Macro Setup: The guest argues the US economy is increasingly dependent on asset bubbles, creating a K-shaped environment where asset owners feel wealthy while wage earners struggle.
US Equities: The S&P 500’s elevated CAPE (~39) is flagged as bubble-like, with parallels to 1929 and 2000 and risks from buy-the-dip behavior and eventual capitulation.
US Housing: Housing is portrayed as a low-probability bet given the extreme divergence of prices versus inflation/wages, implying likely mean reversion via lower prices or much higher incomes.
Gold: Gold is highlighted as a superior risk-adjusted alternative that has outperformed at points and carries lower downside risk compared to richly valued US equities.
Risk Management: Emphasis on probabilities over certainties, advocating contrarian strategies to protect and potentially grow wealth if asset bubbles deflate.
Opportunistic Investing: Suggests seeking undervalued markets and assets (e.g., past case of Greek equities) rather than chasing bubbles in housing or broad US equities.
AI Bubble Note: Mentions a current AI bubble as part of broader overvaluation risks, reinforcing the need for disciplined positioning.
Transcript
Hello fellow rubble capitalists. Hope you're well. So the fatal flaw with the UN with the US economy, excuse me, has just been exposed. What I mean by that is the mainstream media is starting to pick up on this. Something that we all know and have known for quite some time. But let's get into this article from CNBC and you guys are going to see exactly what I'm talking about. Then we're going to go ahead and connect some dots here. So, first and foremost, let me do the screen share. And there we go. All right. Over to CNBC. Check this out, guys. And I know after you see the title of this article, you're going to be like, "Uh, yeah, duh. Thanks for coming on board here. We've been talking about this for three years. For heaven's sakes, the CNBC says there's a shocking disparity." Well, shocking to those of you who haven't even been paying attention, but to anybody that goes out to a Walmart or to a Target or just asks around to normal people, for heaven's sakes, this is not shocking. This is something that is very wellnown. So, they say there's a shocking disparity between how highinccome and lowincome earners feel about the economy. You don't say. Key talking points. JP Morgan data shows how Americans are different in different income brackets perceive the economy. An analyst said the data shows notifable bifurcation between income groups. Right? So look, did we really need data to quantify this or did we just need some good oldfashioned common sense? And I want to point out that they actually reference the Kshaped economy right here. You guys can see this K-shaped economy. So this is something that so many people have been talking about and you but if you discuss the K-shaped economy, you're kind of dismissed as a crank and you're like, "Oh yeah, you're just one of those, I don't know, one of those Austrian people or or you're just one of those people that like to complain. You're just one of those doom and gloomers. you don't realize that the economy is booming for everybody. Or remember what the mainstream media has been saying, the way they were gaslighting you is they're saying, "Well, you're you think the economy sucks, but that's because you're just sour grapes. You just don't realize how awesome the economy is." Remember, they said that when Biden was in office. Well, this is all political. The only reason why people thinks the think the economy sucks is just because they don't like Joe Biden and they're just taking out their political views or their political bias on these surveys and polls about the economy, the job market, the labor market, etc. But now all of a sudden they're starting to come around and say, "Oh, well maybe there was something to that." And I want to point out the K-shaped economy can become the small H shape economy very very quickly. And I think this is the fatal flaw. It's another thing we talk about on this channel all the time. What I'm referring to, I'm talking about the fact that the US economy is totally totally propped up by asset prices. What is the K-shaped or what what produced the K-shaped economy? Was it that the people that are making a hundred grand a year think the economy is just fantastic all of a sudden or think the economy was just a lot more fantastic than they did in 2019? And that the people at the bottom of the income, let's say, spectrum all of a sudden think it's way way worse than it was in 2019. No, it's not like the people that have jobs paying 100 grand a year all of a sudden have all this massive additional purchasing power due to their income they didn't have before. Now they have massive amounts of purchasing power they didn't have before. But it's not a result of their income. It's a result of the fact that they own assets. They own assets. So if you have a house, you're like, "Woohoo! My equity has gone up by $150,000." Yes. Let's take