Summary of 🚨 "Hoop op het beste, maar houd rekening met het ergste..." | Madelon Praat

00:00:00 - 00:55:00

In this section, Madelon Praat discusses the recent remarks made by Jerome Powell, the president of the US central bank, about the need to bring inflation back to a normal level by rapidly increasing interest rates, which could potentially lead to a recession, housing market correction, and job loss. Madelon also mentions her goal of reaching 100,000 subscribers and encourages viewers to support her channel. She then discusses the recent interest rate hike and its potential consequences on the economy, including impacts on mortgages, pensions, the stock market, and the labor market. The graph shown represents the desired interest rate trajectory, but there are varying opinions within the central bank about the path forward. The speaker emphasizes the importance of considering the worst-case scenario and preparing for potential damage in case a recession occurs. She then discusses a recent study on energy bills in the Netherlands and the impact of inflation on the housing market and wider economy. The section concludes with a

• 00:00:00 In this section, Madelon discusses the recent remarks made by Jerome Powell, the president of the US central bank. Powell stated during a press conference that while his plan is to bring inflation back to a normal level by rapidly increasing interest rates, this could potentially lead to a recession, a housing market correction, and a loss of jobs. Powell hopes that these measures will help curb inflation, but it is uncertain whether this hope has turned into a monetary theory. Madelon also mentions her goal of reaching 100,000 subscribers and asks viewers to support her by subscribing to her channel. She then moves on to discuss the recent interest rate hike and the potential consequences it may have on the economy, including impacts on mortgages, pensions, the stock market, and the labor market. Powell's speech also indicated that policymakers expect interest rates to continue rising in the US, with expectations pointing to a range of 3% to 3.5%, potentially reaching 4.6% in the future.
• 00:05:00 In this section, Madelon discusses the different views within the central bank regarding interest rates. On one side, there are those who want to raise rates, while on the other side, there are those who prefer a more moderate approach. Economics is not an exact science, and different economists can have different theories and predictions. Madelon also mentions that the current monetary situation is an experiment, highlighting the risk of hyperinflation. She emphasizes that monetary theory is not set in stone and that disagreements among economists are common. The graph shown represents the desired interest rate trajectory, but there are varying opinions within the central bank itself. The interest rate has a significant impact on various aspects of the economy, such as pensions, stock market, housing market, and mortgage rates. Madelon also mentions the potential negative effects of inflation and a possible recession, despite central banks' efforts to maintain consumer confidence. The goal is to achieve a soft landing, reducing economic growth without causing a recession, but the chances of this happening are getting slimmer. Additionally, Jeroen Paauw admits that no one can accurately predict if this process will lead to a recession and how severe it will be.
• 00:10:00 In this section, the speaker discusses the importance of price stability and how central bankers prioritize long-term stability over short-term political gains. The goal of a central banker is to ensure stability and economic growth in the long term, even if it may cause short-term discomfort. The difference in perspective between central bankers and politicians is highlighted, with politicians often focusing on short-term concerns to secure re-election. The potential risks of inflation getting out of control, leading to stagflation, are also mentioned. The speaker emphasizes the importance of maintaining trust in the economy and discusses indicators suggesting a possible recession in the eurozone. The mismatch between policy rates and inflation in the United States is also brought up as a factor contributing to inflationary pressure. The section concludes by mentioning Germany's potential recession and how these economic challenges could have been anticipated.
• 00:15:00 In this section, Madelon discusses the hope for a mild economic slowdown without falling into a deep recession. She explains that while a recession is not necessarily a bad thing in the natural ups and downs of the economy, it can still have damaging effects if multiple negative factors converge rapidly. Madelon emphasizes the importance of considering the worst-case scenario and preparing for potential damage to a large group of people, not just in third-world countries, but also in Europe and the Netherlands. She also raises the question of when hoping for the best became a trend, considering the historical challenges of stagflation and the limited options for raising interest rates to combat inflation. Madelon points out the high levels of debt and the need for confidence in the economy. She mentions the possibility of the situation going out of control and highlights the uncertainty of whether current policies will bring inflation back to a normal level or if it will become difficult to control. She explains how inflation can alleviate the burden of debt for individuals and governments but acknowledges that it negatively affects the value of money for savers. Madelon concludes by discussing the factors contributing to inflation, including rising commodity prices, and mentions ABN AMRO's peculiar statement that there is currently no energy crisis.
• 00:20:00 In this section, Madelon discusses the findings of a recent study on energy bills in the Netherlands. The study reveals that the average monthly energy bill has increased by 26% compared to the previous month, indicating a quarter increase in energy costs for households. However, it is important to note that the study only considered the advance payments and not the final settlements, so the actual figures may differ at the end of the year. While some extreme cases may require people to pay €500, it is not yet seen as a major problem by the energy companies, although they anticipate an energy crisis in the near future. Madelon also talks about the impact of inflation on the economy and the concerns of the ABN AMRO bank about adding more money to the system, as it may result in higher prices and limited supply. Additionally, she briefly mentions the implementation of a price cap on energy prices and the uncertainties surrounding it. Madelon further highlights the role of taxes in the upcoming year and how it will affect self-employed individuals and small business owners. She also mentions the recent agreement in the metal sector, where employees will see a 9% increase in wages over 18 months, contributing to further inflationary pressure. However, FNV, the largest trade union in the Netherlands, argues that wages should be compensated to maintain purchasing power, contradicting the viewpoint that the economy and businesses would be negatively affected by such increases.
