We have also seen when U.S. debts rose, rates rose (to attract lenders) and consequently U.S. dollar continues to gain strength. That’s why they are emboldened to print more money and export inflation to the world.
I always trust someone who make slides like that . Not fancy, straight to the point . Not some McKinley shit that never fails to make my eyes roll . Great job for doing this video !!!!!!
I think you can’t compare Euro to BRICS (and RMB for that matter). BRICS is a monopoly of energy, commodities and agricultural suppliers unlike EU which is net consumer. EU is subjugated to US foreign and monetary policies which BRICS is not quite so. Euro is like a mini-USD used for a large part for speculation rather than for trade and hence is much more dependent on US Fed and military actions. Hence Euro can never dethrone USD and U.S. has done all it can to ensure that to maintain her hegemony. But U.S. will have a much tougher time dealing a blow on BRICS given its size and monopoly over vital resources.
I thought the whole point is that if the debt get to high, the dollar will depreciate in value to the point where it could collapse...If that happens it doesnt help you if you own American companies...If you have inflation of double digits because of excessive money printing, I dont think taxes is going to cut it in relation to the interest, let alone paying the money back. Then the bubble will pop and dollar collapse. But I do agree. It could be another decade before that happens for all we know, or perhaps even more. But you see the early signs already. The USA is not what it was back at the turn of the millenium. People running three jobs, bad maintenence and even powerty. I think there are two things that can save the American economy: 1. A war 2. AI (automating all jobs booms the economy)
Perhaps just a little more insights into the period 1980 to 1990 : Holding short term cash during this period has an annualised return of close to 10%. Treasury 10 year bonds annualised return is approx 12%, US Equities annualised return approx 14% (none are inflation adjusted). The drawback of holding equities during this period is that it experienced a max drawdown of about 30% without rebalancing. Using S&P as a guage is fine but I think Adam's portfolio is predominately growth oriented - whilst it gives outsized returns, one should also expect higher volatility and larger drawdowns.
Other than from a nominal interest rate versus gdp growth rate pov, In my humble opinion regarding debt sustainability of a country (or any entity in general) Looking at debt (or debt to gdp alone) is really meaningless. Just like when we analyse a company, we look at the other parts of balance sheet (eg. Liquid assets enough to pay off debts etc.) and the income statement (whether nett income can cover the the debts owed, whether interest coverage ratio is healthy etc . In fact, for strong cash cow companies, having a nett debt to EBITA of 3 times is still consider quite ok for most cases) So for a country like USA, 1) it has a money printer that prints out the world reserve currency 2) its debts owed are mostly in usd, owed to itself. It can also print itself out of the mess 3) its annual GDP can easily cover its interest owed within two years For China, it’s a black box for sure. However, from just by scraping the surface of media articles, the central banks have a lot of reserves/assets and being a command and control country, the debt level Shld be sustainable. For emerging countries where most of their debts are owed in usd and other currencies, that’s where things become unsustainable when their economies go down. Because they can’t simply print their way out of the mess. And with kleptocracy and cronyism plaguing some of these countries, it’s really tough since a lot of the money borrowed and earned flows into the pockets of these corrupted politicians
Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.
Fears of US debt crisis is likely overblown. The debt level itself is meaningless without looking at other metrics. Sovereign debt crises can happen at low levels of debt. Ukraine’s 1998 debt default - debt to GDP ratio below 30%. High levels of debt don’t necessarily will cause a crisis. Japan’s debt ratio of well over 200% in the 2010s, which sparked little or no concern. What matters is the relationship between nominal growth (g) and nominal interest rates (r). If g>r, think of debt dynamics like an airport’s moving sidewalk. In the 2020s and beyond, with upward inflation bias, r will go up but not g. Moving sidewalk may slow to a crawl or stop or even fully reverse. However in the longer run, neutral rates may likely still be lower than in the last few decades, meaning r need not be particularly high. Prospects for some upside to growth from productivity are real, hence g can go up. Philipp Carlsson-Szlezak and Paul Swartz
Our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
Yes most investors before 1929 before the crash and great depression thinks the same way as most people and experts thinks like now- "nothing will happen, I have been hearing people calling stock market crash for the last 20 years and nothing happened. Buy the dip". People think what they till now in their life span have not experienced will never happen.