that vacation. And then you're like, let's go out to that restaurant. Let's go out for drinks at TGI Fridays on Friday night. It's on me because look at this. I look at my Zillow quote every single day and it just keeps going up and up and up. I'm getting rich. It's all on paper, but who cares? I feel rich. The economy's on fire. Look at this. Donald Trump, he's doing every single thing that he said he'd do. I mean, the Republicans are jamming right now. He just negotiated a peace deal in the Middle East. The stock market's at all-time highs. I mean, what's not to like? For heaven's sakes, it's just anyone out there that's saying the economy sucks, well, they're just all Democrats. You see how it's just switched based on the political party or I'm just throwing that out there. But you see what I'm saying? And it's the exact same thing with the stock market, right? If you own stocks, if you have a 401k, well, then you're looking at this and you're like, "Woohoo! This is fantastic." Sure, we had uh or is this a up-to-date chart? Let's see here. No, no, no, no, no. Whoa, whoa, whoa. What are we doing here? There we go. There we go. I was looking for retardation day and I couldn't find it. There it is. Right there. So after retardation day, it's just gone straight up. And people with assets, their 401k, they're it's getting bigger and bigger and bigger and bigger and they feel rich and they look around. They're out there buying a brand new Mercedes. They're doing this. They're doing that. And they're saying, "Woohoo! Life is good." Now, it's true that if I had to live on my income, I would be living in a shack or I would be homeless. But that doesn't matter because my 401k is up by $500,000 in the last 5 years or whatever it is. So you see what I'm saying that the United States economy the fatal flaw is that it isn't it it it's the days of it being dependent upon productivity and what we're actually producing in the real economy. Those g those days are gone. They were gone a long time ago. what it's based on now is just simply asset bubbles. And you say, "Oh, George, well, you're just sour grapes. It it's it's it's not an asset bubble. The only reason you're calling it a bubble because you haven't been long the S&P 500 and you've missed out on all these gains." That's what you always hear in the comments. Yeah. Okay. Doom and gloomer. If I would have listened to you, I would have missed out on all these gains over the past three years. As if I've been 100% in cash. as if I haven't been in gold or maybe gold miners. So, by the way, for the S&P bros out there, if you were invested in the S&P 500 instead of gold, guess what? You would have missed out on all these gains in 2025 and you would have had a hell of a lot less downside risk. But we'll set that aside for a moment. Let's go over to the valuations. Oh, heaven forbid that we actually look at valuations of the S&P 500. Look at the cape ratio. Isn't that neat? 39. Wow. So, with this cape ratio thing, just remind me. Is it the higher the better? Um, no, no, no, no, no, no. Not the higher the better. It's Oh, what is it then? Oh, I see. Every single time we get to this point or at a point at this level, it usually doesn't end well. And we can see the average here. Let's just call it 20. And before the bust, that was one of the contributing factors of the Great Depression. Oh, we were at 31 and we're at 39 now. So 39 is better. No, no, no, no, no. 39 would most likely be worse. And look where we are with dot com. Now a lot of people say that right here. So 1997 right around 1998. You could have looked back and said, "Oh my gosh, we're higher than we were during the great crash, the market crash of 1929 that led to the Great Depression. Well, there's no way I'm going to buy." And then the S&P Bros would come in and say, "Oh yeah, what an idiot. He's going to miss out. he would have missed out on all these gains right here going into 1999 and into 2000. But we know what happened after 2000. The whole House of Cards came crashing down. So, was it a wise move to get in here at the beginning of 1999 or in 1998? I don't know. Depends how good of a trader you are. You see, the problem here is that most people, most retail investors, they're not trading. And if they are, they're not very good at it. So what they're going to do is they're just going to buy and hold and then they're just going to buy the dip. And then psychologically, they can't stay in the game. So they end up selling because it's the opposite wealth effect. And now they're scared sless because this is their entire retirement or this is the only possibility they have to retire is the S&P 500 because based on their job, there's no way they're going to retire on that. Absolutely not. Because their purchasing power, looking at it just through the lens of their job, has decreased massively since 2019. even if they're making over, let's say, $100,000 a year because their income, their nominal gains haven't kept up with the rate of consumer prices. Okay? So, what