Speaker 1: Gerald Celente, he’s a trend forecaster. He’s the publisher of the Trends Journal, and he makes predictions about global financial markets and other important events. Not long ago, he came out and he started talking about the American economy, what is happening and what is going to be to come, OK? He thinks that the economy, if things keep going the way they’re going, will look pretty bad. He said if it stays locked down, it’s going to be hell on earth. Look at the businesses going out of business.
You put your whole life into a business, a bar, a retail shop, whatever it might be. It is gone. It’s gone. Well, it’s going to go up and down, but the trajectory is going to keep going down. We’re in the early stages of the greatest depression, end quote. So the question we need to ask is why? Why is he saying things like this and what are the underlying facts that he’s got to back up these claims? One of the things that Cilenti mentioned was the trade deficit from the United States. The U.S., if you look back 10 or so years, they have always had a deficit, normally hovers around that 45 billion dollar mark. And then you go to 2020. The start of 2020 was actually looking very good. But then we all know what happened. The pandemic hits and the deficit shot in the wrong direction and shot downwards. Obviously, when you’re trading with other countries, generally, you want to make a profit selling and making more money compared to how much you spend. And for a long time, the U.S. just hasn’t been able to do this. And odds are they never will. But the pandemic has made the deficit even worse. And this is something that Celente alludes to when mentioning the so-called economic hell on earth. We’re constantly at a deficit and it’s been made even larger recently. But of course, apparently we have the solution for this size. The Fed says the government’s let’s just inject money into the economy. Don’t worry. We’ll give you the stimulus checks, will send them right to your front door. If you’re a business with poor credit rating, don’t worry. Stop purchasing junk bonds. There’s cash for you as well. But Cilenti and a lot of other economists are not fans of this policy at all. He said. Why would anybody I’m only speaking for myself. I don’t give financial advice. Why want this digital trash backed by nothing and printed on nothing when they just keep printing more and more of it? And that’s the thing people don’t really want to hold of these days. So they either put their money in the stock market, which is one reason why stocks are so highly priced or they put it, and things like real estate, which is why we’ve got such high house prices as well. The other risk that comes with this printing of money is inflation, because as you get more money, what happens? Generally speaking, you spend more and this causes the prices of goods to go up. So in the long term, as it a practical, sustainable solution, no, the solution is actually not just the print money. The solution is to grow the economy and grow outputs. That’s how you make more money. That’s how you pay off debt. But lately we’ve not seen growth. We’ve actually seen negative growth when it comes to the economy. The other thing that’s a Lancey goes into as reasons for poor economic times to come is the interest rates, he said. The other big difference this time is I mentioned about how economy of the economy and governments after governments, they’ve locked down what’s keeping it up or that cheap money they’re dumping into the system the negative and zero interest rate policy in quotes. So you see the Fed has a couple of main levers that they can pull. One is printing money. We all know that doing that vastly. We don’t need to talk about that anymore. However, the other main lever is controlling interest rates. So they either have interest rates low, which helps the economy because it means it’s cheaper to borrow and thus more money is put into the economic system or they have interest rates high, which helps make sure people don’t borrow too much and keep things under control. Okay, but if you look throughout the past 30 or so years, their interest rate has been around that five percent mark. But let’s zoom in and see what the interest rate is now. And it’s pretty much zero, as you can see. So what does this mean? It means that the Fed no longer has the power to stimulate the economy anymore with low rates because they can’t go any lower unless it gets into negative, of course, which gets very dangerous.
So we go back and we look at 2009. We had what’s known as the Great Recession. What did they do back then to stimulate the economy? They dramatically lowered interest rates from five point twenty five percent to zero point one five percent. And yes, this helped the economy recover. However, fast forward to the economic trouble that we have today. No, we can’t use the same trick as last time because interest rates are already at zero. The next thing that Celente mentions, which is very interesting, is the countries that got hit the worst economically from this pandemic. And he also shows you the one that didn’t get hit too badly. Let’s go over what he said. He said Every major country is going to have negative GDP this year. Oh, except one China. You know, as I said, the 20th century is the American century. The 21st century is going to be the Chinese century. OK, I want to go over this a bit deeper because this fascinates me. We’re going to look at the GDP growth of the major countries of the world. If we take a look at this graph, Cilenti is dead accurate. So this is the year over year growth for quarter two of twenty twenty. Most countries were deep into the negatives. Australia minus six point three percent, France minus 19 per cent. India minus twenty three point nine per cent. Britain twenty one point nine per cent minus, and the USA minus nine point one percent. But what was the one country that wasn’t in the negatives?