Solid video! AK back at his very best after a long holiday. Missed his videos but the 2 he released after the break more than make up for the long hiatus. Please keep them coming. Thoroughly insightful and enjoyable.
But the question is, don’t small companies buy products from big companies and consumers will also likely buy less products from big companies because of high borrowing costs so would that be a domino effect? Who’s gonna buy products from Apple, Microsoft and Amazon? Somehow they will also get affected.
Excellent video Adam. While the astonishing Debt Ceiling is nerve racking, your point is valid. Staying invested in those companies you mentioned are way to go. I think AI revolution will cause a paradigm shift in the economy and what we see out there hasn’t even scratched the surface yet. AI agents across many scenarios will create opportunities for companies in ways, we are not yet comprehending. Have you considered Brookfield Corporation (BN) & Brookfield Asset Management (BAM) as interest rates going down. I have been looking into it and started position with intention to add more. I think they are better alternative to Blackrock which I owned before and got called out of it during Covered Call play. I think Blackrock is too expensive now.
Singapore actually don’t need debt , but because their sovereign rating is high 90% of those debt is investment type . So they borrow at 3% on their reputation and invest and get returns of 5-12% and keep the difference . Greece are mostly past and current govt spending .
The price for such wanton printing of money is passed on to the rest of the world as inflation. We are all footing the bill for all their fiscal overspending.
Thank you from South Africa Adam. Very educational and informative video. I have been following you and Greg manarino for past 5 years and you just gave me so much clarity and a huge relief with al the worrying talk Gregory does about US debt.
Question: If the dollar crashes due to the government defaulting on the debt, global de-dollarization, or any other reason; and you hold stocks, how do you plan on selling those stocks? Do you plan on selling them in worthless, hyperinflated currency? Gold is the way to go. Maybe real estate, but gold you can carry with you.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
Russia is not a communist country. While it was once part of the Soviet Union, which was a communist state, Russia today is considered a federal semi-presidential republic with a mixed economy
us just gonna print dollars. so if youre holding dollars, youre purchasing power gonna erode everytime dollars supply increase. they call it inflation but it actually dollars buying power getting more weak. just look at gold-usd. roman coin today still had buying power even tough ancient rome has gone. because its gold.
Weaker currencies, which is every currency over all lengths of time is the argument for pro-bitcoin. It will ONLY grow in the long run. You should have some Adam.
Neither the collapse of the Roman empire nor the British empire happened overnight. It may not happen in my lifetime, but I do think the US is losing on the global stage if it does not reinvent itself. I will not rule out the BRICS gaining popularity as more and more countries join. Particularly poorer nations who have grown weary of the hegemony of the western Europe and US
Since the debt crisis could unleash carnage on the stock market leading to economic downturns at some point. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?
I am a new investor / trader. I learned a lot from your free videos by tapping into your decades of investing experience. You are a great teacher, entertaining too! Thanks for sharing your knowledge and experience. I am up 10% so far after I started investing and trading on 8 Aug 2024. I want to make more profits and join your paid programs down the road. Thanks Adam！
Imo the dollar won’t collapse, the process is likely slow and long process (it will be like decades) collapse of US dollar benefits no one.. more importantly, there is no other better alternatives. None of the countries in the world would want to see a sudden collapse of dollar anyway. What they want is multi-polar, more alternative.
The one who bet against US will broke…JP Morgan we dont care of the debt if assets value is much higer as collateral and if gdp growth rate is here….ME
You are one of the best in the youtube when it comes to stock market. Thanks Adam for all
Two videos in two days?? Thank you Adam!!
christmas came early
We have also seen when U.S. debts rose, rates rose (to attract lenders) and consequently U.S. dollar continues to gain strength. That’s why they are emboldened to print more money and export inflation to the world.
Great video - timely topic. Curious why you didn’t include AMZN in the top 5. It has become quite non discretionary.
Hi Adam now your thought about ASML.
