A Lifeline Demand Hits Washington

SPEAKER_00 0:00

Just now, one of America's closest allies walked into the US Treasury and said, give us a lifeline, or we'll crash your bond market. That country was the United Arab Emirates, and Washington blinked. I explained the importance and the dangers of this to you actually in March, even before this happened, in the video here on the screen. And this one meeting has set up a chain reaction right now that is pushing your mortgage rate higher, it's crushing your tech stock portfolio, it's crushing your bond retirement portfolio, and it's forcing central banks around the world to dump the American dollar at the fastest pace in over a decade. And most investors have got absolutely no idea this is happening. So stick around, watch this video, and you will learn not just what this means, but how to position yourself and how to actually profit from this. Because this isn't 2008, this isn't a banking crisis, this isn't an everything that's kind of collapse crisis, it's a trust crisis. It's the one type of crisis the US government can't print its way out of, which is what they've always done. So I'll show you how these dominoes fall from the war in the Middle East to the interest rate on your mortgage, and I'll give you my three-step domino framework so you can protect your portfolio or I'll say actually benefit from this. My name is Felix Brynn. I'm a former investment bank economist. That was Winston just now, which obviously was a lot more interesting than me. And Winston has. Come here, come in. Sit down, sit down, sit down, sit. Good boy. And there he is. Winston has done something for you that's even better than this video. Because he said to me, Felix, this is a bit information dense. People don't really want to talk about treasury markets and all that boring crap. So he's put together a full research report that outlines absolutely everything we're about to show you. Plus, actually, more you can download out for free at FelixFriends.org slash domino. And if you are happy about that document, just write Winston in the chat and you'll know that all the work he's put in was worth

Why The UAE Needs Dollars

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it. So what actually happened? Well, picture this. The United Arab Emirates walks into a meeting with Treasury Secretary Scott Bessant. And the UAE is one of the richest countries on the planet, and we're talking about 270 billion in foreign exchange reserves, literally trillions in sovereign wealth funds. So why do these guys need money? Well, they have a problem, a pretty big one. Since the US war kicked off with Iran, the end of February, and the Strait of Hormuz, that narrow waterway where all their oil and gas exports go through, is essentially shut down. And they've been hit by almost 3,000 missiles and drones. Guess what? Their oil exports, which is how they earn their dollars, have basically slowed to almost nothing at all. So the UAE says to Washington, we need what they call a currency swap line. It's like a lifeline, it's a dollar lifeline. And then they apparently said, according to certain reports, that if we can't get dollars easily, we may have to start selling our oil in Chinese Renmin B. Now, the US doesn't like that idea because here's one country threatening to use a different currency for oil. And as you may remember, since 1974, when the Saudis agreed to price oil exclusively in US dollars, the dollar has been the oil currency. Every barrel sold anywhere in the world is pretty much priced in dollars. And it gives the dollar a superpower. It gives the US the ability to run a massive deficit because every country in the world has to buy dollars so that they can use it to buy oil with it. So if one of these allies, the Gulf breaks rank, the whole thing can unravel. You know, when you have a sweater and there's like a thread sticking out, like if you have cats, you know what I'm talking about. You pull on it, the jumper is gone, right? It's the same thing here. So Washington knew it. So the Treasury confirmed publicly that many Gulf and Asian allies have requested the same lifelines. Not one country, but many. Now, before we go further, I need to explain something hideous to you. Um, if you think it's hideous, write hideous in the comments. It'd be funny for people who don't know what this video is about. What are we actually talking about here?

