They Are About to RESET Your Money — Pay Attention

The money system is being reset. This is getting so crazy. People are really blind to some of the ways that this is happening. And right now, we're going to go through the small handful of things that are breaking right now that show you the direction of travel for the economy and exactly what you need to be doing with your money. You literally have 11 days left. That's it. 11 days until a deadline that no one's really talking about. And it's going to hit the money in your bank account and in your portfolio, whether you're paying attention to it or not. The president of the United States gave the people who print your money, the Fed, an ultimatum. And the actual words, and I'll put it on the screen for you, is something like, "Lower the rate. Well, I'll stop trading with countries with which we have a def." Okay, everybody, you've got to understand how absurd this is. You are supposed to have a separation between what's going on in the Fed so that they are an independent body. They are not controlled by the people who want to spend the money. So you've got the people printing the money and the people spending the money thinking on their own going in uh separate directions that create a dynamic tension that allow you to make sure that there's balance when the people spending the money who want to leverage money to get elected when they're able to tell the Fed what to do. Now you have an absolute death spiral and the world is going to react. So all eyes as we go through this you're going to hear me talk about the bond market a lot. All eyes need to be on the bond market because if you break the bond market, that's basically people's trust that they're going to get paid back from the government. And when Trump is talking about doing that, he is queuing the people who actually understand how the economy works that you cannot trust us. Lower interest rates or start this incredible trade what we haven't seen. And he called high interest rates a very fair disadvantage and told the Fed to be patriots. And this ultimatum comes to you on September 16th. That's the day the Fed walks into a room to decide interest rates, which the market is currently expecting to go up. He wants them to go down. But something much stranger. >> Here's the thing. You also have to understand. So, as we look at the bond market, when people talk about we're expecting rates to go up versus them to go down, it's better said that they the rate needs to go up because people understand what's being done to the money. The fact that you've got the president who, if people are like me, they believe that the reason that Kevin Walsh in particular was picked was because he gave indications that he was willing to play ball. I do not believe that Trump and Bessant would have picked Kevin Walsh if they didn't think, okay, this is going to be the partner that we need to get this stuff done, that we're going to have to work somewhat in concert with each other to grow our way out of this debt. Okay, that's a big part of the drum that Trump is banging is we've got to grow the economy and to grow the economy, we've got to lower rates. Now, the reality is that when money is cheaper and and people believe in the future, they feel very optimistic, they're going to borrow that money and they're going to then um start investing in their companies and that does become stimulatory to the economy. But I want to be very clear, lowering rates is not stimulatory to the economy on its own. In fact, uh we watch Euro Dollar University around here quite a bit and there is an idea that they hit on a lot which I think is very important which is the lowering of rates is the Fed responding to the economy. Now I think it's even sharper to say lowering the rates is the Fed responding to the psychology of the economy. But the problem is it's not an effective response which is why you don't see that stimulus working. If it did, Japan would be in a totally different picture because they held rates low for an extraord decades and it didn't stimulate the economy because the psychology of people was that this isn't going to um we're not going to invest. We want to hold back. We don't want to take on a bunch of debt. And so it was the rest of the world which had a different psychology than the people in Japan because they get their hand burned on the stove so badly when the uh real estate bubble burst in '89. They were like, "Yo, we're going to be completely hands off. We don't want to take on a bunch of debt." And so the economy didn't ignite. It didn't get stimulated. The global economy did because everybody that had the right psychology was like, "Yo, Japan's basically giving us free money." They went in and borrowed and ran with it. But if people don't believe that borrowing money is going to be in their best interest, lowering rates isn't going to stimulate the economy. That's very important to understand. So, you're raising rates because people don't want to buy the debt. They don't think that you're a trustworthy uh lender uh to lend to, excuse me. They don't think you're a trustworthy borrower. So, they're like, "Hold on a second. If we're talking 10, 20, 30 years here, there's no way that I think that you guys are going to pay me enough to outpace inflation because of the crazy that Trump is saying. I know you guys are going to inflate the money supply. And that means you're going to have to pay me a very extraordinary return on my money if I'm going to come out ahead. >> And bigger is actually happening at the same time. And that's why I really really wanted to put this out for you. And I apologize the audio might be a bit windy and so on. I'm on the beach. But there are pallets of actual gold being loaded onto planes and flowing out of America right now. Country after country pulling their gold home for the first time since 1971. And the last time a president leaned on the money printer while the world pulled this gold out, what happened to the the dollar? Well, that's what we're going to cover today. >> All right. So 1971 is something you're going to hear people talk about a lot. It is certainly a very important beat. But the reason it was 1971 is that the US government had already been so fiscally irresponsible that they kept having to limit the amount of gold that they would let people take back. Okay? So there is a historical coralate for what we're going to hear about which is different governments coming to the US taking their gold back out. It's a very important part of the story and it comes when they no longer believe that they're going to be able to get their gold from you. Okay, that is a very big vote of no confidence. This is what happened in 1971. Um he's going to give us a name if I remember right. I think he covers this uh that you had somebody come over and basically say no no no we're going to take a huge amount of gold out and Vulkar who ends up becoming the Fed chair uh later but at this time he's sent to basically try to convince this guy not to do it and they do it anyway precisely because they could see that we were printing money. And