Cryptocurrency 2021 2022 and Beyond
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Cryptocurrency Predictions For 2022 And Beyond!! (Shocking Intel Revealed)
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Oct 4, 2021
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Cryptocurrency Predictions 2022 and Beyond
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FULL VIDEO TRANSCRIPT
00:00
shocking predictions for cryptocurrency
00:03
going into 2022
00:06
and beyond i’m gonna explain this to you
00:09
in three
00:10
simple fast steps step number one
00:14
people are getting
00:17
rich
00:19
and we’re not talking about rich some of
00:21
these people are getting to be
00:23
millionaires even billionaires in
00:27
cryptocurrency but let’s think through
00:30
the numbers the devils and the details
00:33
as they always say
00:35
14
00:36
of americans now own cryptocurrency
00:39
their combined net worth has gone up
00:43
almost 2
00:45
trillion
00:46
dollars since the beginning of 2022.
00:50
i’ve got a chart right here going all
00:52
the way back to march 2020 the beginning
00:54
of the cervasis sickness all the way to
00:56
today september 2021.
01:00
on the left we started zero
01:02
trillion dollars if we go up to two
01:05
trillion
01:06
the market cap for cryptocurrency that’s
01:10
what this chart is illustrating starts
01:13
off at
01:15
144 billion dollars this was not
01:19
10 years ago
01:21
this was basically one year ago or a
01:23
little over a year ago at the beginning
01:26
of the cerveza sickness
01:28
it goes pretty straight for a
01:31
cryptocurrency chart and then before
01:33
january it goes completely parabolic and
01:37
peaks out over
01:39
two trillion dollars and then it comes
01:41
crashing down but it’s rebounded to a
01:44
point where it’s still right around two
01:47
trillion dollars so if we take the two
01:50
trillion dollars we subtract where it
01:52
came from at 144 that’s why i’m saying
01:55
the net worth or the increase in net
01:59
worth for these 14
02:02
of individuals who own cryptocurrency
02:05
has gone up by almost
02:07
2 trillion
02:09
a staggering amount but to understand
02:12
what may happen to the price of
02:15
cryptocurrency and cryptocurrencies
02:18
themselves moving into the future
02:21
we have to understand
02:23
who
02:24
owns crypto today
02:26
the demographics and why those
02:29
individuals own so much crypto why have
02:32
they moved over into that space what has
02:35
prompted them to make those decisions
02:38
first of all the demographics the main
02:40
group that owns cryptocurrencies male
02:43
ages 25 to 34.
02:46
they’re making on average about 25 to 35
02:49
000
02:51
editor going throughout the chart we can
02:52
see this is 25 to 35 000 pounds this
02:55
study was done in the uk so in dollar
02:58
terms might be a little bit more but you
03:00
get the general idea we know one thing
03:03
is for sure in the trailing 12 months
03:06
they absolutely
03:08
crushed it
03:10
they knocked the cover off the ball a
03:13
lot of these crypto currencies are up 2
03:15
3 4 5 10 100 times
03:19
who knows but at the end of the day
03:20
demographics are just numbers and
03:23
statistics i think it’s far better to
03:26
get your mind around who actually owns
03:29
cryptocurrency through a visual
03:32
representation so i summoned
03:35
all of my artistic ability and created
03:38
this guy right here his name is crypto
03:42
caleb
03:44
let me describe
03:45
all of crypto caleb’s characteristics
03:50
first of all of course he’s kind of a
03:53
hipster guy he’s got his really clean
03:55
haircut with the part right on the side
03:58
and of course he has a beard because
04:00
caleb has so little testosterone that
04:03
he’s got to over compensate for it by
04:06
having that facial hair and he has
04:09
tattoos showing what a badass he is he’s
04:12
got his el salvador
04:14
shirt on and of course he’s holding a
04:16
sign that says follow me on insta while
04:20
he’s holding his soy
04:22
cafe
04:23
latte that he just got at starbucks he
04:25
has a dog because every male in that age
04:28
group has to have a dog and take it with
04:31
them everywhere regardless of whether
04:33
they’re going to a restaurant
04:35
in an airplane or how wildly
04:38
inappropriate it may be he’s wearing
04:40
these pants that
04:42
kind of aren’t pants they’re more like a
04:45
modern day version of knickers i have no
04:47
idea why men actually choose to wear
04:51
these pants it would be sort of like a a
04:54
prison sentence for me if i did
04:56
something wrong it would be my
04:57
punishment and all of them have these
04:59
badass off-road vans or always mercedes
05:04
i think it’s some sort of transit van
05:06
they’ve got the ladder on the back and
05:08
these racks where you can put all your
05:10
luggage it’s a proper bear grylls
05:13
type of off-road adventure vehicle they
05:17
like to think that they can bug out at
05:21
any time but the only thing they’re
05:22
really doing is kind of bugging out of
05:25
their parents basement so now we know
05:27
what the average crypto
05:29
investor looks like let’s dive into the
05:33
psychology what has prompted them what
05:35
has driven them to make these decisions
05:39
well it starts off like it usually does
05:42
with the fed in your drunk
05:44
insolvent uncle sam they have been
