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Top Three Videos – September 12, 2023

Andrew Maguire– Russia Driving the Multi-Trillion Gold Runaway Train 

Kinesis Money

Timestamps

00:00 Start

02:00 The short-term data you won’t get from the mainstream media

08:00 The Fed: The only central bank short on gold

15:00 The evolving gold barter trade

18:30  Are the mainstream media getting the threat of a BRICS alternate currency wrong?

22:15 The potential trillion+ dollar expansion of the gold trade and how Russia fits in

30:00 How the gold barter trade is happening right now

Quick Summary Bullets:

Russia’s Influence in the Global Economy

  • “This is a multi-trillion dollar trade.”
  • Russia’s involvement in the gold and silver markets is causing controversy and has significant implications for the global economy.
  • Russia is actively facilitating the trade of physical gold bullion to establish a stable index for a new global currency backed by commodities.
  • Russia’s chairmanship of the BRICS in January will give them control over a significant portion of global oil production, potentially challenging the dominance of the dollar in international markets.
  • The potential for expansion of the gold barter trade between BRICS members is in the multi-trillions, which is mind-boggling and something that many people haven’t even thought about.
  • Russia is accumulating physical gold in preparation for the Sino-Russian alliance’s plan to create a commodity-backed currency, aiming to control the bulk of price setting mechanisms for global oil production.
  • The trade attracting multiple brokers and increasing liquidity suggests that it has the potential to dominate the multi-trillion dollar energy trade, further solidifying Russia’s influence in the global market.
  • The launch of Russia’s gold-backed currency aims to facilitate settlements for a large component of the current US dollar-denominated global commodity trade, potentially challenging the dominance of the dollar.
  • The increasing demand for gold will raise the offer price in global markets, putting the Fed in a difficult position and causing other central banks to accumulate physical gold.

Controversial Manipulation of the Gold and Silver Markets

  • The Federal Reserve’s pre-planned dollar rescue intervention and hawkish comments caused a sell-off in gold and silver, highlighting the controversial manipulation of the market.
  • With net stable funding ratio compliant first tier physically deliverable spot gold trading increasingly competing with U.S treasuries, the Federal Reserve intervened in gold to prevent it from triggering safe haven and central bank spot gold buy stops.

Transcript Summary:

