Fed Rate Cuts: The Hidden Opportunity No One's Talking About!

Summary

Mark Moss discusses the Federal Reserve's interest rate cut and counters the popular belief that markets will crash post-pivot. He analyzes historical data, highlighting that rate cuts often occur during economic slowdowns but do not necessarily cause market crashes. Moss anticipates an asset boom in the next 12-15 months, driven by cheaper money and a resting market. He advises investors to consider sectors like multifamily real estate, tech stocks, and gold, aligning with his 'qwave' thesis focusing on Bitcoin 2.0 and AI.

Takeaways

• 📉 The Federal Reserve has announced a pivot to lower interest rates, sparking speculation about market reactions.
• 📈 Historically, markets have not always crashed after the Fed cuts rates; sometimes they've rallied significantly.
• 💹 Mark Moss, with experience through five rate cuts, suggests that the current market conditions and Fed's actions may lead to a boom rather than a bust.
• 💼 Jerome Powell's focus is on preventing labor market weakening, indicating a shift from tightening to easing monetary policy.
• 📊 Despite past rate hikes, the markets have shown resilience, and there's a significant amount of capital waiting to be invested.
• 💰 The Fed's policy of quantitative easing post-2008 has changed the dynamics of the market, making historical comparisons less applicable.
• 🏦 The central bank's quick response to recent bank issues shows an increased willingness and ability to intervene in financial markets.
• 🚀 Moss anticipates an asset boom in the next 12 to 15 months, driven by cheaper money and capital coming off the sidelines.
• 🏠 Specific sectors Moss recommends for investment include multifamily real estate, tech stocks, and Bitcoin, which align with his 'qwave' thesis.
• 📚 The 'Monetary Codex' concept introduced by Moss outlines how liquidity flows affect asset prices in cyclical patterns.

Q & A

What recent announcement by the Federal Reserve has sparked widespread speculation?

The Federal Reserve has announced that interest rates are going down, indicating a pivot from tightening to easing monetary policy.

What is the general misconception about market behavior following a Federal Reserve rate cut?

The general misconception is that the market will crash whenever the Federal Reserve cuts interest rates, based on historical events being misinterpreted as causal rather than coincidental.

How does Mark Moss describe his experience and expertise in finance?

Mark Moss describes himself as an investor who has been through five rate cuts, an educator of investors for six years, a financial newsletter writer, an advisor to tech startups, and a partner at a tech VC hedge fund.

What does Mark Moss argue is the real reason behind the Federal Reserve's decision to cut rates?

Mark Moss argues that the real reason behind the rate cut is the Federal Reserve's concern about labor market weakening, as indicated by Jerome Powell, rather than inflation which has been coming down rapidly.

What historical pattern does Mark Moss refute in relation to Federal Reserve rate cuts and market crashes?

Mark Moss refutes the pattern that every time the Federal Reserve cuts rates, the market crashes. He provides examples where rate cuts occurred during or after market downturns, not causing them.

What does Mark Moss suggest is the asymmetric risk that the Federal Reserve is trying to avoid?

The asymmetric risk that the Federal Reserve is trying to avoid, according to Mark Moss, is unemployment. The Fed prefers inflation over unemployment because it is easier to stimulate the economy out of inflation than to recover from high unemployment.

What does Mark Moss recommend for securing Bitcoin and why?

Mark Moss recommends using a hardware device like a Trezor for securing Bitcoin because it allows for taking custody of one's property and protecting it with no cost, unlike other assets like gold or stocks.

What is the 'monetary codex' that Mark Moss refers to and how does it relate to the current economic situation?

The 'monetary codex' is a concept used by Mark Moss to map liquidity flows and their impact on asset prices. He suggests that the current cycle indicates an upcoming asset boom in the next 12 to 15 months due to the Federal Reserve's easing policy and the amount of money sitting on the sidelines.

Which sectors does Mark Moss predict will perform well in the upcoming asset boom?

Mark Moss predicts that real estate, particularly multifamily properties, tech stocks, and gold will perform well in the upcoming asset boom due to the easing of monetary policy and the influx of money into riskier assets.

What is Mark Moss's 'qwave' thesis and how does it relate to his investment strategy?

Mark Moss's 'qwave' thesis refers to the intersection of Bitcoin 2.0 and AI, where he believes significant money will be made in the next 12 to 15 months. This thesis aligns with his investment strategy, focusing on sectors that will benefit from the influx of cheap money and technological advancements.

