Summary
➡ The article discusses the trends in the S&P 500, Nasdaq, Bitcoin, and housing markets, suggesting that they may be in a bubble due to overextension. However, the author argues that this is a misunderstanding and that these trends are influenced by monetary policy, specifically monetary easing. The Federal Reserve’s decision to taper or tighten the monetary base in November 2021 is highlighted as a significant event. The author also emphasizes the importance of watching the U.S. as it is the global reserve currency of the world.
➡ The US, along with other major central banks, plays a crucial role in global financial liquidity. Despite appearances, assets like the S&P 500 and real estate are not in a bubble when adjusted for the money supply growth. In fact, the S&P 500 is down 22% and real estate is down 47% when adjusted this way since 2000. This means that while it may seem like you’re gaining wealth, your purchasing power is actually decreasing.
➡ The US national debt has surpassed $35 trillion and continues to grow rapidly, with the government needing to borrow more to cover its expenses. The Federal Reserve is expected to cut interest rates, leading to more debt and credit expansion. Despite concerns about sustainability, the government continues to increase debt to pay off old debts, a cycle that doesn’t seem to end soon. Meanwhile, the gap between asset prices and wages is widening, making the rich richer and leaving others behind.
➡ To improve your financial situation, don’t just rely on wages or assets, but invest in assets that grow with monetary expansion. Real estate is a good investment due to leverage and loans, but assets like gold and bitcoin are more sensitive to liquidity, making them potentially more profitable. Bitcoin derivatives are growing even faster than bitcoin itself. The speaker offers more detailed advice in other videos and live sessions.
Transcript
Now, based off my social media post over the last few days and weeks, it seems that no one’s prepared to see this data. It’s gonna challenge every belief and every bias that you have. But if you wanna know the truth, then stick around and let’s go. All right, now, real quick, before we do, if you’re new to the channel, my name is Mark Moss. I’ve been investing through multiple bear market cycles. I’ve seen my share of asset bubbles. I started investing right before the.com boom and the bust. I then built up two tech companies with big exits.
I had a big multi eight figure real estate portfolio, only to see the real estate asset bubble crash in 2008. And so I’ve been studying these events in great detail ever since. And I’ve been making these educational videos for over five years to help you avoid the same mistakes and pain that I had to go through. So let’s jump right in. All right, so we’re going to talk about the everything bubble, and I’m going to talk really fast because I have a ton of data, I got a ton of charts that I’m going to show you.
So I’m going to go through them as quickly as I can, try to keep the ad libbing down to a minimum. All right, but we’re going to talk about the everything bubble as a Jerome pal is showing us right here. And look, most people have this completely wrong. It’s a reverse thinking of what most people think. It’s why I’ve been changing my tune for about the last year and a half. You can see my record on the videos down below. And we’re going to talk about this now, the first thing, let’s just frame this up. Okay? We’re going to start from the beginning.
What the heck is this everything bubble? It was a term that was really coined by Janet Yellen back when she was running the Fed. And it’s basically an everything bubble refers to a correlated impact of monetary easing. So in Wikipedia, it sort of tells you this, but for some reason, all these analysts and all these people on Twitter and social media, they don’t understand it. It’s a correlated impact of monetary easing. We’ll come back to that. It says monetary easing on asset prices. So what does monetary easing do to asset prices? Creates an everything bubble. The policy itself and the techniques of direct and indirect.
Direct and indirect of quantitative easing. Why do I stop there? Because people are like, but mark, we haven’t been having quantitative easing. Look, the Fed’s been tightening, well, direct and indirect. So while their official policy has been tightening, all the indirect stuff they’ve been doing has had the same effect of easing, like the BTFP program, for example. And it says, the Fed put is a modern monetary theory. So modern monetary theory means that we can just print as much as we want. There’s no limit to the amount of money that we can just create. And if we print too much and inflation is too high, then we can tax it out sort of like a drain on a bathtub.
We’re going to come back to this. But this sort of frames it up right here. But most people just don’t understand this. Now, a bubble, I often say when someone says, hey, but bitcoin or houses or stocks are in a bubble, everything’s always a bubble. Now, the question is, at what stage in the bubble we are, right? So if an asset price is going up, let’s imagine if we have a baseline. If an asset price is going up, that’s a bubble. Now, is it low? Is it high? Right? So the question is what stage? So here’s the stages that we have.
