 Good day fellow investors. Last week the US Department of Labor announced inflation numbers for 2017 and inflation has been at 2.1% which is something very important to think about because 2.1% really accumulates over time which means that if you are not protected against inflation you are losing a lot year per year. Secondly, the 2.1% is just a little bit higher than the Fed's target rate which means that they have to start increasing rates to prevent inflation to go to 3% to 4%. Perhaps over a short term they will let it a little bit higher, however they will have to start trimming it. When they start trimming it we have, if they start, if they do really push on the brakes there we can have a recession or we can have higher inflation. Nevertheless those are two environments that we haven't seen in the past and past 8 years and it is something that we as investors really have to be prepared and protected from. Higher inflation. Inflation can really be a game changer for the next 10 years and a game changer for how to invest in this environment. Let's look what's going on. This is something very important. You have the blue line is the unemployment rate. As you can see it goes up and down all the time as the economy is a cyclical beast. And then you have the natural rate of unemployment which is the normal rate which would be normal in a normal economy because there is always somebody that is unemployed. And you can see that in the last year the blue line crossed the red line which means that the current unemployment rate is below the natural unemployment rate. This means that sooner or later wages have to start going higher if you want to hire somebody you have to pay them more. If you want to grow you need to hire people, you need to pay people more, you need to steal people from other companies. And this increases costs, this increases inflation. So higher costs, higher inflation, inability to grow pushes really the environment makes it difficult for companies to grow plus the Fed wants to prevent higher inflation and they are increasing interest rates. Which leads back to the cyclicality and whenever we are when the unemployment rate crosses the natural unemployment rate we look forward to a close recession where it will all even out without the bad businesses so that the healthy one can prosper and continue to grow. Further the actual GDP crossed the potential GDP which means that the actual GDP is higher than what actually the country can produce. And you can see that sooner or later after that happens you can expect recession. In Europe things are also doing great, the economy has grown at 2.4% in 2017 which is more than the expected 1.7% that the ECB expected so never take their estimations as granted even positive or negative. Inflation in Europe is however still low but if I walk around here in the Netherlands everybody is looking for employees. So unemployment rate in Europe is now around 8% was 12% but don't take that number as granted. Labor in Europe is much less flexible than in the United States. You have language barriers, movement barriers, countries whatever so if the average is 8% it means that it is much much lower somewhere and it's much much higher somewhere else. This means that even Europe might be at the limit of how much it can grow without inflation and the ECB if it stops their quantity of easing which they are still doing, they are still buying bonds we can see really inflation also in Europe as a hinder to growth especially if it leads to higher interest rates. What is very interesting is that slowly gold has surged from 1200 over to 1300 and if you temporary ups and downs if you omit those in the last year it has been really slowly slowly going up which means that people are trying to protect themselves from inflation at least a little bit. Now Ray Dalio has also changed what he has been saying. A year ago two years ago he said long-term returns from the stock market and bonds should be around 3% to 4%. Now in the last interview he said that long-term returns 10 year returns from stocks and bonds will be 0% over the next 10 years. So the stock market went up 20% so he went down from 3% to 0%. So that's also something to expect because higher interest rates, inflation will slow down this growth which is based on debt and money printing. That's inevitable. It won't happen perhaps tomorrow in the next 6 months but in the next 3-5 years definitely. So really think about how to position yourself because you have to be smart. Some people sell everything staying cash. Ok that's the safest way but you lose 2% from inflation. You really have to position yourself accordingly and see how your financial goals fit this financial environment of potentially higher inflation and the soon to come recession. Thank you for watching, looking forward to your comments and I'll see you in the next video.