• 00:25:00 In this section, the speaker discusses the impact of inflation and rising costs on businesses and consumers. While politicians may view inflation as a positive aspect that can lead to increased wages and spending, entrepreneurs face challenges such as rising raw material prices, energy costs, production expenses, and transportation fees, which cannot be fully passed on to consumers. The speaker provides an example to illustrate how automatic wage increases tied to inflation can further escalate inflation and create economic difficulties. As a result, many businesses are unable to keep up with rising costs, leading to layoffs and job instability. The shortage of available personnel exacerbates the situation, causing even more challenges for small entrepreneurs. Ultimately, the speaker highlights the potential negative consequences of inflation on the economy and the need to consider both optimistic and pessimistic scenarios when analyzing its impact.
• 00:30:00 In this section, the topic of higher taxes for entrepreneurs in difficult times is discussed, particularly in relation to the upcoming repayment of deferred taxes from previous lockdowns. It is noted that this tax burden will be challenging for businesses that are already struggling. Additionally, there is concern over the timing of the 2023 tax plan, which is seen as coming at an inconvenient moment. The director and major shareholders of companies are expected to be hit hardest by these tax changes. Therefore, it is emphasized that it is crucial for them to start building wealth within their holdings to cushion the impact of these financial challenges. The speaker also mentions her ongoing work on a comprehensive financial education program, which she believes to be a valuable resource that encompasses various aspects of finance, including central bank policies, money creation, mindset, portfolio building, and macroeconomics. The program is described as a result of extensive time, energy, and dedication, aiming to provide the best possible content. The speaker invites interested individuals to sign up for updates on the program's progress. Furthermore, attention is given to the increasing interest rates in the capital market, with a significant rise observed over the past couple of weeks. The potential impact of this rise on housing prices is highlighted, emphasizing the need for an understanding of the calculations behind reported price increases. It is explained that the reported 11.9% increase in August is based on a year-over-year comparison and does not reflect the month-to-month changes. A closer look reveals that the rate of price increases has actually slowed down, suggesting a potential gradual decline in price growth. Therefore, it is important to consider the context and not solely rely on headline figures.
• 00:35:00 In this section, Madelon discusses the recent housing market trends and their potential impact on the economy. She notes that while the housing prices have technically decreased by 0.2% in the past month, this is not reflected in the overall numbers due to the way it is measured. Madelon highlights the significant increase in mortgage rates in America, which could also affect the European and Dutch housing markets. She explains that the role of the central bank in raising interest rates will lead to a decrease in house prices, although this might not be immediately visible as buyers and sellers are cautious. Madelon emphasizes the predictions of housing market corrections by experts such as Klaas Knot and Christine Lagarde. Additionally, she compares the inflation rate and housing price increase, suggesting that inflation is not effectively correcting housing prices anymore. Madelon also raises concerns about the use of mortgages as a means to finance other expenses, creating a potential bubble in the housing market. She estimates that around 1.5 to 2 billion euros were spent on non-housing expenses using mortgage funds in 2021, but this trend is expected to decline as house prices decrease. Overall, these factors highlight the potential risks and challenges in the housing market both in the Netherlands and globally.
• 00:40:00 In this section, Madelon discusses the significant increase in debt in America, particularly in relation to credit cards. Many people are struggling to make ends meet and rely on credit cards to cover their expenses. However, there is little education on the consequences of debt, and interest rates are rising, making it even more difficult for individuals to pay off their debts. Madelon emphasizes the importance of managing debt and ensuring that the interest rates are manageable, such as with mortgages. Additionally, she highlights the financial challenges faced by central banks, using the example of the central bank of Belgium, which has seen a significant decline in value. This is due to the fact that some central banks are privately owned and listed on the stock exchange, exposing them to potential losses. Madelon suggests that it might be wise for individuals to consider selling their shares in these banks. Overall, financial education and careful debt management are crucial in navigating these challenging times.
• 00:45:00 In this section, the excerpt discusses the potential need for additional measures, such as capital injections from the Dutch government, to restore the balance and address the potential shortage of capital for the central bank. The transcript also mentions the importance of central banks having sufficient buffers to maintain independence and credibility. It highlights that while central banks can technically operate with negative net worth, there is a limit to how effective their monetary policy tools will be if confidence in their credibility is lost. The excerpt also mentions the European Central Bank's recruitment of Amazon for testing the digital euro, emphasizing the importance of maintaining trust in the central bank as technological advancements are made. The discussion then transitions to the idea of a central bank digital currency potentially replacing physical currency in the future, and the implications that may have on privacy and personal liberties. Overall, it raises the possibility of a currency reset and the potential consequences of transitioning to a digital monetary system.
• 00:50:00 In this section, Madelon discusses the potential opportunities in the crypto market, particularly in relation to gold and silver. She highlights the historically stable purchasing power of gold, using the example of the Big Mac to demonstrate how the price of gold has remained relatively consistent over the years, despite fluctuations in the value of the dollar. Madelon emphasizes the importance of including gold and silver in one's portfolio to preserve purchasing power and protect against inflation. She also mentions Coinbase's registration with the Dutch bank, signaling the continued growth and development of the cryptocurrency industry. Additionally, she briefly touches on the recent market downturn and attributes it to new regulations in the crypto space.
• 00:55:00 In this section, the speaker briefly discusses a giveaway they are doing with six cryptocurrency experts within the Monitors Community. They are offering a one-year subscription to Money Talks for those who share the video with their friends or acquaintances. They emphasize the importance of spreading knowledge about money management and wealth preservation. Moving on to the charts, the speaker notes that the market is still in a downward trend, but there are signs of higher RSI levels. They mention the importance of finding a bottom formation and suggest the possibility of Bitcoin returning to the support line around 13,000 to 14,000. However, they caution that this process will take time and emphasize that a downward movement does not mean Bitcoin will go to zero. The speaker observes a slight increase in volume, which should confirm the trend. They conclude by thanking viewers and encouraging them to follow them on Instagram for the latest news and updates.