Outlines

00:00

📉 Fed's Pivot to Lower Interest Rates

The Federal Reserve has announced a significant policy shift towards lowering interest rates, a move that has sparked widespread discussion and speculation. Contrary to popular belief that market crashes typically follow rate cuts, the speaker, Mark Moss, challenges this notion with historical data analysis. Moss, an experienced investor and financial educator, aims to provide a fact-based perspective on the Fed's latest move, focusing on the implications for the market and potential hidden opportunities. He emphasizes the importance of data over sensationalism and outlines the Fed's actions, including Jerome Powell's influence on the US dollar as the world's reserve currency, and the market's anticipation of rate cuts.

05:02

📈 Historical Analysis of Rate Cuts and Market Performance

This section delves into a historical examination of the relationship between Federal Reserve rate cuts and market performance. Moss scrutinizes the common assertion that rate cuts precipitate market crashes, using data to question this causality. He reviews periods of rate cuts coinciding with economic recessions, as indicated by gray lines on the chart, and challenges the simplistic narrative by highlighting that rate cuts often occur after market downturns have already begun. Moss provides a detailed analysis of specific instances, such as the 2000 and 2007 financial crises, and the 2020 pandemic, to argue that the Fed's actions are more reactive than proactive in causing market movements.

10:02

💼 Contextualizing the Fed's Current Actions

The speaker transitions to discussing the context behind the Fed's current decision to lower rates, emphasizing that the move is not due to an existing recession but rather as a preemptive measure. He presents data on GDP and personal consumption, suggesting that while these indicators are stable, it is the unemployment rate that concerns the Fed. Moss explains that unemployment is a lagging indicator, and the Fed's primary concern is the upward trend in unemployment, despite the rate being at a historical low. The discussion highlights the Fed's focus on maintaining economic growth and employment over managing inflation, setting the stage for the rate cut as a strategic intervention.

15:03

💸 The Impact of Lowered Interest Rates on Economic Growth

In this segment, Moss explores the rationale behind the Fed's decision to lower interest rates, likening the cost of money to the price of goods. He argues that cheaper money stimulates economic growth by encouraging borrowing and investment, which in turn can lead to business expansion, job creation, and increased asset prices. The speaker anticipates that the current rate cut will inject significant liquidity into the market, potentially leading to an asset boom. He also touches on the psychological aspect of rate cuts, suggesting that the perception of economic stability can itself be a driver of growth.

20:04

🚀 Preparing for an Impending Asset Boom

Moss concludes with a forward-looking perspective, predicting an asset boom in the coming 12 to 15 months. He attributes this optimism to the Fed's readiness to intervene with monetary policy, the potential release of capital from conservative investments into riskier assets due to lower interest rates, and the broader economic context post-quantitative easing. The speaker identifies specific sectors, such as multifamily real estate, tech stocks, and Bitcoin, as likely beneficiaries of the anticipated boom. He also references his 'qwave' thesis, which suggests that the convergence of Bitcoin 2.0 and AI technologies will be particularly lucrative. Moss invites viewers to consider his analysis and share their thoughts on the potential for a market boom or a repetition of historical patterns.

Keywords

💡Federal Reserve

The Federal Reserve, often referred to in the script as 'the Fed,' is the central banking system of the United States. It plays a crucial role in the economy by influencing monetary policy, including interest rates. In the video, the Fed's decision to cut interest rates is a central theme, with the speaker discussing the implications of this policy shift on the market and the economy.

💡Interest Rates

Interest rates are the cost of borrowing money and are a key tool used by central banks like the Federal Reserve to manage economic activity. Lower interest rates encourage borrowing and spending, while higher rates can cool down an overheating economy. The video discusses the Fed's announcement to cut interest rates, which is expected to stimulate economic growth.

💡Pivot

In the context of the video, 'pivot' refers to a significant change in policy or strategy. The speaker mentions that the Fed's pivot from a tightening to an easing policy, signaled by the reduction in interest rates, is a major event that will influence financial markets and investor behavior.

💡Market Crash

A market crash is a rapid and severe decline in the stock market or other investment markets. The video script addresses the common narrative that a Fed rate cut will lead to a market crash, but the speaker argues against this view, using historical data to suggest that the market's direction is more complex and depends on various factors.