  • 00:00 Russia is driving a multi-trillion dollar gold trade, and if they stop renting, there will be a crash, with the paper to physical gold battle intensifying and short-term market conditions affecting gold and silver futures.
    • Russia is driving a multi-trillion dollar gold trade and if they stop renting, there will be a crash.
    • Andrew McGuire will be joining the show to discuss the truth about the precious metals industry and the global economy, providing exclusive information and insights that cannot be found elsewhere.
    • The paper to physical gold battle is intensifying as there are significant supply and demand developments, with the short-term market conditions affecting gold and silver futures, leading to heavy trading sessions in September.
  • 03:27 The US experienced a significant loss of full-time jobs, prompting the Federal Reserve to intervene and rescue the dollar, resulting in a sell-off of gold and silver.
    • The non-farm payrolls beat jobs headline was accompanied by a guaranteed downside adjustment, but what couldn’t be ignored was the unprecedented loss of 670,000 full-time jobs in just two months, making it the worst unadjusted August payroll since the Great Recession.
    • The Federal Reserve intervened in the market to rescue the plunging dollar and drive the inverse gold and silver sell-off after the release of disastrous jobs data, which led to a spike in safe havens including gold and silver.
  • 06:24 Russia is driving the multi-trillion gold runaway train, with gold becoming a safe haven asset and the Federal Reserve intervening to prevent a potential central bank-driven gold rally.
    • Russia is driving the multi-trillion gold runaway train, with net stable funding ratio compliant first tier physically deliverable spot gold trading increasingly competing with US treasuries as a first-year asset cluster, and the Fed intervened in gold to prevent it from triggering safe haven and central bank sovereign spot gold buy stops.
    • The Federal Reserve was close to losing control of gold, which could have been catastrophic for them, as they are the only central bank that is net short gold, and there is a potential for a large central bank-driven gold rally at the end of the year.
    • Gold’s behavior is changing as it is increasingly seen as a safe haven asset, with both paper and physical gold being sought after, similar to the 2008 financial crisis when gold and silver rallied alongside the dollar.
  • 10:34 The Fed’s decision to raise interest rates could lead to a spike in bond yields, triggering bank downgrades and causing a rally in the dollar and gold, which has become a first-tier asset class and a risk hedge for commodity trading advisors.
    • Banks were failing, so the only choice was to invest in gold and silver, but now the Fed is risking disaster by raising interest rates.
    • The potential spike in bond yields could trigger bank downgrades and lead to a concurrent rally in the dollar and gold, as gold has become a first-tier asset class and more commodity trading advisors are using it as a risk hedge.
    • The mispricing of gold in the COMEX Futures markets has led to a higher price for physical gold in the global markets, as evidenced by the outflows from the exchange for physical and the mispriced LBMA gold fixes, which are deliberately kept off the radar of the CME LBMA supply demand data.
  • 13:41 Russia is using physical gold as a barter currency in the energy trade, expanding the price of gold and draining global bullion into the sino-russia alliance, potentially leading to a shift towards a gold-backed currency.
    • Physical gold is being used as a barter currency in the Russian energy trade, with competing central banks acquiring bullion from the deliverable over-the-counter markets.
    • Russia has implemented a sophisticated trade involving gold and oil that is expanding the price of physical gold and draining global bullion into the sino-russia alliance, all while being kept under the radar.
    • The mainstream media has failed to report on the multiple sideline meetings in South Africa and the subsequent meeting in Moscow, which suggests that there may be a shift towards a gold-backed currency.
  • 17:25 Russia is driving a multi-trillion dollar gold trade that could de-dollarize the global economy, as they acquire physical gold bullion and gain control over global oil production, while the mainstream media overlooks the potential threat to the US dollar.
    • Russia is actively driving a gold-backed currency forward, while the mainstream media has overlooked the potential threat to the dollar hegemony.
    • Russia is actively acquiring physical gold bullion to establish a stable index for a new currency backed by commodities, including gold, which could be used by the BRICS development bank or settled on a trustless blockchain.
    • Russia, along with other BRICS countries, is gaining control over a significant portion of global oil production, which could potentially undermine the dominance of the US dollar.
    • Russia is driving a multi-trillion dollar gold trade that could have a major de-dollarizing effect and is being ignored by mainstream media.
  • 22:19 Russia is accumulating physical gold to back its currency and control the price setting mechanisms for global oil production, attracting bullion inflows and commanding high prices for physically deliverable gold.
    • Russia is preparing to take over the chairmanship of the BRICS and is accumulating physical gold to back its currency, while also competing for spot gold and futures liquidity, with the goal of controlling the price setting mechanisms for global oil production, making gold the beneficiary of this multi-trillion dollar trade.
    • Russia is offering a higher gold price to attract bullion inflows and ultimately back commodities, while also using it as a way to swerve sanctions and rinse specs.
    • Unleveraged physical bullion outflows from spec cartels are causing a drain of physical liquidity from the LBMA ring fence to Moscow’s spot gold and physically backed gold futures platforms, resulting in large premiums being paid to attract bullion and Moscow gold futures commanding high prices compared to the December COMEX futures contract.
    • Moscow Futures are currently trading at a significant premium to the front month comex December contract, indicating a strong demand for physically deliverable gold.
  • 27:27 Russia is using gold to barter with energy buyers, resulting in a discount for energy and inflows of physical bullion, potentially leading to a new currency agreement with BRICS countries and inflationary effects on the US dollar and Western commodity prices.
    • Russia is leveraging heavily on gold to barter with energy buyers, exchanging cheap dollar-priced gold bullion for Russian oil energy grain at a higher dollar denominated price in Moscow, resulting in a discount for energy and inflows of physical bullion to back a larger plan bricks backed commodity currency.
    • Russia is receiving gold in exchange for energy, which is part of a trade that is attracting multiple brokers and will ultimately serve 80% of the multi-trillion dollar energy trade.
    • Russia is ready to participate in the currency agreement with BRICS countries, but is cautious due to potential US sanctions, while India and China are concerned and trying to distance themselves, but the BRICS conference is likely to announce the adoption of the new currency units for international trade.
    • Russia is implementing a gold-backed trade outside of the CME LBMA ring fence, which will eventually set the global price and have massive inflationary effects on the US dollar and Western commodity prices.
    • Increasing demand for gold will raise its price in global markets, allowing Russia and other central banks to accumulate physical gold while the Fed is left short, as the energy trade enables Indian buyers to bypass the CME LBMA ring fence and take advantage of the gamed global PM fixed prices.
    • The Euro has lost significant ground in global trade, with the U.S. price influencing European gold markets and causing a drain of physical gold into Russia, so it is important to differentiate between physical gold and silver markets and the casino paper gold and silver markets.

