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The stock market has set 53 all-time record highs since the election for the first time in their lives. We want to protect those values. We want to keep those values up. People keep saying this time is different. I don't think we've ever seen anything like this. Cash keeps coming into these markets. You don't see it ending. Well, I guess my question would be when. What's up you guys? It's Graeme here. So, I know this sounds insane, but the stock market will literally never go down again. Now, before you call me crazy, a viral thread just laid out a
very convincing argument. Apparently, stons go up is no longer a meme. It's a law like gravity, only in reverse with money. Let me explain. One, we owe 40 trillion in debt. Our interest payments are about to exceed our GDP. This means that the only way to make our interest payments alone is to print enough money to cover the interest. Two, this will cause hyperinflation. But who cares if you own Palanteer or Tesla stock? Those will inflate proportionally. This is why you see any crash instantly recover within half a trading day. The stock market could literally not go down. So, with this in mind, we really have to talk about exactly what's going on. Why the government is now forced to print
more money than we ever thought was imaginable. And if this theory is correct, because if he is right, we could be witnessing the largest wealth transfer ever in history. But if he's wrong, this could be the greatest drug pull of our generation. And most likely, you are the exit. Although, before we start, look, I made a promise in my last video that I would do a push-up for every like and subscribe the video got, and I'm currently on push-up number 259. So, if you appreciate me just breaking myself for YouTube likes, it would mean the world to me if you hit the like button again and subscribed. And as a thank you for doing that, here's a picture of a puppy. So, thanks so much.
And also, big thank you to Surf Shark for sponsoring this video. But more on that later. All right. So, in terms of what's happening and whether or not there's any truth to the idea that stons only go up. Believe it or not, this argument isn't just theory. It's actually based on a true concept that some economists call the great meltup. See, for those unfamiliar, the basic logic just works like this. In every single bull market, we eventually reach the final euphoric phase where prices are no longer driven by earnings and fundamentals, but rather they're driven entirely by momentum. At that point, there's the feeling that everyone else around you is getting rich, along with
the simple belief that prices keep going up because they've so far kept going up. And believe it or not, these meltup scenarios are surprisingly common. They've happened many times throughout history. And the returns during them could be absolutely insane up until the point where all of a sudden they aren't. Like the most recent example was the 1999.com bubble. In this case, from 1995 through March 2000, the NASDAQ rose roughly 400% with the final year alone up nearly 90%. Back then, investors genuinely believed that the internet had
permanently changed the financial laws of gravity. Until all of a sudden, the NASDAQ lost 78% over the following 2 and 1/2 years and didn't fully recover for more than a decade. Or if you want even more extreme, take a look at Japan. Their stock market rose 900% between 1975 and 1989 and land became so valuable that the Imperial Palace was estimated to be worth more than all the real estate in California. Although as soon as Japan started raising their interest rates, the entire economy broke. Their stock market fell 60% in under two years and their economy took the following 34 years just to break even. In fact, great meltups like this never stop because the underlying idea was good or bad, but rather they stop
when there's no one left to keep buying in higher. That's why in terms of what we're seeing today throughout our own economy and whether or not this Reddit post is telling the truth, we need to talk about the 2026 stock market. See, the basic logic behind the Reddit meltup theory goes somewhat like this. The US government currently owes nearly $40 trillion in debt. We're running a $2 trillion annual deficit, meaning we consistently spend more money than we take in for decades, which look, obviously that's not sustainable long term. So the question then becomes, how can the US government get out from underneath that without completely collapsing the economy? Well, historically, the easiest path is just to inflate the debt away. You let the
dollar lose purchasing power over time until that 39 trillion becomes worth a lot less in the future, and there you go. problem solved. In fact, there's even a term for this and it's called financial repression. It's literally how the United States was able to get rid of all of its debt after World War II. Without exaggeration, we printed a lot of money, kept interest rates artificially low, and then over the next few decades, the national debt just quietly disappeared. But here's why that matters in terms of the stocks. When the government inflates their currency, usually anything priced in that currency tends to rise alongside with it. This is exactly why Goldman Sachs just raised
their S&P 500 target to 8,000 this week. Morgan Stanley and Deutsche Bank are also in the same ballpark with 17% growth. And AI is giving corporations a real fundamental reason to justify a lot of that optimism. On top of that, when you look at current valuations, this has been playing out exactly as described. The market has continually hit all-time highs. The M2 money supply keeps increasing at the same pace as the stock market, and we're on target for a $50 trillion national debt by 2030. But here's where the numbers get a little crazy. The stock market right now is expensive. And the amount that investors are paying for earnings, is now at some of the highest levels ever recorded,
roughly double what investors have paid historically. And when you look at the cape ratio, which is a longerterm version of exactly what we're talking about, it has only ever been above 40 twice. once at the peak of the dotcom bubble and once again today. Or to put it differently, stocks are currently more expensive than they were heading into the 1929 Great Depression and the 2008 financial crisis. And the only time that was more expensive relative to today was the peak of the dotcom mania. That is why there's such a massive difference between the stock market could probably keep going higher long-term in a debt driven world and the stock market is mathematically impossible to fall anymore because the
market isn't just pricing in a debt driven meltup. It's recording something that's only ever happened once before in the last 140 years. And the last time that happened, it didn't end so well. So, in terms of what this means, if there's truth to the great meltup theory, and then most importantly, what you could do about it to come out ahead, here's what you came for. Although, before we go into that, building wealth isn't just about earning more, investing smarter, and protecting your money from inflation. It's also about protecting what you already have, especially in a world where more of your money, accounts, and personal information are online than ever before. Like the same
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lot of credit because I think it accurately describes what a lot of us are feeling. Like I was scrolling Reddit the other day and I saw the headline AI stocks keep ripping and it honestly feels kind of weird and I think that accurately describes what a lot of us are thinking. However, there are a few things in here that's not the full picture. And to give you an idea of what's actually going on along with some flaws that no one's talking about, we need to discuss claim number one. Interest payments are about to exceed GDP. This one is completely false. Although in fairness, I have a feeling they probably meant to say that the debt to GDP ratio is exceeding 100%. Which would be true. But as you could see,
this previously occurred in the 1950s, and they were able to successfully print their way out of it to the point where the market completely recovered and then kept ripping higher. Which brings me to claim number two. The only way to make interest payments is to print more money. Again, this one is also not entirely true. Like, I know a lot of people want to believe that there's some dude out there just pressing a button printing money to pay off the debt, but in reality, the government's just able to borrow everything they need to pay the debt by selling treasuries to investors, pension funds, corporations, foreign governments, and anyone else who wants a stable return on their money.