05:47
sending crypto caleb stemi checks for
05:50
the last year his income has skyrocketed
05:54
from all the
05:56
free money that he is getting from the
05:58
government but more importantly the fed
06:02
has kept real rates
06:05
negative for a long time now i know that
06:09
if you buy into the cpi there’s been
06:10
several times throughout the past few
06:12
decades where real interest rates have
06:15
been positive but if you actually look
06:18
at how much prices have gone up i think
06:22
everyone would come to the same
06:23
conclusion
06:24
that real rates of interest are usually
06:28
negative that means that you’re losing
06:31
purchasing power by holding cash or by
06:35
holding a bond that is only paying you
06:38
let’s say two or three percent it’s
06:42
really important that you
06:44
everyone watching this video right now
06:47
understands how that impacts society as
06:52
a whole we might not consciously always
06:55
think about it but subconsciously
06:58
we know that if we keep our money in the
07:01
bank
07:02
or in bonds we’re going to lose
07:05
purchasing power over the long run so
07:09
what this does is it pushes us the
07:12
average investor the average joe and
07:15
jane and
07:17
crypto caleb
07:19
further and further out the risk curve
07:22
they’ve got to take more and more risk
07:26
to make sure that their savings is not
07:28
only keeping up with inflation but
07:31
hopefully accelerating at a faster pace
07:34
but it’s not just stemis and negative
07:37
real rates pushing people further out
07:39
the risk curve it’s also that there’s
07:42
fewer opportunities out there for those
07:45
young people who are graduating college
07:48
or those middle aged millennials will
07:51
call them the government has created all
07:54
of these economic distortions they’ve
07:57
created malinvestment and a
07:59
misallocation of resources which has
08:02
incentivized businesses to speculate
08:06
on financial assets instead of
08:09
reinvesting back into their business
08:12
growing their business trying to produce
08:13
more goods and services by hiring more
08:17
people and creating jobs because of the
08:21
actions of the fed and the government
08:23
our entire economy has been
08:26
financialized and what that means for
08:29
crypto caleb is fewer
08:32
good job opportunities and the central
08:35
planners have also
08:37
disincentivized caleb to become an
08:39
entrepreneur himself because of all the
08:42
additional regulations and most likely
08:45
taxes going to the moon in the future we
08:48
hear the administration and the
08:50
mainstream media all the time talking
08:53
about how bad and evil the capitalists
08:57
and the entrepreneurs the producers and
08:59
job creators are in our society and we
09:02
really need to bring them down a few
09:04
notches
09:05
for the greater good
09:07
so why on earth would caleb want to sign
09:10
up for that
09:11
it’s far easier to take your stemi
09:13
checks and just put them on doji coin
09:17
because at the end of the day
09:19
it is yolo time you only
09:23
live
09:24
once but this meme is just a
09:27
representation that illustrates
09:30
how much the fed has pushed the average
09:34
investor out the risk curve if i had a
09:37
picture of jerome powell right here he
09:40
would be holding a sign saying take more
09:43
risk to explore this yellow attitude
09:47
that has been driven
09:49
by the fed and the government creating
09:51
negative real rates and inflation let’s
09:55
cut to the internet and a comedian named
09:59
remy you guys are really gonna get a
10:01
kick out of this one
10:04
coming up bad news for savers as even
10:06
those with high interest savings
10:08
accounts are seeing their money
10:09
disappear thanks to inflation but first
10:12
we’ll detail every possible thing you
10:14
could die from he’s a rational investor
10:17
dividend i just uh saved some numbers
10:19
paycheck just like all his ancestors him
10:22
looking for high yields that’s never the
10:24
case he’s seeking six percent return
10:26
slow and steady wins the race when he
10:28
checks his accounts just to see what
10:30
they’re fielding it’s like driving in
10:32
maryland ain’t nobody yielding what is
10:34
he to do he shouldn’t be in a drought so
10:37
he visits his advisor just to sort it
10:39
all out inflation’s higher than your
10:41
bond rate that’s what i was fearing so
10:43
your savings account is slowly
10:45
disappearing and your cds are pointless
10:48
that’s not very funny what would you
10:50
like me to do put it all in dog money
10:53
dog money dog money dog money dog money
10:57
i’m trading it in for dog
11:03
[Music]
11:13
moves i ain’t gonna be a pun i sold my
11:16
ira and bought an nft a one all in all
11:19
doge i dish them out like a tommy gun
11:21
you think i was statehood the way i’m
11:23
passing on watching tons i feel like
11:25
matt gates you know what i mean assuring
11:28
everybody it’s above 18. it’s a modern
11:31
day gold rush the price is a boom like
11:33
reggie white versus all this i’m headed
11:35
straight to the moon
11:37
my broker’s calling you know that it’s
11:39
on
11:40
buy dog money don’t stop till it’s dawn
11:44
step number two
11:45
now i’m going to reveal my first
11:50
prediction
11:51
are you ready for it
11:54
your 401k
11:57
is going to turn into
11:59
a 401k
12:01
9.