The takeoff of the bubble. If we’re in this stage of the bubble, no big deal, right? Then we have this first sell off. They call this a bear trap. You know, if we’re in this stage of the bubble, no big deal. It’s this part, this part of the bubble that we want to be careful of. We have this enthusiasm, greed, delusion, and a new paradigm. Oh my God, we’re going to get so rich it’ll never go down. And then finally, denial, and it crashes back down. Okay? That’s what people typically see. But that’s not all. What it seems now a few notable bubbles from history.
We have the tulip bubble. It’s the most famous one in history. And tulips in Holland, like the flower, they got so overbought, it created this massive peak, and then they sold off. Now, a lot of people like to say, oh, tulip mania is sort of like the.com or sort of like bitcoin. Well, not really, because the tulip mania never came back. It never rebounded again. The.com went up and down, but, of course, it’s way higher today. Bitcoin went up and down, and, of course, it’s way higher today. So it’s a little bit different. You have to understand, sort of how these work.
And I wanted to show you the.com, for example. Now, the.com was a bubble, and it did crash. And when we talk about the bubble, we can see. I drew this trend line for you right here. So this is the Nasdaq, right, which is represented sort of the.com bubble from 1977 to 2024. And what we can see is right here, this did create a bubble, right? It got way over the trend line, so it crashed down back. So back to the mean, back to the trend line. It bounced around, tested the trend line again, and then it took off to no all time highs.
So this right here is what we’re looking for, really. Are we looking for things that are way too overextended, way too overpriced, or are they underpriced? But most people don’t understand this. Okay, I know it sounds like a simple concept. Stick with me. Okay. This is very crucial. You understand this. So now let’s look at asset bubbles. And again, I’m gonna talk fast. I got a lot of data. Okay, so let’s look at stocks. I did a poll on my Instagram, and I basically asked my audience on Instagram, what do you think is the biggest asset bubble? Stocks, real estate or bitcoin or other? And almost everybody thought that stocks and real estate were the two biggest bubbles.
They were about tide. So let’s take a look at those bubbles. Now, what we can see, and actually, we’re gonna look at stocks, real estate. We’re gonna look at bitcoin. This is the tweet that sort of kicked all this off. My good friend Lynn Alden put up this tweet on Twitter. If you’re not following me, I’ll link to my twitter. Down below. You can see us going back and forth on these things. It’s kind of fun. This is what sparked this whole video and she basically said that in 2008, right here, the housing bubble got overextended.
But today it seems to be driven by something else, which I replied, it’s like a bubble in the denominator. You may not understand what that is. I’m going to break it down for you. And this guy right here, Darth Powell, he likes to comment on Twitter a bunch. He says to me, mark, you just don’t understand how real estate is priced. Actually. He said, you don’t understand how real estate is priced, Mark. Oh, I don’t. Well, I’ve been a real estate. I started my career in real estate. I still invest in real estate. I don’t understand.
You don’t typically want to tell that to people like you don’t know what they know. He says, I don’t understand. Which then, of course, I had to reply and I said, I did it gracefully. I said, look, I just don’t understand real estate. And I didn’t say anything else. I just gave him the data. All right, I’m going to break this data down for you, but this is what sort of sparked this. You don’t want to be like that guy. You want to know the data, at least if you want to make money. So let’s take a look at this.
So if we go back to the S and P 500 and are we in a bubble? Now, I drew a trend line from 1980 to 2024, and we see here again in the 2000 dot bubble, it got way overextended and then it recovered. And then it got way overextended in 2008 again, and then it recovered. All right, now, from 2008, we can see this trend line going straight up. Now, if you’re saying, well, Mark, you said this is overextended here, you might say, well, this is actually overextended, and you would actually be right. So these two areas look very bubbly.
So the S and P 500 does look like it’s in a massive bubble right now, similar to here. Okay? But that’s only from the basic. This is where most people go wrong. I’m going to break this down for you. Don’t worry. Okay. If we zoom in just a little bit, just so you can see it a little bit better, here’s the S and P 500. Now, just from. We’ll look at from 2008 until now. And again, you can see, I mean, obviously it moves up and down off this trend line. So, you know, from where it’s been over the trend line, it’s not super high.
