So let's jump right in.
So there's a couple of videos that you did recently, which I loved.
The first one was, I thought was very interesting.
You said that Ben Bernanke, he won the Nobel Prize and he's the one
who created the inflation, the moves he made from the 2008 crisis.
Right.
And and you suddenly said that the stock market has been on life support
since that time.
Can you talk a little about that.
Talking about Ben Bernanke?
Everything that I have done, everything was based on a speech that Ben
Bernanke gave in 2002 called Deflation, Making Sure It Doesn't Happen Here.
And in that speech, he talked about
what a central bank can do once they reach the zero bond,
when they've taken interest rates down to zero.
And if they go too far negative, then people will just hoard cash.
They'll take cash out and take it home.
And Japan had been suffering from this.
And he was trying to say what the U.S.
can do to prevent a deflation that was similar to Japan.
And in it, he outlined things like he'd call it
expanding the menu of assets that the Federal Reserve can buy,
which means mortgage backed securities, for instance, which he did
for the first time in in the crisis of oh eight and several other things,
the QE that was all outlined in 2002.
And so when I wrote my first book, it was all based on
sort of knowing what I could see the future a little bit.
The future was all in that speech. Yeah.
And there are a couple of things that that he did not do,
but I feel that those things have yet to come true,
that they're going to unfold in this next crisis.
So obviously, it's very different in, you know, when when
in the mid 2000, it looked to me like the QE kind of went to the banks.
But now in the most recent one, I went to the people directly.
Yeah.
So can we talk about the difference that you see
because one went straight to the people
and then of course, that really created inflation.
The other one went kind of to and from the banks, right?
Well, they both created inflation.
It's just that there's something called the capital on effect.
And the inflation that we saw from 2008
to the end of 2019 was inflation of asset prices only.
It went into the stock market because they're buying
mortgage backed securities that way.
That kept interest rates low.
It went into real estate and so those things inflated
and that's basically a bubble.
If you've got an economy with, you know, all of the different sectors
of the economy balanced
and then you pump currency into just a couple of sectors of the economy,
they go out of balance with the rest of it.
The free market will always try to balance everything when it does behind some,
when it's an artificial bubble that's been created by something
like a central bank, manipulating interest rates, creating currency,
doing everything that they have done
when the market does overwhelm the manipulation, it comes as a crisis.
And then the Federal Reserve and all the world's central banks
will start screaming. The free market isn't working.
We we've got to. Do smart controls.
So it's it's their fault that it's 100% there.
So how is this time different than oh eight?
You're seeing retail inflation now simply because we sent out checks directly
to, you know, first
they create the supply chain issues by just shutting down the world economy
and then they send checks directly to businesses and individuals.
The checkable deposits, I believe, are up something like 28 times with, oh, our
at the at their minimum back in 2008.
So it's huge.
And that is causing the inflation.
If they feel better and they feel like they've got a little bit saved up,
that currency comes out and it buys groceries and gas, the wealthiest 1%.
Their deposits are up 111 times from the bottom in 2008.
All of these things, the excess currency that's in checking accounts will come out
and and sort of work its way around the economy.
And it will continue to, you know, even if Jerome Powell tries
to get ahead of inflation by raising rates above the rate,
they are the interest rates above the inflation rate.
There's still all of this trapped excess currency just sitting there
in the checking accounts and it is like $7 trillion
or something like that right now.
This will end up somewhere.
It's not just going to stay in their checking accounts.
It's going to come out.
And if they're seeing their inflation
at eight, nine, 10%,
this erosion of their purchasing, purchasing power, they're definitely going
to get that out of their checking accounts if regular assets
the stock market and right now with them raising real estate.
I'm sorry, interest rates, real estate, you know, has been tanking and it will.
Which is going to be good for you.
Yeah. Yeah.
You make money when you buy, by the way.
Exactly. Yeah.
That's what we're talking about. And so
it's going to seek safe haven assets.
I think this 1.33 trillion.
I notice I just got done traveling from I was in Indonesia and Thailand
two weeks ago.
I was there for almost a month.
And one of the things that everybody's upset about in these in the UK
and you know, across Asia is a strong dollar.
And I know you did a video on this.
It's causing pain around the world.
I was hearing about it from people.
They said their strong dollar is killing us.
Can you explain why that is?
It can benefit them, though, when it comes to their exports, correct.
But a lot of the things that they have to buy, like oil is priced in dollars.
And so if they've got to if their currency has to be converted
to dollars to buy those things, then it is killing them.
Yeah.
You're seeing the the price of oil not only go up as much as it did
here, but then you take the exchange rate and put it on top of that.
And yeah, it is just murder.
And there's going to be 50 years from now or 100 years from now when historians
look back at this period with all these floating exchange rates,
you know, this this monetary system that we're on was an accident.
That was it's like what was left over when Bretton Woods collapsed.
Right. It
was a you know, they tried to do something called the Smithsonian Agreement.
There was going to be
a planned monetary system and it fell apart in like three days.
And this is an accident.
The floating exchange rate,
U.S. dollar reserve currency system.
And historians are going to look back at this period of time and go,
what were they thinking?
Let's talk a little bit about inflation.
We've had five now going on six rate increases since March,
and inflation's almost the same, at least in the United States.
Right.
It's higher in like the UK, not by a lot, but a little bit higher.
And so we've got this feels like we've got global inflation and
and these these, you know, federal funds rate hikes don't seem to be doing.
Anything all over the world.
Central banks went nuts during both the global
financial crisis of 2008 and the pandemic.
Now, the pandemic sort of kicked off the retail inflation,
but it was inevitable anyway, because people that get rich in the stock
market eventually take some of it out and they spend it on real things.
Yeah. And so you would have seen
some of
the excess currency that was created that caused those bubbles
come out of those bubbles and create
inflation elsewhere.
We've got high interest rates, which is having the housing market right now.
As you know,
we're already seeing big corrections just in the last four or five months.
And and it doesn't appear that inflation
is going to come down anytime soon and people are getting squeezed.
Well, inflation will come down as soon as Jerome Powell breaks
the economy, when the next big crisis happens, velocity will stop
the number of transactions that a dollar is involved in in a year
that, you know, when people are feeling good
and they take their friends out for dinner and stuff like that, dollars circulate.
There's high velocity.
When it's in a savings account,
there's zero velocity of the currency that's in the savings accounts.
And so when it stops,
then if prices do come down, they will fall.
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