Full transcript
0:00The US bond market is the bedrock of the
0:02global financial system, but now the
0:03United States finds itself fighting its
0:05own system. Now for years we've been
0:07talking about this exact trap, right?
0:08We've been talking about the proverbial
0:09rock and the hard place where government
0:11has too much debt to tolerate these high
0:12rates, but forcing rates back down it
0:15comes with a cost somewhere else. Now
0:16we've always known that the math
0:17eventually forces a choice, but we don't
0:20know is when. Well, last week I think we
0:22got the first real signal. We saw the
0:2430-year Treasury yield push all the way
0:26up to 5.31%.
0:28That may not mean a lot to you, but we
0:30saw the Treasury rush in immediately and
0:32they doubled the size of its long-end
0:34bond buybacks. Then the head of the
0:35Treasury, Scott percent, went on TV and
0:37he said the part basically straight up.
0:39He said, "Part of this is signaling."
0:42Now, what is that signaling? Well, the
0:44buybacks they haven't even started yet,
0:46but all the smart money, all the
0:47insiders, they're already front-running
0:49the market moves. Now, they're doing
0:50this because they're reacting to what
0:52Washington just told them, basically
0:54what they're willing to do next. Now
0:56there's two ways to read this news. The
0:57first is that is this the first move in
0:59a much bigger policy shift? And if so,
1:02then of course waiting around for more
1:03confirmation could mean missing a large
1:06part of the move. But is this a
1:08temporary market adjustment? Because
1:10then chasing that move could now be
1:12exactly the wrong thing to do. So, in
1:14this video we're going to break it down.
1:16I'm going to show you was this
1:17Washington signal or blip? What are the
1:19markets showing us about what comes
1:21next? What I think percent is really
1:22trying to accomplish with 40 trillion of
1:25debt and three signals that I'm watching
1:27to tell me whether this is the beginning
1:29of something much bigger or if it's just
1:31a blip. So, let's go.
1:34All right, we're going to jump right in
1:34because we got a lot of charts. I'm back
1:36to the whiteboard here. It's been a
1:37while since I've been on the whiteboard.
1:38Hopefully you love this. I got a bunch
1:39of charts. I'm going to show you a lot
1:40of data because
1:42they blinked. To me this is a big sign,
1:44but I'm going to show you which way you
1:46should follow this. Okay, so they
1:47blinked. What I mean Washington blinked.
1:49We find the pi- the the place of pain,
1:52of maximum pain where the the the the
1:55Treasury can no longer sit on the
1:56sidelines. They can't take any more
1:58pain, and they move in. That's the
1:59blinking line. And basically, the US is
2:01now fighting fighting itself fighting
2:03its own bond market. So, the US
2:06government bonds are the bedrock of the
2:08global financial system, as we talked
2:09about, and they're fighting the bond
2:11market. I'm going to set all this up for
2:12you so you can understand what's at
2:13stake right here. And just so you can
2:15kind of see what's going on, we're
2:16talking about the long bond, which is
2:17the 30-year bond. Now, a couple of
2:19things I want you to see here. So, this
2:20is a 2020 right here, uh where we had to
2:23drop rates all the way down, and you can
2:25see this trend that we've been on. As
2:26you can see, it's a pretty strong trend.
2:28We're talking about this move right
2:29here, but we're at the highest rate that
2:31we've been on for a long period of time.
2:33But, of course, as uh we always say in
2:35the market, I say it all the time, zoom
2:36out, and let's take a look at a bigger
2:38picture. This is the trend going back
2:40into the '80s, and I drew these green
2:42lines here so you can see the channel.
2:43And so, we've been in this descending
2:45channel this whole time, and uh for any
2:47of you chartists out there, technical
2:48analysts, you can see that, well, it's
2:50either going to break down or break up,
2:51and of course, it broke up here. And
2:53now, the trend
2:55this it's a four-decade trend. The
2:57four-decade trend is reversing, and
2:59we're going back up. This is what the US
3:03government is fighting. They're fighting
3:05this trend of bonds continuing to go
3:07higher and higher and higher. Now, a
3:10couple things happened, and again, we
3:11need to take these things seriously
3:13because
3:14it's the signal. All right, what are we
3:15talking about? The US Department of the
3:18Treasury put out a press press release
3:20talking here announces increased sizes
3:22of nominal long end long end, so the
3:2430-year long end liquidity support
3:26buybacks beginning September 9th. So,
3:27first of all, starting September 9th, I
3:29don't know when you're watching this
3:30video, but that hasn't started yet.
