This Habit Keeps Most Americans Poor
Published: 2024-10-13
Status:
Available
|
Analyzed
Published: 2024-10-13
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
A hypothetical scenario is presented where investing $1,000 per month into SPYD over an unspecified period results in a total investment of $540,000.
"Let's assume that you can invest $1,000 a month into SPYD. Now, let's take a look at what the numbers will look like. Over the course of your investing career, you invested $540,000 into SPYD."
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The Federal Reserve can create money digitally to loan to the government, which the government can then spend.
"The Federal Reserve printed it out of nothing. The government can now take this $2 trillion and spend it in whatever way that they want."
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Increasing the monetary supply without a corresponding increase in wealth reduces the value of each dollar, leading to higher prices (inflation).
"Well, when more money gets produced, it effectively reduces the value of each individual dollar. This is what inflation is. The word inflation comes from the word inflate. What are you inflating? The monetary supply. So, you're increasing the monetary supply, causing the value of each individual dollar to go down, which effectively causes the price of things to go up."
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Inflation is identified as the root cause of supply chain issues, not the other way around.
"The inflation is what causes the supply chain issues."
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Inflation erodes the value of saved money, making individuals effectively poorer over time.
"And so you're effectively becoming poorer each and every day because for most of us, we're taught to save our money. ... your savings are becoming less valuable each and every day."
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Wealthy individuals prioritize acquiring assets over storing cash to combat inflation and grow wealth.
"While what wealthy people do is they're not storing cash, they're buying assets."
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In 2020, the Federal Reserve directly purchased corporate bond ETFs, a historical first, to provide liquidity to corporations.
"So what they did in 2020, this is the first time it's ever happened in history, is they directly gave money to corporations in the form of purchasing corporate bond ETFs."
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Inflation acts as a hidden tax that negatively impacts the poor and financially uneducated disproportionately.
"And inflation now is a hidden tax. It's a silent tax. It affects the people who don't understand money. And it disproportionately affects the poor and the financially uneducated."
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A decrease in interest rates is predicted to lead to an increase in inflation.
"So lower interest rates create more inflation."
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Lower interest rates stimulate demand for assets like homes and stocks, leading to price increases.
"More people are going to want to buy a home. Well, if you have more demand to buy a home, where do home prices go? Up. ... Your stock investments have gone up because now businesses can borrow money for effectively nothing."
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Inflation and rising asset prices exacerbate wealth disparity, making it harder for the less wealthy to acquire assets and benefit from appreciation.
"The reason why it makes rich people richer and poor people poorer is because not only is your cost of living higher, but now if you want to go and invest your money, well, asset prices are more difficult to attain."
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The economic dynamics described are predicted to lead to the elimination of the middle class.
"And that's why the middle class gets wiped out."
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