First I was in disbelief. Now I'm just laughing.

Summary

In this video, the speaker recounts their trip to Colorado, highlighting a hike on the South Park 600 square Lakes Trail and an unexpected detour due to weather. They also discuss the market's reaction to interest rate hikes, arguing that these are misunderstood as fiscal expansions that can fuel economic growth. The speaker critiques the market's fear of rate hikes and emphasizes the positive impact of growth forecasts, suggesting that current selling is misguided. They conclude with personal hiking anecdotes and a broader perspective on the global economic system's transformation due to recent geopolitical events.

Takeaways

• 🗓️ The speaker returned from a trip to Colorado and plans to share pictures and videos at the end of the video.
• 🌤️ They experienced a lucky escape from a thunderstorm and hail by delaying their hike due to a flight diversion.
• 📈 The Atlanta Fed's GDP forecast for the third quarter is up to 2.6%, indicating strong or decent growth.
• 🤔 There's a fixation on interest rates, but the speaker argues that growth, not arbitrary interest rate levels, is what drives the economy and stock market profits.
• 💰 The speaker points out that rate hikes are a form of fiscal expansion, contrary to popular belief that they are negative.
• 🌐 The rate hikes are leading to an increase in government transfers to income and a significant boost to investors holding government securities.
• 😅 The speaker finds the market's reaction to rate hikes comical, as they believe it's a misunderstanding of the positive impact of growth.
• 📉 The market is going down despite economic growth forecasts, which the speaker sees as a major opportunity for investors.
• 🏦 The speaker predicts that the Federal Reserve's monetary policy will lead to negative cash flow, which may attract congressional scrutiny.
• 🌍 The global economic system is undergoing a fundamental transformation due to sanctions and the creation of new financial structures.
• 💪 The speaker encourages viewers to be patient and strong, emphasizing that current challenges are part of a larger, positive shift in the global economy.

Q & A

When was the trip to Colorado taken?

The trip to Colorado was taken on Friday and continued through the weekend, with the video being recorded on Tuesday, September 6th.

Why was the plane diverted to Salt Lake City?

The plane was diverted to Salt Lake City due to bad weather in Denver.

What happened to the people who did the hike on the day of the thunderstorm and hailstorm?

People who did the hike on that day got caught on the mountain and were pelted by hailstones the size of golf balls.

What was the Atlanta Fed's GDP forecast for the third quarter?

The Atlanta Fed's GDP forecast for the third quarter was 2.6% growth.

What is the speaker's view on the fixation on interest rates?

The speaker finds the fixation on interest rates comical and believes that the focus should be on economic growth instead.

How does the speaker describe the impact of rate hikes on the economy?

The speaker describes rate hikes as a form of fiscal expansion that fuels economic growth and provides an income boost to investors holding government securities.

What is the speaker's opinion on the market's reaction to rate hikes?

The speaker believes that the market's negative reaction to rate hikes is misguided, as they are actually beneficial for economic growth.

What is the current federal funds rate according to the speaker?

The current federal funds rate is two and a quarter percent, with expectations that it will be increased to three percent.

What is the speaker's view on the distribution of benefits from rate hikes?

The speaker believes that while the benefits of rate hikes may initially flow to a select few, they eventually circulate throughout the entire economy.

What is the speaker's advice for investors during this period of economic change?

The speaker advises investors to be patient and strong, not to panic, and to see the current period as an amazing opportunity for investment in the stock market.

What is the name of the trail the speaker hiked in Colorado?

The speaker hiked the South Park 600 Square Lakes Trail near Georgetown, Colorado.

Outlines

00:00

🏞️ Colorado Trip and Market Insights

The speaker returns from a trip to Colorado and shares their hiking experience, which was postponed due to a thunderstorm and hail. They mention posting pictures and videos at the end of the video. The speaker then transitions to discuss the stock market, criticizing the fixation on interest rates and emphasizing the importance of economic growth. They highlight the Atlanta Fed's GDP forecast for Q3 and explain how rate hikes can lead to fiscal expansion and increased government transfers, benefiting investors worldwide.