3:32September 9th is in the future, so
3:33nothing's actually happened. They just
3:35announced it.
3:36Come back to that. This was August 19th.
3:38Okay, increasing by at least double. Not
3:41just increasing a little bit. They're
3:43They're already planning to not resume
3:44it, not increase it, increase it by at
3:46least double. Double the size of
3:48liquidity support buyback operations
3:50and for longer dated Treasuries. Okay,
3:53Um
3:54at least 4 billion per operation, per
3:58intervention, not 4 billion total, just
4:00per operation. And this is effectively
4:01again September 9th. Okay, so that was
4:03the the announcement, but here we see
4:05Scott percent, what a time that we're
4:07alive in. It's pretty amazing where you
4:08have like the president of the United
4:09States, head of the US Treasury like
4:11talking directly to the people, not just
4:13on the news, but directly on Twitter.
4:14Let's hear what he has to say in this
4:16clip right here.
4:17>> We have a big toolkit, so we'll see. And
4:21part of it is signaling here and to show
4:24that we we believe that the yields don't
4:26reflect the underlying fundamentals.
4:28>> All right, so you heard it out of his
4:30mouth. We're sending a signal. Well,
4:33what signal are they sending? What are
4:35they trying to tell us?
4:36Well, I'm hearing it. Are you? Okay, so
4:38the signal is basically that they are
4:42ready to jump in. They've they've
4:44reached max pain. That 5.31 level that
4:47was
4:48that was their pain point. Okay, so now
4:50we know, now the market knows where the
4:53stop is.
4:54That is their signal. We're coming in,
4:56not just coming in, we're coming in hot.
4:57We're doubling it. Okay, now how high
4:59could this go? Well, we can see here
5:01percent percent could tap nearly 1
5:03trillion in the TGA Treasury General
5:06Account to fund bond buybacks, sources
5:08say. How? To help fund purchases of
5:10government bonds, percent has built up
5:13the TGA Treasury General Account to
5:15about 1 trillion dollars. The Treasury
5:16surprised markets last week by doubling
5:19the size. So the Treasury surprised the
5:20markets. Markets weren't ready for this.
5:22The market didn't expect them to come in
5:23and do this, but they did. They came in
5:25super hot. And as I said, percent
5:28himself said it, this is the signal. The
5:31TGA Treasury General Account is the ammo
5:33of how they're going to protect this.
5:34Okay, so again, let's take a look at
5:36this cheap TGA just you can see the
5:38Treasury General Account. Think of this
5:39like the checking account for the
5:40Treasury, right? This is how much money
5:41they have.
5:42And we did have a high back here after
5:442020, of course, after you know,
5:45whatever 10, 20 trillion dollars of
5:47stimulus was printed, it's been spent
5:49down through the Biden Bideniers and now
5:51it's refilled and ready to go back to,
5:54yeah, buying government debt. All right,
5:56let's take a look at this. We can see
5:58that the markets were listening to the
6:00signal. Question is, were you?
6:02He said it, right? Governor said, "This
6:04is the signal." Hasn't happened yet, but
6:05they were paying attention. Now, the key
6:07piece here is that the money hasn't even
6:08moved.
6:10This doesn't even go into effect until
6:11September 9th.
6:12Doesn't matter, the markets are already
6:15front running this, right? So, they see
6:16what's happening, they go, "Oh, he said
6:18it's a signal. He showed us where the
6:19line is. Now we see what's going on. We
6:22see the one showing here. Okay, game on.
6:25We're not going to wait for them to
6:26move." That's what retail does. Not not
6:28you and I, right? We we we front run it.
6:30Okay, so we can see a couple charts
6:32here. Let me show you these.
