if you can tell me what interest rates are I can tell you when we should build the factory bam so he's got this uncertainty uh as far as where the economy is going to be and he's very hesitant and now he is somebody that has learned lessons from the past where I see other companies never learning their [Music] lessons there are lots of economic storm clouds ahead but as they say in every dark cloud there is a silver lining this first chart is a chart of then this is from Game of Trades uh the unemployment


rate has s uh systematically spiked with yield curve steepening from inverted levels currently the yield curve is steepening at a historically elevated rate this is an ominous sign for the labor market and what they point out here is you know th this is the yield curve and the inversions uh so it's the percent either positive or negative and what they're doing is they're taking the 10year and the two-year treasury um and you're when it goes below this zero line that's when the yield curve inverts but then you'll


you'll notice that when it starts to rise we have a recession after it starts to rise and unemployment goes up once this starts to rise unemployment increases and it's done this quite reli reliably and we are now we've been in the deepest yield curve inversion in a long long long time way past this chart if not like historically deep uh yield curve inversions and what you see here is that uh the unemployment rate Rises and then shortly thereafter a recession starts so the unemployment rate Rises


with the yield curve going back recovering from the inversion and George gamon pointed out that uh the recession doesn't start when yield curves invert they they it starts when yield curves start to unvert when they start to go back to normal and U but one of the things that I want to point out is look at the low levels that we've been at it's the lowest levels on this chart so I made another chart on the Federal Reserves website the Fred and what you see here is that uh the we we've hit


rates as low as 3.4% but this chart goes all the way back to 1948 and what you see here is that low rates are a harbinger of recession Yet to Come recession Cession and high unemployment the economy contracts companies aren't making as much profit and so they have to lay off workers and unemployment goes up and then the unemployment rate goes down and down and down and the very low rates are predicting that there is going to be a recession and the rates go up and this repeats over and over again low rates


are a harbinger of a recession yet to come and uh what the what is most amazing about this chart is uh here we have 3.4% now the FED is actually fudging some of these numbers but still you the last time we were at 3.4% was 1969 these ultr low employment numbers are saying that a recession is due and now we have the yield curve starting to uninverted Felder saying the evolution of uh initial unemployment claims after yield curve inversion so when the yield curve gets inverted you start a clock ticking


and you measure the number of months until the unemployment rate shoots up and this is uh 19 uh 69 73 79 81 1990 2001 and 2007 so this is a lot of history that we're looking at here this is pretty reliable I should say and what we're seeing is that this is you know data takes a month or two to compile so the data where this chart I'm can almost guarantee you uh is uh at least uh a month or two behind when it says today right here uh and this is the 10year minus the thre Monon treasury not the


10year minus the two-year but what you see is that this was at 12 months we're probably actually at 13 or 14 and it takes a while for unemployment to dramatically start increasing we see this 2001 leading into the 2001 recession this gets really steep 14 months into it and for this 2007 recession that was 24 months so somewhere between 14 and 24 months after the yield curve inverts is where we can expect which is like now and over the next 10 months that's when we can really expect uh this uh the unemploy the the


recession to hit the unemployment to take off and uh the feces hitting the uh the rotational air acceleration device so um uh we're going to get into a little bit of econom OMC data and I just found this interesting when I came across it here we are on the St Louis uh federal reserves website the uh Fred and what we see here is Automotive this is basically connected with Automotive Sales this is Automotive uh loans that are owned and securitized uh and so you know you see them drop off during the uh Global


financial crisis of 2008 but what happened was the pandemic well they gave out a whole bunch of free currency they just said started sending people checks and so automo Auto Sales exploded shortly after they started all of this stimulus now what happens when you I mean some of these people that got the extra stimulus and bought a car some of them are responsible people and they know how to take care of their finances others however are very irresponsible and they've just got cash in their hands


in their pocket burning a hole in in their pocket and so they got to do oh I can afford a new car now or I can afford a a used car and you know for a lot of these people but still they do it on an auto loan so what happens with those people car owners fall behind on payments at highest rate on record so this is not good news and then lower down in that article you'll see this chart that says it's at 6.1% and you got to go all the way back to 1996 to see it get to 6% so this is bad news how does this affect the


economy well I can tell you that you know on this channel when I mention Tesla or Alon musk I get hate mail and so you know I've owned Teslas my first Tesla was a 2010 I own Tesla since before there was a Model S 2010 my second Tesla was at 2011 but but I'm going to stay away from that I'm just commenting on the economics Elon Musk is the richest person in the world and he owns two of the largest companies in the world and they are growing at tremendous rates and so this is the Tesla Q3


earnings call and this is just to sort of clarify and show you what this uncertainty can do to the growth of an economy and here I've taken this transcript which is very long and I've condensed it so there 's a lot of redacted stuff when you see this these lines in the middle uh I've taken many many many paragraphs out and uh then I went a little bit further and I just highlighted the lines that I'm going to read you that that pertain to what I'm talking about so a question could you


