The Coming Market Crash Catalyst.

this video i'm going to talk to you

about a potential fear catalyst that

could lead the market to fall first i'm

going to talk to you about that catalyst

then i'm going to break down why fear

matters which you might think i already

know why fear matters but listen to it

and see how potentially this could be a

little bit of a tipping point see what

your thoughts are as well or i'll see in

the comments down below let's get into

it there is a possibility and i think

this is this is something to consider as

a potential market crash catalyst now i

don't want to sound like fetish like

okay here we go market crash again right

but there there is a serious potential

uh market crash catalyst that we really

haven't been talking about

and that is the potential that joe biden

ends up

not nominating

jerome powell for the federal reserve

again

right now we do expect that uh jerome

powell is going to renominate

uh or uh joe biden is going to

renominate jerome powell uh we expect

that and uh the cool thing about jerome

powell is we know jerome powell right

we're very familiar with john powell

we've gone through this entire pandemic

with him we know that he's on the

slightly dovish side we know where he

stands on inflation he thinks it's going

to be transitory eventually he thinks by

q2 and q3 of 2022 inflation's going to

go down

that's going to happen at the same time

as the taper completes and at that time

we'll be able to assess if it makes

sense to raise rates at that time or not

and how quickly to raise rates there are

expectations as of last month 60 percent

of market participants expected interest

rates to go up

starting in june however we just heard

on cnbc that that rate is now declining

uh and that the market is beginning to

potentially more

so believe uh jerome powell that uh it

is possible that rates could go down uh

or maybe not rates go down but uh that

that inflation does inflict down in q2

and q3 and the necessity to raise rates

uh goes down in in the summer of 2022.

