They Say "It'll Never Happen"...Here's Why They're WRONG

we've all seen these startling clips from the news and social media lately but it's not just Main Street that seems to be an incredible moral decline it's also Wall Street and if we analyze these two things together and connect some dots I think it'll give us tremendous insights as to when everything will collapse and unfortunately I think it's going to be very soon I'm going to explain this to you in three simple fast Steps step number one let's go over cycles and moral hazard that has been created by the government the central planners and the authoritarians we've all heard the saying because it's extremely true Hard Times create strong men strong men create good times good times create weak men and then that cycle repeats those weak men create Hard Times throughout this video I want you to use that as a framework so let's dive right into the Whiteboard and go over not necessarily a chart this is more A visual representation of an idea so we go all the way back we'll call it the mid 1990s to 2020. on the left we go from 0 to 10. now all this represents is how significant or how bad the moral hazard has been getting okay so in my view I think that you had let's just call it 1 or 1.5 on this scale of moral hazard not just within Society let's just focus on Wall Street right now and then you had the bailout of long-term Capital Management well this significantly increased the amount of moral hazard and then it continued to go up and each time we had more and more of these bailouts it goes up to a higher degree but then it continues on an upward trajectory we go through the.com bust what happens well Greenspan drops rates because he wants to create as Paul Krugman said another asset bubble in real estate then we have the GFC we have all the bailouts of AIG the big banksters themselves and then we have quantitative easing one two three everything the central planners have done insinuates if not explicitly states that they are there to back up the financial system they want asset prices to go higher and higher and higher it's almost like we've got the fed and the government right here and we'll use your Drunk insolvent Uncle Sam to represent both of them and it's almost like going back to 1998 you're drunk insolvent Uncle Sam has said we will be right there to bail out the financial economy but the real economy Main Street be damned because we have to focus on one and if we focus on financial assets then we'll have this trickle-down effect and that's the best we can do but again they ignored the moral hazard that this created within financial markets and I think we have seen that seep out into Main Street and society as well but now we need to zoom out even further and realize that all of this is happening while at the same time we're going through one of these Mega cycles that they talk about in the book The Fourth turning and we're at the very end of a fourth turning right now as we speak in the 2020s and in my opinion the fourth turning is just another way to represent this saying that we discussed at the beginning of this video with hard times creating strong men but right now I think what we've done is we've gone from Good Times let's call it in the 80s and 90s well these good times have created weak men and obviously what I'm talking about weak men we're talking about society as a whole which would include Main Street and Wall Street and now we're going into this period of hard times while at the same time we have all of these bailouts that are creating a higher and higher and higher degree of moral hazard so then the next question becomes well what happens if we are rapidly approaching the hard times while moral hazard is going completely off the charts well a very easy way to tell that this is happening is just look at the past couple years with the average Joe setting up his portfolio and his main investment strategy is pretty much summed up by YOLO you only live once and this is just a small anecdote that illustrates the underlying condition the key takeaway here is that today in 2023 we've come to a point on Wall Street and on Main Street therefore in society where bad decisions have no consequences in fact the worst decisions you make sometimes the bigger benefit you have as an example let's look at all the shoplifting and theft that is running rampant right now across the United States this is a bad decision but is it in the eyes of a thief it's a very good decision because you can walk into a Target and walk out with whatever you want and you know that there aren't going to be any consequences it's the same thing with student loan debt right now you can take out a hundred thousand two hundred thousand dollars to study any worthless major you want and in fact you're going to pay that two hundred thousand dollars to get indoctrinated into a woke ideology but are you going to have any consequences absolutely not because the government is going to forgive the debt and most likely give you more and more stimmies in the form of Ubi what's not to like but it's not just the poor middle class and students it's everybody let's look at PPP going back to 20 and 2021 this was basically just student loan forgiveness for business owners on mass scale now it is true that when the government comes in and forces you to shut down the business you should be compensated but let's be honest the majority of those PPP loans went to business owners that just used them to go out and buy Lamborghinis but what trumps all of this were the bad decisions that were made by the government the politicians and the central planners that they will never have to suffer the consequences for we all know what happened with the lockdowns the medicine the mandates Etc and if you look at this rationally now with hindsight being 2020 or even if you looked at it while they were doing it for heaven's sakes as Brett Weinstein accurately points out in his recent podcast they violated on numerous levels they actually violated the Nuremberg code okay we know what happened to people that did that back in the 1940s do you think today's politicians are going to suffer the same consequences absolutely not what we have seen is they have actually gotten more votes and gained more power as a result I would point to Justin Trudeau Gavin news and Joe Biden Anthony fauci as Prime examples step number two let's see how everything we discussed in Step number one has been playing out in