Inequality is driving everything

Summary

In "Inequality is Driving Everything", Gary's Economics explores the critical issue of wealth inequality and its profound impact on economic stability. Gary outlines his journey from a classically trained economist to recognizing wealth inequality as a central economic problem. Starting with the 2008 financial crisis, he illustrates how interest rates dropped drastically, yet economies didn't bounce back as expected. Instead, wealth continued to shift towards the rich, with inequality fueling economic stagnation and misunderstandings among economists. Throughout the video, Gary advocates for addressing this growing wealth gap to prevent exacerbating economic disparities and ensure sustainable growth.

Highlights

• Gary's journey from a traditional economist to recognizing wealth inequality as central. 🎓
• 2008 crisis made people realize that slashing interest rates didn't lead to expected recovery. 💡
• The financial strategies post-2008 crisis paralleled those during COVID-19, with similar pitfalls. 🔄
• Increased wealth concentration leads to economic and social instability. ⚠️
• The need for economists to focus more on inequality to accurately predict and manage economies. 📉

Key Takeaways

• Wealth inequality has been overlooked by mainstream economics but is central to current economic woes. 📊
• Lower interest rates weren't enough to boost spending because people lacked disposable income. 💸
• Asset prices soared as wealth concentrated among the rich, while the majority faced stagnation. 🏦
• Economic predictions often failed as they ignored the growing gap in wealth distribution. 🔮
• Addressing wealth inequality is crucial to improving living standards and preventing societal collapse. 🏠

Overview

In his video, Gary from Gary's Economics delves into the often-overlooked issue of wealth inequality and its far-reaching effects on the economy. Beginning as a conventionally trained economist, Gary recounts his experiences during the 2008 financial crisis, where he noticed that mainstream economic theories failed to predict or address the growing divide in wealth distribution. He articulates how the crisis—and subsequent economic policies—highlighted the critical misunderstanding of wealth's role in economic health.

Gary explains how significant lowering of interest rates was intended to resurrect economies from the financial doldrums but failed to achieve the intended consumer spending surge. Instead of catalyzing growth, these measures highlighted severe systemic disparities as the wealthy were able to capitalize on low rates, further concentrating their wealth while the broader population struggled to stay afloat amidst stagnant wages and mounting costs.

As wealth continued to skew towards the elite, the expected economic recovery stalled, highlighting a crucial flaw in traditional economic assessments. Gary urges a refocus on wealth distribution as a primary economic metric. Recognizing and addressing such disparities is not only crucial for economic stability but also essential to improving general living standards, avoiding the collapse of central political structures, and preventing the rise of extreme political movements.

