The fed has recently been trying to raise rates to tame inflation, but at the same time, they've been implementing other measures which is actually making inflation worse. Today i want to talk about, what's currently happening with the inflation data and how this impacts your money and also impacts the amc, squeeze stay tuned and let's make some money, and now i want to dive straight in with the information so investopedia talks about the causes Of inflation and says, an increase in the supply of money is the root of inflation, though this can play out through different mechanisms in the economy. They say a country's money supply can be increased by the monetary authorities by printing and giving away more money to citizens by legally devaluing the legal tender currency and by loaning new money into existence, as reserve account credits through the banking system. It's basically saying inflation can be caused by the printing of new money or by the reduction of purchasing power of current money.

Basically, meaning the public has to pay more money for the same goods and services, although it can play out through different mechanisms in the economy and that can be classified into three separate types: demand, pull inflation, cost push, inflation and built-in inflation. So the first mechanism is demand, pull inflation, which is when demand for goods and services exceeds the current production capacity, basically, meaning that these companies increase their prices because their current available supply is low and demand is high. The second mechanism is cost push, inflation, which is when production costs actually increase, and then businesses increase their prices as a result aka, because the cost of helium is increasing. The cost of balloons sold to the final customers is also increased as well, and the third mechanism is built in inflation when prices rise, wages rise as well in order to maintain the standard living costs.

But ultimately, all of this boils down to the fact that prices are increasing, because the current purchasing power of the dollar is reducing, potentially as a result of more dollars being printed and as a result, the fed lawmakers and politicians in various states around the us is Planning to fight the inflation and planning to fight the money printing by printing, more money. Moneywatch has posted this article saying stimulus, checks for inflation. Here: are the states planning to send money to their residents? It says roughly, a dozen states are proposing sending tax rebate checks to their residents to offset the highest inflation in four decades with lawmakers on both sides of the aisle pointing to high gas and food prices as prompting their actions. So far, we've got california, georgia, hawaii, idaho, indiana, maine, minnesota, new jersey, new mexico, new york and virginia all planning to print additional money in order to send one-off stimulus checks and as a perfect example, californian lawmakers have just reached a tentative deal to send families 9.5 Billion dollars in inflation relief californian residents, making less than 250 000 per individual resident will get a check from the state government to offset the rising cost of gas prices due to inflation.

Under a tentative agreement reached by lawmakers for every individual filer earning less than seventy. Five thousand dollars they get three hundred and fifty dollars as a one-off stimulus check, which is also doubled for joint filers. Those making between 75 and 125 000 individually receive a 250 stimulus check or a 500 check if joint filing and those between 125 and and fifty thousand is an additional stimulus check for two hundred dollars. So it seems, like california and many other states are planning to fight inflation, aka planning to fight the printing of money by printing, more money aka.

Instead of fighting inflation by raising rates, they're fighting inflation with more inflation market rebellion has tweeted a photo of californian residents receiving a thousand dollars as inflation relief, believing that this is fine, as the house is burning down around them now. Something, i do think is very worrying is seeing more and more banks like goldman sachs and credit suisse before them warning of excessive losses. Goldman sachs is now warning of a 1.2 billion dollar loss from their consumer unit. It seems like all of these major banks are already taking on very heavy losses and over the last few quarters have been issuing tons and tons of profit warnings and reporting below average results.

It says: goldman sachs's, consumer banking unit, which chief executive david solomon previously had likened to amazon's cloud computing juggernaut aws for its growth potential will suffer hefty losses. This year it says the consumer bank, known as marcus, will lose more than 1.2 billion dollars in 2022. According to the bank's internal projections, now the worrying thing is that this loss isn't being caused by one individual black swan event like archaicos defaulting. This is just general losses stacking up over the second quarter.