Treasuries Explained Like An IOU

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Well, first you need to understand what is a US Treasury bond. Well, imagine that your imagine that you lend your friend $1,000 and he then writes you an IOU which says, I'll pay you back in 10 years plus $50 a year in interest. So, you know, as a payment for the favor. That piece of paper is basically that IOU is a treasury pot. Now, imagine your friend did this with everyone his neighbors, his co-workers, people in other countries. He borrowed from everyone, and now he owes $39 trillion. Well, that's the United States. 9 trillion of that is held by foreign buggers, foreign countries. Japan, China, the UK, the Gulf states, they hold about $9 trillion worth of IOUs. And for the last 80 years, these IOUs have been considered the safest investment on the planet. It's ironically known as the gold standard of investing, which is sort of ironic if you were a gold buck. But the question nobody's been asking, like literally nobody, is what happens? And the people who lend you the money suddenly need a cash back, all at the same time, because they need to buy oil. Or they're not selling as much oil and they need the revenue. That's what's happening right now. And it's not because these countries want to sell, it's because they have to sell. So the chain reaction is this the Strait of Homus is closed, right? Largest oil disruption in history. So what happens? Well, it isn't just the Gulf states. Kuwait, major oil exporter, tiny country, right? They're selling zero barrels of oil in a month. Zero. First time since Saddam invaded in 1991. But it isn't just those countries who suddenly have no revenue to pay for their government and their healthcare and their armed forces and you know drones. Um, it is also their customers. Japan, India, South Korea, Thailand, Turkey, these countries import oil and they need to pay for that oil in dollars. So they need dollars. Rapido. So what's the fastest way for a central bank to get some dollars? Well, you sell your most liquid dollar asset. And what's the most liquid dollar asset in the world? Yeah, you guessed it. US Treasury bonds. So what happens? And let me know if this is landing

The Forced Selling Wave Begins

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for you. I know it's a little bit like tedious, but it's so, so important to understand. You get this massive wave of selling. Let me give you one number. Foreign central banks holding at the New York Fed, which is where they keep their dollars, is at the lowest level since 2012. China slashed its treasury holdings to the lowest number since 2008, an 18-year low. Japan, the single largest foreign holder of US debt, dumped 47 billion in just 30 days. 37 billion in 30 days. So about 240 billion globally have been sold in the last 30 days of US government debt. The only one buying is the poodle, sorry, the vassal states, sorry, the uh formerly Great Britain. They're the only country buying probably gun to their head or something. Everybody else, selling. Now, what's the result of this? And maybe you spotted a gold bar on my thumbnail, because yes, central banks now hold more of their reserves in gold than in US debt. That's the first time in over 35 years. So central banks have been buying a ton of gold, and that's even though some countries are selling. Russia is selling, Turkey is selling. Uh, rumors are that the Gulf states are selling gold because they need to raise cash to pay for you know things to continue or to fund drone purchases, which is a bit weird, but that's true. Um, but still, central banks are buying more gold overall. The biggest quarter of gold purchases ever in history. Ever, ever, ever. If I was a six-year-old, I'd say a few more evers. So the people whose job it is, well, and who have a money printer, they're going, we don't want any of that monkey money, we want gold. Now, most investors are going to get surprised by the consequences of this. This is gonna dominate what happens in the stock market for the next 12 to 18 months, maybe longer, in my humble opinion. What happens when you get surprised by it? Well, tech stocks, for example, they tend to get a bloody nose when these things happen. Look at Palantir down 33%. Are you one of the unfortunate souls who bought Palantir at the top here and is regretting it? Or maybe you even bought what sounds like a good investment in a time like this. Maybe you bought silver. But again, maybe you bought it near the top of the market and you're down 32% right now. Or maybe it happened to you with any other, you know, good quality stock uh like PaynePal here. You know this one that's down almost 90%. Tell me in the chat any stock or gold or silver, whatever, that you bought near the top and that you're like kind of annoyed by, just put it in the comments down below. I'd love to see it. And it's gonna help people because they're gonna realize it isn't just me, it isn't just you know manipulation, it's actually a reality for most retail investors. And I'm gonna fix that for you. I'm gonna do something special for you this coming weekend. I'm gonna teach a free life workshop, and I call it how to fix bad timing once and for all. And what do I mean by that? I mean by that that you don't have to buy at the top and you don't ever have to have 30% losses in your stock pot failure. And you can get yourself a free seat at fixinvesting.com. And maybe you're thinking, but nobody can time the market perfectly, Felix. You're talking dribble. Um, you would be right, nobody can time the market perfectly. But the kind of buying at the top, only to see your wealth get destroyed slowly and painfully, that is actually avoidable. And I'll teach you how. So get your free seat at fixinvesting.com. I will teach you how Wall Street deals with that very problem, because it is very, very, very solvable in a very simple way. Just join me at fixinvesting.com on the weekend. And if you're gonna do that, write fix in the comments uh and I know you'll be there. But to really understand what's going on right now and what's gonna hit the market, you need to understand the following. When countries dump US bonds, why should you care? You're sitting somewhere nice and sunny in Florida or whatever, and you're like, why do I care? I only own stocks, whatever. You probably own some bonds in your retirement portfolio, but put that aside. Most people don't understand bonds because they sound tedious. They are. But let me explain it to you so like a five-year-old can understand it and let me know

