Transcription
The Fed just hit the reset button on your money, and you need a plan because the Fed is printing again. And that printing is about to ramp up over the next few months, and I can prove this with their own numbers.
So, since December, the Fed's balance sheet has grown by $189 billion, and it hasn't shrunk for a single month in 2026. And that shouldn't be possible because the man running the Fed right now, Kevin Walsh, is meant to be the toughest chairman in decades, allegedly. So, rate hikes on the table, 2% inflation pledge, a strong dollar. Uh, that's the story, anyway. But the numbers, they say the opposite. And today, I'm going to show you the tricks he's using to cover that gap. Uh, and this matters whether you hold stocks, gold, have a 401k, or any kind of retirement account, really. And it matters most of all if you, if you just on a salary, and you keep savings in your bank, uh, because you're going to be the one paying for this. So, let's talk about why and what I'm doing about it.
So, my name's Nick. I've been a professional investor, an unprofessional trader for 25 years. Before I start, I'm not a financial advisor, and this is not an inducement to buy or sell any assets. And as always, don't take financial advice from some random dude on YouTube. All right.
So, to understand this whole scam, allegedly, [laughter] you, you, you first need to know what actually happened in December because almost everyone has forgotten about this already. On December 1st, 2025, the Fed ended something called QT, quantitative tightening. I always mess up that word. Uh, a quick explainer for anyone new to this because it's a lot simpler than it sounds. It sounds very complex. The Fed has two modes, QE, quantitative easing, uh, and that's when they create new dollars and push it into the system. And QT, quantitative tightening, and this is the opposite, when they pull dollars back out of the system and kind of delete them from existence. So, there, I mean, close enough, anyway. So, there, there's also a transition phase between the two where they allegedly just maintain a balance, uh, allegedly.
So, uh, >> [laughter] >> think of it like a bar with a very dodgy and weird and creepy landlord, like most bankers, right? So, when he wants the party going, he pours a lot of free drinks all night, and when things get out of hand, he just starts collecting all the glasses, not pouring free drinks anymore. So, the free drinks in this analogy is printing money, and when they take all the glasses back, it's, it's removing the money, right? So, in 2020, they printed trillions, and we got the fastest stock market crash in history, followed by the fastest rally in history, both in the same year. Then in 2022, the bill for that arrived, the worst inflation in 40 bloody years. And the wound is still painful today, by the way. So, from 2022 to 2025, the Fed was collecting glasses, trying to drain the printed money back out. Then on December 1st, they just stopped.
On December 2nd, 1 day later, they injected $13.5 billion into the system, one of the biggest 1-day injections since the pandemic. So, a week after that, they committed to creating roughly $40 billion of new money a month. That, that was the reset button, essentially. December 1st, 2025, the free drinks, they just started coming back.
Then something interesting happened. Trump's new Fed chairman, Kevin Warsh, took the chair, and the whole story apparently flipped suddenly. Uh, because the headlines were saying, "Well, Kevin Warsh is an inflation hawk." So, Warsh ran his first meeting last month, hinting at rate hikes instead of cuts, all of a sudden. And the dollar hit a 1-year high. So, the market believes we've got a tough new sheriff who's going to defend your dollars. And I'll admit that part of his act, or his act, is convincing. But, but, but, but watch what they do, never what they actually say. I say that a lot on this channel, because it's true. So, let's break down what they're actually doing. Right.
So, let's start with this $189 billion, because I don't want you thinking I made up some scary number. I looked at the Fed's own balance sheet this morning. It's public data. You can check it yourself. So, when QT ended on December 1st, the balance sheet stood at around about $6.54 trillion. As of July 1st, it's $6.7 trillion. So, while Walsh stands on at the podium talking about holding the line, the machine behind him is actually quietly printing money. The glasses are not being collected anymore, guys. It, it, and the taps are running, also.