6:33When I say the markets are front
6:35running, what am I talking about it? So,
6:36here we have Bitcoin, my favorite asset,
6:38of course, has been dead.
6:40It's dead. It's been dead, you know, I
6:42don't know, it's the 190th time it's
6:44been dead. Uh all the analysts were
6:46talking it's going to go to 20, 30,000.
6:47Some say 10,000. Here it is, dead, and
6:49then boom, it went up 20,000 from in the
6:5260,000 range. Today it's over 80,000
6:54dollars. Bitcoin, hard, scarce asset,
6:57just keep that in mind. Here we have
6:59gold. Gold futures, they've been sitting
7:01pretty flat. Boom, gold jumped up. The
7:04US dollar index, because if they're
7:06going to print more money to buy the
7:08debt back, then the dollar is going to
7:10lose its value. So, you can see how much
7:12that dropped. And then 30-year Treasury
7:14index stayed somewhat flat. They didn't
7:17really move it whole lot. Okay, but the
7:19assets moved. Okay, now, not all assets.
7:22I'm going to come back to that in a
7:23second. But take a look at this. What we
7:25can see here is this is ETFs, all right?
7:28So, the ETFs, QQQ, SPY, so these are
7:31stock indexes, obviously, gold, etc. And
7:34what we can see right here is that gold
7:36and Bitcoin, both being hard, scarce
7:39assets, being part of the what we call
7:41now the debasement trade have now both
7:44entered the top 10. So, we see gold here
7:47in number three and see we see Bitcoin
7:49here in number seven. So, those two hard
7:52scarce assets, the debasement trade
7:54assets, have both moved into the top 10.
7:57So, you can see the market saying that.
7:58And then we can look at the flows. This
8:00one's pretty interesting. So, the gold
8:02and Bitcoin ETFs have a combined $7
8:05inflows in just the past week. 7 billion
8:08have moved into those debasement trades.
8:10It's a record for a 5-day period as the
8:13debasement trade steals spotlight from
8:16AI. So, we've been talking quite a bit
8:18about eventually, you know, AI sucked
8:20all the oxygen out of the room. Gold and
8:22Bitcoin have sort of languished. All the
8:23money went to AI, the IPOs,
8:25semiconductors, all of that. But now we
8:27and we've talked about this capital
8:28rotation would come back into the
8:30debasement trade and here it is. Uh AI
8:32is going down in in a lot of ways.
8:35AI is not going down. I don't mean that.
8:37But we're starting to see the capital
8:38rotate specifically out of
8:39semiconductors going back into these
8:41debasement trade assets. Okay, and we
8:43can see that specifically if we look at
8:45this.
8:47So, this is during the same time period
8:48where I show you gold and Bitcoin.
8:50Bitcoin went from 60,000 to 80,000. Here
8:52we have the SPY and the NASDAQ both
8:56trending down.
8:57Now, there was a
8:59there was no life in the SPY in the S&P
9:01500. Uh the NASDAQ got a little bit of a
9:03bump right here from that. Okay. So, now
9:06we can see the markets are reacting to
9:09this, but let's dig a little bit deeper
9:10under the hood to find out is this a
9:12blip
9:13or is this the beginning as Raoul Pal
9:15said, the signal that the game has
9:17started? The game has shifted. Okay. So,
9:19there's a $40 problem or 40 trillion
9:23problems if you want to call it that.
9:24All right. Now, why is the US government
9:27fighting rates and why is 5.31 the red
9:30line that can't be crossed? Why fighting
9:32rates? Well, again, Scott Pelley said
9:35on TV tells us this is pretty
9:36interesting in this piece right here. I
9:38kind of got a kick out of it. Scott
9:40Bessent said, "There's nothing magic
9:43about the 40 trillion number. Nothing
9:44magic about it. It's just 40 trillion.
9:46Like, whatever, right? Nothing magic
9:48about it." He said, quote, "We can grow
9:51our way out of that."
9:54Okay, how do we do that? And what's the
9:56implications for us, for our business,
9:58for our jobs, and for our investments?
10:01What does that mean for us, okay?
10:03You can watch the news, you can read the
10:05news headlines on your own. I'm here to
10:06try and tell you what it means and what
10:07we're going to do about it. Okay, so I
10:09put this up on X. If you're not
10:11following me on X, you certainly should.
