Name: Everyone Will Be Wiped Out in 67 Days - Ray Dalio
Uploaded: 2022-08-23T18:21:46.000Z
Duration: 11 min 36 s
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March 16, the chairman of the fed, J Powell, said that a recession is unlikely despite

the fact that the fed has raised the rates and cut off the lifeline support to the economy.

A few months later, on June 22, Powell said a recession is 'a possibility' bu t not likely.

GDP growth rates for q2 are out, and real growth decreased at an annual rate of 0.6

percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter.

Which means, technically, we are in a recession.

But J Powell said he does not think the U.S. is currently in a recession.

Seems like he has his own interpretation of a recession.

That's probably what happens when you fail at your job.

However, a month later, on the 30th of August, he said that 'some pain' is on the horizon”.

The economy is declining, the stock market has crashed, and companies are going bankrupt.

But J Powell keeps avoiding the word recession.

He is willing to call it however you want but not - a recession.

Let me tell you what “some pain” means.

It means putting people out of work, shutting down small businesses because the cost of

money goes up because the interest rates go up.”

Companies can no longer borrow money to sustain the growth they had the last 2 years.

Some people find it difficult to understand that money isn't going to solve all of your

If a business is unprofitable, it can survive if you keep feeding it cash.

But it doesn't matter how long you will keep feeding it.

If it's not going to become profitable, it will collapse the moment the financial

Usually, there are 3 to 4 people working at a subway store.

If we double the number of workers there, they are not going to produce double the number

Their productivity will most likely diminish since they will disturb each other since the

place is too small for 8 people to work productively.

That's known as the law of diminishing return when any additional input will cause a negative

But at the end of the day, you have to pay them all, at least the minimum wage.

That's not a problem when you have access to free money, but when that free money is

not available, you start running into a trouble.

You have to cut your workforce and try to be as efficient as possible with just 3 employees

Thats why we have news such as this “Bedbath and beoying are slashing more than 20% of

Coinbase will lay off 18 percent of its employees.

Tesla already began laying off 10 percent of its workforce, with ex-employees confirming

While the fed is trying to calm us down that everything is ok and we shouldn't worry, the

reality is far from that, especially if you ask Ray Dalio who believes that the US is

Why United state's debt crisis will lead the country to a crisis the world hasn't seen

Why it wont just crash the markets, but might cause the US economy to collapse!

How high does the fed to raise the rates to finally bring inflation down?

And how to prepare for the biggest crash in American history.

We will answer all of these questions and many more.

But before we do that give this video a thumbs up

The  main job of the federal reserve is to protect

the value of the dollar, to keep people's faith in the dollar, to make sure that your

So, when inflation is almost hitting double digits, it's clear that the fed is failing

But it isn't always the fault of the fed.

The federal government is to blame as well since the president literally appoints the

chairman of the fed, who is the most important decision maker in the fed.

Secondly, sometimes the government overspends, like distributing stimulus checks or forgiving

If you have borrowed money, you have to return it, plus interest - that's how capitalism

The moment you misuse that printing press and keep printing to pay for everything, the

value of your currency will quickly plummet.

Imagine hypothetically there are 10 goods and 10 dollars in the entire economy.

In this hypothetical example, each good will cost a single dollar.

If we throw an additional 10 dollars into the economy, now there will be 20 dollars

but still 10 goods in the economy which will make the cost of each good to double to match

Of course, it's just a theoretical example but you get the point.

When you throw trillions of dollars into the economy, that's what you get, whether you

And instead of trying to solve the problem by limiting the supply of money, the fed is

saying that inflation is caused by the shortage of energy or supply chain problems.

Yes, of course, these are the factors that are contributing to inflation but that still

doesn't exclude the fact that there are too many dollars in the economy.

Back in the 1970s, when inflation hit 11 percent.

Guess what Arthur Burns said; who were the chairmen of the fed back then?

He blamed the shortage or energy and food.

Later though, he raised the rates overnight to more than 12% by mid-1974.

That instantly cut inflation by half, which was good news.

But that naturally created a recession since suddenly, there was significantly less money

flowing into the economy, which increased the unemployment rate to about 9% from 5%.

Instead of keeping the rates high long enough, Burns panicked and lowered the rates, which

Inflation remained high until Paul Volcker was appointed as the chairman of the fed in

He raised the rates up to 19 percent and kept them high for a few years.

People hated him, but he left the office with inflation at around 3 percent.

And it seems as if the exact scenario is repeating now.

Instead of raising the rates last year, the fed denied any signs of inflation.

Now it's not raising them high enough and blaming global energy prices.

The economy is getting into a recession, and they are changing the definition of recession.

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Everyone Will Be Wiped Out in 67 Days - Ray Dalio

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