Name: Why The Stock Market Hasn't Crashed Yet - What Banks Don't Want You To Know
Uploaded: 2025-09-25T19:08:52.000Z
Duration: 13 min 14 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

Something strange is happening in the stock market, nothing like this has happened in the market for at least the last 100 years.

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Every metric that you look at, the entire stock market is extremely overvalued.

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Even Warren Buffett is sitting on a lot of cash instead of investing that money into the stock market and making real money.

Even if you check Warren Buffett's metric to measure the valuation of the market, it is insanely overvalued.

According to Warren Buffett, this is the best metric to measure the value of the market.

You take the total market value of the stock market and you divided it by the size of the economy or GDP.

In this case, the total market cap is 66 trillion dollars.

The GDP of the United States today is around 30 trillion dollars.

So 66 trillion dollars divided by 30 will be 216 percent.

Any value that is above 100 percent indicates that the market is overvalued.

If it's lower than 100 percent, then the market is undervalued.

So you tell me how overvalued the stock market is.

And that is why Warren Buffett is sitting on a lot of cash.

In fact, at the peak of the dot-com bubble back in 1999, this indicator was 115 percent and the stock market has crashed by more than 60 percent, 150 percent in 1999 and 216 percent.

So that leads us to ask the most important question, why the stock market hasn't crashed yet?

If you pull out the top 10 largest companies in the United States or the top 10 companies of the S&P 500 and you look at their average P.E. ratio, it equals to 66.

Somebody can make the argument that the P.E. ratios of technology companies tend to be higher than normal companies, but that higher ratio means 25, best case scenario 30 and not 66, which is another indication that investors are overpaying for every dollar that these companies are earning today.

In the beginning, when investors are excited and they start to invest in the stock market and the companies, the stock market can grow.

At a certain point, the market reaches a certain peak.

Smart investors who realize that the market is overvalued, they start massively selling off their stocks.

That creates panic within the entire economy and it leads to the overall crash of the market.

And then at the bottom, people with a lot of money realize that the market is undervalued, maybe it's time to jump in and start buying those stocks.

And we go through the exact same cycle over and over and over.

The real question is, if we are at the peak right now, then smart investors who understand valuations, who understand how the market works, supposed to sell their stocks now, right?

There could be multiple reasons but I think this is the most accurate explanation for that.

The US government is the largest spender in the US economy.

In fact, the government of any country is the largest spender of that economy.

The US government collects around 5 trillion dollars in taxes.

That money is being spent on people through different government programs.

The US government pays social security, medicare, and it funds the world's most powerful military at a trillion dollars.

The US government also has a lot of debt, so it has to pay interest to the investors for borrowing that money.

That money ends up in the hands of the average people and the investors who loan their money to the US government.

And then people spend that money by buying things from these companies.

So you will check your paycheck and you will get yourself a brand new iPhone, fill your car with gas, treat yourself at a restaurant, or buy yourself groceries.

So most of that money will end up in the hands of those large corporations who are providing those services, which is another reason why the stock market keeps growing exponentially over time.

Companies at the end of the day have to pay interest or have to pay dividends to the people who own these companies, and we call them investors.

Investors are sitting on a lot of cash, they all take that money, and they have to either invest it back in these companies or they have to loan it to somebody so that money does not simply sit, but rather, it is going to earn and generate interest.

But instead of spending 5 trillion dollars that it's supposed, the US government is overspending by 2 trillion dollars.

The only reason you would borrow money is either you are in trouble and you have to borrow money to get yourself out of that trouble so that you start making money and then pay off that debt, or you believe that by borrowing money, you are going to increase your productivity.

When you borrow money, you are borrowing money from your future, so you have to pay back that money sometime in the future, but if you increase your productivity today, paying back that money in the future is going to become a lot easier.

So the real question that we have to ask ourselves isn't why the stock market hasn't crashed yet, but rather, why is the US government is overspending by 2 trillion dollars?

Why is it instead of spending 5 trillion dollars, it is spending 7 trillion dollars?

The world is going through serious changes.

The world order that the United States has created is under threat.

