SECRET METHOD Banks Use To Control The World

Summary

This video script delves into the intricate world of banking, revealing how banks can seemingly print money and control global assets. It outlines a three-step process: banks create money through loans, engage in a shadow banking system to transfer assets globally, and face constraints due to risk and interest rates. The script challenges viewers to consider risk analysis over central bank actions when making investment decisions, emphasizing the importance of understanding the banking system's impact on wealth-building.

Takeaways

• 💡 Banks have the ability to create money through the process of lending, which initially did not exist before the loan was created.
• 🏦 The balance sheet of a bank is crucial, with assets like loans on one side and liabilities like deposits on the other.
• 🔄 When a loan is paid to another bank, the transferring bank must either offset the liability with an asset or transfer reserves to maintain balance.
• 🌐 The concept of 'shadow banking' refers to banking activities conducted outside the regulatory oversight of central banks like the Federal Reserve.
• 🌿 Shadow banks can operate without the need for traditional bank reserves, potentially allowing for unlimited money creation.
• 💸 Banks can create their own reserves and money, but they are constrained by the risk associated with the assets they purchase with the created money.
• 📉 Market risks, such as changes in interest rates, can significantly affect the value of assets, potentially leading to bank insolvency.
• 🚫 The video emphasizes that despite the ability to create money, banks are ultimately limited by the perceived risk and creditworthiness of their assets and counterparties.
• 💼 For investors, understanding the dynamics of risk and the global monetary system is more important than just focusing on central bank actions like quantitative easing or tightening.
• 🌟 The video suggests that risk analysis should be the starting point for investors trying to navigate financial markets influenced by central banks and large financial institutions.

Q & A

What is the main claim about banks' ability to control the world as presented in the script?

The main claim is that banks have the ability to create money and manipulate the financial system, particularly through the process of lending and the creation of deposits, which can be used to buy assets and influence the global economy.

How does the script explain the process of money creation by banks?

The script explains that when a bank creates a loan, it effectively creates new money by adding a new deposit to its balance sheet, offset by the loan as an asset. This process is illustrated through the example of Joe borrowing money to buy a car from Moody.

What is the role of the Federal Reserve in the process described in the script?

The Federal Reserve plays a central role by acting as the clearinghouse for interbank transactions. It facilitates the transfer of reserves between banks to balance their balance sheets when deposits are transferred between different banks.

What is the significance of the term 'shadow banking system' mentioned in the script?

The 'shadow banking system' refers to banking activities conducted outside the traditional banking system, which are not subject to the same regulations. This system allows banks to create money and reserves without the direct oversight of central banks like the Federal Reserve.

How does the script describe the process of transferring money between banks, particularly internationally?

The script describes the process of transferring money internationally by showing how banks credit each other's accounts and use reserves to offset liabilities. This is illustrated with the example of Exxon transferring money from Chase New York to City Bank in London.

What is the concept of 'ledger money' as mentioned in the script?

The concept of 'ledger money' refers to the credit entries made by banks on their balance sheets to balance transactions. It's a form of money that exists as a record of debt within the banking system, rather than physical currency.

Why doesn't the script suggest that banks would actually buy everything in the world despite their ability to create money?

The script suggests that while banks can create money and credit, they are constrained by risk, particularly the risk associated with the assets they purchase. If the value of these assets plummets, banks can become insolvent, which limits their ability to buy everything.

What is the role of risk in the banking system as discussed in the script?

Risk plays a critical role in the banking system by constraining banks' ability to create money and buy assets. The script emphasizes that banks must manage credit risk, interest rate risk, and counterparty risk, which can affect their solvency and the stability of the financial system.

How does the script relate the concept of risk to the actions of central banks like the Federal Reserve?

The script argues that while central banks' actions, such as quantitative easing or tightening, can influence liquidity, the perception of risk in the global monetary system is a more significant factor. It suggests that investors should focus on understanding risk levels rather than solely on central bank policies.

What is the practical implication of the script's discussion on banking and money creation for individual investors?

The practical implication for individual investors is to focus on understanding the risks in the financial system, which can affect asset prices and the value of investments. The script suggests that being aware of these risks can help investors make more informed decisions about where to allocate their capital.