Chapters

• 00:00 - 01:00: Introduction and Course Overview The first chapter, 'Introduction and Course Overview', welcomes viewers back to Gary's Economics. It outlines the fourth part of the online course focusing on inequality and the economy. The chapter highlights the importance of wealth inequality as a central issue. A brief summary of the previous episodes is provided: Episode one discussed 'What is Wealth', episode two covered 'What is Wealth Inequality and How Does it Affect the Economy', and episode three addressed 'If Inequality is So Important, Why Don't Most Economists Talk About It'. The current chapter sets the stage for an exploration of how wealth inequality impacts economic structures.
• 01:00 - 05:00: Personal Background and Experience in Economics The chapter discusses the author's personal journey and background in economics, starting with their education at the London School of Economics. They detail how their perspective shifted from mainstream economic beliefs to viewing wealth inequality as the central problem facing society today. Their undergraduate studies took place between 2005 and 2008 at a prestigious and elite economic institution.
• 05:00 - 08:00: Economic Crisis of 2008 and Macro Economy The Chapter titled 'Economic Crisis of 2008 and Macro Economy' explores the speaker's first-hand experience starting a career as a short-term interest rates trader at City Bank just prior to the 2008 financial crisis. Initially, the speaker's education in economics did not focus on inequality, which was not a consideration at the beginning of their career. However, the onset of the financial crisis would likely have brought issues of economic distribution and inequality to the forefront, reshaping their perspective on macroeconomic factors.
• 08:00 - 12:00: Interest Rate Changes and Economic Theories The chapter titled 'Interest Rate Changes and Economic Theories' delves into the roles of central banks like the Bank of England and the US Federal Reserve in managing economic stability through interest rate adjustments. It discusses how interest rates are predicted and analyzed over various time frames (e.g., six months, one year, two years), a process central to macroeconomic analysis. Moreover, the chapter explains how central banks aim to control inflation by cutting rates when the economy is weak.
• 12:00 - 18:30: Predictions and Economic Realities Post-2008 The chapter titled 'Predictions and Economic Realities Post-2008' explores the economic conditions surrounding the 2008 financial crisis. The narrative begins with a discussion on how interest rates are used as a tool to combat overheating in the economy and control inflation. The focus is on assessing the strength or weakness of the economy, which was the responsibility of the author and their team starting from June 2008. As the narrative unfolds, it recounts the onset of the Lehman Brothers crisis in October 2008, marking a period of massive economic collapse that many younger viewers may not recall, illustrating the gravity and impact of this financial downturn.
• 18:30 - 26:00: Understanding Public Spending and Government Debt The chapter discusses the drastic measures central banks worldwide took during the financial crisis of 2008, particularly the decision to slash interest rates to zero. This was seen as an extreme measure to combat the widespread economic disaster caused by the crisis, which resulted in significant job losses. The context is provided from the standpoint of 2025, reflecting on the past economic decisions made to address the crisis.
• 26:00 - 33:00: Wealth Inequality Realization The chapter titled 'Wealth Inequality Realization' delves into the dramatic shift in central banks' interest rate policies around the 2008 financial crisis. Prior to the crisis, interest rates were adjusted in small increments (e.g., from 5.5% to 5.25%) as a means of fine-tuning the economy. However, the 2008 crisis marked a significant change, with rates being slashed drastically from levels like 5.5% or 4.5% down to near-zero (technically 0.5%). This abrupt policy shift occurred across the globe, underscoring the severity of the financial turmoil. The chapter implies the realization of wealth inequality as these economic policies unfolded.
• 33:00 - 39:00: Implications of Wealth Inequality The chapter discusses the role of interest rate traders in an economy experiencing massive cuts in interest rates. It highlights the importance for these traders to predict the duration of zero rates, timing of rate increases, and the potential levels rates might rise to. The backdrop includes recent aggressive cuts and a general understanding among traders of fundamental economic principles.
• 39:00 - 41:00: Conclusion The Conclusion chapter focuses on the response to economic weaknesses, specifically highlighting the strategy employed during the 2008 financial crisis and the COVID-19 pandemic. It discusses the modern economic approach of managing interest rates as a means to stabilize the economy during such downturns. This approach is characterized by slashing interest rates to encourage economic activity and manage the overall economic health.

