Bitcoin is PUMPING!!! Surpassing $11,000!! | The Real Economic Recession Might Get Worse

published on August 1, 2020

Hey what's up guys prices exploded across cryptocurrency and precious metal markets in this video we will take a look what is going on in those markets then i will explain why a real economic recession

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To receive one month free let's just take a quick look and see what is going on in different markets first let's take a look what is happening in a cryptocurrency world as a number of different

Cryptocurrencies exploded in price bitcoin makes new highs since the start of this pandemic back in march current price of one btc is over ten thousand three hundred bucks someone is waking up

A sleeping giant for the past three months bitcoin has been fluctuating slightly over nine thousand dollars that's a fifteen percent price appreciation in just one week

We are very close to make new year to date highs bitcoin just needs to get additional 200 a coin so surpass that sentimental 10 500 level as i explained in my previous

Video if bitcoin breaks 10 500 resistance level it has a good chance to continue increasing in price let's take a look at another asset class

That i would like to briefly talk about and that is precious metals gold officially makes new and i mean totally new all-time highs surpassing 1 900 per ounce last time it was slightly under 1 900 is

Back in 2011 nine years ago silver currently makes even more gains and jumped over 24 dollars per ounce back in march when pandemic spread across united states

Silva dropped to 12 dollars per ounce since then it more than doubled but it's nowhere near its all-time high where silver was back in 2011 when silver reached 48 dollars per ounce silver has at least double in price from

Here to surpass those numbers now finally let's take a look at the equity market specifically s p 500 is over 3 200 points mainly it was driven by fan

Companies while other highly capital intensive businesses with lots of tangible liabilities continue to stagnate majority of large cap stocks will report

The earnings in just few days i think companies like amazon and costco are likely to beat their expectations while other businesses that were heavily impacted by this pandemic are likely to perform poorly but there

Is another problem with earnings expectations and their reports let's take american airlines for example stock dropped by 70 while the revenue dropped by 90 percent from 2019

To the second quarter which wants its 20 the wall street expected revenue to drop even more the revenue did not drop as drastically as they expected so we can say that company beat wall

Street expectations and the stock price remains not being punished despite the fact that revenue dropped by much much more and the main reason why all this happened is because those

Cheap ppp loans which essentially a money grant anyway we see what is going on in the number of different markets now let's shift gearing bit and focus on the economic side

Anthony pampagliano made a great video recently explaining why he believes economic recession is likely to get worse let's take a look essentially let's just start with where

Are we right if we go back to um kind of pre-pandemic we were sitting at one of the strongest economies in history we had seen record growth in company values

We had seen record profits we had seen incredible rise over the last decade plus coming out of the 2008 2009 financial crisis and then on top of all of that we had record low unemployment we were

Sitting about 35 unemployment in february and everything looked like it was going to go up and to the right forever we were going to end up having you know trillions and trillions of

Dollars of gdp and everything was going to be awesome and then the pandemic hit and when the pandemic hit there was two key factors that occurred the first was it killed people

And of course because of the health crisis there had to be a reaction that reaction was to essentially shut down economies and what we did was we sent everyone home so people will debate the merits of

Should we have done that should we not i frankly don't care it happened and when you grind an economy to a halt like that what you end up seeing is that businesses can't operate you

Government mandated shutdowns right there's unemployment that skyrockets and so the impact of this decision to send everyone home this government mandated shutdown was that we saw over

40 million americans lose their jobs in about a 12 to 16 week span so three to four months we saw 40 million americans lose their job to go back as a refresher in 1929

Which is the start of the great depression there was 31 percent unemployment record low and that unemployment jumped from 31 to over 85 percent to then over 15 in the next

Two years and so what you end up seeing is we have accelerated faster on the unemployment track than even in the great depression right it only took us a couple of months

Took two years to get to 15 plus percent we pretty much got there in about a matter of four months uh during this recession and so as soon as you saw businesses being shut down in terms of being told

To go home 40 plus million americans right there was that that one big week back in march where six million people filed for unemployment claims the highest ever before that was about 700 800 000 back

In 1982 so all of a sudden we saw this record-breaking unemployment number two weeks in a row remember there were 66 million unemployed 66 million unemployed uh in

Back-to-back weeks the government the federal reserve said we have to step in and so when they stepped in what they did was they created a historic

Stimulus package they created a monetary stimulus package that ended up topping over two trillion dollars right the one of the packages was two trillion dollars by itself then there's a bunch

Of lending facilities and other things that they did and so what has occurred over the last couple of months is pretty simple we have seen a pandemic that caused an economic crisis

