Something coming that will be much worse than a recession

Something coming that will be much worse than a recession

As we look at the different things that can cause financial instability and lower share prices, like bad monetary policies, out-of-date methods for calculating inflation, too much debt, and geopolitical crises, we stress how important it is to keep cash on hand and be patient.

To get the economy back on track, governments have been slowly getting rid of the trillions of dollars they printed based on an outdated theory of money.

Modern monetary theory is based on a flawed idea, so governments around the world have pumped trillions of dollars into the system, which has caused widespread financial instability.

For the world economy to reach real economic balance, governments need to get rid of the trillions of dollars they have been propping up since 2008. To do this, money will have to be spent slowly and in a planned way for about three years.

It will take between 24 and 36 months to end the bear market trend that was caused by fake money driving up the prices of assets. The bottom may not come for another 18 months. Even though the US has been trying to get Russia to accept sanctions, it is now helping Russia make huge surpluses by getting importers to insure Russian oil ships. This has made the market move in a choppy way.

The FED's old way of calculating inflation and the possibility of gas supply interruptions could lead to instability and a high CPI in the coming months. Because of private equity leverage buyouts and the country's high level of debt, the debt and commodities markets could have a domino effect on stock prices. This could cause stock prices to fall.

Even though wise money research says Facebook's stock is cheap, its price went down because not enough individual investors owned it. The fact that only a small number of individual investors own Facebook shares made its value go down. Due to Facebook's low price-to-earnings ratio, a lot of institutional investors have bought its stock. However, new information suggests that this price is too high.

Due to Wall Street's poor performance, stock trading prices will go down. This will put pressure on technology companies, whose earnings are expected to go down because of the recession and new rules to protect consumers. The FED's plan to reduce the money supply will also require a major rewrite of the equity markets.

Since earnings are expected to go down this year and in 2023 because of the recession and the need to keep people from spending their money on things they don't need, lowering the price of stocks would put pressure on cash-burning tech businesses.

As stocks have a 0.92 correlation with M2 money supply, the FED's plan to take $3–5 trillion out of the economy will require a major rewrite of equity markets and a new starting point for earnings.

The best way to keep the economy from being affected by the wars in Russia and Ukraine is to keep cash on hand and be patient as they drag on.

Since the fighting between Russia and Ukraine is still going on, the speaker warns against giving up cash and insists that the current economic crisis should be allowed to resolve itself. European leaders are pushing for a settlement to keep the economy from spreading, and the most likely result will be a negotiated ceasefire and detente in which Russia comes out on top economically.

Even though there were economic sanctions, oil sales in non-sanctioned areas kept going. Russia's economy is doing well, so it is paying for oil in currencies other than the US dollar. This could hurt the dollar's role as the world's reserve currency.

Oil sales in China, Africa, and other countries that weren't sanctioned kept going well, which showed that economic sanctions didn't work because they were porous and didn't fix structural problems. Even though Russia is under sanctions, its economy is doing well, and as a result, the country's current account surplus has grown. Also, Russia is now paying for oil in currencies other than the US dollar, which is a bad sign for keeping the US dollar as the reserve currency.

For economic reasons, starting wars with countries that have porous borders is usually a bad idea for everyone. Trying to shame countries that have been around for a long time and have open borders usually backfires, and getting into fights with them is bad for everyone's economy.

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