Summary
Transcript
Most investors were way off in 2023, and they’ll most likely miss the target again in 2024. The unfortunate part, they still don’t understand why. But you will by the end of this video. The reason stocks keep making new alltime highs while most financial analysts keep predicting a crash isn’t in the data, it’s not in the indicators. It’s down to a force that’s dictating the market. And I’m not just talking about the United States.
I’m talking about a much larger global force at play. We’re going to cover a lot of ground in a short amount of time to get you ready to navigate these global markets. So get comfortable as we dive in and look beyond the headlines and into the fascinating world of global economics. Let’s go. All right, if you’re new to the channel, my name is Mark Moss, and I make these videos to change the way you think about money.
And today I’m going to give you a new framework to understand global money and global markets in a whole new light. So let’s just dive right in. All right? Now, why do us equities keep climbing, making new all time highs define all expectations, what’s driving the unstoppable climb? And more importantly, how do we stay in front of this? So we stay ahead by understanding the financial framework created by the billionaire George Soros, which possesses so much power, it dictates the global market dynamics.
Now, just a side note, George Soros, he’s a global villain in many people’s eyes, and I agree with that. But in the world of investing and making money, he’s a legend with one of the best track records in the world. And even more, he mentored the goat, the greatest of all time, Stanley Druckenmiller. So we should all want to learn from these lessons. If it worked for Stan, maybe it can work for us.
Now, if applied correctly, what you’ll learn today could not only help you earn more money, but it could also help increase your mental clarity over your investments. We all want that, right? More peace, more certainty. Now, the framework is called the Soros Imperial Circle, and it’s a concept that might just change how you view the world of finance forever. And before we dive in, though, I just want to mention that next week I’m hosting a live event.
I’m calling it how to profit from the rise of inflation and the central bank’s no landing scenario. We’re going to look at about 20 to 30 charts. I’m going to explain how this imperial circle works. What the Fed is doing how it’s going to lead to huge returns this year. If you know what you’re doing. Again, if you get it right now, this is a free event. And after I go through all the charts, all the graphs, I’m going to stay on.
I’m going to answer all your questions live so you can fully grasp how to use and implement this. So, of course, you can crush your investing goals. It’s all free. There’s a link down in the description if you want to come hang out with me live. Hopefully you do. All right, now let’s get back to the imperial circle that we’re talking about. Now, to really understand the imperial circle, you first have to understand it’s a tale of two different policies.
All right? It’s a tug of war. So imagine a scenario where a country can simultaneously experience economic growth, asset appreciation, like strong stock prices, and at the same time have a strong currency. Right? Imagine having both. Sounds impossible, doesn’t it? Well, according to legendary investor George Soros, this is a phenomenon which he calls the imperial circle. And it’s not only possible, it’s actually what’s happening right now. It’s the reason why markets are defying all ods.
Most people don’t understand this. The secret to understanding this concept lies in a contradiction between these two key economic policies, one, fiscal policy and two, monetary policy. Now, in order to illustrate this a little bit, I want to do something a little bit different. I’m going to take you over to the whiteboard so I can draw this out for you. All right, so we’re talking about George Soros imperial Circle, and I want to show you exactly how this works.
All right, so it’s the tale of two economic policies like we talked about. So the two policies are one, monetary, and the other one is fiscal. So you hear these two words. Monetary is what the central banks do, the Federal Reserve. And they’re basically setting the price of money, making the money more expensive or the money more cheap, tight or easy. The fiscal. This is the government. This is the government, the US treasury.
This is the amount of money they’re spending. And so we sort of have this tug of war like this. But it’s not just a tug of war in the United States, it’s a tug of war of all the different nations. So it sort of works like this. If the US wants to slow down inflation like they want to, they make the currency stronger, they make the dollar stronger by raising the price of money.
So they raise the price of money like this. Now, we’re at 5% plus interest rates. All right? Now, as this slows down the monetary policy of the United States, what’s happening is other nations over here, they have an easy monetary policy. And what’s happening is while the United States is sort of contracting because of this, as other nations are easing or lowering their rates, 5-4-3-2 like this, what happens is all this money from this country gets sucked over here because they want that 5% rate.
That’s what we’re talking about, the tail of two policies. Now, if the United States were to do the opposite and bring this rate down to 2% and be easy, another nation could be going up to five. And likewise, that would push money from the United States over to here. All right, so it’s a tug of war. And what happens is most people are just stuck looking only in the United States and not realizing that when the US makes it more expensive, while it might be bad for most Americans, people from other nations love this.
Money from China, money from Europe, money from Japan. It’s all flooding over here. So while the Fed’s trying to make you and I broke, the rest of the world are buying assets and taking advantage of these rates. All right, now, to understand more, let’s go back over to the desk. Okay, so hopefully that helped you understand it a little bit better, seeing the visual there. But there’s a twist, and the twist that’s causing most financial analysts and investors to completely miss.
