- If you're a business owner,
the Boris Johnson recovery is gonna make you richer
and I'll tell you for why in this video.
Hey, I'm James Sinclair and right now,
I'm at home in isolation
and I'm watching the news very closely.
More than ever before because it's imperative
that we know all the facts for preparing
our business to reopen when all this is over,
whenever is it gonna be over.
Let's go for a walk.
If Boris Johnson have died,
the markets would have reacted quite heavily to that.
And there would've been a demand
for another general election,
even though the conservatives have a huge majority.
Labour would have been out saying,
we can't have an unelected Prime Minister,
visa v what happened to Theresa May
when David Cameron resigned.
She just got in and she was there for months
and everyone saying this is not good enough,
how can we have a prime minister that hasn't been elected?
Even though our party politics work on the amount of MPs
that the party gets to get into power,
no one cares about that.
It's the headline of an unelected Prime Minister,
and that's the last thing that we need
in an economic recovery which will come ladies and gents
how that economic recovery looks,
we'll discuss in the studio right now.
So why don't you grab yourself a cup of tea
and I'll discuss the exact reasons
why I think these Boris Johnson recovery
is gonna be good for your business.
I think it's all gonna make us a lot richer
and these types of economic downturns,
we wanna know those things.
You might wanna get yourself a biscuit as well.
You see, the stability of the government
in our country is really important.
In America in November, there's gonna be
a new presidential election race
and there's loads of countries in the European Union
that just have enough power to keep them in government,
and there'll be other elections there as well.
In the UK, we don't have to worry
about that for five big fat years.
So that's good if you're planning to invest
or get outside investment into this country.
Investors and entrepreneurs, business owners
wanna know that there's gonna be stability
before they sign on that dotted line
for some big investment planning.
So you might be thinking,
well James, what's your predictions
of what this economic recovery looks like?
We'll have no fear sailor, I'm gonna let you know.
So again, I read a lot.
And I've read a lot of the business pages
in all the newspapers, Financial Times, telegraph the times,
and I think the general consensus is the recovery
is gonna luck one of these three options.
Way number one is this,
we're going to have a W recovery.
Where we're gonna go down, and then we're gonna go up.
And this is the process we're in right now
as we're going down like this,
then everything's gonna go back to normal,
and then we're gonna go like this.
And then I think what we're gonna see
at the top here is hang on a sec,
credit isn't as easy to get hold off.
Consumer confidence isn't as confident as we thought,
so we'll go back down,
because it's gonna really happen really quick,
and then we'll go back up and then normal times will come.
I don't think that's going to happen,
I think this is gonna happen.
I think we gonna have a situation that looks like this,
the V or the U shaped recovery.
So we traumatizing right now,
we're going down at the bottom
then as soon as everything goes back to normal,
we're gonna go up, or it's going to be the U.
And in fact, I favor this one, the U shaped recovery.
Let's go into these right now.
So let's have a look at the U shape recovery,
something that looks a little bit like this.
Now, basically, we're going right down right now.
So we're in this line that's flattening down here.
What we want to know is how long that U-pit,
the billy in the red box is gonna last.
So I think what's gonna make a big difference
is one of these ladies and gents, a vaccine.
For the first two C's, once we got a vaccine,
I think there's gonna be a lot more confidence
in the market and we'll understand what's gonna happen.
I think there's a big problem ahead
that people are not thinking about though.
And this is the big one, banks.
Now even though we've got our chance of the Exchequer,
Rishi Sunak saying that the banks
are gonna lend money to businesses
in their so called symbols loan.
That's the Coronavirus business interruption loan scheme
for those of you that were interested,
it's just not really materializing.
300000 SME businesses, whats an SME business?
It's a business that turns out 45 million
so that's most businesses, have applied for a symbols loan,
but only 5000 of them have managed
to get their grubby hands on this money.
For our economic recovery to happen,
the flow of credit has got to go to businesses at speed.
And once it goes to businesses at speed,
they can invest, they can employ more people,
they can buy businesses, build businesses,
grow businesses, scale businesses,
but right now businesses are in a situation
where there is literally zero, that's the number,
a big fat round one of money coming into their businesses.
So they're gonna need the government
to give them the money to be able
to start up and re-trade.
Imagine if you're a restaurant and you own 100 restaurants,
and you need to restock all of your restaurants
cause they've been closed for six months.
You might need two three million pounds worth of cash
to get all the booze in there,
to get all the food in there,
to pay your staff to come in a week,
to reset the bloody thing out before you open again.
Remember, businesses have never had
to do anything like this before,
it's all brand spanking new.
The great news is though the banks
have got more money than they've ever had before.
Let me tell you exactly how much money
the banks are sitting on in the UK right now.
Their number looks like this, 4.2 trillion pounds.
