 Whenever there is something free, I always learn that somebody has to pay for it. So given the current economic situation, the stimulus, the money you will be getting into your pocket, the question is always, who will pay for it? How will it be paid for? And what will be the consequences? In that line, let's analyze the situation. Let's see what is the stimulus? What might be the consequences of the stimulus? What are the market expecting? The markets always think short term, we'll also give a long term perspective on things. And then at the end, you'll have a good situation outlook so that you are not the one paying, but you are the one getting advantage, taking the advantage of what's going on in the world because you can take advantage of what's going on. Oh, before we start, just a quick thank you. You always wanted me to analyze Berkshire in a lot of comments, so I thank you for your comments. Thank you for your subscriptions. And I wrote a little article from my Berkshire video and I was in the trending articles on seeking alpha, the second in line. So thank you for your contribution ideas and I always love to read your comments. So please, if you have any questions or anything, just comment below. So let's start with the content. Current economy, market economy. This is a chart with the spike from usually 200,000 or something like that to 3.3 million new jobless claims over the week. That is insane, crazy numbers, but it's clear the economy will get hit. This is the US economy. If we look at Europe, the lockdown scenario is closing 10 to 15% of GDP. The normal operating businesses are just below 40% and then 50, more than 50 is disrupted. So that is, if this remains like this for a year, that's a 20% GDP decline, which is a big, big depression. However, if we look at the markets, Wall Street rallies for three days, big jumps, five days change, 9%, Tuesday, 9%, Wednesday up, first day, 6.24% for the SAP 500. Don't know where it will go on Friday because I'm filming this before the market opens. Nevertheless, what's going on? How come that stocks go up while the economy is clearly tanking? Well, the fact is that stocks, the stock markets always anticipate what will happen. So we can say that stocks a month ago started anticipating the lockdowns, the recession, and then now they are anticipating the stimulus that the money's coming in and they're anticipating, if we'll look later at what the investment banks are saying, a rebound, a sharp rebound in the economy economic activity and even markets over the coming months as the situation stabilizes and then the economy comes back to where it was before. That's what the market expects. But then there are also consequences who is going to pay for an eventual rebound and how will that affect your investments, your life over the very long term? If we look at what's happened, why are stocks up? Well, all over the world, we have seen stimulus packages, house bill, two trillion bill, the Fed, that's 9.3% of GDP as stimulus. That's double what was spent in 2009. Then the Fed is doing whatever it takes. European Central Bank announced the stimulus for the pandemic. China did a lot of stimulus. And then let's explain how these stimulus work, especially the Federal Reserve stimulus. First, interest rates, they have lowered it from 2.5%, already seeing a recession. So they lowered it quickly to 1.5%, now with this current situation to zero. So really money is free. And the problem is interest rates are not working, not effective because A, you have a lockdown, shutdown of the economy. B, interest rates were already pretty much down. So to add liquidity, they started buying more bonds, mortgage-backed securities, government bonds for expected five trillion to be added to the current balance sheet that is already at five trillion now. So in a week, they have surpassed five trillion. And we can see already from the repo investments, et cetera, how the balance sheet is expanding again. So the Fed has turned on the printing press and they are printing more and more money. Plus, the Fed said we will be the lender of last resort equaling the discount window rate with the interest rate effective funds interest rate. So banks can now borrow directly from the Fed. They will buy commercial paper funding facilities to help the economy. Then swap lines across the globe. The Fed is giving dollars, printing dollars and giving them to other central banks to keep the dollar liquidity across the world. But then also, as Mark commented below, the Fed is printing money, ECB is printing money, China is printing money. Everybody's printing money. So everybody has a lot of money, which in consequences tells us, okay, money is worthless. So that's the key thing that people are still not looking because they are focused too much on the short term. But now, because of the crisis, we have experienced what was the plan all from the beginning because they knew whatever, whenever there is a recession, they will lower interest rates to zero, print everything. And now the crisis, unfortunately, gives, allows them to do that all at once and not even thinking about the consequences that might or might not be there. But currencies are practically doomed because if you print so much, if the amount of, if the Fed's balance sheet doubles in a few months, in a few years, it means that the currency simply devaluates a lot. And then when something like that happens, always best to go to Ray Dalio. He just wrote an article on LinkedIn how the changing world order and he believes that the times ahead will be radically different from the times we've experienced so far in our lifetimes. Though similar to many other times in history, it's a very nice