 Good day, fellow investors. Welcome to the stock market news with a long-term outlook. Let's see how the current economic environment impacts us, our investments over the long term. We have very interesting things to discuss. We just had Powell make his speech at Jackson Hall and he gave an excellent overview of what's going on and what is the biggest risk out there. It's not trade wars. Even if those are a shorter-term risk, there is a big risk piling and we will discuss that risk and we will just give you a hint on how to position yourself in relation to the biggest risk in the current environment. And that's something we have to keep an eye on. Then we have very interesting tweets from Trump and he's actually right. Yes, I said that. Okay, doesn't matter. But it will be interesting to see how this develops and leads into longer-term risks again. The situation in the world, Germany slowing down. So let's start with what Powell has been saying about the economy, then what Trump wants Powell to do about the economy and global overview and then finish with the big risk that is piling piling. And we never know when that risk will hit us but what we have to do is always be prepared not to be the investing sucker out there and there will be many of them. Let's start. So Jackson Hall, Powell, he made first an overview of the free era in monetary policy over the last 100 years and he raised the question about whether long-term expansions like the current one of 11 years lead to destabilizing financial excesses does big risks. That's something we will see in the future but we will see how those big risks are created. Powell calls the current monetary policy the new normal with low interest rates, low inflation and low unemployment. We have seen over the last years real GDP growth has really slowed down. Unemployment rate is, on the contrary, very, very low. Inflation very low and the federal funds rate also going down. So we have an environment with very, very low interest rates globally, low unemployment, low inflation. So it's something new, something unchartered. And then he makes the current free policy questions. The first era raised the question whether the Fed can avoid excessive inflation. Looking at what's going on, what has been going on over the past 20 years, Powell says it's not a concern. They have tools to address such a situation. That's what they think. Then we have to address the question whether long expansions inevitably breed financial excesses. That's something we'll see in the future. And where he discusses the overall financial stability, the risks he defines them as moderate. I might agree on the short term. On the longer term, it's always a big risk. There are always risks because risks are not seen beforehand. That's why those are a risk. If you can see it, you can change it. If you don't see it, then there is a big risk. And I don't think people are seeing something we'll discuss except Powell maybe, but the politicians and those that matter don't see it. The first question is how in this low R world, R being the neutral real rate of interest, the Fed can best support the economy. And he simply stated that he will do whatever it takes, let's say, and that they will apply the necessary tools to support the current environment of low inflation and low unemployment. If those two things don't go hand in hand, then we have a problem. So this is the real time estimates for the real rate and the natural rate of unemployment. For now over the last years, everything has been declining. So it was good for unemployment. But there are current issues, fears. So we have trade policy uncertainty to fit into the framework. That's a new challenge for the Fed. We have slowing global growth, trade policy that I already mentioned, and muted inflation. Actually, now the problem is low inflation, not high inflation. Then he discusses how we have slowing down in China, Germany going into a recession, hard Brexit, Italy, and financial markets have reacted strongly to this complex turbulent picture. I don't think financial markets reacted strongly at all. We are still close to all time highs. Equity markets have been volatile. I see a straight up line, but that's okay. That's a different perspective. Long-term bond rates around the world have moved down sharply. And that's a correct assessment, as bond vigilantes really predict the crisis. And perhaps even Professor Schiller argued that the lower interest rates signaled a recession, that it will lead to a recession, not prevent it, because people will get scared. That might be that's behavioral economics, but again, a different perspective. There are three questions in the long run, and the key question is that the result of longer expansions is building up in financial risks. And that's what we are going to discuss in this video especially, because that's what's going on. Just to comment again on the global situation before going into the big build-up of risk. We have below average growth in Germany. We have China hitting back with trade issues. So there is always something happened. And then we have politicians. We have Trump, and here I have to say he is right. The Fed increased interest rates while everybody else in the world still stimulates strongly the economy, keeps interest rates low, and Donald