ends up happening is they buy and hold right around here because they listen to Dave Ramsey and they don't want to miss out on all these gains. And then what happens is it starts to go down and they're like, "Okay, you fearmongers, I'm just going to buy the dip." And they buy the dip here. And then they buy the dip here. And then they buy the dip here. And they buy the dip here. They buy the dip here. And then it goes back up. And like, oh my gosh. Oh, thank goodness. Thank goodness. Let me go online and try to find some sort of echo chamber and let me get some sort of confirmation bias here that I've done the right thing and I'm going to get rich again and I'm going to be able to retire. And then it kind of chops around and then it starts going down lower. And then here's where they capitulate and sell sell sell and swear off the stock market forever. And instead of that nice retirement on the the yacht traveling around to Europe, they end up getting a job at Walmart as a security guard. And this is the the the risks, let's say. But the problem here now that we have is the economy is far more dependent, way more dependent on the S&P 500 or the housing market as it was back during or uh than it was, excuse me, back during the dot blowup and the.com bust. So now let's go over to the housing market. And I love this chart because for anyone who says that housing is not in a bubble, I would present this chart to you. And now, does this mean that housing prices are going to go down? No. No. No. No. No. No. People tend to think that just because you're in a bubble, that means that everything's going to crash tomorrow. No. No. No. Absolutely not. Absolutely not. It can continue to go up for two or three years. Who knows how long? It could double, quadruple from here. But does that mean that it's smart to get in now? It depends. It depends. So, I always use the example of blackjack. Let's say you're sitting at the table and you've got a 19. Are you going to hit or are you going to stay? Now, what if I told you that the guy that hit, well, he got 21. He was dealt a two. Did he make the right move? Yes or no. Now, some of you will say yes, he did because he hit 21. And some of you will say, "No, he didn't. He made the wrong move because the probability of him getting that two was extremely low." And if he does that over and over and over again because the math, the odds are against him, inevitably he's going to lose. He's going to go bust. So that he might have got lucky, but that doesn't mean that what he did was correct. That doesn't mean that what he did had the odds in his favor, even though he just happened to get blackjacked. So it depends on where you fall, right? It depends on how you answer that question. So for me personally, and this isn't personal investing advice, but for me, I would say he definitely did the wrong thing because the right thing, win or lose, is doing something based on the probabilities being in your favor. Because if the probabilities are in your favor, and you do that over and over and over and over again, now all of a sudden it's inevitable that you win, not lose. So let's look at this black line. This is the CPI. And you'll notice, and by the way, the if you go back a 100red years longer, you'll notice that wages basically go up with the rate of inflation. Now, to varying degrees, right? You can have the higher wages go up a little more consistent and then the lower wages not keep up and then they kind of go back to it. They bounce around here. But for the most part over long periods of time, wages tend to stay consistent with the rate of inflation. Okay? So you can basically use this black line as a proxy for wages other than more recently where wages are going to be a lot lower due to what happened and all the economic distortions created by the government during the surveys sickness. So, I guess what I'm saying is if you look at this black line and if you use the black line for a proxy, it's actually even worse because what we're trying to do is we're trying to look at the price to income ratios. And so, the price to income ratios are even more extreme and are even worse than what we're showing here with this black line and red line. But just look at the delta. Look at the spread. Just look at those two lines and look where they are throughout history. In fact, let's do this. Let's have a lot of fun. Let's go all the way back to 1900. Let's go back to 1900. Now, can you see a difference between this red line and the black line? Can you see the difference between 1900 and let's say the 1970s? Answer, no. That's because they're basically tied at the hip. Then you get a little bit of a bump right here in 1990, but then you go right back down pretty much to its historic trend line. This would be the late 90s. So the punch line is for almost a hundred years. And by the way, it's longer than that because this chart, I've seen data that goes back to the 1800s and it's the exact same. Prices did not go up. They only inflated just like wages. They