But, there's another point. The other point is what made me want to make this video because the Financial Times just caught something brilliant. And I love reading the Financial Times. It's one of my, this is not a sponsor, by the way. It's just one of my favorite, uh, uh, media outlets. So, when Walsh, uh, sat in front of the Senate for his confirmation, he said this, and I'm quoting him directly here. He said, "The measures I prefer are looking at things that are called trimmed averages, where we take out all of the tail risk, all of the one-off items." And I'm going to translate this central bank scammer speak into plain English. He is saying that the current way that they read inflation is not manipulated enough, uh, that inflation is too high. So, he wants to remove all the stuff that makes inflation read too high and make it lower, allegedly. And, and what's pushing prices up the most right now is tariffs. So, the, the stuff going up the most right now, uh, they're just going to remove it from the reading. It, it's like standing on the bathroom scales, not looking at, not liking the number you see. So, then you just pull over your wife and you get her to stand on it and you use her weight. I mean, it just makes absolutely zero sense. So, right now his trimmed gauge is reading below core inflation, and he's just gone all in on this friendlier number because, uh, publicly it sounds better, right? Uh, and that's on, that's on the record right now.
So, why would he do this? What, why would a Fed chairman want a gauge that reads really low for inflation? Well, th-, this is where the story gets fun. So, put yourself in the government's shoes. Uh, America, they owe about $40 trillion in debt right now, and, uh, they have to pay roughly $1 trillion a year on interest on that debt. So, every 1% on interest rates, it costs them $400 billion a year. That's, uh, that's most of the military budget every year just from 1%, right? So, they are absolutely desperate for cheap money right now. But, but you can't stand up and say we're cutting rates while inflation is running past 4%. People would riot, and they should, right? So, you need a story, and here's the story. This is the whole scam allegedly in one go. Talk like a hawk. Talk like a money hawk like Kevin Walsh is talking right now. So, so the dollar stays strong and everyone trusts you. Point at the gauge and, and tell them how brilliantly low inflation is, even though in reality it's actually high because you're just making up a number. Then all you have to do is wait for weak job numbers, and they need to be weak for a little while. The first one just landed, by the way. America, 57,000 jobs in June when Wall Street expected about 110,000, and then the two months before that, they got revised down by another 74,000. Now, now you have a ready-made script for, for this reset. Inflation is fine. Look at my gauge, but the workers, they're hurting. They're hurting so bad, so we have no choice but to cut and print money. So, he gets to turn the easy money back on while everyone still thinks he's the tough guy. And, and the crazy thing is, the smart money is already moving. So, the gold jumped the day the job number came out. It, it was the first move up for gold in five weeks. It was the first positive week for gold in five weeks. So, the people with real money, they watched that 57,000 flash up for, for the job number and they just said, "I screw this. We're behind gold." And, you know, probably a smart move, right? They didn't even wait for the press conference because you can't print gold, so that's why they're buying it.
Actually, no, there's, there's another thing. Let's go back 50 years instead because we've seen this exact same trick before, and I want to talk about this. I've not told this, this history story on my channels before, so this is a good one. So, 1973, the Fed chairman is a man called Arthur Burns. I talked about him the other day, but not in this context. He's a very serious guy, a very serious academic guy. President Nixon is leaning on him constantly to keep money cheap, and we know that because Nixon taped himself doing it, which is, you know, an extremely Nixon thing. He just taped himself committing crimes. Crazy. Anyway, the oil embargo hit, energy prices go vertical, and Burns tells his staff that's, that it's a war problem, not a money problem. And then he just takes energy out of the inflation index. He just takes it out. He just says, "You know, I don't like these inflation numbers, I'm going to remove this," just like Kevin Walsh is doing. Then food prices explode. Burns, he blames the weather. He also blames anchovies, of all things. I mean, he actually did blame anchovies. It's, it's funny how he, go read the history on that. Anyway, so there was a terrible anchovy season off of Peru that year. Anchovies go into animal feed, so apparently the food inflation wasn't real either. It was just anchovies or whatever. So, he uses the anchovy thing to remove food out of the inflation index, which is like a quarter of the whole bloody index. And one of his own economists, a guy called Stephen, Stephen Roach or Steven Roach, wrote about this years later. He, he said that the staff just kind of just gulped and followed orders, right? So, used cars were next. They removed used cars from the index, mobile homes, even toys, I believe. Piece by piece, Burns was just removing stuff that wasn't suiting his narrative from the inflation index. That way they could pretend that inflation was lower. 65% of the price index had been ruled out as one-off noise, 65%. So, on paper, inflation looked manageable, but of course it, it, it, it does when you manipulate the numbers. I don't even have to say allegedly here because this is just recorded history, right? So, in the real world, by the end of that decade, inflation was, was double digits, right? The pretend number wasn't, but the real inflation was double digits, and it took the most brutal recession to kill it. And this is, and this magical figure that Burns made up, it got an official name, by the way. They called it core inflation. The measure that every government on earth quotes at you today was invented by a Fed chairman who was under pressure and didn't like what the real number said, so he made up his own number. And now we've got another one doing the exact same thing 50 years later. Right as the real numbers are starting to get ugly again, allegedly.