05:00

📉 Market Reaction to Rate Hikes and Economic Data

The speaker mocks the market's reaction to rate hikes, arguing that the focus should be on economic growth rather than the arbitrary level of interest rates. They discuss the impact of rate hikes on government securities and the income boost investors will receive. The speaker also addresses the Fed's potential negative cash flow due to increased interest payments on reserve balances and anticipates political scrutiny as a result.

10:02

🌐 Global Economic Transformation Amid Conflicts

The speaker discusses the broader implications of the ongoing conflict, particularly the sanctions' destabilizing effects and the resulting transformation in the global financial system. They highlight the creation of new financial structures and trading arrangements as a long-term bullish factor. The speaker encourages viewers to see the big picture and maintain a positive outlook despite the challenges.

15:04

🌄 Reflecting on the Colorado Hike and Staying Positive

The speaker concludes by sharing personal anecdotes from their Colorado hike, including the challenges of altitude sickness and sunburn. They emphasize the importance of staying positive and patient in the face of negative news and market fluctuations. The speaker also mentions the potential risks of escalating global conflicts and ends with a reminder to enjoy the shared pictures and videos from the trip.

Keywords

💡Interest Rates

Interest rates refer to the cost of borrowing money or the return on investment for lenders. In the video, the speaker discusses the fixation on interest rates, explaining that they are not inherently bad but are part of a broader economic picture. The speaker uses the example of the Federal Reserve's increase in interest rates and argues that this can lead to economic growth, contrary to the common belief that higher rates are negative for the market.

💡Economic Growth

Economic growth is the increase in the production of goods and services in an economy over a period of time. The speaker emphasizes that economic growth is a key indicator of a healthy economy and is more important than the level of interest rates. The Atlanta Fed's GDP forecast for the third quarter is mentioned as an example of expected growth, which the speaker sees as a positive sign for the market.

💡Fiscal Expansion

Fiscal expansion refers to government policies aimed at increasing economic activity through increased spending or decreased taxation. The speaker argues that rate hikes are a form of fiscal expansion because they can increase government transfers to income through interest payments, which can stimulate the economy.

💡Atlanta Fed

The Atlanta Fed, or the Federal Reserve Bank of Atlanta, is one of the regional banks of the Federal Reserve System. The speaker cites the Atlanta Fed's GDP forecast as evidence of expected economic growth, indicating that the organization's economic outlook is a significant factor in market sentiment.

💡Stock Market

The stock market is a platform where shares of publicly held companies are issued and traded. The speaker discusses the stock market's reaction to interest rates and economic data, suggesting that current market declines may be an opportunity for investors due to the underlying growth in the economy.

💡Federal Reserve

The Federal Reserve, often referred to as the Fed, is the central banking system of the United States. The speaker mentions the Fed's role in setting interest rates and its impact on the economy, including the potential for the Fed to be in a negative cash flow situation due to increased interest payments on reserves.

💡Market Sentiment

Market sentiment refers to the overall attitude or mood of investors toward a particular security or market as a whole. The speaker discusses how market sentiment is being influenced by a focus on interest rates and economic data, leading to selling in the market despite underlying growth.

💡Global Economic System

The global economic system encompasses the economic activities and interactions of countries around the world. The speaker talks about a transformation in the global economic system due to sanctions and the creation of new financial structures, which he views as a long-term bullish signal for the economy.

💡Sanctions

Sanctions are measures imposed by one country against another, typically in response to unacceptable behavior. The speaker mentions that sanctions have destabilized the global financial system but have also forced the creation of new financial structures and trading arrangements, which could be beneficial in the long run.

💡Investment

Investment refers to the commitment of money or capital to an asset or venture with the expectation of obtaining a profit. The speaker encourages viewers to consider the current market conditions as an investment opportunity, despite the prevailing negative sentiment.

💡Altitude Sickness

Altitude sickness is a condition that can affect travelers who ascend to high altitudes rapidly, causing symptoms such as headache, nausea, and fatigue. The speaker recounts an experience of hiking at high altitude where his hiking partner suffered from altitude sickness, illustrating the physical challenges of high-altitude activities.

Highlights

The speaker has returned from a trip to Colorado and plans to share pictures and videos at the end of the video.

A fortunate decision was made to delay a hike due to weather conditions, avoiding a thunderstorm and hailstorm experienced by others.