Which then led to massive response from governments and central banks around the world now in the united states let's break down what have they done to try to stop or mitigate a lot of the damage there's

A lot of easy things like they have uh inflated asset prices by pumping liquidity into the market right there's a liquidity crisis everyone got nervous and scared they wanted dollars they started selling all

Their assets the dollar got strong and all the asset prices went down so when you pump liquidity into the market all of a sudden you're trying to stabilize prices stop them from

Falling right make it easier for people to get dollars and so they essentially did that and they did it pretty well and what i mean by that is they created all sorts of lending facilities so if you look at the repo markets

They started to buy corporate debt government debt right they did everything they possibly could to stuff money into the system well look at what has occurred well after there was about a 30

Drop in public stocks we have now seen a massive rally including seeing their nasdaq hit an all-time high again right companies that have three and four x in value like the teslas of the world we've even

Seen bankrupt companies that have exploded in value in the public markets and so obviously the mitigation or the stoppage of the sell-off in stocks occurred and then we saw this massive rally

Now along with what i will call the stock market manipulation that has gone on right you can debate the merits again good or bad it happened we also realized wait a second there's a lot of people that are going to lose their jobs

There's a lot of small businesses that are not in the public markets that are going to need help as well and so this is where a lot of these monetary stimulus efforts came in or this relief came in

And so we started with individuals there was an additional 600 per month on the unemployment front to help people who are going to get on unemployment so they're

Going to file for unemployment insurance they were going to get that insurance plus an additional 600 a month this created a situation where many people were actually uh making more money on unemployment

Than they were off of unemployment back at their jobs now that's actually probably more of a statement in terms of we weren't paying employees enough to begin with

But that's what occurred so there's 600 extra a month then what we said was we're going to create the paycheck protection program the ppp loans these are essentially very

Um low interest rate loans that uh could be forgiven if you follow certain guidelines part of those guidelines were you had to be a small business or you had to prove that you were affected by the

Pandemic you then could take the loan and then if you essentially uh in a very over generalized manner if you promise to not fire your employees or to dock their salaries

For a extended period of time let's call it until october 1st then you would not have to pay back the loan right now there's nuances but that's generally what happened well a lot of people hundreds of

Billions of dollars was applied for and granted and people received uh the pvp loans these small businesses received them we then also saw stimulus checks go out

So i think was over 100 billion dollars in stimulus uh checks were sent directly to people so this is up to twelve hundred dollars a one-time cash injection uh to try to

Help people kind of get over the hump and if you remember kind of infamously the treasury secretary said 1200 should last i think he said it was like three months or something crazy um and

So that was kind of the idea was let's get liquidity directly in the hands of the people so you've got a beef up of unemployment you've got the ppp loans and then you've got direct stimulus checks

On top of those three measures we then saw bailouts of specific industries so the airline industry for example they received about 50 billion dollars in bailout money that 50 billion dollars one third of it

Is sent as a low cost or low-interest loan that uh has to be paid back two-thirds of it was essentially free money there was no equity in exchange for there was no uh

Promise to pay it back it was a grant of capital that said if you do not fire your employees you guys can just have this money so all of that sounds great in the sense

Of the government one realized that there was a problem two they immediately realized they were gonna have to step in and intervene in the markets three they went back and looked at the

2008-2009 playbook and decided they were going to use that playbook again here and they actually moved pretty quickly right for a government in a matter of weeks they were able to put together

A multi-trillion dollar stimulus package and get it into the market now we can all debate should they have done it faster should there have been better optimization more nuance of course but if you are going to do this

Speed and um kind of decisiveness is what matters and generally they did a good job so now all of a sudden we are four to five months later right from kind of when the

Pandemic started and what we see is a complete dislocation in the market between economic reality and asset prices i'll give you two core examples the first is obviously stocks so we have

Stocks that are hitting all-time highs they're exploding in value yet all of the underlying economic data suggests that actually gdp is down we are in a full-blown recession we are seeing

Um businesses shut down we are seeing uh record levels of unemployment all of the economic data is bad but stocks are up why is that again there is artificial intervention and manipulation of stock

Prices you can debate whether that's good or not that's what's occurring in the market the injection of liquidity into the market is going to devalue the dollar

Over some period of time and it is going to inflate asset prices right there is no way that a company's revenue drops 90 plus percent in let's say the movie theater industry

Uh in some cases there was 80 90 percent loss in um revenue in the airline industry and the cruise ships all this kind of stuff right there's no way that it drops 80 90

Percent the stock drops 60 to 80 percent and then all of a sudden it rallies again 50 up that just it doesn't match what the economic reality is and so that dislocation is very heavily