We’re not super high. I wouldn’t call this a big bubble, but again, it’s not what it seems. This is what people are totally missing out on. Let’s take a look at the Nasdaq. The Nasdaq, again, is sort of represented by the tech stocks. And again, same time period from 2008. Of course, it bounces up and down the trend line. So it gets overextended, right? A little bit expensive, a little bit cheap. A little bit expensive, a little bit cheap. You know, it got a little bubbling here. It broke through the trend line here, and now it’s bouncing back up.
We’re not high above the trend line. So everyone’s like, oh, my gosh, it’s a bubble. Well, why? Why? Because we’re way up from here? Is that why? Because the prices are more expensive than they used to be? Is that why? Hang on. Don’t worry. We’re gonna break this down. Okay, now, bitcoin, of course, bitcoin’s in a massive bubble. We can see this. Now back to the tulip mania. It went up and it crashed, and then it came back, and it crashed, and then it came up and it crashed, and it came back. So it comes back over and over.
Now let’s get to the homes setting the stage. Don’t worry. We’re gonna break this down. Now, here’s the home. So this is what the guy’s telling me, Mark, you don’t understand. See how big the bubble was here in 2008? See how far this got overextended? But look how much higher homes price are today. They’re way higher than they were in 2008. And don’t you know that mortgage rates are way higher and people can’t afford homes? And don’t you know there’s a recession coming and people are broke? And don’t you know that if mortgage rates go up, home prices are going to have to crash down? Don’t you know, Mark, we’re in a big bubble.
You obviously don’t understand real estate prices. Okay, now there’s another chart, and this is where people get misled, okay? This is the case Shiller index. And just so you don’t know, the case Shiller index tracks the home prices across the United States. So we have the case Shiller index, and we also have an inflation adjusted. Okay, so this right here is the chart I just showed you, the case Shiller index. And again, you see, it went up in 2008. It came down, went back up, and so we’re way above the 2008 level now. But you might say.
But, Mark, I know we have inflation right, because the Fed’s printed all this money and prices go up naturally. Right? So if we adjust this for inflation, you can see that we went up in 2008, they came down. But because of all the money printing, this isn’t real. These prices aren’t real right here. This is the actual real price, as it says, real case Shiller index. And again, if you draw a trend line, boom, boom, boom, boom, boom, you can see that we’re actually above that as well. So even if you adjusted for inflation, Mark, it looks like the case Shiller index is up.
Well, that might be your guess, but that would be wrong as well. Don’t worry, we’re going to break this down. The reason why is because the government reported CPI data, inflation isn’t the number you should be looking at. That’s where everybody goes wrong with all your investments, with all your loans, with everything. Okay? So the first thing we have to understand is that game on. The reason why we have been seeing a rally and the reason why we have this asset bubble goes back to the very first slide I showed you from Wikipedia, which is its monetary easing.
Okay? So I have Jerome Powell here, right here, and we see that it all starts from monetary policy. If monetary policy is loose, the expansion of the money supply is fast, asset prices go up. If they tighten things, things slow back down. Now, we know if you’ve been following my channel, you’ve been paying attention. You know that November, around October, November of 2021 marked the top of the last cycle. It was the peak for the Nasdaq. It was the peak for the, you know, for bitcoin, the peak for housing, all of those things. Now, they’ve gone on to rebound since then.
And the reason why is because in November 2021, the Federal Reserve Fed announced that it would begin to taper or tighten the monetary base. So it had been easing. They decided to taper, popularly known as quantitative. They’re gonna taper the quantitative tightening. So we’re going from easing into tightening. Okay? So we, and we can see that. So we have the fed funds rate, you may know some of this stuff. We’ll go through it quickly. And basically the Fed is just knee jerking reaction. They lower interest rates. They raise interest rates. They lower rates. They kept them low for a very long period of time.
They tried to raise them. They crashed the economy. They lowered them again, and they raised them back up again. Are you getting the point? So we watch Fed policy to see what’s going on there. Okay? Now the other thing we want to take a look at is the money base. So when they lower rates, for example, right, like an iPhone, whatever, it’s $1,500. Do you think if Apple put their iPhones on sale for $100, more people would buy iPhones? Right. So when loans are expensive, less people get loans. When loans are super cheap, more people get loans.
And remember, we’re in a debt based monetary system. So money is created through debt issuance. So when rates are cheap, more people get loans, more money is created. We look at the Fed. This is the m two money supply chart. So this is the amount of money that’s been created through all that debt expansion. Now, what we can see is this trend line going back to about 2005, 2000. I don’t know. Was that 2003 ish? And you can see this trend line that I’ve put here. Now, I circled this right here because this was the 2008 housing crash.