when you're printing money at that level and people are getting to the point where they don't trust they're going to be able to get their gold, that's when you know the psychology of what's going to be happening in the bond market. Again, it's all eyes on the bond market. Radalio has talked about this. The bond market governs everything. It lets you know first of all what rates are going to be. So, how expensive is a mortgage? How expensive is a loan going to be? But it also lets you know what people expect of the world. And those expectations drive their behavior more than reality does. Okay, so 1971, people have the expectation the US isn't going to be able to give them the gold whenever they want it. Spoiler alert, they end up being right. And in 1971, Nixon completely closes the gold window and people couldn't exchange their dollars for gold. Certainly not at that rate. So it's like the the read here is that the world is giving you that same um message that we think you guys are untrustworthy that that if you have dollars invested you have to understand that >> ancient history it's literally a playbook that we've seen again and again and it's literally happening again right now and I don't care whether you love Trump or you can't stand them for forget your your politics that's not what this is about because when the printer starts answering to the politicians The people who understand it early do really really well but everybody else spends a decade or two watching their money shrink which is what we've seen in the 70s and again after co right how is inflation feel to you right now so the Trump thing is the loud noisy thing it's it's in the news but there are four much quieter things that are happening at the same time and people are not connecting them and that's really why I wanted to put this out for you guys because I want you to understand this it's really really important the system itself like The plumbing under your bank account, your pension, your 401k is being reset right now, not sometime in the future. And I'll show you the data for it. Gold is walking out of American vaults. It's getting shipped home to Europe. The >> Okay, that's a sign they don't trust you. >> Biggest, safest, most boring pile of money on Earth. Literally just announced it's dumping a chunk of America's debt. Okay, there's a whole bunch of people dumping America's debt because again, they don't trust that they're going to get the payout from that that they otherwise would because they're all doing inflationadjusted calculations. So, they're reaching into the future. They're hearing Trump saying, "You've got to lower rates." They're looking at the world, which is clearly signaling that you need to tighten rates. And they're like, "Okay, hold on. I know that you guys are doing something called financial repression via yield curve control. So you're artificially suppressing what the yield of that debt should be because the market is telling you no no no you got to pay me way more. This is exactly why you've got Bessant buying our own bonds. Remember the bond market all eyes on the bond market. You've got Bessant trying to make a market there both in Japan and the US by the way which gez. But you've got Bessant saying, "Okay, I'm gonna be buying a bunch of this up with my sort of emergency slush fund and they're trying to uh make sure that WASH is prepared to do the same." So now you've got the US just indicating everywhere that they're going to be buying its own debt. And that tells you that the market wants to see the rates go up. They know that the very thing that we have to do and by the way that was not a Roman salute. That was a graph. Uh that this is one of the I realized you freeze frame that four separate things but they're actually all tied together. And by the end of this video, give me 10 15 minutes or so. You're going to see the whole machine and how it actually works together and know what a regular normal person like you and me can actually do about it. So we're not going to panic. We're not going to like, you know, run for the bunker. We're going to have a plan, right? My name is Felix Print. Uh I'm sitting on the beach. I used to be a banker and I started teaching this stuff to regular people about 7 years ago. And we've taught about 25,000 people over the last seven years as my mentors doing the teaching. And none of this is sponsored. I'm not, you know, ever endorsed by gold mine or any of that nonsense. And and you know, fair fair enough people do that, but I'm very lucky I don't need to. So I can just give you my opinions. That's all this is. I'm not a financial adviser. I can give you my opinions without any filter. Not. >> By the way, every you guys are going to have to make up your own minds. Be very clear. Nobody knows what the outcome of this is going to be. The brightest minds in investing are betting against each other. Uh everybody's trying to see something slightly different than somebody else and be right. Um there's no super obvious answer at the specific level. We're going to get into strategies which will be very um I think useful, but you need to think about the specifics. You're going to have to make up your own mind. So, um, there's going to be a lot to cover here because we're having like four or five things together and and I'm going to put all of that together for you into a, uh, into a free report. You can download that. I'll do that after I have a dip. Um, and and and you can download that at felixpren.org/shift, I think, because that's really what this is. This is a shift in the entire well, in your portfolio, quite frankly. Fenix/shift. It's in the description. Uh, download it. It's free. But the fact that you're even watching this so far is is is incredible because it puts you ahead of 99% of people because most will find out about this in a headline in about 6 months or 12 months. Um, I'm going to get it to you into your brain today. So, give yourself credit for showing up and watching some financial education here because the trap most people are sitting in and don't even know it is this. When the world feels a bit shaky, you want to do something safe, right? And for 40 years, the safe thing has mean put your money in an index fund. It's generally the the sort of accept that uh you know gospel buy the S&P 500 and just don't think about it. It's diversified. It's America. It's always going up, right? Great. Except every single thing that I just show you attacks that very idea. The gold leaving, the debt being dumped, the digital dollar that's coming, it's all the world quietly saying the old safe isn't really all that safe anymore. I think there's another thing that people need to take into consideration here and that is the fact that a very small number of companies now make up a mass percent of the gains in the stock market and they're all technology. This is one big AI bet. If I were going to say the thing that scares me the most about the S&P 500 is that that it's one bet. It's all AI. And we've talked about this before. It's so important to understand that historically speaking, and there are no guarantees about the future, but historically speaking, what you're looking at is as we build out the AI infrastructure that there's going to be a delay between the cost of all the debt that we have to bring on, all the servicing of the debt that we have to bring on in order to build out that infrastructure and when a sufficient amount of revenue is coming in to actually deal with that debt. And so far, while AI is growing extraordinarily rapidly, we haven't seen enough money come in. 