Inequality is driving everything Transcription

• 00:00 - 00:30 okay welcome back to Gary's economics today we are going to do the fourth part of our online course about inequality and the economy and we are going to explain why wealth inequality is a central problem okay so we're back on the course again so far we've had three episodes episode one was what is wealth episode two was what is wealth inequality and how does it affect the economy and episode three was if inequality is so important why don't most economists talk about today we are going to explain how
• 00:30 - 01:00 I came to travel from being a classically trained Economist I did my undergrad at London School of economics and then I went to work in the city to believing that basically contrary to most mainstream economic opinion wealth inequality is actually the central problem that we're facing right now okay so I studied economics from 2005 to 2008 at L School of Economics um it's a very elite economic University uh it it it
• 01:00 - 01:30 teaches economics in the classic way it doesn't look much at inequality so when I started my first job outside of University which was as a short-term interest rates Trader at City Bank I wasn't really thinking about inequality or distribution at all I started working full-time as a Trader in June of 2008 which is obviously just before the Neman crisis and a big part of my job and the job of my team
• 01:30 - 02:00 was to look at Central Bank base rates Central Bank interest rates um so for example in this country the bank of England in the US the Federal Reserve and say okay what are they now what are they going to be in one year's time in 6 months time in two years time so this is kind of what you would call like a macroeconomic analysis job in a way um the central bank is supposed to control inflation basically when the economy is weak they cut the rates when the Eon e
• 02:00 - 02:30 is strong when the economy is overheating from an inflation perspective they increase the rates so really what you're doing is you're looking at the economy is it going to be strong is going to be weak that was my job that was my team job I started there in June 2008 which obviously is a few months before the Leman crisis um in October 2008 the crisis s slowly bubbles in October explodes Lan goes under there's this massive economic collapse I guess some people who watch the channel now might be too young to remember that was a huge economic collapse tons and
• 02:30 - 03:00 tons of people lost their jobs um it was an economic disaster and central banks all across the world including in the US here in the UK Europe Australia they all suddenly slashed their interest rates down to zero uh this was like a really extreme measure at the time so we're doing this video in the beginning of 2025 we had zero interest rates quite recently but at the time in 2008 zero interest rates they were like totally
• 03:00 - 03:30 new except for in Japan which had been happening for a while like before the crisis central banks would move interest rates from like 5 and a half to 5 and a quarter it was really that kind of like delicate fine-tuning and then suddenly in 2008 you have oh my God this is such a disaster they're being cut from like 5 and a half to zero well technically 0.5 but this this kind of thing across the world effectively from five and a half or four and a half down to zero in a
• 03:30 - 04:00 matter of you know a couple of months massive massive aggressive Cuts so our job then as interest rate Traders um from the perspective of predicting is to look at the economy and say okay well how long are these rates going to stay at zero then when are they going to come back up how quickly will they come back up what level will they go back up to and at the time because the interest rates had been cut so aggressively and most of these trades ERS are aware of the basic economic
• 04:00 - 04:30 theory probably worth covering what economists think here right so this response which happened in 2008 basically the exact same response we had in covid right slash the interest rates push the interest rates down this is a very classic modern economic response right this is how modern economists want to manage the economy it's all about interest rate management if there's an economic weakness
• 04:30 - 05:00 you reduce the interest rates and the economic theory is quite simple right interest rates are lower you're not making any money for saving you can borrow cheaply it's the same for businesses there's no point saving money you can borrow cheaply go out and spend go out and spend money borrow money invest build up your business borrow and spend it's free it's super cheap to borrow and bear in mind right before 2008 we would cut the rate from 5 and a half to 5 and a quarter and expect to make like a significant difference
• 05:00 - 05:30 right so we believed and economy still do believe that these small interest rate changes make a big difference to the economy and during 2008 we had these massive changes and the general economic consensus on that was and still is these stimulate the economy but takes a bit of time takes generally they they like to say 18 months a year and a half takes that sort of time for these interest rate movements to affect influence the
• 05:30 - 06:00 economy so when we had these massive massive interest rate Cuts everybody was saying like oh my God like this might be too much we're going to see like a massive economic bounce back you know we might see a spike in inflation people are even talking about hyperinflation and speaking now in 2025 I think you have to point out that a lot of this narrative was quite similar to The Narrative during covid which is when you have these massive massive movements in interest rates they're so economically s simulative that we are going to see like