Now, as you remember from the housing chart, the houses went up like this and came down, but there was really no reason to because the money supply wasn’t really expanding. But you can see the money supply kind of continued this trend, trend, trend, trend, trend, trend, trend. And right here in 2020, when the great pandemic happened and they printed all that stimulus, you can see the balance sheet went to the moon. Now, I circled this right here. This is right when the monetary base actually started to dwindle. So remember about October, November of 2021, the Fed said they were going to do it.
They didn’t actually start doing it until the beginning of 2022. The reason why is the Fed is always trying to project out months in advance what’s going to happen. Like Jerome Powell’s press conference talking about the potential rate cuts coming. We’ll come back to that in a minute. But they tell us months in advance what’s going to happen so they don’t shock the market. And so we can see they announced they would start rate tapering, and they did, and the monetary base started coming back down. Now, the other thing we want to look at is not just the money supply, but we want to look at the fed balance sheet.
All right? So this is how much assets they’re keeping on their books. This is not just money on their books. It’s assets. It’s mortgages, mortgage backed securities, in some cases bonds, other securities, things like that. Now we see again in 2008 how fast their balance sheet went up. In 2020, how fast their balance sheet up. And this is the taper that we’ve been talking about almost kind of getting us back to the start. All right. So you can see that’s what they’re doing. Now the question is, what’s going to happen with the us debt and the US borrowing? That’s the big question.
Now I want to just make one more point before we move into that and that’s that all eyes don’t need to be on the US. I mean, they should. I mean, the US is the global reserve currency of the world. The US is the financial market of the world. However, when it comes to liquidity, we want to be looking at global liquidity, at least the main central bank. So at least the US, the European Central bank, the Bank of Japan, China, the PBOC, we at least want to be looking at those major central banks. And what we do when we look at that, we can see a different picture.
So what we have here, the green is the rate of change. This is more liquidity, more monetary easing. This is restriction of easing, increase of liquidity, decrease of liquidity increase. Right. You see that and what we have here on this blue line. So the green is the, is the money supply growth, change, the year over year change in the money supply. The blue line is the actual m two money supply. So when it goes down, we see there’s a dip. As it goes up, it goes back up. Right? When there’s a dip, this goes down. But the money supply, the base has continued to go up, up, up.
Now put a couple lines here. Why is this? Well, what we can see is these are moving on four year cycles. I’m going to come back to this. You watch my videos on a regular basis. You know what that means? I’m going to come back to this in more detail. But you can see this is happening on a four year cycle. Now right here, this arrow is when the fed announced they were going to start tightening. This little peak in that arrow is when the Fed actually started tightening. Remember I said it was a couple months later.
Now you can see as soon as they did that, we plunged off of a cliff. Now I put this arrow right here because that was about October of 2022. And if you go back on my channel and scroll back to about October 22, you’ll see I made a video that says there is no crash coming, and here’s why. I proceeded to make several videos explaining that. And we have been expanding the liquidity base ever since. Again on four year cycles. We’re going to come back to that in a minute. Okay? So we looked at the asset prices, we looked at stocks, and we looked at real estate.
They’re all in massive bubbles, right? They’re all at new highs, homes even adjusted for inflation, or at new all time highs, they must be overpriced, they must be overexpensive, especially considering where rates are and all those things. Right. But then we looked at the Fed and how the fed eases and tightens. All right. Now we’re going to get to the real data. This is what most people are missing. So let me explain. Now, I do want to say just real quickly, before I break down the real data and what everybody’s missing, I am going to have a live event next week.
I’d love for you to come hang out. If you think there’s a lot of charts, I have even more. And I’m going to show you where the only place to invest in is. I’m going to give you probably the top five or six ideas and picks that I’m looking at right now. And we’re going to do it live. And I’m going to take all your questions live so we can really get this figured out for you can figure out how to implement this. If you’d love to come hang out with me. It’s all free. There’s a link down below.
I’d love to see you there. If you want to really learn this stuff and actually apply it, make a lot of money over the next 1215 months, come hang out. It’s free. Okay, so now taking another look. All right. So now let’s take another look at the stocks. We’ll look at the S and P 500 and the Nasdaq. And here’s where it gets really interesting. So I showed you that the S and P 500 is at new all time highs. It surpassed the 2008 high, the 2020 high, and it’s way above the trend line, right? Right.
