It Started: The 'Great Melt-Up' Of 2025 (Dollar Collapsing, Stocks Skyrocketing)

Summary

In this video, Graham explains how the weakening US dollar is affecting both the stock market and real estate, with the possibility of a major shift in global finance. He breaks down the causes, such as money printing, political instability, and the rise of alternatives like Bitcoin and gold. He also discusses the performance of international stocks compared to US-based ones, and provides advice on how to protect investments. Despite concerns about the dollar's future, Graham remains optimistic about the long-term potential of diversified investments.

Takeaways

• 😀 The U.S. dollar is rapidly losing value, with inflation causing the purchasing power of money to decline significantly over time.
• 😀 Despite record-high market growth, the U.S. stock market's gains are partially offset by the weakening dollar, which makes international stocks more attractive.
• 😀 The U.S. national debt, now exceeding $37 trillion, is contributing to the dollar's decline, as increased debt leads to higher interest rates and further devaluation.
• 😀 Political instability, geopolitical risks, and tariffs are causing other countries to move away from investing in U.S. debt, contributing to the dollar's weakening.
• 😀 The dollar's purchasing power has decreased by over 85% since the U.S. abandoned the gold standard, while assets like gold and Bitcoin have gained in value.
• 😀 International stocks have outperformed the S&P 500 by the largest margin since 1999, with global markets potentially having more room for growth.
• 😀 There's no reliable correlation between the strength of the dollar and the performance of the stock market, as stocks often grow despite dollar fluctuations.
• 😀 Inflation does not directly drive stock market prices; stock market growth is typically driven by company earnings and liquidity rather than excess money printing.
• 😀 Geopolitical risks, such as tariffs and sanctions, have a more significant impact on the value of the dollar than inflation or money printing.
• 😀 To protect wealth in uncertain times, individuals should avoid holding too much cash, diversify investments, ignore negative news, and avoid high levels of debt or margin trading.

Q & A

What is the main point the video makes about the stock market?

The video suggests that the stock market is not rising because of actual growth but because of the weakening US dollar. It highlights that, despite record market growth, the dollar is losing value, leading to a potential financial disparity for those who fail to act accordingly.

How has the US dollar's value changed over time?

The value of the US dollar has significantly decreased over the years. For instance, $1 in 1913 had the same purchasing power as $100 today. The dollar continues to lose value, primarily due to money printing, political instability, and alternative investments like gold and Bitcoin.

What role does money printing play in the devaluation of the dollar?

Money printing increases the supply of dollars, causing the value of each dollar to decrease. The analogy of a pizza being divided into more and more slices illustrates how increasing the money supply dilutes its value, leading to a weaker dollar and increased inflation.

What is the impact of the US's national debt on the dollar?

The US national debt, now surpassing $37 trillion, contributes to the dollar’s weakening. As the debt grows, investors demand higher interest rates, which leads to more money printing and further devaluation of the currency.

How does geopolitical instability affect the value of the dollar?

Geopolitical instability, such as tariffs and sanctions, causes concerns among investors about the dollar’s long-term value. This uncertainty makes countries and investors less willing to hold US debt, further diminishing the dollar's strength.

What are the key factors causing the dollar's decline?

The three main factors contributing to the dollar's decline are money printing, political instability (including tariffs and geopolitical risks), and the growing popularity of alternative assets like gold and Bitcoin.

Why are international stocks outperforming the US market?

International stocks have been outperforming the US market due to a combination of factors, including better growth prospects abroad and the rising costs associated with investing in the US, which is facing economic challenges and a high valuation in comparison to international markets.

Does the declining dollar correlate with the stock market's performance?

No, the declining dollar does not directly correlate with stock market performance. Historical data shows no strong connection between the value of the dollar and the movement of the S&P 500 or global stocks, as the markets can go up or down regardless of the dollar's value.

What are some strategies for protecting your money in a weakening dollar environment?

To protect your money, the video suggests not holding too much cash for extended periods, diversifying investments across various sectors, sticking with your investment plan despite negative news, maintaining a steady income, avoiding excessive debt, and not investing money needed in the short term.

What is the video creator's personal approach to handling the economic situation?

The video creator keeps a diversified portfolio, including US treasuries, international stocks, Bitcoin ETFs, and real estate with fixed-rate mortgages. The creator believes in hedging against the falling dollar while remaining optimistic about long-term market growth, despite concerns about government spending and the weakening dollar.