- If you think about it,
we're just at the end of
what's been a long cycle
of uptrend in terms of
house prices increasing,
the stock market increasing,
things like cryptocurrencies
increasing in value.
There's inflation across the board
and at the same time,
there's all sorts of risks
that are setting up right now that
are only going to get
worse, and worse, and worse
until they hit that point that
takes things down with them.
(money clinking, vault locking)
- [Peter] Some of the
things I've been watching
that are really freaking me out is that
there's such complacency
among investors and it's
well earned in a sense that
a lot of people have
seen nothing except for
increasing stock markets for
as long as they can
remember in recent history.
So what are they worried about?
And the thing is that a lot of
people are focusing more on greed,
rather than focusing on fear.
And when people are so focused on greed
and they're ignoring fear,
when they've got such
a low level of concern,
that's typically when a
stock market will turn
and start going the other way,
when no one is expecting it to.
And if you wanna see
how low investor fear is
compared to historical precedents,
pull up a chart for the
VIX, that's the fear index,
the VIX, the volatility index.
It's all the same thing.
The lower it gets,
the greater the complacency
among investors,
because it represents lower fear.
The point is that, the
more money managers are
preparing for the worst,
then the fear index increases.
The more they are being more
focused on greed or profits,
or the next big thing around the corner,
the lower that volatility index gets.
And if you look at a long
term chart on the VIX,
you're gonna see that it's
close to an all time low
and the lower it gets,
the more risk we're at
for a massive market collapse.
At the same time, I'm lookin'
at things like the Q ratio,
which takes the value of all
the stocks on the stock market
and compares it to the
cost to replace the assets
of all those stocks.
And anytime in history that the Q ratio
approaches 1.0 or above,
there's a massive stock market correction
within a pretty short
timeframe thereafter.
I don't mean months or weeks,
I mean probably a year or two.
But this is a situation.
The Q ratio right now,
last I checked, is 1.06
or something like that,
and you saw the Q ratio spike above 1.0
in the dot-com bubble, lots
of times where the next thing
that happened was a
massive stock market crash.
And I don't say this to try and scare you.
I'm just saying it's a possibility.
We could go to nuclear war.
We could have any number
of things happen that would
cause the stock market to
react and I believe that
you don't have to pick it out,
you don't have to know what black swan
is going to wipe everybody out.
You just need to be prepared for it.
And if it doesn't happen, then great.
If you prepare for the worst,
very often what happens is
that the worst does not happen.
If you look at debt, personal debt,
corporate debt, government debt,
it's at an all-time high.
Global debts, are 225 percent
more than the global GDP,
that makes absolutely no sense.
And people say, yeah, but
such-and-such is the President,
or such-and-such is happening, or the
earnings of companies are increasing
or what about this, what about that.
It doesn't matter.
If you got 225 percent in debt
compared to the global GDP,
this is going to reverse.
This is all opinion.
I'm not tellin' you anything,
don't take any of this
as investment advice,
because I don't provide advice.
In my opinion and what I'm acting on,
is that we are about to
enter a change in the market,
where everything's going
from going up constantly
to coming down constantly.
The thing is that, if the
markets go up five percent,
10 percent, 15 percent,
they're gonna come down a lot faster
than it took them to
get up that 15 percent.
If takes 10 days to go up 10 percent,
it might take one day
to go down 10 percent.
But if you prepare yourself,
and you position yourself appropriately,
you don't have to worry about this stuff,
because if it does happen,
then you're going to enrich yourself
and you're gonna land on your feet.
And if it doesn't happen,
there's no cost to you.
This is my philosophy.
A lot of arguments people say,
but look at the low unemployment.
Well the thing is that,
unemployment numbers are
manipulated by the ones
providing the numbers to you.
If someone has a full-time
job and they lose it,
and they have to pay their
bills and feed their kids
and they go out and get
three part-time jobs,
the government's gonna tell you
that that's three jobs created.
They're gonna provide the report that
actually, we lost one
job but we gained three,
so that's plus two jobs
and all of a sudden,
look at how low the unemployment rate is.
Think about it.
How come every time the stock market
collapses or has a big
crash, that's always
on the heels of a really
low unemployment rate?
That's not a coincidence.
Low unemployment does not mean
that the stock market goes up more.
Low unemployment does not mean
that the economy's strong.
However, the powers that
be have ways to manipulate
what they're showing you,
so that it looks like
low unemployment is a really strong thing.
It's actually a warning sign.
And if you don't understand
what I would say that,
or what I mean by that,
just wait a couple
months, you'll understand
what I mean by that.
But if you look at the
quantitative easing we've had,
the money supply has quintupled,
five times, over the last
not very long decade and a half or so.
It's gone up five times.
Think of a dollar as a share of stock.
Each dollar is share, or a slice of the
GDP of the underlying country.
So if you quintuple the money supply,
each dollar should theoretically
be worth one-fifth as much.
That's why since closer to the 1900s,
the U.S. dollar has lost 98 percent
of its purchasing power.
People will say, my
grandfather was so smart,
because he bought a house
for $40,000 dollars.
And then he sold it for
$400,000 dollars recently.
The house may not have
actually appreciated in value.
What can happen sometimes,
if the house is in the
right place, maybe it
developed around the house and therefore,
the land's more valuable,
so yeah, sure, there's
theoretically possibilities
that the house is more valuable.
But typically what's happening is that
your grandfather bought
a $40,000 dollar house
with strong dollars and now,
those dollars are so much weaker.
They've been printed so much that they're
decreasing in value.
It just takes more dollars
to buy the same asset.
So a $40,000 dollar house being sold
for half a million dollars
may not have actually appreciated in value
in comparison to the value
of the dollars themselves.
Optimism in the stock market
is far too high right now.
And I'm not out here saying
that this is what's going to happen.
I'm out here saying
that this is what I
believe is going to happen.
And I'm wrong plenty of the time.
And if I'm wrong, please
jump on the comments here
and tell me that I'm an
idiot and how wrong I am.
But I will tell you somethin'.
I land on my feet, I've done it before,
I'm doin' it now, I'm gonna
do it again in the future.
