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The Beginning of the US Debt Collapse is Here — Transcript

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0:00America is drowning in debt. $39
0:03trillion of it. If you spent $1 million
0:07every single day since the birth of
0:09Christ, you still wouldn't reach $1
0:11trillion. That's not even 2% of what
0:14America owes. It works out roughly to
0:16$114,000
0:18for every single American. You've been
0:20told it's backed by the full faith and
0:22credit of the government. You've been
0:23told to trust the process. You've been
0:26lied to. It's held together by a system
0:28you've never seen. never voted for and
0:31probably never even thought about. It's
0:33a global system that forces the entire
0:35world to keep using the dollar just to
0:37survive. Now it's starting to crack.
0:40Countries controlling nearly half of the
0:41world's daily oil supply are tearing
0:43that system apart. When it breaks, it
0:45won't happen to them, it happens to you.
0:48Chapter one, the $39 trillion illusion.
0:52The US dollar appears in nearly 90% of
0:54all foreign exchange transactions on the
0:57earth. Nine out of 10 times a currency
0:59changes hands on this planet, one of
1:01those currencies is the dollar. When you
1:03figure that the earth currently has 180
1:05national currencies, it's clear that the
1:07dollar is the operating system that the
1:09rest run on. What built this behemoth?
1:12Trade data and decades of financial
1:14flows point to one central mechanism,
1:16the global oil market, which also is
1:19ironically denominated in dollars. The
1:22global oil market is worth approximately
1:23$2.5 trillion per year. In fiscal terms,
1:26that is larger than the market value of
1:28the globe's gold, iron, copper,
1:31aluminum, nickel, zinc, lead, tin,
1:34cobalt, and lithium markets combined.
1:37Oil is the single largest traded good in
1:39human history. And for 50 years, the
1:42vast majority of it has been purchased
1:43in American dollars. A Japanese company
1:46buying Saudi oil has to convert yen to
1:49dollars first. French refineries
1:50importing Kuwaiti crude must buy dollars
1:53first. Indian power plants importing
1:55Iraqi oil have to buy dollars first. It
1:58all creates an insatiable demand for US
2:00currency. That demand is what absorbs
2:02American inflation. It's also what lets
2:04the Federal Reserve print money without
2:06immediately destroying the purchasing
2:07power of every American paycheck. The
2:10only reason your groceries aren't more
2:11expensive than they already are. Is
2:13because the central banks of Tokyo,
2:15Frankfurt, New Delhi, and Seoul are
2:17soaking up trillions of American dollars
2:19each year just to keep their lights on.
2:21and now it is quietly coming apart.
2:23Unlike most of the rest of the world,
2:25the United States exports more oil than
2:27it imports, mostly from either Mexico or
2:29Canada. It's a convenient closed North
2:32American circuit. What you may not know
2:34is that the United States is currently
2:35the single largest oil producer on the
2:37earth, producing [music] more than it
2:39consumes. So, while the US doesn't need
2:41to buy oil in dollars, it needs the rest
2:43of the world to buy oil in dollars. In
2:46fact, it depends on it. It's a
2:48completely different problem and one the
2:50United States is currently losing.
2:52Chapter 2, the 1974 secret handshake. In
2:551944, the United States gathered [music]
2:5744 countries in Brenton Woods, New
2:59Hampshire, and they made them an offer.
3:01America had all these factories, most of
3:03the gold, and a global military posture
3:06that could politely discourage
3:07disagreement. The deal was simple.
3:09Everyone would peg their currency to the
3:11dollar. The dollar would be pegged to
3:13gold at $35 an ounce. In other words, a
3:16dollar represented more than just a
3:18piece of paper. It could be a claim on
3:20something real. Real gold. And for about
3:2320 years, it worked beautifully. Then
3:26the cracks started to show. America made
3:28some expensive investments. Vietnam, the
3:31Great Society, the space race, a defense
3:34budget that would make a Las Vegas whale
3:36blush. By the late 1960s, the US was
3:39running deficits and printing dollars
3:41faster than it had gold to back them.
3:43That's when the Europeans, the French in
3:45particular, started doing the math. They
3:47started looking at how many dollars were
3:49actually circulating. And then they
3:50looked at America's gold reserves and
3:52they [music] decided those numbers were
3:54not adding up. So they started cashing
3:56out. Literally, they loaded dollars into
3:59hundreds of planes and ships, and they
4:01came back with gold. Over 3 years,
4:04France repatriated over 3,000 tons of
4:06gold to its vaults. Other countries
4:08followed. America's gold reserves once
4:1080% of the world's supply started
4:13draining fast. By 1971, the jig was up.
4:16So, Richard Nixon went on television and
4:18closed the gold window. He announced
4:20that effective immediately, US dollars
4:22were no longer convertible to gold. He
4:24canled Breton Woods with no warning and
4:27no vote. The Americans called it the
4:29Nixon shock. The French called it
4:31several things that [music] don't
4:32translate politely. Suddenly, the global
4:35financial system, previously tied to
4:37gold, was now built on, well, a vague
4:39sense of trust that America would behave
4:42responsibly. Given the preceding decade,
4:44it was quite a lot to ask. Over the next
4:46few years, things got weird. Currencies
4:48floated [music] against each other with
4:50no anchor, which led to a massive spike
4:51in inflation. The system was held
4:53together by good vibes and crossed
4:55fingers. Then, in October 1973, the Arab
4:58members of OPEC, led by Saudi Arabia,
5:00declared an oil embargo against the
5:02United States. Prices quadrupled. Gas
5:05stations ran dry. Americans lined up
5:07around city blocks hoping to fill their
5:09tanks. The economy already limping took
5:11a chair to the knees. Which is when
5:13Henry Kissinger stepped in. Kissinger,
5:15depending on your perspective, was
5:17either a master strategist or a war
5:19criminal with excellent table manners.
5:21What he undeniably was was effective.
5:24Something that was in short supply in
5:261974. The dollar had just lost its gold
5:28packing. The economy was wobbling. The
5:31US needed a new reason for the world to
5:33want its currency and [music] fast.
5:35Kissinger's solution was almost absurd
5:37in its simplicity. If you can't back the
5:39dollar with gold, back it with oil.
5:41Something every single country needs
5:43every single day. With this idea
5:45floating around in his head, he went to
5:47Saudi Arabia under the pretense of
5:48helping modernize infrastructure. But
5:50behind closed doors, the real deal took
5:53shape. Saudi Arabia would sell its oil
5:55exclusively in US dollars, which meant
5:57that every country on the earth that
5:59needed oil would first need dollars to
6:02buy it with. And just like that, a
6:04country that had quietly walked away
6:05from gold had created a new rule. If you
6:08want energy, you need dollars. In
6:10exchange, the US guaranteed Saudi
6:12Arabia's security. [music]
6:13The Saudis essentially got the most
6:15powerful bodyguard in history. America
6:17got its monetary mojo back. Both parties
6:20went home happy. Within a year, every
6:22major oil producer followed suit. No
6:24grand vote, no global summit. Saudi
6:27Arabia moved and it made sense [music]
6:28and everyone else fell in line. And the
6:30wildest part, well, some parts of this
6:33arrangement stayed classified for over
6:3540 years. The deal that quietly
6:37determined the cost of energy, housing,
6:38[music] and groceries for half a century
6:41wasn't publicly confirmed until 2016,
6:44which tells you something. But by then,
6:46the system had already been working
6:48almost perfectly without interruption
6:50for half of a century until now. Chapter
6:533. Enter the dragon. What Kissinger
6:56built did something remarkable. It took
6:58America's greatest vulnerability, a
7:00currency that was no longer backed by
7:01anything physical, and it turned it into
7:03its greatest strategic weapon. Once oil
7:06was priced in dollars, countries no
7:08longer used up their dollar reserves.
7:10They held on to them. And when they held
7:12on to them, they invested them mostly
7:14into [music] US Treasury bonds, which
7:16meant that every time a foreign
7:18government bought American debt, they
7:19were effectively financing Washington's
7:21federal government. The US built
7:23highways, funded wars, expanded its
7:25military, and won the Cold War. All
7:27while the rest of the world helped foot
7:29the bill. It was like installing a toll
7:31booth on the global economy, and then
7:33making every country pass through it
7:35just to turn on their lights. For 50
7:37years, the toll booth held. Then China
7:39decided to build a road around it. China
7:42currently imports nearly 2 million
7:44barrels of oil per day from Saudi Arabia
7:46alone. That's enough to fill
7:48approximately 127 Olympic size swimming
7:51pools with crude oil every 24 hours.
7:54China's now Saudi Arabia's single
7:56largest customer. For years, it's paid
7:58for all of that oil in dollars. For each
8:00barrel purchased, an invisible fee
8:02flowed back into the US system. All
8:04because of that deal in the 70s. But it
8:06was a different development. quieter and
8:08more technical that revealed China's
8:10true game plan. In 2021, a project
8:13launched out of Basel, Switzerland's
8:15Bank for International Settlements. It
8:17was called Mbridge, the multiple central
8:20bank digital currency or CBDC bridge.
8:23That name is forgettable. The idea is
8:26not a system that lets countries move
8:28money directly between each other using
8:30digital currencies issued by their own
8:32central banks. It avoids intermediaries,
8:35detours, and most critically any US
8:37oversight. To understand why that
8:39matters, you have to understand how
8:41things work today. Right now, if
8:42Thailand wants to send money to China,
8:44it must bounce it through a chain of
8:46banks, most of them western, and then
8:48ultimately settle the transaction in
8:50dollars using Swift. Swift is the
8:52messaging system that banks use to talk
8:54to each other. It processes about $5
8:56trillion a day. And because it operates
8:59under western oversight, the US has
9:01enormous influence over it, which means
9:03it can be weaponized. And it has been.
9:05When Russia invaded Ukraine in February
9:082022, the G7 kicked Russian banks out of
9:10[music] Swift and froze approximately
9:12$300 billion in Russian Western
9:14Reserves. If you're another country
9:16watching that happen, like China, India,
9:19or Saudi Arabia, you start to ask
9:21uncomfortable questions. What happens if
9:23we're next? China didn't write a
9:25strongly worded letter in response. It
9:27simply just built its own exit. And
9:29that's the gist of Imbridge, a payment
9:31system that routes around Swift
9:33entirely. It went live in 2024. By late
9:362025, Imbridge had processed over 4,000
9:39transactions worth $55 billion, a
9:42massive increase from its early tests,
9:44but it is still tiny compared to Swift.
9:46[music] Inbridge wasn't designed to
9:48force its users to ask the West
9:49permission to make transactions. It was
9:52designed to avoid [music] that, which
9:54makes it something entirely new. It's
9:56not a replacement for the toll booth,
9:58but it is certainly a way around it.
10:00America's financial nuclear weapon, its
10:02ability to cut off any country from the
10:04global economy, doesn't look so
10:05unavoidable anymore. And this is where
10:08things get scary. Chapter 4, the slow
10:10bleed. In June 2024, news exploded
10:14across the internet claiming that Saudi
10:15Arabia had allowed its petro dollar
10:17agreement to expire. The deal was dead.
10:20It was time for the dollar to pack its
10:22bags. The Saudis were ready to receive
10:23payments from a grabag of currencies,
10:26including the euro, the rupee, and even
10:28the Chinese yuan. It's a bit of a
10:30stretch to say that there was ever a
10:31binding legal contract at all. The 1974
10:34bilateral economic agreement between the
10:36US and Saudi Arabia had technically
10:38expired in 2001, and it was never the
10:41legal foundation of anything. The petro
10:43dollar system was never a treaty, but a
10:46structural agreement, a self-reinforcing
10:48habit of mutual dependency. It didn't
10:50need to be renewed. It was simply baked
10:52into the architecture of global trade
10:54itself. That system though is undeniably
10:57unraveling, one yuan denominated oil
10:59transaction at a time. Economist Zultan
11:02Pulchar called this transition Bretton
11:04Woods 3. His argument first made in
11:06March 2022 is that the world is shifting
11:08from what he calls inside money, paper
11:10claims on governments like US Treasury
11:12bonds to outside money, physical stuff
11:15like gold and commodities. His punchline
11:18was commodities are collateral and
11:20collateral is money. When the G7 froze
11:23Russia's reserves, it didn't merely
11:25punish Russia. It told every non-western
11:27central bank on Earth that dollar
11:29denominated assets could be confiscated.
11:31And that changed the calculus
11:33permanently. In practice,
11:34ddollarization, as it's been called,
11:36looks more like a slow bleed than an
11:38outright crash. The dollar share of
11:40global foreign exchange reserves has
11:41dropped from around 85% in the 1970s to
11:45roughly 58% today. Sure, it took 50
11:48years to get to a number that's still
11:49nothing to bulk at, but that number, it
11:52is the lowest point in two decades. And
11:54here is where all of this might land in
11:56your life. The US government currently
11:58pays over a trillion dollars a year in
12:00interest on its debt. That is more than
12:03the annual spend of the entire defense
12:05and education budgets combined. The
12:07number is kept from being even more
12:09catastrophic because foreign governments
12:10are constantly buying US Treasury bonds.
12:12It keeps the bond prices up and yields
12:15and therefore interest rates down.
12:17Mortgage rates track treasury yields
12:19almost exactly when rates moved from
12:212.65% to 7.79%. Between 2021 and 2023,
12:27the monthly payment on a $400,000 loan
12:29jumped by almost $1,300, putting car
12:32payments and family vacations in
12:34jeopardy. Now imagine that instead of
12:36the Fed raising rates deliberately, the
12:38driver is simply fewer countries needing
12:40to buy dollars for oil. With fewer
12:42dollars needed, that's fewer treasuries
12:44purchased. Bond prices quickly fall and
12:47yields rise as mortgage rates follow.
12:50The Fed can cut the federal funds rate
12:52all at once, but it can't force central
12:54banks to keep absorbing American debt.
12:56[music] And if they stop, that bill
12:58lands on you. Chapter 5, the final
13:00domino. Every global reserve currency in
13:03history has eventually lost that status.
13:05Every single one. The Roman dinarios,
13:08the Dutch Gilder, the British pound
13:10sterling. Each one was in its era the
13:12operating system of global commerce. And
13:14each one fell when the underlying
13:16economic logic that made everyone want
13:18that currency slowly stopped being true.
13:21Reserve currencies have the same problem
13:22as bad software. Everyone knows a better
13:25option exists, but switching is a pain.
13:27So, you keep on running the old version
13:29until you absolutely can't anymore. When
13:32Britain finally lost reserve currency
13:33status, it didn't go quietly all at once
13:35in a big apocalyptic bang. It went
13:38through decades of inflation, emergency
13:40bailouts, and a standard of living that
13:42steadily declined relative to the rest
13:44of the developed world. The pound just
13:46slowly became less and less relevant.
13:48British citizens absorbed the cost in
13:50ways that never quite showed up on a
13:52single front page. That is the template
13:54for the dollar today. The US is not
13:56Britain in 1945. The dollar is vastly
13:59more embedded in global finance than
14:01sterling ever was. But the pattern is
14:03the same. Build global demand for your
14:06currency and then watch that demand
14:08erode. Britain did it through empire.
14:10America did it through oil. Now that
14:12system is being routed around. Bricks
14:15now represents almost 36% of global GDP
14:17and 44% of global oil production. The
14:20block includes most of the world's
14:22largest oil producers. IMBbridge works.
14:24SIPs, China's alternative to Swift,
14:26connects 109 countries. India is buying
14:29Russian oil and yuan and rupes. Brazil
14:31and China ditched the dollar in their
14:33bilateral trade. Saudi Arabia [music] is
14:35conducting transactions on Imbridge
14:37while simultaneously declining to
14:39formally join bricks. It's exactly the
14:42kind of strategic ambiguity a country
14:43maintains when it's keeping its options
14:45open. None of these systems are the
14:47dollar. None of them replace Swift on
14:50their own. But the dollar didn't take
14:51over the world overnight either. It won
14:54because for decades the rules were
14:55simple. The world runs on oil and oil is
14:58priced in dollars. So if you wanted
15:00energy, you needed dollars. That's the
15:02[music] part that's starting to crack.
15:04America's $39 trillion in debt only
15:06works because the rest of the world
15:07keeps needing dollars. The real question
15:10isn't whether China builds a perfect
15:12alternative. It's what happens when the
15:14world decides what it's built is good
15:16enough and starts moving those trillions
15:18somewhere else. Because if that shift
15:20actually begins, it doesn't stay
15:22contained to currency markets. It spills
15:24into interest rates, asset prices, and
15:26eventually real life. And at that point,
15:28the system doesn't slowly adjust. The
15:30world is on fire, and nobody is looking
15:32where it really matters. Every headline
15:34screams about the Middle East, chaos,
15:36and global fear. The media wants you
15:38glued to the straight of Hormuz, and the
15:40rising price of oil. But it's a lie, a
15:42distraction. The real story is in Japan.
15:45In 2024, after 17 years, the planet's
15:48biggest creditor ended its era of free
15:51money. The engine of the global economy
15:52is sputtering in Tokyo. And if you have
15:55a mortgage, a savings account, or a
15:56401k, you're in the crosshairs. Chapter
15:591, the demographic black hole. On the
16:02surface, Japan looks like it's already
16:03living in the future. A place where tech
16:05giants dominate the world stage. Robots
16:07share the streets with people. AI
16:09predicts what'll come next. And entire
16:11cities run smarter, cleaner, and faster
16:13than anywhere else. But look past the
16:15distractions, dim the neon signs, forget
16:17the shiny gadgets. Focus instead on the
16:20finances, the numbers. That's where
16:22Japan's deepest, darkest, most
16:24disturbing secrets lie. The demographic
16:26death spiral. Because in 2026, Japan's
16:29population officially sits at
16:30approximately 122.6 million people. That
16:34might sound like a lot, but in 2010 it
16:36was even higher. 128 million to be
16:39precise. Since the late 2000s, Japan has
16:41been on a steady, unrelenting decline.
16:44It's losing around half a million people
16:46[music] from its population every single
16:48year. That's like the city of Atlanta
16:50vanishing every 12 months. To make
16:52matters worse, Japan also has the
16:54highest proportion of elderly [music]
16:55citizens anywhere in the world. In 2014,
16:58close to 26% of the population was over
17:0065. By [music] 2022, that increased to
17:03more than 29%. The population is getting
17:06older while [music] the birth rate is
17:08hitting its lowest level in more than a
17:10century. Fewer and fewer people are
17:11choosing to start families. Birth rates
17:13are falling. Meanwhile, [music] the
17:15number of people of working age keeps
17:17shrinking. It's reached the point where
17:18now there are two deaths in Japan for
17:20every birth. That is a problem for a lot
17:23of reasons, especially for the economy.
17:26Every year that these trends continue,
17:27Japan's tax base disappears bit by bit.
17:30With more retirees, fewer families, and
17:33[music] fewer people paying taxes,
17:34Japan's financial foundations are
17:36starting to crack. But the Bank of Japan
17:38[music] saw this problem coming, and
17:40they acted in a way that was desperate,
17:43dramatic, unprecedented. They made money
17:47free. Instead of raising interest rates
17:48[music] to fight the problem, they kept
17:50them at zero. At times, they went below
17:53zero. At the same time, trillions of yen
17:55were pumped into the system. The Bank of
17:57Japan became one [music] of the biggest
17:58buyers of its own stocks. In effect, it
18:01socialized its stock market just to keep
18:03the lights on. It was a gamble, one with
18:06a massive amount of risk attached. No
18:08other central bank of any major
18:10developed nation around the world
18:11operated the same [music] way as
18:12Japan's. But somehow the gamble paid
18:15off, at least for a little while. People
18:17in businesses didn't have to worry about
18:19paying back much more than they'd
18:20originally borrowed. Loans became almost
18:23irresistible. Families took them.
18:25Businesses took them. Everyone wanted
18:27in. Why wouldn't they? It was almost
18:29like free money. Wall Street hedge funds
18:31and investment firms took advantage too,
18:33but on a much bigger scale. They
18:35realized they could borrow huge amounts
18:37of the Japanese yen at 0% interest and
18:40convert all that cash to dollars. They
18:42would then use that cash to buy US tech
18:45stocks, treasury bonds, or anything else
18:47they wanted. It was known as the yen
18:49carry trade, and it [music] was like
18:51some sort of video game infinite money
18:53glitch. A seemingly foolproof way to
18:55guarantee returns. For a while, Japan
18:57retained its status as an innovative,
18:59pioneering, and worldleading nation in
19:01more ways than one. But, as gamers know
19:04all too well, glitches get patched. The
19:06system couldn't last. The so-called
19:08stability it provided was, [music] in
19:10actual fact, little more than just a
19:12band-aid slapped hastily over a gaping
19:14hole in a broken economy. It was only a
19:17matter of time until that sticking
19:18plaster began to peel away. Private
19:20investments went nowhere. Wages stalled.
19:23Public debt spiraled, reaching a
19:25staggering 260% of the country's gross
19:27domestic product or GDP by 2022. Soon,
19:31the Bank of Japan was running out of
19:32options. So, they went further, much
19:35further. They forced 10-year government
19:37bond yields to stay at zero. The country
19:39was borrowing at home for nothing
19:41[music] and then exporting those profits
19:43around the world, hoping that the
19:45inflation would never rise too fast. But
19:47in 2026, that gamble is coming to
19:49[music] an end. Now, Japan is left with
19:51an incredibly big bill to settle. First,
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21:41The Widowmaker detonates. The Bank of
21:44Japan had hoped that it would never come
21:46to this. And for years, it didn't.
21:48Crisis after crisis hit, and somehow it
21:50held. But anyone watching closely knew
21:53it couldn't last. It was never a
21:54question of if the bubble would burst,
21:56only when. A bomb had been planted. We
21:59just didn't know how long the fuse was.
22:01Now we do. The explosion is here. And
22:04the spark that started it all was rising
22:06costs of oil and energy. In 2026, crude
22:09[music] oil prices have surged by close
22:10to 50%. And it's having an impact all
22:13over the world. For [music] a resource
22:14poor nation like Japan, rising rates are
22:17a death sentence. As prices rise,
22:19central banks of countries all over the
22:21world have been forced to take action.
22:23In the US, rates still sit at 3.75%.
22:26It's a similar story in the UK and
22:28across Europe, but elsewhere, the
22:30pressure is building. interest rates
22:32passed the 4% mark in Australia, 5% in
22:35India, and even close to 7% in places
22:38like Mexico and South Africa. And in the
22:40middle of all of this, Japan was
22:42trapped. On the one hand, it could raise
22:44rates, but basically bankrupt its own
22:47government. It carries the highest debt
22:49to GDP ratio of any nation in the entire
22:51developed world. Or it could keep rates
22:54at 0% but sacrifice the value of its
22:56currency in the process. Neither of
22:58these options was attractive, but the
23:00Bank of Japan had to pick one. It
23:02decided to persist with its 0% rate, and
23:05the results have been [music]
23:06catastrophic. The yen has effectively
23:09gone into freef fall. 5 years ago in
23:112021, the yen was sitting at less than
23:14110 to the dollar, but by late 2022, it
23:17was approaching 150. In April 2026, it's
23:20close to the 160 mark, hovering near its
23:23weakest point in decades. In just a few
23:25years, the Japanese currency has lost
23:27[music] more than 30% of its value. For
23:29businesses, families, workers, it was
23:32devastating. Before they knew what hit
23:34them, salaries and savings were slashed.
23:36The money they [music] had spent years
23:37earning was suddenly worth far less than
23:39it had been just a few years ago. It's
23:41just one of the ways the Japanese public
23:43has suffered. The cost to import goods
23:46to the country has also skyrocketed,
23:48leading to higher prices for numerous
23:50products and services. The more the Bank
23:52of Japan waited, the worse the situation
23:54would become. The yen [music] would
23:55continue to spiral. They couldn't allow
23:57their own national currency to become
23:59worthless. They had to act. So, in a
24:02state [music] of panic, policymakers
24:04made a decision almost 20 years in the
24:06making. They raised interest [music]
24:07rates to 0.75%
24:10with plans to increase them all the way
24:12up to 1% [music]
24:13by 2027. It might not sound like much,
24:16and in isolation, it isn't. But compare
24:19it to the rest of the world, the US, the
24:21UK, [music] Australia, rates of 2,
24:23three, or 4% aren't uncommon. A rate of
24:26just 1% would actually be something of a
24:28freak occurrence. But for the Japanese
24:30financial system, [music]
24:311% or even 0.75%
24:33is a seismic amount. It means that 17
24:36[music] years of free borrowing and free
24:37debt are coming to an end. And that
24:40doesn't just impact Japan and its
24:41people. It affects the whole world. For
24:44years on Wall Street, there was one
24:46investment strategy everyone had heard
24:47of. A strategy built on shorting the
24:50Japanese government bonds, betting that
24:52[music] prices would fall and yields
24:54would finally rise. A gamble against
24:56decades of history, a [music] bet that
24:57the Bank of Japan would finally break
24:59its own trend after years of stubbornly
25:02holding 0% [music] interest. They called
25:04it the Widowmaker. And the name wasn't
25:06just for show. So many people who used
25:09this strategy ended up losing enormous
25:11amounts of capital because the Bank of
25:13Japan never did what they wanted it to
25:15do. It continued to maintain near zero
25:17or even negative [music] rates year
25:19after year. But in 2025 and continuing
25:22into 2026, that all changed. The
25:24Widowmaker paid off. Trillions of
25:27dollars borrowed at nearly 0% in Japan
25:29[music]
25:30have been flowing around the world, and
25:32now they are starting to seep away. The
25:34hedge funds and investors who were on
25:35the right side of the bet are making a
25:37fortune. Meanwhile, banks and firms that
25:39borrowed yen at 0% and poured [music] it
25:42into risk assets or treasuries are
25:44scrambling to cash out while they still
25:46can. But while the top gets richer, the
25:48bottom pays the price. Everyday [music]
25:50people, families, workers, and those who
25:52had no hand in the gamble are the ones
25:54footing the bill. Chapter 3, the great
25:57repatriation. This is the final nail in
25:59the coffin. The part that the media
26:01won't explain. They don't even want
26:03people to know about it until it's
26:05already too late. An event that is both
26:07catastrophic and almost invisible. A
26:09crash you won't see coming, but one that
26:11will shape the economic future of not
26:13just Japan, [music] but the United
26:15States and dozens of other countries
26:17around the world. A shock wave that
26:18could be felt for years, even
26:20generations. The repatriation of the
26:23yen. The wealthiest and most important
26:25Japanese investors, [music] including
26:27mega banks, pension funds, and insurance
26:29companies, are some of the biggest
26:30foreign holders of American debt. As a
26:33nation, Japan owns a whopping 1.2 2
26:36trillion in [music] United States
26:38treasuries. To put such an astronomical
26:40figure into perspective, 1.2 trillion is
26:43enough to fund the entire [music] US
26:44military for around 18 months. It's
26:47enough to end world hunger several times
26:49over. It is an insane amount of money,
26:51or to be [music] more exact, an insane
26:54amount of American debt, all held in the
26:56hands of a single nation [music] in a
26:58different continent. For years, it made
27:00sense for Japan's institutions to hold
27:02that debt. The Japanese government
27:03pension investment fund [music] or GPIF
27:06is the world's biggest pension fund and
27:08has historically held on to a massive
27:10amount of foreign bonds. US treasuries
27:12made up 51% of its foreign bond [music]
27:14portfolio in March 2025. There was a
27:18logic to that decision. US bonds [music]
27:20paid interest while Japanese once paid
27:22nothing. But now that logic is being
27:24washed away by the rising tide of
27:26Japan's [music] interest rates. As those
27:28rates draw closer to 1% and the 10-year
27:31Japanese government bond yield surges
27:33past 2%. [music] The math has been
27:35flipped. Why should a Japanese
27:36institution or pension fund like the
27:38GPIF continue to run the risk of holding
27:41America's debt while it could invest in
27:43its own government bonds instead? These
27:45companies, these banks, these pension
27:47funds no longer have the same incentive
27:49to chase returns abroad. Domestic
27:51investments finally pay off. And it
27:53doesn't take a financial genius to see
27:55the obvious. It is time to sell. We
27:58found data showing a quiet but growing
28:00exodus. Japan is cashing out. It's
28:03selling off its assets, dumping US
28:05Treasury holdings at a record rate. That
28:07doesn't mean the entire 1.2 trillion
28:09will disappear overnight, but billions
28:12are starting to evaporate. And those
28:13billions can quickly turn into tens or
28:16hundreds of billions as the weeks go by.
