원문 보기
I look at three major forces that are happening now um haven't happened in our lifetimes but have happened many times in history and those three major forces are the creation of a lot of debt and the printing of a lot of money to buy that debt because particularly because the government is running large deficits and so they don't have enough money so that government has to print that money so that creation of all of that that debt and its financial implications and its economic implications is one force the second force is the internal conflict the amount of conflict that's internally largely due to the largest wealth gaps that we've had since the 30s they um and that produces populism of the left and the right particularly when there are financial difficulties the third Force um is the rising uh Power the um challenging the existing power um largely in the form of uh China and to some extent Russia um so let's call it the great power conflict because in 1945 you know there's there's the cycle you have a war then after a war you have winners and the winners determine the rules of the game and then there's this evolution of others becoming more competitive and then you have a conflict again um for who's in control so we have that Dynamic taking place so those three influences the financial the internal conflict external conflict uh influences or having a dominant um influence I learned before that when I was surprised um often it was because of things that hadn't happened in my lifetime before but happened in history because of that reason I went back and studied history the last 500 years on these Cycles there are big cycles that last about 75 years give or take about 50 years and of Rises and declines and I put that out because I think it's so important people understand that I put it out in a book called The Changing World Order and in a free video calling the changing world order so when we look at each one of those they're important I also learned in studying history that there were two other influences that were very big and you could see them uh the first was Acts of nature such as the droughts floods and pandemics the changes over time in uh the evolution over time of people's learning and the Technologies they make so I'd say there are the really five big influences that drive everything and they are the money and debt economic influence the internal conflict the external conflict the nature uh influence um and the let's call it the technology influence so as we go now into this uh it's important again um I put it out as a free video on YouTube so that people could see it easily and when we get into whatever we're going to talk about it'll be certainly in the context of those things and since they each affect each other it produces what I call the big cycon if you just let's I want to talk about the mechanics really I'm so eager to pass along an understanding of the mechanics so people themselves can do the analysis um so one man's debts or another the man's assets um okay so what happened the government had to sell a lot of debt and when it sold a lot of debt there were a lot of entities that bought a lot of bonds government bonds um and money was very easy which meant that short-term interest rates were very low um and money was almost being it was actually being given away because they had interest only loans and interest rates were less than one percent and you didn't have to pay back principles so you can go get money and so that created um a lot of debt and it created a lot of buying of government bonds so what happened to um Silicon Valley Bank um is uh what happened to what happened to many many entities all around the world not just Banks they um what does a bank do a bank takes in deposits typically or get in some way and then it buys that it can do that in the form of making a loan or it could do that in the form of buying a Government Bond buying debt and then when interest rates went up the value of that debt went down the money they had to give to depositors became more and more expensive and also depositors wanting them to be competitive looked at money market rates or other rates and withdrew money from the bank to because they had better uses okay so what that that leave them with it's a banking problem that has happened literally for thousands of years that um that what they do is the the positives you know want their money back and they're holding assets that are in this case have gone down in value so they're wrong exactly I think you said it very well um you're allowed to be in the business let's call it 110.