💡Recession

A recession is a period of negative economic growth that lasts for at least two consecutive quarters. The video discusses the state of the economy and whether the Fed's rate cut is a response to an impending recession, with the speaker analyzing current economic indicators to assess the risk.

💡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 script references QE as a tool that has been used historically by the Fed to stimulate the economy, and how it has changed the dynamics of economic cycles.

💡Asset Boom

An asset boom refers to a period of rapid increase in the prices of assets, such as stocks, real estate, or commodities. The video suggests that the easing of monetary policy by the Fed could lead to an asset boom, as cheaper money often leads to increased investment and higher asset prices.

💡Monetary Policy

Monetary policy refers to the actions undertaken by a central bank, such as the Federal Reserve, to influence economic activity by adjusting the money supply and interest rates. The video's discussion on the Fed's rate cut is an example of monetary policy, aimed at stimulating economic growth by making borrowing cheaper.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling. The video mentions that the Fed is more concerned with unemployment than inflation, indicating a preference for managing the labor market over controlling price increases.

💡Unemployment

Unemployment refers to the number of people who are without jobs and actively seeking work. The video script highlights the Fed's focus on unemployment as a key indicator of economic health, with the speaker suggesting that the central bank's policy decisions are aimed at maintaining low unemployment rates.

Highlights

The Federal Reserve has announced a pivot towards lowering interest rates, sparking widespread speculation.

Mark Moss introduces himself as an investor with experience through five rate cuts and educator of investors.

The video aims to bypass sensationalism and focus on factual data regarding the Fed's latest move.

Jerome Powell's influence as the head of the Federal Reserve is highlighted, emphasizing his control over the US dollar.

A historical overview of rate hikes and pauses is provided, with the current pause being a year long.

Market expectations for a rate cut of 102 basis points are discussed, with a 65% chance of at least a half-point cut by December.

A historical analysis challenges the notion that market crashes follow Fed rate cuts, suggesting context is key.

The role of recessions and their correlation with rate changes is examined, showing that rate cuts often follow market downturns.

The potential for an asset boom is predicted due to the Fed's current position and the amount of money on the sidelines.

Advice is given on securing Bitcoin with hardware devices like the Trezor, emphasizing the importance of custody and security.

The Fed's focus on unemployment as a key economic indicator is highlighted, with a preference for inflation over unemployment.

The direction and speed of unemployment rate changes are identified as more critical than the actual rates themselves.

The concept of 'cheap money' is explained, and its impact on borrowing, business expansion, and asset prices is discussed.

The Fed's readiness to act with monetary policy tools is underscored by their historical rate adjustments and balance sheet management.

The impact of quantitative easing since 2008 is analyzed, arguing that it has changed the dynamics of market interventions.

A forecast for the next 12 to 15 months suggests an explosive asset boom, with specific sectors like real estate, tech stocks, and gold highlighted.

The 'monetary codex' concept is introduced as a tool for mapping liquidity flows and predicting market movements.

