We’ve talked a lot of finance shop in this article

Watching Warren Buffett completely change what he believes about money in a matter of months has been fascinating.
He is considered the most successful investor in history, so he’s worth listening to when financial markets enter a strange period that nobody understands or can properly explain (even if, like me, you don’t love everything he says).
https://www.eventbrite.it/e/biglietti-liveatalanta-juventus-in-dirett-133050320089
https://www.eventbrite.it/e/biglietti-streamsatalanta-juventus-in-dirett-live-133050366227
https://www.eventbrite.it/e/biglietti-onlineatalanta-juventus-in-dirett-live-133050470539
https://www.eventbrite.it/e/biglietti-serie-aatalanta-juventus-in-dirett-live-133050584881
https://www.eventbrite.it/e/biglietti-it-streamsatalanta-juventus-in-dirett-live-133050620989
https://www.eventbrite.it/e/biglietti-ita-streamsatalanta-juventus-in-dirett-live-133050815571
https://www.eventbrite.it/e/biglietti-livefiorentina-sassuolo-in-dirett-16-dicembre-2020-133051198717
https://www.eventbrite.it/e/biglietti-streamsfiorentina-sassuolo-in-dirett-live-16-dicembre-2020-133051337131
https://www.eventbrite.it/e/biglietti-onlinefiorentina-sassuolo-in-dirett-live-16-dicembre-2020-133051385275
https://www.eventbrite.it/e/biglietti-serie-afiorentina-sassuolo-in-dirett-live-16-dicembre-2020-133051549767
https://www.eventbrite.it/e/biglietti-it-streamsfiorentina-sassuolo-in-dirett-live-16-dicembre-2020-133051894799
https://www.eventbrite.it/e/biglietti-ita-streamsfiorentina-sassuolo-in-dirett-live-16-dicembre-2020-133051924889
https://www.eventbrite.it/e/biglietti-livegenoa-milan-in-dirett-16-dicembre-2020-133052338125
https://www.eventbrite.it/e/biglietti-streamsgenoa-milan-in-dirett-live-16-dicembre-2020-133052408335
https://www.eventbrite.it/e/biglietti-onlinegenoa-milan-in-dirett-live-16-dicembre-2020-133052450461
https://www.eventbrite.it/e/biglietti-serie-agenoa-milan-in-dirett-live-16-dicembre-2020-133052596899
https://www.eventbrite.it/e/biglietti-it-streamsgenoa-milan-in-dirett-live-16-dicembre-2020-133052947949
https://www.eventbrite.it/e/biglietti-ita-streamsgenoa-milan-in-dirett-live-16-dicembre-2020-133052984057
https://www.eventbrite.it/e/biglietti-liveatalanta-juventus-in-dirett-16-dicembre-2020-133049720295
https://www.eventbrite.it/e/biglietti-streamsatalanta-juventus-in-dirett-live-16-dicembre-2020-133049752391
https://www.eventbrite.it/e/biglietti-onlineatalanta-juventus-in-dirett-live-16-dicembre-2020-133049774457
https://www.eventbrite.it/e/biglietti-serie-aatalanta-juventus-in-dirett-live-16-dicembre-2020-133049844667
https://www.eventbrite.it/e/biglietti-it-streamsatalanta-juventus-in-dirett-live-16-dicembre-2020-133049876763
https://www.eventbrite.it/e/biglietti-ita-streamsatalanta-juventus-in-dirett-live-16-dicembre-2020-133049912871
https://www.eventbrite.it/e/biglietti-livejuventus-atalanta-in-dirett-16-dicembre-2020-133046761445
https://www.eventbrite.it/e/biglietti-streamsjuventus-atalanta-in-dirett-live-16-dicembre-2020-133049210771
https://www.eventbrite.it/e/biglietti-onlinejuventus-atalanta-in-dirett-live-16-dicembre-2020-133049258915
https://www.eventbrite.it/e/biglietti-serie-ajuventus-atalanta-in-dirett-live-16-dicembre-2020-133049377269
https://www.eventbrite.it/e/biglietti-it-streamsjuventus-atalanta-in-dirett-live-16-dicembre-2020-133049557809
https://www.eventbrite.it/e/biglietti-ita-streamsjuventus-atalanta-in-dirett-live-16-dicembre-2020-133049619995
These two lines from Warren made me think:
“The [US] debt isn’t going to be repaid; it’s going to be refunded.”
“You better own something other than debt.”
Buffett explains that when the government can just keep on printing money to pay their own debt it’s laughable to think they will ever default. He says, “The trick [for countries] is to keep borrowing in your own currency.”
So if money will keep being printed out of thin air then what does that mean for your investments, assets and savings? Let’s explore the topic in simplistic terms and see what you can do about it.
The Most Important Lesson On How Money Works From Warren Buffett
This is what Warren said recently about how money works that will test everything you thought you knew about money:
If the world turns into a world where you [governments] can issue more and more money and have negative interest rates over time — I’d have to see it to believe it, but I’ve seen a little bit of it. I’ve been surprised. I’ve been wrong so far.