28:18The [music] ripples won't just stay in
28:19Japan. They'll spread across markets
28:22across borders across the Pacific.
28:24Because when the biggest buyer of US
28:26debt bows out, who steps in to fill the
28:29void? The simple answer is no one. At
28:32least not at first. To attract new
28:34buyers and convince the world to absorb
28:36[music] the debt, the Federal Reserve
28:37will be forced to act. Rates will have
28:40to go up. And when that happens,
28:42everything else is affected. Mortgage
28:43rates climb. Credit card interest rates
28:45soar. You're suddenly [music] faced with
28:47spiraling costs. Everything becomes more
28:49expensive. Spending power diminishes and
28:51disposable income vanishes. Meanwhile,
28:54the stock market starts to bleed.
28:56Government bonds are far more attractive
28:57than risky bets like tech [music]
28:59stocks. Money begins to move fast. For
29:02years, the yen carry trade was the
29:04grease and the wheels of [music] the
29:05entire global financial machine. It kept
29:07everything running smoothly. It allowed
29:09those Wall Street hedge funds to borrow
29:10[music] billions and pump it all into
29:12big businesses across America and
29:14beyond. Now, those same funds are seeing
29:16their borrowing [music] costs explode.
29:18They're backed into a corner and they're
29:20running out of options. They're forced
29:22to sell their most profitable [music]
29:23positions. Shares, and companies like
29:25Apple, Nvidia, Microsoft, they're all
29:27[music] dumped just to cover spiraling
29:29yen debts. This is the invisible crash.
29:32It doesn't dominate the headlines. It
29:34doesn't involve mass panic at the New
29:36York Stock Exchange or vast crowds of
29:38people protesting in [music] the
29:39streets. It happens quietly in the
29:41background, and the world has no idea.
29:44Chapter 4. The sovereign [music] debt
29:45trap. We've reached a critical point in
29:48history, something the global economy
29:49has been building toward for nearly 20
29:51years. And at the center of it all is
29:53Japan. It's pinned between [music] two
29:55outcomes, both dangerous, both
29:57unavoidable. It is the ultimate
29:59sovereign debt trap. It either keeps
30:01interest rates low and protects its
30:03debt, but watches its currency collapse
30:05in its country [music] starve, or it
30:07raises rates and temporarily saves its
30:09economy, but it sets its own national
30:11debt on [music] fire, as well as
30:13detonating the entire global bond
30:15market. There is no out, no alternative
30:18option, no [music] last ditch magical
30:20solution. The fuse was lit a long time
30:22ago, and now it's reached the powder
30:24keg. The yen is just the first domino to
30:27fall, but it won't be the last. The
30:28dollar is [music] next, and when that
30:30begins, everything changes. In early
30:32June 2026, Bitcoin plummeted below
30:35$60,000. People panicked and sold up. It
30:39seemed like the crypto dream was dead.
30:41But while retail investors were losing
30:43their life savings, Wall Street was
30:45executing the largest wealth transfer of
30:47the decade. Because this wasn't a crash,
30:49it was a robbery. A deliberate move
30:52designed to flush out over $1.8 billion
30:54in leverage. Friday, June 5th, was one
30:57of the most dramatic days the crypto
30:58markets had seen in years. It happened
31:00so fast that most traders barely knew
31:03what was going on. Bitcoin, the premier
31:05cryptocurrency, which had been trading
31:07above 80,000 only a few weeks prior,
31:09experienced a sudden colossal collapse.
31:12Millions of cell phones vibrated
31:13simultaneously across the world as the
31:16news came in. BTC's value was taking a
31:18nose dive. It even dipped below the
31:21$60,000 mark to reach a $59,100
31:24intraday low at one stage. It managed a
31:27minor recovery, hitting 61,000 the next
31:29morning, but it was chaos, a market
31:32failure, at least to the untrained eye.
31:34It seemed like the definitive piece of
31:36proof that critics of the crypto world
31:38had been waiting for. A clear sign that
31:40Bitcoin and [music] crypto in general
31:42can't be considered a safe and secure
31:43store of value. But here's the truth.
31:46This wasn't a failure or uncontrollable
31:48crash. It was a controlled burn. A burn
31:50that was perfectly executed,
31:52mathematically precise, and absolutely
31:54necessary for the market to not just
31:56recover, but to reach whole new heights.
31:58It was the financial equivalent of
32:00setting fire to a diseased forest
32:01[music] so that healthier roots can take
32:03hold. Because while most people were
32:05focused on the price charts, [music]
32:07they were only seeing the smoke. The
32:09real fire was happening behind the
32:10scenes. Approximately 1.8 8 to2.5
32:12[music]
32:14billion worth of toxic leverage was
32:16utterly incinerated. Here's why that
32:19matters. Leverage is like a plague on
32:21the financial system. It's borrowed
32:23funds. [music]
32:24It's retail traders effectively betting
32:25with money that isn't theirs. That in
32:27turn forces the system into shaky
32:29ground. The more the leverage builds up,
32:31the more unstable the situation becomes.
32:34Eventually, it reaches a point where the
32:35market can no longer move, grow, or
32:38progress until that leverage is wiped
32:40out. In other words, for Bitcoin to
32:41[music] take the next step in its
32:42evolution, for this crypto rocket to
32:44surge, the leverage had to be
32:46jettisoned. [music] But that money can't
32:48just vanish. It has to go somewhere.
32:50While terrified users were frantically
32:52smashing the sell button as they feared
32:53the worst, [music] the entities buying
32:55up their assets weren't amateurs or
32:57casual investors, they were pros. Wall
33:00Street investors [music] who took
33:01advantage of the fire sale, snapping up
33:03assets at a massively discounted rate.
33:05They were confident that they would
33:07double [music] or even triple their
33:08money on the other side. The retail
33:10market provided exactly what the big
33:12dogs of the investment world had been
33:14waiting for, exit liquidity. Everyday
33:16investors became fuel for the machine.
33:19They thought that they were fleeing a
33:20sinking ship. In reality, they were
33:22handing over their hard-earned
33:24portfolios to [music] giant investment
33:26firms. But this crash didn't start in
33:27the crypto markets. It started in
33:29Silicon Valley. Money is the oxygen of
33:32the market. [music] When it flows in,
33:33assets grow stronger and more valuable.
33:35When it leaves, they become weaker. And
33:37in [music] the weeks and months building
33:39up to June 2026, one sector in
33:41particular was sucking up almost all the
33:43oxygen available. That sector was
33:45artificial intelligence. In just a
33:47[music] few years, AI has infiltrated
33:48almost every aspect of modern life. It's
33:51become one of the most powerful
33:52technological forces on the planet. And
33:54where there's power, there's value.
33:56Investors didn't want to miss out on
33:58making the most of that value. They had
34:00to get in on the ground floor of the
34:01biggest and best AI companies as well as
34:04emerging upandcomers to maximize their
34:06long-term gains. 2026 has seen numerous
34:08big AI brands making their entry into
34:11the markets [music] with a swath of
34:12highly anticipated initial public
34:14offerings or IPOs arriving on the scene.
34:17These are the companies of the future,
34:19the masters of machine learning, the
34:21creators of the next generation AI
34:23models [music] and unsurprisingly they
34:25attracted a lot of attention. The
34:27valuations for some of these companies
34:28were almost unprecedented. An
34:30unstoppable wave of hype built up and
34:32only got bigger as IPO [music] after IPO
34:35hit the stock market. The global
34:36financial ecosystem responded instantly.
34:39Hedge funds and venture capital firms
34:41suddenly found themselves in a race
34:42against the clock. Some of the biggest
34:44tech listings in years were [music]
34:45about to hit the market, and everyone
34:47wanted a piece of them, but they needed
34:49cash fast. You might think that [music]
34:52they would start unloading stocks or
34:54selling off parts of their real estate
34:55portfolios. They didn't. Instead, many
34:58turned to the fastest source of
34:59liquidity they had available,
35:01cryptocurrencies. Slowly but surely,
35:03they began draining liquidity out of the
35:05crypto markets to pour into AI IPOs. It
35:08happened in the background, and bit by
35:10bit, the depth of Bitcoin order books
35:12began to [music] thin out. The total
35:13volume of cash in the world's leading
35:15cryptocurrency slowly but surely
35:17evaporated. On the surface, the market
35:19seemed to be performing as normal. Deep
35:21down, however, its foundations were
35:23being ripped out. A system with high
35:25liquidity can cope with a crisis. But
35:27with liquidity drained, the crypto
35:29market was a dry forest [music] just
35:31waiting for a match to set it all
35:33ablaze. And the algorithms knew exactly
35:35where to strike. There's a rhythm to
35:37financial markets that most people don't
35:39understand. They believe that a healthy
35:41market should only ever move in one
35:43direction, up. Volatility is seen as a
35:45weakness, a defect. The best and most
35:47successful investors see things very
35:49differently. They understand the rhythm
35:51of the markets, the cycles, the rises
35:53and the falls. They know that volatility
35:55is a feature, a necessity even. For any
35:58asset class to mature and reach its full
36:00potential, it has to pass through
36:01periods of structural collapse. It's
36:03only by falling that markets learn to
36:05rise even higher. The evidence is right
36:07there in the data, not in the price
36:10charts that everyone watches and not in
36:12the surface level metrics that most
36:13retail investors obsess over. It is in
36:16the deeper macrolevel indicators, the
36:18kind the world's most sophisticated
36:20trading desks use to plan their orders
36:22and time their trades to perfection. One
36:24of the most powerful is something called
36:25the market value to realized value zcore
36:29[music] or MVRVZ score. It sounds
36:32complicated and in many ways it is.
36:34Think [music] of the MVRV Zcore as a
36:37market alarm system. When it flashes
36:39red, Bitcoin might be trading above its
36:41fair value. When it moves to the
36:43opposite extreme, Bitcoin might be
36:44massively undervalued. Take a look at
36:46how the Zcore has fluctuated over time,
36:48and [music] an astonishing trend
36:50emerges. During all of the past big
36:52Bitcoin crashes, 2015, 2018, and 2022,
36:56the Zcore always did the exact same
36:58thing. It [music] dropped below zero,
36:59plunging into negative territory. Every
37:02time that happened, the media started
37:03writing headlines and publishing reports
37:05about how Bitcoin was too volatile and
37:07dangerous for people to invest in. Some
37:09even called the cryptocurrency market
37:10dead in the water. Meanwhile, the
37:12smallest investors [music] ignored the
37:14noise and focused on what mattered, the
37:16Zcore. It was a flashing red light and
37:19screaming [music] a single allimportant
37:21order. Buy. Because every time that
37:23score dropped below zero, Bitcoin rose
37:25by at least 300% in the cycle that
37:28followed. It's a pattern that's played
37:29out over and over. In March 2020, the
37:32global pandemic ground the world's
37:33economy to a halt. Bitcoin's price was
37:35slashed in half within just a couple
37:37days. The panic was palpable, but in the
37:41180 days following the massive decline,
37:43the long-term holder supply, the total
37:45volume of Bitcoin owned by entities that
37:47refused to sell, increased by
37:49approximately 3 to 5 [music] percentage
37:51points. That's the equivalent of taking
37:53the entire gold reserves of America off
37:56of the open market and moving them to a
37:58private vault within 6 months. It was a
38:00silent [music]
38:01yet massive consolidation of wealth, a
38:03dramatic shift of Bitcoin out of weak
38:05hands into strong ones. This is a
38:08biological necessity of a healthy
38:09market. It needs to fail so that it can
38:11be reset and rebuilt better than before.
38:14And this [music] too is something that
38:15we've seen happen in the past with
38:17devastating precision. In 2021, [music]
38:19Bitcoin was performing well. It reached
38:21an all-time high in the $60,000 range by
38:24the spring when suddenly a barrage of
38:26bad news sent its value plummeting yet
38:28again. Perspective mining bans,
38:31regulatory measures, and [music] forced
38:32liquidations all took their toll. Within
38:35just a few weeks, Bitcoin's price had
38:36been slashed in half, sitting in the low
38:3930,000s. The same narrative emerged
38:41again. Bitcoin was over. The bull market
38:44was dead. Anyone still holding crypto
38:46better get out while they can or suffer
38:48even greater losses. Large parts of the
38:50retail public followed that advice. They
38:52sold off their assets and [music] rued
38:54the fact that they hadn't got out
38:55sooner. But the smartest investors saw
38:58what was really happening. A unique
38:59phenomenon known as the wickoff
39:01accumulation phase. Named after a
39:03legendary investor, editor, and founder
39:05of the magazine of Wall Street, it
39:07describes a strategy [music] that many
39:08believe the largest market participants
39:10have used for decades. Before major
39:12moves to higher prices, the biggest
39:14players don't usually buy all at once.
39:16Instead, they accumulate. The so-called
39:18whales do this to frighten retail
39:20investors to the point that they sell
39:22off their holdings. During the 2021
39:24wickoff phase, however, an uneasy
39:26anomaly appeared. The number of whale
39:28wallets, those holding 1,000 BTC or
39:31more, started to decline by around 12%.
39:33[music] At the same time, the number of
39:35smaller retail level wallets increased
39:37as casual investors bought into the dips
39:39in the hopes of turning a quick profit.
39:41The narrative shifted to something even
39:43scarier. Big money was backing out of
39:46Bitcoin. The public once again bought
39:48into this story, but the whales weren't
39:50really abandoning Bitcoin. They were
39:52preparing for a massive leverage
39:54wipeout. On May 19th, 2021, that wipeout
39:57arrived. A staggering $8.6 billion was
40:00wiped out within a matter of hours. To
40:02understand the magnitude of that value,
40:05$8.6 billion is enough to purchase the
40:07Dallas Cowboys, [music]
40:08one of the world's biggest sporting
40:09institutions outright and still have $3
40:12billion to spare. The impact was
40:15immediate. Retail accounts were
40:16liquidated to nothing. This in turn set
40:18up the largest wealth consolidation
40:20since the 2008 financial crisis. By the
40:23end of 2021, Bitcoin's value had surged
40:25yet again. Now, in 2026, there's enough
40:28data to show that this isn't random or
40:30coincidental. History is repeating
40:32itself with surgical precision. The June
40:342026 crash is almost a mirror image of
40:37the 2021 event. The same headlines, the
40:39same narrative, and the same emotional
40:41impact on the retail investor market.
40:43But 2026 has a safety net that 2021
40:46never had. A floor built by the most
40:48powerful financial institutions on
40:50Earth. In early 2024, the rules of the
40:52Bitcoin market were effectively
40:54rewritten. The [music] United States
40:55Securities and Exchange Commission
40:57officially approved the first Bitcoin
40:58Exchange traded funds or ETFs. For more
41:01than a decade, Bitcoin had existed as a
41:04separate entity from the global
41:05financial system. It was always on the
41:07fringes, volatile, lacking in regulatory
41:09oversight, and difficult to break into
41:11for both amateur investors and even
41:13traditional institutions. The launch of
41:15the exchangeraded funds or ETFs changed
41:18all that. It bridged the gap that had
41:20separated Bitcoin and the legacy
41:22financial system for so long. The impact
41:24was immediate. The titans of the
41:26investment world like Black Rockck and
41:28Fidelity jumped into the pool head
41:30first. By the end of the year, they had
41:31held a jaw-dropping 900,000 BTC in their
41:35institutional vaults. That's around 4.6%
41:38of the entire circulating supply of the
41:40asset itself. To put the number into
41:42perspective, 900,000 Bitcoin is just
41:46200,000 Bitcoin short of [music] the
41:48total of the 1.1 million lost coins of
41:51Satoshi Nakamoto, the synonymous creator
41:54of Bitcoin worth roughly $80 billion.
41:57It's an amount so huge that it holds
41:59almost unimaginable influence over the
42:00rest of the market. It gives these
42:02investment firms enough financial clout
42:04to control the very gravity of the
42:06blockchain. Wall Street doesn't operate
42:08like the rest of the investment world.
42:10The biggest players in stock markets,
42:12equities, and cryptocurrencies don't
42:13trade assets back and forth [music] in
42:15the same way retail investors do. They
42:17buy assets in order to secure them, and
42:20then they build wealth from there. When
42:22an institution like Black Rockck takes
42:24control of a cryptocoin, it is no longer
42:26in open circulation. As the 2026 crash
42:29played out, the media spread
42:30sensationalized headlines about massive
42:33capital flight. They pointed to the $1.4
42:35billion that flowed out of spot ETFs
42:37during the peak of the panic. To them,
42:39it could only mean one thing.
42:41Institutional interest in Bitcoin is
42:43dead and buried. But when you look at
42:45the bigger picture, $1.4 billion is a
42:47drop in the ocean as far as these big
42:49mega funds are concerned. In reality,
42:52the vast majority of institutional
42:53capital hasn't moved at all. It is still
42:56exactly where it was before the panic
42:57began. And while retail investors were
43:00getting cold feet and cashing out, the
43:02big dogs like Black Rockck and Fideli
43:04absorbed the impact. They didn't panic.
43:06They didn't flee because they understood
43:08the structural reality of the market.
43:10They knew that in holding the line, they
43:12could secure the asset supply and
43:14construct an even stronger floor for the
43:16future. But with Wall Street hoarding an
43:18everinccreasing amount of supply, the
43:20actual quantity of Bitcoin left to buy
43:22is starting to vanish. One of the most
43:24fascinating things about Bitcoin and one
43:26of the factors that has helped it become
43:28such a popular asset among investors
43:30around the world is its scarcity. There
43:32will only ever be 21 million coins
43:35minted in total. That separates it from
43:37the very concept of conventional
43:39currency in a major way. No central bank
43:41will ever be able to just print more
43:43BTC. No political decision will ever be
43:46able to expand the supply. And the
43:48reality is that Bitcoin is even scarcer
43:50than it seems because a huge number of
43:52those 21 million coins aren't available
43:55to buy and sell and they never will be.
43:58Why? Because many of them are
44:00effectively out of circulation. They're
44:02stored on lost hard drives, trapped
44:04behind encrypted wallets and forgotten
44:06passwords, or held in cold storage and
44:08untouched for years. A metric called
44:11illlquid supply essentially measures the
44:13percentage of Bitcoin that's held by
44:15entities which show zero propensity to
44:17sell. In 2024, that metric reached an
44:19all-time high of approximately 78%. That
44:23means only 22% of all the Bitcoin ever
44:25mined is actually available for open
44:27market circulation. It's like trying to
44:29buy a home in a major metropolitan city
44:32in which nearly 80% of the homes can't
44:34be sold ever. If a huge part of an
44:37asset's inventory is essentially locked
44:39away and removed from the ecosystem,
44:41even a minor increase in demand can
44:43trigger a violent vertical explosion.
44:45The value of that asset rockets up. This
44:48is the illquidity shock in a nutshell.
44:50It's like a coiled spring being wound
44:52tighter and tighter, just waiting to
44:54burst into life and expend all the
44:56energy it's accumulated. And this brings
44:58us to the ultimate uncomfortable reality
45:00about how global markets actually
45:02operate. The truth about who really pays
45:04for the bull runs. If you ask the
45:06average person on the street what drives
45:08a major bull market or who has the
45:10biggest influence on an asset like
45:11Bitcoin, they would probably point to
45:13retail investors. They would argue that
45:15it's the ordinary people opening
45:17accounts, setting up wallets, and
45:18putting a few hundred dollars into
45:20crypto every month who drive prices
45:22higher. They believe that the public has
45:24the power. That is a carefully
45:26engineered lie. Retail investors don't
45:28drive bull markets. In reality, [music]
45:30they provide the exit liquidity for the
45:32institutions. And to understand that,
45:35you have to understand how institutional
45:36order books work. A multi-billion dollar
45:39hedge fund or ETF issuer won't log on to
45:42their usual cryptocurrency exchange and
45:44buy up tens of thousands of coins in one
45:46fell swoop. That would have a massive
45:48and violent impact on the market.
45:50Instead, these mega funds prefer [music]
45:51to expand their investments without
45:54impacting the market right away. To do
45:56that, they have to trigger a wave of
45:58sell orders to match their buys. They
46:00basically need thousands of individual
46:02investors to sell off their positions at
46:04the same time and price point. They need
46:07people to panic. That's why the June
46:102026 crash wasn't a random chaotic
46:12event. It was planned [music]
46:14programmed. It was an intentional
46:16mechanism engineered by the big
46:17investment firms to solve their
46:19liquidity problem. It's actually quite
46:21simple once you know the basics of how
46:23it all works. The same algorithms used
46:25by market makers can identify areas
46:27where large numbers of stop-loss [music]
46:29orders are likely clustered. They know
46:31the price levels where retail investors
46:33have decided to sell to limit further
46:36losses. As the market approaches those
46:38levels, even a relatively small wave of
46:40selling can push prices lower and lower,
46:43bringing them closer to that stop-loss
46:44[music] zone. Once the first stop-loss
46:46orders hit, a chain reaction begins. A
46:49wave of additional orders follows,
46:51executing automatically. Huge amounts of
46:53BTC are sold off without holders even
46:56having a moment to think about their
46:58decisions. The price drops further and
47:00further, still hitting more and more
47:02stop-loss limits in the process. Within
47:04minutes, the [music] value has
47:05plummeted. And to the average investor
47:07watching all of this unfold, they get
47:09terrified and they start dumping their
47:12coins. When BTC's value has dropped
47:14about as low as it can go, the Wall
47:16[music] Street investors rush in like
47:18sharks, snapping up the coins that have
47:20flooded the open market. But it doesn't
47:22necessarily mean bad news for retail
47:24[music] investors. So far, everything
47:26about the Bitcoin crash has seemed like
47:27it is rigged against the public. [music]
47:29It's designed to chew up retail
47:30investors and spit them out with big
47:32institutions playing on their emotions
47:34and exploiting their panic. That may be
47:36true, but it doesn't tell the full
47:38story. To see that, you have to look
47:40beyond what's happening at the moment.
47:41[music]
47:42Ignore the headlines because the macro
47:44models and projection tools used by some
47:46[music] of the world's finest financial
47:47analysts are all still pointing in the
47:49same direction, up. Their forecasts
47:52haven't changed, and nor has their
47:54optimism. They still believe Bitcoin is
47:56destined to go up far higher, far sooner
47:58than you might expect. Most experts
48:00agree that Bitcoin should reach 150,000
48:03to 180,000 by the fourth quarter of
48:062026. But there is no single agreed
48:08view. Different models point in
48:10different directions, and they change as
48:12conditions change. In moments like this,
48:14large price moves are usually tied to
48:16shifts in liquidity, leverage, and
48:18overall positioning in the market rather
48:20than any single clear cause. As those
48:22conditions unwind, capital tends to move
48:24around the system in ways that aren't
48:26always visible in real time. Depending
48:28on the perspective, this can look like a
48:30normal part of market cycles or like a
48:32sign of deeper structural stress. What
48:35tends to stay consistent is that those
48:36[music] forecasts are constantly being
48:38revised as new information comes in. And
48:41in markets like this, the story is never
48:43really about a single crash [music] or a
48:45single rally. It's about cycles. how
48:47liquidity enters, how it leaves, and how
48:49the structure of the market reshapes
48:51itself [music] each time it happens.
48:53Because in the end, price doesn't just
48:55move in one direction or another. It
48:57moves through phases. And every phase
48:59eventually becomes the [music]
49:00foundation for the next one. From
49:02insurance scams to credit cards, people
49:04are trying to rip you off every day.
49:06Want to avoid ending up broke? Pay close
49:09attention. I'm Josh and on today's
49:10episode of the infographic show, we're
49:12revealing the 30 stupidest financial
49:14traps that middle class people fall
49:16into. Number 30. According to Yuggov,
49:19back in 2022, the insurance industry
49:21ranks an impressive fourth in the
49:23rankings of America's most hated
49:25industries behind only tobacco, news
49:28media, [music] and cable. And one of
49:30those literally gives people cancer.
49:32Part of the reason that people hate the
49:34insurance industry so much is finance
49:36ruining griffs like whole life
49:38insurance, which can utterly destroy
49:40even well-off white collar
49:42professionals. A whole life insurance
49:43package, unlike term life, which only
49:45covers you for a set number of years,
49:47lasts from the moment you purchase it
49:49until you die. That's when it pays out a
49:51death benefit and maybe even some cash
49:53value along the way. It seems like a
49:55stable long-term investment. Nope.
49:57That's what they want you to think.
49:59You're signing up to pay insurance
50:00premiums for your entire life, which
50:03often ends up costing you 8 to 10 times
50:05more than a term life policy, while
50:07paying out less when you kick the
50:09bucket, presumably from a heart attack
50:11after looking at your bank account. And
50:13[music] that is just the beginning.
50:14Number 29. According to Pew Research
50:16Centers, 24% of Americans think having a
50:19lot of money is the most fulfilling
50:21thing in life. Rising living costs and
50:23the push to save more have forced
50:25Americans to delay retirement and work
50:27longer than ever. At least you'll
50:28bolster your savings just a little bit
50:30more, right? Well, that's another nasty
50:32trap the money men are setting for you.
50:34The average life expectancy of a person
50:36in the US is 79. Work until 65 or later,
50:39and you may only have a decade to
50:41actually enjoy retirement. Even worse,
50:43those years are statistically the most
50:45likely to be spent frail and battling
50:47serious illnesses. But at least you'll
50:49be driving something nice to that job
50:51that you can't retire from, right? Well,
50:54not if you fall for this next one.
50:56Number 28. It's the kind of thing that
50:57you dream about as a kid. Swaggering
51:00into the dealership, buying a new car,
51:02and rolling right off the lot. But it is
51:04one of the worst things you can do. And
51:06it's all because of one word that sends
51:08a chill down the spine of anyone
51:10interested in finance. Depreciation. In
51:13your first year of buying a new car, its
51:15value will depreciate by 20%. And it
51:17keeps on falling as time goes on. It's
51:20only considered a new car while it's
51:21still on the lot, but the second you
51:23drive it off, it is used and priced as
51:25such. All that extra money you paid will
51:28vanish into thin air. And the worst
51:30part, everyone says buying a used car
51:32means inheriting someone else's
51:33headaches. But a new car with all the
51:36latest tech and [music] high replacement
51:37value, it hits you with an even bigger
51:39insurance premium. And just like that,
51:41your dream car is now a nightmare. This
51:44next trend [music] convinced millions
51:45they were getting rich while draining
51:47their pockets. Number 27. NFTts or non-f
51:51fungeible tokens are blockchain
51:52authenticated, usually ugly little
51:55illustrations designed to be unique and
51:57randomized. People bought them as
51:58speculative investments hoping that
52:00rarity would drive their value up. They
52:02were all the rage during the early 2020s
52:04crypto craze. But next time you see NFT,
52:07it'll save you a lot of heartache if you
52:09think of it as meaning not financially
52:11tenable. Around 23 million people didn't
52:14know this and they're now sitting on
52:15worthless blockchain JPEGs. According to
52:18NFT scan and coin market [music] cap,
52:20almost 69,800 out of 73,000 NFT
52:23collections have lost all their value,
52:25leaving everyone who bought in
52:27financially devastated. A perfect
52:29example is the NFT of the first ever
52:31tweet by founder Jack Dorsey. It [music]
52:33sold for 2.3 million in 2021 and reduced
52:38to a mere 1,200 in 2023. That is less
52:42than 2,000 bucks. And if you want to
52:45keep your money, maybe hang back the
52:47next time you see a crazy speculative
52:48investment trend that everybody else is
52:50hyping. [music] This next trap is
52:52something most Americans are already
52:53carrying in their pockets. Number 26.
52:56Because everything is so [music]
52:57expensive and wages are stagnant, it's
52:59not uncommon for people to use credit
53:01cards. In fact, 82% of adult Americans
53:04have one, often several. And in 2025,
53:07America's total credit card debt hit
53:08around $1.28 trillion. Many struggle to
53:12keep up and just make the minimum
53:13payments to avoid [music] late fees. And
53:15that is exactly how they get you. The
53:17minimum repayment is often only 2 to 3%
53:20of the total you owe. But all the while,
53:22the interest is still acrewing. That
53:24means you'll pay more money over time.