Transcripts

so the Federal Reserve just announced

that the pivot is finally coming and of

course interest rates are going down now

this has set the news off with a wave of

speculation and bad takes frankly and

everyone is pointing to history look

once the FED Cuts rates the Market's

going to crash but what if I told you

they're all wrong now real quick if

you're new here welcome to the channel

my name is Mark Moss I've been paying my

dues investing through five rate Cuts

with my own money real risk not some

academic Reddit the books Theory now for

the last 6 years I've been educating

investors so they can avoid many of the

expensive mistakes that I had to make

now I've been writing a financial

newsletter I've been advising Tech

startups and I'm a partner at a tech VC

hedge fund and I want to get right to it

okay so we're going to skip The

Sensational clickbait you know Market is

going to crash narrative and instead I

want to focus on facts and data so in

this video I'm going to break down the

fed's latest move and we're going to

look at why the markets won't crash

we're going to look at what the hidden

opportunity in all of this are and of

course what actions you and I should be

taking right now to get ready for what's

about to come so let's

go all right let's get right into it

because I got a whole lot of charts

graphs and data to show you because you

know on this channel we don't do things

by Intuition or wrong facts instead we

look at the data to see exactly what's

going on now of course just to set the

stage you already know the pivot is here

we've been talking about the pivot

coming for a long time we'll get back to

when we started talking about it but of

course all eyes have been on Jerome

Powell you know maybe one of the most

powerful people in the world because he

controls the price of money of the US

dollar which of course is the reserve

currency of the world so all eyes have

been on him every time they go into a

meeting a Fed meeting are they going to

lower rates what are they going to say

and almost like the whole world is

waiting to find out their fate based off

of what this guy says I think of it the

insanity of that almost like seeing Punk

Satani Phil the groundhog come out of

the ground and tell us whether spring

coming or not I mean that's kind of what

it's like it's a pretty insane if you

think about it and of course we've been

waiting and then sure enough here it

comes fed's Powell declares the time has

come finally we're going to Pivot going

from a tightening policy to an easing

policy uh he talked about this at

Jackson Hole uh and he says that they

intend to act to Stave off labor market

weakening we're going to come back to

that labor market weakening in a minute

but that's uh exactly what's happened

now just to kind of see this and like I

said how long we've been talking about

this we can see that of course uh rates

had been kept down at zero since the

2020 pandemic and then they started

raising them uh right around January of

2022 now we went 17 months of raising

rates which into one of the fastest most

aggressive rate hiking tightening Cycles

we've seen and then we've been in a

holding pattern since August of 2023 or

about a year at this point and so

they've been on a pause now a lot of

people were speculating are they going

to raise rates a lot of headlines were

saying that that online I think that was

insane of course I've been talking about

that openly uh in history there's never

been a point where they paused and then

started raising again and this certainly

wasn't one of them so 17 months of

increasing we've had 12 months of a

pause which in my opinion is sort of

almost as good as uh that pivot because

what it does is it assures the market

that the fed put is there we'll come

back to that but we can see here that

Traders are now priced in a 102 basis

point cut or basically a whole point um

of easing this year and this kind of

shows where it is they're basically

expecting in September to be uh 32 basis

points in November 67 and by December a

whole 102 of course if we look at the

CME fed watch tool which seems to be a

lot more um accurate we can see that the

market on there is actually giving a 65%

chance of at least a half a point cut or

more so that's the the odds favorite

that we're going to see at least a half

a point cut or more okay but you already

know all that I don't need to rehash all

that what does all this mean and what is

everybody wrong again about okay so

let's take a look at the Historical look

back of this because what you see all

over social media and YouTube because

they want you to click on their videos

and watch them so they want to sell you

the Doom is they say well historically

whenever the FED pivots the market

crashes so it's going to be

bad okay does it really say that let's

take a look okay so rate Cuts as soon as

the rate cuts Cuts we have a bust in the

market now we're going to go through a

bunch of data and a bunch of charts I'm

going to go through this pretty quickly

okay so the first thing is we have rate

Cuts okay so the FED of course sets the

price of money by making money more

expensive or cheaper and so you can see

money got more expensive cheaper more

expensive cheaper more expensive cheaper

Etc boom bust boom bust boom bust now of