just stayed consistent with the rate of inflation. But then what happened is there was a disconnect. And that disconnect peaked out in, drum roll please, 2006 to where it was just so extreme that you had to come back down. and you came back down. Not in fact, if you really want to be technical about it, it didn't even come all the way back down to the black line. By then, the cash flow was fantastic. So, you had investors like me come in and that's what kind of propped it up. But now, look where we are. Look, look at this. So, you're going to tell me that betting that the real estate market is going to continue to go up, in other words, betting that this spread is going to continue to get more extreme. You're telling me that's the bet where the probabilities are on your side? Like, what are we talking about here? That that's hitting on a 19. Now, does it mean that you won't get blackjacked? No. You might get it. You might get blackjacked two or three times in a row, but I can assure you this is a low low probability bet. Now, you could have said that back in 2020 and you would have been correct. But does that mean that if you would not have bought a house in 2020, you would have just gone and you would have been all in cash? No. No. You would have done something else. I don't know. Maybe buy gold. maybe buy the the Greek stock market. Say, George, where on earth did you come up with that one? Did you know that the Greek stock market, which was extremely undervalued and had a bit of a catalyst there, has gone up more than the NASDAQ in the last 5 years. Bet you didn't know that. So, you see, it's not that we call something a bubble and then we're just all in cash and we're going to miss out on all these gains. No, you're going to take that. You're just going to go where the riskreward makes more sense. See, but the whole point here is there's an extremely high probability that these two lines get a hell of a lot closer. And they can do that one of two ways. Either prices can come down or incomes can go way up. Way up. So, what do you think's going to happen? What's your base case? especially look at looking at the deterioration in the labor market that we've seen over the past year something like that and then understanding that that K-shaped economy that CNBC is talking about and the entire US economy is predicated upon this spread this extreme delta that we have never seen before staying in place and it's also predicate ated upon these extreme valuations staying near 40 when historically they're right around 20 maybe maybe but it's all a game of probabilities there are no certainties so you get the punchline here the fatal flaw in the US economy is that it's completely dependent upon not just asset prices. But now we can safely say it is completely dependent upon asset bubbles. Asset bubbles. And if you think that's going to continue, well then fantastic. More power to you. But for me, George Gammon, I would much prefer just to sit back, play the odds, and find other opportunities, not in cash, but other opportunities where the riskreward makes a lot more sense. And on that note, I'm going to do a free training, webinar training, whatever you want to call it, because so many people watch my videos and they say, "Yeah, George, I get what you're saying. It totally makes sense. The fundamentals, they're definitely deteriorating." Or, "Oh my gosh, we're in a massive AI bubble right now. The housing market's in a bubble. Everything's in a bubble. But what on earth do I do about it?" It's exactly what this training is all about. So, I'm going to go through the contrarian strategies, let's say, that hedge fund managers, guys I know, use to actually invest, when they know things are in a bubble. So when they know things are at nosebleleed levels, when they know the probabilities don't make sense, what on earth do they do with their portfolio to not only protect their wealth, but hopefully actually grow their wealth? And then if if things do come crashing down, how are they positioned to where they can turn that potential crisis into a huge huge opportunity? That's what we're going to discuss on this webinar. It's October 29th and you can register for free. Excuse me. We'll put a link in the description below. And there's a huge bonus, huge bonus for Rebel Capitalist Live. Those people who attend the webinar are going to get a coupon code that takes the ticket for Rebel Capitalist Live from $599 all the way down to 99. And you're going to get that coupon code as a special bonus just for attending this webinar that's going to give you the cheat code for heaven's sakes as to how and what contrarian strategies you can use to invest in these crazy crazy times when we look around and see all of these financial bubbles. So you can join me October 29th again to register for free. You can go ahead and check it out. We'll put a link in the description below. All right, guys. Enjoy the rest of your evening. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you in the next video.