53:26One source, My Budget, gives this
53:28example. If you owe $5,000 on a credit
53:31card at 18% interest and you only pay
53:33the $100 minimum each month, it could
53:36take more [music] than 30 years to clear
53:38the debt, by which time you'll have paid
53:40over $12,000 in repayments, over double
53:43the original debt. Think about this next
53:46time you're making a repayment. And that
53:47slow bleed is nothing compared to what's
53:50coming. Number 25. The number one
53:52commodity in the 21st century is
53:54convenience. And companies have realized
53:56that they can take advantage of this.
53:58What could be a better example of this
54:00than food delivery services like Door
54:02Dash and Uber Eats? [music] It feels
54:03even more practical if you live out in
54:05the suburbs. But much like credit card
54:07repayments, it's a financial death of a
54:09thousand cuts when you look just a
54:11little bit [music] closer. You might
54:12think nothing of door dashing in your
54:14meal when you're tired after work on a
54:16Friday night until you realize that
54:18items can be as much as 39% more
54:20expensive on these delivery services.
54:22And that is before you get the added
54:24delivery charge and driver tip. A meal
54:27that might [music] cost you 40 bucks if
54:29you buy it in the store would be as high
54:30as $54 over the app. So if you're
54:33ordering in multiple times a week, you
54:35[music] are bleeding out and you don't
54:36even know it. But that is nothing
54:38compared to our next financial trap.
54:40Number 24. Ah, the lottery. It's like
54:43being struck by lightning except it
54:46pushes you into a new tax [music]
54:47bracket. Americans are paying big to
54:49play a game they're almost guaranteed to
54:51lose. Your chances of getting killed in
54:53a lightning strike are around 1 in
54:55187,000. Your chance of winning the
54:58Powerball are [music] 1 in 292.2
55:01million. It's not even close. According
55:04to CNBC, half of Americans play the
55:06state lottery. And depending on the
55:07specific source, the average American
55:09spends between $30 and $1,000 on lottery
55:12tickets every single year. That's money
55:14you might as well just toss into a
55:16wishing well. Needless to say, it is far
55:18better left in your pocket. And speaking
55:20of dreams, the American dream itself
55:22might be one of the most expensive traps
55:24of all. Number 23. It's the middle class
55:27dream to actually own your own home
55:29rather than renting. And [music] in
55:312024, mortgage repayments actually were
55:33cheaper than rent, which probably has a
55:35lot of us considering a call to the
55:37Samaritans. However, this comes with
55:39another financial trap for owners. And
55:40it's [music] one that seems to be
55:42getting worse every year along with
55:43inflation. Maintenance costs. According
55:46to Forbes, the annual maintenance cost
55:48for a single family home is
55:49approximately $10,400 [music]
55:51perom with a 5.9% year-over-year
55:55increase. Isn't life just absolutely
55:57relentless? Even when you've got a dream
55:59situation, there are insanely expensive
56:01caveats. But homes aren't the only
56:04heartwarming purchase that can quietly
56:06wreck your finances. Number 22. You may
56:08[music] think that pets add a little
56:10extra meaning to your life, but they can
56:12just as easily be like an anchor around
56:14your neck, dragging you down into
56:15financial oblivion. Let's look at the
56:17most popular pet in America. There are
56:19currently 48.3 million dogs living in
56:22American households. [music] While the
56:23dividends of owning a dog are largely
56:25seen as love and companionship, you
56:27can't buy a Lamborghini with either of
56:29those. So, let's look at the real costs
56:31of owning one of these four-legged
56:32freeloaders. According to the Wall
56:34Street Journal, upfront costs for
56:35obtaining a dog vary from $1,100 to
56:38$4,400. But that is just where it all
56:41starts. You've also got spaying and
56:43neutering, vaccinations, [music]
56:45training, food, routine checkups,
56:47grooming, and physical supplies. That
56:49adds up to between 3,00 and 9,500.
56:52[music] And then it's time for pet
56:54insurance. And if you're hoping for more
56:56than one pet, feel free to add the
56:58appropriate multipliers to all of the
56:59numbers here. Now, we're about to talk
57:01about lifetime damage. Number 21.
57:04[music] Are you a millionaire? We're
57:06going to guess probably not. But did you
57:08know that if you're a committed smoker,
57:10you might spend as much as $1.6 million
57:13on cigarettes over the course of your
57:14life? And that stat came out in [music]
57:162016, adjusting for inflation over the
57:19past decade, you might be looking at as
57:21much as $2 million by now. But if
57:23alcohol is your legal take the edge off
57:26option of choice, that's also going to
57:27financially bleed you. The pandemic
57:29supercharged alcohol consumption, seeing
57:31jumps as large as 20% [music] to 40% in
57:34some US states, so business is booming
57:37if you happen to be selling it. In 2022,
57:39[music] the average American spent $583
57:41on alcohol each year. Even if you shrug
57:44off the upfront costs of cigarettes and
57:46alcohol, the true price comes later as
57:48their health toll adds up to a
57:50staggering global health care bill.
57:52Better to curb your habits now for your
57:54finances and your future, no matter how
57:56cool you think you look with that cigar
57:58and glass of scotch. This next one locks
58:00you in without realizing. Number 20,
58:03Netflix, Amazon Prime, Disney Plus,
58:05Hulu, HBO Max, Peacock, [music] and that
58:07is still just a fraction of the
58:08streaming services that entertainment is
58:10spread across these days. And it's all
58:12getting more expensive. In fact, Forbes
58:14found that streaming packages got 44%
58:17more expensive across 2025. The average
58:19American is spending just over $42 a
58:22month on [music] streaming, working out
58:23to just over $500 a year. And are you
58:26even regularly watching half of the
58:28services you have? It's yet another
58:30reason to scale all that back and watch
58:33more free infographic show videos here
58:35on YouTube. Number 19. Gambling apps are
58:38currently causing a financial and health
58:39crisis across the US thanks to relaxed
58:42gambling laws. People bet on sports,
58:44elections, and even random world events,
58:46sometimes spending thousands of dollars
58:48every year to little or no return. The
58:51National Council on Problem Gambling
58:52estimates that about 2 and a2 million
58:54adults in the US have severe problems.
58:56[music]
58:57Another 5 to 8 million have significant
58:59issues. If you find yourself as one of
59:01those [music] people, it might just cost
59:03you everything. And just when you think
59:05you've avoided the obvious traps, there
59:07are contracts waiting for you dressed up
59:09as opportunity. Number 18. A rare method
59:12of getting a foot on the property ladder
59:14is a rentto- own deal. This lets you
59:16build equity with each rent payment
59:18until you fully own the home. But while
59:20it seems like a sweet deal, there are
59:22some major financial traps that you need
59:24to watch out for. With a shady seller,
59:26your payments could be pocketed or used
59:28to cover their taxes and mortgage,
59:30passing the debt on to you. In extreme
59:32cases, they might even rent or sublet
59:34the property, pocketing [music] extra
59:35money while you're getting nothing. If
59:37you enter a rent to own deal, do your
59:39homework first. It couldn't get worse,
59:41[music] could it? You bet it could.
59:43Number 17. What's more middle class than
59:46having a boat in your driveway? While
59:48it's a status symbol for many, it can
59:50also become a major financial sinkhole.
59:52Not only do boats depreciate in value
59:54just as bad as cars, it can be an
59:56expensive hobby. Boat insurance can be
59:58costly and maintenance costs can be
1:00:00considerable. And if you feel like
1:00:02keeping it at the harbor rather than on
1:00:04your trailer outside of your garage,
1:00:05renting a birth will be an ongoing cost,
1:00:07too. And how much are you actually going
1:00:09to use it? Really? Now, for one of the
1:00:12biggest scams for hopeless romantics.
1:00:14Number 16. It's a tradition as old as
1:00:17time. Spending 2 months of your salary
1:00:19on a big old diamond ring to propose to
1:00:21your beloved. Except it's not as old as
1:00:23time. It's only as old as 1947 when the
1:00:26Debeers Diamond Company made this the
1:00:28new tradition. Before the 1940s, only
1:00:3010% of brides were getting diamond
1:00:32rings. By the 1990s, it was 80%. Instead
1:00:35of blowing 2-mon salary on a generic
1:00:37diamond ring, spend a bit less on
1:00:39something personal and [music] don't
1:00:40bankrupt yourself over a rock. And the
1:00:43debt keeps on coming. Number 15, middle
1:00:46class people are careerists. They want
1:00:48to get their foot in the door, even if
1:00:50it means being financially abused. It's
1:00:52why one of the biggest scams out there
1:00:53is signing up for an unpaid internship.
1:00:56People tell you it's a valuable way to
1:00:57earn experience and build your
1:00:59connections in the industry. But if
1:01:00[music] time is money, you deserve to
1:01:02get paid for your time and hard work.
1:01:05Now for something that shouldn't
1:01:06surprise you. Number 14. Everyone knows
1:01:09they're getting ripped off at the
1:01:10hospital. It's a staple of every hack
1:01:12joke in the universe. Even routine
1:01:14procedures can come with a shockingly
1:01:15high cost long before major medical debt
1:01:18hits. Here's a little infographic show
1:01:20life hack for you. Ask for an itemized
1:01:22list of charges on your bill where
1:01:24they'll have to tell you each thing
1:01:26they're charging for and then you'll see
1:01:28a lot of that bill disappear like magic
1:01:30and the bills keep on racking up. Number
1:01:3313. Fashion moves fast and constantly
1:01:35changing cheap trendy clothes can cost
1:01:37more than investing in a few quality
1:01:39staples that [music] last for years.
1:01:41Clothes are getting more expensive with
1:01:43average items costing as much as $17 or
1:01:45more. And that is a problem. New clothes
1:01:48make up 2.3% of the average American's
1:01:51yearly spending. Buy reliable, save
1:01:53money, and reduce clothes waste in the
1:01:55process. [music] Everyone wins. And
1:01:58that's just your wardrobe. Wait until we
1:02:00talk about spending that can haunt you
1:02:02for decades. Number 12. Would you spend
1:02:05$33,000 on a vacation that lasts a
1:02:08single day? Probably not. But people
1:02:10regularly go into debt funding weddings
1:02:13with that as the average cost. 40% of
1:02:16which is just the cost of the reception
1:02:17venue and the catering. Is it really
1:02:20worth it? [music] We're not saying you
1:02:21shouldn't get married, just that instead
1:02:24maybe you should go in with a more
1:02:26reasonable budget if you don't want your
1:02:28wallet to be haunted by a matrimonial
1:02:30ghost for years to come. All of that
1:02:32debt will be with you until death do you
1:02:34part, and even then you can't escape.
1:02:36Number 11. One of the darkest financial
1:02:39traps that people fall into is dying.
1:02:41And as it [music] turns out, death is
1:02:43insanely expensive. According to the
1:02:45University of Pennsylvania, if you or a
1:02:47loved one died of a long illness, the
1:02:50last month of your life in hospital can
1:02:51already cost as much as [music] $32,400.
1:02:55Actual burial costs can be around 7,800.
1:02:58[music] And you'll save a little bit of
1:03:00money with cremation at $7,000. And when
1:03:02it comes to settling the legal matters
1:03:04of the deceased's property, you're also
1:03:06looking at a few thousand more. Even
1:03:08death can't help you escape from
1:03:10capitalism. But check out what's
1:03:11happening when you're alive. Number 10,
1:03:14buy now pay later plans allow you to
1:03:16finance purchases and pay them in
1:03:17installments. It seems like a pretty
1:03:19sweet deal. You can even do it on
1:03:21PayPal, but there is some darkness
1:03:23beneath [music] the surface. Some of
1:03:25these legal services offer credit limits
1:03:26of $30,000. And that [music] money is
1:03:29easy to abstract. Even if you manage to
1:03:31get an interestfree deal, if you miss a
1:03:34payment, you'll find [music] yourself in
1:03:35a world of financial hurt until you're
1:03:37old. And when you're old, new financial
1:03:39traps await. Number nine, age comes for
1:03:42all of us eventually, and it leaves us
1:03:44supporting ourselves or supporting
1:03:46elderly relatives. And in this predator
1:03:48system we call America, that can lead to
1:03:50a pretty brutal financial trap. At the
1:03:52high-end retirement homes, the median
1:03:54cost of care is $5,900
1:03:56per month. But ancillary services can
1:03:59make that [music] rise to $20,000 per
1:04:01month. And even this doesn't necessarily
1:04:04guarantee you a good standard of care.
1:04:06It can be a brutal industry and [music]
1:04:08a sign of the fact that our productivity
1:04:10obsessed society casts away the elderly
1:04:12on our dime. Most people won't see this
1:04:14one coming until it's too late. Number
1:04:17eight, health insurance is another one
1:04:19of those traps that you sadly can't
1:04:20really avoid given that your life and
1:04:22well-being is being leveraged against
1:04:24you for it. You'll be paying monthly
1:04:26premiums [music] for health insurance in
1:04:28case you get sick or injured, but a lot
1:04:30of the time you're actually paying more
1:04:32and getting less. Healthcare providers
1:04:34negotiate higher prices with insurers
1:04:36than if you [music] were just paying in
1:04:38cash. Isn't the system wonderful? Number
1:04:40seven, call it a cliche, but if a deal
1:04:42[music] looks a little too good to be
1:04:44true, it almost definitely is. Throw in
1:04:47some cash [music] and someone promises
1:04:48to quadruple it quickly, well, you might
1:04:51just be staring down the barrel of what
1:04:52experts call a high yield investment
1:04:54program or HYIP. These unregistered
1:04:58investments will offer shocking payouts,
1:05:00the kind that would scare away any savvy
1:05:02investors [music] and leave only the
1:05:04juiciest of rubes. And soon they'll be
1:05:06parted from what little money they can
1:05:08spare. If someone's offering you a
1:05:10once-in-a-lifetime investment
1:05:11opportunity, do your due diligence or
1:05:13you might never invest again. Think
1:05:15you're safe from fraud? Think again.
1:05:18Number six, as the economy worsens,
1:05:20people look for ways to ease the pinch
1:05:22and that is when payday lenders creep
1:05:24in. Increasingly middle and upper income
1:05:26individuals seeking quick cash end up
1:05:28leaping straight into this financial
1:05:30blender. Even with a loan of $500 to
1:05:34$1,000 with a 300 to500% [music]
1:05:37annual interest rate compared to the 15
1:05:39to 30% APR you'd get with an average
1:05:41credit card, you are soon going to be in
1:05:43some real trouble. Avoid payday lenders
1:05:46at all costs. Number five, at the risk
1:05:49of sounding like your drunk uncle at
1:05:51Christmas, you really want to be careful
1:05:53who you're married to. It could be the
1:05:55worst decision of your life. Divorce is
1:05:57a booming industry raking in around $50
1:05:59billion every year. How much you could
1:06:01get annihilated for in a divorce will
1:06:03depend on your personal net worth and
1:06:05the peculiarities of the split. That's
1:06:07not our business. But in general, the
1:06:09median cost is 7,000 and the average
1:06:12cost is between 15,000 to 20,000. And
1:06:15that is before you even get into
1:06:17property disputes and child custody. But
1:06:20there's another seemingly innocent and
1:06:21quintessentially middle class decision
1:06:23that can financially haunt you for the
1:06:25rest of your life. Number four, going to
1:06:28college was once a right of passage for
1:06:30everyone in the middle class. But these
1:06:32days, with a population more educated
1:06:33than ever, a degree isn't worth what it
1:06:35used to be. In a metaphorical sense,
1:06:37anyway, because in a financial sense, it
1:06:40is more expensive than ever. According
1:06:42to the Education Data Initiative, the
1:06:43average US cost for attending university
1:06:46is just under $38,300 [music]
1:06:48per student per year, including books,
1:06:51supplies, and daily living expenses.
1:06:53Kind of like owning 10 pets [music] with
1:06:55severe health problems all at once. And
1:06:58then comes the student loan debt. 42.3
1:07:01million Americans are shouldering a
1:07:02total of $1.81 trillion in debt. The
1:07:05average loan debt works out at almost
1:07:07$39,400.
1:07:09But thanks [music] to the beauty of
1:07:10compound interest, you might just be
1:07:12paying it off until your whole life
1:07:14insurance plan pays out. Still, there
1:07:16are three financial traps that are even
1:07:18stupider and even worse. Number three,
1:07:22take every financial trap of traditional
1:07:24college, double it, and then add the
1:07:26risk of a near worthless degree. And
1:07:29that's the reality of for-profit
1:07:30colleges. These [music] private
1:07:32institutions cut costs on teaching
1:07:34because the proceeds go straight to the
1:07:35owners. Students at these schools
1:07:37default on their exorbitant loans twice
1:07:39as much as people who [music] attend
1:07:40regular college. According to the
1:07:42Guardian, from 1995 to 2015, enrollment
1:07:45at for-profit colleges went up more than
1:07:48460%.
1:07:49They promise a lower barrier to entry as
1:07:51a smoke [music] screen for shoddy
1:07:53teaching, bunk diplomas, and hidden
1:07:55costs. Avoid them like the plague.
1:07:58Here's where things get really serious.
1:08:00Number two, ever wanted to be your own
1:08:02boss? plenty of people do, hoping to
1:08:04escape the rat race and forge some
1:08:06financial independence. [music] And
1:08:07multi-level marketing companies or MLMs
1:08:10prey on that exact feeling. [music] MLMs
1:08:12are sales companies that recruit you,
1:08:14sell you the supplies for you to sell
1:08:16on, and then encourage you to profit by
1:08:18recruiting new salespeople into your
1:08:20downline. Essentially, they're predatory
1:08:22companies that sell the concept of
1:08:24selling. Some of the worst of these
1:08:26companies are literally illegal pyramid
1:08:28schemes that will land you with a garage
1:08:30full of surplus products and plenty of
1:08:32open space in your bank account. [music]
1:08:34They'll make lofty promises about the
1:08:35huge amount of money that you could earn
1:08:37with them, but you'll only be able to
1:08:39turn a profit if you turn predatory,
1:08:41too, and start dragging more unfortunate
1:08:43folks into the scam. According to Gerard
1:08:45Brody, chairperson at Essential Services
1:08:47Commission, there is literally a 99.7%
1:08:51chance that you will lose money. Almost
1:08:53nothing but tomorrow's sunrise is that
1:08:56certain. So stay away at all costs.
1:08:58[music] Now for the ultimate financial
1:09:00trap. Number one, when it comes to scams
1:09:03that will suck you absolutely dry,
1:09:05nothing beats the utter nightmare that
1:09:07is the time share deal. It's essentially
1:09:10a shared vacation home. You use it for
1:09:12part of the year, others use it for the
1:09:14rest. So the cost is theoretically lower
1:09:17than renting a place you'd only visit
1:09:19occasionally. The problem is predatory
1:09:21management companies use this as a way
1:09:23to lock you into a contract that favors
1:09:26them. Meanwhile, they absolutely ream
1:09:28you on property maintenance and
1:09:30management charges that they have been
1:09:31known to ramp up whenever they want. And
1:09:34while they're sucking your bank account
1:09:35dry, you will barely use the place since
1:09:38you and every other buyer are fighting
1:09:40over the same peak vacation weeks.
1:09:42Everyone loses while the time share
1:09:44companies are cleaning up. If someone
1:09:46tries to sell you a time share condo,
1:09:48turn around and run for the hills.
1:09:50You've been told the Federal Reserve
1:09:52controls your interest rates. That's a
1:09:54lie. Your mortgage, your car loan, and
1:09:56your 401k are all tied to oil rich
1:09:59nations in the Middle East. America's
1:10:01economy depends on a deal most people
1:10:04never knew existed. None of it is
1:10:06[music] secret. Most of it is on the
1:10:08public record. Almost none of it was
1:10:10ever put to you. Chapter 1. The 2026
1:10:13mortgage spike. In March 2026, the
1:10:16average [music] 30-year mortgage rate
1:10:17climbed by 13 basis points. It's the
1:10:20biggest weekly jump in nearly a year.
1:10:22Eventually, it hit its highest level
1:10:24since September 2025. [music] Just 3
1:10:26weeks later, rates surged again, this
1:10:29time by 34 basis points. Mortgage
1:10:31applications fell [music] 10 12% that
1:10:34same week. Refinancing fell off a cliff.
1:10:37It wasn't for the usual reasons. The
1:10:39Federal Reserve hadn't raised rates.
1:10:41Inflation data hadn't suddenly exploded.
1:10:43Instead, war tensions abroad were
1:10:45pushing Treasury yields up. Mortgage
1:10:48rates were dragged along with it. So,
1:10:50[music] how does conflict on the other
1:10:51side of the world changed the cost of
1:10:54buying a house in America? Behind the
1:10:56scenes, a small number of foreign
1:10:57governments hold enormous amounts of US
1:11:00[music] debt. When one of them suddenly
1:11:02needs cash, there is a simple way to get
1:11:04it. Sell treasuries. [music] When a
1:11:06major holder starts selling into a
1:11:08volatile market, treasury prices fall
1:11:10and yields rise. American mortgage rates
1:11:12are built on top of those yields. When
1:11:15long-term bond yields climb, 30-year
1:11:17mortgage rates usually climb with them.
1:11:19Banks price home loans off of that bond
1:11:22and then add their own cut on top. None
1:11:24of this is hidden. It's just rarely said
1:11:27out loud. The numbers behind it are
1:11:29bigger than most people realize. The
1:11:30Federal Reserve Bank of Kansas City
1:11:32estimated that a single month of roughly
1:11:35$141 billion in foreign treasury selling
1:11:39could push US yields up by about 57
1:11:42basis points. Other estimates range from
1:11:4425 to 100 basis points. A separate study
1:11:47in the Journal of International
1:11:48Economics puts the impact of a 100
1:11:51billion sale at around 100 basis points
1:11:54within a month. Put that on a median new
1:11:57American home today. A 50 basis point
1:11:59jump adds about $130 a month to your
1:12:02mortgage every month for 30 years. A 100
1:12:06basis point move roughly doubles that
1:12:09north of $260 a month. Over the life of
1:12:11that loan, it adds up to tens of
1:12:13thousands of dollars. All of it paid out
1:12:16of one family's future. [music]
1:12:18And the pain does not stop there. Home
1:12:20equity is the biggest pile of wealth
1:12:22most middle- class families ever touch.
1:12:24And when their rates shift, it starts to
1:12:26chip away at it. The house stops rising
1:12:28in value while the cost [music] of
1:12:30keeping it climbs. That is wealth
1:12:32thinning in slow motion. Higher rates
1:12:35also halt new construction and
1:12:37renovations. Projects get delayed. Jobs
1:12:39on framing crews, electricians, and
1:12:41contractors disappear. The slowdown
1:12:44doesn't stay in [music] housing. It
1:12:46spreads outward. Car loans get more
1:12:48expensive. Student debt becomes harder
1:12:50to refinance. Even small business credit
1:12:52lines start tightening in towns that
1:12:54have nothing to do with global bond
1:12:56markets. All from one [music] shift in a
1:12:58distant market. One thing can send a
1:13:01shockwave through the entire system
1:13:02before most [music] people even realize
1:13:05anything has changed. Chapter 2, the
1:13:07invisible pawn shop. The Fed uses a
1:13:10system called the FEMA repo facility.
1:13:12FEMA or FIMA stands for F foreign and
1:13:15international monetary authorities.
1:13:17Let's say a foreign central bank owns US
1:13:20treasuries and suddenly needs dollars.
1:13:23It can bring those bonds to the Fed,
1:13:25hand them over as collateral, and then
1:13:26walk away with cash. It's a short-term
1:13:28[music] deal. It gets bonds back when
1:13:30the trade is reversed. Essentially, it's
1:13:32a pawn shop [music] for entire
1:13:34countries. But it was never meant to be
1:13:36a permanent system. The Fed set up a
1:13:38temporary FEMA repo facility on March
1:13:4131st, 2020 during the COVID pandemic. It
1:13:44was supposed to run for at least 6
1:13:46months. It was extended again and again.
1:13:49On July 28th, 2021, the Fed made it a
1:13:52standing facility. [music]
1:13:53There was no debate or vote. It just
1:13:55became a thing. The pricing was set
1:13:58deliberately high, 25 basis points over
1:14:00[music] the interest rate on excess
1:14:01reserves. That rate is on purpose. It
1:14:04sits above private market rates when
1:14:06conditions are calm. [music] So, nobody
1:14:08uses the Fed's counter when markets are
1:14:10healthy. The open market is cheaper and
1:14:12easier to deal with. A central bank only
1:14:14uses it when selling would be worse than
1:14:17paying the Fed's markup. In other words,
1:14:19it only gets used when doing anything
1:14:21else would make things worse. For years,
1:14:24the Fed has been fighting inflation and
1:14:25making loans harder and pricier. But at
1:14:28the same time, the Fed is ready to hand
1:14:30dollars to foreign central banks. One
1:14:32move squeezes the American borrower. The
1:14:35other ensures that if a foreign holder
1:14:37needs help, there is always a backs stop
1:14:39waiting. Critics say it creates a death
1:14:42loop. When a [music] market knows
1:14:43there's always a safety net for its
1:14:45biggest players, pricing stops being
1:14:47honest. Price discovery is the whole
1:14:49[music] point of a market. It's how
1:14:51everyone learns what a thing is truly
1:14:53worth. Markets don't move on just data.
1:14:56They move on what people believe will
1:14:58happen when [music] things break. And
1:14:59that's the problem. Emergency tools are
1:15:02supposed to be the backup, the last
1:15:04resort. They only exist for rare [music]
1:15:06moments of stress. But if they keep
1:15:08getting used, rare stops meaning rare
1:15:11and it becomes a part of the system.
1:15:13[music] FEMA became necessary because
1:15:15the normal buyers of US debt stopped
1:15:17doing their job as reliably [music] as
1:15:19they once did. But the warning signs
1:15:21were there. Chapter 3. The warning
1:15:23nobody watched. On September 17th, 2019,
1:15:26[music] the repo rate, the rate that
1:15:28banks pay to borrow cash overnight
1:15:30against safe government bonds, suddenly
1:15:33spiked. It went from about 2.4% 4% to
1:15:36over 5% in a single day. At one point,
1:15:39it briefly touched the double digits.
1:15:41For a market that rarely moves 20 basis
1:15:43points in a session, that's a warning
1:15:45sign, and nothing big had happened. The
1:15:48cause was boring. Corporate tax payments
1:15:51drained cash out of the system at the
1:15:53same moment that a large Treasury
1:15:55settlement pulled even more liquidity
1:15:57away. Roughly $120 billion vanished from
1:16:00available reserves in a single day. The
1:16:03institutions that normally smooth these
1:16:05gaps didn't step in fast enough. Not
1:16:07because they were in trouble, but
1:16:09because the rules and incentives after
1:16:112008 made them more cautious about doing
1:16:14so. The New York Fed responded within
1:16:16hours. It injected $75 billion and
1:16:19repeated the operation every day for the
1:16:21rest of the week. This is where the Fed
1:16:23drew a line. Cash drained out in
1:16:25predictable ways. tax payments, treasury
1:16:28settlements, normal events, but there
1:16:30wasn't enough of a buffer left in the
1:16:32system to absorb them. Nobody in charge
1:16:34could confidently say where the safe
1:16:36level actually was anymore. So, 2 years
1:16:39later, in July 2021, the Fed made it
1:16:41permanent. It turned its emergency repo
1:16:44actions into a standing repo facility
1:16:46for US banks. This was a standing
1:16:48promise to step in and lend cash
1:16:50whenever private markets wouldn't. It
1:16:52was the same day it created the FEMA
1:16:54facility. One domestic, one global. Both
1:16:57built for the same reason, to make sure
1:16:59liquidity stress could never again spike
1:17:02the system [music] like it did in 2019.
1:17:04And this became the template for
1:17:06everything that followed. Chapter 4, the
1:17:08Japan pivot. For a long time, Japanese
1:17:11institutions were among the steadiest
1:17:13holders of American government debt.
1:17:15They were reliable enough that markets
1:17:17treated them as part of the furniture.