Stock Market Is In Trouble, Says Technician Who Predicted Rally | Milton Berg

Blockworks Macro

Quick Summary Bullets:

Market Health and Potential Downturns

  • The technician predicts that the stock market is in trouble and that the market is standing on weak legs, potentially leading to a significant downturn.
  • The technician predicts that the stock market is in trouble based on historical measures and elevated ratios, suggesting a potential decline in the market.
  • The technician predicts that the stock market is in trouble, citing signals that indicate a potential bear market.
  • Historically, the banking index has bottomed along with the S&P and NASDAQ during recessions or crises, making it an important indicator to watch for potential market downturns.
  • “The fact that gold peaked in May might be a leading indicator that the market has weak legs and things are falling apart.”
  • “The market’s reliance on a handful of mega-cap companies like Apple, Microsoft, Tesla, and Nvidia to lead the rally raises concerns about the health of the market and the lack of broader participation.”
  • The technician predicts a potential bear market due to various factors such as weak market conditions, recession, and negative indicators in different sectors.
  • Milton Berg’s generosity in sharing his time and insights is greatly appreciated by the audience.

Market Analysis and Predictions

  • “I felt that the June low was the Panic low, as it showed sharp changes in sentiment and subsequent actions were just testing.”
  • The combination of small cap, mid cap, and large cap indices showed a breath thrust on October 28th, indicating a potential gain of 20 and further supporting the bullish outlook.
  • “A combination of buy signals on day seven in the past has seen a median gain within six months of 8.84, enough of a reason to cover short and anticipate again ahead eight percent.”
  • “Stock market is in trouble, says technician who predicted rally.”
  • There is a pattern called “The Three Peaks and a Domed House” that suggests the UK’s FTSE 100 will decline below its October lows and potentially reach its March 2020 lows, indicating a potential bear market for the US as well.

Technical Indicators and Signals

  • “The indicator looks for concentrated market action within days of a low or a surge, suggesting potential turning points in the market.”
  • The technician highlights a historical signal where the market makes a corrective low and experiences a significant increase in volume, indicating a potential market rally.
  • “I’m bullish on the banking index based on pure technical analysis, as it had a climax low in May with all the classic headline news and pessimism.”

Impact of Interest Rates and Financial Institutions

  • If interest rates rise and trigger a bear market in bonds, it could lead to a depressionary and deflationary phenomenon, affecting various financial institutions and retirement funds worldwide.
  • The technician predicts a deflationary crisis caused by high interest rates, which could lead to the collapse of more banks and assets.
  • The deflationary forces in the bond market and the Federal Reserve’s lowering of the money supply could have a significant impact on stock markets for decades.