The Fatal Flaw Of The US Economy Was Just Exposed
Summary
Transcript
Hello fellow rubble capitalists. Hope you're well. So the fatal flaw with the UN with the US economy, excuse me, has just been exposed. What I mean by that is the mainstream media is starting to pick up on this. Something that we all know and have known for quite some time. But let's get into this article from CNBC and you guys are going to see exactly what I'm talking about. Then we're going to go ahead and connect some dots here. So, first and foremost, let me do the screen share. And there we go. All right. Over to CNBC. Check this out, guys. And I know after you see the title of this article, you're going to be like, "Uh, yeah, duh. Thanks for coming on board here. We've been talking about this for three years. For heaven's sakes, the CNBC says there's a shocking disparity." Well, shocking to those of you who haven't even been paying attention, but to anybody that goes out to a Walmart or to a Target or just asks around to normal people, for heaven's sakes, this is not shocking. This is something that is very wellnown. So, they say there's a shocking disparity between how highinccome and lowincome earners feel about the economy. You don't say. Key talking points. JP Morgan data shows how Americans are different in different income brackets perceive the economy. An analyst said the data shows notifable bifurcation between income groups. Right? So look, did we really need data to quantify this or did we just need some good oldfashioned common sense? And I want to point out that they actually reference the Kshaped economy right here. You guys can see this K-shaped economy. So this is something that so many people have been talking about and you but if you discuss the K-shaped economy, you're kind of dismissed as a crank and you're like, "Oh yeah, you're just one of those, I don't know, one of those Austrian people or or you're just one of those people that like to complain. You're just one of those doom and gloomers. you don't realize that the economy is booming for everybody. Or remember what the mainstream media has been saying, the way they were gaslighting you is they're saying, "Well, you're you think the economy sucks, but that's because you're just sour grapes. You just don't realize how awesome the economy is." Remember, they said that when Biden was in office. Well, this is all political. The only reason why people thinks the think the economy sucks is just because they don't like Joe Biden and they're just taking out their political views or their political bias on these surveys and polls about the economy, the job market, the labor market, etc. But now all of a sudden they're starting to come around and say, "Oh, well maybe there was something to that." And I want to point out the K-shaped economy can become the small H shape economy very very quickly. And I think this is the fatal flaw. It's another thing we talk about on this channel all the time. What I'm referring to, I'm talking about the fact that the US economy is totally totally propped up by asset prices. What is the K-shaped or what what produced the K-shaped economy? Was it that the people that are making a hundred grand a year think the economy is just fantastic all of a sudden or think the economy was just a lot more fantastic than they did in 2019? And that the people at the bottom of the income, let's say, spectrum all of a sudden think it's way way worse than it was in 2019. No, it's not like the people that have jobs paying 100 grand a year all of a sudden have all this massive additional purchasing power due to their income they didn't have before. Now they have massive amounts of purchasing power they didn't have before. But it's not a result of their income. It's a result of the fact that they own assets. They own assets. So if you have a house, you're like, "Woohoo! My equity has gone up by $150,000." Yes. Let's take that vacation. And then you're like, let's go out to that restaurant. Let's go out for drinks at TGI Fridays on Friday night. It's on me because look at this. I look at my Zillow quote every single day and it just keeps going up and up and up. I'm getting rich. It's all on paper, but who cares? I feel rich. The economy's on fire. Look at this. Donald Trump, he's doing every single thing that he said he'd do. I mean, the Republicans are jamming right now. He just negotiated a peace deal in the Middle East. The stock market's at all-time highs. I mean, what's not to like? For heaven's sakes, it's just anyone out there that's saying the economy sucks, well, they're just all Democrats. You see how it's just switched based on the political party or I'm just throwing that out there. But you see what I'm saying? And it's the exact same thing