Gary Stevenson

Like this really quite simply answers the question because the way that we dealt with COVID is in many ways the same way that we dealt with the 2008 financial crisis, the 2011 sovereign debt crisis in Europe, and the same way we're dealing with the Iran crisis now, which is we tried to fix it by the government running an enormous deficit leading to an accumulation of an enormous amount of cash with richer people, which they use to buy assets.

We really have like an established playbook now which we can see happens again and again and again and again every time there's a crisis which is the way that we resolve this is the government borrows a ton of money from the rich and gives that money back to the rich and uses that massive redistribution of wealth to basically resolve the crisis which means that every single crisis

ends up with an enormous amount of money piling up with the rich.

Massive increase in inequality, massive increase in wealth and power of the rich and the most obvious consequence of that is an increase in asset prices.

I think in Covid what happened was the amount of money given to the rich was so much that it increased the consumption and actually pushed up inflation which meant that we saw this interesting combination of asset prices going up

and interest rates going up at the same time and you know a lot of people were really confused about that when it was happening but the reason i was able to predict it was because that is exactly what you would expect if you just understand that rich people haven't given an enormous amount of money an enormous amount of money the first thing that's going to happen is asset price will rise and the second thing is if it is sufficiently large amount of money that it even increases their consumption inflation will go up with it which means interest rates will go up too

And that is how we were able to see this really interesting combination of movements, which is asset prices going up, you know, gold and stocks going up at the same time, these things are supposed to move in opposite directions, and interest rates going up at the same time, which is supposed to push asset prices down.

None of these movements when viewed by themselves make sense until you recognise what we are doing is transferring enormous amounts of money, enormous amounts of cash to the richest people in the world.

And what are they going to do with that?

they're going to increase their purchase of assets.

And if the money is enough, they're going to increase their spending, which is going to drive up inflation and interest rates as well.

OK, so

How do you react to this?

Okay, first thing to say is, you need to recognise that asset prices going up is not good for you.

Unless you are a very rich person, asset prices going up is not good for you.

It is not good for workers, it is not good for ordinary people.

Expensive assets mean in the first instance, you cannot afford to buy a house, your kids can't afford to buy a house, and you can't afford to buy a pension.

It basically means you are being squeezed out of asset ownership.

you are being squeezed out of financial stability in particular if the reason that asset prices is going up is because your governments are giving enormous amounts of cash to the rich then this is going to increasingly push governments into very weak financial positions you're seeing this very clearly in the situation of the uk but it's also happening in places like italy places like greece even places like the us are going in this direction if you keep moving in this direction where every time you have a crisis we deal with it by the government's giving a huge amount of money to the rich

you will all end up in situations where we are increasingly seeing the UK government in where basically they cannot borrow any more money because financial markets will not lend them any more money and then you reach situations where suddenly you have crises like these now and governments are increasingly powerless to defend the population from the economic consequences of things that are happening.