With all the announced stimulus, the FED’s balance sheet going to $10 trillion, it is time to discuss Inflation and perhaps even hyperinflation. Government deficits are huge and will be only growing, thus currencies have to be debased! There is no other way. So, protect yourself and own real assets.
This is also the reason why stocks have been going up even as we are entering the mother of all recessions.
When it comes to the stock market, investing in stocks, looking for inflation protection, it is always about real assets. Enjoy the stock market news for today.
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Inflation Ahead – Stock Market News – $2.3 Trillion Stimulus, Huge Deficit, Perhaps Hyperinflation
As the global economy continues to recover from the devastating impact of the COVID-19 pandemic, there is growing concern about the potential for inflation. With governments and central banks injecting massive amounts of stimulus into the economy, combined with record-breaking budget deficits, experts are now starting to raise the alarm about the possibility of hyperinflation.
The United States, for instance, has approved a staggering $2.3 trillion stimulus package to support struggling businesses and individuals affected by the pandemic. Such a massive injection of money into the economy can have serious consequences on the purchasing power of the currency, leading to rising prices and eroding the value of savings.
Furthermore, the budget deficit has also continued to balloon as governments spend beyond their means to provide relief and stimulate economic growth. The US budget deficit alone is projected to reach a mind-boggling $3.8 trillion in 2021. While it may be necessary to overcome the economic fallout from the pandemic, the long-term consequences could be dire.
The combination of increased government spending and excess liquidity in the market has the potential to create a perfect storm for hyperinflation. When too much money chases a limited supply of goods and services, prices skyrocket and the value of money plummets. This can lead to a vicious cycle where wages fail to keep up with the escalating cost of living, plunging millions into poverty.
Historically, hyperinflation has wreaked havoc on economies, destroying wealth, eroding confidence in the financial system, and hindering business investments. Countries like Zimbabwe, Venezuela, and the Weimar Republic in Germany experienced hyperinflation, which led to economic collapse, social unrest, and political instability.
Nevertheless, it is essential to note that not all experts share the belief that hyperinflation is imminent. Some argue that the current economic stimulus measures are necessary to jumpstart growth and that the risks of inflation are manageable. The world’s central banks, including the US Federal Reserve, have reassured investors that they have tools in place to control inflation, such as raising interest rates when necessary.
Nevertheless, investors and individuals alike should remain cautious and vigilant about the potential risks associated with inflation. If inflationary pressures do begin to mount, it is wise to consider protecting investments with assets that traditionally perform well during inflationary periods, such as real estate, gold, or commodities.
In conclusion, as governments and central banks continue to pour trillions of dollars into the global economy to mitigate the impact of the pandemic, concerns about inflation are mounting. The combination of a massive stimulus, huge deficits, and excess liquidity could potentially lead to hyperinflation, eroding the value of currency and disrupting economic stability. While not all experts agree on the imminent threat of hyperinflation, it is crucial to remain vigilant and consider protective measures to safeguard investments.
BOSS
Sven you said SP 500 is 5000 in 10 years? It happened less than 2 years though 🙂
Thanks Sven, I have concluded that I need to buy beer to hedge inflation.
Simple solution – Instead of giving free 1400$ cheques,they should give it now to ppl for 0% interest for 2 years. Once employment is back, ppl will repay
just got your market research platform… cant wait to get into it more
Are those Yugoslavian dinar? I traveled thru that country in summer of 1990. I remember they had 100,000,000 dinar notes. A month later, on my way back, new notes were printed with 6 zeros less; same images and colors on the bank notes.
Awesome video. Always great information Sven. Thank you.
«Eat Brocoli» is probably the best financial advice you can get.
Would you pay off your mortgage early? Mortgage 30-year fixed at 3.99%
Funny video but still full with facts.
+ Sub!
In what country did you live during the inflation?
OMG ! Say the same thing 10 more times
At 20:00, how come you are looking at a fixed rate mortgage? Are you expecting rising interests rates?
Thank you Sven. Fan of your channel. Please please keep the channel rooted this way in facts and hard analysis! Please do not add entertainment fluff like some financial education channels to boost ad revenue. I like your content and i hate fluff. Keep up the good work and you will get lot of views from the more knowledgeable audience you have!
Buy gold stocks?
Apart from what you said, I would say it's intelligent to keep 20% of your savings that you don't need for at least 10 years in gold. It will keep your money value. Consider an extreme case: 2000 years ago, when the Roman empire, Centurions were getting paid around 30 ounces of gold per year. The equivalent, a US captain, considering $1600 per ounce, gets paid 28 ounces per year. It's an extreme example but gives an idea that it's the best value reserve. Also, it's a good hedge when markets go down.