Outlines

00:00

🏦 Understanding Bank Money Creation

This paragraph introduces a secret method banks use to control the world through money creation. It outlines three steps to explain the process. Step one focuses on the ability of banks to print money, raising the question of why they don't buy everything if they can print it. The explanation involves the balance sheet mechanics of banks, illustrating how banks create new money through loans. The example of Joe borrowing money to buy a car from Moody is used to demonstrate how banks create deposits and transfer them between banks, using reserves at the Federal Reserve as offsetting assets. The paragraph sets the stage for further exploration of how banks operate and the implications of their money creation abilities.

05:03

🌐 Exploring Offshore Banking and the Shadow System

Paragraph two delves into offshore banking, also known as the shadow banking system, which operates outside the direct oversight of the Federal Reserve. It discusses how banks can transfer funds internationally, using Exxon's transfer of money from Chase New York to City London as an example. The process involves moving deposit liabilities and reserves between banks, highlighting how the shadow banking system can operate without the need for physical reserves. The paragraph introduces Perry Meiring, an expert on the subject, who explains the concept of euro dollars and how banks can create their own reserves, thus controlling the money supply beyond the constraints of traditional banking regulations.

10:06

💵 The Potential of Banks to Buy Everything

Paragraph three explores the theoretical ability of banks to buy all assets in the world if they so desired. It uses a simplified scenario with two banks, Bank A (JP Morgan) and Bank B (HSBC), to illustrate how banks can create money and use it to purchase assets like treasuries. The process involves crediting accounts and transferring liabilities between banks to balance their books. The paragraph emphasizes the concept of 'ledger money,' where banks essentially create credit entries to facilitate transactions. It also introduces the idea that banks can effectively create their own reserves, which challenges the traditional understanding of money creation being solely the domain of central banks.

15:07

📉 Risk and the Limitations of Bank Money Creation

Paragraph four introduces the concept of risk as a critical factor in bank money creation. It explains that while banks can create money and credit, the value of the assets they purchase with this money is subject to market risks, such as interest rate fluctuations. Using the example of Bank A buying a treasury that later loses value, the paragraph demonstrates how banks can become insolvent if the assets they hold decline in value. It challenges the idea that banks can endlessly create money without consequence, emphasizing that the solvency of banks is tied to the perceived risk of their assets and the trust other banks place in them.

20:12

⚠️ The Importance of Risk in Global Monetary Systems

The final paragraph emphasizes the importance of understanding risk in the context of global monetary systems. It argues that while central bank actions, such as quantitative easing or tightening, are important, the perception of risk and counterparty risk within the banking system are even more critical. The paragraph suggests that an informed investor should focus on risk analysis rather than solely on central bank policies. It concludes by encouraging viewers to consider the broader implications of the banking system's operations on their investment decisions, hinting at the interconnectedness of risk perception and monetary policy.

Keywords

💡Money Printing

Money printing refers to the process by which a central bank or financial institution creates new money. In the video, it's discussed as a capability of banks, suggesting they can generate their own funds, which raises questions about why they don't simply buy everything. The concept is central to understanding the video's theme of financial control and the mechanisms through which banks operate.

💡Balance Sheet

A balance sheet is a financial statement that displays the assets, liabilities, and equity of a company or individual at a specific point in time. In the video, the balance sheet is used to illustrate how banks manage their assets and liabilities, particularly when creating loans and transferring funds between banks, which is fundamental to the video's explanation of banking operations.

💡Federal Reserve

The Federal Reserve, often referred to as 'the Fed,' is the central banking system of the United States. It plays a critical role in the country's financial system, including the regulation of commercial banks. The video mentions the Fed in the context of how it interacts with commercial banks and the creation of reserves, highlighting its importance in the broader financial system.

💡Deposit Liability

A deposit liability in banking refers to the amount of money that customers have deposited into their accounts with a bank. The video explains how banks treat these deposits as liabilities because the bank owes this money back to the depositor. This concept is used to describe the process of transferring money between banks and the creation of new money through loans.

💡Shadow Banking System

The shadow banking system refers to the collection of non-bank financial intermediaries that provide services similar to traditional banks but are not subject to the same regulations. The video delves into how this system operates outside the direct oversight of entities like the Federal Reserve, allowing for the creation of money and reserves without direct constraints, which is a key aspect of the video's discussion on financial control.

💡Bank Reserves

Bank reserves are funds that banks are required to hold and cannot lend out, typically held at the central bank. In the video, the concept of reserves is crucial in explaining how banks manage their liquidity and settle transactions. The video also discusses how, in the shadow banking system, banks can effectively create their own reserves, which is a significant point in the narrative about financial power.

