speaker 2: Lower, everything was great, right.
Speaker 1: This debt kept getting cheaper, cheaper, cheaper, more money kept
Speaker 1: coming over, and these assets went higher higher higher. The
Speaker 1: problem is the unexpected results. When Japan raised the rates,
Speaker 1: and only by raising him only zero point two five percent,
Speaker 1: this whole thing started to unwind. When these rates went up,
Speaker 1: all of a sudden, the interest that was owed went up.
Speaker 1: And when that happened, some of this had to start
Speaker 1: selling off to now pay for this.
Speaker 2: And as this.
Speaker 1: Started to sell off, the asset prices started to go down.
Speaker 1: As the asset prices to go down started to go
Speaker 1: down on stuff that was on margin, then the margins
Speaker 1: were called and they had to post more collateral to
Speaker 1: post more colladal, they had to sell more. When they
Speaker 1: sold more, prices went down even more, which then mean
Speaker 1: more margin calls. It means they had to sell more
Speaker 1: to post more collateral. And all the while they were
Speaker 1: selling this creating this downward pressure, this was getting more
Speaker 1: and more expensive, and this whole thing started to wind down. Now,
Speaker 1: this was great for so long because for twenty years
Speaker 1: they kept rates at zero and they just continued to
Speaker 1: stay low and get lower lower lower. But again the
Speaker 1: unexpected did shift to try to shake off these short
Speaker 1: sellers put the entire market into a tailspins. That's where
Speaker 1: we wrap now, confronting Godzilla.
Speaker 2: Where do we go from here?
Speaker 1: All right, the elephant in the room, if you will,
Speaker 1: we'll call it Godzilla because it's Japan.
Speaker 2: So where do we go from here? What happens?
Speaker 1: Can Japan really continue to raise their rates? What happens
Speaker 1: to the US markets? What happens to the four central
Speaker 1: banks that are now fighting against each other. Well, what
Speaker 1: Japan is doing is somewhat necessary, but it comes with
Speaker 1: a very steep cost. So they have all these short
Speaker 1: sellers that have piled in pushing the currency down and
Speaker 1: doing this carry trade over into the United States. They
Speaker 1: need to shake them off. They need to get rates
Speaker 1: back into positive territory.
Speaker 2: But the problem is it comes at a steep cost.
Speaker 1: It comes at the cost of wrecking the global markets.
Speaker 1: The bigger problem is that Japan is one of the
Speaker 1: most indebted nations in the world, with a two hundred
Speaker 1: and sixty three percent debt to GENP. Now, put that
Speaker 1: into comparison, the US is about somewhere in one hundred
Speaker 1: and twenty percent range. They're at two hundred and sixty
Speaker 1: three percent, and not just the government, the private debt
Speaker 1: is one hundred and twenty percent of debt to GDP.
Speaker 1: So the problem is is that they want to sort
Speaker 1: of normalize their policy with the Federal Reserve. But the
Speaker 1: problem is is that the FED is that's, you know,
Speaker 1: five percent, and they're at zero point two five. They
Speaker 1: may have to hike another thirteen forty It depends on
Speaker 1: how fast they hike, but thirteen more times to even
Speaker 1: get anywhere normalized with the FED. And if it the
Speaker 1: whole world is melting down over a quarter point hike.
Speaker 1: What do think happens if they go with a three
Speaker 1: four five percent hike? Now, the bigger problem is this
Speaker 1: right now currently, if they were to normalize the policy
Speaker 1: with the FED, that means they would be paying thirteen
Speaker 1: percent of their gross domestic product of their GDP just
Speaker 1: for interest on the debt. Now, to put this into
Speaker 1: perspective of the United States, you've seen I have done
Speaker 1: many videos on this, the interest on the debt has
Speaker 1: gone up parabolic, and as a matter of fact, in
Speaker 1: the United States, we're now spending a trillion dollars, more
Speaker 1: than a trillion dollars just on the interest on the debt,
Speaker 1: and the interest on the debt has now exceeded the
Speaker 1: cost that the US spends on the US military, which,
Speaker 1: of course, the US military spends more than the next
Speaker 1: ten nations combined. But even as crazy as that number.
Speaker 2: Is, it's about three percent of GDP. So for Japan
Speaker 2: to try to do.
Speaker 1: What's necessary and try to normalize policy, they'd be spending
Speaker 1: thirteen percent. The problem is they can't do that, and
Speaker 1: so they want to confront Godzilla. But Godzilla might just
Speaker 1: be too big for them. So which path are they
Speaker 1: going to take? Are they going to fight Godzilla or
Speaker 1: are they just going to go back into their hole?
Speaker 1: And really we can see that the entire system is
Speaker 1: buckling as they.
Speaker 2: Weigh these two decisions.
Speaker 1: So their choices are one, do we have a currency crisis,
Speaker 1: do we continue to let the end just fall plunge plunge, plunge,
Speaker 1: plunch plunge, or do we try to save the currency,
Speaker 1: fight off the short sellers and have a deflationary crisis.
Speaker 1: Those are choices, those the sides of the coin heads
Speaker 1: or tails. They can choose what they want, not unlike
Speaker 1: what FTX had to choose, and not unlike which.
Speaker 2: The US is going to have to choose.
Speaker 1: At some point, the US is going to have to choose.
