The Biggest Wealth Transfer In History Just Started

0:00Right now, today, Americans feel worse

0:02about the economy than they did in 2008,

0:04worse than they did locked in their

0:05houses during COVID, and worse than they

0:07did in the 1980s when mortgage rates hit

0:0918%. Consumer sentiment in this country

0:12just hit 44.8, which is the lowest

0:14reading in the 74-year history of the

0:17survey, going all the way back to 1952.

0:20There has never been a worse moment in

0:22modern history to be an American

0:23consumer than the one that you're living

0:25through right now. And yet, the stock

0:28market just hit a new all-time high.

0:30There is only one other moment in

0:32American history when this exact

0:33divergence has played out. That year was

0:361929, and you already know what came

0:38next. So, by the end of this video,

0:40you're going to understand exactly what

0:41is about to break first, what the

0:43Federal Reserve is going to be forced to

0:44do about it, and why the response to

0:46what is coming is going to be the single

0:48biggest wealth transfer of the next

0:50decade. I want you to picture two

0:52families right now in this country at

0:53the exact same moment. Family number

0:55one. Somewhere in America right now, a

0:57family is sitting at their kitchen table

0:59running math on a grocery bill that has

1:01gone up 30% in 5 years, a mortgage that

1:04they can't refinance because rates just

1:06spiked to 6.75%,

1:08a credit card balance growing at 22%

1:10interest, and a paycheck that hasn't

1:11kept up with any of it. Now, multiply

1:14that family by 130 million households,

1:17and you get a country where 57% of

1:19people now say that high prices are

1:21eroding their personal finances, where

1:2313% of credit card balances are 90 days

1:26delinquent, which is the highest since

1:272011, where auto loan delinquency has

1:30just hit an all-time high. So, the

1:32bottom half of America is maxing out

1:34credit cards just to get by at the

1:36fastest pace ever recorded. Now, family

1:39number two. Turn on CNBC, the Dow Jones

1:41is at a record high, the S&P 500 is also

1:44at a record high. The wealthiest

1:46Americans now hold 65% of their assets

1:49in stocks, which is the highest

1:50allocation since 2021. Two families, one

1:53country, happening right now. And what

1:56almost nobody on financial television is

1:58telling you is that this exact gap, this

2:00exact divergence between the real

2:02economy and the financial economy, is

2:04the most reliable signal in 100 years

2:07that something is about to break. So,

2:09let me show you the receipts. I want you

2:11to hold three numbers in your head for

2:12the next 15 minutes. 44.8, that is

2:15consumer sentiment. 4.8%, that is what

2:18consumers now expect inflation to be

2:20over the next year. And 6.75%,

2:22that's the average 30-year mortgage rate

2:24in this country as of today, up from

2:26below 6% in March. Nearly 1% higher in

2:29just 8 weeks. Each one of those numbers

2:32is its own crisis, but together, they

2:34describe an economy that is already in a

2:36recession that the government just

2:38hasn't officially called yet. So, let's

2:40start with that first number, consumer

2:42sentiment. 44.8 is not just a record

2:44low. The previous record low was 50, set

2:47in June 2022, at the peak of

2:50post-pandemic inflation, when inflation

2:52had hit 9.1%. And we just blew through

2:55that floor by more than 10%. Sentiment

2:58has fallen for three straight months,

3:00and it's down 21% in February. So, said

3:02differently, consumers are feeling worse

3:05now than they did when price inflation

3:07was above 9%. The part of that same

3:10survey where consumers are asked about

3:12their feeling of current economic

3:13conditions is more than 25% lower than

3:16the lowest reading of the 2008 financial

3:18crisis. Let me say that again. The way

3:21Americans feel about the economy they're

3:22living in right now is worse than how

3:25they felt while watching the banks

3:27collapse and get bailed out and their

3:29homes getting foreclosed on. So, how is

3:31this possible? How is the stock market

3:33at a record high while consumers are

3:35saying that the economy is worse than

3:37the Great Financial Crisis? The answer

3:39is the K-shaped economy, and it is

3:41breaking American records in both

3:43directions at the same time. So, when I

3:45say K-shaped economy, I want you to

3:47picture the letter K. The upper leg of

3:49the K It the growth in the economy for

3:51asset owners and the lower leg of the K

3:53represents the decline in economic

3:55activity and sentiment among those who

3:57are asset poor. For the upper leg of the

3:59K, five stocks have accounted for

4:01roughly 50% of the S&P 500's gains since

4:05April and the top 10 stocks now make up

4:07about 40% of the entire S&P 500. That's

4:10the highest concentration in 100 years.