Transcript Summary:

  • 00:00 The stock market is in trouble and could potentially experience a downturn, according to technical analyst Milton Berg, who accurately predicted the beginning of a bear market in January and is now predicting a 22% gain based on historical trends and indicators.
    • The market is in trouble and in a precarious situation, with weak legs and the potential for a downturn, according to technical analyst Milton Berg.
    • The speaker discusses how they accurately predicted the beginning of a bear market in January based on technical indicators and changes in sentiment, with the June low being the panic low and subsequent market actions being testing.
    • In January, the speaker discusses a simple indicator that predicts market trends, specifically looking for extreme readings in upside volume, a strong update of at least 2%, and a volume greater than the previous day, which has occurred 26 times in the past.
    • The speaker predicted a bullish signal in the stock market with a projected gain of 46.50, based on previous instances and indicators such as the breath thrust and advancing over declining volume.
    • The speaker predicts a 22% gain in the stock market based on historical trends and indicators.
    • The speaker expresses gratitude for acknowledgement of their bullish prediction on Twitter.
  • 07:43 The stock market is in trouble according to a technical analyst who predicts a potential decline similar to 2007, despite recent buy signals, elevated protocol ratios, and historical data suggesting a potential rally.
    • The speaker, a technical analyst, discusses the number of buy and sell signals in the stock market and mentions that they have not yet met their projections but have seen a series of buy signals.
    • Indices such as the Russell 2000, SP small cap index, and Hank saying index experienced multiple corrections since February, with the most recent correction ranging from 5-13% in various indices.
    • Buy signals indicate that the market is oversold and likely to go higher, as shown by the 10-day put call ratio reaching a six-month high despite the market gaining for six days.
    • The stock market is in trouble as the 10-day and 3-day protocol ratios are elevated, indicating a potential decline similar to the one in 2007.
    • The technician predicts that the stock market is in trouble and not in a bull market, based on past patterns and signals, including a rally before a bear market in 2008 and recent market behavior.
    • The technician predicts that the stock market will rally based on historical data showing that when certain conditions are met, there is an 87.5% success rate of the market making a corrective low and experiencing a significant increase in volume.
  • 16:14 The stock market is in trouble, with weak market rallies, doubts about market continuation, and tightening monetary policy, but there are buy signals suggesting a potential increase, leading to the decision to cover shorts and anticipate an 8% gain.
    • The stock market is experiencing weakness, but there are buy signals indicating a potential increase in the market, leading to the decision to cover shorts and anticipate an 8% gain.
    • The technician predicts that the stock market is in trouble based on various signals, but there is one signal that historically suggests a bull market move, although it has never occurred at the end of a bull market.
    • The speaker believes that the stock market is in trouble due to weak market rallies, doubts about the continuation of the market, sentiment indicating no recession ahead, poor market performance based on gap analysis, and the tightening of monetary policy by the Federal Reserve.
    • The technician predicts that the stock market may be in a long-term bear market rather than a bull market, citing divergences among various markets and the impact of inflation and tightening monetary policy.
    • Gross domestic income has been declining, indicating a weaker underlying economy, and if the market is peaking, it may forewarn a decline in GDP, while the banking index historically bottoms along with the S&P and NASDAQ during recessions or crises.
    • The speaker, a technician, believes that the stock market is in trouble and considers himself a canary in the coal mine.
  • 30:42 The speaker predicts a deflationary crisis caused by high interest rates, warns of trouble in the stock market, and highlights the lack of loans and gaps in the market as indicators of potential economic downturn.
    • If interest rates rise and there is a bear market in bonds, it will lead to a depressionary deflationary phenomenon as most of the world’s assets are tied up in interest-bearing instruments, such as treasuries and zero bonds.
    • The speaker predicts a deflationary crisis caused by high interest rates and believes that many more banks and assets will be affected, although it may be a slow process due to the ability to hide it through certain banking regulations.
    • The speaker predicts that the stock market is in trouble and that a sell signal may come in the near future.
    • The speaker discusses the weakness of the banking index and the decline in the market, suggesting that it may be a sign of trouble in the stock market.
    • The speaker promotes a new functionality called proposals for investment advisors and managers, highlighting its tools for communication with clients and offering a free trial and discount through their provided link.
    • The speaker discusses the lack of loans in the US as a leading indicator of economic trouble and points out the presence of numerous gaps in the stock market, indicating an unhealthy market and potential downturn.
  • 39:44 The stock market rally is showing signs of trouble, with indicators such as put-call ratios and gaps suggesting changing perceptions of a recession and people’s buying behavior influencing market trends, while the lack of momentum and historical patterns in net up volume and streaks and gaps in technical analysis indicate the possibility of a bear market or the end of a bull market, and the Federal Reserve lowering the money supply is negatively impacting inflation and stock markets.
