flipping

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