[00:00] Our economy is booming at the fastest rate that we have seen since 2021, right after the pandemic. At least that's according to S&P Global, who just put out a report talking about the United States' economic growth.
[00:14] And what they said is that the United States is seeing a boom and resurrection with corporate profit booming. But at the same time, we've seen a lot of volatility in the stock market because three things also happened.
[00:27] Number one, the Federal Reserve Bank raised interest rates. Number two, the bond market has been seeing chaos with treasury yields. Now, at the highest levels that we have seen in more than two decades and the number three gas prices are very high.
[00:41] They're up almost 30% from a year ago. So while we hear that corporate profits are booming and the economy is growing very fast, some people are feeling the gain, others are feeling the pain. So what I want to do in this video is explain what's happening in the economy, but also
[00:56] where investment opportunities are shifting. That way you can be a smarter investor and use these changes to your advantage as opposed to just chasing and feeling the pain. This is again why on September 29th,
[01:09] I'm hosting my live, free, and virtual investor workshop where I'm going to show you how you can profit from the dollar falling and find investment opportunities in this shifting economy. I'm doing this same workshop twice on September 29th,
[01:22] once in the morning at 10.30 a.m. Eastern Time and again in the evening at 8 p.m. Eastern Time. If you haven't registered yet, there's a limited number of people that can join me live. So I have that link for you down in the description.
[01:34] And as an added bonus, when you sign up, we're also going to get added to Market Brief, which is my newsletter for investors, completely for free. Corporate profits are up 28.9% from one year ago.
[01:48] This is why S&P Global says that the economy is booming in the United States. But to put that in perspective, on average, corporate profits grow by 7 to 8%.
[02:00] Right now, it's 28.9%. Almost four times the historical average. This is why S&P Global says that our economy is booming, because corporate America is having a field day.
[02:18] But if you dig a little bit deeper, it starts to get even more interesting because what you see is that corporate profits are growing almost two and a half times faster than revenue.
[02:30] So it's not just that they're making more sales, it's that profits are increasing. Now, why is it happening? Either companies are getting a lot more efficient and they're able to get out higher margins for every sale
[02:45] or they're raising prices faster than their costs went up. And this is what we're seeing happen on both sides. On one side, AI is changing how companies can make a profit
[02:59] because running an AI agent or 10 AI agents or 100 AI agents is cheaper than one human. And we know that there's been a lot of companies that have been working to transition some people out with AI agents.
[03:13] And number two is we've been seeing the high inflation in the economy, which has been pushing the prices of things up. Not to mention that there are certain places in the economy where money is flowing very fast, particularly with AI and data centers.
[03:31] because according to this S&P Global report, the way that they measure growth is the same whether it's a data center or a grocery store. And we've been seeing a lot of money go into these data centers, going into these AI industries.
[03:45] So if you were in that industry, you were absolutely feeling the boom. But if you're not in that AI industry, you might not be seeing that boom because it's very skewed. While at the same time what we been seeing is despite the economic boom the prices of things across the board are pretty expensive In the last 12 months gas prices are up almost 30 Energy prices in general are up more than 16 And the reported inflation is 3
[04:15] which means on average, according to the Federal Reserve Bank, the prices of things have gone up by 3.4%. Now, the reason why you want to understand that is because the Federal Reserve Bank has set an inflation target of 2%,
[04:28] which means the prices of things are growing. more than 50% faster than what the Federal Reserve Bank wants. That's why the Federal Reserve Bank then went out and started raising interest rates.
[04:41] Now, the raising of interest rates actually is a way to cool down the economy. Because when you raise interest rates, you make borrowing money more expensive. And a lot of people hear that and think mortgages are going to get more expensive
[04:53] and cards are going to get more expensive because their cost of borrowing money is higher, which, yes, that's true. But the flip side to that is that business loans also become more expensive. And so when you hear that corporate profits are booming, well, corporations are also often
[05:08] reliant on debt. They're going deep into debt, borrowing these loans so that way they can reinvest it back into the company and grow their profits a whole lot faster. Well, when you increase interest rates, that makes borrowing money as a corporation more
[05:22] expensive as well. And you also see corporations that borrow less money. that way they reinvest less money into the company because it's just more expensive and then they need bigger returns to justify the borrowings of money.
[05:34] And that's why those higher interest rates can then also slow down the economy because when you hear about these growing corporate profits, higher interest rates help tame and cool that down.
