Hello Aluxers, welcome back!
With a recession just ahead of us, what better time than now to give you a look behind the curtain on how the rich get even richer
when the economy is in shambles as is currently.
You’ve mentioned you wanted a shorter intro so let’s get started!
You can be as irresponsible as you want with your business and push your leverage to the edge
- because the moment you’re about to fail - the government steps in and gives you free money just to keep things going.
This might not sound fair, as the government doesn’t step in when - as an individual - you’re close to bankruptcy…
but these companies are an important part of the economy, they hire thousands of people with which,
if they were to fail, the government would have to deal with.
This is what happened with banks in 2008 and will probably happen with Airlines this year.
Those who are not struggling are picking up government bonds left and right.
A government bond is basically the government’s way of borrowing money from businesses and individuals with a pretty decent return and little to no risk.
The rich pick up these bonds and the government pays you interest.
These are seen as very safe investments because unless the government collapses, you’re getting your money and your interest.
More economically developed countries use these financial instruments to regulate the market without the need to print new money and devalue the currency.
There’s a reason why the rich constantly have their eye on the market.
They like to think 1-2-3 steps ahead of the curve and put themselves in the right position to make the most of what’s to happen.
When the virus began spreading in China, many ultra-wealthy individuals have taken notice
and starting selling the stocks that were most likely to be affected by the virus as well as shorting the market.
Short Sellers Made Over $50 Billion During Coronavirus Sell-Off!
Here are 2 examples of this being done right:
Billionaire Bill Ackman, the CEO of Pershing Square Capital Management, turned 27 Million dollars into 2.6 Billion
by betting that the markets are going to crash due to coronavirus.
That’s what using leverage allows you to do.
The second example is a lot shadier:
Republicans Richard Burr, Kelly Loeffler and James Inhofe and Democrat Dianne Feinstein collectively offloaded up to $11million in stock
between late January and early February, weeks before the public got access to the same information.
When the world goes in a frenzy and starts panicking that’s when the rich, calmly go out shopping,
but instead of stocking up on toilet paper, they’re buying shares into some of the biggest companies in the world at a discount.
This is one of those things we took advantage of ourselves during the downturn and our portfolio has provided over 40% returns.
If you click in the top right corner you can see which stocks we purchased and at what price.
We’ve been preparing ourselves for this type of situation for years and now it’s time to act.
There’s a great book we learned how to do this specifically called: Unshakable by Tony Robbins
which we recommend as mandatory read during the coronavirus quarantine.
Even better, go to alux.com/freebook right now and if this is the first time you sign up to audible you can get Unshakable for free as an audiobook.
It’s free knowledge, go get it.
The rich love getting better deals and this is the perfect time to pick up the phone.
Everything you can refinance gets refinanced.
Businesses are so desperate to keep their important clients that they agree to terms that they wouldn't have accepted normally.
Just by picking up the phone and renegotiating the rich are not only increasing their returns but also, freeing up money for everything else on this list.
You’re just not used to negotiating that much...
What if you were a large company and could purchase infrastructure, intellectual property, fully trained employees and raw materials,
that you would normally pay a premium for at a fraction of the cost?! Sign us up.
Big companies are swimming in the market just waiting for their competitors or tangent businesses to collapse
so they can pick up the scraps for cheap.
Think of the airline and cruise ship industry right now.
They’re hemorrhaging money, because nobody’s flying or taking a cruise,
but it doesn’t mean the planes and ships aren’t valuable in themselves, they just need to be used.
Companies aren’t the only thing that’s struggling right now.
We consider real-estate the best possible asset anyone can own.
The process is simple:
prices drop because normal people can no longer afford it
-> the rich come in and pick up everything of value at a fraction of the cost.
Although at the moment the hardest hit are commercial real-estate, over the next 18 months the biggest drop we’ll see in new residential developments.
Developers have been building like crazy, more often than not on credit, assuming the demand will be there when the building is over,
but with people unable to buy, the banks will come knocking asking for the money they’re owed.
If you could buy the apartment you’re living in for half the price it’s worth, why wouldn’t you?!
Recessions are great for those who are able to keep the business going.
It forces you to trim out the fat of the business and go lean.
A ton of people get laid of, those who get to keep their jobs are thankful, costs of doing business drop significantly.
This creates an imbalance of power in the market.
The more people are looking for work, the cheaper it is to hire and the less you have to pay employees,
because there’s always a bunch of people waiting in line at the door to take your spot.
Because the economy is a standstill, banks are also losing money, so they’re doing their best to pick up new business.
They do so by lowering interest rates.
Rich people with a great track record can simply borrow money for little to even zero interest rates.
This is where having done this before and having your credit score ready comes into play as a massive competitive advantage.
This allows them to refinance everything without worry.
The bank will loan you money so you can take advantage of the downturn in the market just because you’ve proven that you are able to pay it back.
In the words of Jay Z:
You might be scratching your head at this one, but we want to share a story and piece of insight many of you might not be aware of.
Dunno how many of you are Tennis fans in the audience, but most of you should know about Wimbledon, the tennis tournament.