12:02
[Laughter]
12:04
sorry about that after that last video i
12:07
could not resist that little joke okay
12:09
let’s start with these charts first of
12:11
all the unemployment rate goes back to
12:14
2008 all the way to 2021
12:18
starts around four percent and then
12:19
skyrockets up to about 12 percent during
12:22
the gfc then gradually comes back down
12:25
to an all-time low or very close to an
12:28
all-time low 2020 before the cerveza
12:31
sickness under 4
12:32
but then it goes completely parabolic up
12:35
to 15 or 16 percent and keep in mind
12:39
this is the u3
12:41
unemployment number that’s the headline
12:43
number you always see on cnbc and
12:45
bloomberg which i think understates the
12:49
real rate of employment dramatically
12:52
we’ll save that for another video so the
12:55
way the fed in the government measures
12:57
u3 it has come back down in july it was
13:01
5.4 percent but notice there’s quite a
13:05
delta between the 5.4 percent
13:08
we have now
13:10
and the under 4
13:13
we had
13:14
prior to the cerveza sickness so the fed
13:16
is looking at this
13:18
and they have this mandate for
13:21
unemployment so they want to get this
13:23
number back down to under four percent
13:26
and then there’s also
13:28
politicians like aoc
13:31
elizabeth warren bernie sanders that
13:34
think jerome powell is nowhere near
13:37
dovish enough
13:40
oh yes that’s right that 120 billion
13:43
dollars the qe
13:45
isn’t near enough for those politicians
13:48
who want more and more
13:51
central planning they want to see the
13:54
fed bring the unemployment rate down to
13:57
maybe 1
13:59
or 0.5 percent regardless
14:02
of the rate of inflation but i’m sure
14:05
most of you by now have heard jerome
14:07
powell always come out and say that
14:09
inflation is
14:11
transitory in fact in that
14:14
presentation that they gave to congress
14:17
the other day with janet yellen or
14:19
whatever they want to call it i i can’t
14:21
stand to pay any attention to those
14:22
things but in their
14:24
testimony we’ll call it uh both he and
14:27
yelen said that yes inflation is
14:30
transitory and their argument really
14:32
revolves around something called the
14:35
phillips curve
14:37
so we start here on the bottom three
14:40
percent four percent goes all the way to
14:42
seven percent this is the unemployment
14:45
rate
14:46
over here
14:48
the vertical line
14:50
starts at two so it goes up to seven
14:51
percent this is the rate of inflation
14:54
so basically what the phillips curve
14:57
says
14:58
is that as the rate of unemployment
15:02
gets higher
15:04
the rate of inflation gets lower
15:07
so there’s an inverse correlation
15:10
between the unemployment rate
15:13
and inflation said another way if
15:15
unemployment goes down
15:18
then inflation will go up so the fed is
15:22
looking at the unemployment rate being
15:25
higher much higher than it was at the
15:28
end of 2019
15:30
and they’re looking at the phillips
15:31
curve and saying well there’s no way
15:34
that we have sustained inflation because
15:37
the rate of unemployment isn’t low
15:40
enough and for most of you who are
15:42
really paying attention right now you’re
15:44
probably scratching your head and saying
15:45
wait a minute george
15:47
wasn’t the phillips curve really
15:49
debunked in the 1970s
15:52
and i would argue that was debunked
15:55
pretty much in every single decade but
15:57
believe it or not the 900 phd’s at the
16:01
fed still use the phillips curve to make
16:06
decisions and to predict
16:08
whether or not inflation is transitory
16:11
or permanent but then the next question
16:15
becomes okay we know
16:17
the phillips curve is broken
16:20
but has cryptocurrency
16:23
broken the phillips curve
16:26
even more
16:28
and this is a fascinating thought
16:30
experiment to dive into this deeper
16:33
let’s go right to the internet and a
16:35
blog post from one of my good buddies
16:38
who actually used to work
16:40
at the fed his name is joseph wang
16:45
alright so joseph’s blog is called fed
16:48
guy it’s at
16:49
fedguy.com i’d strongly suggest
16:53
checking it out every one of his blog
16:54
posts
16:55
are awesome and thought provoking and
16:59
extremely
17:00
interesting to say the least so let’s
17:03
start by going over his recent or most
17:05
recent blog post wealth
17:07
side effects
17:09
and this is where he is arguing that
17:12
because the stock market and
17:14
cryptocurrency has gone up to such a
17:17
significant degree
17:18