Can't thank you enough for your detailed analysis that helps us stay rational and on the right path with our investments!!
Best financial youtuber in Singapore
Very explicit and crisp insights into the economics of USA and twisted market fundamentals😊🎉
I always trust someone who make slides like that . Not fancy, straight to the point . Not some McKinley shit that never fails to make my eyes roll . Great job for doing this video !!!!!!
Thanks for a different pov? Great information.
High time for your next epic video. Impatiently awaiting..
I think you can’t compare Euro to BRICS (and RMB for that matter). BRICS is a monopoly of energy, commodities and agricultural suppliers unlike EU which is net consumer. EU is subjugated to US foreign and monetary policies which BRICS is not quite so. Euro is like a mini-USD used for a large part for speculation rather than for trade and hence is much more dependent on US Fed and military actions. Hence Euro can never dethrone USD and U.S. has done all it can to ensure that to maintain her hegemony. But U.S. will have a much tougher time dealing a blow on BRICS given its size and monopoly over vital resources.
Adam always bring calm from news storm that try to scare us.
Thank you 🙏 for evidence based information
thank you for the knowledge and mindset.
I thought the whole point is that if the debt get to high, the dollar will depreciate in value to the point where it could collapse...If that happens it doesnt help you if you own American companies...If you have inflation of double digits because of excessive money printing, I dont think taxes is going to cut it in relation to the interest, let alone paying the money back. Then the bubble will pop and dollar collapse. But I do agree. It could be another decade before that happens for all we know, or perhaps even more. But you see the early signs already. The USA is not what it was back at the turn of the millenium. People running three jobs, bad maintenence and even powerty. I think there are two things that can save the American economy:
1. A war
2. AI (automating all jobs booms the economy)
THANKYOU ADAM FOR HELPING ME, GUIDING ME, I APPRECIATE YOU VERY MUCH..THANK YOU MY HERO.
Thanks Adam for making and sharing many informative and useful videos. 👍👍👍
Very useful content like always. Thank you Adam!
Amazing Video. Very educational and puts a lot into perspective!! Thank you!
Adam back to work!! Thanks
Thanks Adam very educational.
Perhaps just a little more insights into the period 1980 to 1990 : Holding short term cash during this period has an annualised return of close to 10%. Treasury 10 year bonds annualised return is approx 12%, US Equities annualised return approx 14% (none are inflation adjusted). The drawback of holding equities during this period is that it experienced a max drawdown of about 30% without rebalancing. Using S&P as a guage is fine but I think Adam's portfolio is predominately growth oriented - whilst it gives outsized returns, one should also expect higher volatility and larger drawdowns.
Other than from a nominal interest rate versus gdp growth rate pov, In my humble opinion regarding debt sustainability of a country (or any entity in general)
Looking at debt (or debt to gdp alone) is really meaningless.
Just like when we analyse a company, we look at the other parts of balance sheet (eg. Liquid assets enough to pay off debts etc.) and the income statement (whether nett income can cover the the debts owed, whether interest coverage ratio is healthy etc . In fact, for strong cash cow companies, having a nett debt to EBITA of 3 times is still consider quite ok for most cases)
So for a country like USA, 1) it has a money printer that prints out the world reserve currency 2) its debts owed are mostly in usd, owed to itself. It can also print itself out of the mess 3) its annual GDP can easily cover its interest owed within two years
For China, it’s a black box for sure. However, from just by scraping the surface of media articles, the central banks have a lot of reserves/assets and being a command and control country, the debt level Shld be sustainable.
For emerging countries where most of their debts are owed in usd and other currencies, that’s where things become unsustainable when their economies go down. Because they can’t simply print their way out of the mess. And with kleptocracy and cronyism plaguing some of these countries, it’s really tough since a lot of the money borrowed and earned flows into the pockets of these corrupted politicians
Oh, you answered my question...thanks
Hey Adam, the country debt ranking you shared is wrong and outdated. For example Portugal that comes right after the USAl is currently at 99%.
ASML video please, is it good buy for long term ?
