Kathy Woods thinks we could be heading back to the Roaring 20s as inflation potentially goes to negative 15. Let's talk about the latest update and add my commentary. So Kathy would suggests that if inflation is unwinding as we believe we could be heading back towards the future The Roaring 20s just like we did in the 1920s. Now this is a belief that I've held as well that if we can actually prove that inflation is indeed transitory, we could have a phenomenal era of stock market booms going forward for the rest of the decade really, as companies have laid off their their slush or their fat so to speak and maximize their profitability and their margins while amplifying their ability for technology and green technology to really take over which in the future not only it costs more in an inflationary way, but leads to substantially more profits or four companies. So Kathy Woods goes on to say that the last time several General Technologies evolved at the same time the telephone, electricity and the internal combustion engine. we were in the 1920s and prior to the Roaring at 20s, then the world was at War World War one and suffering a pandemic, the Spanish Flu. While both of those had a much more serious impact on the global economy than what we're seeing today, in other words, Covid and Russia Today aren't impacting the economy as much as the Spanish flu and World War One did. today's combination is a strong Echo that could result in much lower than expected inflation and a boom in Innovation says Kathy Wood during World War One and the Spanish Flu a supply chain and other shocks pushed inflation to 20 percent. At its worst in June of 1920, inflation peaked at 24, but then dropped precipitously in just one year to negative 15 percent in June of 19, 20, 21.. Now that's remarkable because if in one year we end up going into negative inflationary reads: negative CPI rates which is possible if we actually see owner's equivalent runs Trend down, then we're actually seeing prices across the board go down, which we are seeing that in some sectors already. Freight is trending right towards levels that we saw before the pandemic, and it's entirely possible we could actually go negative. It's possible that we could go negative on things like chips as well. Certainly, PC demand down 19. The exception of Apple, they're still pulling off uh, Positive Growth year over year, but anyway. Founded in 1913 and challenged by the first bout of serious inflation. Kind of weird to think that the Fed was founded in 1913. the FED raised interest rates less than two-fold from 4.6 percent to seven percent between 1919 and 1920. to fight that higher inflation faced with much lower inflation this time around, right? peaks of around eight to nine percent. The FED has increased interest rates 16 fold now. I Personally think it's a little extreme to suggest that inflation has been raised 16-fold mostly because what she's doing is she's comparing okay, well. rates were 0.25 and now rates are nearly. You know, knocking on the door of four percent. Oh, there we go. Nearly. Uh, nearly a a 20x increase in the exact math 16 fold. I Personally think this is just a comparison of a small number growing to a larger number and then a relatively already large number doubling. So I Don't necessarily think that's that's something to be so impressed by. Uh, but anyway, she she does. Really. What she's trying to convey is the difference in rate, the shock to the economy, right? Is it possible that the shock we're experiencing today could be substantially greater than than what we've been used to in the past? And yeah, that is a possibility. In fact, Susan Collins She's the President of the Boston fed. She came out today and said that I think that as quote as we have raised rates that the risk of over tightening has increased. That's what. Uh, Susan Collins just mentioned and she says that there is though, a risk that inflation expectations become entrenched and that ends up becoming a problem. So uh, ultimately, if, uh, the FED Okay, so this is interesting because it talks about the transition here of uh, inflation and the FED but I Gotta check in here. Hey what's up man, we checked in last night. we're back. We're Kevin and Lauren Good to see you again. Okay, get them on video he wants to be on YouTube Show him Sean No, it doesn't always I Appreciate it man. have a good night. All right, thank you. Uh, all right. So uh, if inflation drops below the Fed's two percent Target and economic activity disappoints, then interest rates are likely to surprise on the low side of expectations next year, ushering in this Century's rendition of the Roaring Twenties. Now, this is a really interesting argument because she's essentially suggesting that hey, next year if we go negative the way we did between 1920 and 1921 and we do that this time from 2022 to 2023, we can actually see a Fed that essentially has to print money and Usher in. As she says, the Roaring 20s of the 2020s and Jerome Powell has alluded to this before, he suggested that look, you know we can over tighten if we need to because we don't want inflation to become unentrenched. That is as soon as expectations break and expectations rise. Which fortunately, right now, they're starting to plummet. Not the consumer expectations though, but remember, the consumer bases their expectations based on the last CPI report. So I think that measure is kind of rigged. The important one that I like is the bond Market's expectation of inflation. What have we seen without one? Hey, Lauren would you mind take in this in my bag