course we have gray lines here these

represent recessions so of course they

make money too expensive people don't

buy as much money we have a recession

they make it cheaper the Mark goes up

they raise it up again we have recession

raise it up again and recession that's

it boom and bust boom and bus the FED

which is supposed to stop the boom and

bus are the ones that are actually

causing this but what I want to look at

is is it true that every time the FED

raises rates that the market crashes

well let's just take a look at this

again uh skip the headlines of the

cliches look at the look at the real

facts U we'll go back here to 2000 so we

can see right here the FED started uh

lowering rates at this point the gry

line shows we went into a recession here

we have in 2007 that they started

lowering rates we went into a recession

here in 2020 of course during the

pandemic they lowered rates and we went

into a recession okay so that is looking

at that but that is a recession that is

maybe slow economic growth but what's

going on in the markets okay so let's

take a look at this from a factual

standpoint so let's go back here to the

2020 I'm sorry the 20 ,000 rate cut now

what I have here is the S&P 500 on the

top and what I have down here is the Fed

uh funds rate okay so what we can see is

right here is where they pivoted and

started to lower rates now if we draw

this up what we can see is that the

market had already been crashing now did

the market continue crashing yes of

course it did it continued going all the

way down to here till they were at zero

the point being is that yes they cut

rates but was it commonality or

causality because the markets were

already crashing down before the rate

cut happened hm okay interesting that's

in 2000 let's go back a little bit uh

let's let's move forward a little bit so

here we have in 200,000 now what we can

see is something sort of similar we can

see right here is where they cut it in

August of 2007 they started lowering fed

funds rate and if we draw this line up

we can see again surprise surprise

surpris we had already been crashing now

let me just point out um this was the

great financial crash this was the

housing market crash if you guys

remember that and what we know is that

all the way back about here in 2006 the

home starts home building the permits

were down I think 26 or

28% meaning the real the The Real Crash

actually started way back here it didn't

materialize in the stock market until

here and it actually took the fed 30

months 30 months to do anything once the

housing market had already crashed off

the cliff 28% I mean it was amazing so

again causality or commonality okay now

let's take a look at this here we have

February of 2020 of course I don't have

to explain this one to you this is

recent history now we can see right here

is where the FED funds rate started to

get cut if we draw that up that was

about the peak of the market however I'm

going to say we should throw this one

aside because literally if you can

remember I'm sure you can the whole

world the governments of the world

literally shut businesses down

businesses that have been open for

Generations are now gone I mean people

couldn't even work so of course we

expected a crash to happen and it went

off so this was sort of an Al anomaly

but even still it didn't it's not like

the market crashed after that happened

right this happened the market started

they shut the economy down the market

started crashing and they cut rates

immediately within uh like a week not 30

months like we saw in 2008 which is a

key point we're going to come back to

but let's look at the other side of

things okay so here we have in 1995 1995

to 2000 so what we can see here okay now

let's look at the other side of things

okay so here we have a a full chart of

Ray Cuts again and so here we have this

chart where they went down they went

back up and then they went down again

right here we had this whole holding

pattern so they went down but if we take

a look in that whole period we can see

from

1995 until 2000 when they started

cutting rates right here and went down

down down down down the stock market

during this time went up over 200% so

huh most of the cuts didn't look like

they caused the crash it looked like

they actually happened because the crash

was there and here's a case where they

actually cut rates but at the same time

the market rallied 200% well let's look

at another one here we have 2019

now we can see something similar so here

we have the FED funds rate up up up up

up we have a pause and then here we have

a cut and a cut and a cut so here we

have the cut now if I draw the line up

what happened well we can see that

prices continued going up almost

60% so we have cases where they cut but

it looked like it actually happened

after the fact and here we have cases

where they clearly cut but prices kept

going up 200% 60% so it almost seems

like it's not a matter of does the

market cost the Boomer bust it's more

about the context of what they're

cutting into what does the rest of the

market look like at the time of the cut

and that's the important deciding factor

to determine where we're going to go so

let's take a look at that I want to take

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down below okay why why is the Fed doing