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But there's all kinds of accusations that debt is hiding in places that are not people aren't being honest about. So for instance, the chip duration, if the chip duration ends up being 2 to 3 years and then it needs to be replaced versus the like 5 to 6 years that they've all built into their math, then they're far less profitable than they would have you believe even now. So not that any of them are profitable, but they're even more underwater than people think. So, um, looking at the S&P 500 as a concentrated AI bet, that's where this gets scary. >> The definition of safe is changing. The most dangerous thing you can own might be the very thing that you were told is the safest thing to own, right? >> I wouldn't say it's the most dangerous thing that you could own, but it is certainly has a new risk profile. >> Um, and if you own, >> and one thing to remember, all of this is about duration. So, if you're broadly distributed across the S&P 500, meaning the S&P 500 itself as an index is broadly diversified, then if there's an issue, odds are that you're going to come back because you're not making a concentrated bet on any one company that might just go under. You're making a bet essentially on the entire US economy, which right now is way way way overleveraged on AI. But just like when we had the dot crash, many of those companies did end up coming back. And so if you were diversified across a lot of them, then over time you were going to come back. The problem is the time duration. So if you've invested right now in the S&P 500, part of the reason that I would say I'd be thoughtful before you just eject out of it is that one, inflation is going to um force you to be in assets somewhere. And then on top of that, as long as you're thinking on say a 20-year time horizon and this isn't something where you need the money in the next two or three years, odds are that you start coming back and because you were diversified across a lot of companies, then many of those companies are going to come back and make up for some portion of the losses. So just keep in mind time duration is a huge part of the equation. The S&P 500, and most of you do, I do, everybody does, right? It's in your 401k, it's in your Roth IRA, it's in your pension and so on. you feel like you're spread out and safe and diversified, but 40% of that is just 10 stocks. And this year, those same 10 stocks drove 72% of all your gains. So, when someone says to you, I own 500 stocks on the S&P 500 undiversified, you actually don't. 72% of your returns are coming from just 10 companies. And guess who those 10 companies are? They're entirely AI companies. And those 10 companies are the most expensive, most crowded, most >> one thing I will say very quickly and this is so the counterbalancing idea to what I've been saying about okay this is all an AI bet. Uh there's historically speaking there's likely to be this trough of despair between when the debt service just starts imploding companies and when the revenue comes in is that the companies that are funding this are cash cows without AI. So remember, a lot of these guys make their money actually on social media and advertising. And so that's one of the reasons that the people that continue to bet on the AI bet is that it's like, hold on, this is a totally different world than when we were building out the internet, uh, where those companies just didn't exist without revenue from the internet. These guys exist without that. like AI is obviously a huge part of their future and where they plan to go, but they're still making billions of dollars in revenue cash off of something that isn't tied to AI. So, yes, it would hurt. It would certainly sting if they have to write off a lot of this debt, but they've got the money coming in. So, it is a fundamentally different landscape. And this is why I say people have to be very careful not to ignore the past, but not to think that the past is deterministic. dependent names on the planet at valuations we've never seen in the history of the world right at the moment the world is backing away from the dollar and you don't have to believe me on that by the way two of the most careful most respected value investors alive like the calm ones you know the ones who are supposed to love a boring index fund won't touch them one of them a man named Charlie Mer called his best friend one of them >> I'm not sure why he's bringing up Charlie Munger Charlie Mer's dead but there you have it I'm sure he would have uh pulled back even harder as all of this wound up, but he has passed away. >> Warren Buffett's own company, they quietly sold their S&P index fund, right? And he was telling everybody to buy that for decades. And the single most bullish voice on on Wall Street, the man who called this entire rally year after year, he's now warning of a 20% drop. So, you get the biggest bull and the most careful bears all backing away from it. And you might therefore want to know what to do about it as well. And that's also, man, Michael Bur is uh putting some big bets against the economy right now. Uh he clearly expects the bubble to burst. You've got Ray Dallio talking about something's going to have to prick this bubble. Um the dollars and cents of the situation are crazy. We're buying the stock market at what sounds good all-time highs. Yay. But when you start looking at some of the numbers like the cape index, you start realizing like god damn, we are buying these at uh it's not like the stock market is just at all-time highs. It's that the ratios that we look at to understand if something is overvalued or appropriately valued is getting way out of whack. And so the question becomes is AI really this magical force that is going to justify in the short term these valuations or is it actually going to take 20 years for those companies to be worth that which is precisely what happened during the dot crash. It was like everybody was pulling forward so much revenue that the reality was you had to wait all those 20 years to get to that revenue and most people can't deal with that time mismatch. we're going to do, not this week, but the coming weekend um when I'm probably no longer on the beach. I might still be, who knows? But I'm going to run a free live training and it's the first time we've run this. It's probably most important thing we've done and probably the last time we're going to run it and it's called the index fund strap. Like why the S&P 500 is actually lying to you. We're going to do it live. We're going to do a real Q&A. You can ask me anything you want. I'll show you how to check