This is not just a national game. Like I was explaining, it’s actually global. Now, no matter where you are in the world, most eyes are focused on the Federal Reserve and what they’re doing with rates. Now, I talk about this all the time, but the reason why it’s important is this affects the whole world. While cutting rates might seem like a solo move in the world of global finance, it’s actually a coordinated dance.
You see, as much as you hear that the US can’t keep up this massive spending, you have to realize the imperial circle doesn’t need to exist in just one country. And the US doesn’t operate in isolation. In today’s globalized world, some countries can be tightening while other, multiple other countries can adopt loose fiscal policies, creating this cumulative effect. You see, the imperial circle thrives on relative actions. It’s not just the US with loose fiscal policies.
When other countries follow suit, not all stimulus remains in their borders like I just showed you. A perfect example is the eurodollar system. The eurodollar system is a global network. It’s a global monetary system, but one that essentially puts the fed in charge of monetary policy worldwide. Meaning the Federal Reserve’s monetary policy decisions, like cutting interest rates, impact not just the US, but the entire world. So analyzing only the US economy paints an incomplete picture.
Now, we always have to keep in mind the global ecosystem if we really want to understand the forces driving the current market trends, especially when we’re thinking about global assets like bitcoin, like commodities, we have to remember that one country’s tight markets attract another nation’s loose money. So how does the Soros imperial circle fit into this global puzzle? And more importantly, why? And how is this the underlying force that’s propping up us markets despite the US national policies? Well, remember, the US, like I said, doesn’t operate in isolation.
Its financial decisions ripple across the globe, influencing and being influenced by international dynamics. Now, to visualize this complex concept, what I want to do is show you some charts. Let’s look at some graphs. So let’s go back over to the whiteboard so I can pull some charts and data up for you. All right, so I want to show you some charts and some graphs. The first one we want to look at is us flows.
This is what everybody’s focused on. And they don’t understand why the markets are moving because they’re only focused on one piece. The first thing I want to show you is this chart. And what we can see here is this is the S and P 500, the US stock market overlaid by the dollar index. Now, most people think that the dollar, when the dollar gets weaker, assets rally. And when the dollar gets stronger, assets go down.
But that’s not always the case because of the imperial circle. And this is a perfect chart to illustrate this. So what you can see, this is the stock, the PE price to earnings ratios. And you can see them moving with the dollar index almost in lockstep. Why? Because even when the dollar is getting stronger, which most people think should push asset prices down, it attracts a flow of capital coming into the country.
And so while most people are focused on this, this is the Fed money supply chart. Fed M two. I show this chart all the time. You should understand this by now. It basically stayed pretty flat through until 1971. And now we’ve taken off another angle. But what most people are focused on is this end part right here. I have it on another chart. We can see a little bit bigger.
And what people want to tell me is, Mark, you don’t understand. Look, liquidity is actually going down. So we have a little bit of a downtrend right there. Well, a couple things we have to take into consideration. One, sure, you’re right, it is going down a little bit right here. But look at this trendline. So we’re still, even though it’s gone down a little bit, we’re still way above the trend line.
Okay, but that’s only the US. Remember, the sorrow circle takes into consideration other nations, because when rates are strong like this, it sucks in capital from around the world. So we have to look at other charts. So let’s take a look at this. This is the global flows. So for example, we have the, remember, it’s monetary and fiscal. So the monetary side is the price of money. What we can see here is these are the other central banks around the world.
And this is the price of money. This is the interest rates. Now, what we can see here, this is the bank of England, and we can see how far rates have already come down. We have the Federal Reserve right here. It hasn’t come down a little bit, but you can see it’s trending down right here. And you can see basically the rest of these nations trending down. Even this one right here we have the European Central bank is trending down.
But this is the price of money. What does it do to the money flows or the liquidity is the question. So let’s take a look at this. Remember, I just showed you the US m two. Here’s the other nations. So here we have Canada going up, we have France going up, we have Germany going up. We have Japan mostly staying flat. South Korea mostly staying flat. United Kingdom sort of going down.
And the US went down. It’s kind of been trending. But here we have a little bit of an uptrend. So it’s not just the US in isolation, because as these go up, it attracts money over into the US, Germany attracting money. And so more importantly, what I like to look at, instead of getting stuck just looking at us m two, is I like to look at the major central banks.
You don’t need to look at all the central banks. The four big central banks we want to keep an eye on, that would be the PBoC, that’d be the BoJ, the ECB, and of course the Fed. Now, what we can see in this chart that most people are missing here we have the balance sheet, so you can see the amount of liquidity continues to go up. The red is the rate of change.