Wall Street we start by looking at a chart going all the way back to August of 2022 to April or just past April of 2023 on the left we go from zero dollars up to Fifteen dollars this is a chart of Bed Bath and Beyond and we're going to use it as a proxy to illustrate the moral Decay that we have seen and that's putting it lightly that we have seen in financial markets so we start this red line here indicates the price right around let's call it 13 14 bucks it plummets it's gone all the way down it jumps up and becomes very volatile what I really want you to focus on is this Spike right here around February of 2023. why is this so important to get some more insights let's cut right to a clip from a recent interview with Jesse Felder and Ben Hunt from epsilontheory.com at this point bed bath to Beyond is selling worthless stock directly to the meme investing public uh this is post Ryan Cohen this is posting a short squeeze this is just saying hey guys um you know when it hurts when bankrupt their common stock actually popped a bit so you know hey who's to say the same thing wouldn't happen for us would we go bankrupt we're going to have this this head this this Institutional Investor they believe in us they're going to come in and they're going to buy you know it's only a billion dollars worth of our stock well they've already agreed to buy the whole thing the whole deal was for Hudson Bay to buy warrants preferred stock from Bed Bath and Beyond and then immediately turn around and sell it into the open market is common stock Hudson Bay gave 360 million dollars to Bed Bath and Beyond uh so that's cash for equity instruments Hudson Bay turns that around into at least 300 million shares of common stock which is sold into the open market average price right about a buck and a half so they pulled out 450 million dollars so 90 million dollars in profits 25 return on their investment for a two-month bus down it's it's it was all there I mean it's all publicly filed so basically what happens is the management team for Bed Bath and Beyond sees one more opportunity to scam the average Joe the average retail investor and what they do is they know darn well that they are basically bankrupt they're on the brink of bankruptcy they can see the writing on the wall but what they decide to do because they know there's such an appetite from these YOLO traders that they take a billion dollars worth of shares and they say hey retail Traders why don't you go ahead and buy these billion dollars worth of shares and initially you would think that the investors or the retail would say oh no we don't want anything to do with that so what they do to sweeten the deal is they create a story to scam these people out of their money so insert the next character in the story Hudson Bay this hedge fund so with the management team at Bed Bath and Beyond does is say hey Hudson Bay if you agree to go ahead and buy I don't know let's say two 300 million of these shares they don't have to be specifically in shares we'll structure it in a way maybe warrants so it's basically impossible for you to lose money so now we can take this story go out onto CNBC and we can sell it to the general public they'll buy the rest of the shares and as the price is going up then you can go ahead and sell the shares that you now own at a huge profit we'll go ahead and do the exact same thing while at the whole time knowing that the company is basically bankrupt and knowing that they are going to scam the retail investor out of every dime so I know right about now you're probably scratching your head and saying how on Earth can this happen how can these people be so morally bankrupt and how can we'll call them YOLO Joe's how can the YOLO Joes be so stupid to just buy buy knowing that they're buying buying buying into all the selling selling selling from the scam artists right here right now because I know more than anybody well to understand this Dynamic we've got to dig a little deeper so my good buddy Jeff Snyder most of you know him from euro dollar University always talks about how just because money's cheap that doesn't mean it's loose and to take that one step further I would say at times of cheap money money will be loose for certain people certain entities while it will be tight for other entities and this creates a completely distorted set of incentives and if you layer this over the top of the cycles and the increase of moral hazard you can see how this plays out not just with Bed Bath and Beyond but how it's played out on Wall Street going all the way back to 2008. let me show you specifically what I'm referring to so before when the strong men were creating good times we would have the banks that would create credit and they would loan money to the businesses why would they do this because they knew that the businesses would go out there and they would produce more and more goods and services so on my white boards when I depict a simple economy I always try to get people to Envision an economy that simply produces corn cows and cotton sometimes we throw some wheat in there as well to mix it up but that's a very simple economy so the banks are lending to the businesses the farmers let's say to create more goods and services the more goods and services that are created the Richer Society is and I'm showing society as the average Joe making more money but really the definition of wealth is not money it's not gold it's not Bitcoin it's simply how efficiently a society can create goods and services and if they're creating more goods and services then by definition they are wealthier if they're creating fewer goods and services than they are poorer but now we need to realize everything has changed so what we talked about in Step number one is the central planners the fed the government bailing out the system but remember they didn't bail out the real economy absolutely not they were specifically bailing out the financial economy so this sends a message to Society at large basically it's if you are too big to fail if you're in the financial economy then we won't allow you to fail but if you're in the real economy if you're an entrepreneur that's out there trying to create more goods and services then we could care less if you go bust so let's think this through the banks now look at this type of lending and they say no no no no there's way too much risk there you see what we can do is we can just lend to Mega Corporation and mega Corporation can