Why Yields Jump And Mortgages Hurt

SPEAKER_00 12:10

if it's let me know if there's lands for you. I'm not saying uh you don't have the capacity of a five-year-old. I'm just saying I'm hoping it's as simple as I think it is. So it works like this countries sell US debt, treasury bonds, the bond prices will drop, right? It's a bit like imagining your house, if imagining your house, you're sitting in your house and in your street, all your neighbors put their house up for sale at the same time. All the houses, well, you live in a condo, all the condos in your block go on the market on the same time. What do you think happens to prices? Correct, they crash. Because the buyers are like, well, I can haggle with him, I can haggle with him, I'm gonna need a better price. But in the bond world, when the price of a bond goes down, interest rates go up. And you can think about that, it might cause you a headache. Just take it as truth for a moment. They go in opposite directions. So mass selling of US debt does what? It increases interest rates, it increases your mortgage rate, your car loan rate, your credit card rate, and of course, also corporate borrowing. So all those data centers that are getting financed, the factories, the machinery leases, all that stuff is getting more expensive. So, what does that mean? Well, it means two things actually. It means one, yeah, you get higher inflation, and two, you get generally lower profits at companies that can't pass the costs on entirely to you, the sucker, the customer. Now, the scary part here is that long-term interest rates are now at 5.2% as I'm recording this. So 5% is now. Now, Bank of America asked global fund managers, and guess what they said? And this might terrify you. They said it's gonna go not down, no, it's gonna go to 6%. US interest rates are gonna go to 6%. The last time we saw that was 1999, when we had like the biggest bubble in the world, you know. Wasn't that the um I did not, I did not have, you know what, relations with that woman? And wasn't that the time? That's what it feels like. That was the time. Maybe I'm off by a few years. And the reason interest rates were so high is because we had a lot of inflation, the economy was booming, but right now the economy isn't booming. So what do the high interest rates do in 1999? Remember what happened after 1999? 2000 happened. 2001 happened, the stock market collapsed, the dot-com bubble collapsed. That's the scary part here, because when interest rates go higher and higher and higher, it's harder and harder to hide the cracks in the system. Mortgages are already around 6.3%. Now, some people will benefit from that, and I'll show you who in just a second. But for you, for right now, we've already seen half a percentage point increase in mortgage rates. That's $200 out of the average mortgage, or $64,000 added on top of that mortgage. If you have a fixed fixed rate mortgage, good for you. But some people are buying homes, right? Student loans, refinancing, business lines of credit, that all goes up, and that's a problem for the economy and for you and for the stock market when it becomes a big lead deal. And people realize this has actually happened. Now, who else is this a big deal for before I tell you where the opportunities lie? You know, the new fetcher keeps saying he's gonna lower interest rates. He's like, yeah, yeah, we're gonna we're gonna lower rates. The problem is, rates are not set by the Fed. Yeah, they can they can set a rate nominally, but it's actually the bond market that sets it. And because the bond market is so big now, because the US government keeps issuing all this debt, debt is a bond, the bond market is now more powerful than the Fed. And the bond market is saying rates are going up to six percent. You can cut all you like, doesn't make any difference to us, interest rates are going up. So the tail is wagging the

