CRYPTO ALERT: A CRASH IS INEVITABLE...

Summary

In this market update video, the speaker addresses the panic surrounding a potential recession and argues that it's not a reason to panic for long-term investors. Despite a 30% market drop, the week ends green, emphasizing the importance of understanding central bank policies and their impact on assets like Bitcoin. The video discusses the manipulation of GDP and the real game of currency debasement, highlighting Bitcoin's role as a hedge against inflation and its potential as a world capital asset. It concludes by suggesting that Bitcoin and certain equities are strong long-term investments, capable of outperforming traditional asset classes.

Takeaways

• 📉 Panicking about a potential recession this week was not the right move, despite a 30% drawdown.
• 📈 Bitcoin has been the best-performing asset over the last 15 years, despite short-term volatility.
• 💼 Portfolio management should focus on long-term investments that can withstand short-term volatility.
• 🏦 Central bank policies are impacting Bitcoin's long-term value, driving its price upward over time.
• 💰 The real challenge for investors is protecting against currency debasement, which is a continuous process.
• 📊 GDP is considered a fake metric in the context of wealth creation, manipulated by stimulus and government spending.
• 💸 Without government stimulus, GDP would be negative, revealing the fragility of the current financial system.
• 🔄 The financial system relies on continuous debt creation and stimulus to maintain GDP and asset prices.
• 🌐 Bitcoin offers protection against fiat currency debasement, serving as a fixed-supply asset in a volatile economy.
• 💡 Real wealth creation comes from innovation and technological advancements, which drive prices down, not traditional GDP metrics.

Q & A

Why is panicking about a potential recession not advisable according to the video?

The video suggests that despite market fluctuations and fears of a recession, the week is ending green, indicating that long-term investments in assets like Bitcoin, which have historically performed well, are more important than short-term market reactions.

What is the role of central bank policy in affecting Bitcoin's price?

Central bank policies, particularly those involving monetary stimulus, can lead to currency debasement. This, in turn, can affect Bitcoin's price positively over time, as Bitcoin is seen as a hedge against such debasement due to its fixed supply.

What does the video suggest about the relationship between GDP and wealth creation?

The video argues that GDP is not a true measure of wealth creation. It is often manipulated through fiscal and monetary stimulus, which can give a false impression of economic health. Real wealth creation comes from innovation and efficiency improvements that reduce costs.

How does the video describe the impact of currency debasement on various asset classes?

The video explains that most asset classes, such as bonds, commodities, and even the stock market, struggle to keep up with the rate of currency debasement. It highlights that Bitcoin and certain technology companies on the NASDAQ have been more successful in this regard.

What is the video's stance on the usefulness of GDP as an economic indicator?

The video criticizes GDP as a 'fake metric' that does not represent real economic health or wealth creation. It suggests that GDP is artificially propped up by government stimulus and does not reflect the true state of the economy.

What is the significance of Bitcoin's fixed supply in the context of currency debasement?

Bitcoin's fixed supply makes it a valuable asset in times of currency debasement. Because no more than 21 million Bitcoins will ever exist, it cannot be debased like fiat currencies, which can be printed indefinitely, leading to a loss in purchasing power.

How does the video relate the concept of 'demonetizing labor' to the NASDAQ's performance?

The video suggests that technology companies, particularly those listed on the NASDAQ, are effectively 'demonetizing labor' by creating efficiencies that reduce the cost of services. This contributes to the NASDAQ's outperformance as these companies are at the forefront of wealth creation.

What is the video's perspective on the role of stimulus in maintaining positive GDP?

The video posits that without continuous stimulus, the GDP would naturally trend negative. Stimulus is used to counteract this natural downward trend, but it also contributes to currency debasement and increased debt.

Why does the video suggest that investing in Bitcoin could be a good strategy for long-term investors?

The video recommends Bitcoin as a long-term investment because it can act as both a hedge against currency debasement and a beneficiary of real wealth creation through technological advancements and efficiencies.

What advice does the video give regarding portfolio management during times of market uncertainty?

The video advises setting up a portfolio with long-term investments that can withstand short-term volatility. It emphasizes the importance of having assets that won't need to be liquidated in the event of short-term financial needs or market downturns.

Outlines

00:00

📉 Market Volatility and Long-Term Investment Strategy

This paragraph discusses the recent market fluctuations and emphasizes the importance of not panicking despite a potential recession. It suggests that despite a significant market downturn, the week is expected to end positively. The speaker advises viewers to differentiate between short-term liabilities and long-term investments, and to understand central bank policies that could positively affect Bitcoin's value over time. The paragraph also touches on the uncertainty in the market due to the US elections and the holding pattern that traders might be in, waiting for more clarity. It concludes by highlighting the importance of focusing on long-term currency debasement as the core investment strategy, rather than short-term market worries.