Okay. So here’s another chart. Now, what we have here is what I’ve done is I’ve taken the S and P 500 in a massive bubble and I’ve now adjusted it for the money supply growth. You see, every asset has a denominator and a denominator. So a home priced in us dollars. Right? Bitcoin priced in us dollars. So what if it’s not bitcoin that’s going up? What if it’s the denominator, the us dollars that are pushing it up? That’s the question I posed on the Twitter thread that started this whole video idea. And let me show you the proof of that now.
So what we do is we adjust it for the denominator. Again, I have the S and P 500 adjusted for the denominator. The M two money supply. And what we can see is that the S and P 500 is down 22% when adjusted for the money supply since the year 2000. So it looks like it’s in a massive bubble, but again, it’s being pushed up. This is why in your retirement account, your 401K, your mutual fund, you look, on paper, nothing like you’re getting rich. However, your standard of living is going down because your dollars don’t buy as much stuff.
They buy you 22% less stuff when measured this way. Another way we could look at it is we’d look at the S and P 500 priced in gold in the same exact period. It’s down 60% when priced in gold. So the S and P 500 is not in a bubble. As a matter of fact, you can see it’s been almost completely flat right here. I mean, it did have a dip right here, but it’s been almost completely sideways. There’s no bubble at all. As a matter of fact, prices crashed and have never come back. Okay, that’s the S and P 500.
Now, the Nasdaq covers the tech stocks. They’ve been much more explosive. So let’s take a look and see what’s been going on there. What we can see here is about the same thing. Now, we did have this massive.com boom and bust, and since that time, we take the Nasdaq, we adjust it for the m two, the money supply growth, and we can see that the Nasdaq is also down 20%. Now, this period has been sort of flat. We had this long, prolonged period here. Now it is up. It is up, granted, but it’s still down 20%.
It has not reached its previous all time high. It’s not even really come close. We can take a look at the same way we take the Nasdaq and we price it in gold, and we can see about the same thing. In the same time period, the Nasdaq is down 60% to gold. Nowhere near all time highs. Nowhere exceeding all time highs. And moving sideways in this whole sector right here. Let’s keep going. Let’s go back to real estate. This is the one that started all because as that guy, Darth what’s his name? Darth Powell, I think it was, told me, mark, you just don’t understand real estate prices.
So if we take real estate prices, which, again, even when adjusted for inflation, look like they’re higher than 2008, but again, they use the wrong number. They’re using adjusted for inflation, as in CPI, consumer price inflation, which is a completely wrong, completely manipulated, completely fabricated, numbered by the government. The real number is the rate of debasement. It’s the rate of the monetary base expansion. That’s the real number. It’s your hurdle rate. Okay, so now I’ve taken, in this case, what do we have? Okay, so in this case, we have homes divided by the money supply, adjusted not for inflation, adjusted for the debasement.
And what we can see is a very similar thing. From the year 2000, we can see that homes are actually down 47%. Nowhere near a bubble. Nowhere near. Back to an all time high. Like it shows when you adjust for inflation or when you don’t adjust for inflation. When you adjust it for the real inflation, which was the definition of inflation, like previous 1950, when you adjust it for the monetary base expansion, we’re actually down by 47%. What about if we do homes priced in gold? Well, we see a very similar thing. As a matter of fact, it’s even worse.
Homes are down 70%. They have moved completely sideways. There’s no bubble. They have not gone up at all. It takes more dollars to buy those homes today. You have to understand this if you’re ever going to make money, because that is a completely different game. Now, what a lot of people tell me then is, Mark, what you don’t understand though, because that may be true, and that might be right, but the price is still going up, and it’s unsustainable. There’s no way the government can maintain this level of debt. There’s no way that people can continue to pay those prices.
It’s unsustainable, they say. I mean, haven’t you seen that interest payments on the debt have now exceeded the military mark? Of course I have. I report on it all the time now. Ding, ding, ding is the first video we’ve done where the national debt clock, the United States debt clock, has exceeded $35 trillion just a couple days ago, I think. Amazing number. Now, to make it even more amazing, we’ve already added 12 billion onto the back of that. I mean, we’re going up at an astronomical rate, adding about a trillion about every quarter at this point.
