 Hello, good morning. Oh doing a quick sound check. Can you guys hear me? Can you hear me? Yeah, I can hear you Leon. Ah Hello, Howard. How are you doing? All right, you're not too bad. Yeah, brilliant brilliant. Hi everyone. Hi Ross. Hi Bobby Maxwell Hack him. I hope all is well Just looking at the max. What says yes Ross. Yep. No worries. You're a Bobby. Yep Okay, brilliant. All right. What I'm gonna do is in this I was thinking about this and it was from I think I remember it was matter of fact over the weekend they had sent me a message about Fundamentals that I don't know who it was matter of fact. It was it was Derek has sent me something about fundamentals and I was thinking how I could really kind of comprehensively kind of just really Break it down. I thought I'd done it before in previous videos But maybe it's just maybe a way To kind of do my maybe some sort of brain dump on on in this presentation is and try to get it out and maybe the simplest way possible So I just thought I'd try and get this this all out and record this video So if you do have any questions by the way along the way and it has something specifically to do with what I'm talking about then You know then chime in or send the message if it's Something that Isn't to do with this maybe just leave it to the end of the of the fundamentals and the risk sentiment and I'll definitely address those those questions after So so yeah So really this this I'm gonna get I guess I'm gonna get started now, but What it is is As we know what we want to do is always look for trade ideas Yeah in In anything that you do so you have to kind of know The environment that we're trading in And most trade ideas if the all trade ideas are geared around You know the local and global economy Yeah, all roads probably lead back to this. Yes a local and global economy Central bank monetary policy and interest rates and inflation and government fiscal policy These will be the main Sorry one sec, so yeah, these will be the main Well, actually the main thing is actually is is is local global economy Yeah, that's pretty much it and that is really managed as you say by Central bank policy and interest rates and government fiscal policy Yeah, so all roads lead to whether we are growing or whether we are, you know shrinking going into a recession That's pretty much it now as we know risk on is pretty much economic growth So When everything is all right in the world Yeah, and there's growth In in countries, whether it's locally or globally or both Then we are in a risk on environment. So the focus would really be On things like inflation. So the central bank target is, you know, two to three percent inflation year on year and When you kind of know that we're in a risk on environment is usually when you have interest rate hikes when When inflation is below the target, yeah, the two three percent because as we know Central banks really kind of hike hold or cut interest rates. So the time that they would really be hiking is For example, if you're and you guys know the economic cycle where you have You know, you have the boom phase you have Like for example, the contraction phase you have the recession phase you have the bust or slump phase here You have the recovery and then you have Expansion and then it's back to boom again Yeah, so if The usually when when inflation is is low or below the two three percent target It's it should be probably around its recession the economic status of standing over of a country is normally around the recession Maybe bust slump potential recovery phase. So as we get closer to this two percent target Yeah, in the recovery phase normally Yeah If it starts if they start to hike interest rates Then that is a sign of potential, you know recovery or growth in the expansion phase. So this growth risk on Is usually Synonymous with a growing economy when it comes to rate hikes if inflation is below targets and obviously, you know Stable government encouraging economic growth. So when all is right in the world, that's pretty much what we're seeing now the main thing is what we're in right now is Risk off and again just to remind you that risk on and risk off is Like a scale. It's not a light switch So you have varying degrees of risk on and risk off Maybe that being the most extreme this being maybe, you know, zero this being, you know Five and it's being five, etc. And it literally risk will slide along the scale depending, you know on On on really any of you know, these risk off scenario and risk off environments so recessions when it comes to The global and local economy, right if we're heading into a recession Then it's usually a risk off scenario and again, it can be local or global at the moment with, you know, COVID-19 And and the like We are heading into what is known as a global recession Meaning that pretty much all major economies in the Western world Around the world really are heading into a recession now Risk off scenarios Yeah, so these are usually the risk on scenarios Yeah, and The risk off scenarios are going to be Really when you have these type of indicators going on so inflation below 2% Yeah, it's usually Recession territory or above 3% And this kind of goes into hyperinflation and deflation and I'm not necessarily going to get into it into that right now But when you start if you start to see in the news the words Deflation or you start to see, you know, hyperinflation or high inflation Then you know that it's a you know potential heading into a risk off scenario fear uncertainty and doubt is fucked by the way So When you start to read You know the news and they start talking about a country is below their 2% target when you start to see and hear central banks Talking about interest rate cuts. Yeah, and that is again some of us with inflation Sorry below that's what I forgot the e Inflation below targets. Yeah, they're 2% target Yeah, it's below then central banks usually are in the cutting Cycle of the interest rate cycle You have quantitative easing when you pretty much have no bullets left and when I say no bullets. I mean when you have no Interest rates to cut normally what they do is they go into negative interest rates like for example where Swiss the Swiss national bank car and the The Bank of Japan are and then obviously with Europe as well going into minus Potentially and obviously QE and central bank intervention When you start seeing these types of things that is usually terrible for an economy Yeah, not only for the currency. It's terrible for the economy because country's currencies strength is determined by How well the economy is doing Uncertainty right fear