05:01

💵 The Illusion of GDP and Currency Debasement

The speaker argues that GDP, a commonly watched economic indicator, is a misleading metric for wealth creation and is artificially manipulated through fiscal and monetary stimulus. They explain that without such stimulus, GDP would be negative, indicating an underlying economic weakness. The paragraph delves into the effects of currency debasement, showing how different currencies have lost significant purchasing power over time. It also points out that most asset classes fail to keep up with the rate of currency debasement, except for Bitcoin, which has shown exceptional growth. The speaker encourages viewers to invest in assets that can protect and grow their wealth despite currency debasement, positioning Bitcoin as a strong candidate for such investment.

10:02

🚀 Bitcoin's Role in Wealth Creation and Protection

This paragraph explores Bitcoin's dual role as both a hedge against currency debasement and a participant in real wealth creation. It discusses how Bitcoin's fixed supply counters the inflationary policies of central banks and how it can be a store of value in a world where traditional assets are subject to the whims of monetary policy. The speaker also addresses concerns about economic slowdowns and recessions, arguing that these are less relevant when considering Bitcoin's potential as a world asset. They highlight the importance of investing in assets that can outperform the rate of currency debasement, with Bitcoin and certain technology companies on the NASDAQ being the standout performers. The paragraph concludes by promoting a crypto investment course and a deposit bonus for those interested in trading cryptocurrencies.

Keywords

💡Recession

A recession is a period of negative economic growth that lasts for at least two consecutive quarters, typically characterized by high unemployment, a decline in GDP, and reduced consumer and business spending. In the video, the speaker discusses the fear of a recession and argues that the panic surrounding it is misplaced, as the current economic system relies on stimulus to maintain positive GDP growth, which would otherwise be negative without such measures.

💡Portfolio Management

Portfolio management refers to the process of making investment decisions and managing investments for an individual or institution. The video emphasizes the importance of setting up a portfolio with long-term investments that are not affected by short-term economic fluctuations, as well as having liquid assets to cover liabilities during times of market volatility.

💡Central Bank Policy

Central bank policy refers to the actions taken by a central bank to influence a country's money supply, interest rates, and overall economic stability. The script mentions that understanding central bank policy is crucial for investors, as these policies can have a significant impact on the value of assets like Bitcoin, which is portrayed as positively affected by such policies over time.

💡Bitcoin

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network without the need for intermediaries like banks. The video positions Bitcoin as the best-performing asset over the last 15 years, highlighting its potential as a hedge against currency debasement and its role as a long-term investment that can outperform traditional asset classes.

💡Currency Debasement

Currency debasement occurs when the value of a currency decreases due to inflation or other economic factors. The script discusses how currency debasement is a continuous process in the current economic system, with Bitcoin presented as a fixed-supply asset that can protect investors from this debasement and maintain purchasing power.

💡Fiat Currency

Fiat currency is a type of currency that is not backed by a physical commodity, such as gold, but rather by the trust and credit of the government that issued it. The video argues that fiat currencies are subject to constant debasement, which erodes their purchasing power over time, making investments in assets like Bitcoin more attractive.

💡Stimulus

Economic stimulus refers to government spending or tax cuts designed to boost economic activity during a downturn. The script explains that the current positive GDP growth is largely a result of fiscal stimulus, and without it, the economy would naturally trend towards a negative GDP, indicating a deep reliance on stimulus to maintain economic stability.

💡GDP (Gross Domestic Product)

GDP is the total value of all goods and services produced over a specific time period within a country's borders. The video criticizes the focus on GDP as a metric for economic health, arguing that it is artificially inflated by government stimulus and does not represent real wealth creation, which is more accurately reflected in the innovation and efficiency gains seen in the technology sector.

💡Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. The script discusses the relationship between currency debasement and inflation, noting that an increase in the money supply without a corresponding increase in goods and services leads to inflation.

💡Investment Returns

Investment returns refer to the profits or income generated from an investment. The video provides a comparison of annualized returns for various asset classes, emphasizing that most traditional investments struggle to keep pace with currency debasement, while Bitcoin has shown exceptional returns as a hedge against inflation.

💡Wealth Creation

Wealth creation is the process of generating new economic value through innovation, increased efficiency, or the production of goods and services. The script contrasts the artificial inflation of asset prices through stimulus with real wealth creation, which is achieved through technological advancements and increased productivity, often reflected in the performance of certain sectors like technology companies.