Driven by the manipulation and intervention by the government in the market good or bad who cares that's what's occurred but what happens when it runs out and that's what we're facing now

And so again you cannot have dislocation between economic reality and asset prices forever either the asset prices have to come down or the economic situation has to improve now what the federal

Reserve and the us government has hoped would happen is that they could inflate and kind of mitigate the damage for long enough with this intervention so that the economic data uh could bottom right so it would drop it would

Bottom and then it would recover and by the time the effects of the monetary stimulus into kind of pre-pandemic levels well if you look outside there's a lot of states that all of a

Sudden have re-closed certain types of businesses they went through all the shelter in place they began reopening the virus cases exploded and then all of a sudden now they're starting to reshut

The bars the restaurants all this kind of stuff this doesn't appear like it is going to go away anytime soon it may but it doesn't appear like that's going to happen and so we've got

An a second perfect storm occurring we have unemployment benefits expiring we've got pvp money that is going to allow people to start firing their employees in the next couple of months and then we have what looks like a

Economy that is not going to reopen how everyone thought it was going to reopen and so it is likely that that economic data is going to stay bad or not ideal for a long period of time right gdp

Could still continue to be negative into q3 and q4 if that occurs i don't think asset prices can stay inflated forever i personally believe that the most important thing people can do right now

Is understand that the recession is not over right we are only four or five months into this thing and so there's all sorts of chaos that is still on the horizon

And that may happen in the next three or four months if they let all the monetary stimulus expire or they can extend it even further but there's no way that this is over in the sense that all

Of the economic situation is resolved what we are getting is we are getting tricked by looking at stock prices into thinking things are okay but the economic data is really bad just

Looking at the economy itself pre-pandemically had relatively strong economy gdp was growing year-over-year on average between two to three percent unemployment rate

Was the lowest since 1970s around 35 percent and it looked like economy expansion would continue to grow but out of the sudden the black swanky event came by and completely changed the environment in our economy

Many businesses closed the doors and many people lost their jobs new jobless claim topped over 1 million for 18 straight week with the pandemic and social distance in measure driving stubborn high levels of

Joblessness since mid-march the total number of new claims filed since the last week and march 20th topped 52 million in total just last week we had 142 million

People applied for unemployment benefits a week before that we had 13 million since april will saw continued decrease in number of unemployment claims but it looked like just last week we

Broke that trend trend might continue to reverse and the numbers of unemployment claims could search once again considering the fact that six hundred dollars a week

Will likely end july 31st gop lawmakers debating whether to reduce the payment and possibly to include bonuses for those who accept a job offer and return to work while democrats help propose continued the 600

Benefit into 2021 personally looking at the free market and capitalism standpoint i do not think this is a good idea to extend 600 weekly payment because just like lousy

Businesses people will get addicted to free money and they won't want to be productive after all and i don't blame them why would you want to go back to work

And spend 50 hours of your time and physical labor if you can make more money sitting you as home just from the beginning the system was designed very poorly

From financial incentive standpoint or maybe they didn't purpose to get people hooked on free and cheap money just like drug addict get hooked on cocaine another thing that i strongly dislike is

Those ppp loans that will lend it especially to zombie companies ppp loans turned specifically into grant if the underlying company follows a specific guideline

Such as keeping employees on the payroll and do not fire them this is just absurd i work my ass off for the same dame dollars while zombie companies get free dollars so why do i have to exchange my precious

Time and labor if they receive everything for free the only reason why majority of companies are still open is because of those stupid grants right now retail airlines and

Hospitality business are not profitable at all in real capitalism it would be much more beneficial to keep the dirt closed then remain open and continue to lose more and more

Money every day but no we receive free grant from the government so we have to keep paying our employees and even if we make no money the system is just flawed and is doomed

To fail once real capitalism take place once again if the system is flowed when will the stock market drop it seems like market continues to go up and up and makes

New recent highs well i can't find some data points online and tell you that stock market should drop in this particular time but the reality is no one knows as long as the fat

Prints trillions of dollars and inject into the economy market will keep floating if this would be free market stock prices and real gdp cannot stay disconnected for a long period of time

In real terms prices will always fluctuate around the intrinsic value of the underlying asset but in nominal terms who the hell knows if the fat will continue printing asset prices are likely to go up then

Eventually we might get high inflation rate and the value us dollar either way we cannot kick the can down the road forever i'm sure free market will take place

Once again in the future first scenario if the federal reserve stopped the printing press and their consistent intervention into the economy and second scenario and most likely one

They will continue printing and blow up us dollar let me know what do you guys think about our current economy and the stock market leave your thoughts in the comment section below hit that like button

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