your real concentration and all of that. And I'll show you where the smart money is going instead. And by the way, what he's talking about is real concentration, I presume, to AI because AI a lot of times you a company might be doing really well right now and you think, oh, that company doesn't have anything to do with AI, but in reality they sell them the uh fiber optic cable or whatever that they need in the data centers. And so without data centers, then that cable isn't necessary. And so that company really is just an echo of the AI boom. Because when the smart money leaves those 10 names, it's going to go somewhere else, but it's going to leave the people who are in those 10 names that you're in pretty devastated. And it's completely free. No credit card, no couch, anything. It's just part of like what I what I love doing, which is teaching you um how this really works. So, show up for yourself, right? I'm going to show up for myself in the comments down below. Claim your free seat. It's at index.com. indexp.com. And that's precisely, >> by the way, I let this stuff play obviously to honor them for the content. what it is. But let me show you the machine that's happening right now. So you understand more than most even before the week's out. So let's start with gold because gold is kind of the lie detector of the financial world. Gold doesn't have, you know, earnings. It doesn't have a CEO. It doesn't, you know, tweet and all of that. All gold does is sort of sit there and it tends to hold its value while while paper money slowly loses it. And for 80 years, a huge chunk of the world's gold is sat in in in one place. the vaults under the Federal Reserve Bank of New York as allegedly a tunnel to JP Morgan, but that's a rumor I can't confirm. Anyway, so countries store their gold in America because America was the safest, most trustworthy place on the planet to keep it. That's basically the deal. But that deal is breaking. And look at what's actually happened here. The Netherlands pulled 86 tons of its gold out of North America just and they shipped it to London. France finished pulling out 129 tons out of the New York petrol vaults. Germany moved about 300 tons of its gold home again out of New York. Um, now the central bankers will give you a very calm, very technical reason for it. You know, liquidity, you know, preparedness, trading standards, blah, and yeah, okay, strip away the jargon. But the only question is this, why after 80 years of leaving your gold in America because it is the safest place on earth would you suddenly go to all the cost and trouble and risk of physically shipping at home? Right? because you think something bad is going to happen and you're going to need access to it and that the US is going to act dishonorably. That's why. >> Well, you only do that for one reason. You want it where you can put your hands on it. You want it out of somebody else's control. So, this isn't some technical BS. It's just it's a trust decision. >> So much of the battle for the economy right now is playing out at the level of gold. Gold is so interesting and if people don't wrap their head around it, you guys are going to end up being confused. You're going to make mistakes. The way that gold works is we all agree that there's this thing that holds value. Remember, it's all fake, man. It is all fake. Uh right now, some of the most valuable things on earth are chips. Our silver is far more used in industrial uh uses than gold. Gold is just a thing that everybody agrees. It's withtood the test of time for thousands of years. It's been doing its thing. And so, when I'm really concerned and I want to get as close to burying my money in the backyard as I can, I'm going to own gold. not gold paper, gold, the physical thing of gold. And that way, whatever craziness happens to all the money in the world, if the US devalues our currency, and by the way, this isn't just the US, man. Banks the world over are devaluing their debt. Uh, or that's part of what they're trying to get to. They're devaluing their money so that their debt becomes less painful. And because so many countries are printing money, so many countries are using inflation as a way to run deficits and be reckless. It isn't just the US, but that means that I'm going to, as a nation, as a central bank, I'm going to slide back to gold. So, previously, they could just use US debt. Now, that's not a thing. And so, you've got China obviously going ham buying gold. But you've got these guys moving their gold. You've got central banks all over buying more gold. Gold is now the number one reserve asset. But understanding what that communicates is the important part. It's the I don't know how this is all going to play out. I don't know what's going to blow up when. And so I just need to make sure that I have that thing that's going to be safe. And I don't just want to own it. I want it to be closer to me. Now, most of these guys are moving it to London, so there's still some uh iffiness there, but storing gold is hard, which now I'll insert my own take. This is not universally accepted by any means. But this is why I keep not selling Bitcoin is for me, I really want to treat it like digital gold. It's gold that I can essentially own that just sits there. I'm not expecting it to go up. I'm just expecting it to hold its value against inflation. That is not the way that it behaves right now. But that's why I keep holding on to it. It's back up near 80K. Before we started rolling is like 79K. So, uh, it continues to be volatile, which is a strike against the way that I use it, just for the record. But I don't want to have to have physical gold in somebody's vault. I do not trust people. I don't trust US. I don't trust London. They'll confiscate it if they need to. They've done it historically. But I want to hold something that is that hedge against I don't know what people are going to do. Now I do own some gold just to be very very clear and I'm sure I will buy more. Uh but there are downsides, trade-offs. Trust is leading the building literally on PL pallets and on planes. And if you think okay someone moved a bit of gold, so what? Let me tell you about a guy called Yan Newuen, and I can't pronounce that. I believe he's Dutch. He tracks this stuff sort of obsessively, and he put out a reminder this week of what happened the last time, the last time this happened. And you got to go back to 1971, the Netherlands, same country, funny enough. Um, and they asked to convert $250 million was holding into actual gold because back then the dollar was basically backed by gold and you could swap one for the other. and a young American official was sent all the way to Amsterdam to personally beg the Dutch not to do it. That official's name was Paul Buler, a man who'd later become the most famous central banker in the history of the US. And the head of the Dutch central bank, >> he became that for breaking the back of inflation, raising rates really high, yada yada, >> refused. So he wanted the gold. And Vulkar said to him, "This is a real quote. You're rocking the boat." And the Dutch chap said, um, if