[05:46] But the other side of the consequence is that also means the hiring can also get hurt and the job market can get hurt because corporations are not reinvesting more growth and they might need less people. but when we take a look at what's happening now in the market side of things, outside of the economy,
[06:03] this is where a lot of people get concerned, because we've been seeing a lot of volatility in the stock market. We saw the stock market fall the last couple of days, and then there were talks about a peace deal between the United States and Iran,
[06:16] and maybe then the oil prices are going to fall, so the stock prices started to go up. But the big thing that's happening is we've been seeing a lot of concerns in the stock market, but also concerns in the bond market.
[06:29] And this is where you really want to pay attention because generally the way that it works is when people feel strong and good about the economy, they sell their bonds and they buy stocks because they want to own a piece of the economy where it's moving.
[06:44] When people are concerned about the economy, they sell their stocks and they buy bonds because bonds are generally considered a safer investment. So generally what you see happen is stocks and bonds move in different and opposite directions.
[06:58] When stocks go up, bonds go down. When bonds go up, stocks go down. Because people buy bonds when they're concerned, they buy stocks when they are excited about where the economy is moving.
[07:11] And when I talk about bonds, I'm generally talking about treasury bonds. Again, that's when you make a loan to the United States government. It's considered a risk-free investment because the government can always pay back their bills.
[07:23] Why? Because they can raise taxes and they can work with the Fed to print money. Well, what we have been seeing recently happen is that the stock market fell and the bond market also fell.
[07:36] And that's where things get very interesting. Because what we're seeing is that treasury yields have been rising, meaning the interest rate that the United States government is paying out is going up.
[07:48] and the reason why it's going up is because the government has been struggling to find lenders. We have more than $40 trillion worth of national debt and as the government goes out to borrow more money they were struggling to find lenders so they had to raise interest rates
[08:01] to incentivize people to continue lending money to the United States government. The treasury yields went up and that happened simultaneously to when the stock market was going down and what we seeing is now people aren going into bonds or stocks because they worried or excited about the economy Instead the bond market is now starting to compete with the stock market
[08:26] In the beginning of this video, I said that treasury yields are now at the highest levels that we have seen in more than two decades. If you put your money into a 10-year treasury, it's now at over 5.1%, or at least it was.
[08:39] and a 30-year treasury is even higher, which means investors are now saying, well, I can put my money into the United States treasury market and get 5% to 6% in interest rates on their money.
[08:54] Guaranteed. In the stock market, of course, it's not guaranteed, but hopefully I will make more money. But as the interest rates on treasuries go up, some people are saying, well, maybe instead of stocks, they decide bonds.
[09:06] And we're starting to see this competition between the stock market and the bond market, which is why we saw the stock market and the bond market fall at the same time. That's not what normally happens. Normally, stocks fall and bonds go up,
[09:19] or bonds fall and stocks go up. But right now, we're seeing something a little bit different happen, because it's kind of like a supply chain. We saw this economic boom in our economy, according to S&P Global, that corporate profits are booming
[09:33] at the highest rate since essentially the pandemic. That then led to, and is working with number two, inflation rate at 3.4%, a lot higher than what the Federal Reserve Bank wants.
[09:46] This then led to the Federal Reserve Bank raising interest rates to then fight the higher inflation rates, to then fight the growing economy. And this is where now people are saying, well, maybe instead of the stock market, which the Federal Reserve Bank is fighting, we go to the bond market.
[10:03] because when the Fed is raising interest rates, that means the Federal Reserve Bank is trying to slow down the economy and bond their winnings because you're getting a higher interest rate on your treasury. And this is some of the dynamics that we're seeing happen right now.
[10:18] Now, if you are an investor, the thing that I want you to remember is emotions are the enemy of profits. A lot of people tend to panic when they hear the headlines
[10:32] or stocks falling or bonds falling or other things like that. But what I want you to do is to be able to cut through the noise and really find where the opportunity is. Because at the end of the day, there's three ways to invest your money that I like to talk about.
[10:44] Number one is this ADB, always be buying into the markets. You buy on markets up, down, sideways. It doesn't really matter. You're always buying. It's a great strategy and it's been proven to work. Option number two is you want an opportunity.
[10:57] And when I say opportunity, I mean you're taking advantage of market crashes. that when markets go down, you come in and buy aggressively and you take advantage of those market crashes. Again, great opportunity, great thing for investors to do,
[11:09] a great way to build your wealth a whole lot faster. In fact, market crashes and recessions create more millionaires than any other time because you can buy great investments at a discounted price. And then number three is what I call market shift.
