Okay folks, so I know that this market is a walking talking dumpster fire. You may say, hey, you know what? It's time to give up the markets and try out a new and more fulfilling hobby that costs a lot less money. Like I don't know. Frequent divorcing after all.

Bezos seems to be having a good time and he's only on his first divorce. Imagine how happy he might be after a few more. But today in this short video, I want to explain to you why it actually makes a lot of sense to be incredibly bullish over the long run, even if you are incredibly bearish over the short to medium run. I want to explain to you why the bullish Phoenix will once again rise from the Powell ashes.

And the only thing that I ask in return is that you hit that ravishing like button and also subscribe. Feeling a little depressed in this market condition? Are you? well? make sure you know that the best prescription is a subscription. Okay, so I want to start with number one. Inflation feeds into long-term earnings growth.

So when inflation first hits, companies are able to pass pricing pressure onto consumers and excess capital allows them to report record profits even easier. But as inflation gets out of control, especially if it's being sped up by commodities and crucial components in a supply chain, Eventually, that changes and profit margins get destroyed alongside consumer purchasing power. And then the Fetty Fed raises rates, weakening the consumer and the economy even more, and of course hammering the stock market. But before you get fed up at its core, long-lasting inflation caused by a long-term expansion of the money supply is actually a pretty big positive for stocks.

Eventually, when the cycle turns back to bullish and the Fed's actions are behind us, all those excess dollars end up rinsing through the system again and again and create higher and higher profits sped up by future further money printing, because of course we never learn our lesson. In 2020 to 2021, the M2 money supply grew quite a lot. an unprecedented 42 percent, far more than the economic balance was able to absorb. M2 includes cash in circulation, checking and savings accounts, and other readily available personal accounts.

A 42 increase in that supply is catastrophic on the other side, when you have no supply of goods and services to back up what those dollars are chasing. And so right now, while the Fed is trying to put massive brakes on this economy, while we're going 150 miles per hour down a hill, well still, most of that money is still going to end up being in circulation. So on the other side of this, when the economy starts picking up again, all of a sudden, that money is going to make its way to the bottom lines of many different corporations, helping curb the recovery in a massive, massive way. And the eventual pausing of interest rate increases or complete reversal, of course, will cause people to once again want to pay multiples on those earnings.

Maybe not to the extent that we saw a pre-tightening period, but to some extent. The second reason to be bullish is that the government will bail you out every single time on a wide scale In order for the economy to work as smoothly as possible. the Federal government and or the Feds step in almost every single time. Something bad happens right now.

because of inflation. The economy's interests are adverse, the stock market's interests, but over the long run, the economy and economic growth trajectory is completely in line with the stock market's trajectory and the government wants both to do very, very well. Why does the government care about the stock Market? Well, in order to get a rapidly growing economy, you need to incentivize people to use their capital to risk their capital in innovative new companies and technologies and the growth of different businesses. You need people to be taking on risk to go out into the marketplace and come out with new products and services that can create new quality of life adjustments, new quality of life improvements, and more importantly, jobs that can then go and feed into the rest of the economy.

And you need that to be happening all the time. You want companies that are growing to see huge capital inflows so that they can grow even faster. So over the long run, you have to put in policies that encourage that investment so that you keep getting growth from that category. But even more practically, if you don't believe the government cares about growth, public pension funds have 61 of their assets in stocks.

Most other types of retirement accounts also have the majority of their assets in stocks. Which means a long-term crashing market is an existential threat to every single generation. As they retire, it creates swarms and swarms of angry voters. and of course, threatens the electability of politicians who haven't created policies that cause stocks to go up over the long run.

at the end of the day. people, they vote with their money. Outside of that, you could also say there's a personal incentive. Politicians are very, very heavily invested in the market because they know at the end of the day, the cards are stacked in their favor.

According to insider, more than 220 members of Congress held individual stocks in 2020. They are not going to enact policies, at least not intentionally. Some of them are definitely doofuses, but they're not going to enact policies that over the long run, hurt their personal wealth and hurt their re-electability chances. In this life, you can always count on three things: death, taxes, and the outperformance of Nancy Pelosi's portfolio.