💡Asset Risk

Asset risk refers to the potential for a decline in the value of assets, such as loans or investments, held by a financial institution. The video uses the concept of asset risk to explain the limitations on banks' ability to create money and buy assets. It suggests that while banks can create money, the risk associated with the assets they purchase can constrain their actions, which is a critical factor in the stability of the financial system.

💡Counterparty Risk

Counterparty risk is the risk that the other party in a financial contract will fail to fulfill their obligations. The video emphasizes the importance of perceived counterparty risk in the global monetary system, suggesting that it can influence liquidity and financial stability more than actions like quantitative easing or tightening by central banks.

💡Quantitative Easing (QE)

Quantitative easing is a monetary policy in which a central bank purchases government securities or other securities from the market to increase the money supply and encourage lending and investment. The video mentions QE in the context of how it's often misunderstood by the public and the media, arguing that the perception of risk is a more critical factor in liquidity than the actions of the Fed.

💡Settlement

Settlement in finance refers to the process of completing a securities transaction by exchanging the security for cash. The video discusses the settlement process to explain how banks transfer funds and liabilities between each other, which is integral to understanding the mechanics of interbank transactions and the creation of money.

Highlights

Banks have the ability to print money, raising the question of why they don't simply buy everything.

The process of money creation through loans is explained, showing how banks can create new money that didn't exist before.

The balance sheet dynamics of banks are detailed, with assets like loans and liabilities like deposits.

The transfer of deposits between banks and the role of the Federal Reserve in facilitating these transfers are discussed.

The concept of shadow banking is introduced, explaining how banks operate outside the direct oversight of the Federal Reserve.

The mechanics of transferring funds internationally within the shadow banking system are outlined.

The ability of banks to create their own reserves and money in the shadow system is highlighted.

The potential for banks to buy all assets in the world is explored, considering the constraints they might face.

The role of risk in banking operations is emphasized, explaining how it can limit the banks' ability to create unlimited money.

The impact of interest rate changes on the value of assets like treasuries and the solvency of banks is discussed.

The importance of perceived counterparty risk in the global monetary system is explained.

The video argues that risk analysis should be the starting point for investors, rather than just focusing on the Federal Reserve's balance sheet.

The video concludes by emphasizing the importance of understanding the banking system's inner workings for informed investing.