The Atlanta Fed's GDP forecast for the third quarter has increased to 2.6%, indicating strong or decent growth.

The speaker criticizes the fixation on interest rates, arguing that growth is more important for the economy and stock market profits.

Rate hikes are seen as fiscal expansions, contrary to the common belief that they are detrimental to the economy.

An increase in government transfers to income through the interest channel has been observed due to rate hikes.

The national debt discussion is highlighted, with 24 trillion owned by the public and 6 trillion owned by the government.

Investors holding government securities will receive an income boost from rate hikes, affecting the global economy.

The Fed's monetary policy is discussed, with the potential for negative cash flow due to increased interest rates.

Political implications of the Fed's financial situation are considered, with the possibility of congressional scrutiny.

The speaker emphasizes the importance of understanding the broader economic impacts of fiscal policies.

A call for patience and strength in the face of market fluctuations and economic news.

The ongoing conflict and sanctions are forcing a transformation in the global financial system.

New financial structures and trading arrangements are being created as a result of the current geopolitical situation.

The speaker encourages a positive outlook despite the challenges, highlighting potential long-term benefits.

The personal experience of hiking in Colorado, including an encounter with altitude sickness and intense sun exposure.

A description of the South Park 600 Square Lakes Trail hike and its location near Georgetown, Colorado.

The speaker reflects on the physical impact of the hike and the importance of being prepared for such activities.

Transcripts

yo what's up everybody it is Tuesday

uh September 6th I'm back from my trip

to Colorado I'm gonna post up some

pictures and a couple of videos at the

end of this video so stay tuned keep

watching until the end we had a really

nice hike it was a beautiful day

actually we were lucky because

we flew out on uh Friday night was

supposed to land in Denver

on uh well around uh 11 30 p.m local

time there but our plane got diverted to

[Music]