please provide an update uh on the opening schedule for gigafactory in Mexico hi I just wanted to take a moment and thank you for subscribing and mention that if you'd like to help help our Channel please consider my company goldsilver.com the next time you buy precious metals we're one of the most trusted names in the industry our prices are sharp delivery is fast and we have an insiders program where you find out exactly what I'm doing with my own Investments thanks for making goldsilver.com your dealer and now back


to the video gigafactory in Mexico now this is the new Factory they purchased the land they are planning on opening another Factory remember in the Shanghai Factory it took 11 months from the first shovel of dirt to cars coming off the production line out the back of that factory only 11 months because all of the permitting and studies and everything they just got fast-tracked into production uh and so Elon musk's response in Mexico we're laying the groundwork to begin construction and doing all of the long lead items I'm


going to scroll this up a little but I think we want to just get a sense of what the global economy is like before we go full tilt on the Mexico Factory I'm worried about the high interest rate environment that we're in uh if interest rates remain high or if they go even higher it's much harder for people to buy a car they simply can't afford it and then I eliminated a whole bunch of stuff that had had nothing to do with with the point of what I'm trying to make here uh question you said that


you're uh not going full tilt on the plant in Mexico until there are signs that the economy is strong and part of his answer here is the question is really one of timing and there's and I don't know if this is the um you know this is an uh Auto transcription by a computer doing this so uh some of the words will be incorrect or maybe out of order here but maybe this is what he said maybe not and there's going to be a broken record on the interest front so I'm not sure if that line is correct it's just the


interest rates have have to come down like if interest rates keep Rising you just fundamentally reduce affordability it is just the same as increasing the price of the car now Tesla has done many price increases lately to offset this so it's just so I just don't have visibility into and I'm not sure if this is a word here that uh that it didn't transcribe or if this is uh him just having a thought and then going off on it if you can tell me what interest rates are I can tell you when we should


build the factory bam so he's got this uncertainty uh as far as where the economy is going to be and he's very hesitant and now he is somebody that has learned lessons from from the past where I see other companies never learning their lessons but I am still somewhat scarred by 2009 when General Motors and Chrysler went bankrupt while that's now 14 years ago it it's that is seared into my mind with a branding iron because kind of Tesla was just hanging on by a thread during that entire time with I


mean we closed a financing round 2008 at 6: PM December 24th Christmas Eve and if we had not closed that financing round we would have bounced payroll two days after Christmas so we actually closed that round the last hour of the last day it was possible now this meant they were if they hadn't done that the next hour they were bankrupt they would have had to file for bankruptcy uh so stressful to say the least then and then barely made it through 2009 so I'm like I I just I want to just I don't want to


be going top speed into uncertainty a lot of Wars going on in the world obviously as well and we have room here when he says we have room here he means Tesla has more cash on hand than any car company on the planet and they're the most profitable car company on the planet so they are the ones that do have room but even in that super strong position he is pulling back on potential growth because he's worried about the global economy like I just I'm not saying that things will be bad I'm saying they might


be and I think like Tesla is an incredibly capable ship but we need to make sure like as if the macroeconomic conditions are stormy even the best ship is still going to have rough times the weaker ships will sink we are not going to sink but even a great ship in a storm has challenges now that storm will apply to everyone not just the automotive industry it will apply to everyone I think if interest states start if interest rates start coming down we will accelerate if anybody's got any good guess on this I'd


love to be less wrong and I AP olizee if I'm perhaps more paranoid than I should be because that might than I should be because that might also be the case because I'm I am I have PTSD from 2009 big time and 2017 through 2019 were not a picnic either that was very tough goinging and then his Chief Financial Officer chimes in with especially if there are Wars going on and then that impact your s sentiment and he sort of ends this section with yes I mean people are reading about Wars all over the


world at this I think you know this was supposed to be at this time and buying a new car tends to not be front of their mind so this is the world's richest man running two of the largest companies on the planet pulling back on growth in the future because of the uncertainty that the Federal Reserve and the government is causing and a lot of this could be a distraction I mean they are having some severe currency problems so um uh anyway getting back to the economy uh Wall Street Silver home prices the home price


to income ratio in the USA this time is different if you look closely there's no note saying housing bubble this time that is what's different so this is from long-term trends a great website and what you see here is that back in the 90ss uh home prices were four times the typical household income so the average uh us home price probably the median us home price was four times the median income in the United States and then we got into the uh bubble of 2005 six and seven and that was marked


housing bubble and it fell down during the crisis and and bottomed in about 201 12 2011 20 2 at less than five times income 4.75 and there's a change here in in data Robert Schiller used to report monthly and I believe this is Robert Schiller uh no longer updating his uh house price index uh monthly but doing it like uh quarterly semi uh semiannual or annual and uh and here we are at 7.25 the greatest bubble on this chart so real estate going into this crisis real estate has the furthest to fall this is