They've never had more money than they've got right now.
They need to be lending this money
and getting it out to the people
as super duper fast as they can.
And for the first time in a long time,
they're allowed to do that.
What do I mean?
Well, in 2008, and 2009 in the credit crisis,
the banks had no money, it was called the credit crunch.
So they had to walk up to the then chancellor
at the time, his name was Alistair Darling,
and big black eyebrows like to caterpillars
looking to mate on the top of his head.
So that was quite strange,
in fact, if you're wondering about that,
here's a picture of him now.
And he had the whitest hair, the whitest of whitest hair.
And he said, we'll lend you the money,
but the way we're gonna lend you the money via the taxpayer,
is we're gonna make sure that we put fiscal policies on you.
And he did this with his chums and the Bank of England.
And together they said, you've got
to show up your balance sheets.
That's the amount of money that banks sit on.
He said that you're gonna have to make sure
for every pound you learn for example,
that you've got three pounds in the bank.
And that's why they've got this big fat amount right now
because of those rules.
What's happened now the Bank of England
and the government have started printing money,
and they're gonna put cash into the economy,
but they've also said to the banks,
you can loosen up your fiscal policy.
So for example, rather than keeping three pounds
on their balance sheet, they might now need
to only keep one pound for every one pound they lend.
Well, that's good news for businesses,
or so it should be because they'll be able to get this cash,
and then it will flow into the economy,
and we should see a boom.
At least that's what I'm hoping,
and as long as the banks don't do
what's happening right now which I'm seeing
is this tightening of not lending the money
that the government have said to them,
you can go and lend this money,
but they've actually said,
well hang in a sec, these these businesses are not trading.
Are we sure we're gonna get this money back?
Are they actually good businesses?
For these number of reasons,
the banks are not actually lending this money
as fast and as freely and easily
as the government want them to do.
And part of me thinks well yeah, I think they're right.
You know, it's still their money
even though the government is saying
that we're gonna back 80% of it.
But if they lose that 20% you know,
if they go and lend on a 1 trillion,
and then 1 trillion of loans then get locked about,
that still 200 billion that the banks have lost.
And here's the other thing,
are they thinking that
are the government gonna go to them and say,
oh yes, here's the money that you said
you would secure for us,
just have it because all these businesses have gone wrong.
I bet someone smart thinking Well,
actually, hello mister bank manager, hello, Mr. government.
Mr. government saying through
the bank manager that lend the money,
did you do the right due diligence before you lent them that
to make sure that you've got to 80% secured?
And then there'll be this whole trace
and will the banks get their money back?
Yeah, because that's a big problem for them.
So this all comes back round
to my Boris Johnson recovering situation.
Because Could you imagine it if he had died,
and then we need a new prime minister,
the banks would have then tightened up
their cash flow lending even more,
and we'd be in a position where
it take even longer to recover.
Because we would have tide of a general election
or we would have had to find out
who the next prime minister is,
where you're gonna have a leadership race,
then the opposition would be saying
yeah hang on a sec, we've got
an unelected Prime Minister in Downing Street.
These are the what happened
to Theresa May and David Cameron.
Not really liked it that Theresa May
on the first round was in Downing Street
just because David Cameron resigned.
It's not great for headlines,
people don't like unelected prime ministers.
Even though our party political system in the UK works
on the number of MPs a party has to gain power.
They just don't like having a prime minister
sitting in Downing Street
that hasn't been elected by the people.
We don't have to worry about that,
because of these next five years,
we've got a majority government
that has a decent control over the banks.
Well, the bank's own 62% of RBS,
RBS own NatWest, Kyotos, Lombard,
and they also own a big chunk of Lloyds TSB as well,
and they're the regulators and they can make laws.
And in fact, the government have got more power
than they've ever had before
because they put these emergency powers going through
on Coronavirus just a few weeks ago,
which means that they can now make decisions in cabinet
without getting full permission from MPs.
Parliament isn't even sitting.
So for these number of reasons,
I think the UK is in a best place to recover from this
and be a great place to invest in growth business.
I'm super excited about it, this is a great country.
There's brilliant entrepreneurs,
there's brilliant talent, brilliant financial system,
brilliant legal system, we've got London,
Manchester, Birmingham, Glasgow, Edinburgh,
great cities with great people,
great companies and great talent.
So if you're an entrepreneur and a business owner right now,
you should be really excited
that you live in the UK and not other countries,
they've got elections and campaigns coming up.
We've got some elements of stability
in what seems a very unstable time.
For that reason I'm very excited about it.
Watch this video here because I've got some great tips
on how you can grow your business
and work out what to do for that Coronavirus.
Make sure you subscribe to the channel here.
Share it let people know because I'm very excited
about the excitement of this great country.
See ya, bye bye.
(pencil scratching)