the boat capsizes because I asked to swap $250 million for gold, then the boat's already sunk. >> Okay, that is an important line. So, understand that's basically what people are betting on right now is anybody that says the gold to dollar ratio is this. Um, that has changed before where the US literally confiscated everybody's gold, then changed the price. So they bought it at the old price and then changed it to make gold much more expensive in dollars. So that's devaluing dollars against gold. The value of gold didn't change. What changed was the dollar got weaker. And so that's precisely the kind of thing that people are trying to protect against. They want to make sure that they have the gold in their possession, that it can't be confiscated from them so that they can change the rate of the dollar to the gold or whatever currency to gold. Because the way he said that's actually a little bit weird. The dollar is always exchangeable for gold and gold is always exchangeable for dollars. It's the rate at which they are exchangeable that changes. >> What happened next? A month later in August 1971, President Nixon went on television and slammed the gold window shut forever >> because we had printed so much money that now if people actually wanted to claim their dollar, we weren't or claim their gold, we weren't going to be able to pay them back because we were like reserve uh in in a bank where it's like, okay, you give me $10 and I loan out $9 and I only keep one in reserves. So, we were doing a similar thing with gold where we were way out over our skis doing something that only works if people don't want their gold back. But as soon as they start losing trust in you, they want their gold back. Guess what makes them lose trust in you? The fact that for every uh dollar that you or every $10 that you get, you spend 11 or 12, which is basically what we're doing now. People like, "All right, hold on. I don't trust you guys are going to maintain this relationship, so give me back my shit." Cut the dollars linked to gold completely because too many countries were showing up asking for the real thing America didn't have enough of. That one night is the reason your dollar today is backed by nothing but a promise and a money printer. That was the last great monetary reset. And it started with one small European country, the lovely Dutch, asking for its gold back. Sound a little familiar, right? But forget the the history books for a second. There is the part that actually matters to you right now. What came after 1971 wasn't some weird economic footnote. The 10 years that followed were the great inflation of the 1970s. Pricely roughly doubled. The value of the dollar in your pocket. It saved it carefully. Well, it evaporated. That's what a monetary reset actually feels like. It's not some dramatic crash on a Tuesday afternoon and then a, you know, taco Tuesday on the afternoon. It is a slow bleed. It's a little every month and most people have no idea for it, no plan for it. They don't know it's coming. So, >> okay, the question becomes how do they do it? This is where mechanism matters a lot and this is where Warsh comes back into our story. So, the way that they do it is they're going to money print. They're going to artificially keep rates low. They're going to put ourselves in a position where they are making the taxpayer pick up the bill for all of the deficit spending. And the reason that they are basically being backed into that corner is because we have $40 trillion in debt. When you have $40 trillion in debt, the big problem becomes that you can't service that debt. You can't pay the interest on that debt. And so you're left with a small handful of choices. You can either raise taxes, which obviously is going to be unpopular because you're not just going to be able to raise it on the rich. It's not nearly enough money. So, you're gonna raise taxes on everybody. So, you're either going to raise taxes, you're going to spend less. You can bet that that isn't going to be the solution that people are going to do because everybody wants their free Remember, voting is where people get themselves in this problem. Going to a primary and backing a candidate that you know wants to give you more free at that is where we're creating this problem. We've got to get somebody in power that understands that we cannot keep deficit spending. But just assume for now you're not going to get that. I'm going to keep banging the drum because it's what we ought to do. It is the moral obligation that we owe to ourselves and to our children, but we're most likely not going to do. I'm most likely going to lose that war. Your third option becomes what everybody calls a reset because that's like a trigger word for people. I think most people are triggered by it, but they don't even understand what's happening mechanistically. What happens mechanistically is you go, "Okay, well, if we can't get people to vote for um spending less money or taxes, then we'll do the thing that they don't get to vote for, which is we're going to use inflation as a way to take your purchasing power. We're going to devalue the dollar against things like gold or assets, which is precisely why you're going to have to be in assets, which is precisely why the rich end up getting richer because they're a proxy for people who understand assets. So, they go in and they can escape this. And so, it will be this, I won't even say slow, but it will be this steady eating of your purchasing power through inflation, through holding rates low. And that is exactly how you make the debt more manageable because what happens is you took on that $40 trillion of debt in the pre-inflation dollars and now you're going to be able to pay them back with postinflation dollars. So as you inflate it and you're getting uh paid the $2 instead of the $1 and the government is getting their tax revenue off of your new $2. It buys you less by the way, but you have more of those dollars. And so now the trillions that you're getting uh from taxing are now paying pre-inflationary dollars when it's like oh 40 trillion 40 trillion is nothing now man 100red trillion is the new 40 trillion and so you're with those inflated dollars again they are buying you the same or less. So the fact that it looks like there's more doesn't help you as an individual but it definitely helps the government pay off that debt. And so that is the game and that is what people are calling the reset is they're taking your purchasing power from you and the only way to hide yourself from it is to be an assets whether that's gold whether that's Pokemon cards whether that is um the S&P 500 owning some part of what's going on with AI. If you're doing that then you hope to keep up with inflation but they are going to print money. It is the most likely outcome by far. And if you're not positioning yourself to weather that, I think rapid devaluing of your dollar, you're going to be screwed. For me, gold leaving the US is the smoke. But there is always a fire and there is smoke. And I think this is the most important bit I want to explain to you. When the US