The Trade That Made Me Millions - Interest Rates

Gary explains how he made his millions betting on economic disaster when he worked in the City for Citibank. He also explains why this bet is no longer possible
SUBSCRIBE, SHARE & START A CONVERSATION
SOCIAL MEDIA:
WEBSITE - www.wealtheconomics.org
TWITTER - @garyseconomics
FACEBOOK - @garyseconomics
INSTAGRAM - @garyseconomics
Performed by Gary Stevenson
GARYSECONOMICS
Produced by Simran Mohan
MOHAN MEDIA

[@Basu117]

Here in Switzerland they're already cutting rates again (from a measly 1.75% to 1.5% while official inflation numbers are 1.5%). I fear that real interest rates are forever doomed to be below or at zero. What a time to be alive.

[@cai1000]

Thanks for sharing that, Gary.. It's so true what you said because interest rate hikes and inflation rises will not affect the rich, and they are not there to help us.

[@caity9278]

You're really excellent at breaking things down to the absolute most basic, understandable terms. Much appreciated. Thanks.

[@Mizztah_D]

keep making great points gary! we can do this 💪

[@TheGingerWeegie]

'Build some community to come back against it' Could you explain how that is done please?

[@y0kayden]

Hi Gary - Thank you for another excellent video. I really appreciate you not pandering to the finance bros I often spot asking for trading tips or talking up bitcoin in your comments. It's great to have some economics and finance content that is focused on implications for the lives of ordinary people. My one question would be what your prediction is house prices in the short to medium term? I know you have mentioned before that you think prices will continue to grow out of reach for ordinary people as long as investors have a significant presence in the market. But given the trend towards rising interest rates, do you think prices could 'crash' as result?

[@alanmead755]

Great videos Gary, good luck to you and your endeavours. What happens to this trade when Mr Powell says inflation is transitory?

[@apeter86]

Can you do a video on what the next 2-3 years would look like financially for ordinary people just like you did one during COVID?

[@garyseconomics]

Actually we have already filmed it, it's being edited. Unfortunately, it's not good.

[@apeter86]

@@garyseconomics Thanks that is wonderful. It is good to be forewarned and be prepared for what lies ahead for us.

[@caparn100]

@@garyseconomics Have you any advice on what to invest in to counter high inflation?

[@eileencorcoran3057]

Thanks Gary x

[@chinleybrewer]

You often say people need to come together, which is undoubtedly true, but currently it's not clear how that might happen 🤷‍♂️ The main political parties are not offering anything positive to vote for which would properly tackle the inequality. The newer PAL parties are thinking differently but it takes a very long time to build a new political party. How then would you suggest people can come together as a movement that has a chance of changing things any time soon? Really enjoy your videos by the way 👏 and I often share them 😎

[@jackdawson3993]

One comes together by way of a charity. Charities, like Churches don't pay tax. An association has many benefits. Mainly associated with bulk buying. But money is made by group purchases. Nothing happens without money. Rioting is not an option: too violent. We need self-sufficiency and less debt. Rent, mortgage and loans. Banks control us by debt. They actually run the planet. Because they control the release of money. Rothchild said: "Give me control of a nation's money and I care not who makes it's law". Pleased with himself to say that. All bankers make their money by debt and interest. But they have so money much they buy whole armies to do their bidding or they change the amount of money in the economy to increase debt. This has been going on for a long time. Cecil Rhodes was the first. Made his money in diamonds in South Africa. "Give me control of a nation's money and I care not who makes it's laws". Kinda obvious. Who thinks on a national scale? You must reject the existing structure. It is contrived. It is prejudicial and racist and un-equal and that is not a moral value to prescribe to. We stand for life, not greed.

[@daee121]

Can someone explain how exactly would you trade this ? How do ppl trade interest rates?

[@GreenLarsen]

well made

[@dadsbarmy254]

i'd like to see you say some of these thing directly to Keir Starmer, just to see his response.