1:17:19The thing pulling Japanese money across
1:17:21the Pacific was a trade called the carry
1:17:23trade. Japanese rates sat near zero for
1:17:26years. Investors could borrow yen for
1:17:28almost nothing. Converted to dollars and
1:17:31then buy higher yielding US assets. The
1:17:34difference became the profit. For years,
1:17:36huge amounts of capital flowed through
1:17:38that single trade. It didn't feel like
1:17:40speculation in the usual sense. Money
1:17:42moved so consistently, it stopped
1:17:44looking like movement at all. It worked
1:17:46like a hidden stabilizer under the whole
1:17:48treasury market. And that all changed in
1:17:502025. The Bank of Japan stepped away
1:17:53from its long era of super loose policy.
1:17:55It raised its policy rate in stages. By
1:17:58December 2025, that rate sat at 0.75%.
1:18:02The highest in three decades. The
1:18:04increment looked small, but its effect
1:18:07was not. A carry trade only prints money
1:18:10while the borrowed money is free. The
1:18:12moment the yen stopped being free, the
1:18:14gap that justified the trade started to
1:18:16close. Even worse for Washington,
1:18:18Japanese bond yields were rising at home
1:18:21above 2%. Japanese investors suddenly
1:18:23had a reason to bring their money back.
1:18:25They could earn a safe return in their
1:18:27own currency. Money that had flowed out
1:18:29for a generation began to turn around.
1:18:32Japan's pullback arrived while US debt
1:18:34issuance was setting records. At that
1:18:36exact moment, Washington needed to sell
1:18:39more debt than ever. and one of its most
1:18:41reliable buyers started stepping back.
1:18:43That doesn't trigger an instant crisis,
1:18:46but it changes the balance underneath
1:18:47the system. Because when a borrower
1:18:49suddenly needs more money while a
1:18:52longtime lender buys less, the stress
1:18:54has to go somewhere. The foreign
1:18:56slowdown wasn't even the full problem.
1:18:58While that cushion was thinning
1:19:00overseas, another pressure point was
1:19:02quietly building inside the United
1:19:04States itself. One large enough to
1:19:06matter on its own. Chapter 5. The $1
1:19:09trillion maturity wall. Washington is
1:19:12not the only borrower in America living
1:19:14or dying by the refinancing window.
1:19:16Underneath the federal numbers sits a
1:19:18second debt pile. Most people never
1:19:20think about it until it lands on them.
1:19:22Commercial real estate. From the office
1:19:24block downtown to the strip mall off the
1:19:26highway, almost none of it is financed
1:19:28with loans that pay themselves off over
1:19:30time. Those loans come due in full.
1:19:33Nearly a trillion dollars in property
1:19:35loans were scheduled to come due in 2025
1:19:37alone. Hundreds of billions more were
1:19:40stacked right behind them in 2026. That
1:19:43means well over $1.5 trillion in debt
1:19:46suddenly has to be refinanced [music]
1:19:48into a completely different world. A
1:19:50building financed years ago at 3% now
1:19:53has to roll into a loan that costs
1:19:55dramatically more. While the building
1:19:57itself may be worth dramatically less.
1:19:59For many properties, there isn't enough
1:20:01income left to make the numbers work
1:20:03anymore. So, lenders lean on a move
1:20:06called extend and pretend. And it's
1:20:08exactly what it sounds like. Banks
1:20:10extend loans and push the deadlines out
1:20:13for another year or two. They avoid
1:20:15locking in the loss today and they hope
1:20:17conditions [music] improve before the
1:20:18problem comes back around. Individually,
1:20:21every step sounds reasonable, but across
1:20:23the entire system, those delays start
1:20:25piling on top of each other. A
1:20:27refinancing wave that large, hitting
1:20:29that fast, is enormous. It's a debt on
1:20:32the scale of an entire midsized
1:20:34country's economy suddenly needing new
1:20:36terms all at once. Except this isn't
1:20:38some distant sovereign crisis. It's
1:20:41American real estate. Much of that debt
1:20:43was written in a completely different
1:20:45era when rates were low and property
1:20:47values were far higher than they are
1:20:49now. Some sectors got hit harder than
1:20:51others. 35% of hotel mortgages and 24%
1:20:54of office mortgages came due in that
1:20:57single year. Offices have an extra
1:20:59problem. The working world stopped using
1:21:01them during the COVID pandemic and
1:21:03working from home became the new
1:21:05reality. Fewer workers came back and the
1:21:07buildings emptied out. So naturally,
1:21:09their values fell. Now the loans are
1:21:11coming due against properties worth less
1:21:14than when the debt was originally
1:21:15issued. Hotels have a similar problem.
1:21:17Their revenue swings with travel demand
1:21:19and conference budgets both shrank. That
1:21:22pressure does not stay inside of real
1:21:24estate. It moves directly into the
1:21:26banking system, especially smaller
1:21:28regional and community banks. They tend
1:21:30to hold huge amounts of commercial
1:21:32property debt on their books. And those
1:21:34are the same banks many small businesses
1:21:37rely on every day. A bank carrying
1:21:39quietly stressed property loans becomes
1:21:41more cautious. Lending tightens. Small
1:21:44businesses struggle to expand.
1:21:46First-time home buyers get squeezed
1:21:48harder. This is where the pieces start
1:21:50connecting. Earlier, foreign demand for
1:21:52US debt began thinning out. Now,
1:21:55domestic credit is tightening, too. Two
1:21:57separate pressure points start pushing
1:21:59against each other. And because the
1:22:01[music] losses haven't fully surfaced
1:22:03yet, the system enters a strange state.
1:22:06Everyone knows the stress exists, but
1:22:08nobody wants to be the first to fully
1:22:10price it in. Banks extend the loan or
1:22:13rewrite the terms. They can give the
1:22:15borrower more time. Technically, the
1:22:17loan can still look current on [music]
1:22:19paper because payments are still being
1:22:20made under the new agreement, but the
1:22:22losses don't vanish. They just sit there
1:22:26quietly accumulating until the [music]
1:22:28system runs out of room to keep
1:22:29postponing them. Chapter six, the dollar
1:22:32liquidity squeeze. The Gulf runs on a
1:22:35steady current of American currency. Oil
1:22:37[music] is priced in dollars. Export
1:22:38money returns in dollars. Sovereign
1:22:41wealth funds are all measured in
1:22:42dollars. When the Iran war broke out in
1:22:44late February 2026, the conflict had a
1:22:47global impact. The closure of the Strait
1:22:49of Hormuz choked off the flow of roughly
1:22:51a fifth of the world's oil. Oil prices
1:22:54rose and inflation expectations rose
1:22:56with them. Treasury yields and mortgage
1:22:59rates [music] followed. As instability
1:23:00spread through the region, governments
1:23:02across the Gulf started pulling harder
1:23:04on dollar liquidity. These countries are
1:23:06usually portrayed as the lenders,
1:23:08[music] the cashrich powers buying
1:23:10skyscrapers, sports teams, and stakes
1:23:13and companies all over the world. But
1:23:14when dollar funding tightens, even they
1:23:17can feel the effects. The countries
1:23:18people imagine as financially
1:23:20untouchable still depend on the same
1:23:22Federal Reserve mechanics as everyone
1:23:24else. When the pressure rises, they need
1:23:26dollar access too fast. Which means the
1:23:30image of total independence [music]
1:23:31was never quite real. It only looked
1:23:33solid while liquidity was easy. And
1:23:36that's when the foreign banks face a
1:23:38hard choice. They either sell a huge
1:23:40[music] pile of treasuries into an
1:23:42already stressed market. But that
1:23:44creates its own problem immediately.
1:23:46Selling pushes bonds down [music] and
1:23:48yields up, which means that the value of
1:23:50the bonds you still own also falls. You
1:23:53solve the cash problem by damaging your
1:23:55own balance sheet. So most don't want to
1:23:57do that unless they absolutely have to,
1:23:59which means they use the Fed's dollar
1:24:01back [music] stops instead. They borrow
1:24:03dollars, postc collateral, and avoid
1:24:05dumping bonds into the market. And that
1:24:07decision can ripple all the way into
1:24:09American households. If enough
1:24:11treasuries hit the market all at once,
1:24:13yields rise, mortgage [music] rates rise
1:24:15with them, retirement portfolios get
1:24:17hit, too. One liquidity decision
1:24:19overseas can change the monthly payment
1:24:21on a house thousands of miles away. For
1:24:24the foreign banks, it makes sense.
1:24:26Without swap lines or repo facilities,
1:24:28they have no choice except to liquidate
1:24:30treasuries into the open market, and
1:24:32that kind of force selling can spiral
1:24:34fast, driving yields sharply higher and
1:24:36destabilizing everything tied to them.
1:24:38The backs stops exist to stop that chain
1:24:41reaction before it starts. And
1:24:42technically, these arrangements are
1:24:44structured to protect the Fed from
1:24:46direct currency losses. [music] So, this
1:24:48isn't a simple bailout in the way that
1:24:50people imagine. But the broader shift is
1:24:53still real and the repeated use becomes
1:24:55the normal and then is [music] baked
1:24:57into the system. Chapter 7. Who actually
1:25:00holds the debt? Now you might imagine a
1:25:03dollar swap taking place in smoky back
1:25:05rooms in Washington. An oil richch Gulf
1:25:07state storms into Washington, makes
1:25:09demands, and threatens to dump
1:25:10treasuries unless it gets what it wants.
1:25:13That's not how it works. When swapline
1:25:15discussions happen, they're not
1:25:16ultimatums. They're precautions.
1:25:18Countries with enormous reserves want
1:25:20reassurance [music]
1:25:21that if markets freeze or dollar funding
1:25:23tightens, they still have access to
1:25:25liquidity. Kuwait's US Treasury holdings
1:25:27have climbed to records near 66 billion.
1:25:31UAE holdings are in the tens of billions
1:25:33and growing, backed by reserves far
1:25:35larger than that. So, this wasn't a case
1:25:37of bankrupt countries begging for
1:25:39rescue. The real purpose of these
1:25:41arrangements isn't necessarily to save
1:25:43the creditor. It's to stabilize the
1:25:45Treasury market itself. Because the
1:25:47danger isn't just that a large holder
1:25:49loses money. The danger is that a large
1:25:52holder suddenly becomes a forced seller
1:25:54in a market already struggling. The word
1:25:57precautionary is doing a lot of heavy
1:25:59lifting. It's less about emergency aid
1:26:02and more about keeping major creditors
1:26:04calm enough to keep holding debt. That
1:26:06leaves the United States in an
1:26:08uncomfortable position. If policymakers
1:26:10don't reassure major holders, the risk
1:26:12of panic selling rises. But if
1:26:14policymakers do build permanent
1:26:16reassurance mechanisms, the dependence
1:26:18becomes more structural. The reserve
1:26:20issuer starts managing the conditions
1:26:22under which its creditors remain
1:26:24comfortably financing it. Neither option
1:26:26is especially clean. And once one major
1:26:29holder [music] starts becoming more
1:26:30cautious, the others notice. That's how
1:26:33financial behavior spreads. [music] If
1:26:35one large player starts hedging,
1:26:36everyone else starts asking whether they
1:26:38should too. And that's important because
1:26:40the Treasury market rests on a global
1:26:43assumption that has existed for
1:26:44generations. US government debt is
1:26:46supposed to be the safe asset, the
1:26:48[music] foundation underneath everything
1:26:50else. But foundations rarely crack all
1:26:52at once. Usually, confidence erodess
1:26:55gradually. For decades, foreign demand
1:26:57under American debt came mostly from
1:26:59allied central banks. They buy for
1:27:01strategic and monetary reasons. [music]
1:27:03They don't panic sell because one
1:27:05quarter went badly. Now that's changed.
1:27:07In 2024, [music] foreign private
1:27:09investors overtook foreign governments
1:27:11as the largest overseas holders of US
1:27:14treasuries. And private [music] capital
1:27:16behaves very differently. These aren't
1:27:18institutions built to sit still for
1:27:20geopolitical stability or long-term
1:27:22reserve management. Many are asset
1:27:24managers, hedge [music] funds, and
1:27:25leverage traders running complex
1:27:27treasury and repo trades through global
1:27:30financial networks. Their job is to move
1:27:32when the [music] conditions change,
1:27:34which means the market swapped part of
1:27:36its shock absorber for something much
1:27:38more reactive. Chapter 8, the great
1:27:41dollar backs stop. The Federal Reserve
1:27:43has taken on a role it was not
1:27:45originally designed for. It's now a
1:27:47standing source of dollars not only for
1:27:49American banks, but it's also a standing
1:27:51source of dollars for the global dollar
1:27:53system, foreign central banks included.
1:27:55People can argue about whether the Fed
1:27:57expanding its role in global dollar
1:27:59support is good or a form of overreach,
1:28:01but the expansion has happened and most
1:28:04people aren't aware of how far it's
1:28:05gone. The Fed's total commitment to
1:28:07rescuing the system since 2008 tops $29
1:28:11trillion. That's enough to pay off the
1:28:13vast majority of the United States
1:28:15national debt in a single transaction.
1:28:18Not $1 of that built a road, funded a
1:28:20school, or made the economy more
1:28:22productive. The purpose was narrower.
1:28:25keep a stretched system from having to
1:28:27recognize its flaws. Every dollar of it
1:28:29bought time. None of it bought a fix.
1:28:32What has thinned across all of this is
1:28:34not money but independence. American
1:28:37prosperity was once close to
1:28:38self-funding because the world wanted
1:28:40the debt freely and that has weakened.
1:28:43More creditors now rely on official
1:28:45backs stops as part of staying in the
1:28:47market. Not as an exception, but as
1:28:49something assumed will be there if
1:28:51selling pressure appears. At the same
1:28:53time, the holder base has become faster
1:28:55moving and more sensitive to [music]
1:28:57changes in rates and liquidity
1:28:58conditions. That shift made it harder to
1:29:00rely on private demand alone to absorb
1:29:03the stress. The Fed's backs stop is no
1:29:05longer temporary. It's no longer small.
1:29:07The system now relies on two things that
1:29:09cannot be taken for granted. The
1:29:11continued willingness of large holders
1:29:13to hold US debt and the standing
1:29:15presence of central bank support when
1:29:17they do not. And that is not a
1:29:19prediction of collapse. It's a
1:29:20description of the conditions already
1:29:22sitting in the system. And conditions
1:29:24like that don't stay theoretical
1:29:26forever. But let's say the worst does
1:29:28happen. How will the average American
1:29:30cope with a worthless dollar? And who
1:29:32will be left picking up the pieces?
1:29:34People think high interest rates fight
1:29:35inflation by slowing the economy. At
1:29:38least that's the story you've been told.
1:29:40But that is not what actually is
1:29:41happening. For the assetrich boomer
1:29:44class, high rates don't feel like
1:29:45punishment. They act like a stimulus
1:29:47check. one that boosts disposable income
1:29:50and keep service sector inflation high.
1:29:52The Federal Reserve didn't cool the
1:29:54economy. They delivered a multi-billion
1:29:56dollar annual windfall to the wealthiest
1:29:59generation. And you are the one paying
1:30:01for it. This isn't monetary policy. It's
1:30:04a 78.5 trillion demographic heist
1:30:08happening in plain sight. Chapter 1, the
1:30:11$450 billion stimulus nobody voted for.
1:30:14In 2021, a Bureau of Economic Analysis
1:30:17data set showed American households
1:30:19earning $1.45 trillion in interest
1:30:22income from cash and bonds. By 2024,
1:30:25that total hit 1.9 trillion. That's a
1:30:28$450 billion jump in annual interest
1:30:32income. And that money flows into
1:30:34household accounts every 12 months, with
1:30:36almost none of it requiring anyone to
1:30:38lift a finger. The average NFL team is
1:30:40worth 7.1 billion in 2025, according to
1:30:43Forbes. All 32 teams added together
1:30:46crossed $227 billion for the first time.
1:30:49The interest windfall is about twice
1:30:51that. One year of extra checks could buy
1:30:54the entire NFL outright, and you'd still
1:30:57have more than $200 billion left in the
1:30:59bank. 450 billion is bigger than the
1:31:02total annual GDP of countries like the
1:31:04Philippines or Denmark. None of this
1:31:06money required Congress. None of it
1:31:08required a vote. The Fed raised rates
1:31:10and a spreadsheet did the rest. and cash
1:31:13did not get sprinkled evenly. The Fed's
1:31:16own quarterly report on household assets
1:31:18showed that the money flowed into
1:31:19treasury bills, money market funds,
1:31:21[music] CDs, and short-term corporate
1:31:23bonds. Households over 60 hold most of
1:31:26those instruments. When the Federal
1:31:28Funds rate moved past 5%, those holdings
1:31:31started paying yields not seen since
1:31:33before the 2008 crash. And that's a
1:31:35problem. The Federal Reserve's stated
1:31:37job is to slow the economy by making
1:31:40money expensive. Borrowing should hurt,
1:31:42spending should drop, and prices should
1:31:44cool. That's the lesson every freshman
1:31:47economics student learns. That lesson
1:31:49describes an economy that no longer
1:31:51exists. Young households with 7%
1:31:54mortgages and 24% credit card APRs got
1:31:56the break. Their parents and
1:31:58grandparents sitting on $1.2 million in
1:32:01tea bills got the gas. The Fed pressed
1:32:03[music] both pedals at once, and the
1:32:05people with cash won the trade. Service
1:32:07inflation, the kind that you fill in
1:32:09restaurants and cruise tickets and
1:32:11dentist bills, has refused to come down.
1:32:13The reason is right there in the
1:32:15numbers. You can't cool a market when
1:32:17its biggest customers just got a
1:32:18permanent raise. So, here's the
1:32:20question. How did a single age group get
1:32:22strong enough to break the basic rules
1:32:24of monetary policy? The answer took 40
1:32:27years to build. Chapter 2, rewind. The
1:32:30demographic bulge. The Federal Reserve
1:32:32publishes a data set called the
1:32:34distributional financial accounts. It
1:32:37tracks how American wealth is split
1:32:39between generations updated every 3
1:32:41months. As of May 2026, baby boomers
1:32:43born between 1946 and 1964, hold about
1:32:4778.55
1:32:49trillion in net wealth. That is 51.8% of
1:32:53everything American households own.
1:32:56Millennials, the largest adult
1:32:57generation in the country, hold about
1:33:009%. That is less than a fifth of what
1:33:02their parents own. Every farm, factory,
1:33:05office, hospital, and gas station in the
1:33:07country produced 28.3 trillion of goods
1:33:10and services in 2024. The boomer balance
1:33:13sheet is almost three times that. One
1:33:15age group sits on 3 years of total
1:33:17national output. The Federal Reserve has
1:33:19never recorded a concentration like this
1:33:22in the data series, which goes back to
1:33:241989. Researchers at the St. Louis
1:33:26Federal Reserve traced the cause to a
1:33:28deeper shift in asset prices. They used
1:33:31a number called the wealth to GDP ratio.
1:33:34It compares everything households own to
1:33:36what the country produces in a year. In
1:33:38the early 1980s, that ratio was about
1:33:403.6. Today, it's 5 1/2. The paper value
1:33:44of the things Americans own grew much
1:33:46faster than the actual products the
1:33:48country made. The shift had winners and
1:33:51losers, and the timing decided
1:33:53everything. A couple [music] bought a
1:33:54Cape Cod in Boston in 1985 for $80,000.
1:33:59By 2020, it was worth $600,000. Someone
1:34:02who bought $10,000 of S&P 500 index
1:34:05shares the year Reagan was inaugurated
1:34:08had over $400,000 by 2024. Compare that
1:34:11to a software engineer who graduated
1:34:13into the 2009 job market. By the time
1:34:16they could afford a down payment, the
1:34:18same house cost 10 times the median
1:34:20income. 40 years of asset inflation does
1:34:23not divide evenly by age. It pools to
1:34:26wherever the assets already are. In
1:34:281985, that was the boomers. They didn't
1:34:31plan it. They just happened to be in the
1:34:33door before the rent went up. By 2022,
1:34:36when the rates climbed, you could see
1:34:38the result. A huge pile of cash sat in
1:34:41accounts built to benefit from rising
1:34:43yields. Holding $79 trillion is one
1:34:46thing. turning it into an annual
1:34:47paycheck pointed at the working class is
1:34:49a different problem. And that is where
1:34:52this story gets ugly. Chapter 3, the
1:34:54reverse Robin Hood heist. Economists
1:34:57have a polite name for all of this, the
1:35:00interest income channel. The phrase
1:35:02shows up in the Federal Reserve papers
1:35:04and Bank for International Settlements
1:35:06working documents. The mechanics are
1:35:07simple and they're brutal if you're on
1:35:10the wrong side of it. When the central
1:35:12bank raises rates, two things happen at
1:35:14the same time. Borrowers pay more and
1:35:16lenders collect that money on the other
1:35:18end. Every extra dollar of mortgage cost
1:35:20shows up as extra interest income on
1:35:23someone else's statement. Money doesn't
1:35:26disappear, it just changes hands. So,
1:35:28who borrows and who lends? The Fed's
1:35:30flow of funds report answers without
1:35:32much room for debate. Households under
1:35:3550 carry the vast majority of
1:35:36outstanding mortgage debt in the
1:35:38country, with Americans aged 40 to 49
1:35:41holding the highest balances at $3.4 4
1:35:44trillion. Most of the student loans and
1:35:46the biggest credit card balances sitting
1:35:48there, too. Their parents and
1:35:50grandparents hold all the cash and the
1:35:52money market positions and the
1:35:53short-term treasuries that pay the
1:35:55yield. When the Fed raised rates from
1:35:58nearly 0% in 2022 to 5 12% [music] by
1:36:012023, it didn't slow the economy evenly.
1:36:05It hit the brake on one age group and
1:36:07the gas on another. The total spending
1:36:09change came out close to zero. The
1:36:12change in who holds the wealth was
1:36:14historic. The Fed's main weapon against
1:36:16inflation just broke a 70-year promise.
1:36:19Working hard no longer builds a future.
1:36:21Hundreds of billions in new no- risk
1:36:23cash now sits in older accounts. So,
1:36:26what are the holders doing with the
1:36:28money? They're spending it on
1:36:30experiences that didn't used to sell
1:36:32out. Chapter 4. The luxury paradox.
1:36:35Royal Caribbean Group reported fullear
1:36:372024 revenue of $16.5 billion. Net
1:36:40income hit 2.9 billion and adjusted
1:36:43earnings per share landed at $11.80.
1:36:46CEO Jason Liberty kept using one phrase
1:36:49to explain the run. He called it strong
1:36:51close-end demand. Analysts used a more
1:36:54descriptive name. They called it the
1:36:56silver tsunami. Carnival Corporation
1:36:58told the same story. Fiscal 2024 brought
1:37:01an all-time high of $25 billion in
1:37:03revenue and 1.9 billion in net income.
1:37:06CEO Josh Weinstein told investors the
1:37:08boom was being driven by older
1:37:10customers. They were booking premium
1:37:12cabins on cruise ships weeks before
1:37:14sailing at prices that would have looked
1:37:16insane in 2019. The data behind those
1:37:19earnings is consistent. Travel research
1:37:21from photos shows the same trend.
1:37:24Boomers spend nearly three times more
1:37:25per trip than Gen Z travelers. They
1:37:28account for 80% of all luxury travel
1:37:30spending in the United States. That
1:37:32figure puts a four out of five grip on
1:37:35the market in the hands of a single
1:37:37generation. A Royal Caribbean Oasis
1:37:39class ship holds about 6,800 passengers
1:37:42at peak. The annual dollar volume of
1:37:45boomer luxury travel is enough to fill a
1:37:48thousand of those ships. That is every
1:37:50cabin every year fully booked. It's like
1:37:52a fleet of floating cities stretching
1:37:54from Miami to Reichovik. The whole thing
1:37:56is funded by interest checks the Fed
1:37:58mailed out. The spending lands right in
1:38:00the inflation data. The Bureau of
1:38:02Economic Analysis sorts consumer outlays
1:38:04into goods and services. Hotels,
1:38:06cruises, restaurants, premium
1:38:08healthcare, and travel all sit in the
1:38:10services bucket. Services inflation
1:38:13refuses to drop toward the Fed's 2%
1:38:15target. Demand keeps building. You can't
1:38:18starve a market when its biggest
1:38:19customers just got handed a raise that
1:38:21they didn't earn. A young household with
1:38:24a 7% mortgage [music]
1:38:25cannot afford a Caribbean cruise.
1:38:27Meanwhile, a retired couple with 1.2
1:38:29million in treasuries can take four
1:38:31cruises a year. They're the ones who set
1:38:34the price. Leisure economy prices
1:38:36respond to who can pay, not who used to
1:38:39pay. The pattern repeats itself across
1:38:41the market. Fitness brand SoulCycle
1:38:43parent company is reporting record
1:38:45bookings for premium retreats and
1:38:47high-end [music] fitness experiences.
1:38:49Meanwhile, Restoration Hardware has
1:38:50openly positioned itself around older,
1:38:52wealthier buyers furnishing and
1:38:54upgrading homes with cash. Concierge
1:38:57medicine networks like One Medical and
1:38:58MDVIP have waiting lists for new
1:39:01patients. None of these businesses care
1:39:04where the federal funds rate sits
1:39:06because their customers don't need a
1:39:08loan to buy, and the spending spree
1:39:10isn't contained to vacations and dinner
1:39:12reservations. The same cash flow is
1:39:14quietly destroying the housing market
1:39:16for everyone under 40. Chapter 5, the
1:39:18cash buyer cartel. According to the
1:39:21National Association of Realtors, in
1:39:232024, 31% of repeat home buyers
1:39:26purchased their homes entirely in cash.
1:39:28At the national level, atom data
1:39:31solutions tracked the same shift. All
1:39:34cash sales reached 32.8% of total home
1:39:37transactions in the first half of 2025.
1:39:40That means nearly 1 in three American
1:39:43home buyers is operating in a market
1:39:45where mortgage rates don't matter at
1:39:47all. In certain markets, the numbers
1:39:49turn surreal. West Palm Beach, Florida,
1:39:52closed 49% of all home sales in cash in
1:39:552025. Miami came in at 43% overall,
1:39:59climbing past 65% in the segment above
1:40:02$1 million. In Naples, Florida, ILO
1:40:05realtor data and Redf fin tracking show
1:40:07cash buyers closed about 60% of all
1:40:10single family transactions in 2024. The
1:40:12median sale price topped 800,000.
1:40:15Mortgage dependent buyers in Naples are
1:40:18the people who actually live and work
1:40:19there year round. They're now boxed out
1:40:22by retirees flying in from New York and
1:40:24Illinois with checks already written.
1:40:26Cash wins on every variable that matters
1:40:29to a seller. It offers speed, certainty,
1:40:31and a clean close with no bank dragging
1:40:34out the underwriting. A split market
1:40:36means two pools of buyers, two pricing
1:40:38structures, and two very different
1:40:39outcomes. High rates only punish
1:40:41borrowers. The 55 and over cohort sits
1:40:45largely outside of the rate environment.
1:40:47They're not financing purchases the same
1:40:49way, and they're often holding assets
1:40:51that benefit from higher yields. Fed
1:40:53policy isn't hurting them, it's paying
1:40:55them. You can't outear a cash buyer. You
1:40:58also can't afford the rates being used
1:41:00against you. So, the next question stops
1:41:02being about strategy. It becomes about
1:41:04whether the path to ownership still
1:41:06exists for anyone born after 1985.
1:41:09Chapter six. Root cause the death of
1:41:12labor. The US wealth to GDP ratio is the
1:41:15most important number in American
1:41:17economics that almost nobody talks
1:41:19about. In 1985, it sat at around 3.6. By
1:41:232024, it was closer to 5 1/2 according
1:41:25to the Federal Reserve. The bottom
1:41:27number, what people earn from working,
1:41:30rose steadily like it always has. But
1:41:32the top number, what people already own,
1:41:35pulled away fast. That gap didn't widen
1:41:38because people worked harder. It widened
1:41:40because ownership compounds. The economy
1:41:42isn't just rewarding effort anymore.