government spends more than it takes in, which is always right, it makes up the difference by borrowing. And the way it borrows it, it sells you IUS. And they call them treasuries because it sounds fancier, but they're IUS. It's just a piece of paper saying America owes you money uh plus interest. And and for the last since World War II, the world has lined up to buy them because lending America money was the safest thing you could possibly do. And that constant reliable demand is what kept America's borrowing cheap. It's kept your mortgage rate low, kept your car loan, your your credit card all all lower than it should be. and everything is tied to it. So, watch what just happened. Norway, right? Again, we're in Northern Europe, they run the biggest sovereign wealth fund on the planet because they have a lot of oil and it's just a giant national savings account, $2.3 trillion, the most conservative big pool of money in existence in Norway just formally proposed cutting how much government debt it hold. and they're going to slash it by about $80 billion of those US treasuries, those US IUS. So, you got the single most cautious large investor on Earth stepping back from America's debt. And there is something even more alarming. The list of historically reliable buyers of America's debt is getting longer. Japan, the Gulf States, Norway. Now, the steady, dependable buyers who always showed up are just not showing up. So, why should you care again? Isn't this some random thing in the financial world? Well, if fewer people want to lend America money, America has to offer a higher interest rate to temper them. The same way you'd have to hire you'd have to offer a better rate to borrow from a nervous friend, right? And when America's interest rate goes up, yours goes up, your mortgage goes up, your car payment goes up, the interest on the national debt goes up, the cost on building your infrastructure goes up, the cost of building data center goes up, everything is financed. So this is America's master switch behind every bit of your financial life. And the switch is being flipped. And this is where Japan comes back. And and not in Japan, but fairly close to it because a few weeks ago I I talked about Japan a lot in a video in the yen. A lot of you watched that. And I want to be very clear about something. That story was very real. It was a warning shot. So for those of you who didn't watch it, going to give you a sort of oneline summary of that. The United States spent a fortune propping up the Japanese currency and that briefly cracked a giant hidden trade. Um, and the Wall Street and it wiped out about a trillion dollars of stocks in 40 minutes. But the point today is bigger. That Japan wobble wasn't a one-off Japan problem. It was the first place the pressure cracked. >> Okay, so this is where I think it's really important for people to understand again the mechanism here. So what actually happened to Japan? What happened to Japan is that they got inflation and the inflation was an echo of COVID. Prices went up everywhere and Japan had been able to operate in a position where there was no inflation expectation in Japan. So literally businesses didn't pay people more. Think about that for decades. Nobody's getting a raise. But the costs of things in your country are also not going up. Then all of a sudden inflation happens in a way that is so dramatic that it finds its way into Japan. And now Japan is in a situation where it's like, uhoh, we now have to start giving people more money. The inflation is real, and so prices start going up, wages start going up, and you create an inflation spiral. And if it were crisisled like it is, you have a problem. If it had been innovationled, uh, where people are just like, "Oh my god, there's a crazy boom. Everybody's getting more money now. There's more money in the system. Everybody feels richer. Everybody's buying more. It's causing prices to go up." That's a good kind of inflation. But alas, this is the crisisled inflation. Bad news. And so now, what the hell do we do? And what they're realizing is Japan has bought their own debt. Okay. The danger sign was Japan buying its own debt. Japan could not get people to buy their debt because the rates were being held so low. And everybody said, "I see what you're doing. You're not giving me what the market says that this debt is worth. So, you've got to buy your debt." So, okay, buying your own debt puts you in crisis. Turn to look at Bessant and Walsh. They're buying our own debt. So, now we're in a position where it's very similar to what Japan is going through where interest rates need to rise because people are unsure that you're going to be the right person to lend their money to. So, they need you to entice them in with higher rates. And lo and behold, right at the time when the whole world is backing away from you. And so, now they're going to have to buy their own debt. What are they going to have to do to buy their own debt? They're going to have to print money. That's the game. This is what people are talking about when they say that there the system is being reset. It's not like, oh, this is evil mustache twirling villains in the background. The evil mustache twirling villains in the background were set up in 1913 when we created the central bank and we created this mechanism. Now, it's just people going, "Well, this is the mechanism. This is how I avoid uh getting hurt is I can give you all the things you want as a politician. I'm going to keep giving you free stuff. uh I as the government can make sure that your economy doesn't blow up. I'm going to make sure that there's still appetite for the debt. I'm going to use your tax dollars to buy it. Uh sort of I'm going to use your purchasing power stolen from you by money printing in order to um keep this all afloat so that we decline but we decline more slowly. And the bad news is it ends up hurting the people who don't understand it. If you understand this, you're listening. You're actually migrating your money over to something that is in assets, very diversified, protecting against overconentration and things like AI, but you're actually diversified. You've got some gold, whatever. The don't take any of these literally. You've got to sus this out for yourself. I'm eternally paranoid that I'm doing this wrong. But this is where you you've got to be thinking, I've got to be in assets. I've got to be in what they say, a thing people can't print. So when money printing is going off the hook because we backed ourselves into a corner where we've taken on so much debt that we can't service the debt, we can't raise interest rates because it ends up hurting us as the government because we owe interest on that debt and we can't pay that those higher interest rates and so we've got to keep rates artificially low. We put ourselves in this trap and so we are in the trap. This reset is us dealing with the trap and the inflation becomes an inevitable mechanistic um process because we refuse to um raise taxes on everybody which would be a part of the solution but nobody's going to go for people just want to tax the