[@darrenlemaire8750]

And Ed Davey

[@Kid_Ikaris]

It's a shame Jez was such a decent guy but a shit politician.

[@lewisjackson94]

On the latter point on real interest rates. The U.K. and parts of Europe are really starting to mirror these third world countries.

[@1sammyson]

Sitting in that chair, you remind me of the Lou Lou and Harry bit from Harry Enfield and chums

[@omema81]

In a layman terms would this describe the situation which you’ve mentioned in your video . If I borrow money on my credit card with a higher borrowing fee although the lender is not paying any interest on the money they’re owing me , I’ve to pay them the fee if I miss one payment . Which goes into their pocket . Is that correct ? I’m trying to understand this on a micro level how everyday lending is affected . Please guide .

[@arthurbumblefoot]

I'm pretty sure that's the basics of it yes. A very simple example would be this. You want to borrow 10000 and the lender says okay, but you need to pay 2% on that. The lender borrows the 10000 at 0%, gives it to you and then pockets the extra 2% you agreed to pay when you make payments back, eventually paying off the original 10000 they borrowed at 0% and basically getting 200 for free. But it's like Gary says, when this is done with 7, 8, 9 or 10 digit numbers is when it really pays off.

[@haydenharris3059]

Was the zero % interest loaned money to trade with such as margin from a broker or was it real money you could spend anywhere.?

[@rogermanvell4693]

Given the extent of public and private debt it is very unlikely that interest rates will rise to twentieth century levels anytime soon.

[@dennykeaton9701]

Hmmm this didn't age well 😅😂

[@rogermanvell4693]

@@dennykeaton9701 Yes it did average interest rates across the twentieth century were well above what we are seeing now and given that even the modest rates we are currently seeing are causing stresses in the banking system my point very much stands.

[@bdz_4206]

I used to watch this person called Max Keiser, he has this term he uses "Cantillionaires", sounds like what you are describing, but less mad. Just curious are you aware of him?

[@Thomas-ls6qe]

What about taxes based on the money one spends. The banks pay taxes on the interests they pay and so on ...

[@stephen4518]

Now that interest rates are rising, how does that influence your theory, the standing of your bet and yor analysis of how things can and perhaps even will go from here.

[@dennykeaton9701]

Cricket's

[@Monkeycbr1]

Maybe now he's broke because we know he holds his trades. He said it in his book. And we all know traders that hold positions until they blow up.

[@samcpage]

Does it follow that if interest rates will almost never climb to pre-2008 levels that the pullback in growth stocks in the US market is temporary? Once the US Fed reverses course (whether from political or economic pressures), it'll pump the stock market again.

[@garyseconomics]

I was talking to another trader about this today. Personally I think that is correct, but, that said, I am holding very few stocks as I think gold is the better and safer long term bet (this is not financial advice). In the short term stocks look very dicey (this is also not financial advice) xx

[@samcpage]

@@garyseconomics Yea, I think downside risk is asymmetric on growth still but worth taking some stake in. I never considered gold since it under-performed the last few years while it is the preferred hedge for institutions. I'll do my DD here. Thanks again!

[@garyseconomics]

Personally for me, under-performed often means cheap.

[@kristofs8893]

It would have been important to mention that as Retail Traders we don't have access to platforms as banks do. There's a delay and fees on everything making profits almost impossible.

[@LiveCustoms]

Lol thats only relevant if you want to be a day trading quant. Anyone who understand markets, volatility, and trading overall know the sweet spot for 'trading' is a 20 - 60 working day time frame (i.e., 1 month to a quarter).

[@darrenlemaire8750]

Hi Gary. Another great video. I’m not an economist nor in the financial sector, but I do have an opinion on interest rates this decade, and I think we may see high interest rates, perhaps double digit rates. However, this is because of the high inflation I think that we will see. Now, I noted your comment about the interest rates being relative to inflation, therefore they may still be considered low by comparison. I wondered if you could expand on the relationship between interest rates and inflation retrospectively, and perhaps show us where the gap between the two has widened and narrowed through previous decades. I’d also be very keen to watch / listen to a video that really shows us what happened in the 70’s. I’m trying to find material on line, but it’s all in drips and drabs, and I think you might be able to lay it out in layman’s terms for us. History never repeats itself, but it always rhymes, and I think we will see a similar decade to the 70’s, but for different reasons.