Back in 1945, when the United States created the global world order, the United States was industrially, technologically, and financially superior compared to the rest of the world.

So if you wanted the United States to protect you, you have to follow the US global world order.

If you wanted to be part of the global financial system that the United States has created, you have to follow the US global world order.

If you want to buy all the fancy things that the United States is producing, you have to follow the world order of the United States.

There wasn't a single country that could stand up to the United States.

So the United States was at the top of the game since 1945.

Which is why now we are witnessing something different.

Something that hasn't happened since 1945.

Because there are countries today across the globe that no longer want the US financial system, that have built militaries that can rival the United States and are building financial systems that can compete with the United States.

China is one of the major economies in the world and is almost as big as the United States.

It has built a very powerful military and alongside other nations, for example, it is building its own financial system.

Other nations are also standing up and building their own financial systems and are competing with the United States.

So the current world order or the new world order might not be putting US interests first.

Which is why the United States, instead of simply spending 5 trillion dollars, it is borrowing money from its future to ensure that the new world order is either going to only favor the United States or will favor the United States the most.

Because nobody knows how the world order is going to look like.

There is a huge conflict in Europe going on.

European countries are looking for new allies.

China is catching up the United States militarily, technologically, and financially.

So the United States took a strategic decision.

We are going to borrow as much money as possible to ensure that we stay at the top until we find out how the new world order is going to look like.

In fact, if you look at the projections of how the US government will be spending money over the next 10 to 15 years, you will see that it already plans to overspend and run a huge deficit over the next 10 to 15 years.

So the 2 trillion dollar deficit is just the beginning and that will continue to ensure that the new world order that will be created within the next 5 to 10 years will favor the United States.

But borrowing money from the future or borrowing money at that scale is going to create massive devaluation.

The reason that one thing is more valuable than the other thing is because of supply and demand.

The reason that gold is more valuable than stones is because if you walk outside your house, it's filled with stones, so you can pick them up.

But if you want to find gold, then you have to invest hundreds of millions of dollars, dig underground in specific places in the world and only you can find gold.

If it's rare, if the supply of gold is very limited, its value is rising.

The same terminology applies to currencies.

Governments have the ability to manipulate the value of the currency by increasing its supply or by decreasing its supply.

Because there is always demand on the other side, there is always demand for the US dollar.

You have to pay your taxes, and you can only pay your taxes in US dollars, which is why there is always demand for the US dollar.

But if the US government is going to massively increase the supply of the dollars today by massively borrowing money from its future and filling the government with so much dollars, it is going to make the value of the dollar go down.

Imagine within the entire economy, there is simply just 10 dollars.

If we double the number of dollars in the economy, suddenly the dollars will become less valuable.

So the reason that the stock market is growing tremendously despite the fact that it's extremely overvalued is because investors are betting on dollars devaluation.

Current stock earnings does not justify current stock prices.

But because investors are betting on devaluation of the dollar, companies over the next 5-10 years will have to raise their prices as the dollar continues to lose its value and that's when the earnings will justify the current stock prices.

There are two ways to increase your earnings, either you are going to become more productive, you will produce more, you will become more efficient, or you are simply going to raise your prices.

By just simply raising your prices, it means inflation, it's very difficult to do that.

The only way you can do that is when there is massive devaluation of the currency and that's what investors seem to be betting on.

But that is going to create one of the biggest wealth inequalities in history.

Because if you look at the entire stock market, you will find out that it is mostly owned by the top 10 percent.

The bottom 90 percent of Americans almost own no stocks whatsoever.

So as the value of the dollar goes down, the stock market goes up, your wages don't grow as much as the stock market, so the vast majority of Americans will continue getting poorer while the top 10 percent of Americans will continue getting wealthier.

They won't suffer as a result of this massive devaluation.

And the biggest problem is that the bottom 90 percent of Americans will have to spend their money on these corporations.

You have to get yourself a car, fill it with gas, go to restaurants, buy yourself groceries and so on and so forth.

The rich people who are sitting on a lot of cash will take that money and will continue buying stocks.