[Music] a lot of these guys are fearing what is taking place Jamie Diamond says this the most dangerous times we've had in America in decades Michael bur shorted the S&P 500 $1. 6 billion of his client's money my intuition is that a recession is inevitable but the market can remain crazy longer than you can remain solvent whatever the quote is why hasn't it happened yet only the paranoids survive but how do we turn paranoia into an action plan yeah so everything is right now about mapping out different possibilities World War III takes place what think the chances of this taking place Ray doio says 50% okay so if World War III happens what happens to the economy who's going to be the parties involved are we going to be involved purely through proxy or is there going to be attack here then you write down the possibilities okay if this happens what are you going to do if this happens what are you going to do then next what happens if unemployment all of a sudden goes to 7% what happens if inflation goes down what happens if Powell starts lowering rates back down to 5 4% holy that's going to be crazy but here's a couple things that we have to be thinking about credit card debt highest it's ever been you know what's the craziest thing about credit card that being the highest it's ever been the average interest rate on credit card is the highest it's ever been Jesus forget about the debt so people are worried about the debt the average is 23% on credit card you know what 23% means that means the debt doubles about 2 and A2 years that's like loan shark that's loan shark three years your debt is doubling right but that's what we got right now on credit cards so our debt is record-breaking forgiveness for your school loan is gone so now you have to start paying for that's $3 $400 a month that people are expecting I think October November starting then go to the corporations you were talking about that are borrowing money this year their interest payment is going to end up being around $530 billion just interest oh my God next year it's going to 730 next year it's going to 1. 1 trillion in the next 5 years it's going between 1.
3 to$ 1. 5 trillion just on the corporate debt next part mortgages we're not saying anything crazy with people with bad credit not making payments we're still good car payments and subprime they're seeing a spike in defaults where people are not making car payments the first sign you're seeing on what's taking place let's go to the next one that's the scariest one us has $33 trillion of debt worst it's ever been the highest it's ever been what does that really mean no way I can really figure it out here's what it means every single time the rates go up one point just one point for the US government our interest payments increase by $320 billion so imagine we raise rates by three points just interest it's a trillion dollar more per year if it's 6% $2 trillion more per year that's that then last thing that I'll just kind of get you to be thinking about anytime you want to know if the economy is back to normal go to Vegas Vegas is humming like okay we're good and always whenever you go to Vegas talk to C drivers and talk to the drivers who are doing Uber always ask how's conventions doing are you noticing things cancelling no this has been crazy for us the last 3 months everything's good but if they start seeing a downturn they're typically an indicator of what's to come one of my friends their Construction Company does very well we have these three clients that we have who are doing Transportation two of them numbers are down 40 50% one of them is doing a billion a year their revenue is down 70% wow why would Transportation be down 70% aren't Walmart Amazon companies ordering stuff to ship it from here to there why would that be lowering what do they know that we don't know again these are people who have data to Insider stuff that we can sit there and say these are great indicators when you're studying these things on what's going on does this mean recession is going to come here my bigger fear is a reverse market crash which Venezuela just went through all of a sudden rates get lowered and DOW an S&P goes and DOW goes from 33 40 45 50 5560 just goes Voom is that just the dollar losing its purchasing power yes exactly that's what happens the more we're printing like the inventory increases the more we print money the more you print dollars and it's more accessible the less it's value the less it's worth you sit you're like okay so does this mean guys are not going to make a lot of money no no you're going to see the first trillionaire in the next 24 months cuz none of this is going to affect the guys at the top none of it every time they print money the guys at the top make more money if there's anybody that should be against printing money it's low and middle- income families if there's anybody that's for printing money guess who it is the guys at the top why because the poor in Middle America can't keep money they spend it and when they spend it what do they buy a product owned by somebody in the S&P 500 or other people who have business money flows up they can keep printing money all they want so when low and middle income families are like look at these guys all they care about is themselves let that bill passed for $2. 