[@bigdaz7272]

We are never gonna see double digit interest rates everythings carrying way too much debt to be able to service it at rates that high, i doubt we will see interest even above 5% again for the foreseeable, the economy is on its ass as is, take away easy money and what limited growth we can point to will stall. Its clear we are gonna go into recession, there are markers that say we are already going into one and that is the last time you wan't to restrict money supply ect. My 2 Cents anyways :)

[@jackdawson3993]

One needs to bear in mind that there is no explanation of this activity because it is not based on logic. Its actually paid for by very wealthy families. Don't bother to try and understand it: you cannot. Its based on money, greed. debt, war, and disparity. We do not support this as an objective. We believe is morality and life. Lives. This is our objective and value. They have the money but we have the numbers but we are in debt. Concentrate on self-sufficiency so that you do not need your job. Then you are independent and have a bargaining stance. When you invest follow tight risk conditions. Use gearing to improve results. But invest for the long term. Do not trade. Put only 10% in Crypto. But by gearing it you double the investment. Interest rates are good. Use IG Marketing.

[@clivewilliams4859]

Has Martin Lewis replied to you yet???

[@khorumrehman1638]

The economy is so broken, rates up but still no recovery! Can Gary make a video on that?

[@aub8670]

Gary can you run as an mp?

[@lancecroll972]

What can people do to protect themselves? What can people do come together?

[@STARZldnlyfe]

They are all corporations we are the outsiders with the working for them all

[@helicoptergunship]

Why are interest rates going up now along with inflation? Based on what he's saying and the state of the economy, the rates should be at less than zero.

[@josiasnkwana9282]

Mandate is fighting off inflation n trying to make the currency more valuable🤷‍♂️

[@jackiehenderson9781]

How can we combat this disaster, you say come together, but how to get people to act together?

[@darrenlemaire8750]

Just talk to people. Friends, family, ur hair dresser, and ur dog groomer ….. even strangers. Tell everyone. I’ve been spouting my shit at everyone for years, and I’m so please that a leader like Gary has come along so we have a bigger voice. My dog groomer who doesn’t vote was very surprised to find out, that had Lib Dems got in power last time, she wouldn’t have to pay for all of her courses that she wants to do, so that she can better herself. Because the Lib Dem’s manifesto was offering every adult a £10k educational grant. How that alone didn’t get them voted in surprises me. But if no-one knows about it…

[@EarthPoets]

Hi Gary. You seem a likeable guy with some potentially important and helpful messages for many of us, however do you ever watch these back and ask yourself if you could have been clearer in your attempt to educate us? For example I can't see where you explain the link between interest rate rises and that being a positive for the economy in this one. It is possibly basic to anyone who already understands but I don't understand that link and if understanding it is a prerequisite for watching you then I am in the wrong place because I am expecting you to explain it to me. So I guess the real question is who are your audience? Is it me or should I find a one stop shop where I don't feel so frustrated?

[@alexanderthornton8622]

Read the book “capital” by Thomas piketty

[@EarthPoets]

@@alexanderthornton8622 Thanks Alex. I know there are many places I could educate myself however I was hoping this was the place. Gary calls for people to get involved and could so easily better explain the important issues he covers and achieve more success. This is just a friendly nudge which I hope he hears, not only for me but because I believe he makes a very valid and important point.

