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the fed's been operating its monetary policy while looking in the rear view mirror because they keep creating inflation right printing money quantitative easing whatever you want to call it and they keep printing more and more money and they look at the CPI and as long as it's below two percent or some version of it they think it's okay to keep pretty money meanwhile they're ignoring the road ahead the problem is they're going to raise rates enough to crush the economy but not enough to slow inflation and in fact as inflation gets worse that's going to be another drag on the economy and so what you've got to do what I'm trying to tell you is you got to get out of all of the bubble assets that were propped up by all the cheap money because even though money is cheap it may be slightly less cheap for a while and that's enough to collapse the bubble but you can't just go to cash because inflation is very high and it's eroding away the value of your cash there's no safety there you can't buy bonds bonds are even worse than cash because it's cash in the future but in the meanwhile you're tying your cash up and inflation is eating it up I think the balls are already in motion because you know we had this big increase in consumer prices and prices were up seven percent maybe a little bit more that would be the highest rate I think since 1982-ish but you know if we still measured prices the way we measured them in 1982 we would have uh you know reported about a 15 increase in consumer prices which would make it worse than any individual year during the 1970s or 1980 so this was a horrible year of inflation and I think this is you know really the beginning of the end because now the FED can no longer justify by zero percent interest rates and quantitative easing it needs to raise interest rates and it's now talking about raising interest rates and it may in fact raise them we'll see it may not just talk it may actually do it but the problem is even the rate hikes they're talking about are too small and too late to make a difference because the FED is talking about raising interest rates well we got seven percent inflation you can't raise rates one or two percent rates need to be higher than the rate of inflation if you want to slow the rate of inflation so interest rates need to go I don't know ten percent but of course we can't even get near ten percent we can't even get to five percent we have so much debt because of all the past money planting and all the stimulus of the FED they have created a situation where it's impossible to fight inflation and so they won't do it and that's going to be the seeds of the next Crisis because as the FED is tightening up on its monetary policy to make it less loose right we're not going to have Tight money we're just going to have money that's less loose than it was before the problem is less loose is not enough to sustain the acid bubbles you know in a lot of these Financial assets so we get a crash but it's not tight enough to actually bend the inflation curve and so inflation is going to keep getting worse even as the FED is hiking rates supposedly to fight it that's going to lead to stagflation that's ultimately going to cause the FED to reverse course and start easing again even though inflation will be worse than when it started it's tightening campaign and somewhere along the way the markets are going to wake up to this reality and the dollar or the bottom rather is going to drop out of the dollar and then we're going to have a currency crisis that will morph into a sovereign death crisis and then it's all over you know then we have a real collapse because then the FED has to let interest trades go way up and everything comes crashing down in a much more spectacular way than 08 except nobody gets bailed out everybody has to suffer the losses in their entirety and they'll be much bigger or they don't have the guts to do that and they just keep printing money anyway and they they print the dollar into Oblivion and we have hyperinflation which of course would be even worse so people have to go out of these risky momentum stocks into value and what we're seeing is a massive shift out of U.S growth stocks to International value stocks stocks in Europe stocks in Asia basic businesses that have real earnings right now that pay good dividends right now that's where investors are hiding out that's why you're seeing some of these stocks up 10 20 percent on the year with no news even as U.S tech stocks are cratering and all the bubble stocks including the cryptocurrencies all that stuff is going down you got to get into real assets you got to get into value you got to get out of paper and you got to get out of U.S paper in particular because we've got the biggest inflation problem that we can't do anything about because we're so loaded up with debt there's no way to fight inflation without collapsing the entire economy because the whole economy is built on the foundation of these artificially low interest rates but in order to fight inflation you have to remove that foundation and then if you do that everything built on top of it comes crashing down most of when you think about a stock market you're thinking about the entire market and index I want to own businesses I have to get out of cash but I can't own you know the momentum stocks I can't own these you know high-flying companies that don't have any earnings and I can't buy cryptocurrencies which have no value or no earnings you know they went up along with everything else I want to own something real so I own businesses tangible companies that have property plant equipment what you want to do with inflation is recognize that the biggest losers are creditors people who are or owed money and are going to be paid that money in depreciated currency so you don't want to be a creditor in U.S dollars so you don't want to own cash you don't want to own bonds you don't want to be in annuities or you don't want cash value in a in an insurance policy you've got to own real things and that's why I'm buying