take that money they can buy their shares back now the fat cats well they all get rich the banksters and the people on Wall Street the scam artists that are running Bed Bath and Beyond as an example they're all going to get rich while the average Joe is going to get poorer why because we're not lending into the creation of goods and services we're only lending to financialize the economy so why would they do this because now the risk reward for just lending to Mega corporations to buy their shares back makes a lot more sense than lending to good old-fashioned businesses to create wealth for the average Joe or Society at large so what do you expect YOLO Joe to do when he looks at this and intuitively he realizes that the only shot I have is to gamble with all these stemi checks that are coming in and if Bed Bath and Beyond wants to sell me some shares that I know are worthless I don't care because I'm going to buy them and just keep my fingers crossed so I can double triple or quadruple my purchasing power or I can go flat bust and I'm going to go ahead and take that risk because I don't have any other choice it's almost like whether we're talking about Main Street or whether we're talking about Wall Street nobody knows up from down nobody knows what's right or what's wrong and unfortunately it seems like very few people even care whoa time out I also want to bring to your attention something that's going to absolutely shock you so I hope you're sitting down for this one editor go ahead and throw up the chart and what we can see is that between 2010 and 2019 the only net buyer in the stock market was corporations buying their own shares back in other words the only reason the stock market went up was because of financial Shenanigans because these Mega corporations were enriching themselves at your expense courtesy of the Federal Reserve the government and the central planners step number three most of us realize we are in a time of weak men creating hard times if you don't believe me just look at this chart we go all the way back to the late 60s to today's date on the left we go from 2.5 up to 15 percent this is a chart of unemployment and it's very volatile when you look at long periods of time but what I want you to focus on is the fact that unemployment today in 2023 is at a historic low going all the way back to the late 1960s why is this important because let's also remember that theft and shoplifting is at an all-time high look at Target they just came out and said that they are expecting a 1.3 billion dollar loss due to theft we see the same thing with Dollar General and I'd like to point out that just the other day Lululemon fired two of their employees why because they actually tried to prevent someone from stealing merchandise that's the world we live in today I think a good summary of what we're seeing in the United States and in the Western World in general is a tweet that I just posted the other day and it was based on my recent experience of going back to the United States as most of you know I don't spend much time there anymore and I've noticed it's a lot like looking in the mirror or if you do that every day you don't see changes they're very subtle but if you only look in the mirror once every two years those changes become very obvious so when I went back to the United States I saw a huge decline in respect for rule of law private property and overall civility well I saw a massive increase in mental health issues likely due to drug use tribalism narcissism and overall anger everywhere I went people were on edge and it seemed like they were on the brink of snapping but we still have to answer the question when will everything collapse and there's no better person to go to for insights than my good buddy Doug Casey this is from a recent post on International man.com talking to Doug Casey on Rising crime basically legalized shoplifting in other disturbing trends in the United States Doug says the real problem is that the moral fabric of the U.S and many other Western countries is torn there's not much of a moral compass left it's no longer clear to the average American what is right and what is wrong right and wrong is now viewed as arbitrary social constructs property rights are barely even seen as rights which is perverse since the very concept of Rights is based on properties starting with your own body which is the most basic form of property and we see this lack of respect for property rights playing out whether it's people punching each other at an airport stealing from Target or Bed Bath and Beyond stealing money from retail investors Doug goes on to say this degeneration is understandable in a world where black is white and wrong is right it's become unclear in many people's minds what is man and what is woman and what the difference is if there's no recognition of something as basic and obvious as that the meaning of words in any logic in thought becomes meaningless so of course they have trouble understanding concepts like right and wrong now Doug looks at this through the lens of business or like we said on the Whiteboard creating wealth more goods and services increasingly business itself makes no sense with the amount of taxes and regulations an entrepreneur has to deal with combined with the fact that you're getting no defense from common criminals what he's basically saying is why on Earth would you start a business the answer is you wouldn't if we have fewer and fewer businesses being created we're going to have less stuff being created therefore the overall wealth of society declines if we have wealth declining the standard of living going down while at the same time people cannot differentiate between right wrong up down black white man woman whether they're on Main Street or Wall Street in my opinion by definition Society has already collapsed and unfortunately it's going to get a lot worse before it gets better but the good news is this is all cyclical remember these hard times will create the strong man in turn will create the next round of Good Times for more content that'll help you build wealth and thrive in a world of out of control central banks and big governments check out this playlist right here I will see you on the next video

Channel: George Gammon

Views: 143,263

Keywords: society collapse, stock market crash, wall st bailout, stock market bubble, social unrest

Id: 4oMdAMqRJL8

Length: 24min 48sec (1488 seconds)

Published: Wed May 31 2023