so uh

that that is very clear and so when

jerome powell changes his his tune a

little bit we can really easily

determine

okay this is a huge shift this is a

slight shift like we know jerome powell

is really predictable he's really clear

uh he's he's easy to understand i

actually think he does a very good job

now how could there potentially be a

market crash uh catalyst

uh well

the market crash catalyst

uh

let's see here would

essentially be that if joe biden says

hey i'm going to pick somebody else

the market could temporarily freak out

because the market's going to have

uncertainty every time the market has

uncertainty stocks seem to fall

and the uncertainty would be

what if we get somebody who is a real

hawk who wants to raise rates like crazy

starting now

what if we get somebody who's a real

dove

and doesn't raise rates quickly enough

and we end up getting hyperinflation

fears of both extremes in my opinion

will happen

or be amplified if joe biden ends up not

renewing

jerome powell

as chairperson of the federal reserve

i think the best and smartest thing for

joe biden to do would be to

renominate jerome powell because it'll

keep stability and so that's why i say

it's smart because the last thing joe

biden needs right now is more political

instability thanks to the disaster that

we've had

on uh

with this infrastructure package and

infrastructure negotiations

uh

so if joe biden really cares about the

infrastructure package and keeping the

economy somewhat

you know

on the on the skinny path to to normalcy

please renominate

j pal oh the market has this funny funny

tendency about going in cycles of fear

and it's really important to consider

that and my economics teacher back a

long long long time ago always said that

a stock market is a graph of human

emotion

and what's fascinating is every time you

look around at our stock market and you

look for when were the best buying

opportunities you consistently find that

the answer was

when there was fear

think about it for a moment

last uh

last

march we had the recession uh the covet

pandemic that was a massive amount of

fear right that was an obvious one

massive amount of fear stocks go down

then you think about

the summer

people think okay covet's going to be

over everything's going to be good

recovery stocks are going up all of a

sudden looks like we're going to go into

a coveted winter all the restaurants

hotels everything plummets to lower

levels that we've ever seen before

because of fear of the virus right that

was the the winter wave that we had you

look at what happened in

october of 2020 it was pure fear people

were fearful that we were not going to

have a peaceful transition of power that

we were not sure who was going to be

president we weren't sure what policies

were going to get enacted massive fear

same thing regularly happens over and

over again it happened uh this uh this

spring and people are asking me kevin

how

how do you know how did you know there

was going to be an end of the year rally

people all the time i'm getting this in

the comments all the time

and it's i don't have a crystal ball i

just made an educated guess

my educated guess was such that

i looked at when is most fear likely to

subside

see

in uh

we knew we already knew going into like

november december of 2020 that we were

going to have massive inflationary fears

in 2021 in fact i wrote a tick tock or

made a tick tock about a bitcoin price

prediction and uh and in it uh it was

from a course member live stream grouped

out of it uh it was on jane in was like

january 5th or january 6th and uh in it

i said there's going to be a lot of

inflation click bait next year

inflation's going to go up but there's

going to be a lot of fear uncertainty

and doubt around inflation

and sure enough there was it came a

little earlier than expected rather than

coming in march april and may people

start getting fearful in february around

february 19 markets started falling and

selling off right so you had a lot of

fear around inflation fear around

inflation started subsiding a little bit

in the summer

and then came back in august and

september and then in september we had

this combination of inflation fears with

oh no what's the fed going to do with

the taper oh no the ever grant crisis

the market's going to collapse uh and on

top of that the debt ceiling the budget

deficit and the reconciliation

infrastructure packages lots of fear

or i should say lots of uncertainty

leading to a lot of fear

if

you look at those moments throughout the

last year and a half you can see the

best times to buy were when fear was

most extreme

now

you look at the market why is it

rallying

well there's no fear

what

what possible fear do we have now look

sure we have an inflation report coming

out next wednesday

but look at what we got today we got a

jobs report

that wasn't

overly hot

it wasn't bad

it was actually slightly better than

expected

and the inflation readings within it

came in slightly lower than expected

so

all of a sudden

it's like wait a minute

what what fear catalysts are left

uh and very very few uh and so in my

opinion until we have another big fear

catalyst not necessarily we're not

necessarily going to be in a type of

market where we're going to have the

best buying opportunities now don't get

me wrong we're still going to have

stocks that are red and green right

every single day you're going to have

that you're going to have stocks that

went up 15 one day and then they pull

back five percent but then when you zoom

out and you look at pricing it's things

things have pretty much all elevated a

chunk not everything there's still some

things that have lagged behind but

worth noting right i mean look at this

the dow jones industrial up 0.59 percent

the s p at 0.42 percent of the nasdaq

0.22 the russell up 1.27

uh the bond market down all of these

things our representation uh yields down

that is all of these are a

representation of fear going down but

the exception of gold being up because

usually people see that as a fear-based

medal but i think gold has kind of lost

itself as as the the sole fear hedge so

i prefer to look at the 10-year treasury

and the 10-year break-evens 10-year

break evens

but remember yields go down when more

people feel comfortable generally

institutions when more

uh institutions feel comfortable

purchasing

uh bonds

and if you think we're going to have a

highly inflationary period coming up

ahead you're not going to buy bonds that

are going to pay you 1.49 or 1.439

percent it doesn't make gosh we're down

to three nine holy smokes we're yeah

we're basically 1.44 right now wow

yields plummeted so wide yields plummet

because we're we're not we're not seeing

massive crazy fears of of potential

hyperinflation staying and so the bond

market's becoming more chill about the

idea of buying bonds again you get bond

buying pressure what happens

bond yields fall

same thing we saw this morning on the

10-year break even 10-year break even

we've come off some of the peaks that we

had at the end of october

so anyway

things to pay attention to but a lot of

fear missing in the market not a lot of

fear catalysts left

and i think that's why we're seeing a

pretty dramatically positive market

along with a bond market that

is uh is is leading yields to fall

uh

the way that works of course more people

buy prices go up yields go down so the

question for you is is it possible that

jerome powell and this nomination or

potential mystery around nomination will

be the next big fear catalyst for the

market taking our lofty valuations and

prices down a notch let me know what you

think in the comments down below

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