with the stock market, right? If you own stocks, if you have a 401k, well, then you're looking at this and you're like, "Woohoo! This is fantastic." Sure, we had uh or is this a up-to-date chart? Let's see here. No, no, no, no, no. Whoa, whoa, whoa. What are we doing here? There we go. There we go. I was looking for retardation day and I couldn't find it. There it is. Right there. So after retardation day, it's just gone straight up. And people with assets, their 401k, they're it's getting bigger and bigger and bigger and bigger and they feel rich and they look around. They're out there buying a brand new Mercedes. They're doing this. They're doing that. And they're saying, "Woohoo! Life is good." Now, it's true that if I had to live on my income, I would be living in a shack or I would be homeless. But that doesn't matter because my 401k is up by $500,000 in the last 5 years or whatever it is. So you see what I'm saying that the United States economy the fatal flaw is that it isn't it it it's the days of it being dependent upon productivity and what we're actually producing in the real economy. Those g those days are gone. They were gone a long time ago. what it's based on now is just simply asset bubbles. And you say, "Oh, George, well, you're just sour grapes. It it's it's it's not an asset bubble. The only reason you're calling it a bubble because you haven't been long the S&P 500 and you've missed out on all these gains." That's what you always hear in the comments. Yeah. Okay. Doom and gloomer. If I would have listened to you, I would have missed out on all these gains over the past three years. As if I've been 100% in cash. as if I haven't been in gold or maybe gold miners. So, by the way, for the S&P bros out there, if you were invested in the S&P 500 instead of gold, guess what? You would have missed out on all these gains in 2025 and you would have had a hell of a lot less downside risk. But we'll set that aside for a moment. Let's go over to the valuations. Oh, heaven forbid that we actually look at valuations of the S&P 500. Look at the cape ratio. Isn't that neat? 39. Wow. So, with this cape ratio thing, just remind me. Is it the higher the better? Um, no, no, no, no, no, no. Not the higher the better. It's Oh, what is it then? Oh, I see. Every single time we get to this point or at a point at this level, it usually doesn't end well. And we can see the average here. Let's just call it 20. And before the bust, that was one of the contributing factors of the Great Depression. Oh, we were at 31 and we're at 39 now. So 39 is better. No, no, no, no, no. 39 would most likely be worse. And look where we are with dot com. Now a lot of people say that right here. So 1997 right around 1998. You could have looked back and said, "Oh my gosh, we're higher than we were during the great crash, the market crash of 1929 that led to the Great Depression. Well, there's no way I'm going to buy." And then the S&P Bros would come in and say, "Oh yeah, what an idiot. He's going to miss out. he would have missed out on all these gains right here going into 1999 and into 2000. But we know what happened after 2000. The whole House of Cards came crashing down. So, was it a wise move to get in here at the beginning of 1999 or in 1998? I don't know. Depends how good of a trader you are. You see, the problem here is that most people, most retail investors, they're not trading. And if they are, they're not very good at it. So what they're going to do is they're just going to buy and hold and then they're just going to buy the dip. And then psychologically, they can't stay in the game. So they end up selling because it's the opposite wealth effect. And now they're scared sless because this is their entire retirement or this is the only possibility they have to retire is the S&P 500 because based on their job, there's no way they're going to retire on that. Absolutely not. Because their purchasing power, looking at it just through the lens of their job, has decreased massively since 2019. even if they're making over, let's say, $100,000 a year because their income, their nominal gains haven't kept up with the rate of consumer prices. Okay? So, what ends up happening is they buy and hold right around here because they listen to Dave Ramsey and they don't want to miss out on all these gains. And then what happens is it starts to go down and they're like, "Okay, you fearmongers, I'm just going to buy the dip." And they buy the dip here. And then they buy the dip here. And then they buy the dip here. And they buy the dip here. They buy the dip here. And then it goes back up. And like, oh my gosh. Oh, thank goodness. Thank goodness. Let me go online and try to find some sort of echo chamber and let me get some sort of confirmation