10:13If you want the daily play-by-plays,
10:14I'll link to my X account down below in
10:16the description. So, for Bessent to be
10:18right and for us to grow our way out of
10:20this,
10:21for the last 5 years, so we have to look
10:23at, well, to grow out of debt, how fast
10:25are we growing and how fast is the debt
10:26growing? So, for the last 5 years, debt
10:28is growing about 7% a year.
10:31Nominal GDP is growing about 5 to 5 and
10:341/2. So, we're about 2 2 and 1/2% under.
10:37So, that means the the debt is growing
10:39faster than GDP. Well, how do we grow
10:41our our way out of that? It seems like
10:43we're just digging ourselves deeper
10:44holes. Remember the 2021 spike, the real
10:46growth was 2 to 3% and we have to remove
10:48that out. That's the outlier. To stop
10:50the ratio from rising,
10:52with about a 2 and 1/2% primary deficit,
10:55nominal growth needs now 6%. Now, uh if
10:58you haven't studied what growth rates
11:00are, 6% is insanely hot. That's what
11:02China achieved, you know, as
11:04as it had its great uh growth spurt for
11:06about a decade. Uh so, to actually
11:08shrink it, we need growth to get
11:10actually to about 7 to 8%.
11:13Hm, how do we get to 7 or 8%?
11:16Couple ideas. So, we need to increase it
11:18to 1.5 to 3 points faster than the
11:20trend. How? Well, they got to let the
11:23economy run hot. So, that means uh no
11:25recession, that means all the economy
11:27has to run hot, booming, etc. And the
11:30debasement trade has to happen, okay?
11:33There's an actual playbook for this.
11:35There's a precedent for this, and I'm
11:36going to show you that. But, let me show
11:38you the problem that we're up against
11:40before we do that because as you can
11:41see, the problem is that higher
11:43effective interest costs raise the
11:46growth needed to stabilize the debt. So,
11:49back to the $40 trillion problem.
11:52Why is the Treasury, why is the
11:53government so worried about bond prices?
11:55Because higher effective interest costs,
11:59when rates go up, mean that we need more
12:01growth. So, it gets harder and harder
12:02and harder. So, if we have 4.5% cost of
12:05debt, we need 6.8% growth. Wow, how do
12:08we get that? But, if we have 5% cost of
12:11debt, it goes from 6.8 to 7.3%
12:15growth. So, all of a sudden it gets
12:16harder and harder and harder. So, those
12:18have to come down.
12:20Now, why does that have to come down?
12:21Well, take a look at this. We can see
12:23this is the interest, the amount of
12:24interest that's being paid on the debt
12:26going back to 1950.
12:29I mean, it's basically flatlined here
12:30until about 1980. Um then it obviously
12:33started taking off, but right here
12:34around 2020, look at that.
12:37It's like a parabolic. It's like a
12:38hockey stick as we might call that. The
12:40interest on the debt is now over $1.2
12:42trillion per year. And to put that into
12:45perspective, just to kind of understand
12:47how we can get out of this, if we take a
12:48look at this, when you look at the
12:50government expenditures, you can see
12:52it's the third highest government
12:55expenditure. So, social security is
12:57above it, and Medicare is above it. We
12:59have health, national defense is all the
13:01way down here. Not all the way down
13:02here, but how do we cut
13:05Medicare? How do we cut social security?
13:08Like, that's money that's owed. We We
13:10don't cut that.
13:11Uh national defense, we're probably not
13:13cutting that either. And so, you can
13:15start to see the problem that we're in.
13:17The one that could be adjusted is the
13:18net interest, the $1.2 trillion. We can
13:22get that down.
13:24There's a couple ways we can get get
13:25down. Obviously, number one, lowering
13:27interest rates, but let me show you the
13:28playbook from 1945 that's getting dusted
13:32off and about ready to go back into
13:33place. Now, like I said,
13:35it's interesting to see these stocks
13:36going down while the debasement trade's
13:38going back up, the capital rotation from
13:40AI, and the point here is that just
13:43because rates come down and the economy
13:45runs hot and the Fed intervenes in the
13:46market doesn't mean all assets go up at
13:48the same time, doesn't mean they all go
13:50up at all, and it doesn't mean it's
13:51going to be a smooth ride. If you'd like
13:53to see the playbook of how we're making
13:55sure that we maximize what's happening,
13:57I'm going to do a full live workshop.