all these foreign stocks companies that pay very high dividends I mean I'm buying stocks for some of them are trading for under 10 times earnings many of them pay dividend yields of five to ten percent I get that cash I can spend it if you're retired you can use that cash to you know Finance your living and as the dollar goes down the value of those dividends will go up and of course the companies that I own they're all raising their prices now so they're going to be able to raise their prices so they're going to have higher earnings and they can pay me higher dividends so those increasing dividends will keep Pace within increasing cost of living but a lot of Americans who are in the U.S stock market they're collecting no dividends they just have overpriced stocks that are falling and if they have money in bonds the low interest rates that they're earning are completely inadequate they're being more than offset by inflation if you're getting two or three percent interest and inflation is seven or ten percent you're going backwards every year and eventually you won't be able to afford to maintain your lifestyle especially if you're retired bonds are riskier than stocks right now I mean it's unfortunate because bonds are where you're supposed to go when you want to play it safe because you're not taking the risk of the stock market you're guaranteed to get your money back the person who you loan the money to is committed to paying you back and you know what your return is going to be because you have a fixed interest but the problem is anyone who buys bonds now in this environment is overpaying the prices are inflated because of the Fed so you're paying this ridiculously high price for an asset that barely throws off a yield interest rates event actually rise the price of the bond collapses but meanwhile inflation is destroying the value of the bonds of the cash rather that the bonds are going to pay you bonds are extremely risky I mean people talk about treasuries as risk-free return I've been calling it return free risk for years nothing's safe anymore thanks to the central Bankers so you have to look at degrees of risk and to me I think it's a lot less risky to be in foreign equities than U.S bonds I think it's a lot less risky to be in gold and silver than in U.S dollars one of the ways you know the stock is a good value you look at the income just like when you look at a piece of property and you're looking for the cash flow you're looking at what the rents are relative to cost of operating it if I own a business I want to know what my piece of the profits are what am I going to get what's my return on my investment forget about potential appreciation I don't care about that I mean what if I never sell the stock what is my return on owning this stock and that return is the dividend it can also be capital appreciation if the company has enough income to buy back stock and deliver some of my income in the form of capital gains so you also look at the earnings because most companies don't pay out all their earnings and dividends so you still are you know entitled to a share of the earnings of the company when you're a stockholder even if those earnings aren't paid out in dividends but you look at all these valuations and you determine if that's a good place for your money now fortunately there's a lot of good businesses around the world that we can own a piece of and preserve our wealth that way but you know all of these assets are going to get increasingly more expensive for Americans as the dollar loses value so people have to act quickly while they can still afford to buy these stocks the last decade was all about us stock market the U.S stock market outperformed the rest of the world because the rest of the world's got value stocks and we've got hyped up momentum and tech stocks and so the world wanted those stocks they don't want them anymore they're getting rid of those stocks and that's also a big problem for the dollar because we were recycling our trade deficits because foreigners at one point took the dollars they earned selling us stuff and they bought our bonds but then our bonds became so expensive the yields were so low they started buying our stocks well now our stocks are really expensive there's nothing that we have that they want the dollar is going to collapse but in the meantime we're getting into these foreign stocks they're the ones that are going to do really well in this decade nothing that worked in the last decade will work in this one it's a totally different environment this is a stagflation and the same thing with cryptocurrencies if you bought Bitcoin you know at the beginning of the last decade and wrote it up for 10 years you cleaned up as well as a lot of these other cryptocurrencies is well it's going to happen now is it's a rotation out of Fool's Gold into the real thing so now it's time to take your profits in that Bitcoin that you bought a while ago because this is the rotation it's out of hype into value and that includes out of cryptocurrencies into real money into gold and silver it's all about value and it's about getting out of the dollar and protecting yourselves from a real economic crisis in the United States because it's coming we have delayed the Day of Reckoning for decades now as a result the problems are much bigger so we have a lot more to reckon with it is going to be very very difficult environment financially in the United States think about the 1970s only way worse much higher inflation a much weaker economy and we're starting from a much more vulnerable position the political landscape is far scarier now socialism was not acceptable in the 1970s most people would not vote for socialism now people Embrace socialism capitalism has never had a worse reputation unfortunately than it does right now so it's a very dangerous time to be invested in America and so you just need to do what you can and I'm helping Americans because I care about the country and I care about my fellow Americans I don't want them to go broke foreign
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