really really dangerous and then we go to the condition of the banks and Rick Rule and I were talking about this just a few videos ago this is unrealized losses on lenders balance sheets so this is basically the banks the lenders and the thing about this is uh the Securities that they hold the uh the US treasuries the ones that are available to for sale they have marked to Market and they can sell them right away and those are usually like one month treasuries so they were purchased at a yield that is very close to what the


yield is today uh but the long-term treasuries all these red ones that are uh held held to maturity uh the reason that they are held to maturity is they they're expecting that they're not for sale but those are typically underwater like the 30-year treasury has fallen 53% uh since March of two of 2020 so if they bought a 30-year treasury before that the yield on the new treasury is so much higher that the ones that they purchased are almost worthless they have dropped 53% and these are all of those


treasuries that they do not have to mark to Market because they're saying we're going to hold these until they mature well look at the amount of uh of Securities held to maturity back in the 2008 crisis versus today uh what is happening here is the banks get to lie to us this is a get out of jail free card except it comes back to haunt them they're not out of jail instead of being in jail they get executed they get they get they go out of business when all of this gets disclosed as Silicon Valley and first uh


uh I can't remember First Republic and uh and man credit Swiss uh you know this is big it is huge the economy is in a real bind right now this crisis I've said many times Silicon Valley and and what happened in in March April May of this year that was just the first leg down and so it only exposed the tip of the iceberg uh this is uh Us's forecast to run persistently large bus budget deficits and so this is the uh uh fiscal balance as a share of GDP which is a great way to measure this how much are


we spending uh over our GD GDP so this isn't uh this is the budget deficit and as compared to the GDP and you can't re if your GD if you're spending more than your GDP there's no chance of ever catching up now the source is the Congressional B budget office and the Office of Management and budget I did a study on this years ago and I used to travel with Robert kosaki in 200 um uh five through 10 not through 10 but uh to the middle of of 2010 and I had my crew go back and look at the years uh


when they would the Congressional budget office and uh the uh Office of Management and budget and the uh Controller General uh the uh and see what if it's a government office what were they projecting out in the future and they were projecting back then that all of this was supposed to go positive we were not supposed to have budget defic deficits they always missed it and they missed it by a long shot in other words they fabricate a lie that is telling that they're going to tell you to give you some hope for the future and


all of this gray area here is that lie and the LIE is depressing I just can't believe that this is their Rosy scenario because they always paint a Rosy scenario so let's go and you know here here I'm going to demonstrate the LIE do you see this Blue Area they're saying that we had four years in a row of budget surpluses now if you uh make more than your income that means that you should be in in if you're in debt or even if if you're uh just at neutral you're not in debt but you don't have savings if you


make more than your income you have savings if you're in debt you you can pay down your debt and uh you shouldn't be showing a deeper debt each year every one of these years the debt should have grown but during these years if you made more than you spent your debt should be less so let's take a look at at the Federal Reserves uh the the total the federal debt total public debt so the federal debt they're the ones that get to spend it and they stick us with the bill now I want to point out that this


is as of Q2 of 2023 it's actually about 3.5 trillion now instead of or 33.5 trillion instead of 32.3 three trillion uh now that is because this was updated September 1st for the second quarter so on December 1st is about when we're going to find out what the third quarter was what our our current is we're going to find out that it'll the graph will say that 33 something trillion but what I want to do here is take this and you know what you can see in here is we go up and we reach


the debt ceiling and it goes flat we go up and it reaches the debt ceiling again and it goes flat and we go up and it reaches another debt ceiling and so on and the debt ceiling is just this uh thing where they're trying to it it's ridiculous don't pay any attention to it anymore because they're always going to lift it or do what they're they've done right now suspend it until after the next election cycle so they it doesn't hurt the incumbents running for reelection and uh currently and either


if the incumbent wins he gets to deal with it when uh he's not going to lose his job over it uh or it's somebody else's problem so let's switch this to annual and what that does is it sort of Smooths the data but now uh since it's annual it's uh taking in the uh it's it's measured up to the fourth quarter of last year uh which would be uh you know this I believe is a fiscal year so that's going to be as of September 30th last year uh but what that's done is it's smoothed all of the


data nicely now let's focus in on those budget surplus years these this is when these are all those years when we made more than our income do you see any year where the deficit where where the debt is going down if you made more than you in your income for these four years in a row the debt should have gone down it was a lie and uh so uh let's let's move on here uh in every dark economic Cloud there is a silver and gold lining notice there's more silver here than there is gold there's a lot of economic


dark clouds like I just showed you so that that ratio of silver to gold lining in that cloud what is it let's take a look at uh FX Empire so this is uh it has to do this site has to do with uh trading currencies gold Price Forecast experts predict $110,000 gold and $300 silver well a quick look at that you know right now we've got close to $22,000 gold so this is going to go up by a factor of five but currently we have less than $24 gold so this is going to according to these experts silver should Rise by a


factor of more than 12 I want to thank you for watching smash that like And subscribe and see you next time hi I just wanted to tell you about gold Silver's 111 ounce silver giveaway where you can win win win one one1 one 1 oz silver bar one 10 oz silver bar and one 100 oz silver bar so enter today and win