4:13In 1929, it was only 26% and the dot-com

4:16bubble in 2000, it was 23% but every

4:19single time this occurred, the market

4:21entered a decade of sideways chop every

4:23single time without exception. You also

4:26have stock allocation among high net

4:27worth individuals hitting 65% of total

4:30assets, which is the highest level in

4:32the last 5 years. Cash holdings have now

4:34dropped to 10%, which is the lowest

4:35since 2018. So, the wealthy are all in

4:38but meanwhile, the bottom half of the

4:40country is collapsing. US household debt

4:43just hit a record 18.8 trillion dollars.

4:46Mortgage debt just hit an all-time high

4:48at 13.2 trillion dollars and auto loan

4:50debt hit an all-time at 1.7 trillion

4:53dollars. Over 13% of credit card

4:55balances are 90 days past due, which is

4:57the highest since the great financial

4:59crisis. So, low-income Americans, as I

5:01mentioned, are maxing out their credit

5:03cards at a record pace just to keep up.

5:06By the way, real quick before we go any

5:07further, if you're feeling the weight of

5:09these numbers, I want you to comment the

5:10word rigged below. One word, I want as

5:13many Americans as possible to see what

5:15is actually happening to the economy

5:17right now. So, comment the word rigged.

5:19Now, back to the math because here is

5:21where it stops being a vibe and starts

5:23being a genuine forecast. So, right now,

5:26we're seeing a huge spike in gas prices

5:28and if you recall back in 2022, we saw

5:31something similar but the big difference

5:33between the 2022 gas price spike and the

5:35one we're living through right now is

5:37the savings cushion that Americans have.

5:40In 2022, the personal savings rate was

5:42roughly double what it is today.

5:44Americans had stimulus money, they had

5:46pandemic savings, they had room to

5:48absorb the hit. But they don't have that

5:50anymore. The cushion is gone. Anything

5:52Americans do not have to spend money on,

5:54they're not spending money on. That is

5:56the definition of a recession, or at the

5:58very least the cusp of a recession,

6:00whether the government calls it one or

6:02not. Now, take a look at consumer-facing

6:04stocks. Nike is down 47% from its high.

6:07Home Depot is down 29%. McDonald's is

6:09down 20%. The actual consumer economy is

6:13very clearly, by all data, already in a

6:15bear market. The index isn't because

6:18five tech stocks are masking the damage.

6:20The S&P 500 hitting record highs, while

6:22almost every single consumer-facing

6:24stock crashes, is not a sign of

6:26strength. It's a sign that the average

6:28American is being lapped by a narrow

6:30group of asset owners, and the gap

6:32between them is now the widest it has

6:34ever been. US private sector financial

6:37assets relative to GDP just hit a record

6:396.7x,

6:41meaning the value of the financial

6:43assets in this country are almost seven

6:45times higher than our actual economic

6:47productivity. So, the size of the

6:49financial economy compared to the real

6:50economy has more than doubled since the

6:521970s. And that brings us to the part

6:54that 99% of you are missing. Every

6:58single time that inflation has spiked to

7:00the level that it is at right now, the

7:02stock market has lost an average of 30%

7:04over the next 1 to 24 months. In 2000,

7:07when inflation surged into the dot-com

7:09bubble peak, the S&P 500 lost 50%. In

7:122008, when oil hit $147 and consumers

7:15cracked, the S&P 500 lost 55%. There has

7:19never been an exception. And right now,

7:22year-ahead inflation expectations are

7:244.8%,

7:25and longer-run inflation expectations

7:27are 4%, which is insane. Both are above

7:30the levels that preceded the 2000 and

7:332008 crashes. So, comparing 2026 to 2008

7:36is no longer hypothetical, it is slowly

7:39becoming a reality. Real quick, before

7:41we get into what the Federal Reserve is

7:42about to be forced to do, if you've made

7:44it this far in the video and the data is

7:45starting to add up for you, hitting the

7:47join button down below to become a

7:48channel member helps me keep doing this

7:50work. The breakdowns get deeper, the

7:52research gets sharper, and the channel

7:53keeps growing. It genuinely helps a ton,

7:56and I appreciate every single one of you

7:57who supports it. So, now you have the

7:59full picture. Consumer sentiment is at a

8:0274-year low, inflation expectations are

8:05higher than they've been in years, and

8:06the concentration in the stock market is

8:08at a 100-year high. Consumers are in

8:11their worst financial position since

8:122008, and the Federal Reserve, with

8:15their brand new chair who just got sworn

8:16in, are walking into the worst trap any

8:19Fed chair has walked into in 50 years.