    • The speaker explains that the stock market rally is not as orderly as it appears, pointing to indicators such as put-call ratios and multiple gaps, and suggests that people’s buying behavior and changing perceptions of a recession are influencing market trends.
    • The speaker discusses the rise of zero data expiry options and explains that the ratio of buying puts to buying calls is a more important indicator of market sentiment than the expiration date of the options, and points out a significant pattern in the early stages of bull markets.
    • The technician points out that the current bull market lacks momentum and highlights the historical significance of four successive days of higher percentage gains in the S&P 500, cautioning that this so-called momentum is not necessarily positive and can lead to market declines.
    • The speaker discusses a historical pattern in the stock market where a specific reading of net up volume has occurred multiple times before corrections in the bull market and at the end of a bull market, suggesting the possibility of a bear market or the end of a bull market.
    • Streaks and gaps in technical analysis are not randomly distributed and can indicate both tops and bottoms in the stock market, with the current momentum suggesting a potential new bull market but also the possibility of a recession.
    • The Federal Reserve lowering the money supply is a killer for inflation and stock markets, as the money that was freely floating has disappeared and the reserves and bank deposits have declined, although treasuries can still be borrowed against.
  • 56:34 The speaker predicts volatile and emotional fluctuations in the stock market over the next two months due to cyclical forces, suggesting that a market collapse cannot be solely attributed to the Fed.
    • The speaker discusses the importance of cycle-based analysis in predicting market trends and highlights the cyclical nature of market phenomena such as September being a bad month for the market.
    • Suppliers of commodities are already aware of the seasonal demand patterns for natural gas and oil, and the idea that the sun or moon have an effect on people’s emotions and cause them to make irrational buying or selling decisions is not true.
    • The speaker discusses the cyclical forces that affect people’s emotions and stock market movements, stating that October is only negative when there are cycles involved, and that a slow cycle is beginning on September 14th.
    • The convergence of solar and lunar cycles in September and October may lead to increased buying and selling in the stock market, potentially influenced by natural factors and fundamental forces.
    • September historically has been a bad month for stocks for the past three years, but it could be random, and there are various theories as to why this is the case.
    • The speaker predicts that the stock market will experience volatile and emotional fluctuations over the next two months due to cyclical forces, and suggests that a market collapse cannot be solely attributed to the Fed.
  • 01:05:12 The technician predicts trouble in the stock market due to weak conditions, lack of liquidity, and potential correlation with faltering Chinese equities, while also highlighting upcoming dates that could turn the market.
    • The technician predicts that the stock market is in trouble and highlights upcoming dates that could potentially turn the market, while also discussing the faltering Chinese equities and their potential correlation to a bear market in the United States.
    • The speaker predicts that the stock market is in trouble due to weak market conditions and a lack of liquidity, and while they are currently cautious and have no position in China, they expect to remain long on US stocks until they have evidence to become bearish.
    • The speaker predicts a recession ahead based on the market’s performance and disagrees with economists who believe otherwise, citing evidence of two consecutive quarters of negative real growth.
    • The inverted yield curve can exist while the stock market goes up, but now it may be right to worry about a slowdown causing a decline and potential banking crisis.
    • The stock market is in trouble as many markets and real stocks are weak, with only a few mega-cap companies leading the market, which is concerning despite the nature of capitalism and the market having a leading group.
    • Markets ending with narrowness, combined with factors such as sentiment, Federal Reserve tightening, and lagging markets, indicate potential trouble in the stock market.
  • 01:15:19 The stock market is in trouble and a major bear market is imminent, with potential declines surpassing previous lows, and the speaker emphasizes the need to adapt to changing market conditions.
    • The speaker discusses the current state of the stock market, noting that there are no actionable buy signals and that sell signals are still present, indicating a potential decline in the market.
    • The speaker predicts a decline in the stock market and is bullish on the banking index, but cannot pick a long-term asset due to uncertainty, emphasizing the need to adapt to changing market conditions.
    • The speaker predicts that the stock market is in trouble and a major bear market is imminent, based on historical patterns and current indicators such as emotional buying, market tops, and various economic factors.
    • The stock market is in a precarious position, with narrow fundamentals and the potential for a bear market that could surpass the lows of October 2022 and even approach the lows of March 2020, although this is not a prediction but rather a consideration of possible scenarios.
    • Milton Berg discusses the value of his Twitter account for education and providing a taste of his market analysis, while his upcoming book aims to teach readers how to analyze markets and make money based on historical scenarios.
    • The speaker expresses gratitude towards those who have taught and influenced them, and thanks the viewers for watching.