China, you know, even look to quarter three GDP growth for the major countries. It’s a similar story. All countries, their economy got hit hard. Oh, except the one which is China. And for those who don’t know, there’s this big competition between China and the USA economically, which country can be the biggest and produce the most dominating in this century? It’s been the USA, but China is starting to catch up. And this pandemic, purely in terms of looking at the economic race, has helped China. No one can dispute that. OK, that’s an interesting thing to note down. I don’t want to go too in-depth into what’s the main thing that we want to focus on is the USA economy. And Gerald Celente is not a fan of it when you break it down. And I don’t think many people are, to be honest, as of late, if you just looked at the economy, you would think we would have had a massive stock market crash that came with it, just like in 2008. But no, the stock market has totally ignored economic signs and it’s just been rocketing to new highs as a lot of investors. Jarold is questioning why he said it’s right in front of everybody’s eyes. Why the heck are the equity markets going up when you have an economic crisis like this going on? So as we all know that the game is rigged, it’s totally rigged in front of our eyes, rigged with the printing of money, rigged with junk bond loans and rigged with zero interest rates. So a lot of people might ask, well, how is he preparing for this?
One of the things that he’s doing is buying gold and silver. It’s a bit of a trend that you’ll notice with a lot of these economists and forecasters. OK, he got asked recently if he was still buying gold and silver or if he was changing his strategy. He said no, still gold and silver and the Trends Journal, we said in June that silver prices were going to spike a higher percentage than gold. I’ve been buying gold since 1978, so he likes those precious metals. And I think it’s pretty obvious as to say why precious metals, we have a set amount of them. We can’t just keep printing more. There are limited resource. So this way, gold and silver are much more likely to hold their value over the years. And they do especially well and tough market conditions because these are known as symbols of safety. So if these forecasters like Gerald Celente, Jim Rickards, Harry Dance are correct, while gold and silver are great assets to own, to protect ourselves from a market crash, and I know a lot of you probably don’t care, but I do just want to give my brief opinion on everything as well. OK, so all in all, you’ve got a lot of these economists, as we’ve talked about, who are predicting tough economic times ahead. But then you’ve got people like Warren Buffett who say, listen, I don’t know what’s going to happen with the economy. It could rebound strongly or it could be dampened. Anything can happen for me either way. It doesn’t really matter the main. Thing that matters is our strategy for what may be to come, you want to be prepared for if the economy goes strong and the other way round of economic hell takes place to prepare for this.
I personally don’t mind gold and silver, but not my whole portfolio. For me, I prefer around five to 10 percent. It’s more than enough. Just like Ray D’Alessio. With regards to stocks, I think it’s appropriate to keep looking for deals in the market, even though it’s pricey right now, there are still deals to be found, just like Warren Buffett. He’s still searching and he’s still picking off stocks here and there. But he’s not betting the house on them. He’s just slowly accumulating a position. Lastly, I don’t think it’s silly to have some form of cash in a portfolio because the one thing that you need in a market crash is cash. That’s how you buy stocks when they’re cheap. If you don’t have cash, you can’t do it. It’s as simple as that. So I don’t know, maybe you can let me know down below what your strategy is to mitigate these potential economic times that may be to come. Remember, there’s no guarantee on a crash and there’s no guarantee on a bull market economically. So what are you doing?
Are you using the Buffett strategy of still buying and holding stocks but keeping some cash? Or do you like the Cilenti and Jim Rickards approach of buying gold and silver? No matter what comes in the future, we must make sure that we are prepared. Hope you enjoyed the video from.