um

Salt Lake City because of weather and

then we flew out on Saturday

to get back to Denver and then we when

we got to Denver it was late we decided

ah we're not going to do the hike today

and it's lucky we didn't because in the

afternoon there was this big

thunderstorm and hail storm with big

hail pellets it's funny because then I

was reading comments of people who did

the hike that we were going to do they

did it that day and they got caught up

on the caught up on the mountain and got

pelted by you know golf ball-sized uh

hailstones anyway the next day we did it

on Sunday and it was beautiful it was

beautiful

but I'll post some pictures at the end

let's talk about the market

I thought we could see a bounce today

um

actually there's a lot I gotta talk

about here and it's kind of for me at

this point it's getting it's getting

comical

it's getting comical

um and the reason is this there is this

insane fixation on interest rates okay

and I understand that that's that's been

just pounded into everybody's brain that

when rates go up

um it's bad all right

first of all

I just saw that the Atlanta feds GDP now

forecast for the third quarter is now up

to 2.6 growth GDP growth in the third

quarter that's kind of like what I was

talking about you know back in July I

said we're going to see strong growth or

decent growth coming out of the you know

the negative to two quarters negative

we're going to see Positive Growth you

know decent growth that's kind of like

um the average growth rate over the last

like 30 years been like two and a half

to three percent I mean under Trump

two and a half to three percent the

stock market was on fire

so like it's not about some arbitrary

level of interest rates it's it's about

growth

growth means the expansion in the

economy it it leads to the expansion in

income profits I mean that's ostensibly

that's why we invest in a stock market

for profits I mean it's just I Gotta

Laugh at this I mean yeah we have seen

interest rates go up to where are they

now uh two and a quarter percent on on

the FED funds rate and they're gonna

they're gonna Jack it up to three you

know at their meeting on the 21st

but it's the arbitrated some arbitrary

level of interest rates is meaningless

it's about growth if the economy and and

I gotta add another thing here guess why

we're having

um growth forecasts ratcheted up

can you guess

yeah it's exactly because of the rate

hikes rate hikes as I've been telling

you

their fiscal expansions they fuel the

increase in government transfers to

income

through the interest Channel

I think I put up or I mentioned

something in a prior video that uh

interest on Treasury Securities that the

government pays

we have seen over a 20 billion swing

from negative early this year you know

like March April

um to a positive year-over-year flow

okay 20 billion just in a few months

positive flow and if you look at the

discount on T bills right because

t-bills don't have a coupon they're just

sold at a discount and that discount is

effectively the interest rate

that added over 30 billion so far since

uh March compared to last year so I mean

the impact has been huge and there's

something else that I think everybody

ought to know

right we hear so much about all the

national debt the national debt 30

trillion oh my God actually 24 trillion

is owned by the public 6 trillion is

owned by the government some of that

including the FED right so 24 trillion

24 trillion of government securities in

the hands of you know investors

throughout the world

they're gonna receive a big income boost

with these rate hikes that's going to

flow to every corner of the world

basically okay so here's the thing about

rate hikes and here's why right now I

gotta tell you I'm just I just sit here

and laugh like yeah the Market's going

down

I mean sell

if you think that's what's you know the

thing to do then go ahead and sell and

good luck with that because you're

selling into expanding economic growth I

mean think about this

growth is gonna be at 2.6 even with the

rate hikes and I shouldn't say like I

said before not be not even with the

rate hikes but as a result of the rate

hikes

I mean

the investors have this so backward and

again I completely understand it because

it's been so pounded into their heads

this is all they hear all rates rate

hikes are bad rate hikes are bad rate

hikes are bad

I mean this is a major fiscal expansion

that is happening right now it's a

stealth expansion because nobody

understands this I mean it's real and I

see this I see this selling this you

know just Relentless selling on the

slightest by the way today we had some

economic data

I forget off the top of my head there

were some numbers that came out today

much stronger than the forecast one of

the headlines I saw which you know kind

of uh correlates to what I just been

telling you a couple of minutes ago one

of the headlines where you know

the market is down because there was

Stronger economic data

I mean think about that for a second

it's like the same thing they remember

they sold the market down uh on the July

job report when we had like a 530

000 payroll increase and then last week

we added 300 that also beat so like

cell growth if that's your thing

if that's your thing

then I'm saying to you here right now

cell growth go for it just go for it all

right and you can post up whatever

comments you want about how I've been

wrong about it go for it sell growth if

that's your thing

and let's see how that's going to work

out all right and again if you don't

understand

that

rate hikes

are

fiscal expansions that there's 26

trillion in the hand of government

securities in the hands of investors

throughout the world that are going to

receive a big huge income boost and by

the way that's not even I'm not even

talking about what the FED is going to

have to pay to the banks on their

Reserve balances because every time the

FED jacks up interest rates the FED is

on the hook to pay on reserve balances

and I talked about that there's what

like 5.6 trillion in reserves you know

if they Jack it up to um

three percent was that like 168 billion

that's more than the FED earns right now

the FED is in negative cash flow

territory which uh I predicted a long

time ago I said there was going to come

a time when the feds own monetary policy

would put it into negative cash flow not

that that's a big deal I think the fed

you know can can easily continue to

operate like that but it will call

attention

uh from Congress there's no question

it's going to be some yahoo you know

Congress man or woman or Senator who's

gonna say like hang on a second

back to New York Folk

um who's gonna say like hey what's going

on here you guys are run you guys are