As a matter of fact, the government, the treasury just put out the funding requirements, or I should say the debt borrowing requirements, just for the rest of the year, which is where not even half the year left. And I think it was like 1.7 trillion they need to borrow just to get through the rest of the year. We’re going up at an astronomical rate. So what we know is that this is unsustainable. Supposedly, that’s what people tell us now, why I, why is it unsustainable? Let’s just, we’ll come back to that. But we know the Fed is going back to easing.
So there was a fed FOMC meeting that just happened. And we can see that the FOMC does not change rates, but it sets the stage for September cuts. So we know that President Biden said that there would be, in his words, there would be a rate cut before the election, which is November. This says before September. The betting markets, the CME, for example, shows that there’s about 100% probability that rates cuts will be there in September. And really the language that Jerome Powell used set the stage for it. I won’t go into the details of it to keep this video short, but basically when you study what he says, he basically set the stage for that to happen, which is why markets are pricing at 100%, which means we go back to easing, which means lower rates, means more credit expansion, means more monetary base expansion.
It means more debt to roll over. Now, why is that? You might remember at the last debt ceiling debate, every year we have to haggle over will we raise the debt limit? And of course, we always do. Every year. President Biden, this is directly off the White House website, remarks by President Biden on the need to raise the debt ceiling. And here’s what he said. Raising the debt limit comes down to paying what we already owe, what has already been acquired, not anything new. Raising the debt limit comes down to not get anything new. Like he said.
Like, look, we need more debt. Give us more debt. Don’t worry, though, we’re not going to go buy new stuff with the debt. You know, new stuff that would be productive, that maybe we make more money with. We’re not going to buy new stuff. We need new debt just to pay off the old debt. That’s what I said. That’s literally the definition of Ponzi. We need more debt to pay off the old debt. And the reason why I make that point is you have to understand that the debt never gets paid. The debt only gets rolled over.
And because debt is, or money grows through debt issuance, in order to roll over the debt, we have to print more money to roll over the existing debt so the debt doesn’t get smaller. It gets bigger every single time. But again, but people say, but Mark, you don’t understand. This is unsustainable. I mean, look at the rate of interest going up. I mean, who is going to continue? People won’t be able to buy debt and who’s going to continue to buy the treasuries. No one’s going to buy them from the government, right? Well, the government can just buy their own.
The Fed can just buy the governments. We see this all the time. There is no example in history currently, right now. Lebanon, Turkey, Venezuela, Argentina, you name it, right now, today. Nor is there any historical precedents of a government going, well, boys, that was a great run. Pack it up. Let’s just go home. Never, never once, never once in history nor in current times have we ever seen that. As long as there’s ink to put in the money printer, they will continue to print. That’s it. Period. As Biden said, we need to get more debt to keep paying the old debt.
That’s it. So when you think it’s unsustainable, I mean, sure, eventually. Eventually this ends, but not anytime soon. Anytime. Probably not. At least in the next decade. I mean, it’s gonna be sustainable for a long time. I would imagine this number is gonna get to well over 100 trillion before we see any big problem. So when you see all those videos about this doom and gloom, maybe eventually, yes, of course. But I’m gonna have made a lot of money and retired before then. Okay, let’s get to what the real bubble is. As I already said, the real bubble is in the denominator, not the top number, right? It’s not in bitcoin or Nasdaq or S and P.
It’s in the bubble, the denominator, the dollars being printed. But really, what the real bubble is, is we have to think about, like, prices compared to what? Well, when we think about prices compared to pay, that’s a problem, because what we have is we have asset prices going up like this while your payer wages are going up like this. And so every year, you fall further and further behind. You can see it in this chart right here. So this is growth of the stock market versus us household income. So what we have here, unfortunately, this orange line going back to 2005, this orange line is your household income.
And notice it stayed basically flat. The patient’s on flatline. What we have here is the S and P 500 right here. Stocks are going up faster, faster, faster. And now they’re going up like this. This is only through 2019. And then we have the Nasdaq that’s going up like this. So right here, you could buy the S and P 500, Nasdaq, you buy cheap here, but you’re getting further and further and further and further behind. That’s the real asset bubble, which maybe goes back to the point where, well, Mark, who’s going to buy this stuff? Well, the rich are still getting richer.