8:22Because here's what people don't

8:23understand about Kevin Warsh. Jerome

8:25Powell is gone. Kevin Warsh was

8:27confirmed 13 to 1, which is the

8:28narrowest Senate vote for Fed chair in

8:30history. Half of Washington doesn't

8:33trust him, and the other half expects

8:34him to do exactly what the president

8:36wants, which is cut rates aggressively.

8:38Take a look at this clip of Warsh

8:40getting sworn in earlier today.

8:41>> And that I will well and faithfully

8:43discharge

8:44>> the duties of the office on which I'm

8:47about to enter.

8:48>> The duties of the office upon which I'm

8:50about to enter.

8:51>> So help me God.

8:53>> So help me God.

8:55>> [applause]

8:56>> So, Kevin Warsh is inheriting an economy

8:59with oil above $100 a barrel, inflation

9:02reaccelerating, and a labor market that

9:04is cracking. If he cuts rates into this,

9:06inflation explodes. But if he doesn't

9:08cut, the president comes after him

9:10publicly, and the stock market reprices

9:12everything down to where consumer

9:14sentiment is already telling you that it

9:16should be. There is no good move. Ray

9:18Dalio went on CNBC this week and laid

9:20out the trap plainly. Take a listen.

9:22>> Almost anybody who's objective, they

9:24would say, "Certainly you would not cut

9:26interest rates now, okay? You will lose

9:29your credibility. The Federal Reserve

9:31would lose its credibility, particularly

9:33now, almost at any time." And so, I

9:36would say, "But beyond that, um it's not

9:39the right way to have monetary policy

9:41given all things considered.

9:42>> He should wait till when? With the

9:44>> Well, you should you have a dual

9:45mandate, right? You're in a

9:47stagflationary period. We're in a

9:50stagflationary period.

9:51>> we are?

9:51>> We are certainly in a stagflationary

9:53period. Now, how that transpires

9:56has a lot of

9:58parts to it, but we certainly are in a

10:01And that And if you look at monetary

10:03policies by other countries, you're not

10:05going to see them cutting Okay, so you

10:07Whatever your benchmarks are, you're not

10:09going to be inclined to cut the monetary

10:11policies not with today's

10:15information.

10:15>> At the Federal Reserve's last meeting in

10:17April, the majority of policymakers now

10:20think that a rate hike could be

10:21warranted if inflation persists. So,

10:24cuts are virtually off the table, but

10:26the bond market is calling the bluff. If

10:28you'll take a look at this chart here,

10:29mortgage rates just went from below 6%

10:32in March to well above 6 and 1/2% today.

10:35That is not a normal move. That is the

10:37bond market telling you that the Federal

10:39Reserve has lost control of inflation

10:41expectations, and it gets worse. Because

10:44the shock driving inflation right now is

10:45not a shock that the Fed can fix with

10:47rate hikes at all. Think back to COVID.

10:50That was a demand problem. The Fed could

10:52print money to solve it, but the current

10:54inflation shock is a supply problem. The

10:56Strait of Hormuz is still closed, and as

10:59a result, oil is above $100. The 1973

11:02oil embargo, which is the closest analog

11:04to what we're living through today, led

11:05to a 50% correction in the S&P 500. And

11:08the current oil disruption is bigger

11:10than 1973, significantly bigger. We're

11:13in the largest oil supply disruption in

11:15the history of the globalized world

11:16economy. So, what's the Federal Reserve

11:19actually going to do? You already know

11:21what they're going to do, because

11:22they've done it every single time. 2008

11:24financial crisis, money printing. 2019

11:26repo crisis, money printing. 2020 COVID

11:29lockdowns, money printing. And 2023

11:31regional bank failures they printed

11:33money. At every single inflection point

11:35of the last 17 years, the Federal

11:37Reserve has chosen the exact same path.