Transcripts

this is the secret method Banks use to

control the world I'm going to explain

this to you in three simple fast step

step number one they can print money

which begs the question if they can

print their own money why don't they buy

everything the answer is they can we're

going to address that more in Step

number three but before we get there

let's go over how this process typically

works so we've got the average Joe right

here and we have everyone's favorite

Millennial Moody the millennial with

their blue hair because I do not know

their preferred pronouns so Joe Banks

with bank a moody banks with bank B

we've got the Federal Reserve here in

the middle and as always we have assets

on the left liabilities on the right we

have the balance sheet for the

individual entities so Joe needs to

borrow some money let's say to buy a car

from Moody so Bank a says yeah we can go

ahead and do that we will go ahead and

create a brand new deposit for you Joe

which is what they do when they create a

loan this creates brand new money that

didn't exist before so if the balance

sheet starts with let's say Bank

Reserves on the left those are those

assets that they hold at the fed and we

have one deposit now we've added another

deposit but the offsetting asset is the

loan to Joe so Joe needs to pay for the

car that he's buying from Moody and

Moody Banks obviously with a different

bank so Bank a has to transfer this

liability called it Commercial Bank

deposit liability but it's just a a

deposit in your checking account so this

deposit liability has to go over here to

bank B well if they do that then they're

going to have negative equity they also

have to either offset the liability by

the same amount or they have to transfer

over an

asset aha so what they do is they take

this bank reserve and they say fed go

ahead and shoot this over to bank B's

account and that will be the offsetting

asset for this liability we just

transferred so then we get to the point

where the balance sheets look more like

this so this deposit liability has gone

over here so now it's no longer on the

balance sheet of Bank a and then with

the fed has done is they have taken the

reserves the Bank Reserves from A's

account and they've moved them into B's

account so when all is said and done

with bank B they now have that bank

reserve and the deposit they started

with but then they also have the

additional Deposit they got from Bank a

as well as the bank reserve that was

from Bank a but really it was a

liability of the Fed so they just

transferred it from A's account down to

B's account but here is where the story

gets interesting you see now Bank a only

has this loan as an asset and a deposit

they don't have any more Bank Reserves

so what do they do well they have to go

out to let's say Bank B and they have to

borrow some of these Bank Reserves if

they want to transfer or if one of their

customers wants to transfer this deposit

over to bank C so just say that Joe has

this deposit as well for 100 bucks and

he owes Larry which I didn't put on the

board here but let's say Larry banks

with c and he needs to pay Larry that

$100 that's in his account so Bank a

will transfer this $100 deposit

liability over to bank C but wait a

minute they're not going to be able to

transfer that loan as the offsetting

asset so what on Earth do they do well

what they'll likely do is go in into the

open market borrow the Bank Reserves

from Bank

B and then they'll transfer those Bank

Reserves over to bank C's balance sheet

so when everything is said and done now

they still have that loan but instead of

the deposits they have an IOU

to bank B because they owe them the Bank

Reserves that bank B was nice enough to

transfer over to bank C for them so Bank

a could settle up with bank C but the

whole key to step number one

lies right

here I'm talking about this red

arrow that's highlighting the fact that

when this transaction is done

effectively Bank B has accepted

IUS from Bank a as the offsetting

asset to that deposit

liability and if you have a hard time

following this or if it doesn't quite

make sense don't worry because we're

going to dive into this in even greater

detail in Step number two which is going

to show you how Banks if they wanted to

could quite literally buy everything in

the world but there is one constraint

and again we're going to get into that

at the end of this

video step number two now let's talk

about how the banks operate

offshore outside of the purview of the

FED we call this the shadow banking

system and just like its name implies it

is very mysterious but once we start to

dive into these details you see how

these Banks can really control the world

so let's start by looking at a paper

from a professor I believe at Boston

University and they basically go over

something similar that we went over on

the whiteboard in Step number one but

they're starting with Exxon and they've

got assets on the left liabilities on

the right and Chase New York Chase City

now they get into City London so City

Bank of London but let's hold off on

that for just a moment because I want

you to see kind of the how the

transaction plays out so we've got Exon

and they want to transfer let's to say

$10 probably more like 10 billion

dollars or 10 or 10 million or something

but they want to transfer

$10 from Chase New

York to City New

York okay great very simple process we

just went over this so what happens is

they decrease the assets they have on

deposit with Chase and increase the

assets they have with City but then

Chase New York has to transfer those

deposit liabilities over to City so it's

a minus here A Plus here but then they

also have to transfer them the Bank

Reserves so it's a minus on the asset

side of their balance sheet A Plus on

the asset side of City therefore

everything balances out in the end so

now let's assume Exxon didn't really

want transfer the money to City New York

they wanted to transfer it to city in

London City Bank in London their Branch

over there okay fine well how does it

differ so what would happen in this case

is the deposit and the reserves would go

from Chase to City New York but then

what would happen is City New York would

Credit City London's

account that City London has with City

New York so what I'm saying here is this

Bank in London has an account with the

bank in New York just like you have an

account with Wells Fargo or Bank of

America these banks have accounts with

one another so what city does is they

credit London's account with the 10

bucks those reserves back up that

liability and then what they do is they