• 06:00 - 06:30 a massive bounce back and um you know people now might not remember the the media during the 2008 crisis but they'll probably remember media saying during covid we're going to have a roaring 20s there's going to be all this pent up demand in a lot of ways it was quite similar people were saying these massive M and interest rates will cause a massive economic stimulus and basically when you're a Trader you can just look at the markets right and the and the markets will say we think interest rates next year will be X right
• 06:30 - 07:00 so interest rates went down to like 0.5% here in the UK it's pretty much the same us Europe and you can say what would they be next year what would they mean in two years time and everybody was like well we're going to have such a big bounce back that these interest rates are going to come massively up um I was really young I was only 21 uh no would well I turned 22 during the Leman crisis um very young uh naive inexperienced Trader fresh out of University study economics so I just
• 07:00 - 07:30 you just you kind of accept it right I was busy you know trying to make money in other ways there was a lot of sort of kind of easy money to be made at that time in my area and I just kind of accepted I wasn't really getting too involved in you know looking at these economic predictions and and like most 22y olds fresh out of economics University I thought well yeah they probably right they probably know what they're talking about and I expected like everybody else rapid recovery uh rapid bounce back in interest rates obviously we know now that didn't happen
• 07:30 - 08:00 so I sat through 2009 and the interest rates didn't go up and people were kind of saying well you know it takes 18 months so you know this was a particularly bad crisis maybe it's going to take a little bit longer give it a bit more time so we get to the end of 2009 and the narrative is kind of unchanged okay we were wrong rates haven't gone up yet but next year rates will definitely go up obviously again we know now we sat through the whole
• 08:00 - 08:30 2010 and rate stayed zero all across the world um and you know I'm getting a bit older getting a bit more experienced by the end of 2010 I would have just turned 24 and I've got a couple of years experience as a Trader now we get into the beginning of 2011 and a lot of people don't remember this but there was a kind of mini inflation crisis in 2011 that was quite similar in a lot of ways although less extreme than the inflation
• 08:30 - 09:00 crisis we had just after covid which was inflation shot up it was much higher than the 2% Target I think it went up in this country to nearly 6% I don't think ever quite at 6% it was driven primarily by energy and food similar to covid so we had this inflation Crisis coming in in the beginning of 2011 and then people were like well this is really going to be it now you know we we not only have we got all this money flooding in and governments running a massive deficit similar to covid we had these quantitive
• 09:00 - 09:30 easing programs which were designed to push even more money into the economy so you've got zero interest rates quantitive easing massive government deficits just like covid all this money getting pushed in so much money getting pushed in and now you're starting to see inflation go and everybody at the beginning of 2011 was like well now it's really really going to happen um and by then I was 24 and I'd witnessed you know two and a half years three really three years really of like really really bad economic predictions by not just the
• 09:30 - 10:00 Traders like this is pretty much a broad economic consensus you're always going to get a few people who disagree but most Traders most economists said the same thing throughout you know they didn't predict the 2008 financial crisis there was this famous moment when the queen visited LSC did you hear about this the queen visited LSC and uh just on some sort of visit and she asked one of the professor so why didn't you predict the economic crisis then um yeah 2008 crisis comes you know some sort of
• 10:00 - 10:30 Lone voices called it but in general the economic establishment hadn't predicted it definitely nothing of that scale 2009 big recovery didn't happen 2010 big recovery didn't happen we're sit in the beginning of 2011 and everybody's like no we're going to have a massive recovery and I had started to become like very cynical basically I was making a half million pound a year in my early 20s and people around me obviously making millions um and you see them just consistently wrong
• 10:30 - 11:00 um you start to get to know these guys and I was lucky like I worked with some really smart people but if you the majority of the people on the trading floor to be honest these are just basically guys from Rich families and I think if you come from a rich family it's kind of the norm to end up at Elite University and get a job like something on the trading floor so you know you sit there two and a half years you start to realize like actually most of the guys making these calls the economists the Traders and they're
• 11:00 - 11:30 consistently wrong they've been wrong here for like 3 years and you know my job was was to be a Trader so if you can out predict these guys you can make a lot of money so I'm I'm not going to pretend that my motivation was at all altruistic it was like you know here I am top degree from a top university on one of the biggest trading floors in the world you start realizing these guys around me they're just wrong they're just wrong they're wrong every year