rich again it's just not enough money uh and then the other option is that we could spend less money but of course we're not going to do that >> weakest seam if you wish but now we have gold walking away we have Norway backing away the president leaning on the Fed in a way that we've never seen before. So yes, different countries, different headlines, but it's the same machine groaning underneath the same way. And once you understand all that together, you kind of see this is not a coincidence. And you line them up, it is the symptom of a system being reset. Japan was the start, but what I'm talking about today is the reality right now. So if the old system is straining, the gold's leaving, the dead buyers are backing off, the question is, well, what replaces it? And here's the part that unsettles me because they are not actually hiding it. They're building the replacement in front of your eyes and it's just not making the news. And I don't understand why it isn't making the news because it's like the most important thing in the world. On September 1st, 21 of the largest financial institutions in the world, literally Goldman Sachs, City, Banker America, UBS, and others announced they're forming a company to launch a US dollar stable coin. It's going to launch in 2027. Now, what's a stable coin? Well, forget about crypto. It's got nothing to do with crypto, actually. It's just a digital dollar. >> That's not true. This is crypto. This is literally uh all the weird reaction that people had to um blockchain. Uh if you were around like 2020 through 2023, this is the reality. The technology is real. People were inevitably going to use it because it's a superior technology. So, this doesn't have to do with crypto scams or anything like that. This is exactly what that technology allows you to do, which is make money digital. And quite honestly, they're going to do the same thing to the stock market. >> Dollar that lives on a computer network instead of in a paper node or a normal bank account. And you can move it around the world instantly like 24 hours a day. There's nothing you need in between. >> But everybody wants to control the uh currency that you own. So what's the stable coin? So that people can benefit from it. And uh people that are in the rails game obviously want to be the rail that wins for all the reasons you would expect. It's very financially lucrative. So of course there's going to be a major race by the banks to get into this and do all that stuff. Uh but really the thing to pay attention to is the underlying debt appetite that this will create if the US wins. >> An actual law called the Genius Act that lets us lays out the rules for there's a Euro version is being planned to follow. So for you Europeans, you're not safe either. And JP Mong is not even joining that group. It's actually building its own. That's how important they think to this. Again, you might be thinking, well, why do I care? Dollar, right? Well, here's why. Money that lives on a computer is money that can be tracked, moved, and managed in ways a paper note couldn't. Whoever builds the rails of the new dollar gets an enormous amount of say and power about how money flows. >> It's very true. This is where you're going to make a philosophical decision about something like a CBDC, which is a central bank digital currency that I'm wildly opposed to because that effectively means that the government is going to be able to have the influence to shut that down, or a decentralized currency like a Bitcoin or Ethereum, which is a very different game. So, keep that in mind. >> Who can send it? How fast and under what conditions? And I'm not here to tell you that's good or bad today, although I'm obviously leaning towards the bad. I'm telling you that the people, >> the control of the money is terrible. Terrible. Absolutely terrible. People should be just in absolute outrage pushing back. Absolutely insisting that the government not be the ones in control of the movement of the money. You do not want the government to be able to watch what you spend, control what you spend. A thousand% not. But money becoming digital is a very good thing. It just matters who controls it. >> Are the biggest banks on earth alongside the government and you and I are not in the room. So when something this fundamental to your life gets built without you, the least you can do is understand and know it's being built and what it means. So the dollar is being rebuilt into something digital by the loveies on Wall Street. And I can tell you when you build new infrastructure like that, there'll be winners and there'll be losers. And the people who just keep their money parked in the safe old thing because nobody told them something new was happening, well they tend to be on the wrong side of it. And that brings us all the way back to September 16th, the deadline I mentioned at the top. The Fed decides on rates. The president has told them he wants a cut or else literally a threat. And you see the one thing that's meant to make the dollar trustworthy and that's meant to make people want to lend the US government money is that the people who print it are separate from the people who spend it. The Fed is supposed to be able to say no to politicians. And that wall, as boring as it sounds, is a huge part of why the dollar is trusted and has been trusted for the last 80 years. So when a president stands up openly and puts pressure on the Fed to cut rates to juice the economy and at the same time threatens trade war once again with its trade partners, well people notice that. They think, well, if the printer now answers to the politician, how much do I really want to hold at this current? So they buy gold, they trim their treasuries, and they build new digital things that they control, which is precisely the four things that we just watched happen, right? Can you can you start to see it? Put it all together. That's one machine. Trump leaning on the Fed, the gold going home, Norway stepping back, 21 banks building a dollar, Japan cracking. It's it isn't five things. It's actually just one thing. It is the slow, deliberate remaking of the money that you have and own. And it's not a forecast. is I'm not telling you this is something that could happen. It's it's happening right now. It's already stopped. So, what do you actually do about it? I'm not I'm not here to scare you. That's really not not the goal. So, what do you actually do about this? Because I'm not here to scare you. I'm I'm leave you sitting in the dark, right? No, I'm my goal is to actually prepare you. And I want to be really clear before I say this. I'm not a financial adviser. This is not financial advice. I'm not registered with anything. Um it's just me telling you how to think about it. And bear in mind, Winston isn't here, so you know, who knows where I'm going to say it. Um, I'm just going to tell you what I learned from my Wall Street mentors to help you then make your own decision. So, so first thing, don't hold too much of your life in cash. And I know that sounds backwards when things are scary. Keep an emergency fund. Yes. 3 to 6 