since the beginning of 2020 that it is
17:22
having an impact on the labor force
17:24
participation rate and therefore the
17:28
unemployment rate so a lot of people are
17:30
choosing to not go back to work because
17:33
they’ve increased their wealth so much
17:37
by
17:38
we’ll call it quote-unquote investing or
17:40
speculating in cryptocurrency and the
17:43
stock market why on earth should they go
17:46
back to work and make 15 an hour when
17:49
they just made 30 000
17:51
in the last two months in doji coin as
17:55
an example he starts by pointing out
17:57
this chart of the estimated increase in
18:00
median wealth from 2019 to q2 2021
18:04
and it is true
18:06
that the people at the top of the
18:09
economic
18:10
ladder
18:11
really saw most of the gains their net
18:14
worth increased by an average of 553
18:18
000
18:20
wow that is
18:23
really incredible but then he also
18:25
points out the surge in asset prices has
18:29
been so extreme that even less wealthy
18:33
cohorts saw meaningful gains since
18:37
2019. and we can just go back to the
18:40
chart and see people even
18:42
in the
18:43
25 to 50 percentile their net worth
18:48
increased by 18
18:50
000
18:52
that is a significant amount assuming
18:55
you’re making
18:56
let’s say thirty or forty thousand
18:58
dollars a year so joseph’s hypothesis
19:00
which i would completely agree with is
19:03
because we’ve seen such extreme wealth
19:05
gains this has dropped the labor force
19:08
participation rate
19:10
significantly because people are just
19:12
choosing not to go back to work and
19:14
what’s odd is we have this dynamic in
19:17
the labor market where job openings are
19:21
at all time highs so the fed is sitting
19:25
back kind of scratching their head none
19:27
of this makes sense to them because if
19:29
job openings are at all time highs that
19:32
would indicate that the labor market is
19:35
very tight and therefore the
19:36
unemployment rate should be a lot lower
19:40
than the 5.4 percent that we saw on the
19:44
chart going back to the whiteboard now
19:46
let’s go ahead and start connecting some
19:48
dots with cryptocurrencies
19:51
so this section of the blog post is
19:53
called dark money cryptocurrencies are a
19:56
two trillion dollar asset class absent
20:00
from flow of funds data because they
20:03
exist on decentralized ledgers outside
20:07
of national reporting systems
20:10
crypto as an asset class was negligible
20:13
in 2019
20:15
but may have grown to levels that are
20:17
impactful on a macroeconomic level like
20:20
dark matter it is exerting influence
20:24
without being seen now we go over some
20:27
more statistics that really put things
20:29
into perspective it’s called fast money
20:32
the scale and speed of the rise in
20:35
household wealth is simply unprecedented
20:37
the roughly 40 trillion
20:40
increase in household wealth over the
20:42
past two years is real money that can be
20:45
spent on goods and services
20:48
and he points out here correctly just
20:50
not all at once
20:51
[Laughter]
20:53
don’t sell all at once so the price will
20:55
come crashing down
20:57
this has obvious implications for
21:00
consumption and inflation but also on
21:02
the public’s urgency to seek employment
21:05
we were talking about earlier
21:06
stopping the flow of unemployment
21:08
payments may be less impactful and i
21:11
think that definitely has a lot to do
21:13
with it as well but i’ve done several
21:15
videos on that so we’ll stick to the
21:17
topic of this wealth creation
21:20
cryptocurrency and demotivating people
21:23
to go back to work
21:25
so stopping the flow of unemployment
21:27
payments may be less impactful in
21:29
encouraging employment when the stock of
21:31
wealth has grown tremendously
21:34
and this chart is really jaw dropping
21:38
its households and non-profit
21:40
organizations net worth level so we can
21:43
see it dip down which is what you would
21:45
expect in the gfc
21:47
and since then it’s gone straight up
21:50
into the right but look at what happened
21:53
after the cerveza sickness
21:55
it not only goes up into the right it
21:57
goes pretty much straight up it’s a buzz
22:00
lightyear chart to infinity and beyond
22:04
to infinity
22:06
and beyond just to reiterate over the
22:09
last two years household wealth has gone
22:12
up by approximately
22:14
40
22:15
trillion dollars the fed appears
22:18
confused by the labor market there are
22:20
many signals of the labor shortage even
22:22
though the unemployment rate is also
22:24