this right now we have to understand the

context okay well are we in a recession

well technically no we're not we're not

in a recession as a matter of fact um

things are good on the GDP front I have

a chart right

here so we can see technically a

recession would be GDP negative GDP and

we can see that GDP is pretty flat it's

up a little bit not good it's not 5% but

it's not bad we're definitely not in a

technical recession for sure so what are

we really worried about well we can see

that um it's not personal consumption

and spending so here we have a chart of

personal spending it looks like the

consumers doing pretty good spending

hanging on uh pretty

well but what Jerome Powell told us

right here is what he's worried about is

unemployment is the fed's biggest enemy

right now pal says he's not worried

about inflation inflation's been coming

down pretty rapidly and they'd much

rather have inflation than the opposite

which is unemployment

why is that well let's take a look at

this to understand a little bit now the

first thing we want to look at is it

seemingly is much more dangerous he's

much more worried about unemployment

than he is actually inflation but if we

take a look at the unemployment number

we can see that right here we're sitting

on pretty much like a historical

low so why so dangerous we're like at

one of it's not like we're like up at

this level right we're down at a

historical low level right here but

here's the thing this is the reason why

I show you all these charts and graphs

it's not the sheer number that's the

problem it's the direction and the speed

that we're going so here we have a

zoomed in chart from 2019 and you can

see that unemployment obviously here

spiked when we shut the whole world down

but we've been basically Flatline we got

back to that normal here but this right

here is the problem we can see that

we've been on this trend line solid

consistently and right here we're

starting to turn up so it's not the

number itself at a historical low that's

the problem it's the direction that

we're going the problem for Jerome pow

and the fed and the the central planners

overall is that unemployment losses are

asymmetric meaning um unemployment is

one of the last things that happens

typically a business is going to try to

hang on hang on to their business hang

on to their employees as long as they

can and firing people will be one of the

last things so it's what we call a

lagging indicator and not a leading

indicator okay so there you have it

unemployment is the thing they're

worried about the the economy the

recession uh not all those other things

and so of course what's the answer well

let's make money more cheap again look

uh here here's a thought experiment if

you think about it I talk about it in

cheap money expensive money if you sell

an iPhone let's call it for

$1,500 um you sell an x amount of

iPhones if they put the iPhone on sale

to $200 do you think people would buy

more iPhones or would they buy less

iPhones they'd buy more because they

were cheaper so money is the same way

the price of money is the rate I have to

pay to borrow it if if I have to pay 7%

to borrow it's expensive I'll borrow

less of it if they move it down to 1%

interest I'll borrow more of it it's

cheaper so we have cheap money now why

does the FED lower and raise or raise

and lower the price of money of course

to stimulate growth if they lower the

price of money more people borrow that

means businesses expand they buy more

equipment they buy more trucks they hire

more people uh more homes get built more

homes get purchased so they use it to

stimulate growth when we we have that

cheaper money now once we have cheaper

money that stimulates the growth

businesses do better people have more

money uh maybe people can refinance

their homes down then we have more

discretionary spending so now all our

money doesn't go to fixed expenses we

can spend on other things um again we

can build up businesses we can spend

more money which then means those

businesses do better which then means

their stock prices go up which then mean

asset prices go up obviously you get all

this it's the boom that we're talking

about and that's what is happening now

can the FED save us this time well I

already showed you the historical facts

but let's talk about why I think dare I

say this time is different dare I think

that the FED can save it well the FED

has been reloading the cannon the money

printers reloading as I said reloading

the ink in the money printers if you

will so you have to realize that right

now we have all the markets basically

S&P 500 the NASDAQ Bitcoin Gold

Everything things at alltime highs right

now after the FED has been on the

fastest and most aggressive hiking cycle

we've seen in history there's been no

stimulus they've been tightening they've

been uh reducing their Reserve balance

sheet and yet we're at all-time highs

with no stimulus now what we can see is

that there's lots of room for them to go

they're they're they're rested up

they're reloaded now what we can see

right here is this is um 2004 going into

2007 2008 into the great financial crash

we got to zero so we're at 0% rates and

then of course we went up into 2019 came

back down to zero and again this fast

rate hiking cycle what we can see here

is that we're all the way back up to

where we were in the '90s

in the 90s in the mid 2000s that's how

high we are what that means is the Fed

bought themselves all this room they can

easily cut down a couple points and end

up right here and not even be that crazy

low hiso historically nowhere even near

to zero and they've bought themselves

all this room they've got themselves all

these tools they've rested up if you

will in addition what they've been doing

is they've been rolling off their

balance sheet so you can see right here

was in 2020 when they put all the

stimulus onto the books to get the

economy going again and that went up

like crazy but they brought it all the

way back down right here so they freed

up all this room so that's like uh

restocking the ammo in their cabinet if

you will so they have all this capacity

that they freed up they have all this

interest rate capacity that they freed

up and they're ready to go they're

they're rested and they're ready to run

to do whatever it takes to keep this

economy going Jerome pal said it himself

in a 60 Minutes interview I played the

clips on this channel before he said

look we would rather go too far meaning

hold rates higher for longer we'd rather

go too far than um pivot early because

inflation we we want to get inflation

under control he said we'd rather go too

far and break things because we have the

tools to rebuild them that was his quote

