Everyone me kevin here so the bond king just insulted jerome powell. Hugely and you you won't believe what he's calling for it could be bad for the but got some sage advice here. So the bond king is of course. The co founder of pimco legendary and billionaire investor.

Bill gross he uh his company runs over two trillion dollars in assets for central banks pensions corporations and sovereign wealth funds and even though now he's retired he's like 78 years old he's got a lot of great insight. Because he's been through a lot of cycles before and he talks about how monetary systems go through these three phases and i'm gonna speed up his letter. A little bit that just came out but start off with he says level. One is hedge finance.

Which is kind of like people are like okay yeah. We want to make smart investments we're gonna analyze the fundamentals. But we're gonna hedge level two is speculative finance. This is just like i'm gonna put my money in this because it's going to go up.

And the number three is just straight up ponzi finance. Where the people putting money in are solely just paying people who want to get out to get out right and so he kind of suggests and implies that in the last 10 years. We've gotten to ponzi finance. His proof for this is historic price to earnings ratios for profitless companies.

Nfts. Meme. Stocks and cryptocurrencies is all the proof. You need that we have graduated from hedge finance to speculative finance to straight up.

Ponzi finance. And he's got some big things to say about this. But first before he slams the fed and gives some advice he says look you can't tell me that going from 75 trillion dollars in debt in the country to now uh and this is everybody's debt levels included right now outstanding credit. Not just the government but of people and businesses and seeing that balloon from 75 trillion dollars to 905 trillion.

Dollars. You can't say that that is natural and that that is okay this is his argument. He says. It's unreasonable to expect that this to be to expect this to be normal.

And so he says the big culprits of this sort of expansion of credit are really uh politicians and the federal reserve whom he calls completely ignorant. He says that the federal reserve should have never kept yields or rates at zero for as long as they had and slams them for still buying bonds as recently as may of this year. While they're supposed to be getting started to tapering or getting started with the tapering and reducing inflation. They're still injecting money into the economy.

Kind of crazy. He goes on to characterize this this sort of economy that we're in now as one of meme apes and to the moon hype. But it says that the reality is the recession is probably a healthy thing that we need now to kind of get rid of all this crazy credit expansion that we've had this reminds me a lot of ray dalio's deleveraging cycle. And i kind of think to myself a little bit.

And i've been talking to course members about this pretty regularly about how we've taken my own personal debt from a relatively high figure somewhere around maybe 15 million dollars to under 4 million dollars. In total now. And that's because i've sold off a lot of real estate and now i'm using that cash to prepare to buy real estate back whether through the series a that we're launching in august. You can go to met.

Kevin dot com. Series a to sign up to learn more about that when we announce. We're expecting to announce around august 1st. So stay tuned for that uh or it's just to buy stocks as we go through volatility.

And then hopefully ride the wave of stocks increasing back up slowly as eventually the federal reserve u. Turns and at the same time buying real estate as rates are still high those are some expectations that we have but we're seeing the de leveraging ourselves. We're encouraging de leveraging and we're seeing that de leveraging at businesses. Now as well not only are you seeing layoffs.

I mean rivian just announced layoffs as well you've got tesla you've got coinbase. I mean any kind of tech companies. Either hiring or that was hiring is now freezing or potentially laying off. And this is actually probably a you know a natural thing to go through.

But this here is bill's advice and this was fascinating so first uh he believes and he prefaces as he says he's no more credible than jerome powell here. Which he does not seem to like jerome powell at all uh. But he goes on to say. But at least.

He can offer advice. That's maybe a little bit. More. Honest.

Than jay pals. Big slam. Here. On jay pal.

And he says. Look. Now's not the time for paul volcker. We can't have interest rates go up to 10 pull the rug on the economy and destroy us.

This is not the time to do that this is the time to get back to a neutral level of rates as soon as possible. We don't want to just cold. Turkey. The markets here because we've become so addicted to cheap credit.

So now is not the time for paul volcker. He says instead what he says. It's time for is creating a mild recession to gradually lower inflation and the way to do that he says is stop with this crap of 50 basis points or 75 basis points. Or whatever get us to three and a half percent right now that'll be slightly tighter than neutral and that'll slowly push inflation down and then we can slowly u turn right now bond futures markets are only pricing in three and a half percent by about the summer of next year which by the summer of next year.

My programs on building your wealth will probably be three to five to six hundred dollars more expensive next summer. That's a year from now might even be more than that it could be as much as 500 to 600 to 700 more expensive because we plan out a few months ahead raise the prices every single month every few weeks. And that's why when we mentioned this coupon expiring like the one link down below. There is join those private live streams and all the lectures that we've just added including the use of our amazing smart board within our lectures now which we're so excited about now in terms of recommendations for you bill gross makes this argument against jim cramer.

Who gets kind of made fun of in social media. A lot as being the person who anytime. He makes a suggestion you should do the opposite. Because jim cramer's always looking for a bull market somewhere well bill gross says.

I don't know about that i don't know if there's a bull market anywhere right now he says bonds are at levels which represent diminished risk but little reward. He says don't buy them. He says stocks must contend with future earnings disappointments and are not as cheap as they appear. He's not wrong we haven't had earnings revisions to the downside yet and once earnings misses come in we're gonna have a really tough earnings season earnings season.

Is about to start q2 earnings are coming out right after cpi data. It's the perfect recipe for going to the moon. I mean having problems uh. So he says don't buy stocks yet and he says commodities are out of gas in other words uh.

We're not seeing the rise of commodities anymore instead we're seeing them bleed out. And so the alternatives. He say. He says.

Nothing he says right now is the time to be patient that 12 month. Treasuries at 27. Percent are a better investment for your money for the next year. And basically be patient personally i don't know how i feel about the idea of not being in the stock market for 12 months from now because i feel like if i'm investing now during these hard times in 12 months from now and certainly.

24 months from now this should be pretty dang green. Who knows could be wrong. But at least that's the way i'm investing expecting that inflation will go down. Eventually.

The fed will eventually u. Turn and folks hopefully eventually we'll go back to the moon and to mars. Thanks for watching folks make sure to subscribe check out the courses link down below and we'll see in the next one bye.