transfer this liability that originally

started on Chase New York's balance

sheet over to City London because

remember that's where Exxon actually

wants the

deposit and then the offsetting asset

for London would be the increase of $10

to their account that they have with

city in New York so why this is so

important is because now what we've done

is we've taken dollars and they're

outside of the United States but more

importantly they're in a system that

doesn't necessarily need Bank Reserves

in other words they don't need the

Federal Reserve in other

words there's nothing constraining the

amount of money they create

except one thing that we're going to go

over in Step number three now if you're

having a hard time getting your head

around this no problem let's go over to

a video from I believe the author of

this paper and this guy's absolutely

brilliant his name is Perry Merling and

he's got all the credentials you would

expect PhD from Harvard he went to the

London School of Economics so let's go

over there and hear how he describes

this because he's probably going to do a

much better job than I just

did now

these deposits that City London has in

City New York are essentially reserves

that's the city London cannot have a

deposit account at the FED it cannot

have it's not allowed but it can have a

deposit account at a bank that has a

deposit account at the fed and so it can

sort of indirectly have a deposit

account at the fed and that's what it's

operating so it has these deposits and

the way it will it it uses them as money

the way it it if Exxon wants to transfer

this deposit to somebody else okay City

London uses its deposit in in in New

York to do that so there's these like

layers of reserves that are

happening I would like to suggest

revised version of this where Exxon is

transferring its money to credit

Leon

C and credit Leon is using a deposit at

City New York as its

Reserve okay so its deposit is in

another bank a different bank not its

own bank that makes it much clearer

what's going on here that this is a

correspondent kind of relationship so

the when we talk about euro dollar we're

talking about this stuff here that's on

the balance sheet of banks that are

outside the United States now we have

this bank credit Leon C

Leon it's a bank

it can go into the dollar deposit

business it can go into the dollar

lending business it has

reserves in its correspondent

bank plus dollar

loans plus dollar deposits you know it

can make loans by creating

deposits okay and if somebody withdraws

those deposits it can use these deposits

in New York at to make to make payment

okay so it can go into the dollar

borrowing lending business even though

it's in

France so the main takeaway from Step

number two is once you get into this

rather mysterious Shadow banking system

they can create not only their own money

but they can also create their own

reserves to have the ability to transfer

that deposit liability to another bank

so if they can create their own money if

they can create basic basically their

own reserves just like the Federal

Reserve creates their own Bank Reserves

then why don't they go out there and buy

all the treasuries all the real estate

all the businesses all the gold all the

Bitcoin all the

stocks and completely own the entire

world it's a good question and to a

certain degree they could and we're

going to discuss that right now

step number three the banks buy

everything remember what they've been

telling

you you'll own

nothing and you'll be happy here's how

this would work out as far as the

balance sheets let's say there are only

two banks in the world to keep things

super simple we'll call it Bank a or

maybe JP

Morgan and Bank B maybe City Bank bank

or

HSBC so before we get into what this

Bank buys buying all the assets all the

Bitcoin all the gold all the real estate

all the treasuries all the stocks

Etc let's go back to what Perry Merling

was saying at least this is his View and

there are different views out there more

on that in just a moment but the Banks

can effectively create their own

reserves they can create their own money

they can create their own assets their

own

liabilities so let's just put that or

let me just give you a real world

example so before we get to this part

let's just assume that bank B has an

account with bank a that's their

liability and Bank a has an account with

bank B and this is Bank B's liability so

there's only two Banks they know each

other well they've been doing business

with each other for the last 40 years

and they say look let's go ahead and uh

start by I'll just credit your account a

100 bucks and Bank a says well that's

mighty nice of you Bank B I'll go ahead

and respond in kind by crediting your

account 100 bucks so the balance sheets

all

balance from the

standpoint of Bank a has this $100 asset

that's how much money is in their

account at Bank B and Bank B has this

$100 asset which is the amount that they

have their balance in their account at

Bank a okay now let's go ahead and

continue so Bank a says well boy I want

to go out there and buy some Treasury

IES they're looking real good so they

say I'm going to go ahead and buy

treasury from XYZ non-bank entity and

we'll go ahead and credit their account

with us let's say they just buy it from

the average Joe so we'll credit Joe's

account by

$100 we'll assume they're buying $100

worth of treasuries okay so the $100 wor

of treasuries become the asset on their

balance sheet that's what bank a is

trying to buy but the $100

deposit is now a liability that would be

Joe's asset the asset that he now has

for selling his treasuries to bank a to

begin with all right but then George

remember we've got that settlement issue

that we were talking about in steps one

and two so let's assume that Joe wants

to transfer this deposit liability over

well Commercial Bank deposit liability

over to bank B all right well what

happens because Bank a doesn't have

anything to really settle with because

they want to keep that

treasury so this deposit goes over to

their balance sheet which we can see

right here so now on the liability side

of Bank B's balance sheet they have

$200 when they only had 100 to begin

with and they only started with $100 in

their account at Bank

a but Bank a says well here's what we'll

do we'll go ahead and transfer you this

liability we want to keep our treasury

so we'll just go ahead and add another

$100 to bank B's account that they have

with

us this is why my good friend Jeff

Snider calls this simply Ledger

money that's all it is is they're just