and this is exactly what we're seeing so

they have all the tools they need to

keep this system going now the other

reason why this thing is about to blow

off like a powder cake is because not

just the FED has been resting but you

and I have been resting businesses

investors we've all been resting there's

a lot of money that's been sitting there

uh sleeping on a pillow ready to go what

do I mean by that well because rates

were so high 5% plus a lot of people

even like myself took a large amount of

cash out of the markets and moved it

into fed funds treasuries money market

accounts and earned 5% plus why would I

take the risk in the S&P 500 to make 78%

when I'm guaranteed five or 6% over here

and that's what everybody did so all

that money came off however when the

rates come back down it's no longer as

attractive as it used to be now we can

see this evidence again in the charts we

like to look at the data so we can see

this is money sitting in money market

account so money You' put into account

to earn that treasury yield and we can

see it was basically zero up to 1980 I

mean look at that Flatline and it inched

up it inched up here in 2000 rates went

up it started attracting some money

here's 2008 money ran to safety um and

it went in there but look where we're at

right here we have six almost 6 and A5

trillion 6.44 trillion dollars that's

sitting on the sidelines because the

sidelines is the most or has been the

most attractive place to be however when

rates come back down and asset prices

start running where do you think that

resting money goes would I rather make 2

and a half or 3% over here when

bitcoin's running at 100 150% when

Gold's running when S&P 500 is running

when Real estate's Running no I'm going

to take that money the 6.5 trillion out

of here and I'm going to deploy it into

assets and then what happens well those

assets go up even faster and faster okay

now the uh the old cliche it's uh

different this time why is it this

different this time well I've laid out a

bunch of reasons let me give you a

couple more one of the reasons why is

2008 quantitative easing I talk about

this all the time I've done entire

videos on this that most of the data we

look at pre2 2008 doesn't really apply

as much as as as the times that we're in

today because everything changed in 2008

when we got quantitative easing so

quantitative easing was something new in

the United States sort of new for the

world and you can see the FED balance

sheet had been basically flat and then

they pumped it up with all the stimulus

to try to get the markets going and this

balance sheet has been growing ever

since there's a couple things with this

number one they've gotten pretty good at

QE now I talked about how in 2007 it

took 30 months to get any type of a

bailout going as a matter of fact when

Bear Sterns went down which is you know

widely accepted as sort of that that

trigger point that brought the entire

Global Financial system down cascading

down after that it took uh seven months

to organize a bailout so when the bank

that took all the banks down with it it

took seven months to get a bail out but

here in 2023 when we had the three Banks

Silicon Valley Bank First Trust Etc when

they went down it took I think six days

so we went from seven months to get a

bail out over here to six days so the QE

changed a couple things changed number

one how the central banks and

governments interact in the markets

number one number two it changed their

willingness to even intervene again 30

months or 7 months here to 6 days over

here but more importantly what it did is

it over levered the system the more the

system gets levered up the less it can

withstand any type of draw down so what

we saw in 2000 or in 2008 isn't really

possible to happen again and so that's

why this time is different as I quote

all the time Einstein he said the

answers changed Okay now what's going to

happen What do we do to prepare for this

well uh what we want to prepared for is

an asset boom okay I think that over the

next 12 months things are going to be

explosive why well this comes down to

something I call the monetary codex I've

done a bunch of videos on this as well

and it basically Maps the liquidity

flows so liquidity the money moves asset

prices and it goes in Cycles like this

and we have about 12 more months in this

cycle probably maybe up to 15 months

before we start to see the next downturn

and the next problem so in all of the

things that I've shown sh you the pivot

the cheaper money the money coming off

the sidelines the next 12 months 12 to

15 months I expect this to be explosive

where will it go a couple sectors I

think will do really good real estate I

think could do really well now not just

single family um you know bread and

butter 3.2 or three bedroom 2 Bass But

specifically I like multif family why

because multif family is purchased for

cash flow and you price it off of a cap

rate so a cap rate is a multiple of the

net operating income to the value price

now when you bring the cost of the Debt

Service down that means that the

valuation of the building goes up

because rates went up so fast it hurt

the valuation of those buildings but if

rates go down it brings the valuation of

those buildings back up I like multif

family real estate I like the leverage

that it provides I like the tax that

Cent that provides tech stocks tech

stocks have been sort of well they're

still holding up the mag 7's been

holding up pretty good but when money is

uh cheaper then we have to chase more

yield and it will go into more risk

assets tech stocks of course this Falls

in

Bitcoin and tech stocks fall in line

with my qwave my quantitative wave

thesis this is where all the money is

going be made in the next 12 to 15

months basically the intersection of

what I call Bitcoin 2.0 plus AI so I

really like that and of course gold is

breaking out in almost every currency

across the world we can see that gold is

telling us something big is happening

and it's breaking out it's not going to

be anywhere near explosive as these two

um you know maybe in more in line with

real estate but real estate has other

things but that is where I'm looking to

put my money now if if you want to know

more about this qwave and this sector to

invest into I got a video right here you

can go ahead and click and watch that if

you want but let me know what you think

about this is this time going to be

different or am I wrong and uh history

is somehow going to repeat let me know

in the comments down below if you like

this video give me a thumbs up if you

don't you can give me a thumbs down

that's okay but at least tell me why in

the comments and that's what I got all

right to your success I'm out