The Fed released their new economic plan, and our money just got weaker. Here’s what it all means for the stock market
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Let’s talk about the Federal Reserve, and we can’t talk about the fed without talking about Jerome Powell who just released a warning with what’s about to happen to the economy, what their estimates are for our future, and what their planning to do to interest rates for the next few years. It’s called the SEP or the SUMMARY of Economic Projections. Meanwhile, the stock market is painting a rosy picture of the future but if you’re investing, you have to be prepared for the consequences.
The fed is predicting that the GDP, the Gross Domestic Product will contract 6.5%, and that unemployment will be around 9.3% by December. In comparison to what we have now which is around 13.3% so it will be better, but not exactly good.
To make things worse, I recently saw an article called The Dollar Is Getting Weaker! This immediately made me think of inflation because we’ve been printing so much money – which begs the question, where does all this printed money come from and can it crash the stock market? Could we just print enough money to pay back the national debt of 26 TRILLION dollars and counting? Theoretically, yes, but practically, that would be a very bad idea for the economy.
While we won’t be printing the money to pay back the national debt, we will be pumping another one trillion dollars this month into the economy to keep the party going.
There’s 2 main reasons for why the stock market dropped really hard:
Reason number #1 is that we’re noticing more ill cases popping up, this creates fear and uncertainty in the stock market because a second economic shutdown is what we are afraid of most.
Reason #2 is because Jerome Powell just released his prediction about the economy and it wasn’t good. Normally, the Fed chairman can sort of act like a cheerleader to help boost the economy, and while his job is to be accurate, he also has to be somewhat optimistic – because that’s in our best interest. If the fed came out and told us that the end is near, then things would be a lot worse. The stock market is smart enough to understand this, so it dropped when the Fed released their prediction.
With the newly updated dot plot, most fed members have agreed to hold 0% interest rates all the way until 2022 if necessary. That means they’ll do ANYTHING to keep the economy afloat but for now, no interest rate changes.
What do higher interest rates mean exactly though? Here’s what they mean. When the Fed signals HIGHER interest rates, that means banks are much more profitable, they get to lend money out to us and we pay them more interest, so they make more money. BUT, if the interest rates are low, like they have been and will be for quite some time, is when bank stocks generally don’t do too well, because they don’t make much of a profit. Which is also one of the reasons why bank stocks are generally discounted at todays prices. REITS are similar, when interest rates are high, companies that hold real estate generally tend to see the prices of those assets go up and they make more money so we get to make more money. So interest rates go up, banks and REITS go up as well.
But what about the dollar and our money getting weaker? If we look at a chart of what the dollar has done in the last 3 months, it looks like it’s declining, but the reality is, the last 5 years saw a huge growth of the US Dollar. That’s because the US dollar is the world reserve currency, that means when times are bad, everyone wants to HOLD dollars instead of their native currencies.
When the dollar is STRONG, it means it’s cheaper to travel to other places of the world, we have more purchasing power. In relation to the stock market, the currency doesn’t really move the direction of the stock market. Some companies will benefit from it, and others will suffer from experiencing less trade.
A weaker dollar means our goods become much more competitive on a global market, which means not only will other countries want to do more business with us, but it would also encourage us as the consumer to buy more stuff at home.
Read more about currencies here: https://www.bbc.com/news/business-53001248
*Links above include affiliate commission or referrals. I’m part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.
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The stock market is basically a yo yo now
I’ve never seen anyone do it better
Trump was increasing the dollar value.
Jesus whooped the ancestors of these money changes out the synagogue a long time ago.
Your video is so good,hope you get better and better
Your video is so good hope you get better and better
I am your fan, I will always support you..
Here is a very simple way to understand why America is over, why we are bankrupt. We have only ever printed, in actual currency, about $484 Billion, so think of that, that much actually currency, yet we've SPENT let's just say $26T for argument sake. Now a real life scenario would go like this, you have $484 dollars, that's how much money you have, yet on credit, you have spent $26B, can you see how you are in debt? Here's a second way of looking at it, the Federal Reserve, A Private Corporation, Incorporated in Delaware in 1917, is owned by a few people, the US President doesn't really appoint the Chairman, instead he is given a list of people, and told which one to pick. So let's pretend you and I incorporated the Federal Reserve Corporation in 1917, our job is to print currency, we ship it to the US Government, but at interest, so the US Government gets worthless paper, yet they have to pay us back, with interest, in real money, for example all of the money in Ft. Knox belongs to the Federal Reserve Corporation, our parks, the Federal Reserve OWNS the United States. This is why you see ie Obama, "It is a crime to put our children in debt", he gets in office and runs the debt up, same with Trump, said the debt was insane, then raised it. The Fed calls the shots, think if the US Governemnt didn't do what they said, they could say "Fine, we'll raise interest rates to 26% and you can forget about re-election. If people knew how their government was actually run, we'd all march on WA
"The End is Nigh"？ Geez, these days the click bait has to get so bookish? 🤣🤣🤣🤣🤣
Even though Germans do still use "nah", they don't get so bookish as often. "Das Ende ist nah."