Highlights

Despite a 30% drawdown, the week is expected to end green, suggesting a recovery from market panic.

The importance of setting up a portfolio with long-term investments that aren't affected by short-term market fluctuations.

Central Bank policy's impact on Bitcoin, which has been the best-performing asset over the last 15 years.

The current market situation is uncertain, with traders possibly waiting for the US election outcome.

The argument that panicking about a potential recession is not beneficial for long-term Bitcoin investors.

Individual portfolio management is crucial to handle short-term volatility without affecting long-term investments.

The concept that market worries about recession are 'smoky mirrors' and not the actual focus of long-term investment.

GDP is considered a fake metric, manipulated by government or central bank stimulus, not reflecting real wealth creation.

The US federal government's deficit spending, which if removed would lead to a significantly lower GDP.

The fiat currency system's inability to pay off debt, leading to continuous currency debasement.

Bitcoin's role as a fixed supply asset that can protect against currency debasement.

The majority of asset classes fail to keep up with the annualized returns needed to outperform currency debasement.

Bitcoin's significant outperformance compared to other asset classes, including the S&P and NASDAQ.

The potential for Bitcoin to grow into a world capital store of value, distinct from equities.

Equities are seen as a good investment for wealth creation, but they are risky and subject to business failure.

The presenter's view that Bitcoin is in a growth phase and offers significant advantages over traditional investments.

The promotion of a crypto investor course and a deposit bonus for those interested in trading Bitcoin.

Transcripts

hey guys this is market update in this

video we're going to look at some of the

fundamentals of why panicking this week

about a potential recession was not the

play it's been a crazy week we had

basically a 30% draw down over you know

a couple of days and this week's candle

despite this huge draw down in this week

here is going to end the week green so

why is that what's going on and why is

panicking about a potential recession

not the play now I understand if you

have liability short term that you need

dollars for it's really important to

understand what's going on right but

you have to set up your portfolio so

that you have long-term Investments that

don't have to get eaten into if

something happens to your lifestyle

right so it's important to look at

Central Bank policy and what it's

actually doing and why it is affecting

Bitcoin to the upside over time the best

performing asset over the last 15 years

right from 0 to 62,000 almost this week

so it's been a crazy week we traded

still within the range a huge draw down

massive panic and and then buyers are

coming in and a green candle again we're

still in this range to be honest I don't

really see anything that moves us out of

this range short term because everything

is so uncertain right now Traders are

probably waiting for the US election to

be over and see what's happening there

so I just still think we're in this

holding pattern of as long as things

carry on a little bit then nothing much

is going to change now many people are

panicking about a potential recession

spike in unemployment those things you

know are important to about shortterm

but ultimately lead to a higher Bitcoin

price longterm I want to focus on that

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there was a lot of panic this week about

a potential recession and higher

unemployment and the Yen carry trade

blowing everything up and none of that's

come to pass right essentially the

central banks are doing some shifting

around here and it's creating volatility

in markets for sure and volatility

shortterm is only a worry if you have

fat currency liabilities that need to be

met shortterm and you don't have the fat

currency to meet them because it's tied

up that's about individual portfolio

management at that point that we have

long-term investments in assets that can

stand that volatility and we have enough

assets that can be liquidated or cash

equivalents that can pay our bills

shortterm that's individual portfolio

management but the worry about recession

is actually uh something that is kind of

smoky mirrors and I want to explain that

in this video because it's really

important to understand the dynamic

between what the market worries about

which is completely irrelevant I think

and then what is actually happening

which is long-term currency to basement

which is the game of investing our real

game that we're playing here is to

protect ourself from currency de

basement that's happening it's all here

and it will never get talked about in

the Press which is always looking at GDP

and everything all of these metrics

which are totally made up and fake and

don't represent anything real this is

the Atlanta feds uh Now cast for real

GDP so they're saying around 2.9% so

it's a forecast of GDP and everyone's

worried in the mainstream media about

GDP falling you know if GDP Falls it's a

nightmare well let's have a look at GDP

2.9% and this is the fiscal stimulus

happening in the States this is the US

federal government spending money that

they don't earn in tax and as you can

see it's not a one-off thing this

happens every year there is a deficit uh

of2 to3 trillion do right for debt

creation that the government has to

create to pour into the economy so this

is about 6 to 7% of GDP so what I'm

saying is if this deficit was taken away

and the US federal government only spent

what they earned in tax GDP would

literally be negative double

figures the natural free market is to

drive GDP

lower the GDP is only positive because

of stimulus that's worrying because if

the stimulus disappears all of our

assets are going to drop by 90 plus per.