And this is what I’m looking at right here. And this is what most people are completely missing. We have been in a massive liquidity uptrend globally. And so while the US has been cranking the screws, making the price of money to bring prices down, global liquidity has been coming over. Now, we can see it even better by looking at one of the major central banks, and I’m talking about China.
Now, if you’ve been paying attention, China is in a world of hurt right now. Right now, they’re trying to prop up their real estate markets. They’re trying to prop up their stock markets. And what we can see right here, these China stocks, they’re getting these boosts right here, the central bank is basically injecting liquidity into the market to continue to prop up the stock prices. So when the central bank does that, what happens? Creates liquidity.
It pushes the stock prices up. We can see that in this chart right here. This is the central bank liquidity. And what you can see since 2013, look how much liquidity they’ve added to the system. Now, most of this money doesn’t want to stay in China. Where does it want to go? It wants to buy land and homes in the US, homes in Canada. It wants to buy stocks, things like that.
And we can see that right here where the PBOC liquidity is actually driving gross domestic product. So as this goes up right here, we can see on the black line right here, it’s pushing gross domestic product. All right, let’s go back over to the desk. I’ll finish explaining how we can use all this to our advantage. All right, hopefully that made sense. Now, let’s dig in so you can figure out how to use this to your advantage.
But first, don’t get me wrong, okay? I’m not saying that because of this, the markets are invincible. First of all, nothing ever goes up and down in a straight line, right? We always have pullbacks on a bull. We have bounces on a bear. Corrections are inevitable, and we may see one in the near future. For us, equities, we just don’t know. However, the broader trend that’s fueled by the global imperial circle that we’re studying right now could continue to play out on a larger scale in the years ahead.
Like what I just showed you in China, it’s definitely worth paying attention to because as I pointed out, as China’s easing and it’s pumping liquidity into the market, even while America’s been sort of tightening or kind of trying to stay tight and trying to drain liquidity, China’s been pumping it back up. It’s a battle of liquidity. It’s a battle of liquidity on a global scale. And too many investors in the western world get overly focused on the Federal Reserve and then completely ignore the liquidity decisions of foreign central banks.
The US is still the top dog, but countries like China have a significant impact that can overwhelm the US in certain situations. Like what we’re just seeing now. The trouble brewing in the eastern world is going to bring an estimated $2 trillion of liquidity into the market. And if that happens, investment assets globally are going to benefit from this, because today we live in a digital, a hyperconnected world.
Your local geography can have an impact on you, but the global liquidity situation is the final boss. Now, also, keep in mind, this is a multi act play. Right now, we’re still in the first act. So now you might be wondering, how do I navigate this complex landscape? Well, first off, you can come to my live event next week called how to profit from the rise of inflation and the central bankers.
No landing scenario. Like I said, we’re going to look at 2030 charts. I’m going to explain how this imperial circle works, how we can use it more in depth, what the Fed is doing, and how this could lead to huge returns this year if we get it right. Like I said, it’s a free event. There’s a link down below. Just come check out the charts. And then I’m going to do all live Q A to make sure that you have all the information you need to implement this so you can crush your investing goals.
All right? Now, next, we want to understand that the Soros imperial circle gives you a lens to which we can view global financial trends and make informed decisions. It’s a framework, right? This is what Soros used to make money across all the countries, become a multi billionaire. It’s what he taught Stanley Druckenmiller to become the greatest investor in all time. If you’ve watched that video, it’s all about liquidity.
And so we have this framework now. Next, we want to stay nimble. We have to be prepared to adapt your portfolio as the market unfolds, because things are moving quickly right now. All right? Diversification across different asset classes and geographies is crucial. Also, we want to keep our head for sure. Don’t panic when corrections come, because what we’re trying to get right is the directionality here. All right? As I said, nothing ever goes up or down in a straight line.
And we have to remember this is a long term game. And the long term trends, they’re still in play. Also, we want to use data not emotions. Too many people get caught up in, like, I think this is going to happen. I feel like, no, no, we want to look at the data, not emotions. We want to watch global liquidity. I showed you all the charts, not just the US global liquidity.
Now, while everyone else might be losing their heads in the bigger picture, we can capitalize on the opportunities that lie ahead. And if you want to understand how to navigate this even better, then you need to learn to watch the global liquidity. It’s what I broke down that video. I’m going to go link it right here about the Soros protege. I’m talking about Stanley Druckenmiller, the best investor of all time, and how he uses it to his advantage.
So watch that video, and hopefully, if you like this video, give me a like. If you don’t like it, you can give me a thumbs down. That’s okay. But at least leave me a comment. Let me know what you think down below. Of course, subscribe if you’re not already subscribed. And that’s what I got. To your success. I’m out. Thanks. .
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