The Wealth Gap Is Tearing America in Two — And It’s About to Get Worse

The American middle class is shrinking and I just wanted to address this because this is true. This is happening and wealth inequality is just getting worse. So there are clear reasons for this and I want to walk you through them. So we're turning into a country of basically just two groups of people. The haves and the have-nots. And there are things that you can do to protect yourself, but first you have to understand what is truly going on. Okay, so let's start here. This is coming straight from Pew Research. In 1971, 61% of Americans were considered middle class, and today that number has dropped down to 51%. And the trend is expected to continue downward. So the question is, why is this happening? So it comes down to a few key factors. So first, wages have not kept up with the cost of living. So the price of housing, food, health care, education, insurance, property taxes, you just name it, whatever it may be, I mean, you know, it's all gone up dramatically. And wage growth has been lagging. And another reason that the middle class is shrinking is because middle income jobs are disappearing. So over the past two decades, globalization has sent an estimated 5.8 million U.S. manufacturing jobs overseas. And that's just one part of the story because as you know, now AI has entered the picture. So AI is now threatening white collar jobs the same way that globalization disrupted the manufacturing sector. And another reason why the middle class is shrinking is because of inflation. So I'll tell you this, in a perfect world, if the government prints money, then that newly created money would be distributed evenly across the entire economy, like everybody would get their fair share. But we don't live in a perfect world. In reality, the elite class, you know, the politicians and the donors, they receive the bulk of the newly created money first. And another thing they have to keep in mind is that an inflationary environment actually favors the wealthy. So when inflation rises, the cost of everything goes up. Groceries, gas, housing, it all becomes much more expensive. But who's going to feel the most economic pain? It's not going to be the rich, because they're the ones who own the majority of the stocks, the real estate, their private equity, their businesses, they're all going to rise with inflation. So it's going to be the people that are living paycheck to paycheck who are going to suffer the most. You know, they don't get relief. They just fall further behind. And the result? Well, the result is that the rich are going to get richer and the poor will just get poorer. And climbing the economic ladder is going to become even harder. And it makes the American dream, you know, harder to reach. And for many, just harder to believe in. Now, this is where things get even worse. Because to survive inflation, millions of Americans are turning to credit cards and also personal loans just to stay afloat. So I remember when, I mean, you may remember too, when U.S. credit card debt hit $1 trillion. I mean, that was a big milestone. And now it's just under $1.2 trillion and it's still growing. But take a look, it's at record highs. And the average interest rates on credit cards are, I mean, that's now over 20%. And people aren't just falling behind. They're digging themselves deeper and deeper into a hole with high interest rate debt that most people are not going to be able to afford to pay back. They're using this debt to cover the gap that inflation created. Now, let's talk about where inflation is headed. So will the Federal Reserve get inflation under control? In my opinion, and this is just my opinion, I mean, you can let me know your opinion in the comments down below. I believe that we've already passed the point of no return. I think that inflation will reaccelerate. Okay, so listen, the U.S. government is over $37 trillion in debts. And how are they going to deal with that? Well, it's just my opinion that they're going to do more of the same. They're going to do more borrowing and more money printing. So I want to show you this. So here's the M2 money supply. So more money is being pumped into the system and it's near record highs. So if you're wondering, why isn't the stock market crashing? Why is Bitcoin just continuously just going up, skyrocketing to new highs? Why is gold going up to new highs? It's simply because they're printing more money. Look at the M2 money supply. And if you take a look at the trend, it's, I mean, at least to me, it's clear in what direction we're headed. So that's why I believe that inflation isn't going to go away. I don't think that they're going to have it under control. And that the wealth gap is going to continue to get wider along with it. And if you want to take a look at the Federal Reserve's balance sheets. So I want to show you what happens and then I'll show you what's likely to happen next. Okay. So this spike up here, that was during the great financial crisis. So the GFC, the Federal Reserve, they stepped in, they bought, they bought the toxic assets and they held them on their books to stop the financial system from basically collapsing. It was either that or just let there be a catastrophe. Okay. Then it happened again during the pandemic, the Federal Reserve, they had to step in once more to prevent a complete economic and financial meltdown. Now, I just want to tell you that the next crisis that could send the Federal Reserve's balance sheet off the charts, like literally, at least from this point of view, is expected to be a sovereign credit crisis. So in plain terms, we're talking about treasury bonds or US government debts becoming the next toxic assets. And when that happens, the Federal Reserve is expected to step in as the buyer of last resort because the alternative is letting the entire system collapse. Okay. So if the Federal Reserve expands their balance sheets by, let's just say, another $7 trillion, that would be massively inflationary. Okay. So why am I saying $7 trillion? Because if you look at the pattern, the Federal Reserve's balance sheet has roughly doubled after each major crisis. So just take a look. So that's what it takes to keep the system from falling apart. And if history repeats, we're going to get more of the same. Financial asset inflation and cost of living inflation. So listen, during the last round of money printing and inflation, the rich got richer, they became more powerful. And after the next crisis, it's going to be the same thing. The solution is going to be the same. Print more money, inflate again. And once again, it's going to be the elite class that comes out ahead. And it's just rinse and repeat. So right now, the top 0.1% of households in the U.S. control 13.8% of all the wealth in the country. So that is up from 8.5% in 1990. So the trend is clear. The middle class keeps shrinking. And we're heading towards a country, again, which is two groups of people, the haves and the have-nots. And if this continues, we're going to see more division, more frustration, and more instability. OK, now, I just want you to think about this logically. Now, how should you position yourself in this type of environment? OK, so let's just assume, and I think it's a pretty safe assumption, that Uncle Sam and the Federal Reserve will continue printing money and inflating. OK, so if that's the case, then asset prices are going to rise. And a rising tide lifts all boats. So as a defensive move, it makes sense to be invested in, I'm just telling you, in whatever asset that you want, whatever floats your boat. It could be stocks, the stock market, index funds, gold, silver, precious metals, crypto, you name it. Again, whatever floats your boat. Personally, I believe in diversification. So I spread my investments across a variety of things. OK, but that's why I'm not sitting on the sidelines holding a big pile of cash. You know, yes, I do have some cash for liquidity purposes. You know, that is important. But if we get a dip, I'm putting my money to work because I don't want to lose out to inflation. OK, now, if I had to make a prediction, this is what I see coming. And I don't think this is too wild of a prediction. I see another economic crisis followed up by just more government bailouts. You know, where's that money going to come from? They don't have the money, so they're going to print the money. And with that's going to come more inflation. And with that's going to come more wealth inequality. So that's why I'm taking these steps to protect myself right now by getting myself invested. OK, so I just want to end by saying this. Today's video is just so important for me to make, to present to you, because I mean, so many people, they don't understand how damaging inflation is from a country's perspective to the people, because what it does is it creates more wealth inequality. It makes the rich richer and the poor poorer. And the gap is just widening. You know, all the stats show that. Anyways, that is your update for today. Please subscribe. I'll keep you updated on this whole situation. Thank you for the support and I wish you a very nice day. Take care.