running negative cash flow you guys are

broke you're gonna probably have Rand

Paul Rand Paul would be the perfect guy

to do that right or that uh what's his

name Senator Kennedy from Louisiana

you guys are running a you know a scam

show here

you got negative cash flow

you're taking the money at taxpayers

taxpayers on the hook that's what's

gonna happen over here I can't wait

until that happens I cannot wait that's

going to be great that's going to be

fantastic all right

um you're running a rat ship here a

vessel for sea going snitches I love

that movie uh Scent of a Woman

all right so cell growth

go for it go for it all right

um big income boost going on big big big

income boost going on and again if you

say to me well I didn't I don't own

those and that's uh I I get it and

that's a political that you know the

structure of all that how it's set up

you know that's all political and it's

been that has evolved over decades and

decades and decades and I'm I'm with you

on that a hundred percent

I'm not into free money for Millionaires

and billionaires and financial

institutions but you have to understand

that that all flows back into the

economy right that's the swimming pool

analogy that I always use

you know if you put water in one end of

the pool where a few people are and they

get you know the the the water pouring

in on top of them and they're rejoicing

in that and they're splashing around and

that eventually the water you know

circulates around through the rest of

the pool so indirectly

you know we the little people receive

some of that benefit now would I like it

to be different would I like it to be

structured different absolutely

absolutely and if I was in charge I

would set it up differently but I'm not

in charge if I was like a benevolent

dictator I would set it up differently

but I'm not in charge

but anyway that's what happens

and you know as hard as it may seem it

may be to you know keep that framed

correctly in your head you really have

to try to do that that's number one

okay number two is

you know you gotta be patient

and you gotta be strong

because it's very easy to look at what's

going on and freak out and panic

you got to be patient and you got to be

strong I'm telling you this right now I

am absolutely pounding the table on this

that we will look back at this period if

I'm still doing the videos or whatever

and we will say this was one of the the

most amazing opportunities to be

investing in the stock market as long as

I'll just add as long as we don't end up

in World War Three I mean I haven't

spoken about that in a long time but the

escalation uh in this horrible you know

Ukraine war it just continues and that's

a real uh concern let me tell you that

is a real real concern and it's it's no

laughing matter and it's no joking

matter you know if I can put that aside

for a second

I have to say one thing about you know

not necessarily the war but one of the

the outgrowths of the conflict and we

are seeing now

a fundamental

transformation in the global economic

system I mean it's really really

incredible what is going on because of

all the sanctions that have been applied

um yes they were very destabilizing and

they continue to be destabilizing but

they have forced a change in the Global

Financial system where new Financial

structures are being created okay like

Russia and these countries working

around Swift and new trading

arrangements are being forged and this

is very very bullish long term all right

you have to understand this is something

you really have to step back

from and see it in the big picture it's

very destabilizing you know now in the

near term when it's happening but we're

already starting to see a transformation

I mean historians are going to look back

on this and the world is going through a

change that you know I mean you

basically have to go back to over 150

years I would say to when the it was

really the British Empire in control of

everything and then you know the United

States took the the the the mantle uh

took the Baton over after uh you know

World War one and two and now like but a

complete and utter transformation is

going on new Financial structures new

trading Arrangements I mean the world's

economy is completely completely

changing and once it you know once

everything gets in place and there's

progress on that now there's progress

happening on that now

all right so be positive look I I know

people it's very easy to be negative I I

think that is implanted in people I I

have the same problem

it's very easy to fall into that

negative trap

very very easy I mean we're bombarded

non-stop 24 7 365 days a year with

terrible horrible headlines

I mean so it's very easy to fall into

that negative trap you're gonna be

strong

all right

that's it for the update

um I'm gonna uh post up some pictures

here and maybe a couple of videos on my

Colorado trip for those who are

wondering

um

uh the hike was called this the the

South Park 600 square Lakes Trail you

could look that up on

um old Trails which is if you like

hiking you probably already know there's

an app called all Trails the South Park

600 square Lakes Trail

um near Georgetown Colorado all right

Georgetown was where I was if you

remember last year last November I hiked

up with my son Mount bierstadt which is

a 14 000 it was like 14 032 feet we did

our first 14er this hike that I did on

Sunday uh we the top we were about

twelve thousand three hundred

um and my hiking partner she she got a a

bad case of uh altitude sickness and

also like it was an intensely sunny day

you'll see in the pictures and we were

just walking but we got fried we got

sunburned she got sunburned really

really bad I didn't know this but for

every thousand feet of altitude that you

go up uh the the sun rays intensifies by

like some crazy percent like 40 or

something like that so like at 12 in

over 12 000 feet with not a cloud in the

sky it was like one of those perfect it

was like you know Desert Sun

glaring down you know and we were just

out there shorts and a short sleeve

shirt and um

yeah so uh it was pretty intense and the

next day I woke up and I'm you know I'm

in pretty good shape I work out seven

days a week I lift weights I run stuff

like that but my legs everything was was

fried I think even worse than the the

14er that I did I don't know for some

reason

all right that's it just stick around

watch my uh take a look at my my

pictures and my videos and I'll see

everybody tomorrow bye

here we are right on the lake

a couple of pit bulls

pit bull in a some kind of Collie

and then that little thing

not you baby

I was like that little thing

sometimes walking down is harder than

walking up

you're gonna watch where you're stepping

I could trip and fall

but I still rather be going