The Great Reset | A Message To Investors

The great economic reset and why everything is unaffordable.

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WHAT IS THIS ABOUT?

Last week the inflation numbers reported 6.8% inflation which is the highest we've seen since the year 1982 - and if you’re ever out and about and you notice the price of everything going up, it’s not just you, it’s happening everywhere around the world. So we’ll talk about what this all means, where we’re going, what it would take us for us to fix it, and what we can do about it as consumers and investors.

WHAT WENT UP IN PRICE?

Virtually everything. Food went up .8% - the highest increase in the last 13 years since 2008. Energy also went up 3.5% in November and this is after going up 4.8% in October. The gasoline index is up 6.1% in November, the same increase as last month. The cost of electricity increased 0.3% in November after going up 1.8% in October. The cost of natural gas went up 0.6% in November after a massive 6.6% increase in the last month. But overall, the biggest 12 month change in prices is as follows:

New vehicles which are up 11.1%, furniture 11.8%, transportation up 21.3%, hotels up 22.4%, used cars up 31.4%, rental cars 37.2%, and gasoline which went up 58.1%. That’s a lot more expensive than all that stuff was at the beginning of this year.

I KNEW IT! COMPANIES ARE INCREASING COSTS!

That's not the full story. Companies also have to increase prices because there’s more money now. This is going to blow your mind, according to the NASDAQ - as of March 2021 we have created roughly 13 trillion dollars. That’s $5.2 trillion for the Rony Rona, $4.5 trillion for quantitative easing (money printer go brrr) and another $3 trillion for infrastructure. That’s roughly 13 trillion dollars.

HOW MUCH IS $13 TRILLION?

Just for context, World War II cost the US 4.7 trillion by today’s dollars. That’s not to mention the fact that supply chains are still not working properly, things aren’t being shipped, and interest rates are still low which encourages borrowing and leveraging and more competition amongst ourselves for what’s left - so of course prices are going to go up.

WHAT IS THE GOVERNMENT DOING ABOUT IT?

When it comes to President Joe Biden - he says that inflation is at the peak and that it should only get better from here. President Joe Biden’s plan to fix inflation and bring prices to a more reasonable level is his Build Back Better plan. The BBB is a proposal to invest 1.75 trillion dollars over the next 10 years to fund care for senior citizens and people with disabilities, it proposes to expand medicare coverage, investing in clean energy, tax credits for for families, and subsidies for child care.

IS THIS A GOOD IDEA?

It depends where you get your news from. MSNBC reports that according to dataforprogress.org - 61% of voters are happy with the bill - the other 39% are not. However, if you get your news from more conservative outlets, they're saying this is asking for inflation and that if these programs are made more permanent, we will add $3 trillion to the national deficit.

WHO DO WE BELIEVE?

The truth is somewhere in the middle. In the short term inflation will likely go up as a result of spending by the Build Back Better plan, but in the long term it should help us out.

WHAT ABOUT THE FEDERAL RESERVE?

He can increase interest rates to cool down what’s called the “corporate debt”. The downside is we risk destabilizing the economy because companies are extra sensitive to interest rate adjustments. If you adjust the rate higher, stocks go lower. It doesn’t matter which political party you’re a part of, no one wants to be the person responsible for a potential market crash.

WHAT SHOULD I DO AS AN INVESTOR?

Watch the video to find out!

SOURCES:

*None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.