• 11:30 - 12:00 and you start realizing well I'm in as good a situation as anybody to figure out why these guys are wrong basically you I've got the elite degree just like everybody else you know I'm in the best place these are the top paid economists these are the top paid Traders um and they're wrong so it was actually really exciting this exciting realization that you're here on The Cutting Edge of like a really important thing like economics and everybody's wrong so we need to figure out why they're wrong because because if we can
• 12:00 - 12:30 we can make a ton of money so I started to think a lot about okay well what's the theory and I've explained the theory to you which is low interest rates get people spending because it's cheap to borrow money um there's no point saving money so people should be spending and all the economic theory says that people should be spending people should be spending people should be spending and yet there I was early 2011 and people were not spending so there's what you can do then and what I was able to do is you can kind of boiled
• 12:30 - 13:00 down this really important economic problem of why is the economy like consistently to a much more objective answerable question of why aren't people spending money and I spent a lot of time thinking about that simple question of why aren't people spend their money and um you know I was young I was 24 um you don't know that much jinia 24 I just want to start asking people and I think this is where I had quite a big advantage over a lot of economists and not by the Traders
• 13:00 - 13:30 because I come from a poor background I was just a lot closer to just ordinary people and you know if you ask Ordinary People and I did and I think this is a really like useful thing to do if you ask them why don't you spend more money you know the answer then was exactly the same as what the answer now would be the vast majority of people just said well I don't spend any money because I don't have any more money like most people are basically you know money in money out you know very often of than money in was less than money out you
• 13:30 - 14:00 know they were struggling to spend money and I think this is this is where my experience was different from a lot of economists and a lot of Traders because if you were to ask people from Rich families that they can't say that and and they wouldn't say that it wouldn't make sense to say that most people from Rich families they're not constrained by their income their income is more than their expenditure they save every month so what I was seeing was I think the correct answer to the very simple question why aren't people spending money which is the core question of why is the economy weak which was that people didn't have any money and that
• 14:00 - 14:30 sat in my head for a bit and at the time I was working with I'd hired um a junior Trader an Italian guy I he's in the book so I can't use his real name in the book is called titti really smart kid Italian kid um went to bonei which is basically the Italian lse and I sort of like I'd poke this question around at him okay well why why maybe people don't have any money and he would say and we would discussed the fact that it's kind of impossible for
• 14:30 - 15:00 nobody to have any money we've done videos on this channel about what is money this kind of thing money is basically a spreadsheet there's winners and losers it has to balance out it has to add up that is the way our current monagy system works it doesn't make sense to say like nobody has any money and furthermore beyond that like other than money there exists real wealth you know we covered it on part one what is wealth and you know the wealth wasn't disappearing you know the houses are still here you know the resources are still here the businesses are still here the the buildings are still here and that's that's what most of wealth is so
• 15:00 - 15:30 you know the the wealth is not disappearing somebody has to have the money and yet when you ask people why don't they spend money they're like well I don't have any money it kind of didn't make any sense and that was bouncing around in my head early 2011 and then I got called into a meeting so I was still a junior Trader then but I used the the previous manager had allowed me to come to like the meeting of all the senior managers to bring the sandwiches so I was able to go to these like quite senior Economist meetings uh and a really good City Bank Economist I'm I'm
• 15:30 - 16:00 sometimes quite mean about economists but there are good ones and I thought this guy was a good Economist he showed us all these slides going through the fiscal situation the financial position of a lot of Major World governments so you probably remember maybe maybe some people don't in 2011 after this meeting there was a crisis of the financial position of major European governments and it was centered on Italy Greece Spain Portugal Ireland were the ones who are Central in it before that crisis blew up this guy kind of spoted or this
• 16:00 - 16:30 could blow up and he said well if you look at all of these countries they're spending more than they make every year um they're having to sell their assets they're going into debt and it wasn't just those countries that were Central in that 2011 crisis the situation of the UK was not much better situation of the US not much better situation of Japan not much better so what you have here is basically governments also can't spend because they don't have any more money they're running their wealth down and that really reminded me of you know when my friend said we don't have any more money