because they're the wrong price the

natural rate of the economy once GDP to

go negative it is not naturally positive

at this point in time in this economy so

stimulus pushes that higher that's

extremely worrying and that's why

markets are so fragile because without

the GDP without these stimulus

GDP would be negative and everyone's

assets would go down 90% and there would

be complete upheaval around the world

this is why it's not allowed to happen

this is why central banks are so active

essentially the government through

fiscal stimulus or the Central Bank

through monetary stimulus makes sure

that GDP is positive the thing that gets

hit is the fiat currency every single

time in Argentina over the past 4 years

98% inflation it's a 90% loss in

purchasing power in the Turkish L we've

got a 78% loss in purchasing power over

3 years and in the states the USD uh the

supply of USD has increased

approximately 7% for the past Century

which is a 99.9% loss in purchasing

power wow the useful life is 14 years

for the USD which is the best one so

what I'm saying is worrying about GDP

which is a completely fake metric is not

relevant because the government or the

central bank will manipulate it higher

through currency to basement and that's

it there is no recession GDP going lower

GDP is a fake metric to look at it's not

wealth creation stimulus is part for the

course the real game in investing is

currency of the basement and how to

protect from that over the long term we

know then that if GDP is soft they will

stimulate that's actually what they're

doing now so to worry about recession

right we're actually in it because

without that stimulus GDP would be

negative and so the game here is just

that they have to keep asset prices

higher higher higher to basing the

current debt out that will never ever

change the debt will never be paid off

that is not the game of the fat currency

system the F currency system is a credit

system the only thing it can do is

create more credit on top of the other

credit it does not pay itself off that's

not how it's designed it literally

cannot pay itself off so in US Dollars

about 7% currency in the basement a year

that means with inflation and everything

I would say you're looking at let's say

7 to 10% a year that is the base level

that you have to achieve over the dollar

in order to keep up right so if you've

got dollars if you've got an investment

it needs to be going up 7 to 7 to 10% a

year just to kind of keep its head above

water and not actually lose purchasing

power you can see here that these are

the major asset classes and if you look

at the annual Iz returns between 2011

and 24 this vast majority of assets do

not keep up with this so of course bonds

aren't going to keep up with it because

they're the actual mechanism by which

the basement happens paying less money

than the inflation you create uh we've

got Commodities here have actually gone

negative right so Commodities um no one

stores Commodities as value and them

getting cheaper is actually I would say

a good thing right it means that

Innovation is happening and we're

getting more out for Less input so the

price has actually gone down despite

currency to basement so that's how good

we are at getting things out of the

ground these days we've got cash here

which clearly isn't going to outperform

high yield bonds no way us small caps

are kind of keeping up preferred stocks

no way and then you've got kind of the

US Stock Market which is typically seen

as you know the place to put your money

right so outperformance here you've got

the S&P which is um us large caps around

133% here so a couple of percent a year

is actually what you're earning when

people say you you might you may earn 10

to 12% in the S&P you're actually

earning like 2% in the S&P right because

you have to take away the currency

debasement from that the NASDAQ is uh

improving that a little bit with around

18% annualized but again that's probably

around 8% annualized so they're decent

returns and then you've got Bitcoin here

um which you know clearly just is in

this massive growth and adoption phase

which is why it has this out performance

so to outperform real currency the

basement in the dollar there's basically

about three things you can invest in

many people are worried about a

potential growth scare or growth

slowdown what they're really worried

about because of the financial metor is

GDP slowing down unemployment going a

little bit higher there's actually two

sides of the same thing right here so

the first one is like I said without

stimulus GDP would literally be double

figures negative right so we're in that

slowdown if you want to look at GDP

right but GDP is not real wealth

creation GDP is a fake metric that is

basically just controlled by how much

stimulus there is that's the lever that

pulls right so what you're actually

trading there is just government policy

and stimulus we know that it happens the

other side of this is that the free

market is actually driving GDP down as

well through uh real wealth creation

real wealth creation is when humans

invent ways to get more out of less so

they invent tools and machines and AI

where you get more out of less that's

real wealth creation Bitcoin comprise

both of those things in so we know that

real wealth creation is actually driving

the cost of things down and that means

that that disinflate wages disinflate

prices we can't let that happen because

everything would collapse in in terms of

the pricing structures that we have and

all the debt that we have so we can't

let that happen so all we do is just

pour more and more and more and more

debt in as stimulus to keep prices

higher that's why the debt is going

through the roof over and over and over