elevated the fed is holding rates low on
22:27
the belief that the economy is far from
22:29
maximum employment even though inflation
22:33
is high this goes back to the phillips
22:35
curve that we were talking about
22:37
but if the wealth effect has
22:39
structurally changed the labor market
22:42
then the fed is viewing the world
22:44
through an outdated model
22:48
so let’s think about this for a moment
22:51
what happens is people still have the
22:53
same amount of purchasing power or if or
22:56
more purchasing power for that matter
22:58
but yet they’re not going back to work
23:00
producing goods and services and in the
23:03
mind of the fed if people are unemployed
23:05
then they should see a decrease in
23:08
demand and that ties into the inflation
23:11
rate so if demand goes up even though
23:13
the unemployment rate stays persistently
23:17
high the fed is going to see that and
23:19
assume that inflation is transitory
23:22
because they’re going to assume that
23:23
they actually have less purchasing power
23:25
because they’re not taking into
23:27
consideration this wealth effect that
23:30
joseph wang is pointing out extremely
23:33
well so therefore it may take much
23:36
higher wages to reach the pre-pandemic
23:39
unemployment rate the fed may be
23:41
inadvertently running the economy much
23:45
hotter
23:46
than they realize
23:48
so in order to get people to go back to
23:50
work when they’re making 30 000
23:53
every two months trading cryptocurrency
23:55
wages are going to have to go from 15 an
23:58
hour let’s say up to 30 or 50 or 75
24:02
dollars an hour and then that will
24:05
exacerbate the problem of inflation that
24:09
the fed
24:10
thinks doesn’t exist
24:13
so my first prediction is the fed is
24:16
going to continue to use the phillips
24:18
curve to make policy decisions moving
24:22
forward and because cryptocurrency has
24:26
created so much wealth at least paper
24:29
wealth on the balance sheet of those 14
24:33
of americans who have less of an
24:35
incentive to go back to work the
24:38
unemployment rate
24:40
as measured by the government and the
24:41
fed is going to be persistently high
24:45
therefore the fed is always going to
24:47
come back to the conclusion that
24:49
inflation is transitory regardless of
24:53
how many years it goes up at six percent
24:58
eight percent 10
25:00
12 who knows how high it will go and
25:04
we’ve seen this movie before it’s not
25:07
the first time the fed has inaccurately
25:12
come to this conclusion i’d like to take
25:14
you back to the early 1970s at the time
25:17
the fed chair was a gentleman by the
25:19
name of arthur burns and just like
25:22
jerome powell he was coming out and
25:24
making the claim that inflation is
25:27
transitory but we all know what happened
25:29
throughout the rest of the 1970s
25:32
arthur byrne was proven wrong over and
25:36
over and over again and i think jerome
25:39
powell will also be proven wrong in this
25:44
decade and i know a lot of you right now
25:46
are saying okay george i understand the
25:49
stuff with arthur burns and the
25:52
inflation being transitory or permanent
25:55
but that’s not really a specific
25:58
prediction about cryptocurrency or the
26:00
price of cryptocurrency
26:03
but don’t you worry
26:05
my friend
26:07
we are going to connect all the dots
26:10
in step number three coming up right now
26:14
step number three
26:15
now it’s time to reveal
26:18
my big
26:20
cryptocurrency
26:22
predictions but before i do
26:25
i can give you a prediction that is 100
26:29
guaranteed
26:31
to come true
26:32
and that is mr joseph wang will be
26:36
speaking at the next rebel capitalist
26:39
live event
26:41
in houston if you haven’t checked out
26:43
rebel capitalist live definitely do so
26:47
as soon
26:48
as this video is done we’ll put a link
26:50
in the description below but it’s just
26:53
rebelcapitalistlive.com
26:56
you can see all the speakers that will
26:58
be in houston january 7th through the
27:01
9th guys like ron paul chris cole g
27:05
edward griffin gals like lynn alden
27:08
lynette zhang and like i said mr joseph
27:12
wang the fed guy
27:14
himself but back to the cryptocurrency
27:18
predictions in step number one
27:20
we saw that crypto caleb has gotten
27:24
rich to the tune of two trillion dollars
27:30
just in the last year then in step
27:32
number two we saw that all of these
27:35
gains have most likely decreased his
27:38
willingness to go back to work therefore
27:41
the unemployment rate stays higher than