Why are the rich getting richer? And how do you get richer with them? Well, before I answer that question, let me just go back to this four year cycle I teased out earlier. So remember, the debt never gets paid. The debt can’t get paid. I have videos on this. We’ll link to them down in the show notes down below if you want to go watch them, to understand why it can’t get paid. So we have to get more debt to roll over the new debt so it gets refinanced. And as I showed you that chart earlier, these four year cycles, basically, there’s this metronome phenomenon.
I have a whole video on this breaking it down. I’m going to link to it down below if you want to go watch it. And basically, the entire global debt situation got refinanced in 2008. You know, if your mortgage company called you and said, hey, we’re going to give you 0% mortgage, like you would refinance. So when rates dropped to zero in 2008, the whole world refinanced at once. What we can see in this chart is about 75% of global debt is within about a five year period, most of it in about four years. And that four year period just happens to align with an election year, which we’re in right now.
And it also happens to align with a bitcoin halving year, which, again, we’re in right now. That’s the importance of the four year cycles. Now, we can see this not just with debt cycles, but here’s a four year business cycle. So businesses are on the same four year cycle, and we can see the liquidity cycle of the world oscillates on a four year cycle. It’s important to understand that. So you know when you should be investing, pressing, and when you shouldn’t. This is a chart of the global liquidity. If you watch my channel regularly, you’ve seen me use this before.
And again, we can see that the amount of money, the debt, the money supply went up for four years. And it went down. Went up for four years and it went down. Went up for four years. Oops. And remember that date, October 2021, it started going back down when the Fed said they were gonna start tightening. And remember the other date, October 2022, it started going back up again. Starting to see the pattern here. Okay, so now that you know all this, what do you do about it? How do you protect yourself? More importantly, how do you get ahead and make a lot of money during this.
Well, a couple things. Number one, as I showed you, wages are going like this while asset prices are going like this. That’s not good. So the first thing is the rich are able to get richer because they control their income. So hopefully you’re a business owner. If you’re not a business owner, you probably should be because you need to be able to control your income as this goes up. The second thing is you need to buy assets. Remember, asset prices are going like this, your wages are going like this. So if all you do is depend on your asset or your wages, you’re never going to make it.
You need to get onto this track. This is the track you want to be on, not on this track. So you have to start buying assets. The next question is, well, what assets should I buy? Well, I already showed you that houses, the s and P 500 are actually down when you adjust them for the monetary supply, which means they’re not really that good of investments. Now, the reason why real estate is a good investment is because of the. Well, there’s four reasons why. The leverage, the loan, is one of them. If you could put 10% down, right.
I’m not going to go into the other ones. If you want a whole video on why real estate is a better investment than most people realize, leave me a comment. I can do a whole video on that. So which assets should you buy? Well, we know that back to the S and P 500 when we adjusted for the money supply, it’s not really up. We can look at it another way. So here we have the black line, or, I’m sorry, the gold line is the global liquidity, or basically the monetary base expansion. The black line is the S and P 500.
And you can see that they move in almost perfect lock step. And so that means the s and P 500 is just going up with the rate of monetary expansion, which is. Okay, you’re keeping your head above water. You’re not losing money, but you’re not getting ahead. But we can look at this chart right here, and this is now gold and bitcoin. And we can see that for every time the monetary base goes up by 10%, gold goes up by 14%, and bitcoin goes up by 90%. That’s a sensitivity ratio, 8.9. Okay, so these are the types of assets that we want to buy, the ones that are more sensitive to liquidity.
Now, bitcoin is moving up nine times for every one time that the liquidity moves up. But then there’s bitcoin derivatives that are moving up even faster. It used to be cryptocurrencies, but now cryptocurrencies are dead. I, and now there’s new bitcoin derivatives that are going up two 3400% more than bitcoin itself. So watch out for those. I did a whole video on that. I’m going to link those down below so I’m not going to go into that right now. And if you’d like to come hang out with me next week live, I’ll break this down for you.
And I’m going to show you the top five positions that I’m paying attention to and putting on my buy list right now. And you might want to as well. I’m going to give those to you. So coming out, it’s all for free. I’ll show you the charts to give you the names and you can ask me all the questions you want. And if not, no worries. Check out the other videos that help you understand this. And I’m going to put this one investing black hole. Watch this video right here. Now if you like this video, give me a thumbs up.
If you don’t, you can give me a thumbs down. That’s okay. But at least tell me why in the comments down below so I can make better videos for you. All right, subscribe if you’re not already subscribed. And that’s what I got to your success. I’m out.
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