Worst and useless videos i have ever seen. Why don't you just sing a song "Long term long term long term long term – after my death I will have money in haven or hell
What for those who can't buy a property? I can loan at halve your 3%, but i don't have the deposit. And I'm your age +1, but single. I can't get my deposit in the next few years, so I gave up on getting a mortage in 40's (by then at what conditions?). So I should by REITS? Am I doomed to rent for ever?
a lot of the feds money that will be printed, there is a majority of loans, and take backs, and offsets. you won't see "Hyper-inflation". The money printed was a cash print. changeing credit to cash, a much needed input for spending. Spending is the economy.
You seem to forget bubba that if people can’t afford to eat or pay rent that the people responsible for that will be purged from society it will cause uprisings across the country where the very systems put in place to belittle the citizens will fail so yea let the idiots in the government raise the price of food so people can’t afford it see what happens.
What do you think about bank stocks during inflation?
Finally a viable replacement for toilet paper, hyperinflation.
I like how you manage to have a global perspective (US) but also able to discuss Europe and other markets. That's valuable for anyone not living in the US.
Your analysis is very insightful. I think I'll become one of your paying subscribers !
I have been considering investing a portion of my very small portfolio in gold mining and other precious metals stocks. I have indeed been investing a small amount in Vedenta. However I also came across a company in South Africa called NGLOY Anglo American PLC. My knowledge of value ingesting is still pretty limited in the grand scheme of things but it I am reading the fundamentals correctly NGLOY seems to be a better deal as they seem to have a smaller amount of debt, better eps, and more consistent cash flow and book value growth. The only thing is that they are a "Pink Slip" so you basically have to buy them "under the counter." I believe with Fidelity, which I am using, you have to buy them during their trading hours.
Znači ti si iz ex-Yugoslavije? 🙂
out of many many youtube financial video this channel is the best. Subscribing
These guys always come out when the bailouts start cranking up. Reserve currency and safe haven status. Watch and learn.
Thanks ofr this informative video Sven. Much appreciated.
Hahaha I remember that, I was like 13 then, prices in shops changed almost every hour. Trick was to buy stuff using as many interest-free rates you can, after 12 rates you pay more for bank service than rate itself. You had to visit your local shop in the evening and order a number of loafs of bread you needed next day. Usually parents sent kids to wait in the morning for ordered bread, groceries because as day went prices got up :D. I also have bunch of those banknotes. And if you think they are good as toilet paper you are wrong 😛 they are tough and sharp. Listen to him, he is most realistic financial advisor on youtube imho. 30+ people that got rich last decade had a huge boost and very few of them understand this. His advices are especially good for Europeans, because Americans have huge financial freedom. For example my taxes+mandatory health insurance+2 mandatory pension funds ( that are basicly goverment/bank scams) take 55 % of my paycheck (we don't use checks couple of decades I think). And God help you when filing an investment tax in Croatia. But hey we didn't have a 1990 crisis, we had war 😀 .
November – January was getting pumped by the fed. November is the true prices of stock with good economic conditions.
Dr Hannah Fry, a mathematician, presented a BBC documentary in 2018 on a possible virus outbreak, in a show called Contagion, available on BBC iPlayer. Excellent programme, predicts exactly what has happened and shows how scientists model their figures. It all came true
Here she is discussing it more recently https://youtu.be/Xkqtcm3w7Vw
The point being, this programme was made in 2018. She tells you point blank this will happen. 2 years before it does. Most people, didn’t listen (myself included). Are you listening to Sven and Ray Dalio, probably not. I am.
Hi Sven, I am from the Netherlands as well. We are about to buy our first house but wr are seeing alot of news the last days that the corona virus will impact real estate prices and we will see lower real estate prices (probably) at the start of 2021. Therefore, what is your opinion on this? As you are buying real estate right now. Why arent you waiting for lower prices? Would like to know your opinion on this. Is it wise to wait? And again, thank you for the great video 🙂
"Stay healthy eat broccoli!" LMAO Too funny Sven! also true!
Great video again! Hyperinflation is a real risk and everybody should protect themselves with real assets
You forgot to mention the bit about separation and loosing everything mid life.
Great video Sven!
I would appreciate if you could make a video explaining how governments inflate their way out of debt.
Wishing you all the best.