What Happens When ‘Biggest Housing Bubble In History’ Pops? Economist Dhaval Joshi Explains

DAVID LIN

Quick Summary Bullets:

Global Economic Trends and Challenges

  • Economist Dhaval Joshi’s prediction of a recession outside the United States indicates potential economic challenges beyond the US, highlighting the need for further analysis and understanding of global economic trends.
  • This recession may not be as catastrophic as the Great Depression or the pandemic, but it still poses significant challenges for the global economy.
  • The Chinese economy’s growth has significantly slowed down, going from double-digit growth to potentially below four percent, which is a major shock and a surprise to many observers.
  • “You’ve got to be really confident that that boom is justified because if it’s not justified there has been a decoupling between a handful of stocks and the rest of the market and the global economy and of course it’s gonna reconnect in the other direction.”
  • “You can avoid a recession, but then you won’t have killed inflation…it’ll be like pouring gasoline on a fire where the embers are still burning.”
  • The Chinese consumer spending less or slowing down their wealth accumulation could have a significant impact on global growth, as China has been the biggest engine of global growth in the past decade, contributing 41% of it.
  • “In the near term, the lost demand from China is going to overwhelm the bullish case of new demand for commodities like copper, zinc, and steel.”

Housing Bubble and Economic Impact

  • “China has the biggest housing bubble in history, even surpassing the massive bubble in Japan in the late 80s.”
  • China’s massive overhang of overvalued homes and the need to control the bubble’s burst will result in a protracted correction that will last many years.
  • The housing bubble bursting could have significant consequences as these investments could lose value, potentially leading to financial instability.
  • “There’s been this funneling of money into real estate almost as a kind of savings vehicle on the assumption that prices just go up year after year until they don’t.”
  • The bursting of the housing bubble in China could significantly impact GDP growth, as the construction and infrastructure sector, which accounts for 25% of the economy, would no longer experience rapid growth.

Investment Strategies and Portfolio Allocation

  • Tech stocks have had a sustained performance since 2010 based on strong profits, which can be attributed to the network effect and the emergence of winners in each segment like Amazon, Google, and Facebook.
  • “I would actually be tilting my portfolio a little bit away from Tech towards Healthcare and pharmaceuticals which have kind of been forgotten because everyone sort of is pumped in piling into you know Tech as the only sort of growth play and I don’t think that’s right.”