7 trillion you simply look at him and you say you have no clue how money Works guess what let's print $10 trillion Rich are okay with it you ain't going to get the rich complaining about printing $10 trillion or $5 trillion black Rock's going to be like all right cool $8 to10 trillion of money in our ETFs and we're buying up a bunch of different companies we're buying up all these properties today right now it's going to be nothing but in the next few years you have to go through us and we dictate the market and we're going to own it all and what are you going to do about it the idea of Middle America not being able to make the money they need to make to be able to afford a house send their kids to school live in a nice place enjoy some of their dreams maybe not the biggest ones but some of their dreams are going to become a reality Middle America is getting smaller and smaller and smaller every single time we print money you have to have a mechanism by which you put this new money that you created out of thin air by Fiat literally just saying it now exists you have to put it in into the system the way it's put into the system is by buying assets because typically low and middle inome people don't buy assets they buy products like you were saying then they aren't beneficiary of that unless there are simulation checks now those they will get sent directly to them so there are ways to put it in their pocket but what you're effectively doing is socializing losses so you are spreading the loss out across everybody my dollar buys less and so it takes more dollars to buy the same thing because nothing fundamentally happened to the business that I own a piece of did not become more productive and therefore can actually generate more by adding more value to the world once you understand that like I actually as a wealthy person do complain when people print money cuz I'm like hey there is a point at which you break everything because the money is just going to hyperinflate and it isn't only going to be the stock market that goes up it's going to be the cost of bread and gas and taking your family to a movie and all of that when Co happened that actually kept us from going into something that probably should have been worse than the Great Depression they money printed their way out of it and we ended up being okay because it was spread across a lot of people now because I am such a student of Ray Doo I know that governments once they start money printing they can't stop and every time in human history that it's been used as a tool it's used Until It Breaks Until It Breaks every time without exception and typically as it's racing towards breaking I think it's what eight out of the last 14 times it's ended up in a hot War as the big debt cycle comes to an end and money's inflating away to nothing debt is completely out of control nobody can make their payments everybody's defaulting you have to have a complete reset of the wealth which is I think why everybody calls this the great reset or the big reset or whatever because we are forestalling catastrophe right now by printing but we are only forestalling it and nobody I've had a lot of people on the show nobody can tell me how you pull out of this death spiral other than austerity and no one's going to do austerity yeah so how can you fix this thing my question would be how do you fix this thing in a year no one's going to know how to fix it cuz it's not going to happen how do you address this and make progress towards getting better over a 20e span okay now we're talking 40-year span even better the problem with America today is the following which by the way is a beautiful thing but it's also problem whoever that gets elected we have cyclical Cycles okay you got Carter gets elected then it's Reagan senior then you have Clinton then you have Bush then you have Obama then you have Trump then you have B so Republican Democrat Republican Democrat Republican Democrat so every time you do this every 8 years the system is like changing so Cycles are changing whatever you're doing is changing so you can't really consistently build on a philosophy over a 20-year period because in America you can't put a 20-year plan in place there is no such thing as a 20-year plan in America cuz whoever is the next guy that's going to come take your job is going to say no we're not building that wall no we're not going to do that no we're going to cut those benefits no we're going to add these benefits no we are going to spend more money no we are going to leave this war no we are going to get into this war these things the complexity of what we're asking about is challenging because no one leader is going to run for 20 years we just don't have that would you want it is it good for America long term absolutely not if that one person's a person that gets into office for 20 years this thing's gone it's destroyed at least this allows us to not be able to go super extreme because you have to get it through Congress and Senate and it's already complicated enough to do that but to fix this thing you're never going to have both sides agree philosophically economically on what they're going to be doing over a 20 year span you have the war right now with China and India iPhones are now being made in India you can now get iPhones on the back of it it says Made in India first time not made in China it's It's Made in India really guess who blocked Tik Tok in their country India guess who's blocked 100 apps of China India India is not afraid of China now why does China not like India why do they always be on closed doors talk yet at the same time they're part of bricks you got Brazil you got Russia you got India you know you got China and