 Good day fellow investors. Welcome to the weekly stock market news with the fundamental twist. Today we're going to discuss consumer confidence, how that impacts the economy and at what stage in the economy are we now looking at consumer confidence. We're going to discuss how this economy is really dividing we have the young and the old and how this economic bubble is really helping those who have and not really helping those who are just starting. That's something very interesting and I think it will have a very very strong impact in the long term. We're just shortly going to touch on the copper price and its movement in the last week then we're going to discuss the new entrepreneurship channel that I started one video a week so you have the link in the description below. So let's immediately start with consumer confidence. The consumer comfort index is extremely high it has never been so high in the last eight nine ten years. This means that consumers are feeling good the economy is doing perfectly. We have seen last week that the actual GDP is above the potential GDP which means everything is great and consumers also feel great and this might look good but in the past has never been good now we'll see why. If you look at the gap between high confidence and low savings in the past it has always led to a drop so we have consumer confidence very high savings very low consumers feel good you don't need to save everything will be good everything will be great that happened in 1999 that happened in 2006 and is happening again consumers are confident and savings rates are down. Last time it happened after such a discrepancy there was a huge drop in spending. If we look at consumer credit consumer credit is growing growing and growing at huge rates billions and billions every month. Why is credit growing? Well interest rates have been going down and here we can see that total consumer credit really growing after the 1990s as a percentage of disposable income since then we have seen only a decline in interest rates which make it easier to take loans and those loans have less pressure on what you have and own. However the situation is slowly changing we have seen the federal funds rate slowly growing slowly and the Fed has become with its tightening slowly slowly it will lower its balance sheet but really really slowly nevertheless everything looks great now the Fed knows it and they need to tighten they need to increase interest rates and lower their balance sheet. Higher interest rates will make it more difficult for people to pay back their loans they will not feel so confident about taking loans so there is always a balance that creates itself there are these short-term debt cycles that are normal that have been there last usually five ten years and given the confidence we have now the Fed starting to tighten we are really in the late part of the cycle that's something that nobody is seeing yet or nobody wants to see yet because everybody is enjoying the party and while the party lasts you don't want to be the one that destroys the party. However if you are smart really take into consideration the current situation the debt cycle it is all about the debt cycle and how we are in the late part of the cycle we are investing to reach our financial goals in a period of 20 40 40 50 years now the question is will you get greedy and play the cycle or you want to get defensive fearful and protect from the cycle so it's up to you how do you feel in life and where you are in life the question where you are in life leads me to the next topic this is the amount of student loans it was 500 billion in 2006 and now it is 1.5 trillion higher student loans created burden on the young but there is something more just read world street journal article that if you want to buy a house you'd better pay cash and if we look at how much are people spending on houses and mostly in cash and that's very irrational especially with the current low interest rate I would rather buy two free houses than buy one completely in cash but that's how people are financial rationality is not the strong side of the majority if we look here Americans 28 percent of the home purchases are bought totally in cash under 100 000 more than 60 percent of houses are bought in cash almost 50 percent of the 2 million plus houses are bought in cash so even those who have more than 2 million they prefer to pay the house all in cash and then the median of course the young which buy a new house from 400 to 750 they make a 20 percent down payment of the cash which is a minimum so this shows how there is a lot of people 2 million and plus the pay all in cash and that makes house prices go higher higher and higher and that's again a burden on the young we have seen student debt huge burden now if you want to buy a house you want to rent something prices are skyrocketing let me show you just what's going on in the Netherlands this is the median price in the Netherlands it was 240 000 a year and a half ago now it is 270 000 however this is for the whole country and as with every country there are good places to live where people really want to live and there are places where you don't want to be fine that so this is the difference in Amsterdam the price in 2013 2014 was about 225 000 euros the average price in the Netherlands was 2007 the average price in 2016 the average price was 358 000 huge increase in Amsterdam and the surrounding area in the Netherlands was just 20 higher so here we have 50 60 percent more Netherlands 20 percent more so if you look at the median yes it doesn't matter but if you look at from where you want to live as a young person where you will get your job where you will create something of your life their house prices are booming and really putting a burden on starting your life starting from scratch so we have an asset bubble in real estate in stocks that help those who have held stocks over the last 20 40 years and don't really help the young so i'm really looking forward to your comments here how do you feel about the situation about the monetary easing about everything that has created this situation where asset prices went high high up but is that helping you or is that not helping when you look from a long-term perspective if you're 25 you had 10 000 dollars in stocks and now you have 40 000 you might feel good but if you have to pay now 400 000 instead of 200 000 to buy a house your really wealth your benefit is not that better so looking forward to your comments because this is very very interesting and it is happening all around the world so that really affects a lot of us so it's something to think about for the long term another thing that i wanted to discuss is how news affects copper prices we can see that copper prices in the last month are as always volatile and then we have seen the biggest drop in copper prices in the past two years that was because copper hits two months low slowdown in china economic growth fears and everybody was seeing more pain ahead this was on monday monday tuesday so copper prices really fell however two days later china's commodity imports row back in november this was the news and copper prices immediately spiked up a little bit not as much as the drop but i'm always dazzled by how this short term news impact affects copper prices and everything else it's crazy on monday china is slowing down on tuesday china is rolling back so you have to be really careful to look at the long-term trends and not so much as at the short term news yes look at them to take advantage when to buy when to sell but not really to buy and sell constantly on dot news you get you crazy and you spend a lot of money on fees as i said i started the new entrepreneurship channel i i think i'll manage to make one video a week so feel free to subscribe click the notification button there to get the message when the video comes out because i think it will be every first day or wednesday so hope you enjoyed that channel and as we are talking about new channels our viewer one of us yaokai has also started a new investment channel and he really discusses a lot of technical details very interesting about energy about tesla and his latest video about uranium so in the link below you have also his channel and take a look if you're interested in those technical details supply demand uranium great video a little bit long but he will improve i think on the length nevertheless the data is very very valuable and gives an excellent overview of the uranium market thank you for watching looking forward to your comments about the young and the old and if you are happy with how the world looks like now see you in the next video and have a great day