Speaker 1: Right now, would we rather have another great depression, a
Speaker 1: deflationary crash where jobs are wiped out, people are homeless
Speaker 1: and on food lines, that the stock markets wiped out,
Speaker 1: the real estate markets wiped out, we go into another
Speaker 1: twenty year great depression period? Or do we have a
Speaker 1: great debasement where let's just go pren trillions more dollars. Now,
Speaker 1: let's just put assets assets sky high. This is the
Speaker 1: same decision the US is in, which is the same
Speaker 1: decision that.
Speaker 2: Japan is in.
Speaker 1: Do the markets crash or do taxes crash? You see,
Speaker 1: if the markets crash, if we choose option one, a
Speaker 1: great depression, then what happens, Well, nobody's working, and so
Speaker 1: with nobody working, then there's no taxes being paid. If
Speaker 1: the stock market crashes, if the real estate market crashes,
Speaker 1: then there's no capital gains taxes, and then there's no taxes.
Speaker 2: To the government.
Speaker 1: Now, the government's already running multi trillion dollar deficits today.
Speaker 1: If we go into just even a garden variety recession,
Speaker 1: we'd expect to see tax receipts plunged somewhere between twelve
Speaker 1: to fifteen percent. Now, the Treasury just announced a couple
Speaker 1: weeks ago that just the borrowing for the rest of
Speaker 1: this year, which is not even half left. They need
Speaker 1: another one point seven trillion just for this year. So
Speaker 1: if taxes garden variety recession crashed by fifteen percent, they have.
Speaker 2: To borrow it more.
Speaker 1: If we have a great depression style, how will the
Speaker 1: government survived? Now, what's going to happen, obviously would be
Speaker 1: that they would have to continue printing money for the
Speaker 1: government and more stimulus, more welfare, and more importantly, to
Speaker 1: continue to run those deficits. All of that money printing
Speaker 1: will be highly inflationary. So you know, I think about
Speaker 1: twenty twenty.
Speaker 2: Remember twenty twenty.
Speaker 1: And what happened in twenty twenty, Well, the whole country
Speaker 1: was shut down, not because the recession, but because the
Speaker 1: government forced to shut down. The government then was forced
Speaker 1: to inject money, print stimulus money and inject.
Speaker 2: It directly in the economy. Trillions of dollars. And what happened.
Speaker 1: Homes went up by fifty percent, Stocks went up by
Speaker 1: fifty percent.
Speaker 2: Bitcoin went to the moon.
Speaker 1: So did your gasoline, and so did your steak, and
Speaker 1: so did your houses as well. And so I think
Speaker 1: about twenty twenty, and I think this is where we're
Speaker 1: going now in my opinion, Well, it's not my opinion
Speaker 1: based off of factual observation. If we look at every
Speaker 1: government in the world today and sort of every experiment
Speaker 1: in the past, every government in the past, there hasn't
Speaker 1: been an experiment that I've seen where a nation decided, well, boys,
Speaker 1: pack it in. It was a good run while we
Speaker 1: had it. Let's just shut her down. Not when there's
Speaker 1: still inking.
Speaker 2: The money printer.
Speaker 1: And so I believe that they'll turn that money printer
Speaker 1: back on and we'll print it sky high. They will
Speaker 1: always choose a currency crisis and a great debasement over
Speaker 1: the alternative, and that is inflation. Now, the thing about
Speaker 1: when this inflation shoots sky high is that doesn't push
Speaker 1: all asset prices up evenly. For example, the Nasdaq went
Speaker 1: up by about double what the S and P five
Speaker 1: hundred did. Bitcoin went up about five six hundred percent
Speaker 1: on top of that, right, and so there's different ways
Speaker 1: of these different assets to interact. Now, if you'd like
Speaker 1: to see the playbook for this. We're in the middle
Speaker 1: of what I'm calling a Q wave, a quantum wave
Speaker 1: leap in technology, and this inflation that we're about to
Speaker 1: see thrust into the market is going to make twenty
Speaker 1: twenty look like chump change, and it's going to drive
Speaker 1: asset prices too.
Speaker 2: High as we've never imagined.
Speaker 1: Come hang out with me live. I got about twenty
Speaker 1: or thirty short charts that I want to show you
Speaker 1: so you can understand how each one of these cycles
Speaker 1: is very predictable and it lays out exactly what assets
Speaker 1: we should invest do. I call it the investing black
Speaker 1: hole because there's really no other place you put your money.
Speaker 1: And I'm gonna give you the top five assets I'm
Speaker 1: checking out.
Speaker 2: It's free.
Speaker 1: There's a link down below if you want to come
Speaker 1: hang out and hang out with me. I'll answer all
Speaker 1: your questions live to make sure you have it. But
Speaker 1: either way, this is what's going on in Japan. It's
Speaker 1: just like FTX was an example of Japan. Japan is
Speaker 1: an example of the rest of the world. We're really
Speaker 1: witnessing this in real time, and the entire world, one
Speaker 1: by one. The Great Milkshake Theory is going to see
Speaker 1: each nation forced to choose one of these three things.
Speaker 1: And as I said, every example in current and past
Speaker 1: history shows which path they take. All right, let me
Speaker 1: know what you think in the comments down below.
Speaker 2: Thumbs up. I feel like this video.
Speaker 1: If you don't, you can give me a thumbs down.
Speaker 1: That's okay, but at least tell me why in the
Speaker 1: comments down below. Subscribe if you're not already subscribed, and
Speaker 1: that's what.
Speaker 2: I got, a right to your success. I'm out