But this time, this is the bit that actually worries me. In Burns' years, the, the damage didn't land on the people with assets. Gold went from $35 an ounce at the start of the decade to over $800 an ounce by 1980. The damage landed on everyone who got paid in dollars and saved in dollars. And that's roughly where we are right now, I think, anyway. They've swapped the gauge and they've started printing again.
So, so let's talk about what this means for you and I. So, right now the official inflation rate is 4.17%, and that's not the trimmed one, that's the real CPI print. Average wages are growing at about 3.52%. Now, you look at those two numbers together and what do you see? The average American worked all year, probably got told that they did well, they got a raise, and they end of the year able to buy less than they did the year before, right? And that's absolutely crazy when you think about it. So, let me explain how this actually works because once you get it, you'll start spotting this everywhere. When new money gets created, it doesn't get posted through your letterbox. It goes into the markets, into lending, into asset prices. Prices at the shops rise, your, your wages chase them, but they never quite catch up, really. And the extra money you're spending flows through the till to whoever owns the shop, the shares, the property. So, when they print, the people who own stuff win, and the people who work for money, they pay for it. So, it's gone that way in every debasement in history, by the way. And no, it isn't fair. It's never bloody fair. But behave it or love it, that's just how the system runs. So, you, you better decide which side of it you want to be on.
Now, let me push back on myself a bit because, you know, in my videos I, I like to kind of counter myself. That way you see all sides of this debate. That way you can make your own mind up, too, which is important. Do your own research, please. So, first objection, and it's a fair one, some of you will say that the balance sheet growth isn't proper quantitative easing. And, you know what, it isn't really. It's technical stuff. It's managing bank reserves. But I, I don't care what we call it. What matters is the direction. For 3 years, money was coming out, and since December 1st, it's going in at a tune of $189 billion and counting. So, while the man in charge tells you that he's tough and that he's going to reduce the balance sheet, it's going up still. So, it's not quantitative easing, but, but it's still going up. So, it may as well be. Anyway, if you've got a better explanation, put it in the comments below. I'd love to read it.
Second, that, that jobs number might be noise, right? There is something to say about the World Cup effect. And that could be messing with hospitality hiring in June. Leisure jobs, they fell 61,000, which, which is could be a weird one-off, right? If July's numbers bounce back hard, the cuts, they probably get delayed and this whole thing moves a bit slower, but I still think it's coming.
Third is oil. So, City, Citybank thinks that Brent could hit $60 by Christmas. And cheap oil really drags inflation down. So, honestly, that, that would be kind of good, really. I mean, I'd prefer that than, than, than everything that I think is going to happen. So, look, if CPI falls on its own, Walsh's friendly gauge starts looking a lot more honest, and, and I look paranoid, which wouldn't be the first time. So, no, I'm not promising you that gold pumps next week. The dollar is strong right now. The AI mania is still hoovering up money into America, and this act could hold metals down for months longer than I expect, maybe years longer. In 2013, I bought most of my metal into a crash exactly like this one, but it took years to pay off. I mean, it did pay off eventually, though, so I'm still happy.
But the math at the end of the road doesn't change, really. America owes $40 trillion, it pays $1 trillion a year in interest, and you cannot hold rates high against that forever. Because the higher you put rates, the more that $1 trillion becomes, right? That $1 trillion could become two, three, four, five trillion, and not even America can afford to pay that kind of interest. And you can't tax your way out of a hole that big either. They can't just keep raising taxes. Every heavily indebted government in history has taken the same exit because it's the only bloody exit you can take. You inflate the debt away. You have to print money and, and hope that nobody looks at the measuring stick too closely. And they're already fiddling with that measuring stick, by the way. I mean, that's what this whole video is about. That's what Kevin O'Leary is doing.
So, what am I actually doing with my money? And you probably expect me to go through my normal rules right now that I always go through, but I'm going to say something a bit different this time. Uh, because this isn't a whole market, the market is crashing video. Nothing here is crashing. This is more of a slow tax, and you deal with that differently.
