Well, get ready to go back in time all the way back to 1994, which is the last year. We actually had a 75 basis points increase by the fed, exactly what happened today and somehow the stock market skyrocketed out of the stratosphere. What's going on well in this video, explain exactly what's going on, but i'm gon na remove all the smoke screen and you're being force-fed by mainstream media by just giving you the actual factuals without the bs. Now look the one thing i will just tell you before.

I go into my analysis. It was really unfortunate for me to hear jean paul speak today because he said something that absolutely infuriated me and i don't think he even noticed how infuriating that was. He said: hey, nobody really thought inflation is going to be that bad and when it happened, you know it. It was a little bit of a surprise to the upside for everyone.

It wasn't a surprise for the upside for everyone. In fact, if you actually bought groceries or had to gas up your car in the past two years, mr powell, you would have known how bad inflation is, but because you're, a millionaire living in your ivory tower, that's a surprise to you, but for everyday, hard-working people. That's hardly a surprise, i'm sorry, but that's just the hard facts, no hate to you, but i mean we all knew and it was really easy to feel it if you're actually spending money on everyday things like gasoline and groceries, which i don't know when it's the Last time you actually had to do it, but look the one thing i'll give jerome powell is that he pulled off a magnificent trick, which is called the leak, and i don't mean a leak in a bad way like you know something that you do in the Bushes, when nobody's noticing, when you can't find the bathroom i'm talking about the way they leaked the mainstream media about the 0.75 increase. Let me explain the reason.

The stock market skyrocketed today is because mr powell and his compadres basically fed the media, the actual rate hike. Two days in advance, not officially, but they leaked it. Every single media outlet go check. Me talked about this naming 75 basis points for a whole 48 hours.

How did they know? Why were they so sure? That's because people leaked it quietly, sometimes officially sometimes unofficially, sometimes directly, sometimes indirectly, but the entire media knew about the 0.75. Of course, the market right away priced that end, causing a massive avalanche and also added another 0.25 priced in just for safety. Because that's how much of a credibility problem we have with the federal reserve right now at this point. After being told for a whole year that inflation is transitory, we absolutely don't trust the fed, we're like the wife, that's been cheated on and now we're trying to work on the relationship with the husband, but the trust is gone same thing with the fed.

It's going to be very hard for the fed to create any sort of credibility with the whole transitory. That transpired, especially if the guy who made that mistake, is still you know, sitting in his chair keeping his job, but that's a whole different video. So, basically, when the market found out that it is 0.75 and not 1, then immediately everything got priced in into the certainty. That is an exact rate hike.

So once the market knew exactly it's 0.75, all the extra risk got priced out of the market, and that's why you saw the market fly up now. The one question i would pose to the audience is: do you think that what fed chair john paul said about ending the year with three and a half percent as our target kind of rate for the end of the year? Will this be enough to stop an 8.6 inflation? Now you don't need to be an economist or a scientist or even a human being. You can be a ping-pong table and you'd know that you cannot stop an 8.6 inflation with three and a half percent interest rate. It cannot be done.

It's like asking me to beat michael jordan as prime at basketball at a seven game series. It ain't happening. Why well go back in history and check me on this. The last time we had rampaging inflation was in the 70s and 80s and paul volcker, who used to be the fed chair of the day, enacted 18 interest, and he did it to fight at 12 inflation.

So right now we're dangerously close to this 12 number. We're dancing and flirting with nine realistically we're, probably already at 12 and 13. if we actually measure this thing correctly, but let's say we're close to it. So if you do a pro rata analysis, if 18 is what was needed for 12 inflation, you probably need 13 to 14 right now to battle this inflation now, even if you apply actual rules that were designed to kind of tackle these questions, like the tail rule, The tail rule basically is a formula telling you how much interest rates you need to battle inflation by using the inflation rate right now, deducting from it the base inflation rate, the good inflation, which is two percent and then the result.

Six point: six percent gets multiplied by two and that's the interest. You need right now, so thirteen percent thirteen point two percent is what the tail rule tells us 13 is what the statistic tells us. If you look at what paul volcker did in the 80s, so you cannot do it with three and a half percent, you probably need to be closer to 13, but the problem is the fed cannot go to 13.. I've been out very spoken about this.

The federal reserve is trapped because our government isn't too much debt. We ballooned our debt from 15 to 30 trillion dollars in a matter of just a few years, we're paying already a lot of our gdp to service this debt and, as time goes by, it's only going to get worse and worse at 3 4 interest rates. We're probably playing one point: two one point three trillion dollars per year to services that as it stands, imagine what would going to 13 would do to your debt service. Now this money has to come from somewhere right now.

The government did not make any adjustments to get that money, whether it's increasing tax collections, whether it's going after offshore companies that are not bringing profits back to the u.s, not getting taxed in the u.s, whether it's decreasing government spending. None of this they did something else which is basically saying. Well, you know what you know. We probably can go as high as four five percent interest.

I'm sorry about that! Maybe six percent! This is as high as we can go with a 30 trillion dollar debt that we have to service. So at this rate, inflation is not going anywhere. That's the dirty secret. The fed cannot admit to it's probably going to be here for a few years, and the federal government is basically telling you right now.

Well, look. This is going to solve the problem. No, it's not so here's what's going to happen, and unfortunately, this is how this thing is going to play out. This is how the cookie crumbles so right now the job market is super hot right.

There's a lot of demand for employees, salaries are super high, etc, etc, etc. Over the past few days you probably heard coinbase tesla, a lot of established companies are firing employees. Well, that's the first sign of the last lagging indicator. That is the job market.

That is starting to unhinge, because what's going on right now is the fed is saying: well, we cannot really fix inflation by raising interest rates to what they should be, because we can't afford it with this debt, so we're essentially going to let the middle class of America take the biggest brunt of it all, and some of them will collapse. They will pay the biggest price, but this is the only way to fix it. We're going to destroy the economy just enough to kill demand and then we're going to stop this madness before it goes too far. But by that time a lot of people will be at the wrong end of the deal.

Let's put it this way, so letting a recession happen and basically taking a shot at the middle class is the only thing they can do. Unfortunately, that means that for the next couple of years, we're literally headed into stagflation stagflation is high inflation, high unemployment, because, right now, as inflation gets, elevated interest rates go up, companies will start firing more and more employees, and this hot boiling job market is going to Become very, very cold. Quite soon, that's the last indicator to fall when you're going into recession. So i assume that in about two weeks, we'll have the second consecutive quarter of negative gdp, which is the definition of a recession, and then it's going to lead to more firings, more job loss and inflation is not going anywhere three and a half percent.

So as this year progresses, we'll have more inflation more and certainly the job market and more stagflationary impact all because the fed was too late to react and is too late to react to this point and of course things can happen that can slow this thing down And change the trajectory completely, for example, russia and ukraine - can work itself out changing this course completely. However, it doesn't seem like it's anywhere in that direction. So at this point, i'm not very optimistic on the market and i've got to be honest with you. It doesn't look good, we might have a few good rallies here and there, but right now look at the macro.

It doesn't look good now, i'm going to be here and i'm going to tell you exactly how i see it, i'm not going to sugarcoat it and i'm going to be all nice about it, smiling and telling you everything is going to be fine and we're going To sing kumbaya around the campfire, this is the situation. It's not good, and now we're going to have to ask the people who are on mainstream media and our politicians to tell us the truth as well, which is exactly what we're missing right now see you next video.