Trump is really tweeting all over the Fed, we can say. But Germany sells 30-year bonds offering negative yields, and they are competing with the US, so it's easy to compete with free money. And this is the big build-up that is going on, the big risk I see. And the big risk over the next 10, 15 years, but we can always be prepared for that. The US deficit is piling, growing, growing. That's fiscal stimulus. So Trump, of course, wants and needs low interest rates, free money to finance the deficit. Of course, everybody wants free money. And this is the big risk. Once you get high on free money, everybody wants. There is the Dutch coalition that they are now thinking about borrowing money at negative interest rates to create 50 billion infrastructure funds, growth funds, development funds. So everybody is getting high on free money. You cannot increase interest rates. We have seen the Fed trying to increase interest rates now after a year or two. They have already lowered them. So everybody's high on free money, and that's the biggest risk that is building up now over the last 10 years in this era of prolonged expansion. Secondly, we have monetary policies that will do whatever it takes to keep the situation as is. Nobody wants a recession. Nobody wants it because we have seen 2009. So they are pumping that money into the system, and eventually it has to break out somewhere. If we look at the Bank of Japan, Kuroda has said the Bank of Japan can deliver more monetary stimulus if necessary, but it needs to take care due to side effects of the financial system. However, they will do again whatever it takes. But what is the impact on long-term investors? It's simple, and you have to look at it from a perspective of financial assets. The S&P 500 over the last 40 years is up 40 times from 1982 till today, 28-40 times. Nominal wages, not even real wages, are up 3 times. So if you want to buy the same stocks people bought 30 years ago, you have to work 10 times more to get the money to buy those financial assets. So long-term investors are screwed because of the low interest rates. You cannot compound your returns. You have to save more, more, more, and more. And that's something that has been going on in Japan. Low interest rates, more money. People save more because there is no return on investment. Pension funds are screwed. Bond owners are screwed because you have 100. There is inflation of 2%, but you get 100 after 10 years. So you practically lost what? 30% of your money by doing nothing. So there is no free lunch in an economy. And the free money will lead to financial excesses that is a build-up of risks. So that's the key we have to watch over the next 10-20 years I'm talking, long-term news here. And that's something that we have to be prepared for. There is so much money into the system so that it's unlikely that we have a credit crunch like we had in 2009. But there might be somewhere down the road inflationary pressures and that's something we have to take advantage of. Just an example of those inflationary pressures. If we look at history, let's go to Rome. Currencies have always been debased. This is the silver content of the Roman Daenerys. So it was, of course, 100% at the start. And then it was 5% after 200 years. Over 100 years, the dollar also similar fate. And now things with the internet and everything go much, much faster. So this is what you have to expect from currency. So don't be a sucker and don't hold that much currencies. What are the real effects of debasement over time in Rome? Wages started to go up after a while and of course the value of the currencies went down as they printed, they debased their currency. What they are now doing is printed. It led to a paralyzed economy but it might not lead to a paralyzed economy now as we are in modern times. What it might lead to is an environment where money is worth less, less and less and financial assets and other assets are worth more, more, more and more. So having that is smart especially with a fixed interest rate invested in a good productive asset might be our home. Invested in good businesses, stocks, that's what we do on this channel and also invested not in not invested in bonds, currencies, etc. because stock markets might not crash at all ever anymore. But you have to look for those returns where you can take advantage of the irrationalities that this financially engineered environment has been creating or has created over the past 10 years. So the conclusion is stay, attend, think about that. Think about having a mortgage, personally think about investing and balancing the risk reward, having some cash to take advantages if there are some dips but buying good businesses because central banks are keep are and keep saying that they will do whatever it takes to prevent any kind of risks or changes of the current scenarios. A 5% drop in the SAP 500 and Powell calls it a downturn. That's crazy and they are doing whatever they can to prevent it lower interest rate. So we have all central banks that have decided and politicians like it they will push financial assets up. So guys be invested. Thank you for watching, looking forward to your comments. Don't forget to subscribe, check the links down below, perhaps if you want to read my book or research and I'll see you in the next video.