1:41:45It's rewarding being early. Look at the
1:41:47income data from the US Bureau of
1:41:49Economic Analysis. It tracks something
1:41:51called the labor share of national
1:41:53income. Basically, how much of every
1:41:56dollar earned in the economy goes to
1:41:58wages. In the early 1980s, that number
1:42:00was about 64%. Today, it sits closer to
1:42:0456%. That difference didn't just
1:42:06disappear. It shifted from paychecks
1:42:09into asset returns. Every percentage
1:42:11point that moved out of wages and into
1:42:13capital [music] is hundreds of billions
1:42:15a year. Returns flow to whoever already
1:42:18controls that pile of assets, not to
1:42:20anyone making new value. America hasn't
1:42:23quite reached the extremes of 19th
1:42:25century Britain's feudal system quite
1:42:27yet, but the trajectory on the wealth to
1:42:29GDP chart is pointing right at it. If
1:42:32labor is dead as a way to build wealth,
1:42:34only one path is left for people under
1:42:3640. Chapter 7, the inheritance trap.
1:42:40According to Lending Tree, 78% of Gen Z
1:42:42homeowners aged 18 to 29 got family help
1:42:46to make their down payment. 33% of them
1:42:48said outright that they could not have
1:42:50bought the home without it. The widely
1:42:52cited $84 trillion great wealth transfer
1:42:55is real. It's happening. Cerui
1:42:57Associates projects the money will move
1:42:59from older to younger generations over
1:43:01the next two decades, but the transfer
1:43:04is conditional. It runs through the bank
1:43:06of mom and dad. The people without that
1:43:08bank are being pushed out of the
1:43:10ownership economy. Redfin's 2024 buyer
1:43:12survey said 36% of all Gen Z and
1:43:15millennial buyers received a cash gift
1:43:17from family to close the deal. 16% used
1:43:20inheritance money. The average gift size
1:43:23came in above $50,000. In high-cost
1:43:26metros like Boston and Seattle, gift
1:43:28sizes often run past 150,000. A
1:43:31permanent class of winners and losers is
1:43:34being created. One that's based entirely
1:43:36on birthright. Buyers without family
1:43:38help aren't just buying slower. They are
1:43:40falling off of the ownership ladder
1:43:42entirely. They turn into lifelong
1:43:44renters paying the mortgages of the
1:43:46gifted group through their lease checks.
1:43:48[music]
1:43:49So, what kind of society replaces work
1:43:51with waiting? An economy where the
1:43:53timing of a parents funeral matters more
1:43:56than your day job. The answer is one
1:43:58that we already have. Most people are
1:44:00just starting to figure it out. Chapter
1:44:038. The reckoning. The demographic wall.
1:44:05The Census Bureau projects US population
1:44:08changes out 20 years in advance. And
1:44:10they have been consistently right. What
1:44:12it shows is that the generation born
1:44:14between 1946 and 1964 is aging on a
1:44:18fixed [music] timeline. There's no
1:44:20ambiguity, just a known curve moving
1:44:22forward. Actuarial tables already price
1:44:24in when that wealth starts to unwind,
1:44:27not as a theory, but as timing. The
1:44:29Federal Reserve has already run models
1:44:31on what that shift does to wealth
1:44:33distribution over time. This isn't
1:44:35something that you need to interpret or
1:44:37speculate about. It's already locked in.
1:44:40Tax reform cannot move $79 trillion fast
1:44:43enough to help anyone currently under
1:44:4540. A return to zero rates would just
1:44:47reinflate the asset values that caused
1:44:50the gap to begin with. Voting
1:44:51majorities, even if you could assemble
1:44:53them, cannot undo 40 years of asset
1:44:56concentration, and the generation that
1:44:58benefits from the current setup votes at
1:45:00higher rates than anyone else. Only one
1:45:03way out exists, and it's a funeral. The
1:45:06wealth pile described in this report
1:45:08ends when its holders end. Inheritance
1:45:10from chapter 7 then decides which
1:45:12descendants get the keys. No other off
1:45:14switch is on the table. Only time and
1:45:17death can stop the cycle. A wealth tax,
1:45:19if Congress ever passed one, would face
1:45:21constitutional fights measured in
1:45:23decades. The estate tax already exists,
1:45:25but the threshold sits above $13 million
1:45:28per person in 2025. Most boomer states
1:45:32pass tax-free under that ceiling. The
1:45:34fiscal levers Washington has on the
1:45:36table are too small for a $79 trillion
1:45:39problem. The tools that could actually
1:45:41move the needle require a political
1:45:43coalition that doesn't exist and cannot
1:45:46[music] form. No corporation stole the
1:45:48American dream. No foreign power seized
1:45:51it. The generation that invented the
1:45:53post-war version of the dream bought it
1:45:55in cash. They picked up houses for 2
1:45:58years of salary in 1972. They then
1:46:00watched those houses become retirement
1:46:02accounts worth 15 years of a young
1:46:05person's salary. And now they collect
1:46:07interest on the cash that funded the
1:46:08heist. The system is working, just not
1:46:11the way people assume. It's tracking the
1:46:13demographics underneath it. Inflation
1:46:16control isn't broken at the Federal
1:46:18Reserve. [music] It's operating inside
1:46:19an economy where different age groups
1:46:21respond completely differently to rate
1:46:23changes. Same policy, different effects.
1:46:26Housing isn't malfunctioning either.
1:46:28It's being reshaped by who already owns
1:46:30assets versus who still has to borrow to
1:46:33get in. And over time, that difference
1:46:35compounds into a sorting mechanism. Not
1:46:38by policy design, but by birth year. The
1:46:40outcome doesn't really look like a
1:46:42crisis. It looks like a system doing
1:46:44exactly what it's set up to do. It
1:46:46doesn't end all at once. It just plays
1:46:48out slowly as one generation leaves the
1:46:51system over time. Until then, wealth
1:46:53keeps drifting the same way it already
1:46:56has, more from owning things than from
1:46:58working for them. Effort doesn't
1:47:00disappear. It just stops being the main
1:47:02way money moves. You don't really get a
1:47:05choice to opt out. You just end up where
1:47:07you were born into it. You were told
1:47:09that a six-figure salary was the finish
1:47:11line, that you had made it. But for the
1:47:13majority of Americans earning $100,000
1:47:16today, it just means that you're keeping
1:47:18your head above water. On paper, the
1:47:20economy is stronger than ever. In
1:47:22reality, the cost of living has climbed
1:47:24faster than paychecks ever could. to
1:47:26match the same middle class life your
1:47:28parents could afford on a single income
1:47:30in 1985. You would now need about 62
1:47:34weeks of work in a year. The middle
1:47:36class didn't disappear. It just started
1:47:39living on time it doesn't have. Chapter
1:47:411. The 62- week year. The American dream
1:47:45used to have a simple definition. Work
1:47:46hard, earn enough, and you can afford a
1:47:49stable middle class life. But the
1:47:51question is whether that definition
1:47:53still holds. Economist Orin Cass and his
1:47:55research group American Compass
1:47:58developed something called the cost of
1:47:59thriving index to test exactly that. The
1:48:02idea is simple. Take one family and one
1:48:04basket of basics and then ask how many
1:48:06weeks do they have to work to pay for
1:48:08the items. The basket covers groceries,
1:48:10a modest home at the 40th percentile,
1:48:12family health insurance, and a car for
1:48:14work. Then add in college for the kids
1:48:16on top of it all, and that's the base of
1:48:18an ordinary American life. In 1985, the
1:48:21answer was about 40 weeks. The average
1:48:23middle-class American paid for all of it
1:48:25and still had a fifth of the year left
1:48:27over. That leftover turned into savings,
1:48:29into a down payment, into a bit of
1:48:31breathing room for a bad year. By 2022,
1:48:34the same basket swallowed 62 weeks of
1:48:36pay. It now takes 14 months of work to
1:48:39buy 12 months of a normal life. The
1:48:42shortfall is not bad luck or a rough
1:48:44patch. It's baked into the system.
1:48:46There's a cruel twist buried in the
1:48:48wages. That 1985 worker earned about
1:48:51$443 a week. His 2022 replacement took
1:48:55home about $1,200,
1:48:57nearly triple the paycheck. On paper, he
1:48:59looks three times richer, but the cost
1:49:01of basics rose faster than the raise
1:49:04ever could. The bigger number now buys a
1:49:06smaller life. A single income used to
1:49:09carry a household. Now it takes two
1:49:10paychecks to barely buy what one used
1:49:13to. The American middle-ass family added
1:49:15a whole second earner and stayed in the
1:49:17same place. So, when a household looks
1:49:19fine, something is usually holding it up
1:49:21behind the scenes. [music] It might be a
1:49:23second job or overtime or gig work after
1:49:26the kids are asleep or a credit card
1:49:28filling in the gap. None of that is a
1:49:30choice anymore. It is how people
1:49:32survive. You might think this only
1:49:34affects a small number of families. It
1:49:36doesn't. In early 2024, the research
1:49:39group payments found that 48% of
1:49:41households earning over $100,000 a year
1:49:44live paycheck to paycheck. It doesn't
1:49:46stop there. Roughly 36% of households
1:49:49earning over 200,000 report the same
1:49:51thing. These families are known as
1:49:54Henry's, high earners not rich yet. They
1:49:57hold the salary their grandparents would
1:49:59have called a fortune. Behind it sits
1:50:01drained savings and a retirement fund
1:50:03that keeps sliding away. They do
1:50:05everything their parents did. They
1:50:07follow every rule they're told and
1:50:09they're still losing ground. So, if the
1:50:11people at the very top are going under,
1:50:13who is this [music] booming economy
1:50:15actually booming for? Chapter 2, the GDP
1:50:19ghost. The booming part is not exactly a
1:50:21lie. The economy grew around 2% in 2025.
1:50:25Unemployment stayed low for a long
1:50:27stretch and the S&P 500 kept hitting
1:50:29record highs. By those readings,
1:50:31everything looks healthy. The trouble is
1:50:33what's left out. Think about what
1:50:35actually matters. GDP tracks output, the
1:50:38total dollars of goods and services
1:50:39produced. It tells you how big the
1:50:41economy is, not how far your paycheck
1:50:44goes. Unemployment tracks whether you
1:50:46have a job, not whether that job lets
1:50:47you afford rent, food, or basic
1:50:49stability. Both are useful indicators,
1:50:52but neither answers the question that
1:50:53people actually live with. Does working
1:50:55full-time still cover a normal life? A
1:50:58lot of what we call growth is just the
1:50:59staggering cost of standing still. A lot
1:51:02of the jobs being created sit in the
1:51:03service economy. Walmart, the largest
1:51:05private employer in the country, employs
1:51:07roughly 1.6 million Americans. But the
1:51:10wages in those roles don't keep pace
1:51:12with rent or health insurance costs.
1:51:14Since the late 1970s, a typical worker's
1:51:16pay has risen about 14.8%. The output
1:51:19from each worker has risen about 64.6%.
1:51:23CEO pay over that same stretch jumped
1:51:25over,300%.
1:51:27There's a huge disparity between those
1:51:29doing the work and those reaping the
1:51:31rewards. Economists sometimes describe
1:51:33the pattern after downturns as a
1:51:35K-shaped recovery. One line rises for
1:51:38those who own the assets. The other
1:51:40drifts lower for those who rely on
1:51:42wages. The same economy, two very
1:51:44different trajectories. So, the economy
1:51:47keeps growing while the family budget
1:51:48shrinks. People feel the gap even when
1:51:51they can't name it. For years, they have
1:51:53told pollsters the economy feels rough
1:51:55and the data keeps insisting they're
1:51:56wrong. Writer Kyla Scandlin calls this
1:51:59gap a vibe session. It's the distance
1:52:02between how the economy looks on paper
1:52:04and how it feels at the kitchen table.
1:52:06Surveys from the University of Michigan
1:52:08have tracked that mood staying weak for
1:52:10years. Even as major economic indicators
1:52:13continue to rise, that disconnect isn't
1:52:15random. It reflects what those
1:52:16indicators measure and what they don't.
1:52:19GDP and unemployment are useful tools,
1:52:21but they don't capture the cost of
1:52:23holding a normal life together. Rent,
1:52:25healthcare, groceries, and everything it
1:52:26takes to stay stable monthtomonth. So,
1:52:29the numbers move on charts and
1:52:30headlines, but they don't always match
1:52:32what people are actually feeling.
1:52:34Chapter 3, the big four. You've been
1:52:36told you're richer than your parents
1:52:38because your things are better and less
1:52:40expensive. The television is huge. The
1:52:42phone in your pocket could outperform a
1:52:441985 supercomput. [music] Economists
1:52:47even adjust inflation figures for
1:52:48quality changes in products. It's called
1:52:51hideonic adjustment because a phone or a
1:52:53TV today is better than one from 10
1:52:55years ago. But in real life, that
1:52:57improvement doesn't always translate to
1:52:59feeling better off. You might be able to
1:53:01afford a large 4K television. What's
1:53:03harder is affording the space to live
1:53:05comfortably around it. Because the
1:53:08biggest shift hasn't been in gadgets,
1:53:10it's in housing. A home used to cost
1:53:12about three times a household's annual
1:53:14income. In many cities, today it's well
1:53:16over five. Take Austin as an example.
1:53:18The price to income ratio reached about
1:53:205.75 in 2022. By mid 2025, it had
1:53:24[music] cooled to around 4.31. But that
1:53:27is still above its long-term average of
1:53:29roughly 3.9. And the barrier isn't just
1:53:32monthly payments. A 20% down payment on
1:53:34a median home can mean around $80,000
1:53:37upfront. That's money most renters can't
1:53:40save while covering rent and daily
1:53:42expenses. After the 2008 crash, the Wall
1:53:44Street firm Blackstone moved quickly to
1:53:47buy up foreclosed homes at scale. It
1:53:49later built a company called Invitation
1:53:51Homes, which at its peak managed roughly
1:53:5380,000 properties. Another major player,
1:53:56Progress Residential, grew to around
1:53:5897,000 homes. In Atlanta, big investors
1:54:01at one point owned close to 25% of all
1:54:04single family rentals. The starter home
1:54:07stopped being a place to live, and it
1:54:09became a return on someone else's money.
1:54:11Child care is another drain on the
1:54:13middle class. The federal government
1:54:14calls child care affordable at 7% of
1:54:17your income, a bar almost nobody clears.
1:54:20[music] The average cost runs over
1:54:22$13,000 a year for a single child. For
1:54:25two kids, you are past $26,000,
1:54:28more than many Americans earn before
1:54:30taxes. In an expensive metro, two
1:54:33children in care can eat 30 to 40% of a
1:54:36$100,000 salary. In 45 states, it now
1:54:39costs more than the average mortgage. In
1:54:4238, it runs higher than instate college
1:54:44tuition. Then there's the problem of
1:54:47health care. In 2024, the average family
1:54:49plan was close to 25,600.
1:54:51By 2025, it was 27,000. Employees cover
1:54:55roughly $6,300 of that straight out of
1:54:58their paycheck. Over 5 years, those
1:55:01premiums jumped 24% while wages lagged
1:55:04behind. Most of the country can't get to
1:55:06work without a car either. By 2025, a
1:55:09new car payment cost around $750 a
1:55:12month. The insurance alone topped 2,000
1:55:14a year before a drop of gas hit the
1:55:17tank. The system doesn't feel like it's
1:55:19breaking. It already has. Chapter 4. The
1:55:22debt illusion. America's middle class is
1:55:25living on borrowed money. By late 2025,
1:55:28credit card balances hit a record 1.28
1:55:31trillion. Add on about $1.66 trillion in
1:55:35auto loans and another 1.6 65 trillion
1:55:38in student loans and household debt
1:55:41reached $18.59 trillion, another
1:55:44all-time high. The mortgage sits on top
1:55:47of all of it. The strain is starting to
1:55:49show in places it shouldn't. [music] In
1:55:512025, more people in their 60s and 70s
1:55:53fell behind on their credit cards. It
1:55:55was the worst rate seen since 2001. A
1:55:58warning sign the people who were
1:56:00supposed to be safe are being caught in
1:56:01the economic trap. The detail that
1:56:03matters the most though is what the
1:56:05borrowing really buys. Roughly 60% of
1:56:08card holders now carry a balance
1:56:09monthtomonth. In one recent survey, 55%
1:56:12said the balance exists to cover
1:56:14essentials, the groceries, [music] the
1:56:16gas, the stretch between the paycheck
1:56:18and the rent. When most credit card debt
1:56:20is used to cover basic necessities, it
1:56:23stops being a story about overspending.
1:56:25It becomes a signal of something deeper,
1:56:27a gap that no ordinary income was
1:56:29designed to close. The debt isn't
1:56:31sitting on top of savings. It has taken
1:56:33its place. [music]
1:56:34After that, the interest goes to work on
1:56:36whatever's left. At a rate near 20%, a
1:56:39$5,000 balance can cost $1,000 a year
1:56:42just to carry. That is money that buys
1:56:44nothing but time. That's why one bad
1:56:47moment can tip the whole thing over. A
1:56:49medical bill, a sudden layoff, a car
1:56:51breakdown. The line between a stable
1:56:53family and a missed payment has blurred.
1:56:55Chapter 5. The doom loop algorithm. For
1:56:58a long time, people judge the economy
1:56:59locally by their job, their numbers, the
1:57:01street they lived on. Now, it comes from
1:57:03social media feeds where [music] posts
1:57:05are ranked by algorithms. Those feeds
1:57:07have an agenda. They don't show
1:57:09everything equally. They prioritize what
1:57:11keeps people scrolling, and uncertainty
1:57:13tends to hold attention, so the
1:57:15algorithms push the scariest posts to
1:57:17the top. One day, it's layoffs at Meta
1:57:20and rounds of cuts at Google. The next,
1:57:22it's someone crying in a parked car
1:57:23after Amazon let them go. One bad week
1:57:26at one company starts to feel like proof
1:57:28of something bigger. It's known as money
1:57:30dysmorphia. It's the gap between how
1:57:32well you are doing and how broke you
1:57:34[music] feel. It widens every time you
1:57:36scroll. Fake wealth sits on one side of
1:57:39the screen, doom on the other. Almost
1:57:41nothing in between tells you what normal
1:57:43even looks like anymore. This design is
1:57:45deliberate. A clip of a $400 grocery run
1:57:48pulls in millions of viewers. The story
1:57:50about a steady job pulls in none. The
1:57:52system shows you the panic and the fear
1:57:54and buries the ordinary and the mundane.
1:57:57You start to believe that everyone is
1:57:58broke and you are next in line. [music]
1:58:00It's easy to dismiss all of this as a
1:58:02phone problem. But that misses what's
1:58:05actually happening. This isn't just
1:58:06about distraction. It's about how the
1:58:09information about the economy is now
1:58:10filtered and amplified at scale. Public
1:58:13perception of the economy often doesn't
1:58:15match individual financial reality.
1:58:17People can feel better or worse about
1:58:19conditions without their own income or
1:58:21bills changing. You can see it most
1:58:24clearly after elections. [music] The
1:58:25same set of economic conditions is
1:58:27interpreted very differently depending
1:58:29on who's in office. The underlying
1:58:31numbers haven't shifted overnight, but
1:58:33the way they're talked about and felt
1:58:35often does. And even worse, it's a
1:58:37feedback [music] loop. Confidence is not
1:58:39just a reading of the economy, it shapes
1:58:41the economy. When enough people brace
1:58:43for a crash, they stop spending. They
1:58:45delay their purchases. and they hoard
1:58:47what they have. The slowdown they feared
1:58:49starts to come true. The genuine cost
1:58:51pressure feeds the fear and the fear
1:58:54feeds the content. [music] The content
1:58:56blows it up larger and at every turn the
1:58:58platform takes its cut. The feed
1:59:00determines your mood, sells it and then
1:59:02hands it back to you as news and it all
1:59:04traces back to one place. Chapter six,
1:59:07the financialization of survival. The
1:59:09things people need to live have
1:59:11increasingly been turned into assets
1:59:13that generate returns for someone else.
1:59:16Housing is the clearest example. It's no
1:59:18longer just shelter. It's also an
1:59:20investment that only works if prices
1:59:21keep rising. And rising prices means it
1:59:24becomes harder for the next person to
1:59:25afford it. Wall Street firms and big
1:59:27pension funds pour money into the
1:59:29housing market to fund someone's
1:59:31retirement. But it's not yours. College
1:59:33took the same path. Loan servicesers
1:59:35like Sally May and Naviant collected on
1:59:37student debt for years. Schools get paid
1:59:39upfront while the student pays it into
1:59:42middle age. Even the private equity
1:59:44money kept hunting for more. Buying up
1:59:46apartment buildings, mobile home parks,
1:59:48and hospitals. Every aspect of our lives
1:59:50is being squeezed for profit. Bright
1:59:52Horizons runs childcare as a publicly
1:59:54traded business under the ticker BFAM.
1:59:57United Health, the largest health
1:59:58insurer in the United States, generates
2:00:00some of the highest profits in the
2:00:02entire healthcare sector. What used to
2:00:04be a nursery and a doctor's office, now
2:00:06operates at scale as part of the revenue
2:00:08side of the economy. Workers keep
2:00:10producing more each year. The reward for
2:00:12that lands with whoever owns the assets,
2:00:14not with whoever does the work. The
2:00:16richest 10% of Americans own most of the
2:00:18stock market, while the bottom half owns
2:00:20almost none. When asset prices sore,
2:00:23most people are watching from the
2:00:24outside. None of this is a glitch. The
2:00:27machine is doing exactly the thing it
2:00:29was built to do. It moves wealth from
2:00:31labor to assets year after year. The
2:00:33workers kept busy and paid just enough
2:00:36to keep going. It's here to stay. The
2:00:38vibe session is now a perma session. And
2:00:41the American dream is hanging by a
2:00:43thread. Chapter 7. The end of progress.
2:00:46The American dream had a clear path.
2:00:48Each generation was supposed to stand a
2:00:50little higher than the last. A home
2:00:51would hold wealth that outlived you.
2:00:53Your children would start with more than
2:00:55you ever had. For the typical worker,
2:00:57that path is gone. The goal is no longer
2:00:59to get ahead only to not fall further
2:01:02behind. Holding your position has become
2:01:04the whole ambition. The young
2:01:05generations inherit the worst of the
2:01:07deal. They have heavier debt while
2:01:09milestones are pushed back. Their birth
2:01:11rates keep sliding toward record lows.
2:01:13And the reason is not some loss of
2:01:15desire for children. People are being
2:01:18priced out of having them. The typical
2:01:20first-time home buyer is now 40 years
2:01:22old, a record high. In the 1980s, they
2:01:24were in their late 20s. First- timers
2:01:26have shrunk to just 21% of the market,
2:01:29the smallest share ever recorded, and
2:01:31many never buy at all. More and more the
2:01:34home you end up with depends on the
2:01:35money you inherit, not on the job you
2:01:37work. Some escape to cheaper towns far
2:01:40from the workplace, but the trade is
2:01:42distance and the people they leave
2:01:44behind. The wealth gap by age tells the
2:01:47same story from the other end. Older
2:01:49owners hold homes that doubled or triple
2:01:51in value. Younger workers hold rent
2:01:53receipts and loan statements. America
2:01:56gave its old and its young two
2:01:58completely different economies. The
2:02:00deficit, meanwhile, refuses to sit
2:02:02still. The same forces that dragged an
2:02:04ordinary life from 40 weeks of work to
2:02:0662 are still running and it will keep
2:02:09climbing. There's nothing to slow it
2:02:11down. The economy will continue to grow.
2:02:13Officials will point to the strong
2:02:15numbers on camera and those numbers will
2:02:18all be accurate, but they won't capture
2:02:20what people are experiencing in their
2:02:21daily lives. Because for many
2:02:23households, higher incomes haven't
2:02:25translated into feeling ahead, only into
2:02:27keeping up with rising costs that move
2:02:29just as fast. The real question isn't
2:02:32about growth. It's about why a full-time
2:02:35year of work no longer feels like enough
2:02:38to cover a full-time life. A huge share
2:02:40of housing and wealth in the US is still
2:02:42concentrated into one generation that
2:02:44built it under very different economic
2:02:46conditions. When those assets begin to
2:02:49transfer, who actually benefits? You
2:02:51think you're broke because you aren't
2:02:52working hard enough. You're wrong. In
2:02:551980, the median US home price was
2:02:57roughly three and a half times the
2:02:58median household income. Today, in major
2:03:01hubs like New York and San Francisco,
2:03:03that has ballooned to over 10 times. The
2:03:06American dream has moved from a
2:03:07reachable hurdle to the height of a
2:03:0940story skyscraper. You're producing
2:03:12more value than any generation in
2:03:14history. But the math in today's economy
2:03:16makes it physically impossible to win.
2:03:18The system isn't failing. It's working
2:03:20exactly as designed. When it comes to
2:03:23wages and workload, most people ask two
2:03:25questions. Why are we working more? and
2:03:27why are we being paid less? But the
2:03:30question that matters the most is the
2:03:31one nobody's asking. Why isn't the money
2:03:34we're earning going as far anymore? And
2:03:36that's where we need to reckon with our
2:03:37first brutal reality. Inflation has
2:03:40stacked the affordability cards against
2:03:41us. Take housing where in quarter 1 of
2:03:441980, the median home price for an
2:03:46American was $63,700
2:03:49compared to quarter 1 of 2026 where it's
2:03:51[music] an eyewatering $43,000.
2:03:55The same honest job and clever
2:03:56investment that could have bought you a
2:03:58house in the 1980s can barely cover rent
2:04:00today. But it gets worse. As of April
2:04:032026, the [music] consumer price index
2:04:05or CPI, the metric that tracks the
2:04:07prices of consumer goods, showed that
2:04:09inflation rates were overshooting
2:04:11expectations. As Heather Long, the chief
2:04:13economist at Navy Federal Credit Union,
2:04:15put it, "Americans are literally getting
2:04:17[music] squeezed now. Gas prices at this
2:04:19same time were also costing $75 extra
2:04:22per consumer per month, which seriously
2:04:24eats into anyone's [music] wallet.
2:04:26You're probably thinking, "Well, an
2:04:28increase in the cost of goods and
2:04:29services over time is only natural." But
2:04:32why do you think that? Track notable
2:04:34price spikes throughout US history, and
2:04:36you'll see that there are times when
2:04:38costs have been elevated way above the
2:04:40norm. The Revolutionary War, the Civil
2:04:42War, and World War II. The strange thing
2:04:45is after the first two, the prices
2:04:47slowly fell back down to a reasonable
2:04:49baseline. After World War II, the cost
2:04:51of living kept on going up. Why? Well,
2:04:54figuring out the answer to this mystery
2:04:55is the key to knowing why you're
2:04:57overworked and underpaid today. Thomas
2:04:59Stapleford is a historian at the
2:05:01University of Notre Dame and the author
2:05:03of The Cost of Living in America: A
2:05:05Political History of Economic
2:05:07Statistics. According to him, it all
2:05:09leads back to policies set by the
2:05:10Federal Reserve. They believe that
2:05:12gradually increasing inflation is
2:05:14actually healthy for an economy like the
2:05:16United States, which invests so heavily
2:05:18in new technology and productivity. And
2:05:20the most concrete way to achieve this
2:05:22end is by minting new cash and putting
2:05:24it into circulation. In economic
2:05:26circles, this is called increasing the
2:05:28money supply. Now, this isn't a video
2:05:30telling you that your life is harder
2:05:32because the Fed made a bad decision 80
2:05:34years ago for no good reason. Like with
2:05:36anything economic, we're dealing with an
2:05:38explosive rigged to colored wires that
2:05:40we need to cut if we want to financially
2:05:42survive. And unless you can see the
2:05:44future, you're essentially colorblind.
2:05:46One of the most concrete reasons for
2:05:48ramping up the money supply after World
2:05:49War II was to avoid a deflationary
2:05:52spiral. If you know anything about
2:05:54macroeconomics, these are two of the
2:05:56scariest words in the English language.
2:05:58A deflationary spiral was the key driver
2:06:01behind the start of the Great
2:06:02Depression, one of the most dire
2:06:04economic situations in American history.