[@alexanderthornton8622]

@@EarthPoets no worries! He has some more technical videos on the topic, let me also suggest that you listen to a world to win with grace Blakey, and the episode with Gary, it was about 2-3 episodes ago

[@EarthPoets]

@@alexanderthornton8622 Alex, I hear you and thank you for your assistance and if I get the time I will have a look, however I worry that many will just walk away. There are very few voices calling out these crimes and Gary's history seems to make him ideally suited to waking people up. With a little more attention to his audience I feel sure he could be a great and helpful success. Anyway mate, thanks again for your help 😎.

[@jackdawson3993]

The difficulty is to accept the influence of the major component because it is not logical. You cannot understand it. It is the influence of selfish people. Very rich people. Gary wants us to join together to use numbers to change the system. We all haver debt and rent. This forces us to work. But actually we do not need to. We are rich, if we shared. You can struggle with the current manipulated system or you can help to change it. That is what Gary is wanting. Money runs the planet. Money does not take into account moral values like equality, food, water, health, basic wages. It is based on debt - rent and survival. Yet we are so rich we do not need to work!

[@julietmichnabeavis1882]

Can't you make your own political party? I'd flaming vote for you!

[@Lucaforex]

He cannot trade anymore then🤣

[@markburton3306]

The central banks have started to raise interest rates, yet the economies still seam buggered

[@declanmcardle]

"Sounds to me like you guys are bookies!" Billy-Ray Valentine.

[@Roberta80]

"What are THEY doing here?"

[@caparn100]

I think the cause of the current high inflation is a combination of the too generous measures by the government to subsidise people and businesses through the pandemic (Furlough, £50k business loans), expensive purchases for the pandemic (PPI, track and trace etc.) and the reduced output from the economy due to less people working during the pandemic, all of which increased the deficit which was funded by the Bank of England increasing its balance sheet to buy government debt. Eventually there has to be a payback in the form of inflation. There is a lot more money in the economy that there was before the pandemic, the Bank of England has doubled its balance sheet from £600 billion to £1.2 trillion. So where is all this new money? It is certainly not in the hands of ordinary people.

[@arthurbumblefoot]

"So where is all this new money? " Gary's first video covered that! And then this "It is certainly not in the hands of ordinary people." Is one of the main reasons why the country is as it is now I think. Ordinary people spend, always putting their money back into circulation. Whereas those that really benefited from the past 2 years don't spend in any meaningful way.

[@aislingmcdonald6778]

But borrowing money has gone up now? (2022). How can ordinary folk push back on this deceite?

[@jackdawson3993]

Yes. You can't. The economy is run by the amount of money is circulation. This is controlled by the banks and a few very rich families. The Federal Reserve, for instance is a private organisation owned - in theory - by the banks. It is actually owned by the Rockefeller and Rothchild families. They are the owners of Citibank and Bank of American. Pushing back is not easy. The easiest way is by finding something that helps humanity. Avoid debt in any case.

[@b00ts4ndc4ts]

Is this because of the global crash or the pandemic?

[@garyseconomics]

The trade mentioned in the title covers broadly 2009-2020, the pandemic is mentioned later on

[@justinuwaidia5873]

I think you’re wrong about crypto btw. Crypto currencies are digital assets that are likely to have an infinite amount of boom and bust cycles. Rates will stay low, quantitative easing will inflate crypto assets bubbles. quantitative tightening will cause the bursts, the rich will search for returns when stocks are overvalued, bonds will remain inverted over the medium term based on currency depreciation, poor economic outlook and rising inequality. Crypto will continue to inflate and reach ath in each cycle before the bust and reinflation

[@haydnlawrence8167]

This video is dated 10/4/22 , and according to you it’s no longer possible to make the trade that made you rich because all the traders now believe Gary’s economics , ie interest rates would stay at 0% . In your own words ‘ I knew the economy was fucked so interest rates wouldn’t rise ‘ . So you had no other position than interest rates would stay at zero, it sounds like you got lucky, 50/50 stay low or rise .

[@pgarrish]

So you and your bank made huge sums of money promising to lend money you didn't have to other banks who'd pay a small amount of interest, so you could then borrow that money at a lower rate when it was time for the other bank to borrow it? And that is a useful function in society how? (I don't blame you for doing it, I blame the fact the job even exists).