So, first of all, I'm sticking to gold and, and silver and commodities. You know, copper, I'm buying a bit of copper, uranium. For gold specifically, we're sitting around about $4,000 right now. It might have moved up or down. This video is probably coming out a few days after recording. But the thing is, it's down 25% from the top, and I said on my metal, metals channel that I think we might be heading to the low mid to low 3,000s. Maybe 3,500, maybe 3,000. And that's possible if this act drags on. If we get there, I'll be happy about it, though. I mean, I like cheap gold. I'm not sure about you, but I like cheap gold.
And I'm still building on boring stuff alongside this. So, copper and uranium exposure, I'm building that slowly over years because the world needs these metals whether or not the Fed lies about inflation. It needs these metals. So, I'm building up those positions. And that is the thing, by the way. A lot of people watch these videos. They watch me say something like, "I'm exiting my AI positions," which I said towards the tail end of last year, and I'm buying consumer staples. And then they'll say, "Ah, you were wrong. AI went up a bit after you sold it." Yeah, I know it went up, but I'm not trying to extract every percent of gain from the AI rally. I've been in AI since bloody 2022. So, I made a lot of money on that run, and I'm happy with it. But my moves and my thinking is always long term. Also, most of what I bought has outperformed AI in any way. I'm not bragging about that. That's not the point. The point is the biggest moves I've made is getting my money outside of America. That, that's all I've been thinking about right now. And that's what a lot of people are doing. If you look at what all the billionaires are doing, they're getting their money outside of America. So, if you, if you see the big money flowing that way, you'll probably know something's up.
And there's an ETF for this, by the way. It's called World XUS. It's exactly what it sounds like. It's like the entire world minus the US. That's the ETF. I don't really like ETFs that much, but sometimes you have to deal with them if you want to invest your money, right? Um, now, why would you cut out the US? Because the whole index leans on the same handful of AI names priced like these boom runs forever. The entire US is just AI right now. So, if the Fed keeps lying about inflation, that's the trade that gets taxed the hardest, in my opinion, the AI trade. That's why I'm looking at World XUS. It gives you everything else. Europe, Japan, Brazil, economies that still make and sell real things at prices that aren't insane. I'm not saying all my money's out of the US, by the way. I'm just saying that's, that's one thing I'm looking at. Uh, and another thing is my favorite. It's still Poland. It probably will be towards the end of this year. I might get out around then. I mean, I keep banging on about Poland, but I'm not going to stop. Their central bank is one of the biggest gold buyers on the planet. They are building one of the strongest militaries in Europe. And their stock market is still cheap next to the, next to US tech. When I said I was selling SPX for WIG, WIG is like the Polish version of SPX, WIG. People said I was. But WIG is up 16% this year, while SPX is up only 8%. So, I'll take that insult.
Anyway, then there's energy stocks. These are things I keep adding on to, also. Quick reminder, by the way, I'm not a financial advisor, and this is just what I'm looking at. So, speak to your financial advisor first. I mean, seriously, you really should. Because this isn't for everyone. So, the two energy stock stocks I've been looking at, Vistra, ticker VST, and NextEra, ticker NEE. And there's a few others, but Vistra's got nuclear baseloads in Texas with contracts already signed with AWS and Meta. NextEra owns regulated utilities for the whole state of Florida. So, Floridians, they, they pay their power bills whatever the economy does, and they're planning on like 15 gigawatts of new generation for data centers by 2025. In 2008, by the way, while the S&P got cut in half, NextEra, it did crash initially, but it recovered way faster because that's generally what energy does in a recession because even in a recession, people have to pay their bills. Anyway, like I said, talk to your adviser about these. Also, don't just ape in at whatever price. I'm not saying to buy today or ever. You need to figure out for yourself.
Anyway, I like these energy stocks because the Mag 7 have signed legally binding contracts to build these data centers. So, when those data centers are built, they have to be powered, right? So, energy is going to, to power those data centers. Therefore, I believe energy stocks are probably going to go up. And I look, I know none of this is exciting like SpaceX or Palantir or Nvidia, but there is a time for exciting stocks, and there's a time for slow, boring stocks that just kind of they protect you in a massive economic downturn, and if there's not a downturn, they just tick up maybe a little bit behind the, the exciting stuff, but they still tick up. And that's what I'm looking at right now because I'd rather be safe than be sorry. And honestly, after living through the tail end of 2001, 2008, 2020, I, I would much rather be a year early than a day late. I'll see you in the next one.