These are simply universal truths, considering that the economy and the stock market are intertwined, and a lot of the benefactors of the stock market are structurally intertwined with the economy, and are structurally intertwined with the political aspirations of politicians in power and the most influential wealthy Americans and everyday people who are trying to just save for retirement. Every single person in society wants the stock market to go up over the long run, except for maybe the Anarchists. and so you will find that government bails it out every single time. It's just a matter of waiting and watching.

The third reason to be bullish and building on what we just said is that we know how this game is played because we've seen different iterations of this cycle over and over again. The Us government and many other governments have enacted a clear spending trend and overall governance trend that depends on what over leveraging over printing and of course, over dancing. It's gotten so bad that investors and anybody with money knows that short term hikes and interest rates, unwinding of balance sheets, and even dips in overall government spending and stimulus are almost always temporary and over the long run are just going to be accelerated, which means the value of even the biggest, most important currency in the world. the Usd is very, very bad over the long run.

I don't want to make a Taraluna analogy, but over the long run, the Usd is kind of like a very, very slow to collapse Terra Luna. And then when everything collapses, they're like, wait, how did we not see this coming So people know, hey, if I'm going to hold Usd, it's certainly not going to be over the long run. People are going to put their money in value generating companies that can either create consistent profits now that are growing over the long run or can create huge, huge profits in the future. Nobody's going to be holding long-term low interest rate bonds or cash for very, very long stretches of time.

The government will intentionally and unintentionally punish that sort of behavior again and again. The fourth and perhaps the most important reason to be bullish over the long run is because humans and companies get substantially more efficient and better at creating goods and services over the long run. Which does what well. it fuels more profits.

Cars, planes, trains, the printing press, telephones, cell phones, smartphones, cameras, Internet in no specific order have all come out over the last 100 years, improved over time and changed the game on productivity and what we can offer and how we can offer it substantially. The economy today looks so much different than the economy. Just 30 years ago, all of these things have completely changed the game in terms of what makes money and how much money we can make. Organizations are learning to be more and more efficient than ever before and will continue to do so back in the day.

If you screwed up a deal, you'd have to send your boss notice of that via messenger pigeon and then he'd send you back a deadly hawk with a message that says you're fired and then the hawk would peck you to death. Now we can just send you a simple text. The fact is that pretty much in every single field, technology has progressed faster in the last 100 years than it has in the last like 5 000 years. That is because progress is exponential, not linear.

If you start with a penny and you double that, every single day, it starts growing substantially about a month. In that's kind of how it works when you think of economic and human progress and development. It just compounds very, very rapidly. Although penny is probably a bad analogy because of how quickly it's losing value.

But whatever. And finally, if you look at the last 100 years in 1929, the Roaring 20s speculative highs, the S P 500 was at about 30 points. Today it's at about 3 700. 30 to 3 700.

Now adjusted for inflation, Markets at 1929 heights were actually at about 500. There are two huge implications of this. number one: Holy crap. Inflation helps markets a lot.

And holy shite. Earnings growth and earnings development help companies a lot as well. Now, just to be completely clear, I wasn't actually alive back then. I know some people might be confused because I am starting to get some gray hair, but this is just me looking at historical data.

But the data dating back to the Great Depression suggests indisputable evidence that missing out on the long-term trend of the market is a big mistake because the long-term trend is pumped by human innovation, government overspending, and over-printing and fed policies. Of course, popping multiples. Those things can ebb and flow quite a bit. But the long-term trend is pretty damn clear, and it's curved in the favor of things going up.

It's true that economies and stock market valuations don't always have to go up forever, but in my view, there's only a few situations where they wouldn't. And let me tell you, in those scenarios, stock market pricing is going to be the least of your concerns. But anyways, folks, that caps off today's video also for our Americans watching, I hope you had a great Fourth of July with your family. I flew out here to New York with my girlfriend and we had a good time.

We got to see some fireworks and had some good food. Anyways, have a good rest of your day. Make sure to hit that ravishing like button and subscribe button below. We have extended our Fourth of July sale on ziptraderu coupon code America50.

We'll get you 50 off our program and lifetime access to it that will now be expiring on Friday. link below. Make sure to check it out if you haven't already have a good one folks and I'll see you in the next video.