The Money Printers are Back | HUGE Bailouts JUST Started.

September 30th is two days away and we

just did a deep dive on lemonade should

you buy or should you sell check out the

course member live streams linked below

okay this is just absolutely insane do

you remember back in March of 2020 when

the Federal Reserve said they would

print as much money as possible to make

sure that markets are backed up they

would bail out everything they would

bail out corporate bonds they'd bail out

public bonds City bonds municipal bonds

small businesses big businesses your

credit cards your car loan your home

loans they would bail out literally

everything to make sure we did not have

a financial crisis remember that in

March of 2020 right that was okay

because inflation then was like 1.5

percent and we probably still overdid it

with like three to four rounds of

stimulus after those unlimited bailouts

right we ended up having the shortest

recession ever I mean we actually had

the Larry Kudlow very shaped recovery

okay that was a little too trumpish

versus Larry but anyway the point he

worked for Trump so I guess that works

anyway what the bank of England just did

is going to have far-reaching

consequences for everyone in the world

and you got to hear about it because let

me put it this way inflation right now

is not one and a half percent it's

actually

9.9 in the United Kingdom that's down

from 10.1 percent but that's not a

really big job okay 10.1 to 9.9 that's

still hellishly bad

and now the bank of England guess what

they've done folks they've gone back

into the Titanic spoiler room and said

you know what screw the iceberg of

inflation crank the engines and let's

print some more money because we're

starting unlimited bailouts again I kid

you not the bank of England is turning

on the money printers and bringing back

unlimited Market bailouts and it's all

in reaction to the Federal Reserve in

the United States aggressively raising

interest rates

ah okay so let's break this down because

there are a lot of moving pieces so part

number one fed aggressively hikes this

creates sell-offs in bond markets around

the world

let's try to clarify that a little bit

and really simplify that okay

when you can put your money into a risk

free like there's zero risk okay I'm I'm

in the process I'm in the licensing

process to become a licensed financial

advisor okay past series 65 like

applying with the SEC and everything

the only thing you could call risk-free

is the government's Bond of the United

States treasuries and those are

generally what are called the risk-free

interest rate of return that you could

earn in the market well that's at like

four percent right now which is insane

that you could get four percent no risk

no risk at all four percent and

treasuries it's crazy just go to

treasurydirect.gov and you can go

shopping for them

anyway

when the Federal Reserve raises interest

rates fed funds rate grates on these

bonds tend to go up and that makes our

bonds in America more attractive than

bonds around the world especially when

you have the bank of England instead of

deciding to do a 75 basis point hike

only doing a 50 basis point hike that

increases the wedge between the bonds in

the United States which have a higher

yield and then the uh of British bonds

which maybe are going to approach

similar yields but don't have the

security of those U.S bonds so you may

as well dump your British bonds sell

them and drop the prices of those

driving up yields of those and move your

money over you know sell your British

pounds dropping the value of that

currency and move your money over to the

dollars

all of this was now

well I should say fuel was added to the

fire of all of this

because the new Chancellor of the

exchange which is kind of like the

treasury secretary for the United

Kingdom

the new Chancellor of the exchange says

that hey you know what we're a country

of entrepreneurs and for us to make sure

that we encourage job growth since we

have a lack of people applying for jobs

and we need to fill more jobs we have

too many job openings much like in the

United States we're going to take this

uh approach of let's lower taxes on the

rich and let's increase spending so

let's lower taxes on the rich in

businesses and increase spending which

selfishly I'm like damn that sounds that

sounds interesting I like lower taxes on

business and I like increased spending

you know I mean like who doesn't right

but the problem with that is when you

look at that Gap you actually create a

massive issue because now you have less

revenue and you create more risk that

your government's going to default so

you have to increase yields on bonds and

lower prices on bonds you even have the

international monetary fund the IMF and

Morgan Stanley coming out going and what

are you doing Bank of England well not

Bank of England what are you doing

government of of the United Kingdom why

would you do this this is just going to

crush your bonds it is going to lead to

a lack of trust in your government's

ability to have a balanced budget nobody

believes you can increase spending and

reduce revenues it's just not going to

work people aren't going to believe you

and so

as a result the pound plummeted as we've

talked about a few days ago but now the

bank of England has responded

because of fears of a massive massive

financial crisis

that's right the bank of England

announced today that they will print an

unlimited amount of money to buy bonds

and stop the pain of the bond market