13:59I'm going to do it all live. I'm going
14:01to do it next week. I'll put a QR code
14:02on the screen, a link down below. But if
14:03you want to understand how to build a
14:04portfolio that's set up for what's
14:07coming and without having to chase hot
14:08stock tips and things like that, but
14:10build a portfolio that will grow faster
14:13than what the economy's going to come
14:14in, um come hang out for the live
14:15workshop. It's going to be amazing.
14:16Again, it's all free. There's a link
14:17down below. But let's keep going with
14:19this. Okay, so let's just go through the
14:20math. Like what does it actually take to
14:23grow out a $40 trillion dollars? Well,
14:25the first thing you have to understand
14:26is we don't.
14:28We don't. We don't get out of the $40
14:30trillion dollars of debt. We don't pay
14:31off the debt. That doesn't get paid
14:33down. A lot of people are like, "When
14:34are we going to pay off the debt?" We're
14:35not. Um what we are going to do is a
14:37couple [snorts] different things. And
14:39so, what we want to understand is debt
14:43to GDP.
14:45It's a ratio, okay? So, right now the
14:48debt to GDP is about 120%.
14:50It's way too high. We need that to be
14:5280%, 70%, 60%, 40%, something like that.
14:56Now, there's two ways to get this 120%
14:59ratio down. Well, one, we can bring the
15:02debt down, so we can go from 40 to 30 to
15:0420, whatever, or we can bring the GDP
15:07up. Now, of course, there's some
15:09combination there, but knowing that the
15:11GD or the debt is never going to be
15:12paid, then we have to get the GDP up.
15:15How do we do that? Well, there's a
15:16couple ways that we can do that. Number
15:18one, Treasury moves can become shorter.
15:21What do I mean by that? So, the
15:23Treasuries, the bonds have a curve. So,
15:25we have everything from short-dated
15:27bills up to bonds, Treasury bills to
15:29Treasury bonds up to 30 years, and
15:31that's a curve. Now, the way it's
15:32supposed to work is that the longer you
15:33loan your money out, the more money that
15:35money that you want to make. And what
15:36the government has been doing is been
15:37shifting most of the debt down into the
15:39shorter-term debt. And they can do more
15:42of that. So, for example, this chart
15:43right here from my friend Nick Bodia
15:45over at the Bitcoin Layer, follow them,
15:47they're amazing. Um right here, the blue
15:49is the bills. This is the short-term
15:52the short-dated bills. We have about
15:546.69 trillion there, and the long-dated
15:58uh Treasury public debt is 31 trillion
16:01right here. Now, what this red line
16:02shows is that means about 21%
16:06of the debt is short-term. So, what they
16:08can do is continue to more and more and
16:10more to the shorter term. Now,
16:14one of the ways that affects things is
16:16by using stablecoins. I've talked a lot
16:18about stablecoins and how they're really
16:20going to be instrumental in helping the
16:22US government get this debt problem
16:23under control. One of the things that's
16:25been holding up the stablecoin bill,
16:26known as the Clarity Act, is the banks
16:28do not want stablecoins to pay interest.
16:32So, if they can take a lot of this
16:33government debt, put it into the
16:34short-term, the short-term the the
16:36stablecoins have to buy the Treasury,
16:38the debt, but the but the Treasury debt
16:40doesn't pay yield.
16:42So, now I have all these stablecoins
16:43that can come in and buy that short end
16:44and buy no yield, and they can bring the
16:46interest expense down. That's one way.