getting their books to balance they're

just creating this

network of ledgers or balance sheets if

you will so now that the transaction is

done let's

see if these things balance

out so Bank a has now $200 worth of

assets $200 worth of

liabilities Bank

B 200 worth of

assets 200 worth of

liabilities Bank a has purchased

treasuries effectively for free with

money that they just created due to this

scheme if you want to call it that with

bank

B whoa timeout I know a lot of you are

probably watching this saying George

this is absolutely

impossible this this can't be right I

mean at the end of the day these aren't

dollars I mean they're just it's just

credit back and forth they're just

IUS and at the end of the day they're

just claims on dollars and we know that

the only entity that can create actual

dollars is the Federal Reserve this is

what we call Base money or m0 so again

these are just all claims on dollars and

there's no way these banks at the end of

the day when they settle would accept

just a claim on a dollar they would

actually want the real

thing okay but let me ask you the last

time you were paid let's say

$1,000 or maybe you received your

paycheck and that was deposited into

your account did you receive claims on

dollars or did you actually receive

dollars see unless you received Green

Piece P of paper then you did not

receive dollars you did not receive base

money you did not receive m0 you did not

receive a liability of the fed you

received claims on

dollars that for you was just as good

because you can spend those claims on

dollars or those IUS from the bank just

like you can the green pieces of paper

it's the exact same thing here oh but

wait there is more if you've really been

paying attention you know that

throughout this entire video I've been

hinting at the fact there is a

constraint So in theory this all works

but in practice it's quite a bit

different and there's one word that

tells us everything we need to

know

risk and I'm not necessarily talking

about the risk initially from from One

bank to the other but what I'm more so

talking about is the risk with the

assets they actually purchase with all

this money they create out of thin air

let me show you what I'm referring to so

remember Bank a bought a treasury from

the average Joe that at the time let's

say was yielding 5% and therefore it was

worth

$100 but but let's assume for a moment

that interest rates go up very quickly

and very dramatically where have we seen

this happen

before so you guys know by watching my

videos that there's an inverse

relationship between the interest rate

and the value of the actual treasury so

if these interest rates go up and go

Skyhigh the value of this treasury

plummets now for the sake this example

to keep things super simple let's say

the value of the treasury goes down to

zero now the value of the treasury

wouldn't go down to zero in real life

but again just for the sake of this

example so now all of a

sudden this

asset basically goes away because it has

no value again it's gone down to zero so

now all of a sudden Bank a is is

insolvent they have negative equity

because they have $200 worth of

liabilities but they now only have $100

worth of

assets and you say oh George well that

isn't a problem because remember what

you're telling us right up here in this

phase of the game that they could just

go to bank B and say Bank B hey credit

my account for another

$100 and then everything will go back to

balancing out out and Bank B says yeah

you're my good buddy but that ain't

going to happen because let's think

about it if Bank B added another

$100 to bank A's

account they would be putting themselves

in the exact same position as Bank a and

that is up a certain creek without a

paddle as we used to

say when I was a kid because if they

added another $100 now they would have

$300 in

liabilities and only 200 in assets so

the constraint on the banks is the risk

it's the interest rate risk it's the

credit risk meaning what if they don't

even get paid

back then they can create as much money

as they want or lend each other as much

money or reserves as they want and it

doesn't bail them out

and this is why I always say what really

drives liquidity in global markets is

perceived counterparty risk it isn't

necessarily the fed's balance sheet

whether they're expanding it or

Contracting it so Bank B looks at A's

balance sheet and says yeah that ain't

looking too good then they're going to

hesitate or they're not going to create

credit for them and vice versa so it's

all about the

Asset Risk and then the perceived

counterparty risk within the network of

the banking system itself or the global

monetary system if you will in other

words these banks that operate in the

shadows I know right about now many of

you are asking the most important

question of this entire

video George why on Earth does this

matter I understand and this network

that you're talking about and all the

balance sheets and the money Printing

and the banks and oh all this is just

mumbo jumbo at the end of the day I'm

just an average investor trying to

figure out whether I should buy some

real estate maybe some stocks bonds

maybe some gold or Bitcoin none of this

matters to me at

all and this is where I would disagree

with you let me explain so if you're

there watching CNBC or Bloomberg If the

Fed is doing quantitative tightening as

an example they are going to tell you

that oh my gosh this means that

liquidity in the global monetary system

is going to shrink is going to decrease

and therefore X Y and Z will be the

likely outcome but you as an informed

investor will know that while it's

important to pay attention to the fed's

balance sheet sheet what's even more

important is to try to determine what is

happening with the amount of perceived

counterparty risk or risk in general in

the global monetary system because if

risk is going up and the fed's doing QE

it's not going to have that much of an

impact and if risk is going down then

conversely if they're doing quantitative

tightening then that also isn't going to

have much impact it's all about your

starting point are you starting by

trying to analyze risk or are you

starting by trying to analyze the fed's

balance sheet and the whole point of

this video is to try to impress upon you

my view and it's just my opinion that

the starting point should be risk

for more content that'll help you build

wealth and thrive in a world of out of

control central banks and big

governments check out this playlist

right here and I will see you on the

next video