I think it's South Africa that's part of the bricks right okay so they're part of the same thing but there's also a way of you know competing the reason why I like India a lot and I think India is going to play very important role here is because India has seen how China negotiated with us and they've realized we're not doing that but India's also seen the mistakes China made with the one child Rule and overexpansion and what's going on with a lot of these properties that they build out in cities that looks like just like Paris I don't know if you've seen the city they build in China it's a city everything Paris has it has it looks identical to Paris if you Google this same kind of architecture if I show you the picture you would think it's Paris they spend billions of their own money to build a city replicating exactly Paris that's what China did okay wow everything they have they have a shaniz same exact model so China overexpanded very quickly India's watching China they had their one child policy the average age of a Chinese right now is 38.
4 years old India is 2728 India's IIT Institute is producing incredible engineers many companies here will hire Indian engineers and they're rock stars better than MIT in many cases so I think India is very important for the next 20 30 40 years as long as India is there China's going to hate it they're not going to like it the fact that Tim Cook right now has got a very hard job I think Tim Cook in the span of four weeks lost $350 billion of valuation for apple one because iPhone 15 didn't do what they expected it to do two because China is now giving him a hard time because China is their number one market of iPhones they sell now China sitting there saying wait a minute we sell more iPhones in this country than anywhere else yet you're giving our business to India who the hell do you think you are right then on the back end the real war that's taking place is the semiconductor chips and there's different levels to the semiconductor chips that's being built and China's specialized in the cheapest kind to make the easiest kind to make where some countries have specialized on a tough kinds to make when it comes on to semiconductor chips this is why China can't stand Taiwan being there this is why China wants Taiwan because Taiwan specializes in building the extremely technical semiconductor chips that the rest of the world uses and then there's complete other aspects to this you can get even deeper on so taiwan's going to play a very important role you know we can't have a Russia Ukraine Israel Palestine Gaza Armenia aeran turkey we can't have that taking place with Taiwan Taiwan needs to stay separate that needs to stay protected how we do that I don't know how we're going to do that we're getting involved in one too many wars but if Taiwan stays free and China relies on them because China destroyed the world during Co absolutely destroyed we realize 80% of medications is being built there 80% of the technology that we need is being built there they controlled everything car pricing use prices went up 50% like what are you talking about you mean to tell me I bought this car for $90,000 it's us you're willing to pay me $130,000 yes are you serious yes why we don't have chips to make cars are you kidding me no Rolexes they were making Rolexes for 18 months they didn't have equipment to make Rolexes you go to a Rolex shop what do you have we only have one watch can I order Rolex no 12 months you're not going to get are you serious yes nothing this is what was going on at Rolex store so the stuff that gets me optimistic is India Taiwan we're committed to the semiconductor business here the things that concern me is China erdon wanting to be involved in the Israeli War because most people don't realize the most powerful military in the Middle East is not Israel Israel is powerful but Israel has 300,000 soldiers of which I think 150 is reserved turkey has nearly 400 active Soldiers the number one military in the Middle East if Turkey gets involved be careful with these companies like Ron and boing and General Dynamics and these guys that are making a lot of money when there's Wars we have to be very careful with that when that's taking place Ray doio says a ression could be possibly around the corner a lot of these guys are fearing what is taking place today Michael bur shorted the S&P 500 $1. 6 billion of his clients's money and now he did it in a way where you know you're kind of protected but still he's not optimistic about the S&P what will happen the rich are still going to get rich the innovators are still going to find a way to win the people who learn how to use AI on their side they're going to advance and Excel even more the acceleration and the disparity between the rich and the poor is going to get wider and wider and wider why because most most people are going to spend majority of their lives on Instagram on Tik Tok they're not going to learn a new skill set they're not studying AI right now they're not studying technology right now Harvard did an article saying to stay competitive right now every 18 months you have 10 new skill sets to learn as an executive it wasn't like that it used to be 10 new skill set every 5 years now we have to learn 10 new skill sets every 18 months how the hell do we keep up we talked about the only the paranoid Survivor like right now you have to be looking at this out there what part of it do I control what part of it do I have not control over if not a