16:48One of probably many ways we're going to
16:50see this play out. Also, as I already
16:51showed you this chart, they have this
16:53Treasury General Account has about a
16:55trillion dollars in it, and they can
16:56start buying the debt down that way. In
16:59addition to that, they use banks to buy
17:01these Treasuries. So,
17:04this is US banks holding trillions in
17:06Treasury, and we can see how much this
17:08is going up, and of course, that can
17:09just continue going up. The banks will
17:11continue to buy that. And then, when it
17:13all else fails, of course, we have the
17:16good old Federal Reserve, and they can
17:17buy the debt. Of course when that
17:19happens, we call that quantitative
17:21easing. Today we have all types of
17:22quantitative easing that's not
17:23technically quantitative easing but that
17:25can come back and you can look again
17:26this is from Bitcoin layer. You can look
17:28at the room that we have here. So the
17:30red is the Fed owned treasuries as a
17:33percent of treasury debt and the blue
17:35here is just the Federal Reserve Bank
17:38and US Treasury securities that they
17:39hold. But you can see how much they've
17:41been able to wind this down over the
17:42last couple years and so they have all
17:44this room right here to add back in.
17:47Okay, so there's lots of ways they can
17:49start to bring that down and all of that
17:51will change the ratio of the debt to GDP
17:53because what [clears throat] it does is
17:54it pushes inflation hot. This is the key
17:56piece.
17:57Inflation runs hot, the economy runs
17:59hot, growth runs hot. Yes, wages go up,
18:02everything goes up, your assets go up
18:05and so GDP goes up. Remember, not debt
18:09coming down, GDP coming up. However,
18:13through inflation.
18:15So the problem is while it looks like on
18:17paper everything's going up, the problem
18:19is everything's going up. So you're not
18:21necessarily getting richer, the quality
18:23of your life is not going up, you're not
18:24buying any more things. And this is one
18:26of the reasons why I love history so
18:28much because history is it's cause and
18:30effect. If you touch the stove and you
18:33get burned and you touch the stove again
18:34when it's hot, you're probably going to
18:35get burned again and history is about
18:37cause and effect. And so let's go back
18:39to 1945,
18:41the last time the United States found
18:42itself in this situation and there's a
18:44couple of very interesting parallels.
18:46Number one, this was coming after right
18:48after World War I and World War II,
18:49right? Obviously. So there was that
18:51going on. There was it was during the
18:52industrialization of the United States
18:55of building out all the factories and
18:56things like that. And so the United
18:58States sort of finds itself in that.
18:59We've been fighting now we're fighting
19:01every war, war on poverty and war on
19:03terrorism and the COVID pandemic war and
19:05all those other wars. Uh but more
19:07specifically we're in this
19:08re-industrialization period with the
19:10build out of energy infrastructure, with
19:12the build out of AI infrastructure, data
19:13centers, etc. And so we have this
19:15massive need for this
19:17reindustrialization at the same time as
19:18we have high debt levels. So let's take
19:20a look at this chart. This is a chart
19:22from Lynn Alden. She's amazing. I've
19:24used this before. You might have seen
19:25it. But this goes back here to the World
19:27War I World War II period from 1932 to
19:301944.
19:32And what we can see here, these gray
19:33lines, is the deficit as a percent of
19:37GDP. And we can see the deficit GDP
19:40spiked really high coming out of the
19:42wars. And this monetary base, this blue,
19:45is the monetary base as a percentage of
19:47GDP. So basically how much money they've
19:49been printing. And what you can see is
19:50they increased the money supply, printed
19:54way more money
19:55in this period.
19:57And in order to do that, this orange
20:00line down here is the short-term
20:01interest rate. So they pushed the
20:03interest rates down to basically zero.
20:05And they printed a crazy amount of
20:07money. They could do that because
20:09interest rates went down to zero.
20:10So when they push the rates down, they
20:12can print more money without blowing
20:13themselves out on interest cost.
20:16All right. Now you can see things sort
20:17of normalized here through the the '60s,
20:20the '70s, the '80s, the '90s, the 2000s.
20:23And we saw short-term interest rates
20:25sort of settle back in. The monetary
20:27base as a percent of GDP came down
20:30because GDP went up. And that sort of
20:32normalized. But here we are again.
20:35And we find ourselves in a very similar
20:37situation where we need to lower rates.
20:40And we need to increase the money supply
20:42at the same time to get that debt to GDP
20:44back down. It happened before and it
20:46worked and it's going to happen again.