Our economy struggling with uncertainties, housing issues, foreclosures, global fluctuations, and pandemic aftermath, causing instability. Rising inflation, sluggish growth, and trade disruptions need urgent attention from all sectors to restore stability and stimulate growth.
Thank you, Adam for educating us!
Fears of US debt crisis is likely overblown.
The debt level itself is meaningless without looking at other metrics.
Sovereign debt crises can happen at low levels of debt. Ukraine’s 1998 debt default - debt to GDP ratio below 30%.
High levels of debt don’t necessarily will cause a crisis. Japan’s debt ratio of well over 200% in the 2010s, which sparked little or no concern.
What matters is the relationship between nominal growth (g) and nominal interest rates (r). If g>r, think of debt dynamics like an airport’s moving sidewalk.
In the 2020s and beyond, with upward inflation bias, r will go up but not g.
Moving sidewalk may slow to a crawl or stop or even fully reverse.
However in the longer run, neutral rates may likely still be lower than in the last few decades, meaning r need not be particularly high. Prospects for some upside to growth from productivity are real, hence g can go up.
Philipp Carlsson-Szlezak and Paul Swartz
Can you do a video on ASML?
Very insightful and informative, once again! Thank you Adam
Our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
Fantastic perspectives!
Yes most investors before 1929 before the crash and great depression thinks the same way as most people and experts thinks like now- "nothing will happen, I have been hearing people calling stock market crash for the last 20 years and nothing happened. Buy the dip". People think what they till now in their life span have not experienced will never happen.
You’re simply the best
Berkshire i think is 1 of them
Thank You Adam. Your explanation is the clearest and most easily understood backed by irrefutable facts.
Solid video! AK back at his very best after a long holiday. Missed his videos but the 2 he released after the break more than make up for the long hiatus. Please keep them coming. Thoroughly insightful and enjoyable.
Great and informative video. Thanks for sharing.
Adam your missing a few geopolitical factors in your analysis as far as Brics is concerned
Could you make a video on which stocks to focus if Kamala wins the election? Thanks
Cannabis sector. CGC, ACB
Most likely male make up products
But the question is, don’t small companies buy products from big companies and consumers will also likely buy less products from big companies because of high borrowing costs so would that be a domino effect? Who’s gonna buy products from Apple, Microsoft and Amazon? Somehow they will also get affected.
many thanks once again!
Adam the goat 🐐 of the stock market 📈
I am looking forward to every new video from you Adam, but this one was really fantastic. Thank you for that! 👍
Thanks Adam, can you analyse Palo Alto please, not sure at what price to buy it , thx
Excellent video Adam. While the astonishing Debt Ceiling is nerve racking, your point is valid. Staying invested in those companies you mentioned are way to go. I think AI revolution will cause a paradigm shift in the economy and what we see out there hasn’t even scratched the surface yet. AI agents across many scenarios will create opportunities for companies in ways, we are not yet comprehending.
Have you considered Brookfield Corporation (BN) & Brookfield Asset Management (BAM) as interest rates going down. I have been looking into it and started position with intention to add more. I think they are better alternative to Blackrock which I owned before and got called out of it during Covered Call play. I think Blackrock is too expensive now.
Singapore debt is 163.9% where is the indicator? How come from Japan to Greece then Venezuela? Singapore 3rd highest
SG debt is domestic debt owed to its citizens via the cpf. easier and more flexible to manage bc not external debt.
Singapore has no debts
singapore's debt is basically father lending money to son for buying a house. it is net zero if you consider how much the son owe's singapore
Singapore actually don’t need debt , but because their sovereign rating is high 90% of those debt is investment type . So they borrow at 3% on their reputation and invest and get returns of 5-12% and keep the difference . Greece are mostly past and current govt spending .
Man of knowledge & wisdom...greatly appreciated !
Can yoh do a video on este lauder
The price for such wanton printing of money is passed on to the rest of the world as inflation. We are all footing the bill for all their fiscal overspending.
How about US bonds or TLT? I have quite a lot...
Thank you from South Africa Adam. Very educational and informative video. I have been following you and Greg manarino for past 5 years and you just gave me so much clarity and a huge relief with al the worrying talk Gregory does about US debt.