billionaire or a hecta or a DEC iire man I got to figure out a way to increase my market value or else I'm going to get crushed you're going to over the next 10 20 years if you're going to spend more time on Netflix more time watching all these shows more time playing all these games more time watching all these Tik Tok Instagram if you're going to spend more time on that than building value for yourself and learning new skill sets fortunately for that Community they're going to be okay this doesn't mean a recession is still not coming down because only the paranoid survive there's actually two things you need to be paranoid about right now paranoia number one is you can pull out of the market too soon and miss opportunities and since no one is going to be able to accurately forecast the timing you have to be thoughtful about that so one strategy might be just that you dollar cost average in every day make sure that you have a certain amount of savings so that you're not going to find yourself in a panic situation the whole purpose of having cash in a bull market is to make sure that you don't have a force sale in a bare market and I thought that was a really wise way so we're going to optimize for options to do that you're going to want to be largely in cash Cas and index funds when I say cash I'm talking money market treasury bills something like that five points right now yep which is an amazing all day every day I'll take it now would not be the time in my opinion to invest in anything where you're not just an absolute complete expert where you have so much disproportionate knowledge that you're able to really recognize a deal when you see it but that's my rough guidance to myself I think it was fantastic and we're very aligned look you're sitting there watching some of these guys sitting on a lot of cash why are they sitting on a lot of cash are they're sitting on a lot of cash in case it's the fan is that what they're doing or they just kind of sitting on a lot of cash wondering I don't really know what's going when I say people I mean work our hathway I mean these guys have a lot of cash right now they're sitting on the table maybe they're not buying value stocks yet because they don't yet believe value stocks are here if you're not in this business if you're not in the business of Investments financial adviser broker day trader don't play around and get crazy about it crypto a lot of people got into crypto and NFD that was not their world they didn't know about it they lost a lot of money I mean a couple guys made $90 million but the people that bought their stuff lost $89 million but they got their money there's a lot of guys that made the money in nfts but it was a gamble for everybody and everybody's like oh my God but I believe it in all this other stuff okay great it's pretty crazy does that mean nfts are going away absolutely not my kids still buy stuff on roblocks and skins and all that there's an element of it that is not going to go away guaranteed is there 95% of nfts that are not coming back yes probably some of them are going to be gone I I have interest in things I know about Jamie Diamond's got a $900 million art collection why he showed me this yesterday that he paid $200,000 for it that picture is probably worth $8 to $10 million today money in art being made again non duplicatable assets are very very valuable whatever there's few of very valuable but only touch it if you know a lot about it if you know nothing about crypto don't even get close to it don't get too crazy about oh my God I'm hearing you know Bitcoin is going to go to 100,000 it may go to 500,000 but don't do it because you're guessing because somebody else said it do it because you've done a lot of due diligence in it so if you don't want to have that kind of a risk colorance indexing is the way to go to play it safe now to the small community of crazies that have an itch and a tolerance for madness when you have a certain amount of money I'm talking to my Goldman guy he comes in we're having our conversation he says hey here's what I think we can do with this amount of money I said okay what about it he says here's a strategy we can use the next 90 days I said do you have any questions for me he says I got one question for you are you okay if in the next 6 months we lose $55 million in this what a great question just straight up I'm like no I'm not okay with this a big n he says uh no problem totally get it then we can't go the way that this is one of the options we can go in because what do you think of the chance of a World War II happen next 6 to 12 months I don't know if I'm at 50% but I'm at 10% well 10 is pretty high okay if that happens how bad is it going to be you know like during Co that went to 18,000 I don't know if you remember for that minute that that went to 18,000 everybody was like holy what's going on but very quickly went back to 32,000 so it recovered very very quickly so what does this mean if you think a possibility of craziness is going to happen that you keep cashing it happens you can buy in dollar cost average okay yes you think you're that brilliant that you can time it historically very few people have been able to do it and those who did got purely lucky do you want to be part of that camp because most people historically what happened to them they missed being in the market on the five best days right and missing those five best days ended up costing them the difference between making 133% over a 20-year period to making 7.