it's actually less than one-tenth is your money whoa uh but let's call it one tenth um you have a certain amount of money up they give you the deposits you invest the money within these General guidelines so for example government bonds are safe from default so you buy the government bonds you think you're making a spread and then what happens is the government bonds go down in value at the same time as the People Say Hey I want to go take my money and put it someplace else so you don't have enough money and Central Banking works like that except the government can print the money so the risk and when it's a government is not that you won't get money back and listen like in this particular case for a bank it goes down in value so you ain't going to get that back you're going to sell it but anyway you described it very well you know what what happens for the economy as a whole is then they print the money because they don't want the faults there's a tolerable amount of default and then you get past a tolerable amount of defaults and it just crushes everything and so they print the money okay and so this thing with the bank is not a Silicon Valley Bank is a loan issue it's not a banking issue it is a global issue in terms of all around the world all sorts of entities Pension funds um um insurance companies um all around the world there was a lot of the buying of these government bonds which have gone down in value and if you then take it and you say What's the value of those those have gone down and the cost of money is high and so the world is leverage law okay law form meaning they own stuff and they borrowed money to own it and it's going down in value I think it's pretty easy to judge on a um you know an intermediate or longer term basis because there's a choice right um the the predominant the the big issue is you know okay the government can come in and print the money and give money to anybody they want to give money to but when they do that that typically devalues the money so if think about it if you're holding a bond you know you got a claim on money um but the claims are too much so um so one way or another you're either not going to get back that money in full or you're going to um get back money that's worth less well right now I I couldn't give you the uh you know number exact number off my top of my head but there's um um household that um corporate debt and government debt well that's right but it's not expected to pay it off in a year sure I want to go back to my main point to make this clear if you're holding that debt um you are holding something that will money will come back uh let's say if the and the government can print the money but if the money's hard if that's going to be good money that's coming back it's going to be hard for those entities to pay back because it's a lot relative to their income and cash flows to pay it and that means that the default risk Rises however because if you don't you're holding that it means that the debt will be bad one way or another it's either bad because they don't pay it it needs a haircut for them to pay it or because they do pay it with money that is going to be printed to come back so when you look at that you're um and that problem occurs when there's a lot of debt assets and a lot of debt liabilities so think of it this way just want to make this clear when there was the position that interest rates got a lot below the inflation rate you're losing buying power there's no good reason to own that um and there's a change in psychology because um before there was um I own bonds the bonds go up in value as interest rates go down so I'm getting a price appreciation even though I'm getting you know let's say a low interest rate but inflation isn't a problem until it's a problem then when it's a problem because they print so much money and they put it out then inflation goes up and a light bulb goes off that light bulb used to be okay how much am I earning okay I'm not earning much but it's okay the price of the bond or whatever's gone up and but anyway I'm holding it and it's safe and then people realize it's not safe because I'm losing money to inflation so now you have the Central Bank wanting to rectify that imbalance by you know real interest rates were minus 1.7 because if I look at inflation index bonds as an indicator um or other indicators I'm losing percentage points to inflation by holding that Bond and then when they and people realize that well you don't want to do that and then the other side of it was you want to buy buy and borrow and buy stuff because you know money's free so companies borrow and buy stuff and individuals bomb buy houses because it interest-only loans on the houses I mean like okay I can buy a house I can buy an apartment and so but that creates the imbalance where it's terrible to be a lender um and a creditor and it's good to be a borrower and and do that so that imbalance takes place it produces inflation and then when it produces inflation and so on and then you you I then you say I don't want to own these things anymore and then and also um the Federal Reserve says I better fight inflation they change things and so by raising interest rates to levels in which it goes from minus 1.7 percent in inflation index bonds to plus 1.7 percent and it makes it um and it raises um the short-term interest rates you know real interest rates much higher than lo and behold all the people who did all those things get hurt okay they borrowed they bought the barns they bought all of those things and all of those debt instruments um and also companies look at the companies that are affected because yields got so low um tech companies and others Those Who Have a Dream I'm going they don't have to necessarily make profits they're selling a dream and the money's got to be invested and so you see all of that change radically when those that tightening of monetary policy so now you sit there and have a lows so when you're looking at the big picture you look at you've got it's think of it as all like banking you're holding all these Financial assets what is the value of a financial asset it has no intrinsic value its only value is what it can buy but there are many many more financial assets out there well the most Financial assets out there that there's ever been relative to the value of stuff to buy there's too many claims out there it's it's like um musical chairs okay if everybody says oh wait a second let get let me get my stuff let me convert my debt assets you know I want to I want to get my stuff I want to get rid of the stuff um that's that's a real problem and so that's the global picture um on the first of those five influences right the fact that it's happening with the other influences is very important because they affect each other so this financials picture by the way is the same as in the 1930 to 45 period and the same as they were throughout history
Comments 0