again you can't take it out because

otherwise you get Negative GDP and

everything collapses so the 7% per year

currency of the basement for the US

dollar two things are outperforming

Bitcoin as people realize this and the

conversation has shifted and you have an

invention that should be some sort of

world asset World Capital something like

gold and that's the size of the market

is huge we're talking about 10 to 50

trillion in terms of Market size and

you're in a growth phase so people are

excited about that and of course you

have outperformance the other

outperformance here is the NASDAQ the

best performing of these assets because

it indexes the companies that are

demonetizing labor the fastest

technology companies that are

demonetizing uh you know everything that

we used to do in terms of communication

right so what are they what are they

doing they're creating actual wealth

which is letting us do more basically

for free communicating for free sending

messages for free so all of the um you

know payments are going to them now

instead of other people demonetizing

labor so the free market is actually

trying to crash down whereas stimulus is

trying to push up stimulus is trying to

essentially fight gravity which is

impossible Bitcoin has two sides to it

the first thing is if you wanted debase

a currency go ahead because it can price

that in because it's a fixed Supply

asset the second thing is if you want to

own BTC as a neutral currency and wait

for other human beings to create wealth

for you and to create things that you

can use basically for free that improve

your life you can do that too those

things will get cheaper for you because

you're holding a currency that isn't

getting debased what I mean by that is

you can buy a Communications orice a

phone for like $20 communicate with

people that's going to help your life

and help you uh create a business for

yourself or um you know improve your

economic standing as well so wealth

creation can be priced by Bitcoin and

not fat currency and Bitcoin protects

against fat currency the basement as

well because of it being a fixed Supply

asset World Capital versus debating Fe

currencies so this fud about growth

scares and recessions doesn't really

make much sense to me because without

this stimulus right here we would be in

what they call a recession anyway which

is negative GD G DP now GDP like I said

is not wealth creation GDP is a fake

metric that means nothing so to say that

GDP is negative is a bad thing what does

that even mean what is a recession does

it mean that people aren't going out and

trying to create a better life for

themselves and work and create wealth

for themselves no it's literally just

the Fiat system and these Fiat metrics

that mean nothing and this whole Fiat

system with this stimulus needs to be

poured in to keep it positive and if

they want to take it out it will go

negative and then guess what happens

more money printing from the Central

Bank you can see down here the

unsustainable upward trajectory of

deficits and debt argues for bipartisan

solutions to improve the country's

fiscal Outlook what does that even mean

if you take this away you create

negative GDP and the whole fat system

will crash if you want to bring this

down actually in nominal terms what you

have to do then is go to the central

bank you have to create a little

recession tell everyone that's a bad

thing and then go to the central bank

and the Central Bank prints money again

to buy this debt printing money is

inflationary to asset price and we're in

the same game over and over and over

again which is debasing currency that is

the game so if you want to invest in

real estate you can do you won't make

any money from it like we've seen but

you Arbitrage the difference between the

rate of your interest on your leverage

and the rate of currency debasement in

the currency that you've taken the

leverage equities are great you can

invest in the companies that are

producing real wealth and you know

getting asset flows and capital flows

into them so I've got no problem with

equities I was a stock broker equities

are great and I've been used for a long

time but as we you can see the S&P and

the NASDAQ once you take out currency

the basement they're not producing that

much right maybe 2 to 8% a year I mean

it's better than nothing right and

you're certainly um protecting yourself

against currency of the basement Bitcoin

is this tiny thing which has a huge

growth phase going on right now and is

outperforming those massively but could

potentially grow into this kind of world

Capital store value type thing which is

important because like these slides show

there is a lot of capital out there that

is just long-term store of value value

that is put aside in something other

than into equities because equities have

this problem of having to be valued

based on their cash flows and equities

are risky most businesses will fail in

fact all businesses will eventually fail

because they'll get taken over by

another business and so that's why you

have to invest in indices as well I

remember when a business being valued at

a trillion dollars was like this huge

breakthrough and now in the last few

years these businesses are valued at two

and three trillion they didn't create

that much value in the last few years it

was currency of the basement which

they're trying to price in that's the

game and you have to concentrate in

these monopolies it's not great Bitcoin

not a monopoly there's a lot of

advantages to it that's why I think it's

growing it's in a growth phase right now

if you do trade check out the deposit

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300 videos on getting set up with crypto

I'm James is man G here for watching and

I'll see you in the next one