long article, but he's still focused on populism. He believes populism will prevail, especially now with the money printing, people will want more, then there is always productivity and debt. He sticks to the topic and I agree with him that demographics, India, China, those are the countries that will be the countries of this century and US, Europe are inevitably going down. Current crisis or no crisis. It will be good, but those won't be the leaders anymore. There is the wealth gap, especially in the US and now with the money printing, the have and have nots, the differences are increasing and then always he's focused on the long-term debt cycle where 10 trillion with negative interest rates entering the market already in 2020, now it will be even more. There are huge pension and healthcare liabilities and there is more debt due to the current crisis. So who is going to service that debt? And what he predicting is, of course, currency depreciation, low interest rates and predicting the decline of the US dollar. So a reserve currency, which is the dollar, is a currency that is accepted around the world for transactions and savings, now the dollar. But it's also the case that all reserve currencies in the past cease to be reserve currencies, often coming to traumatic ends for the countries that enjoy this special privilege. So he began to wonder whether, when and why, the dollar will decline as the world's leading reserve currency and how that would change the world, we know it. But it's not only the dollar, if we look at all the other governments all around the world, they have really started contributing printing, which means that all the currencies will likely be sacrificed. So who's going to pay for all this? You can default, but why would you default as a government if you can simply print your money? You can increase taxes, do you want your taxes to be increased? Unlikely, then you can always play the interest rate game, the inflation game with negative real rates or inflation above the real rates. And then, okay, every year as there is inflation, it makes it easier and easier for the government to pay for the debt, which then turns, can solve this issue. Will it be smooth? Will not be smooth? That's a question that we cannot answer right now. But it's a certainty that your currency, your cash will be probably sacrificed, bondholders, et cetera, et cetera. This is a very interesting story that we're going to discuss. So the question is, okay, inflation, that burden gets lower, but until when will people be happy buying bonds? Will inflation never pick up? That is a big consequence. And then, of course, the stimulus will lead to an economic recovery. Credit Suisse forecasts earnings per share growth of 20% in 2021, down 25% in 2020. And the GDP forecast down 4% for Europe and 0.9% for the United States in 2020. So everything previous will return to 2021. And this is also just a chart, another. So everybody expects, yes, big decline, and then to rebound quickly. Also, historically, recessions have averaged on average, 13 months. We are already probably in a recession, definitely in recession. So 2021, we could already be out of that. If we look at the market, also started a smaller recovery after the massive sell-off and that's also in line with the earnings growth expected down 25% for 2020 and then 20% up for the market also. Keep in mind, this is just expectations, but central banks are suppressing real rates, pushing investor into real assets. There is excess liquidity, more money being printed. The average bear market, we have already seen it 35% from peak to true and bear markets accompanied by a recession rarely, 20% two months after they're low. So that's what investment banks on average expect. And also when you look at the market, the darkest period is always at the bottom. You had the highest amount of bad news, macro news, forecasts, and then before the reaction that stabilizes things. So have we seen a market bottom? We don't know, we don't know what it is the amount of the bad news still coming. If this stabilizes like it did in China, then we have seen a market bottom, especially with the money printing. If this escalates like we're seeing now in Europe or in the US, unfortunately, then we might still see high volatility definitely, but still lower lows in the future. So let's hope for the health of our population that things improve soon. And then of course, if the market goes up even better or worse, if you wanted to buy cheap. So that's a different story. Now my conclusion, okay, I see governments, central banks are ready to do whatever it takes. So if I don't own real assets, if I own cash, I'm the loser. I don't want to be the loser. Therefore, when you see value, you have to buy it. However, there is one idea behind it that who will pay the price for this? Again, the current is, and that's something also you have to keep in mind before investing. And then always, it's always about what's the real value? How can I protect myself? Value investing, margin of safety, business yield, return, buy something when you are happy, owning it for the very long term. And as always, this is the message on this channel. We look at businesses, we look at real assets, we look at what those assets can deliver in eternity or infinity, and that's investing after all. These ups and downs situations, there will always be there, but if you own businesses, you are likely to be protected in the long term, especially if they're print so much money. Looking forward to your comments, subscribe, click that notification bell to be notified when a video comes out. Comment, click like, it really helps the algorithm. And I'll see you in the next video.