*how exactly do you make money doing that?* yeah so this is a question i get asked quite a lot

so i've said often on the channel that i made my money by betting the economy will be shit forever  

people want to know exactly what that  means so i was an interest rates trader  

when you hear interest rates trading you should always think that that's the trading of loans

essentially the borrowing and lending of money you want to borrow money at a low interest rate

and lend money at a high interest rate so i started working in 2008 in 2008  

central bank interest rates went to  effectively zero all over the world  

which meant that you could borrow money  effectively for free almost for no interest  

but sometimes people will want to borrow money  in a year's time say for example you're a big  

corporation and you've got a loan and you know  the loan is going to expire next year in june  

okay so when next year june comes you're going  to need to get a new loan just like you might  

have a mortgage that expires okay so you've got  a loan it expires in a year and you come to me  

trader at citibank and you say okay i want  to borrow money starting from next year okay  

well at the moment we know that the interest  rate is zero but we don't know what the rates are

going to be in a year's time right? but for the whole sort of 12-year period between 2008 and 2020  

economists and traders generally thought  that the economy is about to recover  

which means that interest rates are about  to go up so even though rates are zero now  

in a year's time they're probably going to be  like two percent, one and a half to two percent  

so if you were to call up a bank and say i want to  borrow money starting from next year they're gonna  

say okay well that's gonna cost you two percent  interest right but i came to the conclusion the  

economy would never recover which means that  rates would stay zero basically permanently  

so i could call these banks up and say okay  what's your interest rate for next year  

they'll say two percent i will say i will lend  you money at two percent next year and then i'll  

just wait and then when next year comes as time  goes by time goes by it slowly becomes apparent  

to people that the economy is not recovering  and that interest rates are going to stay zero  

so as we approach next year everybody starts to  realize oh actually rate's going to stay zero  

but that guy has already agreed to  borrow money from me at two percent right  

so as we come close to the time and the rates  are still zero i can then borrow at zero percent  

lend that by two percent and make the  money in between and if you do that with  

a billion dollars then you make two percent of  a billion dollars which is 20 million dollars

so it's as simple as that basically like  for it's amazing for 12 years after 2008  

everybody thought well not everybody but the vast  majority of economists traders thought that rates  

would go up the following year every single year  which meant that you could always lend money at  

you know one and a half two percent  even though rates were currently zero  

so you could just keep lending money at one and  a half two percent and then just wait a year buy  

it back at zero and i did that trade you know i did that trade in 2011, i did the trade in 2012.  

and then after i quit banking i did that trade  myself every year you know i made money every  

year um and i know the people watching are going  to be like fantastic we can do that trade well  

unfortunately guys watching that trade is not  profitable anymore because now for better or  

worse my basic belief that rates will stay zero  forever is now basically the norm and everybody  

you know the the consensus now is that rates  never go up and i think it's worth seeing and  

thinking about what that means because this is  kind of basically like the global economist in  

the market saying actually we agree with gary  the economy is [ __ ] forever and the economy  

does never get better it's like basically accepted  now in the markets you know that's pretty amazing  

that that's happened um and not only is it  terrible but it means i can't make money  

on that trade anymore which is even worse  than the demise of the global economy um  

but obviously i've still got other trades on  i think you know i don't want to talk too much  

about the trades i've got on now because i don't  want to encourage people into the world of online  

trading which is very very dangerous which  we'll talk more about in future videos  

um but yeah that's a question that i get  a lot what was the trade that you did  

um and that was it that's how i bet on and made  millions of pounds by predicting the disaster of  

the global economy and one thing i'd like to add  is it's a pretty mad world that we live in where  

you can be paid millions of pounds to predict the  collapse of the global economy and the next year  

you can get paid a million pounds again and at  no point does anyone ever think to say maybe we  

should do something about this maybe you should  talk to the prime minister you know maybe you  

should go talk to economist at universities do you see what i'm saying? i do and it's not the  

*i mean i'm aware of the story and originally  it's like well you realize no one else did*  

type of everyone's just a bit ignorant but you're  saying that actually there is the consensus now*  