If you can have negative interest rates and pour out money, and incur more and more debt relative to productive capacity, you’d think the world would have discovered it in the first couple of thousand years rather than just coming on it now. We will see.
https://www.eventbrite.co.uk/e/livefulham-v-brighton-live-on-16-dec-2020-tickets-133037894925
https://www.eventbrite.co.uk/e/streamsfulham-v-brighton-live-on-16-dec-2020-tickets-133038013279
https://www.eventbrite.co.uk/e/onlinefulham-v-brighton-live-on-16-dec-2020-tickets-133038055405
https://www.eventbrite.co.uk/e/streams-live-fulham-v-brighton-live-on-16-dec-2020-tickets-133038835739
https://www.eventbrite.co.uk/e/online-streamsfulham-v-brighton-live-on-16-dec-2020-tickets-133038942057
https://www.eventbrite.co.uk/e/eplfulham-v-brighton-live-on-16-dec-2020-tickets-133038996219
https://www.eventbrite.co.uk/e/total-sportek-fulham-v-brighton-live-on-16-dec-2020-tickets-133039768529
https://www.eventbrite.co.uk/e/liveliverpool-v-tottenham-live-on-16-dec-2020-tickets-133040773535
https://www.eventbrite.co.uk/e/streamsliverpool-v-tottenham-live-on-16-dec-2020-tickets-133041587971
https://www.eventbrite.co.uk/e/onlineliverpool-v-tottenham-live-on-16-dec-2020-tickets-133041666205
https://www.eventbrite.co.uk/e/streams-live-liverpool-v-tottenham-live-on-16-dec-2020-tickets-133041752463
https://www.eventbrite.co.uk/e/online-streamsliverpool-v-tottenham-live-on-16-dec-2020-tickets-133041997195
https://www.eventbrite.co.uk/e/eplliverpool-v-tottenham-live-on-16-dec-2020-tickets-133042057375
https://www.eventbrite.co.uk/e/total-sportek-liverpool-v-tottenham-live-on-16-dec-2020-tickets-133042093483
https://www.eventbrite.co.uk/e/livewest-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133042456569
https://www.eventbrite.co.uk/e/streamswest-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133042502707
https://www.eventbrite.co.uk/e/onlinewest-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133042566899
https://www.eventbrite.co.uk/e/streams-live-west-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133042594983
https://www.eventbrite.co.uk/e/online-streamswest-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133042811631
https://www.eventbrite.co.uk/e/eplwest-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133043539809
https://www.eventbrite.co.uk/e/total-sportek-west-ham-v-crystal-palace-live-on-16-dec-2020-tickets-133043587953
https://www.eventbrite.co.uk/e/livesouthampton-v-arsenal-live-on-16-dec-2020-tickets-133037742469
https://www.eventbrite.co.uk/e/streamssouthampton-v-arsenal-live-on-16-dec-2020-tickets-133037886901
https://www.eventbrite.co.uk/e/onlinesouthampton-v-arsenal-live-on-16-dec-2020-tickets-133037975165
https://www.eventbrite.co.uk/e/livematch-southampton-v-arsenal-live-on-16-dec-2020-tickets-133038045375
https://www.eventbrite.co.uk/e/streamsmatch-southampton-v-arsenal-live-on-16-dec-2020-tickets-133038915979
https://www.eventbrite.co.uk/e/streams-live-southampton-v-arsenal-live-on-16-dec-2020-tickets-133038978165
https://www.eventbrite.co.uk/e/streams-reddit-southampton-v-arsenal-live-on-16-dec-2020-tickets-133039778559
https://www.eventbrite.co.uk/e/total-sportek-southampton-v-arsenal-live-on-16-dec-2020-tickets-133039862811
https://www.eventbrite.co.uk/e/liveleeds-united-v-newcastle-live-on-16-dec-2020-tickets-133041519767
https://www.eventbrite.co.uk/e/streamsleeds-united-v-newcastle-live-on-16-dec-2020-tickets-133041600007
https://www.eventbrite.co.uk/e/onlineleeds-united-v-newcastle-live-on-16-dec-2020-tickets-133041668211
https://www.eventbrite.co.uk/e/livematch-leeds-united-v-newcastle-live-on-16-dec-2020-tickets-133041716355
https://www.eventbrite.co.uk/e/streams-live-leeds-united-v-newcastle-live-on-16-dec-2020-tickets-133042011237
https://www.eventbrite.co.uk/e/online-streamsleeds-united-v-newcastle-live-on-16-dec-2020-tickets-133042077435
https://www.eventbrite.co.uk/e/footballleeds-united-v-newcastle-live-on-16-dec-2020-tickets-133042111537
https://www.eventbrite.co.uk/e/total-sportek-leeds-united-v-newcastle-live-on-16-dec-2020-tickets-133042141627
https://www.eventbrite.co.uk/e/liveleicester-city-v-everton-live-on-16-dec-2020-tickets-133042394383
https://www.eventbrite.co.uk/e/streamsleicester-city-v-everton-live-on-16-dec-2020-tickets-133042436509
https://www.eventbrite.co.uk/e/onlineleicester-city-v-everton-live-on-16-dec-2020-tickets-133042482647
https://www.eventbrite.co.uk/e/livematch-leicester-city-v-everton-live-on-16-dec-2020-tickets-133042550851
https://www.eventbrite.co.uk/e/streams-live-leicester-city-v-everton-live-on-16-dec-2020-tickets-133042661181
https://www.eventbrite.co.uk/e/streams-reddit-leicester-city-v-everton-live-on-16-dec-2020-tickets-133042783547
https://www.eventbrite.co.uk/e/online-streamsleicester-city-v-everton-live-on-16-dec-2020-tickets-133043525767
https://www.eventbrite.co.uk/e/total-sportek-leicester-city-v-everton-live-on-16-dec-2020-tickets-133043557863
It’s probably the most interesting question I’ve ever seen in economics.