It seems that many of these major banks just simply aren't profitable anymore as a result of rising inflation. He said the disappointing results follow a rash of exits from the consumer bank last year. Reports at the time suggested an avalanche of overworked and exhausted employees who were fleeing the bank, and it says the losses stem from the addition of new business lines, pandemic effects and a surge in costs. And it also said the bank will also be forced to set aside more provisions for loan losses as the economy.

Sputters basically saying so far, goldman is expecting a loss of around 1.2 billion dollars, but that could be made substantially worse as a result of more loan defaults. This is showing that even the largest banks, like goldman sachs credit, suisse and many others, are being hit by rising inflation and therefore it just doesn't make sense to be fighting inflation with more inflation. Now something i found incredibly interesting was this tweet and this chart from peruvian bull. So the red line on this chart shows the current book value of companies in the s p 500, as time has gone by.

Obviously the assets in these companies has steadily increased. We did see these assets fall in 2008 as a result of the recession and in early 2020, as well as a result of the pandemic, but largely over time. The general assets in these companies has increased. We've then got the blue line.

On top of that, which shows the net present value of the next three years of s: p 500 company earnings. Basically this is the profits generated over the next three years for all of these companies being baked into their valuations. Obviously, during the 2008 recession and during the pandemic, these profits did fall, but obviously, over the last 30 years, the general trend is increasing profits. But on top of that, you have this giant orange chunk, which is effectively hopes and dreams.

This is the speculation that these companies inside the s p 500, will grow in the future and will generate additional profits down the line. This is effectively the potential that these companies have in the future, to generate new business lines and to invent or create new products. Obviously, during the 2008 recession, we basically saw these valuations returned solely to book value plus future profits, but obviously, over the last few years, specifically, we've seen this giant chunk of hopes and dreams spiraling rapidly out of control, but now so far this chunk of hopes and Dreams seem to be coming crashing back down at an alarmingly fast rate back to book value plus profits. Therefore suggesting the s p.

500 could potentially fall well below 3 000 points well below 2, 500, potentially even below 2 000 points. This would obviously be a crash below the 2018 and 2019 lows and effectively if it returned to book value, that's basically the equivalent of 2007 highs and something that supports that disappearance of hopes and dreams in the s p 500. Is the recent consumer sentiment char? This chart obviously tracks consumer sentiment as it runs. Higher consumers have more belief and more faith in the wider market and more faith in the economy, but so far this consumer sentiment has fallen below the lows in 2008 and even below the lows of 1980..

Consumer sentiment is effectively at a 60-year low, significantly below the levels of the pandemic, below the 2008 recession and even below the great depression, and our god believes in his opinion, we're gon na nuke hard for the next four weeks. He said panic is starting to kick in for almost every sector, not just crypto, not just stocks, not just bonds, but also the housing market as well, and he said specifically, the housing market he believes is close to a collapse. Looking at the s p, 500 from today, it does seem like that relief rally that we've seen over the last week could potentially already be over as the s p. 500 was down significantly today.

Over the next few days, we could see the s p 500, falling further back below this downward trending line, potentially setting new lows and finally ferracoin tweeted. This very interesting article about amc. This article from the wall street journal says the perceived risk is not that amc is going to go down to 10. The risk that everybody is worried about is that amc is going up to a thousand dollars per share.

Now that was from henry schwartz head of product intelligence at cboe, global markets, so clearly even cboe is expecting amc to potentially run to a thousand dollars per share, obviously squeezing the shorts. I do think his inflation continues to get worse and consumer sentiment also continues to get worse and the s p 500 continues falling. We will see more and more hedge funds being liquidated and when we see these hedge funds being liquidated and forced to sell off. All of their long positions crashing the market further.

They will also be forced to cover and close out of their short positions as well and obviously when these companies close out of their amc, shorts, buying back every single share required to close the position fully. It will cause the amc squeeze but guys be sure to. Let me know what you think down in the comments below and, as always guys be sure to ding that notification bell, because that way you'll be alerted. When i upload a new video cheers.