[11:21] A market shift is understanding where the money is moving and then you invest your money there. And this is where a lot of people try to invest. A lot of people try to do number three because they go into CNBC or Reddit or ChatGPT or
[11:35] Claude and then they research, you know, where's the hot stocks and then you're chasing what everybody else is buying. Even if it's on ChatGPT and Claude, the reality is a lot of the AIs can only show you based off of what's popular on the internet.
[11:48] This is where, if you really want to identify a market shift, you don't want to invest your money based off of news, based off of what everybody is talking about. You want to go deeper into the research to understand where the money is moving before it hits the headlines.
[12:02] Because unfortunately, by the time it's on the news, a lot of the real money has already been made. So as an investor, you don't want to be chasing what's on the news. You want to be finding the opportunities before they're on the news. Obviously, it takes more work and time and risk, but that's where the opportunities are.
[12:17] So you can buy the markets, which is great. You can buy when markets go down which is great And then you can buy where money is moving which is also a great opportunity Those are the three ways that I have found to build well through investments And so now your job especially
[12:32] when you have this news about the economy is booming, the Fed is raising interest rates, all that means the money is moving and it's changing where it's going. And if you can understand now how people are moving their money into bonds,
[12:44] you can see where people are moving their money to different places, it creates opportunities. For example, I was talking to somebody this morning. It was actually someone on my team. One of my investment analysts was talking about, yeah, I'm seeing what's going on in the bond market.
[12:58] I'm not buying a lot of these treasuries, but I've been buying a lot of Polish bonds. I said, well, that's interesting, Polish bonds? He said, yeah, the reason why Polish bonds is because they're backed by the EU, they're backed by all these things,
[13:10] and they're paying a lot higher interest rates than the United States. They're paying almost double what you're getting in the United States. 8-9% in interest on these bonds. I thought that was very interesting. So, this is where your job is to start to understand how money is moving.
[13:26] That way you can find opportunities, whether it's buying the market, whether it's buying through the crash, or buying through a market shift. But my goal is for you just to be a smarter investor. That way you can find opportunities and not be the person that's chasing the hype.
[13:39] When I first started learning about money management, I avoided using a credit card because I thought that credit cards were bad and evil. And then when I realized that I knew how to spend my money, and I wasn't going to spend money I didn't have for credit card perks and points,
[13:51] I realized that I could earn more cash back, I could earn more perks and points for doing nothing except making the transactions that I would normally make anyways with a credit card instead of a debit card. And that's why I partnered with my sponsor, FinanceBuzz,
[14:04] to put together an article of some of my favorite credit cards. Now, here's a caveat. If you don't know how to manage your money, don't use a credit card. But if you're comfortable using a credit card, In this article with my sponsor, Finance Plus, I go over some of my top credit cards based off of different types of tiers.
[14:19] If you have credit card debt and you want to pay it off faster, I go over some of the top 0% APR credit cards. This will give you an opportunity to attack the credit card debt faster while not accruing any interest during the 0% APR period.
[14:32] I go over some of my favorite cash back credit cards. That way you can earn more points in cash back while you spend on your normal transactions. I go over some of my favorite travel cards for those of you that are traveling more often and earning more income.
[14:44] And then I go over some of my favorite business credit cards as well. So if you know how to manage your money and you're comfortable using your credit card, you can see some of my top credit cards right now in the free article that I have for you down in the description. So what we talked about in this video is the S&P Global publisher report saying that
[15:00] the United States economy is booming at the fastest rate that we have seen since the pandemic. A big reason for that is because corporate profits have been booming, yet the stock market hasn't been feeling that boom recently.
[15:13] Part of that is due to the Fed raising interest rates. Part of that is due to the high treasury rates. Part of that is due to the high gas prices and inflation. And so now we have an economy where the prices of things are rising fast.
[15:27] Inflation is almost twice what the Fed wants. And that means the average person is struggling. while at the same time corporate profits are growing faster than corporate revenues and they are booming at some of the highest rates
[15:39] that we have seen since the pandemic and this is where we're starting to see a big discrepancy in the economy and we're trying to figure out now where does that create opportunity and your job as an investor is not to be chasing
[15:52] the news but rather finding the opportunity as a smarter investor again that's what I'm going to be going over on my workshop on September 29th if you haven't registered for it yet please do so the link is for you down in the description If you got value out of this video, the best thing to do is to follow.
[16:06] If you could please share this video with a friend, family member, colleagues, or fellow investor. That way we can continue to spread this type of financial education. Thank you. It's official. The Federal Reserve Bank wants to reset our economy starting with the United States dollar.
[16:20] Why? There are two big cracks in our economy right now. Number one is our economic growth because our economy has not been growing fast enough. I'll talk more about that in just a minute. Number two is inflation.