because Pension funds and institutions

throughout the United Kingdom could go

bankrupt under the weight of margin

calls

look I understand this is like stressful

and this is a lot to digest so I'm going

to try to make this as simple as

possible here let's say you have a bond

that's worth a hundred dollars okay so

you have a hundred dollars of bonds and

you have loans worth sixty dollars

if your bond goes down in value it's a

seventy dollars think of it like a stock

okay it goes down in value to like

seventy dollars you're like oh gosh

we're getting close to that debt that we

have you might think oh well just cover

your debt right oh wait a lot of our

debt at our Pension funds is tied up in

private equity and real estate which is

extremely illiquid uh oh what if our

bonds keep falling we might get margin

called and we might have to dump our

bonds at the bottom of the market and

then we have a financial crisis

so the bank of England has stepped in

much like the Federal Reserve during

March of 2020. however there are massive

issues with this and no I'm not talking

about the issue that September 30th is

now two days away and it is your best

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will be expiring on Friday so

back to the bank of England this is

literally insane that they're turning

the unlimited money printer on while

inflation is near 10 the bank is going

as far as saying that we were hours away

from massive liquidity crises

and that they needed to prevent forced

selling

there are huge fears here that a big

crash could come and so that's why

they're doing this to stabilize the

market

in the short term this is having the

effect of actually driving down bond

yields not only in the United Kingdom

via the guilts but also in the United

States bond yields on for example wow

cheese uh bond yields on for example the

10-year treasury ran to over four

percent last night but today they've

actually Fallen to 3.8 roughly two

percent and that's because of the

unlimited bailouts happening in the

United Kingdom however that is likely to

be short-lived this decline in

treasuries or guilts in their yields is

likely to be short-lived because the

bank of England in order to fight

inflation is probably going to have to

come out with a serious rate hike of 75

or 100 basis points by their next

meeting of November 3rd there are now

concerns Rising that they might even do

an intermediate hike so in other words

on one hand they're going to print

unlimited amounts of money to bail out

the bond market and then on the other

hand they're gonna have to raise rates

to fight and inflation this is really

dangerous because it could unanchor

inflation expectations this is very bad

they literally just turned on unlimited

QE

that's not good now there's some other

things that happened this morning as

well I'm going to talk specifically in

another video about what's going on with

the Nordstrom Pipeline and expectations

that could happen here but the sabotage

of the Nordstrom pipeline has mostly

been expected but there are some

unintended consequences of the north

stream pipeline shutting down we're

going to talk about those including some

risks to of course inflation but not

because of the Nordstrom pipeline talk

about that in a different video instead

it's worth noting that Deutsche Bank is

calling for a severe economic downturn

that will continue for at least another

year volatility will not be going away

and we have reports not only from Apple

yesterday that they're cutting iPhone

production make sure you watch my apple

video yesterday we've got to get a

category 5 hurricane well it's two miles

away from category five basically

Category 5 hurricane making landfall

soon here in uh on the west coast of

Florida very rare by the way that these

storms make landfall on the west coast

of Florida I grew up in South Florida

I've been through a lot of hurricanes

I've never been through a four or five

the last four or five I can recall

historically was actually in 1992 with

Hurricane Andrew which made landfall

just about of just a few months before I

made landfall in Florida from Germany

uh anyway hurricane Kevin uh wholesale

inventories this morning Rose a lot more

than expected we had an expected rise of

0.4 percent in wholesale inventories and

a one percent rise in retail inventories

those were the expectations we actually

got 1.3 percent for wholesale 1.4 for

retail so a big beat on uh well I mean I

should say Miss because it's negative

but uh bad news on both of those numbers

much worse than expected we've got lift

freezing hiring DocuSign cutting its

Workforce by nine percent and Janet

Yellen might be getting the boot after

the elections Janet Yellen

this is insane it's uh but but anyway

there's there's a lot of insanity

happening this is a pretty painful time

I'm gonna head now over to the course

member live stream as I do every morning

appreciate you being here for these

videos if you want to join those course

member live streams we did some

incredible analysis some deep dive

analysis yesterday into lemonade

lemonade Insurance make sure you take a

look at my analysis on that to see is it

time to buy the dip on lemonade or is

this a stock to continue to run away

from keep in mind I sold lemonade around

65 it made that clear to everyone not

only in the courses but on the channel

uh and um anyway wish you the best out

here thank you so much I do not hold any

lemonade right now thank you so much and

we'll see in the next one goodbye