• 16:30 - 17:00 you know I didn't I didn't just accept that face value I kind of dug into it a little bit where I could and what I can't kind of found was the big the big problem for my friends and their families was the kids couldn't see how they would ever be able to afford a property and what's important about that is so I'm 38 now in 2011 I was in my mid 20s our parents generation you know even my parents I come from quite a poor background they all own property you know I went to grammar school so I didn't know like the poor people but you
• 17:00 - 17:30 know most of my parents generation they own property they own property and yet my generation could in many cases never afford to own property so what what you seeing there is the families ordinary families going over time from being property owning to not property owning and I think once you understand that it doesn't make any sense to really ask the question of why don't you spend more money because what you recognize then is these guys their their wealth tra trajectory over time is going down over to zero which means the family as a
• 17:30 - 18:00 whole spending more than their income and if you're already spending more than your income well you can't long-term spend more and then I went into this meeting about government and it's basically the same families spending more than their income losing their assets going into debt governments losing their income uh spending more than their income losing their assets going into debt and the thing you might think I came out of that meeting thinking like oh my God like this is a disaster like Western countries is going to collapse but but what was really in
• 18:00 - 18:30 my head was the kind of systemic impossibility of this it's not possible for everyone to spend more than their income it's not it's not possible right as a society spending an income have to be the same you can only consume what you produce you know this is this is the way that it is um and it's not possible for everybody to go into debt we've done videos on this videos on this but and you can go look at them but if one group goes into de some group must be accumulating credit like this has to
• 18:30 - 19:00 balance out and it's not possible for everybody to lose their assets not unless you know there's been the earthquake which there hadn't been you know the asset still existed right so I was just sitting there and I was thinking people aren't spending because they're losing their assets which means they're actually spending more than they can possibly spend governments are't spending because they're losing their assets which means that they're spending more than they can possibly spend in the long run it just doesn't balance it's not not
• 19:00 - 19:30 possible where are it's like it was as if everything was like being taken by aliens as you know as if all of the assets and then obviously I'm sitting there on the City Bank trading floor as somebody who'd been paid nearly half million pounds the previous two years surrounded by millionaires right and then you just suddenly realize like oh my God like we are the balance right the balance is us like and and not just us cuz of course you know whilst we were rich people the people whose money were
• 19:30 - 20:00 moving are even richer people and you you start realizing oh and you know at that time similarly to now the stock market was ripping to alltime highs and you were starting to see like house prices starting to move and the gold price was starting to go and you starting to I suddenly realized like the reason that families are losing their homes and the reason that governments are going bankrupt is because the wealth that used to be being held by ordinary families and by governments is being transferred to to the rich and the super
• 20:00 - 20:30 rich and once I realized that I I realized immediately that is a problem which would worsen over time because if families and governments can't afford to run a balanced budget when they own their own properties when they have some wealth well they definitely can't afford to run a balanced budget when they don't own their property and when they don't have wealth because now they've lost that passive income they need to pay to rent those things and if the rich can afford
• 20:30 - 21:00 to outco compete the middle at this lower level of wealth well now they're richer they've got more passive income they can out compete them even quicker so you can you can see very quickly this this core problem this is the the really core problem which is should be spoken about a million times more than it is which is as inequality gets bigger the passive income that the rich receive will get bigger the passive income that the poor spend will get bigger and the rate of increase of inequality will increase over time and this will just
• 21:00 - 21:30 not only will this get worse over time it will accelerate in a kind of what a mathemat what a mathematician would call an exponential fashion and you know this was all going through my head like sitting there on the trading desk um and of course I've thought about it a lot more now so I can kind of explain it clearly um what hit me there as a Trader was this gets worse forever this gets worse and worse and worse and worse forever and ever and ever and at that time the beginning of 2011 as I
• 21:30 - 22:00 explained a little bit earlier everybody was like this is the year that the recovery really happens this is the year that the rates really go and I was sitting there early 2011 saying with everybody saying this is it this is the recovery this is the recovery and I had just become almost certain that the economy would collapse whatever and this might sound callous and I think it's written very well in the book I realized oh my God I could make so much money here because