Transcript Summary:

  • 00:00 China has the biggest housing bubble in history, with a valuation of $100 trillion, and the global economy may already be in a recession, with significant slowdowns in global growth and rising unemployment rates in many countries.
    • China currently has the biggest housing bubble in history, with a total valuation of Chinese real estate at around $100 trillion, which is twice as large as the next biggest real estate market (the US) and has approximately 100 to 130 million empty homes.
    • The global economy may already be in a recession, with implications for investment and the labor market, according to economist Dhaval Joshi.
    • A global recession occurs when global growth slows to two percent or below, and based on current growth rates in China, the US, and Europe, we are currently in or very close to a global recession.
    • Global growth is experiencing a dramatic slowdown, with countries like Germany, Sweden, and Korea being particularly affected, and there are concerns about a potential recession in the US as well as in other parts of the world.
    • China’s growth rate has significantly slowed down, below 4 percent, which is a major shock and goes against the expectation of a strong post-COVID rebound.
    • Unemployment rates have been rising in many countries, including Germany, but the US market seems to be more insulated and its stock indexes have been performing well.
  • 07:52 The US stock market has been performing slightly better than the rest of the world due to superstar stocks, but there are concerns about the sustainability of the tech boom and the ability of companies like Nvidia to protect their profits.
    • Globally, the stock market has been mostly stagnant, with the US performing slightly better due to the influence of superstar stocks, but there has been some insulation from the US economy in response to China’s significant slowdown.
    • The performance of the US stock market compared to the rest of the world can be explained by the stagnation in Europe and the moderate growth in the US, and although investors may think it doesn’t matter for them, it actually does because if their portfolios have done well, it is influenced by the global economy.
    • The narrow range of stocks experiencing a tech boom may not be justified, leading to a potential decoupling from the rest of the market and global economy.
    • The speaker questions the justification of the current stock rally and expresses doubt about the sustainability of the phenomenal growth rate in sales for companies like Nvidia, particularly in the AI sector, and raises concerns about the ability of these companies to protect their profits.
    • Between the mid-90s and 2010, tech stocks did not outperform, but since 2010 they have had sustained performance based on strong profits, particularly in the second part of the internet boom which focused on networks and resulted in the emergence of oligopolies like Amazon, Google, and Facebook.
  • 13:14 It is uncertain if AI profits are sustainable, leading to high valuations of tech companies; it is recommended to shift investments towards healthcare and pharmaceuticals due to the high premium of tech stocks and the risk of economic contraction.
    • Long-term sustainability of profits for AI is uncertain, making it difficult to justify high valuations of tech companies compared to other industries.
    • The speaker explains that when analyzing the housing bubble, it is important to consider the premium being paid for stocks or sectors compared to the market and other growth sectors, as the justification for the premium lies in the sustained growth of profits.
    • Tech stocks are trading at a high premium, so it is recommended to shift towards healthcare and pharmaceuticals in investment portfolios; the risk of economic contraction is similar in developed economies outside the US, such as the UK.
    • The risk of high inflation and the challenge for central banks is to bring it down without harming the economy, as higher interest rates are slowly starting to have an effect.
    • Avoiding a recession may lead to persistent inflation, resembling adding gasoline to a fire that hasn’t died down.
    • Inflation expectations are influenced by long-term history, and recent high inflation rates have created concerns about future inflation shocks and lack of compensation.
  • 19:19 China’s housing bubble is the largest in history, but the government plans to control it by halting new construction to prevent a drastic price decline, despite the prevalence of empty apartments and ghost towns.
    • China currently has the biggest housing bubble in history, surpassing even the massive bubble in Japan in the late 80s, which has made people more fearful of future risks.
    • China’s real estate market is facing a significant problem with overvalued homes and a potential bubble burst, but the government is likely to manage it through a controlled moratorium on new construction to avoid a catastrophic drop in prices.