11:40Bail out the financial system, print

11:42money, inflate asset prices and quietly

11:44steal purchasing power from every

11:46American holding dollars. They're not

11:48going to crash the stock market like

11:50they did in 2008. Instead, they're going

11:52to crash the dollar so that the money in

11:54your retirement fund, your savings, the

11:56money in your paycheck, every single one

11:58of those dollars is worth less is over

12:00than it was when it started. That is the

12:02playbook. If we go into a recession, we

12:05will cut rates to 1% or lower. The bond

12:08market knows this. The Federal Reserve

12:09knows this. The only people who do not

12:11know this are the people who are

12:13ignoring the data. Now, you might be

12:15thinking, "Joe, if all of this is true,

12:17why would I want to own anything right

12:18now? Why would I not just sit around in

12:20cash and wait for the crash?" Well, this

12:22is why. Because the dollar you're

12:24sitting on is the very thing that's

12:25being destroyed to bail everyone else

12:27out. Think about it this way. Since

12:292020, the US dollar has lost roughly 30%

12:32of its purchasing power. Five years of

12:34compounding debasement. And every single

12:36time that the Federal Reserve steps in

12:38to rescue the financial system, the bill

12:40comes due in the form of more inflation,

12:42more debasement, and more wealth

12:44transfer from people holding cash to

12:46those holding assets. So, yes, a crash

12:49might be coming. The data is

12:50overwhelming suggesting that a recession

12:51is on the horizon. We have sentiment, we

12:53have stock concentration, inflation, the

12:55bond market, the consumer. Every single

12:57indicator is screaming the same thing.

13:00But, the crash is not the story. The

13:02response to that crash is the story. A

13:04couple of videos ago, I told you guys to

13:06start thinking in terms of second and

13:07third order effects. When the stock

13:09market drops 30%, 40%, 50% over the next

13:131 to 24 months, if it does occur, the

13:15Federal Reserve will do exactly what it

13:16has always done. It will cut rates to

13:18zero. It will print trillions of

13:20dollars. It's going to backstop the

13:21banks. It will set a floor under

13:23markets. And every single asset priced

13:25in dollars, real estate, stocks, gold,

13:27and especially Bitcoin will reprice

13:30violently higher in the years that

13:31follow. This is what is called the Fed

13:33put. It's the implicit guarantee that

13:35the Federal Reserve will not let the

13:37financial system collapse even if it has

13:39to torch the currency to prevent it. And

13:41once you understand that the Fed put

13:42exists, the entire game changes. A crash

13:45isn't a threat, a crash is the setup for

13:48the largest liquidity injection in human

13:50history. Which brings me to the only

13:52asset on the planet that the Federal

13:53Reserve cannot print, cannot dilute,

13:55cannot inflate, and cannot bail out.

13:58Bitcoin is currently trading at roughly

14:00$76,000 as you can see behind me. And in

14:03every single one of the last four major

14:05Federal Reserve interventions, Bitcoin

14:07has been the single best performing

14:08asset coming out the other side. After

14:10the 2020 COVID response, Bitcoin went

14:12from $5,000 to $69,000, a 13x. After the

14:162023 banking crisis, Bitcoin went from

14:18$16,000 to over $100,000, a 6x. The

14:22pattern is so clean, so consistent, and

14:24so repeatable, that the only question

14:27left is whether you position before the

14:28rescue or after it. The people who get

14:31shaken out this summer are the ones who

14:32think that the crash is the end of the

14:34story. But the people who win the next

14:36decade are the ones who understand that

14:37the crash is the beginning of the next

14:39leg up in hard assets. The Fed is going

14:42to print money. The dollar is going to

14:44lose more purchasing power, and the

14:45assets that cannot be printed are going

14:47to absorb every single dollar of that

14:50liquidity. Two families, one country,

14:52the kitchen table and CNBC. By the end

14:55of this decade, only one of those

14:56families is going to survive what's

14:57coming. And the asset I just walked you

14:59through is the only one with an

15:01absolutely fixed supply that no central

15:03bank on Earth can touch, no political

15:05party can dilute, and no Federal Reserve

15:07chair, including the one who just got

15:09sworn in, can debase. I told you at the

15:11start of the video that the response to

15:13what is coming is going to be the single

15:14biggest wealth transfer of the next

15:16decade. The bond market is already

15:18pricing it in, and the Federal Reserve

15:19is being trapped into it. And the only

15:22question left is whether your position

15:24before the rescue or after. If you want

15:26to understand how the bond market itself

15:28is now signaling the biggest money print

15:30since 2008, watch my breakdown from a

15:32few weeks ago on exactly that setup.

15:34I'll see you over there. Hit the join

15:36button down below to support the channel

15:37and become a member, and hit the bell to

15:38get notified whenever a new breakdown

15:40goes live, and book a one-on-one session

15:42with me at the link in the description.

15:44I'll see you in the next one.