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Fear Grows Over U.S. Stock Market Bubble
00:04:38
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| We need to find out what's going on. | |
| You know, the headlines today, fear grows over U.S. stock market bubble. | |
| What does that mean? | |
| What's a stock market bubble? | |
| Well, stock market bubble is when stocks are massively overpriced. | |
| So we've seen price earnings ratios in recent years soar to unprecedented levels. | |
| The only times they've been higher was when other bubbles burst, the dot-com bubble in 2000, 2001, the financial crisis of 2007, 2008, and of course 1929. | |
| So if you look at the charts, it's very dramatic. | |
| The bubble that we've seen right now looks just like those past bubbles. | |
| In fact, I've been telling my readers that the setup we've seen for this financial crisis, if you were going to write a textbook and provide a textbook scenario for what the lead up to a financial crisis would look like, this is what it would look like. | |
| It's been perfect over the last few months. | |
| And then in the last 30 days, as we've approached the end of this Shemitah cycle, just the last 30 days, we've seen the most dramatic stock market crash in these last 30 days that we've seen since the end of the last Shmita cycle. | |
| Okay. | |
| Okay. | |
| Now you're saying exactly what I've been saying, and nobody talks about it. | |
| Nobody talks about that the stock market went down 2,200 points. | |
| When it went down 777 in one day, we almost lost the world, it seemed like. | |
| It was crazy. | |
| Do you believe there's more crash coming? | |
| Do you believe there's going to be? | |
| Some are talking about even 50% of the market. | |
| What do we believe? | |
| Yeah, I believe that the greatest stock market crash, greatest financial class, not just the United States, but all over the world, the greatest financial crisis we've ever seen. | |
| And what makes things different this time is derivatives. | |
| These two big to fail banks. | |
| Remember 2008? | |
| Yes. | |
| We were told they were going to do something about the too big to fail banks. | |
| They'd gotten too big. | |
| They'd gotten too reckless. | |
| Something was going to be done. | |
| Nothing was done. | |
| Instead, today the two big to fail banks are 40% larger collectively than they were during the last financial crisis. | |
| Meanwhile, 1,400 smaller banks have totally gone out of existence in our financial system. | |
| So the problem of too big to fail is now far larger than it ever was before. | |
| So you're saying the big banks have gotten bigger. | |
| They've gotten bigger. | |
| They've eaten up the little banks. | |
| Yes. | |
| And so what's going to happen? | |
| They're too big to fail. | |
| Is our government going to bail them out if they fail this time? | |
| Well, the problem is they become even more reckless than before. | |
| So they've gotten into all these derivatives. | |
| What's a derivative? | |
| These people, I don't know what a derivative is. | |
| I mean, I kind of do, but would you explain it? | |
| Sure. | |
| Derivatives, they can be exceedingly complex and complicated, so I don't want the audience to tune out because a lot of people do when I start talking about derivatives. | |
| But they're not like stocks where you're buying an ownership interest in a company. | |
| They're not like bonds where you're buying the debt of a company. | |
| Derivatives, some people compared them to insurance contracts, but I break it down real simply. | |
| I compared them to a form of legalized gambling. | |
| You're essentially betting that something either will or will not happen in the future. | |
| Kind of like if you went to Las Vegas and you bet the Chicago Cubs will win the World Series, that's either going to happen or it's not going to happen. | |
| You either win or you lose. | |
| So these big banks are being exceedingly reckless. | |
| They've gone into all of these derivative trades. | |
| For example, J.P. Morgan Chase is the biggest bank in America. | |
| They've got $2.5 trillion of assets. | |
| And that sounds like a lot of money until you understand that they have total exposure to derivatives. | |
| And this is out of an official U.S. government report. | |
| I pulled this number. | |
| They've got total exposure to derivatives of $56 trillion. | |
| That's with a T. Wow. | |
| That's shocking. | |
| Yes. | |
| And Citibank, Bank of America, Morgan Stanley, the five biggest too big to fail banks in this country, each one of them has exposure to derivatives of at least $35 trillion with a T dollars. | |
| Is that what this, is that what a stock market bubble is? | |
| I see this headline today: Fear Grows Over U.S. Stock Market Bubble. | |
| Well, it's this financial bubble all over the world. | |
| The world today is $200 trillion in debt all over the world. | |
| When you add up all forms of debt, add it together. | |
| $200 trillion of debt exploded since the last financial crisis. | |
| We're so much more vulnerable, so much in deeper trouble than we were last time around. | |
| Right now, there are 24 nations, according to a report, an international report that was recently released. | |
| There are 24 nations that are facing a debt crisis right now, 14 more on the way. | |
| So, all over the world, we've got red ink, the financial system, they've gone insanely reckless. | |