bias here that I've done the right thing and I'm going to get rich again and I'm going to be able to retire. And then it kind of chops around and then it starts going down lower. And then here's where they capitulate and sell sell sell and swear off the stock market forever. And instead of that nice retirement on the the yacht traveling around to Europe, they end up getting a job at Walmart as a security guard. And this is the the the risks, let's say. But the problem here now that we have is the economy is far more dependent, way more dependent on the S&P 500 or the housing market as it was back during or uh than it was, excuse me, back during the dot blowup and the.com bust. So now let's go over to the housing market. And I love this chart because for anyone who says that housing is not in a bubble, I would present this chart to you. And now, does this mean that housing prices are going to go down? No. No. No. No. No. No. People tend to think that just because you're in a bubble, that means that everything's going to crash tomorrow. No. No. No. Absolutely not. Absolutely not. It can continue to go up for two or three years. Who knows how long? It could double, quadruple from here. But does that mean that it's smart to get in now? It depends. It depends. So, I always use the example of blackjack. Let's say you're sitting at the table and you've got a 19. Are you going to hit or are you going to stay? Now, what if I told you that the guy that hit, well, he got 21. He was dealt a two. Did he make the right move? Yes or no. Now, some of you will say yes, he did because he hit 21. And some of you will say, "No, he didn't. He made the wrong move because the probability of him getting that two was extremely low." And if he does that over and over and over again because the math, the odds are against him, inevitably he's going to lose. He's going to go bust. So that he might have got lucky, but that doesn't mean that what he did was correct. That doesn't mean that what he did had the odds in his favor, even though he just happened to get blackjacked. So it depends on where you fall, right? It depends on how you answer that question. So for me personally, and this isn't personal investing advice, but for me, I would say he definitely did the wrong thing because the right thing, win or lose, is doing something based on the probabilities being in your favor. Because if the probabilities are in your favor, and you do that over and over and over and over again, now all of a sudden it's inevitable that you win, not lose. So let's look at this black line. This is the CPI. And you'll notice, and by the way, the if you go back a 100red years longer, you'll notice that wages basically go up with the rate of inflation. Now, to varying degrees, right? You can have the higher wages go up a little more consistent and then the lower wages not keep up and then they kind of go back to it. They bounce around here. But for the most part over long periods of time, wages tend to stay consistent with the rate of inflation. Okay? So you can basically use this black line as a proxy for wages other than more recently where wages are going to be a lot lower due to what happened and all the economic distortions created by the government during the surveys sickness. So, I guess what I'm saying is if you look at this black line and if you use the black line for a proxy, it's actually even worse because what we're trying to do is we're trying to look at the price to income ratios. And so, the price to income ratios are even more extreme and are even worse than what we're showing here with this black line and red line. But just look at the delta. Look at the spread. Just look at those two lines and look where they are throughout history. In fact, let's do this. Let's have a lot of fun. Let's go all the way back to 1900. Let's go back to 1900. Now, can you see a difference between this red line and the black line? Can you see the difference between 1900 and let's say the 1970s? Answer, no. That's because they're basically tied at the hip. Then you get a little bit of a bump right here in 1990, but then you go right back down pretty much to its historic trend line. This would be the late 90s. So the punch line is for almost a hundred years. And by the way, it's longer than that because this chart, I've seen data that goes back to the 1800s and it's the exact same. Prices did not go up. They only inflated just like wages. They just stayed consistent with the rate of inflation. But then what happened is there was a disconnect. And that disconnect peaked out in, drum roll please, 2006 to where it was just so extreme that you had to come back down. and you came back down. Not in fact, if you really want to be technical about it, it didn't