27:44
it otherwise would and the fed thinks
27:47
that inflation is transitory so they
27:50
continue to put the pedal on the metal
27:52
don’t worry about inflation this means
27:55
that it most likely will run hot into
27:57
the future and let me be very clear when
27:59
i’m talking about inflation i’m
28:01
specifically referring to the stuff
28:04
the goods and services you buy
28:07
daily so i set up this chart just to get
28:10
a visual of the main concepts i’m trying
28:14
to communicate
28:15
first
28:16
on the left it goes from 0 up to 16
28:20
this is the rate of increase
28:22
so right in the middle this red line
28:24
let’s just assume this is the rate of
28:27
inflation going into the future and i’m
28:30
not saying this is a prediction in and
28:32
of itself we’re just using this as a
28:34
thought experiment so inflation going
28:37
from eight percent to 10 12
28:40
15
28:42
well stocks and real estate
28:45
let’s say they are also going up in
28:48
nominal terms but
28:50
they’re only going up at maybe four five
28:53
six seven percent per year
28:56
which for most americans the average joe
28:59
and jean they look at that and they
29:00
think they’re getting rich
29:02
but then they start to do the math
29:05
and they’re like wait a minute here yes
29:08
my house is going up at five or six
29:10
percent per year but my grocery bill is
29:14
going up by 30 percent per year
29:18
so they realize it dawns on them that
29:21
the stocks in real estate are going up
29:24
at a lower rate or less than
29:27
inflation
29:28
but then they look at crypto
29:30
currency and they see that it is going
29:33
up at a rate that vastly exceeds
29:37
inflation
29:38
so they come to the conclusion logically
29:41
that the only way they can stay ahead of
29:44
the inflation curve
29:46
because remember we’ve got the fed and
29:49
your drunk insolvent uncle sam that is
29:52
pushing the average joe to take more and
29:56
more risk because of these negative real
30:00
rates so the average joe says to himself
30:03
well i’ve only got one choice if i want
30:06
to actually increase my purchasing power
30:09
or at least
30:11
just stay up with the rate of inflation
30:14
i’ve got to move all of this capital
30:17
from stocks and real estate into
30:21
cryptocurrency and for those of you who
30:23
are cryptocurrency fans you may be
30:25
saying well that’s fantastic news
30:28
because that means the price
30:30
is going to go to the moon but
30:32
unfortunately there is a big
30:35
problem to dive into this deeper let’s
30:38
go right to the internet and check out
30:40
this study from the bis the bank of
30:44
international
30:46
settlements
30:48
this is a report titled early warning
30:51
indicators they call e-w-i’s
30:55
of banking crises
30:58
let’s scroll down here and we can get to
31:00
some of their charts
31:02
evolution of ewi that’s early warning
31:06
indicator
31:07
variables around past
31:10
banking
31:11
crises these charts are a little
31:14
difficult to decipher so let me walk you
31:16
through them this zero indicates when
31:19
there was a banking crisis and this
31:21
black vertical line and it shows
31:24
different metrics they used to try to
31:26
predict when this banking crisis would
31:30
come to fruition and not only predict
31:33
when but also the probabilities of it
31:35
actually panning out so the first metric
31:38
they use is credit to gdp
31:41
so the overall credit in the economy the
31:43
public and private debt
31:45
relative to the country’s gdp let’s just
31:48
use the middle red solid line because
31:51
that’s the median so what this is saying
31:54
is it’s going up at eight percent above
31:58
the trend line the historic trend line
32:01
it’s not saying that it’s going up at
32:03
eight percent nominally that’s just
32:06
eight percent above the trend so if the
32:09
trend let’s say was two percent
32:12
and now it goes up to eight percent
32:14
then the delta would be six percent and
32:17
that’s what this solid red line would
32:20
indicate
32:21
another thing interesting about this
32:22
credit to gdp
32:24
is that when it gets to a peak that’s
32:28
usually
32:29
when you see the banking crisis
32:31
so it happens kind of in real time
32:35
contrast that the data represented in
32:37
this property price gap and we’re going
32:39
to focus on that solid red line again
32:42
and this represents the same thing it’s
32:45
just the delta between the historic
32:47
trend line and the current rate of price
32:50
appreciation or the gap between the
32:53