    • Empty apartments and ghost towns are a significant part of the housing bubble equation because even though no one lives in them, they are still owned and considered someone’s investment.
  • 22:46 The collapse of the real estate market in China will lead to a protracted economic slowdown, impacting GDP growth, consumer spending, global markets, and the luxury sector.
    • The collapse of the real estate market in China will lead to a protracted slowdown in the economy, with growth rates expected to drop to four percent, as the home building industry accounts for a significant portion of the economy.
    • The decline in construction and infrastructure development in China, which accounts for a significant portion of the economy, will lead to a significant decrease in GDP growth and potentially impact consumer psychology and savings rates.
    • The Chinese consumer spending less and the slowdown in global growth due to the decline of China as the biggest engine of global growth will result in a significant impact, reducing global growth to around two to two and a half percent.
    • China’s decrease in demand for commodities, specifically copper, due to the bursting of the housing bubble, will have a significant impact on global markets.
    • The French luxury sector may still perform well despite a slowdown in China and elsewhere, as it primarily relies on the super wealthy for sales.
    • Luxury goods providers like Hermes and lvmh prioritize pricing power over volume growth, as they aim to maintain exclusivity and cater to the super wealthy.
  • 30:27 The bursting of the housing bubble could lead to a decrease in global growth, impact middle-income jobs, and potentially increase unemployment rates, while luxury brands may be affected by a collapse in stock and real estate prices.
    • Global growth may decrease, but the super wealthy will continue to thrive, as the impact of AI will primarily affect middle-income jobs, and during a recession, consumer staples and ultra luxury brands tend to perform well.
    • Luxury brands are not completely recession-proof, as a deep collapse in stock and real estate prices globally would impact them, but the primary target demographics for these brands, such as wealthy individuals from the East and Middle East, have not changed.
    • LVMH has low exposure to China’s economy, while our Mayors has high exposure, and a severe slowdown or ban on French luxury sales in China could pose a significant problem for some companies.
    • The labor market is currently strong, but there has been a half million increase in unemployment, and if the fight against inflation continues, it could potentially lead to a sudden increase in the unemployment rate.
    • The U.S. unemployment rate has historically shown a pattern of increasing sharply once it reaches a certain tipping point, and current indicators such as continuing claims and job vacancies suggest that the labor market is weakening rather than strengthening.
    • The cost in the labor market of fighting inflation has been relatively small so far, but there will be more costs as the war against inflation continues.
  • 38:17 The level of the housing bubble is uncertain, but a productivity miracle is unlikely to save it; complexity breakdown in financial markets is a warning sign; buying opportunity in the dollar against certain crosses.
    • The level of the housing bubble and its potential impact is uncertain due to the complexity of the system and lack of knowledge about its tightness.
    • The labor market needs to loosen and more people need to be laid off in order to address wage inflation and achieve the two percent inflation target.
    • The speaker discusses the possibility of a productivity miracle saving the housing bubble, but believes it is unlikely to happen within a year, and also mentions their unique use of fractal analysis to predict price patterns.
    • Complexity in financial markets is important, and when it breaks down, it serves as a warning sign that the trend is about to change, such as the current breakdown in complexity in the strong rally of stocks versus bonds.
    • The speaker discusses the buying opportunity of the dollar against certain crosses, particularly the Mexican peso, which has seen a substantial sell-off over the last year.
  • 43:47 The speaker discusses the importance of psychology, non-linear systems, and statistics in understanding and predicting market behavior, and expresses interest in discussing applied behavioral finance in the future.
    • There are long dollar opportunities and information about fractals can be found on the BCA research website, specifically in the Counterpoint section, which is a contrary perspective to the Wall Street group.
    • The speaker emphasizes the importance of psychology, non-linear systems, and statistics in understanding and predicting market behavior, and expresses interest in discussing applied behavioral finance in the future.

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