You have a beautiful voice and a great message. Thank you for this!
just when you thought the stock market was going to make a v-shaped recovery… uhh… it did! And. uhh.. under the 2016-2020 administration!
Money printing has been the most devastating effect for all humans that ever placed foot on earth.
They're going to do away with the US dollar but then it's going to come back stronger then ever
7:28 "If you pay attention to the dots, you might just miss the larger picture"? That's just like saying if you pay attention to the pepperoni's you might just miss the whole pizza
Dear Andri thank you for this good video stay safe
I have a $100 bill and it says abolish the fed Can someone tell me why ?
Actually gold is the reserve to US dollars. When the economy collapses (and it will in the next 2 years), then gold will become the new currency. No other currency in the world is stronger than the dollar and therefore there is no other choice than to go back to what we know has worked before in history. And thats using gold as currency. I would sell all of my stocks now and wait for the crash, then re-invest it and wait for better times. Its not exagerating the next few years will be the worst economic crisis the US has ever seen.
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Btw the stock market has always been a yo-yo every so many years like clockwork. But right now i'd say alot of this was planned since they came out publicly essentially saying they wish to destroy the us dollar by doing the same thing that caused it to crash in 2009 which was predicted. On top of that they recalled coins to say they had a coin shortage when actually they are controlling whats circulated in order i assume to push people through credit cards and debit. Which could be good in keeping the economy artificially going for a bit longer, however the worry i got here is the fact that they are going to implement bail ins which unlike bailouts are not paid back by the government rather they are seized from everyone's accounts in that bank with only the smallest amount being protected which i think in most cases is 100k$ which they seize anything more than that legally and it becomes theirs as it is anyway since thats the deal with using a bank, you lend them your money. Thats really the fear i foresee with the "cashless" society they are trying to implement atm. But we knew this stuff was going to happen because one of the head company's of the federal reserve the one who is owned by the rockafellers use to be public on what they are doing. However over a two- three year period they sold off all stakes and holdings in both united states currency and debt over a two years period. Upon noticing that people where using the site to invest into what they were they made it private but it was already shown that they had sold all u.s. dollar stakes and debt and bought other foreign ones. Which led many to believe int he stock market area that the Fed planned to make another country's currency the new global currency. Thats when everyone started buying up currency in "third world" country's that those company's bought to replace the u.s. dollar assets. In those couple years several stacking and other laws where introduced to make it harder to withdraw money from the banks in the united states. Several small business had their whole assets seized because of these laws and started a law suit which so far as i know hasn't went anywhere. Before this stuff though it was already predicted that the u.s. market would crash again but this time cause a great depression because after the crash in 08-09 they implemented the exact same measures that was active that caused the crash. The same things that the fed said they were goin to do the other day. I'm not really sure what it all means but i behoove people to start looking into especially if you have a large portion of money tied in everything. Around the same time that the economy for u.s. would crash when several advisors advice was not followed, Several federal and civilian company's also predicted a global food shortage set for 2020 and would last 5 years in 2025 during the time killing off 1/3 or so of the population worldwide. Its interesting and despite what people think i just figured it would be smart for people to know because i have seen other investment "educators" who are not really as open as you. And are telling people that its a good thing the fed is doing what it is and that it will only benefit people yada yada but you strike me as someone who doesn't just care about profits and margins so here it is do what you will with it. Its interesting either way. Also good video btw.
Excellent video, A friend of mine referred me to this channel you make a lot of sense but I do not understand anything until she referred me to a financial counselor that helped me to craft my portfolio and over a year we have been working together making consistent profit enough to get me a new apartment and care for parents, All thanks to her
you make these types of videos easy/fun to watch
Why this dollar only inflame in Ayiti?
Trump must know pressure Ayiti will not save him, the handcuff in your hands tighten Trump, like Ayiti can't breath.
IN GOLD WE TRUST!
Thank you! I really enjoy your videos.
Your magic tricks are getting old
I blame trump for not taking action early, and the demos for scaring the economy
I dare you to click on the dog 🤭
Ron Paul wanted to End the Fed. The only president I ever voted for.