[@syphiliticpangloss]

Nice video but I wonder if this kind of language doesn't emphasize to poor kids that there is in fact something called a central bank and a gov treasury that literally set the yield curve. So it's not "something needs to be done" but "they need to stop doing something". Another important and subtle point to get across is that negative rates and inflation etc might not be so bad if there was no information assymetry. i.e. if the nearly risk free trades that you put on for many years, and so many put on in asset swaps and RE were available to everybody. Basically if we aggree that we will have long term inflation and ZIPR forevere, we should effectively ban renting: mandate that everyone, even those on social assistance, be given levered equity stake in their real estate assets. This line of thinking takes us towards a) people with zero wealth need to be given access to good additive growtth rate changes and possibly subsidized borrowing against real estate assets and b) CAGR must be monitored on a societal level, it should be *MUCH* easier to make your first 10x gain than your 2nd, and this should be on a distributional level across the population. We simply do not yet have access to this data.

[@vfclists]

The problem here is the low interest rates were not to keep the *real economy* going. They were kept low to prevent the banks from crashing. If you can borrow money at zero interest you can keep your creditors at bay indefinitely. Anyone with half a brain could see that they rates would never rise. Now you have a lot of major American banks failing because the Fed decided to keep interest rates high and the low interest rate cushion is gone. Even the so called TBTF banks are not that solvent but are only kept alive by preferential treatment from the Federal reserve.

[@deputyvanhalen6386]

Einstein said, "compounded interest is the greatest human invention!"

[@alexanderthornton8622]

The economy is fucked for whom? Not for billionaires

[@790d4]

Lucky you took the rates position off before Russia-Ukraine

[@alexanderthornton8622]

Same story with climate change

[@matthew1nufc]

Wish you the best mate and I hope you don’t take this the wrong way but I’ve had to unsubscribe. I never see a solution in your videos, only perpetuating upset for the “ordinary” bloke. “tax the rich” or “come together” is what you advocate but these are two of the most vague and impossible scenarios to achieve. Great to hear you made millions mate but I hear a reference to it in most videos. Did enjoy your content for a while but quickly became repetitive and “look at me in my ivory tower”.

[@jackdawson3993]

Trying to understand is futile. In the main, money is the objective. Money, of course runs the economy. Debt is what forces us to work. If we shared the wealth of the planet we would not need to work. Watch: The Choice is Ours by Jacque Fresco at the Venus Project. We are all rich its just that some people hold all the wealth. Check out: Rule by Secrecy by Jim Marrs. Fundamentally the planet is controlled by banks through debt and the control of the creation of money. The Federal Resereve is owned by them and they charge of US Gov't $1 for each note they make. Additionally, they charge interest on all money. It is produced in debt. Bankers have been instigators of the first WW, the Russian revolution, the 1929 crash, financing Hitler and the domination of many countries. They are involved in all wars. War is big business and big loans, often to both sides. They have the money but we have produced the wealth.

[@dennykeaton9701]

Fair point

[@thegrimmer]

Gary's theme song that he never knew existed (2012): kzbin.info/www/bejne/nomaiIedfLCardU

[@icrlp0570]

guess what trade is going to make me millions?

[@garyseconomics]

Is it compiling and selling a book of your KZbin comments?

[@dennykeaton9701]

This didn't age well 😅😂

[@therepublicofcynica]

The irony, of course, is that he's admitting and almost boasting that he was gambling with other people's money. So, after watching some of his other videos, he was part of the problem. Bankers contribute fuck all to the success of society. They're pariahs. Gary was a pariah and that, and that alone, is what enables him to be able to afford not to work and make these videos. (which, by the way, he'll be making income from)

[@dennykeaton9701]

Good for him

[@cigottro]

One year has happened and we can clearly feel the degradation of the system. And the feeling of being poorer is fucking real.