even come all the way back down to the black line. By then, the cash flow was fantastic. So, you had investors like me come in and that's what kind of propped it up. But now, look where we are. Look, look at this. So, you're going to tell me that betting that the real estate market is going to continue to go up, in other words, betting that this spread is going to continue to get more extreme. You're telling me that's the bet where the probabilities are on your side? Like, what are we talking about here? That that's hitting on a 19. Now, does it mean that you won't get blackjacked? No. You might get it. You might get blackjacked two or three times in a row, but I can assure you this is a low low probability bet. Now, you could have said that back in 2020 and you would have been correct. But does that mean that if you would not have bought a house in 2020, you would have just gone and you would have been all in cash? No. No. You would have done something else. I don't know. Maybe buy gold. maybe buy the the Greek stock market. Say, George, where on earth did you come up with that one? Did you know that the Greek stock market, which was extremely undervalued and had a bit of a catalyst there, has gone up more than the NASDAQ in the last 5 years. Bet you didn't know that. So, you see, it's not that we call something a bubble and then we're just all in cash and we're going to miss out on all these gains. No, you're going to take that. You're just going to go where the riskreward makes more sense. See, but the whole point here is there's an extremely high probability that these two lines get a hell of a lot closer. And they can do that one of two ways. Either prices can come down or incomes can go way up. Way up. So, what do you think's going to happen? What's your base case? especially look at looking at the deterioration in the labor market that we've seen over the past year something like that and then understanding that that K-shaped economy that CNBC is talking about and the entire US economy is predicated upon this spread this extreme delta that we have never seen before staying in place and it's also predicate ated upon these extreme valuations staying near 40 when historically they're right around 20 maybe maybe but it's all a game of probabilities there are no certainties so you get the punchline here the fatal flaw in the US economy is that it's completely dependent upon not just asset prices. But now we can safely say it is completely dependent upon asset bubbles. Asset bubbles. And if you think that's going to continue, well then fantastic. More power to you. But for me, George Gammon, I would much prefer just to sit back, play the odds, and find other opportunities, not in cash, but other opportunities where the riskreward makes a lot more sense. And on that note, I'm going to do a free training, webinar training, whatever you want to call it, because so many people watch my videos and they say, "Yeah, George, I get what you're saying. It totally makes sense. The fundamentals, they're definitely deteriorating." Or, "Oh my gosh, we're in a massive AI bubble right now. The housing market's in a bubble. Everything's in a bubble. But what on earth do I do about it?" It's exactly what this training is all about. So, I'm going to go through the contrarian strategies, let's say, that hedge fund managers, guys I know, use to actually invest, when they know things are in a bubble. So when they know things are at nosebleleed levels, when they know the probabilities don't make sense, what on earth do they do with their portfolio to not only protect their wealth, but hopefully actually grow their wealth? And then if if things do come crashing down, how are they positioned to where they can turn that potential crisis into a huge huge opportunity? That's what we're going to discuss on this webinar. It's October 29th and you can register for free. Excuse me. We'll put a link in the description below. And there's a huge bonus, huge bonus for Rebel Capitalist Live. Those people who attend the webinar are going to get a coupon code that takes the ticket for Rebel Capitalist Live from $599 all the way down to 99. And you're going to get that coupon code as a special bonus just for attending this webinar that's going to give you the cheat code for heaven's sakes as to how and what contrarian strategies you can use to invest in these crazy crazy times when we look around and see all of these financial bubbles. So you can join me October 29th again to register for free. You can go ahead and check it out. We'll put a link in the description below. All right, guys. Enjoy the rest of your evening. As always, make sure you're standing up for freedom, liberty, free market, capitalism. We'll see you in the next video.