months of expenses. Uh, you could possibly hold that in shortterm short-term US debt essentially. >> Yeah. So, this is where again, timing is everything. So, the odds that they're going to be able to inflate you super dramatically in the very short term is very low. So, when you think about holding something in cash, you want to make sure that you're getting a return. Um, not that you guys should do what I do, but I have been following a very Buffettesque style where I am backing slightly out of the markets, not not to his extent by any stretch of the imagination, but I am uh where I normally would have say uh three years of cash on hand, which I know is extreme, but for me, I keep very a large amount of money flexibly so I can access it whenever I want. I'm now upping that a little bit more. to say four four and a half years somewhere in that ballpark. Uh so backing off some of my exposure to the riskier um investment side so equities being a little bit more cautious there. I am in US debt but I'm in exclusively short-term US debt. I'm talking uh a month, two months, three months at the absolute outset because it's going to be pretty rare that there's going to be something so dramatic that you would be meaningfully inflated in a narrow uh space of time. It's when you start getting 6 months, a year, 3, 5, 10, 20 years, that's where this stuff starts getting crazy. Um so that I get some kind of return and I can watch what happens in the market. So I don't trust myself to get the timing right. So certainly I'm in the market. I'm still uh I'll call it reasonably exposed to the market, but I've got enough cash on hand that if it were to dip, one, I could spend that money uh to keep my life going. But then two, I could also put money into the market if it really feels like we've got a great opportunity. And that's how you build back from these things is that you see the opportunity uh to get in when it's low, buy low, sell high, right? Best advice ever. Uh but you've actually got to be able to move. To do that, you've got to have the dry powder. So, this isn't literal cash sitting under your mattress or even in a savings account, but cash equivalents, things like a very short-term treasury. The interest rates don't move much, but cash would also be okay. Some sort of savings account. Uh, but beyond that, cash is definitely the thing that's going to get taxed really, really badly by this money printing. When they print, the rates get pushed down to please a politician and the value of the paper in your account will leak. Guaranteed, right? It's a cash is an ice cube in this ice cube in this tropical climate. Second, own things that hold their value when the paper money comes under stress. Historically, that's meant hard. >> What can't be printed? That that is what this one is about. What is it that you can own that cannot be printed? >> Things that can't be printed. Gold is an obvious one. Again, don't go 100% into gold. That'll be a city thing to be insane. And there's another thing you can do, and that's what I also do. pieces of genuinely great businesses, companies with what's called pricing power, which just means they can raise their prices without losing their customers. Inflation shows up, they ride it, you know, they don't get crushed by it. Look at what the president just bought. He bought Visa and Mastercard. Not telling you to buy those, but those are, you know, those kind of businesses that have a very, very stable moat because, well, try launching a new credit card and getting into the hands of, you know, 300 million Americans. Well, good luck with that. So if you if you wish the place where I start with that research it's the Winston app. >> So that that is the long and the short of it. The goal here is that you've got to understand what's going on in the marketplace. What are the mechanisms? Okay, we've just walked through them all. There's there's not like some other mechanism right now that you guys need to be aware of. Those are the mechanisms. This is how the quote unquote reset is going to work. Once you understand that, then it's like, okay, what am I going to do with my money? Where do I put myself so that I can uh have some optionality? That's going to be huge because no one knows exactly what the time is going to be. That's very hard. And so, uh, you know, basically that history tells you the bubble's going to pop at some point. Something is going to prick that, start deflating it. The government is going to try to resist that with everything that they can because typically the thing that would cause the bubble to burst is the um rates get raised and everybody has to contract because to get a hold of money, it's just become more expensive. But the government is telling you we don't want to do that. Uh charging more or um taxing people more reasons we talked about that's probably not going to happen. Uh spending less definitely not going to happen for reasons that we've talked about. So now it's like where can I be that is both diversified because I don't know exactly what's going to happen and is going to at least keep up with inflation and then give you that optionality that we talked about. Those are like the highlevel things that you want to be thinking about so that you can keep your life going even if there is some sort of correction that say 30% 50% which are the kinds of corrections you see when a massive bubble starts deflating. So, keeping an eye on that. The historical signs we've seen when people start treating gold like they've got to get it back, that has been correlated, I won't say positive by any stretch of the imagination, but it's been correlated with the kinds of dips in the economy that we're talking about here where it's major corrections. So having that on your radar, understanding that overallocating in any one direction, even to gold, which may seem like it's a safe thing, but gold can sometimes be down for years and years where people are looking at it going, there's no way gold should be this cheap, and yet it stays low for years. So you can absolutely go down on gold. There's no such thing as a free lunch or a silver bullet or that thing that's going to solve all your problems. But understanding mechanistically what's going on, understanding from a psychological perspective why we are most likely to print instead of being fiscally responsible, taxing more, etc. Um, why the debt backs us into a corner, all of that stuff. Once you understand it, then from there you build your strategy with your money. Only you guys can do that. Taking any one person's advice is extremely risky because if they have a flaw in their thinking, now it's going to take you down with it. So, uh, be thoughtful. These are strange ass times, but keeping this stuff at the center of your focus is how you stay as safe as anyone can stay in this stuff. If you like this conversation, check out this episode to learn more. Let's find out what young people think about AI and whether it's going to kill us all. >> The next topic was one almost everybody worried about, including Bernie. >> There are now robots working in restaurant.