Good morning in japanese, who did it better welcome to the united states stock market, where people come to create wealth and and change their their financial futures and battle inflation, and all these great things? Oh, but but hold on a sec. We got kind of a conundrum here. What do we have for gain for the last two combined months of the spy last month was down about point eight percent this month up about point seven, one percent: that's a combined uh, actually net negative. By about point.

One percent interesting interesting, and what do we have here for inflation? Hmm, this is year over year: inflation, 2021, 5.4 percent for september 6.2 percent for october. Interesting stuff, well, wait a sec if we just think about this 6.2 percent year over year inflation. If you divide that by 12, what does that come out to 0.51 percent huh, but wait wait! A second wait. A second point: five one percent is more than negative point.

One percent huh. Ah well interesting enough. You would actually not beat inflation if you simply played the spy over the last two months. You'd actually be down dollar per dollar point four, actually more than that point, seven six point: six percent.

Obviously i don't know how to do math point six percent, because we're down point one percent inflation is point five one for one month, so you actually you're not doing very good by playing the spy right now. And that brings me into what i'd like to talk about today, which is a couple different things that are a little bit concerning to me. I'd like to touch on margin debt, as well as the reverse repurchase agreement market. I'm going to break these down in a very simple sort of conceptual way uh, so we can get you on your way and move on with our days and we'll put out a video here later tonight.

So i want to start off here with the margin debt. Why is this important? Why do i want to show you guys the finra reported margin debt, because these are at all time highs right. Let's just look at the last year in terms of what margin debts look like back in january, we had about 778 billion dollars worth they've got 935 billion dollars worth looking back about five years ago. You can see how much this has truly increased.

You look at the 10 year. I can't show you the 10 year, but the five year you get the entire picture right margin. Debts are at all time highs anybody wondering to yourself well trey trey. Why would margin that be so high? Why would people be dumping? So much leveraged money so much debt into the stock market.

Well, i'll tell you why? Because mr fed man, mr jerome powell, the money printing, god himself, this dude was born with the genes of mr krabs baby. He just loves that money has just been printing a mad mad amount over the last 18 months to two years now. Why is this important right? Well, if you have more money circulating around in the us economy that allows more money to circulate around in terms of debt, that gives banks more money, it gives institutions more money that gives brokerages more money, and you can see this reflected in the overnight reverse repurchase Agreement market, so i've got this pulled up for you, another situation we're looking at all-time highs. This is not a coincidence when you compare this to the finra reported margin, debt or inflation rates, because of who the transaction is between.

So this is between treasury securities sold by the federal reserve in the temporary open market operations with banks. So what does this mean? Well, i've drawn this on a very simple way for you to sort of grasp in reverse repurchase agreement. You have two sort of uh people in this transaction: there's a buyer and there's a seller in this situation. You've got printer man who is selling treasury bills over to a bank overnight i mean why would this happen in the first place right? Well, there's actually rules and regulations that dictate how much banks can actually hold in their ledger in terms of cold hard cash and banks have so much money right now that there's this transaction taking place between prince or man, the fed and banks.

So what happens here is bank over here decides they want to send over some cash to printer man. Printer man in turn sends over a t bill, a treasury note right. This is just very simply put a bond, and what this tells us is banks have so much money right now that these overnight repurchase agreements have to take place, and you can see how much they've truly increased since march of 2021. Now, why is that a significant date? Why march 2021 in the first place well march, is significant, because this is really when you saw the the economy start to ease up a little bit right.

Things started moving in the right direction. The economy started moving and it in turn, uh reflects in the overall stock market. So if we come back here to march of 2021, what do you see right huge pushes to the upside? This is following a pretty lackluster uh sort of end of 2020, or, i should say, mid 2020 to get us to where we are right now right. So why i'm bringing this up in the first place? Is this much leveraged money? All the printed money? That's been pushed out to big banks gets lent out in the form of margin debt, because, if banks are holding on to this much cash, where do you think these big institutions are getting money to leverage into the stock market in the form of margin? Debt right comes from big banks; it comes from them in the first place, who have so much of this cash.

They don't even know what to do with it. They're basically they're pulling the jordan bill for and wiping their ass with it and throwing a freaking garbage cannot even flushing it down the toilet because that'd be too respectful, that'd be too respectful to the economy right. I want to talk about this because this is an absolutely absurd number that is going to have repercussions uh in the stock market right and most of the people that watch my channel are not your typical investor right, they're, not people who are just putting money into An etf and letting it sit as keenan grace would say you aren't you can't handle they eat these hot stocks that stand get. You put your money in the index funds right.

That's not what a lot of us are doing here, but i do want to show you the point that the stock market is is just sort of inflated right, you're, really not competing with inflation as much as you think. You are because this point five one percent number is for one month, equivalent inflation. So you double that right. What do you get you get over one one point: zero three percent inflation over a two month period, uh of time right, and what do we average over? The last two months of the spy negative point: one percent you're not even beating inflation right now, so a lot of the gains that you're seeing in the stock market are merely matching or lagging even right.

The actual inflation rates that are taking place on a month-to-month basis within the u.s economy. These are important things to consider. Because do i think a market correction is going to come, i mean obviously any guy with with half a brain can say: yep there's going to be another bear market, but these are numbers that are scary, guys and it's stuff that i think you should be paying Attention to in the grand scheme of things, because it is going to affect everybody's lives, i mean when, when the inflation rates really start kicking and the economy takes sort of a bear market, the stock market pulls back a little bit. There's going to be a pullback in the economy, that's going to affect people's jobs, it's going to affect uh how much you're paying for your gallon of milk.

It's going to affect your your uh, your interest rates on a mortgage. It's gon na affect a lot of things, and these are just things that i want to spur thought out and you can dig into this deeper. Hopefully got you asking uh some questions and that's what i've got for this freaking video, so conval noir from me and anime chan catch you on the next one, much lovely taps and peace.