2:06:06This is how it works. In the middle of
2:06:08an economic crisis like a recession or a
2:06:11depression, people have less disposable
2:06:13income to buy anything but the
2:06:14essentials. A reduction in demand in
2:06:17proportion to the supply of consumer
2:06:19goods leads to the price dropping. This
2:06:22in turn leads to production needing to
2:06:24downscale to reduce the supply and level
2:06:26out the costs. But this scaling back
2:06:29also means that companies don't need as
2:06:31many employees, so they let people go.
2:06:33Fewer people can afford to spend while
2:06:35warehouses will fill with products that
2:06:37nobody can afford to buy. Prices and
2:06:39production both plummet in a terrifying
2:06:41race to the bottom. And that's what the
2:06:43Fed wanted to avoid. But every solution
2:06:45creates new [music] problems. One of
2:06:47them is Bal's cost disease, a
2:06:49mathematical flaw baked into the modern
2:06:51economy. It's been one of the huge
2:06:53hidden drivers for why you're overworked
2:06:55and underpaid. The central idea behind
2:06:57intentional inflation is that prices
2:07:00will rise, but so will wages as a result
2:07:02of increased technology [music]
2:07:03efficiency in the workplace. So
2:07:05everything evens out, but not all the
2:07:08time. In labor intensive sectors, we
2:07:10reach an efficiency plateau where you
2:07:12can't use technological advancement
2:07:14[music] to increase economic efficiency.
2:07:16Take a singer for example. Autotune and
2:07:18post-production mastering [music]
2:07:19technology aside, there's no real way to
2:07:22make singing a more efficient process
2:07:24than it is. It's a dead end compared to
2:07:26say mass market car manufacturing or
2:07:28synthesizing new compounds in the
2:07:30chemical industry. [music] A singer
2:07:32singing a song a century ago isn't any
2:07:34more productive than a singer singing a
2:07:36song today. This is true across the arts
2:07:39as well as in industries like education
2:07:40and healthcare as sectors that rely
2:07:43extremely heavily on human labor.
2:07:45Meanwhile, technological advances make
2:07:47manufacturing more costefficient all the
2:07:49time, which increases wages there and in
2:07:52turn decreases or stabilizes the price.
2:07:54[music] This is where the cost disease
2:07:57comes in. Costs in these low
2:07:59productivity sectors [music] still need
2:08:00to increase in order to keep pace with
2:08:02the rising wages across the rest of the
2:08:04economy. It's the consumers who bear the
2:08:07weight of that. This can have brutal
2:08:09knock-on effects like slowing economic
2:08:11growth overall and leading to rising
2:08:13costs for essential [music] services.
2:08:15This begins to really explain the
2:08:17structural rot behind why your
2:08:19hard-earned dollars don't seem to
2:08:20stretch [music] nearly as far as they
2:08:22used to. But that's only one part of the
2:08:24problem. And it might just be the
2:08:26perfect distraction while the job market
2:08:29pulls the rug out from underneath you.
2:08:31The job market is working against you.
2:08:33It's almost impossible to be a worker in
2:08:35the 2020s [music] and not feel it. The
2:08:37effort you're putting in no longer seems
2:08:39to match the value you're getting back.
2:08:41But that value is going somewhere.
2:08:43[music] To understand what's happening,
2:08:44we need to look at the labor share of
2:08:46income. It measures where the wealth
2:08:48generated by workers actually ends up in
2:08:50workers paychecks or in the hands of the
2:08:52owners and the shareholders. Some
2:08:54concerning studies have shown that the
2:08:56answer actually seems to be less and
2:08:58less to the workers. One actually
2:09:00identified four key factors that have
2:09:02played a role in taking the labor share
2:09:04away from workers and giving it back to
2:09:06the owners of capital. The first is
2:09:08technological advancement. They found
2:09:10that when the share of revenue spent on
2:09:12research and development goes up by 1
2:09:14percentage point, labor share falls by
2:09:16up to 1.3 percentage points. The threat
2:09:19of being able to replace your workers
2:09:21with a machine decreases their
2:09:23bargaining power and keeps them content
2:09:25with low wages. The second is
2:09:26globalization where a 1% increase in the
2:09:29share of revenue coming from exports
2:09:31leads to a 0.3% drop in labor share.
2:09:34Again, it gives the owners greater
2:09:36leverage over their employees. They have
2:09:38got freedom to relocate if they believe
2:09:40their workers are asking for too much of
2:09:41the share. The third is high market
2:09:44concentration [music] where competition
2:09:46is low and the share is divided between
2:09:48a relatively small number of companies.
2:09:50In these cases, companies have the
2:09:52leverage to keep their workforces lean
2:09:53and set their terms. In countries with
2:09:56strong union presence like Sweden, this
2:09:58can turn to the worker's favor. But in
2:10:00the US, it almost always shakes out in
2:10:02favor of the capital holders. The fourth
2:10:04is intangible factors like copyrights,
2:10:07[music] patents, and trademarks that
2:10:08keep the reigns in the hands of the
2:10:10capital holders. That's especially true
2:10:12when it comes to the right to research
2:10:13and development. Again, it's all about
2:10:15bargaining power. And [clears throat]
2:10:16the more value that the shareholders can
2:10:18consolidate at the top of the pyramid,
2:10:20the more labor value they can extract
2:10:22from you without consequence. The pie
2:10:24keeps getting bigger thanks to
2:10:26technology advancing [music] and your
2:10:28hard work. But every time the pie grows,
2:10:30corporate interests readjust the knife
2:10:32to just give you a smaller slice. The
2:10:35quality of jobs are declining and the
2:10:37numbers of jobs needed to survive
2:10:39increases. Meanwhile, the economy keeps
2:10:42producing more wealth than ever before.
2:10:44You are [music] just getting less of it.
2:10:46Even if you're no stranger to the modern
2:10:48workforce, two words you might not be
2:10:50familiar with in this context are
2:10:52internal mobility. This means your
2:10:54ability to actually progress at your
2:10:55workplace. That can be a lateral move,
2:10:58gaining the skills to take on a job in
2:11:00an entirely different department or a
2:11:01vertical [music] move where your skills
2:11:03and experience can pay off in tangible
2:11:05advancement up the hierarchy of your
2:11:07company. That is the American dream,
2:11:09isn't it? That [music] anyone could join
2:11:11a company at an entry-level position and
2:11:13through sheer grind and dedication, one
2:11:15day find themselves on the company's
2:11:17board. But these days, it seems more and
2:11:19more like the promise of internal
2:11:20mobility in most jobs holds about as
2:11:23much water as a real Christmy visit from
2:11:25Santa Claus. Part of this is a
2:11:27phenomenon in corporate America that
2:11:29some people are calling the great
2:11:30flattening. It's where the middle
2:11:32management class is downsized in order
2:11:34to streamline a company and increase
2:11:36operational efficiency. From tech giants
2:11:38like Amazon, Microsoft, and Google to
2:11:40huge retailers like Walmart, and
2:11:42Starbucks, it seems like flattening the
2:11:44corporate structure is the order of the
2:11:46day. But you don't see the savings. In
2:11:48fact, [music] it seems like it might be
2:11:50stacking the cards against you even
2:11:51further. Not only will you lose a lot of
2:11:54the guidance and morale that middle
2:11:56managers provide, you also lose the
2:11:58middle management promotion track. It's
2:12:00like they've detonated a bridge between
2:12:02two sides of a long river with labor on
2:12:04one side and capital on the other. The
2:12:06lack of internal mobility in a world of
2:12:08ever rising costs has driven literally
2:12:11millions of people into working multiple
2:12:12jobs just to make ends meet. The data
2:12:15backs that up. According to the US
2:12:17Bureau of Labor Statistics, [music]
2:12:189.3 million Americans reported working
2:12:20multiple jobs in November of 2025. It
2:12:24made for 5.7% of the total active labor
2:12:27force at the time. [music] And this
2:12:28isn't just a full-time job and a
2:12:30part-time job or even two part-time
2:12:32jobs. [music] For half a million of
2:12:34those Americans, two full-time jobs have
2:12:36been fully accepted as standard
2:12:38operating procedure to anything above
2:12:40treading water in life. The burnout is
2:12:43real. This is particularly bad for
2:12:45workers in Gen Z who've entered the
2:12:47labor force in a world of
2:12:48technologyinduced economic uncertainty.
2:12:50[music]
2:12:50Fewer people than ever are employees
2:12:52with true salaries and all the attendant
2:12:54benefits. Instead, [music] people are
2:12:56becoming part or full-time contractors
2:12:58for different companies. The expression
2:13:00for this is income stacking, and it
2:13:02feels like a [music] far cry from the
2:13:04world of the 20th century, where one
2:13:06income was often enough to get by on.
2:13:08But even if you're not working multiple
2:13:10jobs, there's a good chance you still
2:13:12probably feel drained at the end of the
2:13:13week. What makes work so insanely
2:13:15exhausting that it feels like our lives
2:13:17are losing space and energy for anything
2:13:20but more work? Turns out that it's not
2:13:22[music] just you losing your stamina.
2:13:24It's the result of a concentrated
2:13:26workplace strategy that is grinding you
2:13:28away to nothing. A corporate buzzword
2:13:30you probably hear a lot is efficiency.
2:13:33[music] It's one of those words that
2:13:34helps shareholders sleep comfortably at
2:13:36night. But like anything that delivers a
2:13:38quick dopamine [music] hit, it comes
2:13:40with real costs if you reach for it
2:13:42without thinking. One of the most
2:13:43dangerous and short-sighted corporate
2:13:45decisions made in service of so-called
2:13:47efficiency is lean staffing, [music] and
2:13:50it's one of the main reasons you feel
2:13:51like you're always overworked. This
2:13:53tactic is exactly what it sounds like,
2:13:55running your company with the absolute
2:13:57bare minimum of staffers possible for it
2:13:59to work. This results in employees
2:14:01pulling double duty and wearing many
2:14:03different hats. In [music] the past,
2:14:04lean staffing has been an emergency
2:14:06measure in times of dire financial
2:14:08straits at a company. [music] But some
2:14:09of the management class have figured out
2:14:11that it will lead to even higher profits
2:14:13to run lean when the revenue stream is
2:14:15solid. This, by the way, is [music] kind
2:14:17of like taking morphine when you're
2:14:19perfectly fine just in case you break
2:14:21your leg later. It [music] might feel
2:14:22pretty good in the short term, but in
2:14:24the long term, you're on a collision
2:14:26course with real trouble. And that is
2:14:28just for the owners and shareholders.
2:14:30For you, [music] the ground level
2:14:31worker, the awful side of lean staffing
2:14:33will be apparent a lot quicker. There's
2:14:35a reason why another name for this kind
2:14:36of corporate structure is just in time
2:14:39staffing. Hourly workers who make up
2:14:41around 55.8% of workers in the US need
2:14:44to break their backs responding to the
2:14:46immediate needs of their employers. The
2:14:48result of these corporate structures for
2:14:50workers is generally horrific fatigue.
2:14:53They work long hours with huge numbers
2:14:55of complex tasks in a high pressure work
2:14:57environment. It probably won't surprise
2:14:59you to hear that absenteeism tends to
2:15:01spike in lean staffing situations.
2:15:04Workers frequently get physically sick
2:15:06from the exhaustion of overwork. And the
2:15:08science is in. If you are overworked,
2:15:10it's going to make you sick. And if you
2:15:12keep doing it for too long, it is going
2:15:14to kill you. The BBC reported in 2021
2:15:17that people working more than 54 hours a
2:15:19week are at a major risk of dying from
2:15:21overwork. It happens to almost a million
2:15:24people every year. Overwork is in fact
2:15:26the single largest driver for
2:15:28occupational disease. Thanks to the
2:15:30genuinely ruinous effects that stress
2:15:32can have on the human body. Bosses are
2:15:35enjoying the image of paying out fewer
2:15:36salaries on their balance sheets.
2:15:38Meanwhile, you will be doing twice as
2:15:40much work as before with tight
2:15:42turnarounds that don't allow for any
2:15:44slack. Speaking of slack, the increasing
2:15:46role that technology plays in moderating
2:15:48the workforce is another factor that
2:15:50makes you feel so overworked all the
2:15:52time. Before the advent of computers,
2:15:54you would clock in at 9:00 and go home
2:15:56at 5 at most jobs. Now, thanks to Zoom
2:15:58and Slack, your boss can wait around in
2:16:01your pocket or in your living room. It
2:16:03destroys the traditional separation that
2:16:05makes work life balance, well, a
2:16:07balance. Especially for the digital
2:16:09nomads of the world, you are never on,
2:16:12but also you're never really off either.
2:16:14But it gets even more intrusive. The
2:16:16cottage industry of employee monitoring
2:16:18software, also known as boss wear, has
2:16:21increased your standard level of
2:16:22workspace even more. It puts you in a
2:16:25kind of work panopticon. You feel the
2:16:27need to always be on your best behavior
2:16:29in case a live feed your screen is being
2:16:31watched or every keystroke is being
2:16:33logged and fed straight to HR. This is
2:16:36even worse in a flattened lean staffing
2:16:38setup where your boss might genuinely
2:16:40have the free time to actually sit in
2:16:41and watch what you're doing all day. You
2:16:44might think that maybe even though it's
2:16:46killing you, you just need to work a
2:16:48little bit harder to push through the
2:16:49barrier, but that might be working
2:16:51against you, too. You probably heard the
2:16:53old phrase, "No good deed goes
2:16:55unpunished." And in the corporate world,
2:16:57there is plenty of evidence that this is
2:16:58actually empirically true. Welcome to
2:17:01the world of performance punishment,
2:17:03where hard work earmarks you as
2:17:04exploitable rather than employable. If
2:17:07you got a great track record for quality
2:17:09work and hitting deadlines, there's a
2:17:11good chance you'll find more work being
2:17:12delegated your way, but not with any
2:17:15greater compensation for the overtime.
2:17:17Maybe it's because you genuinely are an
2:17:19exceptional employee. Or maybe it's your
2:17:21co-workers intentionally getting more
2:17:23loaded onto your plate with weaponized
2:17:25incompetence. In either case, the result
2:17:27is the same. You're getting punished
2:17:29with extra overwork for the crime of
2:17:32actually doing your job well. You might
2:17:34think that maybe good work like this
2:17:36will make you a shoein for a career
2:17:37advancement, and that is rarely the
2:17:40case. Most companies won't want to start
2:17:42paying you extra for the hard work
2:17:43you're already doing out of the goodness
2:17:45of their heart because they don't have
2:17:47hearts to appeal to. Advancing [music]
2:17:49into a different department for your
2:17:50hard work would also be counterintuitive
2:17:52to their purposes, too, because who
2:17:54would fill in your shoes? Sometimes
2:17:56doing your job [music] too well will be
2:17:58the ultimate tip off to your employers
2:18:00that you should just keep that job for
2:18:02as long as you can physically stand it.
2:18:04And when you eventually leave either due
2:18:05to frustration or health problems, then
2:18:08they'll consider who else they should
2:18:09get to fill in your [music] broken
2:18:10shoes. You'll be little more than a
2:18:12memory. You'll be lucky if you get more
2:18:14than a thank you and the standard
2:18:16severance [music] package for the time,
2:18:17energy, and health you poured into all
2:18:19this. The economy isn't what it used to
2:18:21be. Thanks [music] to the fundamental
2:18:22oversightes in the financial systems of
2:18:24the United States, costs will continue
2:18:26to climb while wages [music] will
2:18:28continue to stagnate. The labor share of
2:18:30value will continue to tip more of the
2:18:32wealth you create into the pockets of
2:18:34your bosses who are laying off middle
2:18:36managers and running skeleton crews
2:18:38while posting ads for jobs that [music]
2:18:40don't exist on listing sites. You're
2:18:41frozen in place, working yourself to the
2:18:43bone at one or more jobs where
2:18:46technology erodess the boundaries
2:18:47[music] between work and life. All the
2:18:49while, performance punishment ensures
2:18:51that any attempt to work yourself out
2:18:53with hard work just digs you deeper into
2:18:56the hole. You're [music] overworked and
2:18:57underpaid because that's how you're most
2:18:59useful to the system. And until the
2:19:02system [music] itself changes, that is
2:19:03not going to change for you either. So,
2:19:05if you're overworked, underpaid, and
2:19:07still falling behind, the system should
2:19:09be breaking. But it's not. Hey, it's
2:19:11Josh, and today on the Infographic Show,
2:19:13we're asking what would happen if
2:19:14everyone tried to pull their money out
2:19:16of the bank tomorrow. On a normal day,
2:19:18banks look boring. People swipe their
2:19:20cards. They pay their bills, get direct
2:19:22deposits, and maybe stop by a branch to
2:19:24grab a little cash. But behind the
2:19:26scenes, it's a lot different. Your bank
2:19:28is moving money digitally between
2:19:30accounts, approving loans, and investing
2:19:32deposits to earn a return. Here's the
2:19:34important part most people don't
2:19:36realize. Your money isn't just sitting
2:19:38in a vault. Banks only keep a small
2:19:40fraction of deposits as physical cash.
2:19:42The rest is loaned out for mortgages,
2:19:44car payments, business investments, and
2:19:46government bonds. That system works
2:19:48because on a regular day, only a tiny
2:19:50number of people want their money at
2:19:51once. So basically, at a bank,
2:19:53everything runs on trust. Trust that
2:19:55your paycheck clears. Trust that the ATM
2:19:57works. Trust that when you need your
2:19:59money, it'll be there. But all it takes
2:20:01is one headline, one rumor, or one
2:20:02unexpected shock to flip that trust
2:20:05upside down. And when that happens, the
2:20:07calm, the everyday routine, collides
2:20:09with something much more dangerous.
2:20:11something that could lead to some people
2:20:13losing everything. A bank run doesn't
2:20:15start with chaos. It starts with
2:20:17something small going wrong behind the
2:20:18scenes. As long as customers believe
2:20:20their money is safe, daily life
2:20:22continues as normal. But when that
2:20:24confidence takes an even small hit,
2:20:26unease begins to spread. And that
2:20:28trigger could be almost anything. It
2:20:30could start with a sudden stock market
2:20:31crash and reports of mounting bank
2:20:33losses or with rising interest rates
2:20:35that erode the value of long-term
2:20:37investments. A major business customer
2:20:39might pull out a massive deposit. Or an
2:20:41earnings report could reveal a bank
2:20:43struggling to balance what it owes
2:20:45depositors against money tied up in
2:20:47loans and bonds. And that is when the
2:20:49clock starts ticking. Remember, [music]
2:20:51banks don't keep most of your money as
2:20:53cash. They lend it out or invest it. So,
2:20:55if the value of those assets falls or
2:20:57too many deposits leave at once, the
2:20:59bank's cushion begins to shrink. On
2:21:01paper, the bank still holds its assets
2:21:03and maintains its balance sheet, but it
2:21:05has far less room for error. In some
2:21:07situations, the problem is simply speed.
2:21:09A modern bank can lose billions of
2:21:11dollars in a matter of hours, especially
2:21:12when large corporate clients move money
2:21:14digitally and without warning. If a bank
2:21:17can't sell investments quickly enough
2:21:18without taking major losses, its
2:21:20financial position weakens. Nothing has
2:21:22exploded yet, and there's still a chance
2:21:24that the [music] bank could meet its
2:21:25obligations. ATMs still work, transfers
2:21:28still go through, but behind the scenes,
2:21:30regulators, executives, and investors
2:21:32are watching very closely. [music] And
2:21:33what happens next will determine whether
2:21:35the bank survives or collapses entirely.
2:21:38And out in the real world, customers
2:21:40might begin to sense something's off.
2:21:42There's no full-blown panic [music] yet,
2:21:43just discomfort, a feeling that the
2:21:45system isn't as solid as it looked
2:21:47yesterday. That unease is the spark.
2:21:49[music] And what happens next causes
2:21:50that spark to turn into an inferno. This
2:21:53is the moment everything changes. Up
2:21:55until now, people just felt uneasy. But
2:21:57once a bank actually looks like it might
2:21:59be in trouble, fear takes over.
2:22:01Customers stop asking questions and
2:22:02start taking action. They log into apps,
2:22:04they visit branches, and they hit ATMs,
2:22:07not because they need the cash, but
2:22:08because they don't want to be the last
2:22:10person left when the money runs out.
2:22:12Banks are built for normal days. Maybe
2:22:14they can handle slightly busy days, but
2:22:16they're not built for stampedes. Every
2:22:18institution carefully plans how much
2:22:20cash it needs for daily withdrawals. The
2:22:22Treasury system works [music] when
2:22:24behavior is predictable. But when more
2:22:26people than expected start pulling their
2:22:28money out, those reserves start to get
2:22:30strained fast. The further withdrawals
2:22:32go beyond what the bank planned for, the
2:22:33higher the risk becomes, [music] and
2:22:35customers can sense that. A few missing
2:22:37features in an app, a slower wire
2:22:39transfer, a longer line at the branch.
2:22:41Each small delay feels like proof that
2:22:43something is wrong. And here is where
2:22:45things start to spiral. A bank run
2:22:47happens when large numbers of people
2:22:49withdraw their money from a financial
2:22:50institution in a short period of time.
2:22:52As withdrawals grow, the bank starts to
2:22:55look weaker to everyone who still has
2:22:57money there. And as the bank looks
2:22:58weaker, even more people rush to pull
2:23:00their funds. Fear feeds fear. One
2:23:03person's just in case becomes another
2:23:04person's emergency. The situation
2:23:06snowballs until the bank simply can't
2:23:08keep up. Too many people want cash at
2:23:10once, and the money just isn't liquid
2:23:12enough to move that fast. The money
2:23:13locked up in mortgages, business loans,
2:23:15and government bonds takes too long to
2:23:17convert to cash. So to meet demand,
2:23:19banks are forced to sell assets as
2:23:21quickly as possible. And selling fast
2:23:23means selling cheap. Loans get abruptly
2:23:26called in. Bonds are dumped at rock
2:23:28bottom prices. Every rushed sale weakens
2:23:30the bank even more, making customers
2:23:32even more nervous. History shows how
2:23:34violent that feedback loop can become.
2:23:37During the Great Depression, the stock
2:23:38market crash made people doubt the
2:23:40financial system. Depositors rushed to
2:23:42pull out money, forcing banks to
2:23:44liquidate assets just to survive. News
2:23:46of one bank run triggered another and
2:23:48another and another. [music] The panic
2:23:50spread faster than any regulation could
2:23:52contain. In 1930, one rumor alone helped
2:23:54sink the Bank of the United States.
2:23:56After a customer walked out angry and
2:23:58spread talk of insolveny, crowds formed
2:24:00within hours. By the end of the day,
2:24:02millions in cash were gone. Not because
2:24:04the bank failed first, but because fear
2:24:07did the damage before the truth could
2:24:08catch up. But modern banking moves even
2:24:11faster. In 2023, Silicon Valley Bank saw
2:24:14about $42 billion leave in a single day
2:24:17as corporate customers transferred money
2:24:18digitally. No lines, no shouting, just a
2:24:21few simple clicks. The withdrawals
2:24:23overwhelmed the bank's ability to sell
2:24:25assets or raise capital fast enough to
2:24:27pay out its customers. And to customers,
2:24:29that feels terrifying. If you're told
2:24:31that you can't get your money, your
2:24:33first thought isn't relief. It's, "What
2:24:35are they hiding?" And that thought pours
2:24:37gasoline on the fire. At this stage, the
2:24:39run is no longer controlled. Every
2:24:41withdrawal makes the next one more
2:24:43urgent. Every headline brings more
2:24:44customers demanding their money. And the
2:24:46worst part, this is only the beginning.
2:24:48Once panic hits the banks, the damage
2:24:51doesn't stay inside the walls. It starts
2:24:53to spill out into the entire economy.
2:24:55That's when mitigation measures kick in.
2:24:57Emergency tactics designed to slow the
2:24:59run, restore confidence, and keep the
2:25:01institution from failing outright are
2:25:03launched. Some of these moves are
2:25:04subtle, others are dramatic, and all of
2:25:07them are about buying time. First, the
2:25:09banks tried to slow everything down. In
2:25:11the past, banks literally slowed people
2:25:13in line. During US recessions, employees
2:25:15and even their relatives would stand in
2:25:17front of tellers making tiny deposits
2:25:19and withdrawals just to clog up the
2:25:21system and delay the rush until closing
2:25:23time. Today, the same idea exists
2:25:25digitally. Transfers suddenly take
2:25:27longer. Apps [music] show technical
2:25:29issues. Wires get delayed. Limits are
2:25:31placed on how much you can move in a
2:25:33day. None of this fixes the problem. It
2:25:35just slows the bleeding long enough for
2:25:37the bank to react and then they start
2:25:39scrambling for cash. If reserves aren't
2:25:41enough, the bank borrows from other
2:25:43banks and money markets or directly from
2:25:45the central bank. This is why the
2:25:47central banks are called the lender of
2:25:48last resort. Their job is to inject cash
2:25:51into the system when panic threatens to
2:25:53wipe out otherwise functional
2:25:54institutions. In 2023, the US Federal
2:25:57Reserve created the bank term funding
2:26:00program, allowing banks to borrow
2:26:01against their assets to meet
2:26:03withdrawals, assuming those investments
2:26:05would eventually mature at full value.
2:26:07Programs like this are designed to
2:26:08quickly turn frozen assets into usable
2:26:10cash. If a bank can borrow a massive
2:26:13amount of cash fast enough, it may be
2:26:15able to stop a run before it becomes
2:26:16fatal. But borrowing also carries risk.
2:26:19It keeps the lights on today while
2:26:21pushing the problems into tomorrow. Then
2:26:23comes the reassurance. One of the
2:26:25strongest anti-panic tools is insurance
2:26:27on deposits. In the US, the Federal
2:26:29Deposit Insurance Corporation or FDIC
2:26:32was created after the Great Depression
2:26:34to guarantee customer money up to a
2:26:36limit if a bank collapses. If people
2:26:38believe their deposits are protected,
2:26:40they're less likely to sprint for the
2:26:41exits. And if a bank actually fails, the
2:26:44insurer steps in. Sometimes, another
2:26:46strong bank will buy the troubled one,
2:26:48and customers barely even notice the
2:26:49switch. Other times, regulators seize
2:26:51the bank and sell off assets to pay
2:26:53depositors back. Deposit insurance
2:26:55doesn't create new money, but it does
2:26:57redistribute losses across the system.
2:27:00Banks may also try to lock money in
2:27:02place. Another tactic is encouraging
2:27:04term deposits. These are accounts that
2:27:07pay higher interest but can't be
2:27:08withdrawn until a set date. By locking
2:27:11up part of their liabilities, banks
2:27:12protect themselves from sudden cash
2:27:14demands. If enough money is tied into
2:27:16non-callable deposits, the bank can
2:27:18survive even while other customers
2:27:20withdraw. But here is the unfortunate
2:27:22truth. Mitigation doesn't always lead to
2:27:25a solution. [music] Slowing
2:27:26transactions, borrowing cash, and
2:27:28guaranteeing deposits can stabilize a
2:27:30bank temporarily, but they can't undo
2:27:32the losses already locked into bad
2:27:33assets or [music] panicked withdrawals.
2:27:35Eventually, the moment everyone fears
2:27:37arrives. At the start of a run, cash
2:27:39flows out fast. But after hours,
2:27:42sometimes even minutes, the vaults,
2:27:43ATMs, and [music] digital settlement
2:27:45systems start to hit hard limits. People
2:27:47try to withdraw their money, and
2:27:49suddenly the machines say no. There's
2:27:51simply no more liquid [music] cash
2:27:52available to release. The hard truth is
2:27:54that even if the bank has assets it
2:27:56could sell, there's simply not enough
2:27:58time to convert them [music] into cash
2:28:00and get it to customers accounts. Panic
2:28:02drives the vast majority of people to
2:28:03demand their money at once, and the bank
2:28:05[music] just can't keep up. But there's
2:28:07an even more terrifying scenario. The
2:28:09bank might have sold all its assets,
2:28:11many of them at a loss. And that means
2:28:13that there's literally no money left. In
2:28:15this case, the only way people will get
2:28:17their money back is if someone else like
2:28:19the government or another financial
2:28:21institution [music] steps in. At this
2:28:23point, the bank isn't choosing to stop
2:28:25paying people. It is physically unable
2:28:27to meet the demand. [music] The money is
2:28:28either trapped in future sales or loans
2:28:31while customers need it to be in the
2:28:33present. Once liquidity is gone, the
2:28:35crisis stops being about fear and starts
2:28:37to be about math. There simply isn't
2:28:39enough cash to satisfy everyone asking
2:28:41for it all at once. And when a [music]
2:28:42bank can't pay its customers, the
2:28:44problem quickly spreads. One
2:28:45institution's failure sends shocks
2:28:47through the entire system. When a bank
2:28:49finally runs out of options, the [music]
2:28:51crisis stops being private and becomes
2:28:53public. If a bank can't meet
2:28:54withdrawals, it effectively fails. At
2:28:56that point, the Federal Reserve,
2:28:58regulators, and government institutions
2:28:59[music] have no choice but to step in.
