This Is How The FED/Government Lose Control

We reside in a world of pure financial engineering, I think that is clear to everybody. Nevertheless, what we likewise all hope is that this environment never ever stops working – I suggest, who doesn't love free money, low rates of interest and a terrific life? Unfortunately, there is something that may end the great times we have actually been living in. Nor , nor the federal government will be able to do anything about it.

0:00 Existing Situation
4:10 Losing Control
7:30 Spending plan Projections
9:47 Investing Today

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This Is How /Government Lose Control

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About the Author: Richard Money


    1. By the time you have paid it off, your house might be worth half as much if the population keeps collapsing.

    2. @@paulsondjIt’s our house, where we live. As long as this is going to be our primary residence, I’ll be happy with the interest rate I locked-in for 20y. If inflation goes up, I will enjoy my reduced monthly payment inflation adjusted. If inflation will go down, nothing will change and I will be ok regardless what happens.

    3. there is precedent in German history at least that governments introduced extra taxes for home owners during these extreme times

    4. God bless Italy no. Whoever made that deal with you is either stupid or the victim of a government scam, stealing from somebody else to give it to you. Classic Europe.

  1. HI Sven,
    An inevitable US debt crisis will come in the next 5-15 years.
    I was very interested about your comments regarding Warren Buffet’s 30% cash/bond position and that he maybe seeing the red flights flashing before the rest of us.
    He has a very concentrated portfolio but with 4 positions in banks/AA (~85 billion) is he himself already vulberable to this debt crisis.

    1. No I don’t believe so. I thought we were going to have a debt crisis in the current year, 5 years ago and this was not the case. Only stocks and real estate will go up. Cash is trash

    2. yes, but I think with banks, he is thinking that he can buy himself one in a crisis! Think of a bank called Berkshire Hathaway :-)))

    3. ​@@CC-gu8rg People have been crying wolf over the usa debt problem for decades! And know what?? Nothing happens to the usa government fiscal position. The debt keeps going higher and higher. And so does the stock market! Only morons like you and robert kiyosaki say some kind of catastrophic crash will happen. What fools. Who are the richest people on the planet?? The people who keep investing in the stock market that you keep claiming are flushed with unsustainable debt. Go tell that to elon musk, jeff bezos, warren buffett, bill gates and more! On other hand the people who keep crying “debt overload” every single time are nowhere near on that list.

  2. Thanks Sven. Good video.modern finance is based on debt growth?
    this can’t go on forever?
    what would be the solution to this debt problem?

    1. the solution is easy, no debt to fuel growth, thus a 5 year recession and a return to normality for people, but that would lead to many other problems and that is why everybody is pushing the debt for as long as possible!

    2. ​​@@Value-Investingwho are you to say the debt cycle can’t go on? Everyone keeps spending money they don’t have. Governments down to private individuals. There are all kinds of debt instruments: mortgages, personal loans, CC, you name it. But the amount of personal bankruptcies are surprisingly low and this is probably due to adequate risk control. Lessons were learnt during the 08 gfc. You grossly underestimate the central bankers’ abilities to limit risk, you just assume they approach debts like a 5 year old! WELL WRONG! THE DEBT WILL KEEP ON GOING HIGHER. TAKING THE STOCK MARKET ALONG WITH IT. AND THE BIGGEST LOSER OF THEM ALL?? YOU! BECAUSE YOU KEEP SHOUTING INSOLVENCIES ETC AND YOU KEEP ADVISING PEOPLE TO “INVEST” IN PHONY CHINESE INVESTMENTS DESPITE THE CHINESE GROWTH STORY IS GETTING WORSE DAY BY DAY, AND YOU CONVENIENTLY FORGET TO MENTION THE CHINESE HAVE A LOT OF DEBT TOO! MOSTLY LOCAL GOVERNMENT DEBT

  3. Dr. Sven, this did not disappoint. Very concise, data-driven presentation. I could feel my adrenaline being released, as if I was watching a monster horror movie.

  4. a small holding in US TIPS might be worthwhile just in case inflation does move up into the 5-10% range. Of course that starts the debate whether the CPI is measuring the “true” inflation or is skewed lower for political reasons.

    1. it is not measuring true inflation as a home in the middle of nowhere is not the one you most likely need, thus for the things you need, the inflation rate is likely double.
      As for TIPS, a small holding won’t move the needle and not give you much more than inflation.

  5. Hi Sven, as always an amazingly clear and data driven video. Such quality is hard to find on YT. Let’s assume that a debt-fuelled crisis explodes in the US in the next 5-15 years, you seem to imply that value stocks will suffer, but less than other type of investments, because one can buy now at low P/E and the underlying companies will still be able to weather a big crisis? Is this correct?
    What about gold and gold miners? I know gold just sits there in general, but in a debt crisis wouldn’t it act as a “safe heaven”? Leading also miners to gain from it maybe?

    1. if a crisis comes, it will last, thus only good investments will keep delivering to allow you to compound…

  6. P/Es of value stocks will also materially suffer as you pointed out. Doesn’t a material chunk of Gold belong in every portfolio if high structural inflation is the base case? Is there historical evidence that value should provide better risk adjusted real returns?

    1. I don’t know about gold, what if the crisis doesn’t happen in 8 years, and gold does nothing, can you handle that

  7. As always super and intuitive videos. Bravo Sven!
    I was a billionaire too, but I was eight.
    In 1989. 1 DEM ~ 60000 YUD 😅

  8. Very good presentation. Not sure given your overall pessimism why you still think stocks will do well when and if this crisis hits. Or perhaps only by comparison with everything else – esp. cash…?

    1. Good companies will do well in the end. Bad companies will get crushed in a recession. So stocks of good companies it’s where the value is.

    2. If people view stocks as pieces of paper then of course they’re unlikely to do well, but if you can purchase stock in a goup of good businesses at decent prices then you can hedge yourself against these risks.

      It’s just that the index, as a group, is kinda awful right now because they’re made up of businesses whose models rely on 0% interest and are selling at very high multiples

    1. @@Value-Investing
      I am investing in stocks and ETF. Market did well in the past but i have some concerns nowadays.

  9. Hi Sven, solar panel related stocks did come off substantially from there highs. Can you make an analysis about Solar Edge/Enphase Energy? I think this would be very interesting for a lot of people (including me). Would be much appreciated!

  10. FED will have to go to yield curve control this decade and flush away the on balance sheet debt and especially the off balance sheet debt with long lasting negative returns on its debt. I don’t know if they can do a large debasement fast, seems kinda hard but what do i know? The thing here is that even if we are talking about FED and USD, its the best place to be when this happens. FIAT-currencies live in a strict hierarchy and if you are too strong or too weak there are consequences for your economy. China for example needs a massive devaluation right now but doesn’t want to do it before US starts to do big easing.

  11. Nice video, very informative.
    Sven, I would like to know your thoughts on Greece.
    It seems to be starting a decent rebound, but it’s difficult to know it the rebound is already fully priced in. I’ve been looking namely at GREK and ALBKY.

  12. Disagree that there will be “extreme ” consequences. They’ll just print more money (or create it digitally out of thin air) and everything will be fine. This is why, if you disagree with what the government is doing, buy stocks. Either way, stocks go up (inflation or money printing). Only thing that goes down, is individual family’s savings accounts and standard of living.

  13. In Germany already over 2 trillion national dept + about 15 trillions on all kind of obligations for the future. Absolutely no politician is talking about these obligations…kicking the can down the road

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