20:48They're doing it right now. We can see
20:50this here. During this time period, it's
20:52important to understand that during that
20:53the debt to GDP fell. So from 120% right
20:57here, it fell all the way down to 60%
21:01not because the debt was paid, but
21:03because the growth of the economy
21:05happened. Nominal GDP went up. So, the
21:08GDP went up, the debt to GDP went down,
21:11but the debt didn't disappear.
21:15The debt actually went up. It was the
21:17ratio that changed. That's the whole
21:19game, and it's important to understand
21:20that if you want to understand how to
21:21make money in this new phase. Okay, now
21:24uh
21:25if you really want to nerd out on this,
21:26something I've talked about quite often,
21:28on the IMF website, International
21:30Monetary Fund website, they have this,
21:32it's called the liquidation of
21:34government debt. It was published in
21:362015, and this lays it out. It's called
21:38financial repression. Bond yields low,
21:41inflation run hot, and they liquidate
21:43the bond holders, which is why you don't
21:45want to be holding bonds. Do not hold
21:47the bonds. If you have a 60/40
21:48portfolio, it's probably not going to
21:50work out really well for you because
21:52things are changing. This is why I talk
21:54about the reverse crash. The reverse
21:57crash is different than what most people
21:58expect. Most people expecting asset
22:01prices to crash, home price to come
22:02down, stock prices come down, my
22:04retirement account comes down, and then
22:06I get a chance to buy again. So, I'm
22:07just going to sit in cash, and I'll
22:08wait. The problem is that what we're
22:10going into is a reverse crash, and it's
22:12a reverse crash because instead of asset
22:13prices going coming down, home prices
22:15coming down, food prices, gasoline
22:17prices, travel prices coming down, they
22:19just keep going up. While that looks
22:21good on paper, the problem is that your
22:22wages don't keep up, and the result, the
22:26crash, ends up being the same, which is
22:28I can no longer afford the quality of
22:30life I used to. I can't take as many
22:31vacations, I can't go out to eat as
22:33much, I can't drive my car as much, not
22:35because things came down, because they
22:36went up faster than I could afford, and
22:38that's the reverse market crash, and
22:40that's what happens during these periods
22:42of financial repression like we saw
22:43after 1945, and what percent just said
22:47is the signal to the market, we're
22:49reentering that again right now. Again,
22:52the proverbial rock in the hard place
22:53has been that we've been talking about
22:54it for years, but he sent the signal to
22:56the market. The signal was sent.
22:59The threshold has been defined. He drew
23:02the line in the sand. He said, "Whoop,
23:04if 30-year goes over that, we're
23:06stepping in hot and heavy." And what the
23:08markets love, traders love, is to know
23:10where that line is, and now it's been
23:12said. So, the basement trade continues,
23:15it confirms it. I showed you which
23:16assets are going up and which assets are
23:18not going up, and most assets are not
23:21going to keep up in this environment.
23:24So, most of what you've done in
23:25investing is not set up for this. Go
23:27back to 1945 and look at what what
23:29worked back then. Okay? And so, again,
23:31if you want to understand this a little
23:33bit deeper, I'm having a full live
23:34workshop here. I'll put a link to it
23:35down below if you want to come join me.
23:36We're going to talk about how to build
23:38your portfolio for this market of cycle
23:41that we're going into. It's not about
23:42trading, it's not about finding hot
23:44option strategies or cryptocurrency pump
23:46and dumps or whatever. It's not about
23:48the asset at all. It's about the
23:49structure in which we put our assets and
23:53how we use our income, our taxes, and
23:56our wealth strategy together to achieve
23:58the goals that we want to, no matter
24:00what the market cycle is doing. If you
24:02want to come join me, again, it's free.
24:03We're going to hang out. I'll I'll go
24:05through all your questions live. It's
24:06amazing. It's a fun time. I'll put a
24:07link down below. But, this is the
24:09signal. Bus sent said it himself. Those
24:11were the very words he used, and either
24:13way, you got to be prepared. Hopefully,
24:15that makes sense. All right, that's what
24:16I got. To your success.
24:18I'm out.