• 22:00 - 22:30 everyone is wrong and not only that they probably won't figure it out for a long time they'll be wrong next year and they'll be wrong the year after and they'll be wrong the year after because at the time I'd been to LC right and I you know and I was after LC you go into trading you're surrounded by economists and the kids that come in on the grad scheme they're all of the top graduates from all of the top economics Union across the world right so so you're very plugged into to what economists saying and what economists are thinking you get
• 22:30 - 23:00 all of these emails from economists you all these economics calls so I knew what the economists were thinking nobody was talking about inequality nobody was talking about inequality at that time and I was like this is why they've been wrong this is why this is why they consistently wrong and I mean it made sense right because if they are consistently wrong which I think was obvious even in 2011 but should be even more obvious now it's because they're missing a big thing and I've been to universities I knew that they weren't looking at this thing and it had just
• 23:00 - 23:30 become the penny had dropped to me this was it this is the big thing they're going to miss it they're not going to catch it and I put this massive trade on that rates would say zero I basically made a ton of money that year basically betting that the economy would be a disaster and obviously that was one year 2011 um so you you're not I was quite confident in that I was confident enough to bet a lot on it but I I wasn't immediately like 100 % certain I was right and you can never be 100% certain
• 23:30 - 24:00 um but then you go into the next year and the same thing happens the next year you're like well everybody saying there's going to be recovery and you're saying there's not going to be recovery because the inequality is getting worse and then you start to you start to think about other things you start for example I started think okay well if if if there is a big increase in wealth inequality that is underlying the reason that markets are wrong on interest rates and also the reason why economists are wrong in their predictions maybe the market Mark wrong on other things so I started
• 24:00 - 24:30 to think well what would it mean for asset prices more broadly if inequality would increase well that that's quite an easy question right because we know ordinary people tend to spend money on goods and services rich people spend tend to spend money buying assets so if inequality increases you would expect to see asset prices rising while Goods Services wages what we call CPI inflation because CPI doesn't look at assets sort of dicks around at the bottom and at this time and then I was like okay well the asset price is going
• 24:30 - 25:00 to go stock market's going to go and that again people the economy was so weak in 2011 we had this big sovereign debt crisis and we had more austerity and the economy was so weak everybody's like stock market is going to be but I was like no if I'm right on this stock markets will go stop because because the economy being if the if the economy is because governments are in debt well who are they in debt to that is that again itself is a manifestation of inequality right so I said I'll stop prices will go up and they did and I
• 25:00 - 25:30 said well you'll get asset price inflation combined with this inflation for the poor and it did and and what you start seeing is this this understanding of inequality it seems to explain all of the incorrect predictions and then you start being able to predict everything correctly and I I think that is the big giveaway I think when when you're understand and you know I think it would be easy to turn around and say oh you're just mad you know you're just pessimistic um if I'm pessim istic why do the bets keep being right you know if
• 25:30 - 26:00 this is just pessimism why do the bets keep being right and um you know I consistently made money betting on the economy staying weak um markets continued to predict interest rate normalization Way Beyond that 2012 2013 2014 2015 2016 2017 2018 2019 and rates in this country stayed zero and there would be a few times you would see rates pop up and the predictions pop up and I would just go go back in and bet bet because I knew you can't if you don't
• 26:00 - 26:30 fix this fundamental problem you're not going to be able to fix the economy and this simple way of understanding it which is that the growth in wealth inequality not income inequality wealth inequality is is being missed and you start being able to predict everything correctly this one simple idea that inequality is at the center that is driving living standards down has enabled me to correctly predict the weak recovery from 20 08 the cost of living crisis during covid stock price
• 26:30 - 27:00 rally in the mid 2010s stock price rally after covid collapse in living standards the collapse of central political parties the rise of the far right like well I'm not Mystic Meg here the theory is right the theory is right um and it's not being looked at and if we don't take action on it it will get worse and worse and worse and wise um so that's it I think that is why inequality is the core Central problem um I would encourage people to care
• 27:00 - 27:30 about it because if we don't take action on it it means living standard is getting worse and worse and worse and we will talk in our next video about how do we fix it so thank you very much thanks for watching support the channel support the patreon send the videos to your family to your mom to your friends um let's stop things being terrible thank you