Can you keep doing what we’re doing now? The world has been able to do it for now a dozen years or so [since 2008]. We may be facing a period where we’re testing that hypothesis that you can continue it with a lot more force than we’ve tested it before.
This description from Warren about all the free money we’ve all been getting access to because of a health crisis may explain why Warren has sold a lot of his US bank stocks recently.
The influential finance blog Zero Hedge wrote recently that Warren “appears to now be quietly betting against the United States,” because “the famously anti-gold investor has abandoned banks — the backbone of America’s credit-driven economy — in favor of a gold miner.”
A friend said this to me the other day: “Watch what the billionaires do, not what they say.” If Warren’s actions are anything to go by then the record prices in the stock market are something to be very cautious of.
Inflation Is Taking Hold
Inflation is when prices go up and the value of your money decreases. Four dollars last year may have got you a small cup of coffee. That same cup of coffee might cost you $5 this year, as a simple example.
Inflation is a hidden tax on your money.
Warren says, “I’ve been wrong in thinking you could have the developments you’ve had without inflation taking hold.”
Warren has put his firm’s money in gold, and treasury bills which he describes as “a terrible investment over time.” (A treasury bill is an investment where you are essentially lending money to the government.)
So Warren is comfortable putting his money in terrible investments in the short-term because of what he can see in the world of finance. That decision is worth contemplating when thinking about your own money and investments.
Why All of This Matters to You?
Let’s break down why the change in how money now works matters to you.
Negative interest rates
Negative interest rates can be bad for you because it means you have to pay to store your money. It also means the bank you choose to bank with may face severe financial trouble that leads them to go out of business.
Yes, banks have insurance in case of such an event, but if the problem is too big then that deposit insurance is useless — many people do not understand this. They assume the government or a magic insurance policy will save them without any negative consequences.
We’re in uncharted territory and I would not be relying on anybody to come and save you and your money.
The poor are being robbed by the rich who have the data to predict their moves.
Many retail investors are buying stocks using apps like Robinhood — the data tells us this trend.
While billionaires like Warren are exiting stocks and running to safety, everyday people seem to believe they are smarter than the pros — or the high-frequency, non-human trading bots who predict the moves of the retail investor and bet against them.
Investments firms use high-frequency trading to automate their investment decisions and beat the average investor. These same firms are front-running retail Robinhood investors. What does this mean in simple terms?
Sophisticated investment firms, according to Bloomberg, are getting access to data that tells them what the retail investors (dumb money as it’s known in finance) are doing so they can take advantage of them.
This data allows investment firms to rob the poor and pay the rich — the name of the Robinhood app is kind of ironic, isn’t it?
The stock market bubble
Record unemployment. A global health crisis. Protests. Despite the world we live in stock markets are beating record highs. Crazy, or a disaster waiting to happen?
Another iconic billionaire investor, George Soros, called the stock market a bubble. “Investors are in a bubble fueled by Fed liquidity,” he says and that’s why he “no longer participates.”
Either everything is fine with markets and businesses haven’t been affected by the health crisis at all, or we’re watching a bubble that’s about to pop. I don’t have the answer so that’s why I’m sitting on the sidelines.
The change in the velocity of money
JavaScript is not available.
Edit description
twitter.com
https://twitter.com/ufc257_live
While free money is being given away through economic stimulus and large amounts of money are being printed out of thin air, the velocity of money is down. (The velocity of money just means how many times one dollar passes through multiple people’s hands.)
When large amounts of money are created out of thin air and that currency is not spent, when that money eventually is spent, it can lead to larger than normal amounts of inflation that devalue the money you’ve worked hard for.
Example of decrease in the velocity of money:

Love yourself first, because that’s who you’ll be spending the rest of your life with.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store