right there? What have we seen with that one? We've actually seen it decline substantially. Hey, thanks so much. Hey have a good night. Yes, Thank you. Yeah, Great conversation. Five stars. Hey thanks. So Uh, you know inflation expectations measured by the Bond market I think are much more reliable than the Consumer expectations of inflation which you see through the Michigan surveys. Lauren Would you mind holding this again? Perfect. So and then I'll take the phone back. There we go. I'll take this back. So uh, that's really important to pay attention to now. Uh, is it possible that the FED Oh yeah, What did Jerome Powell suggest? Well, Jerome Powell suggested. Look, the risk of over tightening is is that all we have to do is turn the money printer back on? But if we under tighten inflation could become unentrenched and then we have bigger problems, right? That would be crazy. So anyway, now Kathy Wood goes on to say as inflation dropped to negative 15 in June of 2021, the FED lowered interest rates from seven percent in May of 21 to 4 of July of 2021 almost to having tripping the switch for the Roaring Twenties from August of 1921 to September of 1929, the Dow Jones Industrial compounded at an average annual rate of 25. Think about that. 25 on the Dow Crazy. Anyway, Kathy says If The Fed does not pivot. The setup will be more like 1929. Oh, this is where she's giving it contrast, right? There's this bullish potential of the FED realizing as Susan College Collins has said, oh, there's actually a risk of over tightening here. Maybe maybe we could overdo it, which would be a problem. and if we overdo it, well, then we have problems. We need to turn the money printer back on. but if the FED doesn't pivot because inflation may be in December, mark your calendar for December 10th I'm sorry December 13th. the FED meeting is on December 15th. The last inflation report was on the 10th of November. Anyway, if the FED does not pivot, she says the setup will be more like 1920.

now line the FED raised rates in 1929 to squelch Financial Speculation That sounds a lot like the.com era and the crypto error. Oh did I say it? Oh, just gonna come out and listen. if somebody remembers the hex interview. I Did okay. go back to it. just type in meet Kevin hacks into YouTube Just would you please come back into the comments there or hear and count for me how many red flags you saw in that interview. That suckers down like 90 year. Today it was spam Bots Here they come anyway. the FED raised rates in 1929 to squelch Financial Speculation Dude, we have so little left over Speculation I Feel like now if speculation has been crushed. Anyway, in 1930, Congress passed the Smoot Holly uh act putting 50 plus tariffs on more than 20 000 goods and pushing the global economy into a Great Depression Ooh bad contrast and we have seen some more tariffs from the Biden Administration on things like Chinese Chips Although you're already seeing companies like Nvidia announce oh, don't worry, we have China compliant chips that we're going to be selling which is really important because 25 of Nvidia's Revenue comes from China Kind of wild Anyway, Unfortunately Today, uh has some Echoes of the same. She says the FED is ignoring deflationary signals and the chips act that's the one I just talked about with the Biden Administration could harm trade I Think that's extreme to suggest that just the chip sack today would be anything like uh, the 20 000 item 50 Tariff of the 1929. So I think that's a little extreme and I will say I don't actually think the FED is ignoring deflationary forces I think they're just waiting for the lagged numbers to catch up. Which does mean they're responding to things with the delay. They responded to substantial inflation with a delay calling a transitory for too long and they respond. and now I feel like they're over responding, waiting for that owner's equivalent rent to actually drag inflation down. Remember CPI minus shelter inflation is actually negative one percent. So everything in CPI Inflation minus shelter inflation negative one percent. It's remarkable. So I don't know that they're ignoring it I think they're aware of it I think they just really want to confirm. Okay, yeah, we definitely are on a downtrend. You know, as Barkin mentioned last week, he thinks we're on the back half of the inflation curve coming down. So I think they're well aware I don't think they're ignoring. but uh, then again, you know Kathy uh is also having to come out to justify the performance of of the Arc fund. Uh and and uh, this is an easy scapegoat. You just always blame the FED Don't me wrong. I like Kathy I Highly respect. Kathy But I think the FED is probably going to U-turn in 2023. I think she's right about that. Do I think she's also right in suggesting we're going to have a roaring 20s? Yes. Probably. Do I think inflation is going to go negative? 15? Probably not. But even if prices just go flat, inflation goes away. which is great. So um, hey, what do you think? let me know in the comments down below after you check out using that 60 off coupon code and what do you think about this folks, should we get rid of the monthly fee for Elite Hustlers and just do a one-time price purchase with lifetime access to the Hustler live streams? Just like all the other courses get lifetime access. Let me know your thoughts on that in the comments down below because I Have to say I've always been talking in this Channel about monthly fees being bad so you know I can't blame you Anyway, let me know in the comments down below and folks talk to you soon. Bye.