prices and the income level so the price
32:57
to income ratio difference between what
33:00
they’ve experienced let’s say over the
33:02
past
33:03
20 quarters and the historic trend
33:06
that’s the important metric
33:08
but you can see here it peaks out
33:10
usually about eight quarters prior
33:13
to an actual banking crisis so this
33:16
would be more of a leading indicator and
33:19
they also have metrics like dsr which is
33:22
debt service ratio i’m not going to get
33:25
too into the weeds on those other
33:27
metrics because i want to focus on
33:29
credit to gdp and also property price
33:33
gap
33:34
what this bis study shows us is these
33:37
are the most predictive indicators when
33:40
you’re trying to assess the
33:42
probabilities of a banking crisis
33:46
so i’d imagine a lot of you are asking
33:49
the question right now okay george if a
33:52
country gets over its skis so to speak
33:55
or they breach this level which would
33:58
indicate the no bueno zone
34:03
the bis might not use that terminology
34:06
but they caught probably the danger zone
34:08
what is the probability that this
34:10
country has a banking crisis
34:14
and from what i’ve read in this report
34:16
the probability can be as high as 50
34:21
depending on what metrics that country
34:24
actually triggers but the metrics we
34:26
just went over are so powerful
34:29
that they usually supersede the rest so
34:32
as an example if the property price gap
34:35
or price to income ratio in a specific
34:37
country gets too extreme
34:39
even if that country hasn’t triggered
34:42
any of the other red flags it could
34:45
still make the probability of a banking
34:47
crisis go up to that 50 percent number
34:51
and what i would argue is in a country
34:53
that has been so financialized like the
34:56
united states not only could a property
34:59
bubble imploding create a banking crisis
35:02
but i think you could see the exact same
35:04
thing happen if the stock market were to
35:06
go down by 50 percent just sit back and
35:10
ask yourself the question
35:12
what would the economy look like if the
35:14
stock market went down
35:16
by 50 percent
35:18
and stayed down by 50 for the next
35:21
decade something similar to what we saw
35:24
in japan in the 1990s
35:28
i think most of you would come to the
35:29
conclusion and rightfully so that that
35:32
would create an economic crisis
35:34
in the united states to the likes which
35:37
we may have never seen it may even
35:39
exceed what we saw during the great
35:42
depression so let’s think this through
35:46
using the example
35:47
of these hot air balloons that i think
35:50
gives us a great visual representation
35:53
of the overall concept so we’ve all seen
35:56
it on a sunday morning those hot air
35:58
balloons are going up over the sky and
36:02
the clouds blue sky it’s a really cool
36:04
thing and they’re all these bright
36:06
colors and at the bottom of those hot
36:09
air balloons you see this little woven
36:11
basket and that’s where the people are
36:14
kind of hanging out there and floating
36:16
around
36:19
in the past when we have a proper
36:22
fundamentally sound economy
36:25
i see it as though it’s this hot air
36:27
balloon that’s controlling or leading
36:31
this basket
36:32
that is following it around
36:34
so in a healthy economy that really
36:37
revolves around producing goods and
36:41
services
36:42
true wealth
36:44
the real economy would be that hot air
36:46
balloon
36:47
and the financial economy like the stock
36:50
market or the housing market would be
36:52
the basket
36:53
underneath that hot air balloon
36:56
so wherever the balloon goes in other
36:58
words wherever the real economy goes
37:00
however well it does
37:02
the basket will do the same the stock
37:05
market and the housing market but what
37:08
has happened as a result of everything
37:10
that we talked about in step number one
37:14
is we’ve completely reversed the roles
37:17
so now we go into this completely
37:20
distorted type of economy that’s been
37:23
totally
37:24
financialized
37:26
so the balloon has gone from the real
37:29
economy to the financial economy
37:33
and it’s the one that has power or
37:36
control of the direction of everything
37:39
else and now the basket is the real
37:42
economy so wherever the financial
37:44
economy goes
37:46
so goes the real economy and that’s why
37:48
the fed has had to come in so many times
37:51
and bail out the banking system and the
37:54
banksters themselves because they know
37:57