2:29:01Not to save a single bank, but to
2:29:03protect the entire system from
2:29:05collapsing with it. Historically, this
2:29:07is where the government takes control.
2:29:08During the Great Depression, after
2:29:10Franklin D. Roosevelt became president
2:29:12in 1933. He declared a nationwide bank
2:29:15holiday. Every bank in the country
2:29:17closed temporarily so federal inspectors
2:29:19could check which ones were strong
2:29:20enough to reopen. Weak banks were
2:29:22reorganized, merged, or shut down
2:29:24completely. Roosevelt also understood
2:29:26that money runs on psychology as much as
2:29:28math, so he went straight to the public.
2:29:31In radio broadcasts, he told the
2:29:32Americans that keeping money in a bank
2:29:34was safer than hiding it under a
2:29:36mattress.
2:29:36>> [music]
2:29:36>> He promised that reopened banks would
2:29:38safeguard deposits and that the
2:29:40government would not allow endless
2:29:42failures to continue. Those words
2:29:44mattered. They helped slow the bleeding
2:29:46by restoring confidence in institutions
2:29:48that people had completely lost faith
2:29:49in. But speeches weren't enough. When a
2:29:52modern bank collapses, the FDIC usually
2:29:54moves in behind the scenes. It may seize
2:29:56the bank after business hours, arrange a
2:29:58takeover by a stronger institution, and
2:30:00reopen the next business day under new
2:30:02ownership. To customers, it can look
2:30:04like nothing happened. Even though the
2:30:06original bank technically died
2:30:08overnight, at the same time, the Federal
2:30:10Reserve injects liquidity into the
2:30:12system, it lends to healthy banks,
2:30:14stabilizes payment networks, and tries
2:30:16to make sure cash keeps moving. So, one
2:30:18failure doesn't trigger 10 more. But
2:30:20here is the reality. When the Fed steps
2:30:22in, it means the bank that held people's
2:30:24hard-earned cash has completely failed.
2:30:26After the panic, the freezes, and the
2:30:28government takeover, one question
2:30:30matters more than anything else to the
2:30:32regular people. Do I get my money back?
2:30:34When a bank run occurs and it leads to
2:30:37the bank failing, recovery doesn't mean
2:30:38everything magically returns to normal.
2:30:41[music] It means sorting out who gets
2:30:42paid, how much they get, and who ends up
2:30:44taking the loss. In the United States,
2:30:46the most important safety net is deposit
2:30:48insurance. And through the FDIC,
2:30:50customer deposits are guaranteed up to
2:30:52$250,000 per depositor, per bank, per
2:30:55account category. That means if your
2:30:57bank collapses, the insured portion of
2:30:59your money is protected. In many cases,
2:31:01the process is fast. Regulators arrange
2:31:03for another bank to take over the failed
2:31:05one, and customers regain access to
2:31:07their insured funds almost immediately,
2:31:09or at least by the next business day.
2:31:11Checking accounts will reopen, debit
2:31:13cards work again, direct deposits
2:31:15[music] resume, and so for millions of
2:31:17everyday customers, recovery feels
2:31:18almost instantaneous. Their money
2:31:20survives because it was insured. But not
2:31:23everyone is that lucky. Any amount above
2:31:25the insured limit is not guaranteed. If
2:31:27you had 300,000 in one account, only
2:31:30250,000 is protected. The remaining
2:31:3250,000 becomes a part of the failed
2:31:34bank's assets. You might get some of it
2:31:36back later after loans and property are
2:31:39sold, or you might get almost nothing.
2:31:41It depends on how bad the collapse
2:31:43really was. Large businesses, investors,
2:31:46and wealthy depositors feel the pain
2:31:47first. Payroll accounts, operating cash,
2:31:50and corporate reserves can be frozen or
2:31:51partially wiped out. And [music] that's
2:31:53how a bank failure can ripple into
2:31:55layoffs, missed paychecks, or bankrupt
2:31:57companies even after the bank itself is
2:31:59gone. Recovery also takes some time.
2:32:02Assets have to be sold. Debts have to be
2:32:04settled. Legal processes grind forward.
2:32:07While insured customers move on,
2:32:09uninsured depositors can wait months or
2:32:11even years to learn how much they'll
2:32:13recover, if anything. So, while the
2:32:15system protects the average person, it
2:32:16doesn't protect everyone equally. Bank
2:32:18runs don't just destroy banks. They can
2:32:21have lasting effects on people,
2:32:22businesses, and the economy. Some people
2:32:24walk away almost untouched. Others lose
2:32:27savings they spent a lifetime building.
2:32:29Your grocery bill isn't skyrocketing
2:32:31because of corporate greed or government
2:32:33spending. What if the real reason costs
2:32:35keep rising is thousands of miles away?
2:32:38[music] A patch of the Pacific Ocean has
2:32:40just hit record temperatures, helping
2:32:42devastate cocoa and coffee harvests
2:32:44around the world. Farmers are facing
2:32:46financial collapse. And your morning
2:32:48coffee has become a geopolitical
2:32:50casualty. The hidden tax you're paying
2:32:52isn't going to the government. It's
2:32:54being swallowed up by the Pacific Ocean.
2:32:56Chapter one. The $12 chocolate bar. The
2:32:59last El Nino in 2023 and 24 caused
2:33:02unprecedented havoc in global
2:33:04agriculture, including major disruptions
2:33:06to the supply of cocoa, coffee beans,
2:33:08and even water. Cocoa futures surged to
2:33:10over 150% between June 2023 and late
2:33:142024, peaking at almost $12,200
2:33:18per imperial ton. That's like the price
2:33:20of silver increasing 5-fold in a single
2:33:22year. That El Nino was considered
2:33:24strong. It was one of the main factors
2:33:26in 2024 being the hottest year on
2:33:28record. And that was literally the
2:33:30warm-up. This time, the National Oceanic
2:33:32and Atmospheric Administration, or Noah,
2:33:35is anticipating a super El Nino, the
2:33:37strongest one in 150 years. To make
2:33:39matters worse, it's expected to be in
2:33:41the summer of 2026 and then last through
2:33:44to February 2027. The 2023 24 El Nino
2:33:48caused widespread droughts, floods, and
2:33:50wildfires. It severely impacted
2:33:52agriculture leading to export bans and
2:33:54shortages of critical crops like rice.
2:33:56It caused shipping delays and power
2:33:58shortages due to low water levels. The
2:34:00combination of these factors caused
2:34:02[music] food prices to soar globally.
2:34:04That was a strong El Nino. Now imagine
2:34:07the havoc a super El Nino is going to
2:34:09wreak. It's a phenomenon that's becoming
2:34:12more frequent and more powerful. Some
2:34:13scientists [music] are waving the red
2:34:15flag that we may already be in a state
2:34:17of more or less permanent El Nino. The
2:34:19price of key crops is expected to
2:34:21increase sharply because the effects can
2:34:23last up to 3 years after the event.
2:34:25Cocoa prices have fallen 70% since the
2:34:28record El Nino spike of 2024. But the
2:34:30price of chocolate hasn't. Not even
2:34:32close. If it wasn't for the action taken
2:34:34by manufacturers, it probably would be
2:34:36much more expensive than it already is.
2:34:38In an attempt to keep prices under
2:34:40control, confectionary makers have been
2:34:42compelled to introduce shrinkflation,
2:34:44smaller chocolate bars for the same
2:34:46price. The latest casualty is the
2:34:48standard Mars bar which shrunk from 1.8
2:34:51O to 1.41 o in April 2026. Companies
2:34:55like Lint and Sprungley. Manderlay and
2:34:58ingredient supplier Barry Calibo have
2:35:00also resorted to skimpflation. They're
2:35:03substituting cocoa butter with shea
2:35:05butter and palm oil. Others are using
2:35:07yeast extract or cocoa alternatives made
2:35:10from roasted grape and sunflower seeds.
2:35:12So, El Nino has already caused chocolate
2:35:14bars to become smaller, less chocolaty,
2:35:16and more expensive. Now, cocoa prices
2:35:19are about to start rising sharply again.
2:35:21There's no way around it. Your finances
2:35:23are at the mercy of El Nino. Climate
2:35:26change is real, and you can feel it
2:35:28directly at the checkout. But the
2:35:29impacts don't just affect crops. Chapter
2:35:322, the Panama choke point. El Nino also
2:35:34caused droughts that led to lower water
2:35:37levels along the vital shipping routes.
2:35:39The writing was already on the wall
2:35:40during the 2023 24 El Nino, [music]
2:35:43particularly in the Panama Canal. The
2:35:4551m canal is the single most critical
2:35:48choke point for the United [music]
2:35:49States agricultural trade. Some 14 to
2:35:5217% of all US agricultural exports by
2:35:55volume transit the canal. More important
2:35:57to your grocery bill though, roughly 40%
2:36:00of all US container traffic passes
2:36:02through the canal. that includes huge
2:36:04quantities of inbound fruits,
2:36:06vegetables, raw ingredients like cocoa,
2:36:08and [music] processed food. Disruptions
2:36:10in the canal cause ripples in the supply
2:36:12chain. They eventually land in your
2:36:14pocket. In 2023, the Panama Canal
2:36:16Authority implemented new regulations
2:36:18that allowed a maximum number of 22
2:36:21daily slots for transiting [music]
2:36:22ships. They were anticipating increased
2:36:25traffic. And then El Nino hit. It caused
2:36:28a serious drought in Gatun Lake, a key
2:36:30stretch of the canal system that
2:36:32provides fresh water for its locks. The
2:36:34canal discharges enough water from the
2:36:36lake to fill up 76 Olympic sized pools
2:36:39with each transiting vessel. Thanks to
2:36:41the drought, water levels dropped,
2:36:43meaning fewer ships were able to pass
2:36:45through. By February 2024, the authority
2:36:47was able to revise the number due to
2:36:49unexpected rain and raise the number to
2:36:5224, but it was still less than the 36 to
2:36:5538 ships that normally transit the canal
2:36:57daily. The impact was massive. [music]
2:36:59It created a backlog of ships that grew
2:37:02steadily. At one point in August, there
2:37:04were more than 160 ships in the queue.
2:37:06Some dropped out, opting to add
2:37:08thousands of miles, millions of dollars,
2:37:11and transit time to their journeys. They
2:37:13went around the tip of South America.
2:37:15the [music] Cape of Good Hope at the
2:37:16bottom of Africa or the Suez Canal
2:37:18instead. Ship owners were bidding up to
2:37:21$4 million to snap up the [music] slots
2:37:23that those ships had vacated, more than
2:37:2520 times the normal rate. The backlog
2:37:27spread through the supply chain like a
2:37:29contagion. When ships couldn't reach
2:37:31their destination [music] ports, the
2:37:32trucks waiting to haul their cargo sat
2:37:34idle. The result was drought induced
2:37:36bottlenecks that stranded enough cargo
2:37:39to fill a line of semi-truckss
2:37:41stretching from New York to London. The
2:37:43economic damage caused went far beyond
2:37:45Panama. The disruptions lasted for
2:37:47months. In South America, the Amazon
2:37:49River and tributaries like the Rioenegro
2:37:52hit record lows. Communities were
2:37:54isolated. Local economies were crippled.
2:37:56In October 2024, 8 months after El Nino
2:37:59subsided, [music] the Rioenegro
2:38:00plummeted to a depth of 41 1/2 ft. It
2:38:04was the shallowest depth recorded since
2:38:06measurements began in 1902. The low
2:38:09waters stranded cargo boats and river
2:38:11fairies, cutting off hundreds of
2:38:12thousands of people in Brazil, Peru, and
2:38:14Colombia. Again, that was a strong El
2:38:17Nino. This next one is even stronger. If
2:38:20one El Nino can shut down the world's
2:38:22most vital canal and largest river, what
2:38:24happens during a super El Nino? Chapter
2:38:273. The energy [music] trap. We already
2:38:29got a preview in 23 and 24, and nowhere
2:38:32was it more devastating than in Zambia.
2:38:35This landlocked nation is reliant on
2:38:37hydroele electricity for 85% of its
2:38:39power. Much of that comes from the
2:38:41Kariba Dam. The Kuriba north facility is
2:38:43the centerpiece of Zambia's
2:38:45hydroelectric network responsible for
2:38:47about a third of total power output. Or
2:38:49at least it was. The same El Nino
2:38:52inspired drought that hit Panama struck
2:38:54Kariba. By September 2024, Karibba
2:38:57North's output had sunk by 90%. The
2:39:00lakes's live storage, the water used for
2:39:02power generation, had fallen [music] to
2:39:04just 3.6 ft, one of the lowest levels in
2:39:07history. Zambia's other hydroelectric
2:39:09plants were in a similar state. The knee
2:39:11high water levels quickly brought the
2:39:13country well to its knees. Zambia's
2:39:16national electricity demand averages
2:39:18around 2,400 megawatt. By September, its
2:39:21supply had fallen to 900 megawatt, a
2:39:24roughly 60% reduction. To stabilize its
2:39:26collapsing grid, the country's power
2:39:28utility, Zesco, was forced to implement
2:39:30rolling blackouts known as load
2:39:32shedding. As the crisis deepened, the
2:39:35blackouts were extended. At its peak,
2:39:37the entire nation was plunged into
2:39:39darkness for up to 21 hours a day.
2:39:41Zambians had already become used to 4 to
2:39:448 hours of load shedding [music] before
2:39:46the 21-hour cuts started in September
2:39:482024. 8 months later, they were still
2:39:51facing 17-hour power cuts daily. Today,
2:39:54the country is still plagued by variable
2:39:56load shedding because the energy deficit
2:39:58hasn't been resolved. The consequences
2:40:00of the last El Nino on the economy have
2:40:02been severe. Reduced industrial output,
2:40:05[music] lost business hours, and slower
2:40:06economic activity. But the loss of power
2:40:09generation has also had another
2:40:10potentially more disastrous long-term
2:40:13effect, disrupting the transition to
2:40:15cleaner, greener energy sources. Like
2:40:18most countries, Zambia has been moving
2:40:19to diversify its energy with the
2:40:21introduction of cleaner technologies.
2:40:23The country had signed a string of deals
2:40:25for solar plants. These include a $2
2:40:27billion deal with the UAE stateowned
2:40:30company Mastar and a power purchase
2:40:32agreement with the Canadian firm Sky
2:40:34Power Global. They hope to supply enough
2:40:36solar energy to power 4 million
2:40:38households. Now Zambia has resorted to a
2:40:40desperate attempt [music] to keep the
2:40:41lights on. They are turning to coal. In
2:40:44June 2026, the country's state
2:40:46investment arm ZCCM Investments [music]
2:40:48Holdings announced a partnership with
2:40:50the Chinese-owned Wonderful Group
2:40:52Services Limited. The goal is to develop
2:40:54a major coal fired thermal power project
2:40:56expected to generate up [music] to 600
2:40:58megawatts of electricity. The government
2:41:00doesn't have a choice. It needs to keep
2:41:02the mines operating, factories running,
2:41:04and households connected while renewable
2:41:06alternatives continue to develop. It
2:41:08says that coal offers something that
2:41:09solar and hydro can't. It generates
2:41:11electricity around the clock regardless
2:41:13of rainfall, cloud cover, or seasonal
2:41:15weather conditions, but it's also
2:41:17accelerating a global [music] climate
2:41:18disaster. Short-term survival is being
2:41:21traded for long-term catastrophe. In a
2:41:23cruel twist, the transition to green
2:41:25energy is being sabotaged by the very
2:41:27climate change it's meant to fight. And
2:41:29the damage doesn't stop at power
2:41:31shortages. Chapter 4. The rice wars. The
2:41:34lack of water isn't just turning off the
2:41:37lights. It's emptying global food
2:41:38reserves, raising the prospects of
2:41:40widespread famine [music] and surging
2:41:42prices for scarce staple foods like
2:41:44rice. In the past decade or so, India
2:41:46has become the world's largest rice
2:41:48exporter, accounting for 40% of global
2:41:50rice exports in 2022 and 23. Any
2:41:54disruption to Indian exports
2:41:55reverberates dramatically around the
2:41:57world. And that's exactly what happened
2:41:59during the 2324 El Nino. Across Asia,
2:42:02rice is the foundation of people's
2:42:04diets. It provides between 40 to 67% of
2:42:07total calories consumed. Countries from
2:42:09Bangladesh to Nepal depend heavily on
2:42:11imports from India. [music] That's why
2:42:13panic spread in July 2023 when India
2:42:16suddenly banned non-basmati rice exports
2:42:19[music] with immediate effect. More than
2:42:2140 countries rely on India for over half
2:42:23of their rice imports and the [music]
2:42:25ban affected roughly 25% of India's
2:42:28total rice exports. It caused instant
2:42:30panic. The ban lasted for around 14
2:42:33months with the Indian government
2:42:34lifting it in September 2024. During
2:42:37this time, India's total rice exports
2:42:38[music] fell by 34% compared to the
2:42:41previous year. Non-basmati white rice
2:42:44exports plummeted by 88%. It was the
2:42:46caloric equivalent of removing every
2:42:48grain of rice from the shelves of every
2:42:51Walmart in the US. The effect, massive
2:42:53rice prices around the world. Countries
2:42:56across Asia and subsaharan Africa rushed
2:42:58to find new suppliers. But Thailand,
2:43:00Vietnam, and the other major exporters
2:43:02were being hit by El Nino, too. By
2:43:04February 2024, the price of benchmark
2:43:06[music] Thai rice had surged 22%,
2:43:09reaching levels not seen in 15 years.
2:43:11The shock didn't stop there. Rice prices
2:43:13spiked across Asia and Africa, hitting
2:43:16countries like Nepal, the Philippines,
2:43:17and Sagal particularly hard. The
2:43:19disruptions undoubtedly increased food
2:43:21insecurity and poverty in some of the
2:43:23places that could least afford it.
2:43:25>> [music]
2:43:25>> Welfare losses in subsaharan Africa
2:43:27alone are estimated at around $353
2:43:30million as a direct consequence of the
2:43:32ban. Since the ban has been lifted,
2:43:35India and other nations have increased
2:43:36supply. It's contributed to a
2:43:38significant drop in prices back to more
2:43:41normal levels until [music] the next
2:43:43super El Nino hits. If domestic supplies
2:43:46are threatened, India has proven that it
2:43:48is prepared to pull the plug on exports
2:43:49to stabilize the domestic market. And
2:43:52it's not just rice. All water inensive
2:43:54crops like sugar, palm oil, and cotton
2:43:56are at risk. Few things disrupt
2:43:58societies faster than basic [music] food
2:44:00becoming scarce and unaffordable,
2:44:02especially in developing countries.
2:44:04Rising migration, geopolitical
2:44:05instability, conflict, and higher
2:44:07grocery bills could become more common.
2:44:10The $12 chocolate bar, water shortages,
2:44:12and rice crises [music] aren't isolated
2:44:14disasters. They are linked by a massive
2:44:17atmospheric system, and that system is
2:44:19breaking down. Chapter 5. the invisible
2:44:22engine. When it comes to El Nino, most
2:44:24of the focus has been on the way the
2:44:26phenomenon causes higher sea surface
2:44:28temperatures in the tropical Pacific
2:44:29Ocean. This in turn leads to disrupted
2:44:32rainfall, droughts, flooding, and a
2:44:34myriad of other climatic ills. These
2:44:36problems are all too real, but higher
2:44:38temperatures aren't the most dangerous
2:44:39effects. El Nino is breaking the global
2:44:42rain machine, and the consequences could
2:44:44be unimaginable. The east-west
2:44:46atmospheric circulation above the
2:44:48Pacific Ocean is known as the Walker
2:44:50circulation and these wind patterns
2:44:52determine how global trade flows. They
2:44:54also play an oversized role in shaping
2:44:55the global climate. Air rises in the
2:44:58tropical western Pacific and travels
2:45:00eastward high in the atmosphere. The air
2:45:02then sinks back down to the surface over
2:45:04the eastern Pacific Ocean where the
2:45:06surface winds blow it back toward the
2:45:08west. It's not always constant.
2:45:10Sometimes it's weaker, sometimes it's
2:45:12stronger. During an El Nino event, the
2:45:14Walker circulation weakens, reducing
2:45:17easterly winds across the tropical
2:45:19Pacific. That shift disrupts [music]
2:45:21global weather patterns and the Western
2:45:23Pacific, including Indonesia and
2:45:24Australia, becomes hotter and drier,
2:45:27often leading to drought. At the same
2:45:29time, the Eastern Pacific sees the
2:45:30opposite. Heavier rainfall and flooding
2:45:32in places like Peru and Ecuador. The
2:45:35result is extreme imbalance. Some
2:45:37regions get far too much rain, others
2:45:39far too little, and the consequences
2:45:41spread through crop production, disaster
2:45:43risk, and economic instability
2:45:44worldwide. And your grocery bill during
2:45:47the 23 24 El Nino, peak sea surface
2:45:50temperatures [music] reached around 29
2:45:52to 30° C, the fifth highest on record.
2:45:55But this time, the Walker circulation
2:45:56didn't weaken as much as expected. The
2:45:59effect of warmer Pacific waters was
2:46:01partially offset by unprecedented heat
2:46:04in the tropical Indian and Atlantic
2:46:05oceans. That extra warmth triggered
2:46:08atmospheric changes that strengthened
2:46:09the trade winds and reinforced the
2:46:12Walker circulation, counteracting the
2:46:14Pacific's influence. As a result, the
2:46:16average rainfall anomalies in the
2:46:17tropical Pacific were much lower than
2:46:19expected. But it would be a mistake to
2:46:21think we escaped lightly. We didn't.
2:46:23Because the effect of this broken rain
2:46:25engine doesn't [music] stay in the
2:46:26tropics. It actively hunts down the rest
2:46:28of the globe via the jetream warp.
2:46:31Tropical rainfall is the heating source
2:46:33that drives global atmospheric waves.
2:46:36Because the effect on the Walker
2:46:37circulation was weak in 23 and 24, the
2:46:40event failed to trigger strong
2:46:42extratropical teleconnections.
2:46:44Teleconnections are recurring largecale
2:46:47patterns of atmospheric pressure and
2:46:48circulation that join climate anomalies
2:46:51across thousands of miles. They act as a
2:46:53kind of bridge, allowing weather changes
2:46:56in one region to influence weather in
2:46:57another. Teleconnections can last weeks
2:47:00to months and often return in cycles.
2:47:02That's what makes [music] them so
2:47:03important for seasonal forecasting. By
2:47:05monitoring source regions,
2:47:06meteorologists can predict weather in
2:47:08far off response regions months [music]
2:47:10in advance. That makes it a powerful
2:47:12tool for preparing for droughts, floods,
2:47:15and extreme heat. It also helps to keep
2:47:17prices down. The 2023 24-week
2:47:20teleconnections had three major and
2:47:22entirely unexpected consequences. First,
2:47:25meteorologists were expecting a weaker
2:47:27Walker circulation to deliver a
2:47:29muchneeded wet winter to the southern
2:47:31tier of the United States in California.
2:47:33The region had been grappling with the
2:47:34severe drought, but it never really
2:47:36materialized and the drought went on.
2:47:39Second, if there's a silver lining to El
2:47:40Nino, it's that it tends to put a damper
2:47:42on hurricane activity. The high vertical
2:47:44wind shear typically tears hurricanes
2:47:46apart. However, because the atmospheric
2:47:49circulation response was weak, this year
2:47:51she didn't materialize over the
2:47:53Caribbean and the Atlantic as expected.
2:47:55As a result, the 2023 hurricane season
2:47:57became the fourth most active on record.
2:47:59[music] And third, seasonal forecasts
2:48:01became unreliable. The normal links
2:48:04between Pacific sea surface temperatures
2:48:05and [music] global climate patterns
2:48:07broke down. So, even when El Nino acts
2:48:10differently than expected, its impact is
2:48:12still severe. And that's because the
2:48:14effects aren't just limited to the
2:48:15tropics and coastal regions. Chapter
2:48:17six, the jetream warp. The planet is one
2:48:20big, deeply connected weather system,
2:48:22and the effects of El Nino touch every
2:48:24corner in one way or another. In the US,
2:48:26it turns weather patterns upside down
2:48:28due to El Nino's impact on a critical
2:48:30planetary weather system. Rosby waves,
2:48:33also known as planetary waves. They're a
2:48:36type of inertial wave that occurs
2:48:37naturally in rotating fluids. They're
2:48:40found in the atmospheres and oceans of
2:48:42the Earth and other planets due to the
2:48:44rotation of the planet. Rosby waves are
2:48:46giant atmospheric and oceanic patterns
2:48:49that help shape global weather. In the
2:48:51atmosphere, they steer pressure systems
2:48:53and the jetream. In the ocean, they
2:48:55travel along the boundaries between warm
2:48:57surface water and cooler deep layers. El
2:49:00Nino disrupts this entire system. It
2:49:02shifts the main source of atmospheric
2:49:04energy, the Rosby wave source, from the
2:49:06western Pacific to the central or
2:49:09eastern Pacific. During El Nino, warm
2:49:11sea surface temperatures in the central
2:49:13and eastern Pacific trigger intense
2:49:15upward motion in the atmosphere and
2:49:17heavy rainfall. This forces the air to
2:49:19spread out high in the atmosphere,
2:49:21creating a region of what meteorologists
2:49:22call upper tropospheric divergence. As
2:49:26this air flow interacts with the Earth's
2:49:27rotation and background wind patterns,
2:49:29it generates a strong Rosby wave source.
2:49:32That source acts like a starting gun,
2:49:34launching a stationary Rosby wave train
2:49:36that travels northeast along the jetream
2:49:39into the middle latitudes. [music] In
2:49:41the United States, this often sets up a
2:49:43persistent low pressure system over the
2:49:45Gulf of Alaska, a defining feature of El
2:49:47Nino winters. The result is dry
2:49:49conditions that often develop over
2:49:51western Canada and in the northern US
2:49:53while storms and cooler air are directed
2:49:56into the southern US. No snow in the
2:49:58Midwest, nasty unseasonal storms in
2:50:01California. Now you know why. But this
2:50:03doesn't just affect the US. Thanks to
2:50:05teleconnections, the effects are felt
2:50:07around the world. These strong wave
2:50:09trains can propagate upward into the
2:50:11stratosphere where they weaken the polar
2:50:13vortex. That disruption can later
2:50:15descend, triggering sudden atmospheric
2:50:17warmings and often cooler winters in
2:50:19Europe. At that same time, the same
2:50:22system can drive extreme heat in regions
2:50:24like the Sahel in Africa. In other
2:50:26words, nowhere is spared. [music] And
2:50:28because roby waves can become
2:50:30stationary, they can lock weather
2:50:32systems in place. That leads to
2:50:34prolonged extremes, standard droughts
2:50:36under persistent high pressure, or
2:50:38flooding rains under stationary low
2:50:39pressure systems. and persistent
2:50:41unnatural weather conditions only lead
2:50:43to one thing, higher prices at checkout.
2:50:46Now, you might be thinking, well, at
2:50:47least El Nino only comes around every
2:50:49couple of years, [music] so the effects
2:50:51are temporary. Unfortunately, that is
2:50:53the best case scenario. The scariest
2:50:55part about all this is that we are
2:50:57entering a permanent El Nino state where
2:50:59the Pacific's cold water upwelling is
2:51:01structurally weakening. The cooler years
2:51:04today are now warmer than the hot years
2:51:06of the 1980s. And that [music] trend is
2:51:09clearly escalating fast. Chapter 7. The
2:51:12death of the cycle. For all of the havoc
2:51:14it caused and is still causing, the 23
2:51:1724 El Nino was milder than predicted.
