 Good day, fellow investors. The Fed has finally done it. It has listened to politicians, to Trump. It has lowered interest rates to stimulate to the economy or to prevent the economy to go into a recession or a slowdown or to prevent the stock market just to fall. The S&P 500 went above 3,000 points so unemployment is great, the economy is doing great, stocks are doing great and then the Fed does anything that it can do to keep things as those are. In this video I want to really discuss what's going on, put it into a long-term perspective because there are some real structural things that are going on. As we have discussed with the video on Ray Dalio, how there is a paradigm shift coming so it might come tomorrow, it might come over the next 10, 15 years but it is time for us to get ready to what might come in the future because this is irrational, it is ridiculous but we have to a. take advantage of it and b. not get burned when things actually change. So I'm not stupid in saying oh my god this will go in burst into flames, it will be economic collapse. It might be, it might not be. I have to be ready for everything. And this channel is about being ready, not being stupid, not being smart. I want to be ready, smart, stupid, I don't care, just ready and just take advantage of where I can take advantage of so that at the end I and hopefully humanity ends up better off. So I hope that these things that are going on now with financial engineering don't destroy the world. I think I believe in humans so I think we'll be better off in the future. So that's something we have to keep in mind. Let's discuss the situation. So the Fed lowered interest rates now. If you look at previous interest rates cuts you can see that those were usually just before a recession to stimulate the economy, to help the economy to lower the effects of a recession except for the 1990s, mid of 1990s when actually the Fed was gradually lowering rates and even hiking them before the 2001 recession. Sometimes it works, sometimes it doesn't work. In 90% of the cases it led to a recession. Also 1980s but those were different times. Now why cut rates now? The economy is doing good 2.1%, 3%. We haven't seen a recession over the last 10 years. There are no indications of a recession coming tomorrow. Civilian unemployment rate extremely low. It wasn't so low since the 1960s. So everything looks very, very good. Why to cut rates now? Well, because the current economy is based on financial engineering, low interest rates and they want to prevent or delay any kind of recession, any kind of market crisis, any kind of financial crisis. Some would argue, me too perhaps, that the recession would be good, especially a short term recession because it would weed out all those businesses that would not survive in a normal business environment that are surviving only thanks to low interest rates. This is not allowed to happen because it would lower economic growth, of course, but it would make the fundamentals stronger and with the current actions, the Fed, the politicians, they are making the fundamentals weaker and weaker and that usually doesn't end up well historically. And here we are talking 10, 20, 40, 50 years, so it might not happen in the next 10, 20 years and that's something we have to keep in mind. If we look again at economic growth, it's good, but it's the slowest in history, even with the largest stimulus in history over the last 10 years. So there is something wrong with the economy because with so much money, with everything being so easy, financial printing, that it's not growing as fast as it used to go. The problem is that growth and stability is based on wrong foundations, just federal debt has doubled over the last years, exploded over the last few years and it cannot sustain higher interest rates. That would be very detrimental for the country. I'm talking here about the US, but the same situation is globally, Europe, Japan, all developed countries are in the same situation. So interest rates are not good for anyone that is in debt. Lower is always better and Trump is always happy to say that and he is notorious for always being in debt, for loving low interest rates, for loving a lot of debt, for growth to build wealth on debt. And that's what he's doing, that's what he's forcing the Fed to do and that's the predominant way of doing things. And here you always see why it is so important. If you look at the network, this is 2015 table that I managed to find quickly, but the total network is now per household about $100,000. Of debt, house prices and equity makes the most of it. So financial assets, house prices exploded over the last 20, 40 years as interest rates went down, stocks exploded as interest rates went down. So there is the reason why they cannot lower interest rates because if house prices fall, if stocks prices fall, the whole economy falls apart everywhere. Because if you are 75, if you look at who has the most money, let's say in the United States, then the older people have more money and they sell their stocks, younger people have debt, they can buy houses and everything. And then they can build new houses, new retirement homes, second homes, third bathrooms, fifth cars, etc. And debt is needed to grow the economy. So it doesn't increase the happiness, but it is the wrong fundamentals. At some point your fifth house doesn't make you happier and at some point we will see a recession. If the fundamentals aren't good, it might be a very, very bad recession. And that's what Delio is discussing with wealth inequality, with the disparity between the rich and the poor, higher taxes in the future, or a lot of money printing, stagflation, high inflation to save the situation. So if stocks would fall 50%, that would be a hit of 20% to network that would destroy spending, building, whatever. So the stock market has to stay up. That's why I'm thinking the S&P 500 will be 5-10,000 points in the next 10-20 years because the Fed and central banks globally will simply print money to push it higher, higher and higher. So the implications aren't good. Money is becoming worthless and that will lead to inflation. It has already been doing so. Look at gold prices or other financial asset prices. Gold is up 5-7 times over the last 20 years in US dollars. Housing is up. Everything is going up, but real wages aren't going up. So the rich are getting richer and the poor are staying poor. So there is a big discrepancy. The fundamentals will see how it goes up. And now how to invest? How to invest? I think we are in uncharted territories. Nobody knows how it will look like in 2 years, who will win the elections, how it will look like in 5 years, 10 years. Will there be a global shock? Will be a natural shock? Will something happen to change the current pretty stable situation? Nobody knows that. So we cannot know whether we'll see deflation, whether we'll see inflation, whether we'll see whatever Martians coming and taking us over. So the thing is that we have to be ready for everything. And this is my message for today. You have to see, OK, how diversified am I? Do I have that fixed interest rate, long-term mortgage? Yes, it means that if there is inflation, if the Fed prints money, I'm doing well. Because the government has a lot of that. So if I have that, I'll do well. Stocks, yes, land, equity, home ownership, investing in various investments, businesses, knowledge. And then I think the key message is when something happens, like we have seen in 2009, take advantage of that. That is something you have to be mentally ready. And the best message I can give to investors is, over the next 10 years, be mentally ready to take advantage of whatever happens. Global diversification. I have stocks around the world, from Russia, from China, Europe, investing in Africa, everywhere. Because I'm trying to diversify away from the weak fundamentals of developed countries, but still exposed to developed countries. I have a pension fund. You have perhaps a pension fund that invests in stocks of developed countries, developed markets. So we are all along the government's social security. So we are already along that. So I might diversify into other things to make your financial well-being good whatever happens. And if you can buy those things on the cheap, then you'll do well. If you just look at gold, it was a 200. Nobody wanted it in 2002. So don't focus on the thing everybody is chasing now, the SAP 500, for example, and start buying those things that nobody wants now, but might want in the future. So we'll see what will happen in the future. It will be interesting to check. I think there will be a recession. There will be a stock inflation. There will be printing money. There will be inflation. There will be ups and downs. There will be much more volatility. There will be political issues. But over the long term, I think humans will prevail as it was the case in the past. So we have to be smart, follow the situation, subscribe to this channel to follow the situation, to follow what's going on, and find smart investments to take advantage of what's going on of the money printing of the lower interest rates, but also get prepared for whatever might happen, because nobody knows what will happen. Thank you for watching. I'll see you in the next video.