For the past 20 years, they actively paid for pandemic insurance.
In total, they ended up paying around $30 million so far in insurance costs.
The payout from the coronavirus claim is ballpark of $140 million, making it one of the best investments anyone could’ve made.
And they’re not alone.
There are many businesses out there who’ve been actively paying for this specific type of insurance
and we’ve seen a surge in the demand for insuring against the next pandemic.
One of the things rich people fear the most is governments devaluing the money they worked so hard to get, through inflation.
Inflation comes as a result when new money is printed and floods the economy.
For the past 100 years, this has been the main play governments have taken in order to stabilize the economy: Just print more!
Taking a look at the USA right now, the fed wants to print $2.3 trillion into the economy to avoid a financial collapse.
As of right now, there are only $1.75 trillion in circulation.
(That’s actual bills in people’s wallets).
With all that new money coming in, there’s a high chance of hyperinflation and the devaluation of the dollar.
The rich see this coming and are looking to safeguard their investments.
They take the money offshore, they buy gold, silver & crypto.
They also diversify their currencies, purchasing less volatile ones, like the Swiss franc or the Norwegian krone.
In order to boost up the economy, governments need people to work.
They begin infrastructure projects and grant these contracts to businesses.
The rich own most of these businesses thus making even more money, but at least they’re hiring people and some of that money trickles down.
Most of yall have probably seen the price of oil drop like crazy in the last few days.
We’re eager to break it down for you, but since we’re trying to keep this short we’ll save it for another day.
When economies come to a stand-still such as it is right now, both people and businesses stop buying raw materials,
thus the price for them drops in direct proportion with the demand.
It doesn’t mean that gas, oil, iron and so on lost their intrinsic value, it’s just that people don’t need them right now!
The rich who’ve been sitting on cash, purchase and store these raw materials and wait for the recession to blow over
before putting them back on the market when the demand -and price- for them returns to normal.
The most thriving sectors of this pandemic have been: eCommerce with a focus on food & products delivery
- of the likes of amazon, online entertainment - of the likes of YouTube, Netflix and so on and don’t even get us started on Pharma as a whole.
Because of the way they structure their portfolios through diversification,
they’re protecting themselves against fluctuations in the market and some of these bets pay off big time.
Every pharmaceutical company right now is rushing towards finding a cure of the coronavirus,
imagine holding stock in that company before they announce they cracked it and are ready for mass distribution.
Another big point we want to touch upon are start-ups thrive in this type of environment.
After 2008 we got Uber, Airbnb and so many others.
The rich are keeping an eye on up-coming start-ups with the option of getting in early as an investment.
Some particular Art, collectibles and premium properties rarely go on the market,
but recessions are special in that sometimes they force wealthy individuals to liquidate their luxuries in order to cover holes in their sinking ships.
That’s when the rich pick up the rare Picasso they’ve been eying for years or that Ferrari 250 GTO that’s been eluding them.
Premium properties never hit the market like most of you are used to.
From personal experience, we can tell you that high-end brokers and real-estate agents already have a curated list of customers
who are notified that said item or property might come up for sale and if they’re interested in placing a bid.
You might not be super-rich, but you definitely have some ideas to come out ahead from this.
As a thank you for watching this until the end you’re getting a bonus:
Before you start putting your tin foil hats on, this isn’t some Illuminati type of information,
instead it has to do with macro-economy and geo-politics
and since we made the video short for the masses, we’ll do a longer dive for you the true Aluxers.
The more you study economic history the more you understand the cyclical nature of it all.
We’re not going to go into long term debt cycle vs short term, you can look that up for yourself,
After the second world war, the USA came out ahead become the #1 top dog in the world.
This gives you certain financial privileges.
The dollar became the international reserve currency and once the gold standard was removed,
the US basically played the money game with Cheat-codes allowing itself to print as much money as it wanted and still retain its value.
This is likely about to change with China overtaking the #1 spot once again.
Many of you may not know this, but historically China has been the world leader for waaaay longer than the US.
The big problem is, these changes don’t come peacefully,
it’s usually war or a great depression that drives them and statistically, we’re towards the end of the cycle and changes are due.
The US plan has been to print money and drive growth without any regard to debt, that’s why it’s currently 25 trillion dollars in debt.
The only way for this to be wiped out is through and international recalibration of power and currency out of which the US hopes to come out ahead.
The moment China overthrows the US as the #1 leading super-power, the YUAN becomes the reserve currency
and the entire US financial system will collapse, forcing the US to retaliate military or accept it’s fate.
Historically, the larger the gap between the rich and the poor the closer you are to war in general.
The first steps are usually a state of unease, losing trust in governments and a rise in populism,
all of which we’ve been seeing all around the world in the past decade.
We’re not smart enough to predict the future, but based on what we’re able to discern,
the coronavirus pandemic isn’t the biggest even to happen in our lifetimes and something bigger is yet to come!
No matter what happens, we hope all of you will find your spot and thrive in the upcoming world.
If you’ve made it up to this point, please write NWO in the comments,
most people will have no idea what it stands for, but we’ll know you watched until the end, so thank you!