You one of his Lyons ? 🤣😂😅🤧
Thank you a lot for the insight.
Mt morning breakfast is an Adam Khoo's video. Thank you buddy!
Pls do entitlements and defense spending. And why is Bank of America and others having paper losses by holding US bonds
A smell recession fears in Adam’s 👀
Is it true that BRICS are buying up the gold ?
What’s the difference between US government debt and china debt?
Thank you Boss
Adam the legend.
What if all the BRICS just trade exclusively in gold instead of looking for a united currency?
they already have a BRICS chain cryptocurrency
The mastah is back ! Txs for this informative video.
the best contents as always
smci hold or sell? 😮
Question: If the dollar crashes due to the government defaulting on the debt, global de-dollarization, or any other reason; and you hold stocks, how do you plan on selling those stocks? Do you plan on selling them in worthless, hyperinflated currency?
Gold is the way to go. Maybe real estate, but gold you can carry with you.
really...but they have 35T debt now, not 9T 2009, even if you say 4% is lower than 10% in 1980s, you are paying much more...right?
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
Excellent work.
Very smart guy 🙏
Great video !!
Thank you Adam! Always so good!
Thank you again Adam.
Hi Adam. Long time no see. Gotten an invitation. Are you and alson coming to msia 18 jan 25?
Thank you Adam Khoo, The 'I' in BRICS does not belong.
Very educational and great timing considering all the Interest rate FUD now 👍
The US stock market seems to be going up everyday, are there any particular sector that you are looking at buying at the moment?
You missed the Aussie dollar :)
Hey adam, due to the declining interest rate ive actually been stock piling on tlt, in ur opinion is that a bad move at this moment?
Way i see it in 35 years US debt is going to be unsustainable unless US creates hyperinflation...
Do a video on TSLA 😅
Great job, Adam!
Portugal with 99% debt-gdp in 23'
Best Info.sir.
Thanks Adam, blessings
nice call microsoft huge gap down...
Russia is not a communist country. While it was once part of the Soviet Union, which was a communist state, Russia today is considered a federal semi-presidential republic with a mixed economy
us just gonna print dollars. so if youre holding dollars, youre purchasing power gonna erode everytime dollars supply increase. they call it inflation but it actually dollars buying power getting more weak. just look at gold-usd. roman coin today still had buying power even tough ancient rome has gone. because its gold.
Weaker currencies, which is every currency over all lengths of time is the argument for pro-bitcoin. It will ONLY grow in the long run. You should have some Adam.
Neither the collapse of the Roman empire nor the British empire happened overnight. It may not happen in my lifetime, but I do think the US is losing on the global stage if it does not reinvent itself. I will not rule out the BRICS gaining popularity as more and more countries join. Particularly poorer nations who have grown weary of the hegemony of the western Europe and US
I made a shit load on Bitcoin. Now going to channel it back to stocks
yes corect if goverment have dept so what i dont care , i buy only good companys nvda , gogle , etc etc tanks master adam
Since the debt crisis could unleash carnage on the stock market leading to economic downturns at some point. We need to be prepared for potential market volatility. how can I secure my $600K stock portfolio against declining?
Put it in gold, but this is not something that happens over night. It will be a gradual process.
Adam is gonna have to be addressed as Andrea Khoo tomorrow
Palanthir, which relies on US government contracts
I can't live without Google maps!
I am a new investor / trader. I learned a lot from your free videos by tapping into your decades of investing experience. You are a great teacher, entertaining too! Thanks for sharing your knowledge and experience. I am up 10% so far after I started investing and trading on 8 Aug 2024. I want to make more profits and join your paid programs down the road. Thanks Adam！
Imo the dollar won’t collapse, the process is likely slow and long process (it will be like decades) collapse of US dollar benefits no one.. more importantly, there is no other better alternatives. None of the countries in the world would want to see a sudden collapse of dollar anyway. What they want is multi-polar, more alternative.
No it's going to be slow and accelarate the debt will cross 40 trillion end of the decade
The one who bet against US will broke…JP Morgan
we dont care of the debt if assets value is much higer as collateral and if gdp growth rate is here….ME