*that that is the situation* yeah and i think this is *you know that's alarming* this is why i wanted  

to make the video which we made before to explain  what is going on in the economy because right now  

the media has no clue what is happening and is  massively misrepresenting and mis portraying   

whats happening whereas financial markets understand that this situation is absolutely terrible  

and things are going to be [ __ ] for  a long time if we don't do anything  

financial markets are accepting this but the media  is not accepting this so i think people need to  

know because the problem is people in financial  markets know but they're all rich they are not  

going to help you these guys are not going to  save it you know what i mean so the way things  

are going right now rich people are going to do  fantastically well ordinary people are going to be  

massively [ __ ] and ordinary people are not  being told so that's why we have to do this we  

have to tell ordinary people what's happening and  ordinary people unfortunately need to be willing  

to come together to push back against it because  no one is going to save us you know what i mean  

rupert murdoch is not going to save these guys  you know what i mean boris johnson and kirsten  

neither of them are going to save these guys  you know what i mean and the financial markets  

are not going to save them and andrew bailey the  bank of england is not going to save them nobody  

nobody with a voice in economics comes from a poor  background these guys don't give a [ __ ] okay  

they are not going to save ordinary people and  ordinary people are being convinced by youtube  

that the only thing they can do to fight back is  trade monkeys on the internet you know what i mean  

or trade bitcoin you know what i mean listen if  there is no political response the future is going  

to be a [ __ ] disaster and i don't take any joy  from saying that right this is why we are up here  

making these videos because i don't want that to  happen okay this is why i'm not in a skyscraper  

making two million pounds a year because i don't  want that to happen i don't want the future to be  

[ __ ] but it will only not be [ __ ] if ordinary  people come together to do something about it and  

i my worry is that with the last two and a half  years societal trust and societal cooperation has  

broken down to a degree and if ordinary people are  not willing and able to come together we will lose  

so we need to create a space where people come  together and support each other to fight back and  

that means coming together across you know across  class boundaries across racial boundaries across  

you know every kind of boundary you know what i  mean we need men we need women we need people from  

every community to come together because everyone  who is from a poor and ordinary background  

is going to be affected if we don't do  anything and it's going to require to a degree  

people willing to say look i'm not going to spend my time trying to do online trading on the internet

i'm going to devote a bit of time to building some community to to come back against it  

because it's the only way it's the only way you  know it's only if we can only change it for the  

positive if people come together so um that is  why you have to share this video i mean that's  

all we can do you know we're trying to build  something get people together to um to make  

things better to understand what's happening  and um i'll keep doing it you'll keep doing it  

keep making them *um just a little follow on from  that it's interesting because you say that it's*  

*now the consensus that actually you're right and  interest rates will (i'm sure not everyone's like*  

*particularly gary's right) but that interest  rate* that's what they all say *in relation to*  

this cost of living crisis yeah they have actually  marginally put the interest rates up yeah i mean  

yeah exactly and i'm at this point i'm not betting  on the street staying low i do think interest  

rates probably will stay quite low um i'm not  absolutely 100 certain i'm not as confident as i  

have been at times in the past um i'm not betting  on that at the moment uh interest rates could go a  

bit higher my expectation *if they're going up does  that mean the economy's not [ __ ] forever then?*  

not really because what is important this is  slightly technical it's not just the interest rate  

but the real interest rate it's the difference  between the interest rate and inflation because  

you know there are a lot of very countries with  not great economies you know for example india  

does not have a particularly strong economy on  a global scale which has high interest rates  

but also high inflation which means effectively  your money's not growing right because you know  

if you make seven percent a year on your money but  inflation is seven percent a year your actual real  

growth in your wealth is effectively zero  um and i think it's it's not impossible  

i don't think it's the most likely outcome  that the uk is sort of moving into this more  

situation which is common for poorer countries  where inflation is permanently higher and then  

interest rates are permanently higher but you know  what matters is can you actually grow your wealth  

and you know if interest rates are you know at the  moment interest rates have gone up to i think 0.5%  

but inflation is like 7% so you know interest rates  have gone up but in in real terms you've never  

been losing more on your money year by year right  than you are at the moment in terms of purchasing  

the power of your money so um interest rates will  definitely go up further than they are now there  

will be further interest rate hikes i suspect that  in the long run they end up coming back down but  

it's not impossible that they stay a bit higher  but only with higher levels of inflation in my  

opinion and you know this is something which i'm  you know legit professional in and have but i'm  

not betting on introduction right now um because  i don't think that there i don't think that's

something that's particularly misunderstood  by markets at the moment you know  

um i do think that the future looks  very bleak though if we don't if we  

don't do anything and i think the only way to  change that is is political action and i don't  

mean that in terms of vote for this party  vote for that by i mean that in terms of  

push for action on wealth distribution  wealth inequality taxation of the rich

so it's intentionally designed national  insurance so that very rich people  

pay a very low percent there is one other thing  they can do with that mass amount of income  

they can buy your mom's house