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hey everyone kevin here so i've been getting a lot of questions especially from course members when am i gonna flip because obviously inflation's not transitory anymore obviously it's not going down okay so let's go wind it back a little bit blend it back a little bit and talk about this let's answer first when do we flip and and and b does that make sense now first when do you flip you flip in my opinion uh when a you're a little or b you think there's going to be a wage price spiral and the fed can't get inflation under control if you think the fed will not get inflation under control or and or we're going to get a wage price spiral and or third condition uh you can combine these in whatever levels that you prefer one third each priority whatever we have inflation expectations get out of control now inflation expectations with the consumer did just take up a tenth of a percent and they will likely after this last cpi report take up even more the bond market's expectations are also up we're at about five year break even of 3.16 that is however 15 below the inflation expectations we had in march when we're like oh my gosh the fed's going to run pull us right and that was also in january although uh the breakevens went much higher after the war anyway so those are conditions that are i think very reasonable to evaluate hey look if the fed can't get inflation under control inflation break evens and consumer expectations for inflation explode and we have a wage price spiral you do not want to own anything you will owe nothing and be happy you will have just cash and you'll be happy that's that's then okay that's that where are we now if we're not there who knows maybe we will be it's entirely possible that the fed will try to fight inflation down just like they did in the late 70s where they try to fight inflation down and guess what happens it stays elevated for six years for six years they're telling us inflation is transitory until finally paul volcker wakes up and says effort pull the rug we're gonna set interest rates above where inflation is and so what happened boom massive crash inflation's at 16 to 18 percent fed funds rate up to about twenty percent okay now you get volcker massive crash hey you could ride through it but it's really painful today's market didn't actually hit new lows after the slow latest cpi report a lot of people like having this latest cpi report is not as good this is bad it's not going down but we've also been saying on the channel that we don't actually expect inflation to go down really until probably the september release of cpi which would be uh the the august figures right the month before that figures and so that's not to try to make an excuse to say like there's still reason to be happy no there are plenty reasons to be gloomy here like this sucks so it's a crop market to be investing in everything hurts everything's painful bankruptcies are coming uh i'll be doing a video later where we talk about identifying bankruptcies like what the hell went wrong over at revlon a company that's been around for 90 years now just go you know now rumored to file bankruptcy stocks down like 60 freaking percent in a day plus after hours it's absolutely insane but the point is we've got to monitor the conditions for inflation and align them with the fed's expected response because we know the fed knows their actions have a delay and the last thing they want is inflation actually to come down towards the later period of the year which would be uh you know the q3 q4 and all of a sudden we start seeing disinflation but at the same time uh the federal reserve has over hyped and the impacts of the federal reserve's tightening occur at the same time as we start seeing bankruptcies layoffs which then lead to a worsening spiral and ultimately foreclosures that would be really bad so what what am i personally doing i'm still buying i know that sounds crazy i know it sounds crazy and people make fun of me all the time like kevin you're gonna do this inflation is transitory people you're like yeah eventually inflation will go down eventually it will go down and so i can't say that i'm bullish today that oh my gosh stocks are going to the moon next week i don't think that i've said it before and i'll say it again this year is going to suck this is the best year to learn this is a learning year you pay your dues now you learn how to buy real estate so you can go from zero to millionaire and actually build wealth buying real estate and then getting into stocks in that order most people here get into stocks and then potentially never consider real estate which is a big mistake and check out the programs link below i'm building your wealth i'm not effing leaving i'm buying this because i'm gonna look back in 10 years and i'm gonna be like damn i wish i had more money to buy more while we were in the middle of that recessionary game
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