2:51:19Even so, global sea surface temperatures
2:51:21in 2023 and 2024 exceeded [music]
2:51:24those of the 1997 1998 Super Elino by
2:51:280.2 2 to 0.3° C on average across the
2:51:32entire ocean surface. To put global
2:51:34ocean warming in perspective, the oceans
2:51:36are absorbing energy equivalent to five
2:51:39Hiroshima nuclear bombs every [music]
2:51:41second. The world is still reeling from
2:51:43the effects of the last El Nino. The
2:51:45hangover effect of residual heat has
2:51:47been even more devastating than the El
2:51:49Nino disruptions themselves. Now, the
2:51:51current one is upon us, and it's
2:51:53anticipated to be the strongest one
2:51:55since the 1870s. But before we've even
2:51:58had a chance to recuperate from that one
2:52:00or its after effects, the next El Nino
2:52:03will arrive and then the next. So the
2:52:05forecast for relief on your grocery and
2:52:07utility bills is increasingly grim. Food
2:52:10shortages and supply shocks are highly
2:52:12likely to diversify and worsen. So is
2:52:14political instability and conflict. But
2:52:16there is another El Nino induced factor
2:52:18that's also contributing [music]
2:52:20significantly to inflationary price
2:52:22pressure on all goods and services. The
2:52:24modern world is becoming uninsurable.
2:52:27Chapter 8. The insurance cliff. El
2:52:29Nino's impacts on teleconnections are
2:52:31driving up global insurance premiums by
2:52:34creating unpredictable simultaneous and
2:52:36widespread weather extremes that
2:52:38overwhelm traditional risk models and
2:52:40deplete reinsurance capital. A super El
2:52:43Nino is an event capable of impacting
2:52:45risks across geographies, perils, and
2:52:47lines of business. [music] The potential
2:52:49impacts are difficult, if not
2:52:51impossible, to predict. For insurers,
2:52:53this is the ultimate nightmare. El Nino
2:52:55patterns can simultaneously trigger
2:52:57flood losses in one region,
2:52:59drought-driven claims in another, and
2:53:00wildfire exposure elsewhere. That means
2:53:03more claims, and higher reinsurance
2:53:05costs. It is of particular concern in
2:53:07the US, where many in the flood zones
2:53:09remain structurally underinsured because
2:53:11standard homeowners policies exclude it.
2:53:14You've probably already guessed where
2:53:15this leads. Higher premiums across the
2:53:18board. And on top of all the other
2:53:20inflationary pressures, those higher
2:53:21premiums will be passed on to consumers,
2:53:24causing prices to rise even more. The
2:53:26old normal is gone. El Nino has deleted
2:53:29it. This is the new normal. And the best
2:53:31approach [music] to it all is to just
2:53:33get used to it. Somehow, no matter what
2:53:35happens in the world, we always end up
2:53:37paying more. And understanding why is
2:53:39where things get complicated. The United
2:53:41States wakes up with millions of people
2:53:43getting ready to play a role in the
2:53:44economy. From the workers keeping the
2:53:46retail sector running to the stock
2:53:48brokers handling huge amounts of money,
2:53:50everyone plays their part. But today is
2:53:52no ordinary day because today is the day
2:53:54the US economy begins to collapse and
2:53:57it'll happen sooner than anyone knows.
2:53:59That's not to say an economic collapse
2:54:01happened out of nowhere. There are
2:54:02warning signs all around and many
2:54:03economists have been trying to tell
2:54:05people for a long time. Inflation has
2:54:07likely been high for a long time,
2:54:08bordering on hyperinflation. When money
2:54:11has less value, the price of goods and
2:54:13services goes up, too. And as salaries
2:54:15rarely rise with them, it becomes harder
2:54:17and harder to afford even basic goods.
2:54:19The economy might have been slowing down
2:54:21in growth as well with many people on
2:54:23unemployment. The combination of these
2:54:25two factors leads to a condition called
2:54:26stagflation. This puts the government in
2:54:29an unfortunate bind as the methods
2:54:31needed to lower inflation might lead to
2:54:32higher unemployment. It's a bad state of
2:54:34affairs, but the dam is about to burst.
2:54:37The stock market is the method most
2:54:39people use [music] to gauge the health
2:54:40of the economy. If it's doing well,
2:54:42people are likely to keep investing. But
2:54:44when there's a sudden lack of investor
2:54:45confidence in the market, [music] it can
2:54:47go downhill in a hurry. And it doesn't
2:54:49take much. If a major player suddenly
2:54:51goes bankrupt or a bad economic or
2:54:53global news drops, people start selling
2:54:55their stocks. Tension over current
2:54:56political affairs like the [music]
2:54:58pending vote to raise the US debt
2:55:00ceiling only makes things worse. When
2:55:02some people start selling, others follow
2:55:04suit, and the snowball effect starts.
2:55:06Easy to get started, hard to stop. And
2:55:09that's where the panic starts. In a
2:55:11matter of hours, billions of dollars are
2:55:12lost in the US economy. Major companies
2:55:15see their stock value drop
2:55:16precipitously. Some losing much of their
2:55:18net worth. And let's not forget about
2:55:20the billionaires. Many of them like Jeff
2:55:22Bezos and Elon Musk have their net worth
2:55:24heavily tied up in stock holdings. That
2:55:26means they lose and gain billions of
2:55:28dollars while sleeping. And today, they
2:55:30might just see half their net worth
2:55:32disappear into thin air. It's a disaster
2:55:34for everyone from the billionaires to
2:55:35the small investors who see their
2:55:37retirement savings go up in smoke. Many
2:55:39companies see their entire net worth
2:55:41disappear and by the close of the
2:55:43trading day, countless people are out of
2:55:44work and facing an uncertain future. But
2:55:47it's only going to get worse from here.
2:55:49Day two, the US government is in a
2:55:51panic. This is the worst day for stocks
2:55:53since 1929, even eclipsing the chaos
2:55:56caused by the Great Recession of 2008.
2:55:58They know something needs to be done,
2:56:00providing aid to keep the economic
2:56:01collapse from getting worse. That's what
2:56:03happened in both 2008 and 2020. After
2:56:06the stock market collapsed in 2008, a
2:56:08costly bailout bill was proposed, giving
2:56:10many of the businesses who were about to
2:56:12fold an infusion of cash. And in 2020,
2:56:15as the stock market collapsed due to the
2:56:16coronavirus pandemic, the government
2:56:18provided both aid to businesses who were
2:56:20shut down and direct payments to
2:56:22Americans who were out of work. That
2:56:24should work again, assuming the
2:56:26Republicans and Democrats can work
2:56:27together. No big deal, right? Not this
2:56:30time. A hurried bailout bill designed to
2:56:32stop the stock market collapse is voted
2:56:34down by a narrow margin with some on the
2:56:36far right not wanting to spend taxpayer
2:56:38dollars and some on the far left wanting
2:56:40a more robust [music] bill. The result
2:56:41is a further loss of confidence in the
2:56:43US economy complete with a stock market
2:56:45slide to match. It's starting to look
2:56:47much less like a recession and more like
2:56:49depression and people around the world
2:56:51are paying attention. The stock market
2:56:53has lost more than [music] 10% of its
2:56:54value in only 2 days. And everyone who
2:56:56relies on the US government for money is
2:56:58starting to get worried. That includes
2:57:00Americans and those abroad. The US
2:57:03government runs a deficit, a massive
2:57:05one. And many of those dollars are owed
2:57:07abroad. The US national debt right now
2:57:09is a whopping $30 trillion. And as the
2:57:12US economy continues its freef fall,
2:57:14that'll have a global fallout. The US
2:57:16dollar declines in value quickly. And
2:57:18many of the creditors are worried
2:57:19they'll never get their money back. So,
2:57:21some might decide to call in their debts
2:57:23while they can, to which the US might
2:57:25start by saying, "I'm good for it, man.
2:57:27I'll pay you next week." But it's not
2:57:29just the big economic players who feel
2:57:31the damage created by the collapse. As
2:57:33businesses shut down due to the stock
2:57:34crash and resulting bankruptcies, more
2:57:37people start to find themselves out of
2:57:38work. They worry where their next meal
2:57:40will be coming from and what would
2:57:41happen if society breaks down as a
2:57:43whole. As night falls on the United
2:57:45States for the second time in the midst
2:57:46of a massive economic collapse, many
2:57:48people look at the news and say, "We
2:57:50better get out there tomorrow and pick
2:57:52up some supplies [music] just in case."
2:57:54And that might just make things worse.
2:57:56Day three. The start of the trading day
2:57:58is 9:30 a.m. and most people heading to
2:58:00the stock market floor look like they're
2:58:02heading to an execution. No surprise,
2:58:05things look grim from the moment the
2:58:06trading starts. But elsewhere, there's
2:58:08already chaos. Grocery stores around the
2:58:10country are seeing a surge in buyers,
2:58:12emptying shelves similar to the way they
2:58:13did in the early days of the pandemic.
2:58:15The sense of uncertainty has driven
2:58:16people to worry about shortages, and
2:58:18that means they're going to create those
2:58:20shortages themselves by stripping the
2:58:22shelves. Soon, news footage starts
2:58:24coming out, and it's not good. Because
2:58:25when people are in a panic, they act
2:58:28out. The first footage shows two [music]
2:58:30old women brawling over the last pack of
2:58:32eggs. Next, a video comes out of a man
2:58:34punching out a supermarket manager
2:58:35because she tells him they've run out of
2:58:37meat. Shots of people looting and
2:58:38running out without paying are common,
2:58:40and robberies in the parking lot start
2:58:42cropping up as well. By the time evening
2:58:44falls on the US, several major
2:58:45supermarkets and big box stores have
2:58:47been looted, which means they aren't
2:58:48going to be open tomorrow. [music]
2:58:50But hey, at least they're not on Wall
2:58:52Street. The overall losses have fallen
2:58:53to around 20% of the overall stock
2:58:56market in only 3 days. The panic has
2:58:58grown to an apocalyptic level, and
2:59:00people are starting to ask, should the
2:59:01stock market [music] open tomorrow?
2:59:03Historically, major events have led to
2:59:05temporary halts in trading.
2:59:06Assassinations of presidents, outbreaks
2:59:08[music] of major wars, collapses of
2:59:10major businesses have led to shutdowns,
2:59:12and the 9/11 terror attacks led to a
2:59:146-day halt. Temporary halts prevented
2:59:16massive sell-offs during the coronavirus
2:59:18shutdown, but it couldn't stop the
2:59:20damage. [music] Stock market halts can
2:59:21also be triggered at three thresholds,
2:59:24-7%, 13%, and 20%. And as the market
2:59:28crosses the third threshold, powers
2:59:29[music] that be say, "Shut it down." So,
2:59:32the stock market won't lose any more
2:59:33dollars tomorrow. But will that solve
2:59:35the problem? Day four. People have
2:59:38started realizing this is bad and it's
2:59:40not going to get better anytime soon.
2:59:42Much like the last morning's panicked
2:59:44grocery shopping, people are worried
2:59:45about another shortage today, money.
2:59:47Most people don't keep much cash on
2:59:49hand, instead keeping all their money in
2:59:50the banks and relying on credit cards to
2:59:52do much of their shopping. But the fear
2:59:54makes people seek out something a little
2:59:56more reliable. So, they head to the bank
2:59:58and do some larger than usual
2:59:59withdrawals. And once again, they're far
3:00:01from the only ones. Footage comes out of
3:00:03line snaking in and out of bank
3:00:05drive-throughs, clogging traffic. Many
3:00:07people are withdrawing their entire life
3:00:09savings, and banks are running out of
3:00:10cash on hand, forcing them to turn
3:00:13people away. As it becomes clear that
3:00:14this panic isn't abading, many banks
3:00:16start to put withdrawal limits to avoid
3:00:18having to close down and to make sure
3:00:20everyone maintains some access to their
3:00:22account. It could be worse. During the
3:00:23Great Depression, many banks went under
3:00:25entirely, and many people lost their
3:00:27life savings as a result. Since then,
3:00:28banks have been insured by the
3:00:30government to prevent that from
3:00:31happening again as long as the US
3:00:33government is in semifunctioning order.
3:00:36And that's not something we should ever
3:00:37question. Or is it? With the government
3:00:40failing to pass a relief bill, the
3:00:41president has been reduced to passing
3:00:43executive orders. He's tried to unlock
3:00:45some emergency funding, but his powers
3:00:46are limited and the bleeding doesn't
3:00:48seem to be stopping. He's ordered the
3:00:50leaders of both parties back to the
3:00:51negotiating table to hash out a
3:00:53bipartisan bill, but both have come to
3:00:54the table with their own demands and
3:00:56aren't in a compromising mood. Making
3:00:58things worse, he spends most of the day
3:01:00fielding angry calls from other world
3:01:02leaders. They've been watching the news
3:01:04and they're concerned about what they're
3:01:05seeing. Is the US economy on the verge
3:01:07of collapse? Right now, everything's in
3:01:09a holding pattern, but it's about to get
3:01:11worse. Day five. The scariest thing
3:01:13about day five of the American economic
3:01:15collapse isn't what's happening, it's
3:01:17what isn't happening. The stock market
3:01:19is staying shut and no one seems in a
3:01:21hurry to open it again. Many of the
3:01:23banks that dealt with the cash rush
3:01:24yesterday are staying closed, too, with
3:01:26some making people arrange meetings to
3:01:28do withdrawals in person or putting
3:01:29strict limits on the amount that can be
3:01:31taken out. Many smaller banks are just
3:01:33keeping their doors closed and not
3:01:34allowing anyone to withdraw money.
3:01:36Grocery stores are reinstating pandemic
3:01:38era policies, only letting a small
3:01:40number of people in at a time, and by
3:01:42the time people do get in, most of the
3:01:43shelves are empty. But they say there's
3:01:45no scarier words than, "I'm the
3:01:47government and I'm here to help."
3:01:49Congress wasn't able to pass a relief
3:01:50bill yet, [music] but they're still
3:01:51negotiating. Debts are coming due. And
3:01:53countries outside the US are starting to
3:01:55wonder if the US has a handle on things.
3:01:57They don't, but [music] the president
3:01:59doesn't want everyone else to know that.
3:02:00The first priority is an infusion of
3:02:02cash to start paying off bills. And the
3:02:04best way to do that is by printing a lot
3:02:06of money. An executive order has the
3:02:07Federal Reserve putting cash on the
3:02:09printer, and the [music] US is able to
3:02:11take care of some pressing issues. But
3:02:12that has a nasty side effect, diluting
3:02:14the US dollar and contributing to an
3:02:16already brutal inflation number. We're
3:02:18not quite at Zimbabwe level yet where
3:02:20they printed billion-dollar bills and
3:02:22people needed to show up to stores with
3:02:24wheelbarrows of cash. But economists are
3:02:26getting nervous and a far bigger crisis
3:02:28might be just around the corner. [music]
3:02:30The United States debt ceiling is the
3:02:31key to keeping the machine running and
3:02:33the US usually runs a heavy debt.
3:02:35[music] And when they don't have the
3:02:36money on hand to pay for something, they
3:02:38just borrow more. The government sets a
3:02:40limit on the amount of debt the country
3:02:41can carry and periodically they have to
3:02:43vote to raise it. That deadline is
3:02:45sneaking up fast. And while the
3:02:46congressmen are debating on what a
3:02:48relief bill should look like, this might
3:02:50be an even more pressing concern [music]
3:02:51because if the debt ceiling doesn't get
3:02:53raised, the US defaults on its debt. And
3:02:55that's when things [music] get really
3:02:57bad. Day six, Congress has been called
3:02:59back to vote on raising the debt
3:03:01ceiling. And the whole country and the
3:03:03world is watching with baited breath. If
3:03:05[music] they pass the bill, the US will
3:03:06be able to find some creditors to tide
3:03:08them over until the economic crisis
3:03:10passes. [music] If it fails, default
3:03:12will come almost immediately on a
3:03:13segment of non-bond US debt, further
3:03:15undermining confidence in the economy
3:03:17and sending not just the US markets, but
3:03:19the world markets into a panic [music]
3:03:21as the world's largest economy continues
3:03:22to convulse. With the stakes high,
3:03:24surely a clean bill can be passed to
3:03:26give the debt ceiling a temporary boost,
3:03:28or at least pass a temporary
3:03:29dispensation, right? Nothing's ever so
3:03:31[music] easy in Congress. It's clear the
3:03:33tensions from the relief bill are
3:03:35spilling over from the minute the debate
3:03:37begins. With multiple congressmen
3:03:39[music] stepping up to raise objections
3:03:40to the bill or offer amendments that are
3:03:42only loosely related to the matter at
3:03:44hand, arguments fill the halls of the
3:03:46House of Representatives. And making
3:03:47things worse, the controlling party only
3:03:49has a 5- seat margin. [music]
3:03:50With around 10 hardline members who
3:03:52often disagree with leadership, they
3:03:54need 218 votes to pass raising the debt
3:03:56limit. But the final bill has multiple
3:03:59poison pill amendments that have angered
3:04:00both the base and radicals. And when the
3:04:03vote roll is called, it falls [music]
3:04:04short with only 210 votes. And the
3:04:07entire world watches as the United
3:04:09States is about to default on a portion
3:04:10of its debt [music] as of midnight.
3:04:12Around the world, in stock markets that
3:04:14are still operating, people start
3:04:16selling off their shares of American
3:04:17companies. [music] The American dollar
3:04:19continues to decline rapidly, and the
3:04:21exchange rate becomes brutal for
3:04:22Americans looking to spend money outside
3:04:24of the country. And around the world,
3:04:26various powers start to sharpen their
3:04:27knives as the US [music] looks weaker
3:04:29than it's been in over a hundred years.
3:04:31Could this be the end of the United
3:04:32States as a great power? Or will it be
3:04:34another economic bump in [music] the
3:04:35road? A whole lot of people are waiting
3:04:37to find out. Day seven. As the economic
3:04:40crisis enters its first full week, the
3:04:42president is not happy. He's already
3:04:44called up the leaders of both parties
3:04:46reading them the riot act [music] and
3:04:47then watched with dismay as the clock
3:04:49rolled over and America officially was
3:04:51unable to pay its debts. He spent the
3:04:53rest of the early morning on the phone
3:04:54with allies, assuring them this was only
3:04:56a temporary [music] problem and they'd
3:04:58get their money in short order. Some,
3:05:00like most of Europe, were understanding.
3:05:02Although rumblings [music] in the
3:05:03streets of Europe was that doing
3:05:04business with America was not a good
3:05:06proposition right now. But other
3:05:08countries were less understanding.
3:05:09China, the single biggest US creditor,
3:05:11wasted no time, and reports started
3:05:13circling the globe of outposts of US
3:05:15companies being placed [music] under
3:05:17Chinese control and US ships being
3:05:19detained at Chinese ports. The president
3:05:21had several tense phone calls with
3:05:22Chinese leadership, but the Chinese were
3:05:24cy and wouldn't admit that there was an
3:05:26official policy of seizing US assets,
3:05:28although they wouldn't deny it either.
3:05:30And in the throws of a massive economic
3:05:32crisis at home, the US wasn't looking to
3:05:34add an international crisis to that. So,
3:05:36the president had little choice but
3:05:38trust China's word and slink away
3:05:40quietly. Back on the home front, things
3:05:42were about to go from bad to worse.
3:05:44[music] A week into the crisis, many
3:05:45companies were struggling with a massive
3:05:47cash flow problem. Many owners had seen
3:05:49their company's value drop like a rock
3:05:51or had problems getting the cash they
3:05:53needed to grow their business. Expansion
3:05:55plans were put on hold. Planned loans
3:05:57were cancelled by timid lenders. [music]
3:05:58And thousands of small and midsize
3:06:00businesses had seen their narrow profit
3:06:02margin disappear and were forced to
3:06:04close up shop when it was clear they
3:06:05would not be able to make this month's
3:06:07rent. And that [music] put tens of
3:06:08thousands of new people out of work and
3:06:10on the unemployment roles, causing
3:06:12massive backlogs in the systems.
3:06:14Tensions are rising and people don't
3:06:16know where their next paycheck will come
3:06:17from. That's a recipe for a tinderbox
3:06:20about to explode. Day eight. One area
3:06:22hasn't suffered much in the economic
3:06:24disaster. [music]
3:06:25Social media. As the pandemic grows,
3:06:27everyone with access to the internet is
3:06:29using social media to vent and make
3:06:30their own suggestions for what to do.
3:06:32And everyone seems to hate every other
3:06:34idea. Political tensions are higher than
3:06:36ever. And everyone seems to agree on one
3:06:38thing. It's the government's fault. All
3:06:40it takes is one spark to make things
3:06:42boil over. And this comes when a video
3:06:43goes viral of an interaction at a
3:06:45supermarket. An old woman with a basket
3:06:47of groceries finds that her credit card
3:06:49has been declined and is roughly handled
3:06:51by security when she begs them to let
3:06:53her take the food anyway. That sparks a
3:06:55brawl in the store with customers
3:06:56brawling with security and later police.
3:06:58The footage spreads around the world in
3:07:00a matter of hours and the public is not
3:07:02happy. It starts as localized riots
3:07:05around the scene of the initial
3:07:06fighting, but soon people in cities and
3:07:08suburbs around the country are taking to
3:07:09the streets. Some are ransacking
3:07:11supermarkets in a stepped up version of
3:07:13the initial food wars. Others are taking
3:07:15their frustrations out on government
3:07:16buildings, looting stores, or brawling
3:07:18with the authorities in the streets. The
3:07:20police are out in force, trying to
3:07:21maintain order, but some find themselves
3:07:23outnumbered, and others aren't
3:07:25interested in fighting with ordinary
3:07:26Americans in a panic over the economy.
3:07:28The public feels like the government
3:07:30isn't doing anything. And that's
3:07:32something that cuts across all political
3:07:33lines. And one figure is taking more of
3:07:36the heat than anyone else. When a mob of
3:07:38protesters starts gathering at the White
3:07:39House, the Secret Service keeps an eye
3:07:41on it nervously. After all, protesting
3:07:43is legal. But when they start
3:07:45approaching the fence and tossing things
3:07:47over it, they spring into action. The
3:07:49Secret Service quickly tries to disperse
3:07:50the crowd, but several agents are
3:07:52injured by tossed bottles. They fight
3:07:54back, arresting some protesters and
3:07:56injuring others, and the president is
3:07:58quickly ushered down to the White House
3:07:59bunker. The crowd is eventually
3:08:01dispersed, but it's clear something has
3:08:03unleashed, and it's not going away
3:08:04anytime soon. And the rest of the world
3:08:06has noticed too. Day nine. The footage
3:08:09of American cities and suburbs in flames
3:08:11has gone viral around the world and the
3:08:13president has given a shaky speech from
3:08:15the bunker calling for peace. To put it
3:08:17lightly, it didn't raise anyone's
3:08:18confidence about the state of things.
3:08:20States have begun calling up the
3:08:21National Guard to restore order. But
3:08:23reports are coming in [music] of
3:08:24guardsmen refusing their orders. After
3:08:26all, they might be facing off against
3:08:27their own loved ones, and many of them
3:08:29are also looking at their bank accounts,
3:08:31terrified of what's happening. Even more
3:08:33businesses choose to close down after
3:08:35last night. Some suffering serious
3:08:37damage in the unrest and others not
3:08:39wanting to expose themselves to the
3:08:40riots if they kick off again. And some
3:08:42radical solutions are being proposed.
3:08:44[music] So what's more important? The
3:08:46United States's economic health or the
3:08:48country staying a democracy? Powerful
3:08:50members of both parties have called for
3:08:51the president to declare a state of
3:08:53emergency and take extreme measures,
3:08:55including seizing the assets of some of
3:08:56the country's most powerful
3:08:57billionaires. After all, those several
3:08:59hundred billion dollars might come in
3:09:01handy. Of course, they probably can't
3:09:02agree on which billionaire should be
3:09:04first in line. Probably the one they
3:09:06disagree with the most, but one isn't
3:09:07waiting to find out. Word starts getting
3:09:09around that Elon Musk took a private
3:09:11plane to Canada overnight where he still
3:09:13has citizenship. And he's not the only
3:09:15one losing faith. Word starts spreading
3:09:17around the world of more and more
3:09:18American assets being seized by other
3:09:20countries. It continues in China, but
3:09:22other less powerful countries are
3:09:23joining in. Even the US's allies in the
3:09:26EU and the Anglosphere are sounding
3:09:28increasingly agitated about the
3:09:29situation, demanding answers from the
3:09:31president as the US dollar keeps
3:09:33inflating and the political situation
3:09:35gets increasingly volatile. Around the
3:09:37country, those well-versed in financial
3:09:38matters decide to get what they can
3:09:40while the dollar still has some value
3:09:42and many try to trade their cash in for
3:09:44commodities with a solid value like
3:09:46gold. But will gold even be worth
3:09:48anything in the event of a complete
3:09:49economic collapse? Day 10. Most people
3:09:52have lost faith in the United States's
3:09:54ability to pull itself out of this
3:09:55economic crisis anytime soon, and it's
3:09:57looking more like a full-on collapse
3:09:59than a recession or depression. The
3:10:01dollar has plunged to an all-time low
3:10:02around the world. Thousands of
3:10:04businesses closed by the day, and the
3:10:06public is in a panic. The president
3:10:08addresses the nation again, announcing
3:10:09emergency executive orders, keeping the
3:10:11stock markets closed and instituting
3:10:13strict limits on cash withdrawals to
3:10:15prevent another bank run. However, he
3:10:17doesn't announce any of the far-reaching
3:10:19radical moves some wanted. Although many
3:10:21say it's just a matter of time. All
3:10:23around the world, a massive ripple
3:10:24effect begins to emerge. Even the US's
3:10:27closest allies see a grim trend. Pending
3:10:29details with American companies are
3:10:31called off. Ongoing projects are put on
3:10:33hold. And branches of American
3:10:35businesses abroad start to shut down due
3:10:37to the contraction of the US economy.
3:10:39Many online markets stop taking the
3:10:41dollar altogether because it's too
3:10:42volatile to make a reliable currency as
3:10:45it declines by the day. The seizure of
3:10:47American businesses and ships in less
3:10:49friendly countries continues. [music]
3:10:50But the US is too preoccupied to care at
3:10:52the moment and many American citizens
3:10:54abroad start to head home. Not that home
3:10:57is looking all that inviting. As the
3:10:59public starts to prepare itself for a
3:11:00prolonged economic crash and possibly a
3:11:03total collapse, what'll they need? The
3:11:05hoarding we saw in the first days wasn't
3:11:07exactly productive, but longtime
3:11:09preppers have a plan for the worst case
3:11:10scenario. They're stocking up on food
3:11:12with a long shelf life, water filters to
3:11:14ensure supply of clean water, clothing
3:11:17for the winter, tools including axes
3:11:18that will allow them to cut wood for
3:11:20fire [music] and serve as a weapon in a
3:11:22pinch. First aid kits, battery operated
3:11:24radios, and flashlights in case the
3:11:25power goes out. Most of these are worst
3:11:27[music] case scenario items for total
3:11:29societal collapse rather than an
3:11:31economic collapse. But who knows where
3:11:33we're headed. Is there a way out of an
3:11:34economic collapse? That heavily depends
3:11:36on what [music] the government does.
3:11:38Some countries like Venezuela and
3:11:40Zimbabwe doubled down on faulty policies
3:11:42that led to hyperinflation and greater
3:11:44isolation from the world. Others like
3:11:46Argentina were able to rebound from
3:11:47defaulting on their debt by negotiating
3:11:49with their creditors and restructuring
3:11:51their debt. It was a long hard four-year
3:11:53depression, but they eventually started
3:11:55rebounding economically and came out of
3:11:57the default. They just needed to work
3:11:59together and establish savvy [music]
3:12:00policy. Good luck with that, Congress.
3:12:02Want to learn more about what happens
3:12:04when it all goes south? Check out what
3:12:06happens to a country when it goes
3:12:07bankrupt.

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