uncertainty in doubt elections coalitions. Yeah Whereas when you have a stable government, yeah, that is encouraging economic growth and their policies Yeah, are Growing the the economy. That's brilliant. That's that's that's risk on when you have, you know, elections Uncertainty a change of government potentially which may not be favorable to Businesses they might for example, you know, hike taxes and and have to cut public spending for example, that's not Great for for for economic growth Yeah, it's more defensive rather than being you know offensive as far as promoting growth and as well policy Government policy mismatch mismanagement. You might have a government politics government policies may just you know end up brewing in the the economy A country's debt and all countries are pretty all countries but a lot of the major currencies are in countries are in debt and You may have heard and how many of you have been, you know, looking at for example the US debt, right? Which is pretty much running into the trillions now Every pretty much every year you get, you know, a bigger deficit When it comes to, you know, US debt anyway and a lot of countries debts But why hasn't the sky fallen yet? Why hasn't You know, the country Collapsed as a lot of conspiracy theorists keep saying every single year, you know, the end of the US Empire, etc etc, etc. I'm not saying it's not gonna happen. But the reason why is because regardless of how Bad the US are and how deep in debt they are is they still have the ability to pay off their debts Now when the cracks start to appear where potentially they may not Be able to pay off the two trillion or where whatever it is or however many trillions is in debt They are that's when that will start to come into play Yeah But for now Massive debt doesn't necessarily mean it means, you know, it's quite bad But it, you know, it's not the end of the world if their ability to Pay off the debt is is still there Commodity supply and demand now there are certain countries that are driven by commodity currencies By commodity prices, sorry as we know commodity currencies like the Australian dollar Canadian dollar And the New Zealand dollar as well are commodity currencies because their main exports are, you know, things like a copper iron or oil and dairy products, for example, so The price of a commodity is directly linked or usually linked high correlated to The currencies value as well, right? So supply and demand is what really drives a commodity's prices and And that will have an effect potentially on again all roads leading back to the local economy Yeah, natural disasters again potential recessions or war potential recessions and then we have really Scenarios that kind of come out of nowhere when I say come out of nowhere But that our kind of not necessarily historical until they actually come. So for example Brexit Brexit is is is a fairly new risk-off event simply because of the situation With regards to the European Union and the UK and the UK pretty much divorcing Europe and trying to go alone, right? So Brexit wasn't a problem. No wars have always been around for example Naturals that disasters have always been around commodity supply and demand problems have pretty much always been around Brexit, you know Pretty much just started 2015 2016 COVID-19 again this global pandemic is something that is I wouldn't say necessarily new in a sense because you know We understand that there was for example, the Spanish flu back in I think the 19s in 1919 1920 for example So it's not necessarily a new thing but in modern in this modern era Yeah, and the way that you know the world now is a smaller place because of you know air travel the internet etc COVID-19 and the coronavirus is Something that is quite quite new in that sense In the way that we're dealing with it and again something And for example the housing bubble the housing crash again We had never seen anything really quite like it when it happened in 0708 So that was something that was a risk-off Scenario, but really and it was quite niche in that sense that it hadn't it wasn't something that had happened You know 20 years before 30 years before and it was a repeat of something of that It was it was something fairly new because of you know credit Credit dried up as a result of that derivative swaps and all that kind of stuff so This is from what I can think of anyway, I'm sure there's going to be some down the road Maybe something I've forgotten or I don't know about but What we're looking to do when it comes to understanding our environment is understanding Whereabouts on this scale? Yeah, we are overall Yeah, if you read the news or you see in the headlines How many boxes are being ticked on you know from the growth phase to the recession phase and If you can tick more boxes on this side, even though they have probably more boxes obviously they have more boxes to tick but You know if this is what is in focus or any one of these or two or three or five or ten of these are in focus in the news And you're seeing it pretty much every day then this is where we are from a Trade idea perspective You know in the environment and whether the economy is in the growth phase or the recession phase So all heading into a recession phase does anyone have any questions by the way So far if I missed anything or is anything you're not clear about Everything all right if I might work it. Hello. Hello. Hello. Hello. All right Yeah, all good. All good. Yeah. All right. All clear. Thanks. Thanks. No worries. Thanks, mate So when we're looking to like I said Look for trade ideas If we know what environment we're in then I guess the next question comes is well, you know, how does that affect? You know certain prices and certain asset classes so you know Price increase or decrease because that's that's the main question isn't it the main question is is that okay? So we know we're in a risk-free environment What's gonna happen to you know the price of gold or the price of the stock market or you know oil etc? So if what I'm saying resonates with you why not check out trading 180 comm there is a Selection process to trade my supply and demand zone for a strategy. I'm only looking to work with Individuals with the right mindset, you know who are hard-working as well. So Check that out and access really for less than one pound a day This some of the strategies in here are not for beginners So if you don't know what supply and demand is please check out all of my Supply and demand videos. I have hundreds of videos on YouTube so you can check that out first Guys take care and until the next video. Have a good one