The Fed Loses Control Of Rates

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dog, as I put on the slides here. Now, who pays the most interest in the world on gov on debt? It's the US government, of course. A trillion already in interest, more than the military defense budget. Uh almost 20 cents out of every tax dollar goes on interest, uh, three billion a day. Now, where does that money go? To bondholders. So the people who own the debt. So someone's getting richer. But there are only two outcomes to this. The government has two options. Option one is inflate the debt away, which means create inflation, which is exactly what they're doing, and it'll destroy your savings. It'll destroy the value of the dollar to destroy the value of your salary. The second option would be to borrow more and kick the can down the road, which of course is what they're also doing. So they're doing both. Now, you might think, well, couldn't we just grow the economy faster? Mathematically impossible to outdo the debt. But I say impossible. Everything is possible, but highly unlikely. Uh the fourth option would be cut spending. Now, if you understand democracy, it is a popularity contest. Who is going to be more popular? The guy who's going to say, I'm going to take away all your benefits, Medicare, all that stuff, getting rid of all of it. Social Security, you're going to kill it all off. Or the guy who's going to say, I'm going to give you loads of free stuff. Vote for me. Who are you going to vote for? The reality is people are always going to vote for the guy who gives you free stuff, which is what got us into this mess to start with. So the dollar is getting slowly demolished or demoted. The dollar is down about 8% since late 2025. And if and when the war stops in the Middle East, well, the war will never stop in the Middle East, will it? When this Iran war stops and oil will flow more freely, um, guess what? Is it going to fix everything? No, the dollar will actually fall faster. Crazy, eh? Um, and Goldman Sachs agrees with me, JP Morgan agrees with me. We're all looking at another about 10% down on the dollar. So if you're an American, you're going on a holiday in Europe, go quickly. You'll be just fine. Um, for you, it's like going to a third world country, isn't it? You're like, it's so cheap. All the Americans were basically thinking that the Liza saw in France. And like, it's like, it's like, I don't know, I can't mention a country, but you know what I mean. Going to a tin pod HUD country, um, but going to France. So dollar reserves are the lowest level in 30 years around the world, and the dollar demand is gonna keep declining. So, what do we do?

What Benefits From Chaos

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Well, there are a couple of things that we can do. First of all, gold. JP Morgan says it's gonna go to $6,300 this year, which would be another 30% up or so. But what we really want to learn is like what benefits from this? What gets crushed? And then we want to follow wherever the money is going, not what these Muppets or talking heads are telling you on television or YouTube. So, what benefits from chaos? Energy. Energy tends to beat inflation. Banks and insurance are doing well. Our weekly um, or rather, my weekly lists of stocks. I'm interested in tons of banks in there at the moment. Gold and gold miners, yep, you could add silver to that. You could add all commodities to that, quite frankly. Uh, that's kind of where I'm fishing. Now, are there exceptions? Yes, there's some oil and service stocks, that's kind of energy that we're in right now. Um, but your high-growth, unprofitable tech stock, that's usually a pretty bad place to be. And I know a lot of you guys are in that, right? Quantum this, quantum that, and all that stuff. There are moments for it, but buy and hold on that could be dangerous. REITs and utilities usually get destroyed, small caps or lots of debt tend to get destroyed, and the long-duration bonds and your retirement portfolio start to suffer pretty badly. So you now understand the concept. Straight-up hormous triggered forced selling of US government debt. That pushes interest rates higher in the US. Isn't it crazy? These people on the other side of the world can affect your mortgage and your car loans. Yeah, it's true. So you get higher rates, the dollar gets weaker, and we realize that some things benefit from it. Hard assets, for example, right? Avoid the stuff that gets crushed and don't hope it's all going to sort itself out because it might well not do. So if you've experienced this, you bought something and it went down 30%. Maybe you even bought something and it was beautiful for a while. It went up and up and up and up and up, and you were like, I'm a genius. You're telling everyone how wonderful this particular stock was, you know, up and up and up and up and up. And then it goes down and down and down and down and down, and now you're already really sad and you're holding on to it quietly, and you haven't told your wife yet. If that triggers something within you and you just want to avoid that going forward, because you can. Hard rules on that one. Wall Street's been following this rules for 50 years plus. Join me on the weekend. Grab yourself a free seat to our workshop at fixinvesting.com. It's called How to Fix Bad Timing Once and For All. And no, I will not make your timing perfect. It doesn't need to be perfect. But it doesn't have to be abysmally horrible where you get an ulcer and can't sleep well at night. Uh that We can definitely avoid. Now it won't be live from France this weekend as I'm in Asia right now,

Free Workshop Invite And Closing

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but we'll still do it. Winston will be here, I think. And I hope you got some value out of this. If you did, please share it with other people. That will be all I ask. Uh share the invitation to our workshop with other people. That's really the best thing we can do. The more people we reach, the more people's lives we can change, which is really what this is all about. And I wish you tremendous success and hope to see you on the weekend.