that if the financial economy collapses
38:00
the stock market or the real estate
38:02
market the real economy will collapse as
38:06
well but here’s where it gets
38:09
interesting if we see this dynamic play
38:13
out in the future
38:14
because the fed has to let inflation run
38:18
so hot before they reduce the size of
38:20
their balance sheet or they increase
38:22
interest rates we see the capital flows
38:25
going from stocks in real estate that
38:28
have a negative
38:30
appreciation rate or negative yield
38:32
compared to the rate of inflation we see
38:34
the capital flows go from stocks and
38:36
real estate into cryptocurrency
38:40
then because we financialized the
38:42
economy so much
38:44
we could transition
38:46
into a brand new type of hot air balloon
38:50
where the price of
38:52
cryptocurrency
38:54
is the actual balloon and now the real
38:57
economy is tied to the price
39:00
of doji coin
39:02
and let’s go back to that thought
39:04
experiment we did during the reading if
39:06
the stock market goes down by 50 percent
39:09
remember most of you would agree that
39:11
that would collapse the entire real
39:13
economy same thing for the housing
39:16
market but now if all of the capital and
39:19
the assets on the balance sheets of
39:21
americans is tied up in cryptocurrency
39:24
the same thing would be true that at the
39:27
price of cryptocurrency goes down by 50
39:30
60 70 percent then this in and of itself
39:35
would collapse the real economy
39:38
regardless of what was happening to the
39:40
stock market and the real estate market
39:42
and to make this even more bizarre if
39:45
the economy started to go down as a
39:48
result of the price of crypto collapsing
39:51
then the fed
39:52
would have to come in and save the day
39:55
because they have these mandates such as
39:58
the unemployment rate well if the
40:00
unemployment rate in the real economy
40:01
let’s say goes up to 15 percent
40:04
because crypto
40:06
falls out of bed and goes down by 50
40:08
percent then the fed would be left with
40:11
a decision
40:13
they would have to come in and literally
40:16
prop up the price of crypto
40:19
just like they have done quantitative
40:21
easing
40:22
to prop up the price
40:24
of the stock market and the housing
40:26
market but step back for a moment and
40:29
think about this paradox
40:32
let’s take out the word crypto and just
40:34
replace it with the word bitcoin
40:37
of all the cryptocurrencies this one has
40:40
the highest probability of competing and
40:43
maybe taking down the u.s dollar so the
40:47
fed would be put into a position where
40:50
they have to prop up the actual
40:52
competitor to the currency that gives
40:56
them power
40:57
in the first place so what are my big
41:00
crypto predictions moving into 2022 and
41:04
beyond well the fed is definitely going
41:07
to continue to push
41:10
people out the risk curve by maintaining
41:13
a negative real interest rate and i
41:17
think the negative real rates we see now
41:20
could actually increase moving forward
41:23
and this will incentivize people to take
41:26
money out of the stock market in real
41:29
estate and move it into
41:31
cryptocurrency so as long as we see this
41:35
dynamic at play
41:37
there are no certainties only
41:39
probabilities but i think there’s a
41:41
significant probability that the market
41:44
cap for cryptocurrency continues to grow
41:48
now which ones go up and down
41:51
i have no idea i’ll let you draw your
41:54
own conclusions and i want to be very
41:56
clear i’m not saying that this is a
41:58
reason to speculate in
42:01
currencies i would never ever buy
42:03
something just
42:05
because i thought the price was going up
42:07
that’s just pure gambling what i’m doing
42:10
is going through a thought experiment so
42:12
you can better understand the risks we
42:15
have
42:16
to the real economy and one more thing
42:18
i’d like to point out this dynamic that
42:21
we’re talking about with cryptocurrency
42:23
taking all the inflows could continue
42:27
into the future as long as there’s not
42:30
another asset class that comes up right
42:33
alongside it where the gains are even
42:36
more than what we’ve seen in
42:38
cryptocurrency can anyone say
42:41
nfts
42:43
for more content that’ll help you build
42:46
wealth and thrive in world of out of
42:48
control central banks
42:50
big governments check out this playlist
42:53
right here and i will see you
42:55
on the next video
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