Now, obviously, that doesn't mean this is sustainable forever because the more we borrow, the more interest we pay, which means the more we borrow, which means the more treasuries we have to sell. But saying that we have to keep printing more money skips over quite a few steps because the real issue isn't whether or not we've hit a breaking point. It's if we're getting closer to that point where every other option becomes a lot more painful. Which leads me to claim three. Stocks inflate proportionally with hyperinflation. Look, as fun as it is to think that stocks keep ripping higher because they print more money, in reality throughout history, that hasn't always been the
case. Like as some real examples here, between 1918 and 1922, the German stock market lost 97% of its value before the hyperinflationary peak. And even though nominal prices did eventually skyrocket, most people were forced to sell at the very bottom to pay for rent and food. Or take a look at Zimbabwe. The stock market rose 500fold in nominal terms during hyperinflation, then lost 99.8% of its value compared to US dollars. Even Venezuela posted a 22,000% return in 2018 while the economy contracted by over 50%. At which point most people were left progressively poorer. On top of that, we saw something similar happen in the United States throughout the 1970s, even though
inflation averaged around 7% a year. The stock market basically went nowhere after adjusting for inflation. This means on paper, you might think that you have a lot more money, but in terms of purchasing power, you could be in the exact same spot as today. That's why in terms of what's most likely going to happen next, as well as what you could realistically do about it, here's what you need to know. And it all has to do with the exit plan. As of right now, history has shown us that based on all the past data and every hyperinflation event before us, most likely the United States is not going to default on its debt. The United States is not going to experience unprecedented hyperinflation,
and we're probably not going to see a great meltup based on endless money printing caused from the national debt. Instead, the most realistic outcome is probably a long drawn out period of financial repression. When this happens, inflation runs a little higher than interest rates, and over time, the debt becomes easier to manage because every dollar in the future is worth a lot less and therefore easier to pay back. Now, the trade-off here is that savers quietly get squeezed. Cash loses value. Prices keep moving higher and asset prices might rise in dollar terms. But after inflation, your returns could be significantly lower than a lot of people have gotten accustomed to. Or I guess
put more simply, even though asset prices go higher, you might not necessarily feel more rich. This would all suggest that we continue to see 3 to 5% inflation cycles. Maybe interest rates drift lower. Occasionally, the market freaks out, but it never completely collapses. At the same time, the government uses a mix of higher taxes, slower spending growth, and inflation to gently manage the debt burden over decades. It's not going to be dramatic. It's not going to be newsworthy. It's just going to quietly run in the background until one day a hamburger starts costing $35. Now, for the stock market specifically, yes, prices will keep drifting higher because this is what usually happens when the dollar loses purchasing power. But the
mindset of stocks go up over time is very different from stocks can't crash along the way. Like the stock market could still fall 30, 40, 50, 60% and then recover later to brand new all-time highs. These two things could be true at the same time. But again, by all metrics, the stock market is expensive. All it takes is one event for us to see a pretty quick 20% decline. Nothing is risk-free. And remember, high debt doesn't necessarily always mean high inflation. It does not automatically mean pump the stock market. And it definitely doesn't mean that you should put your entire financial future on the line, assuming that a bailout is guaranteed. So, in terms of what I'm doing about this and my own thoughts
going forward, here's what you came for. The way I see it, this Reddit post is directionally right, but mechanically wrong. Yes, in a high debt world, the government has an incentive to let inflation do a lot of the heavy lifting over time. And long-term, that tends to favor stocks and assets. This part it got correct. But this idea that it's mathematically impossible for the stock market to fall is probably one of the most dangerous things that you could ever believe as an investor. Because this is what causes people to buy in at record high valuations with no margin of safety on leverage without any idea or preparation for what happens when it does what it does many times
before and that is fail. And look, the market could keep going higher for a very long time. There's a lot of smart people out there who think that this could be just the very beginning. I'm not calling for a crash. I have no idea what's going to happen. It's just that throughout history, the people who beat inflationary periods were not the ones who went in with the most leverage or who speculated the most or who went allin on one thing. They were just the people who kept the steady income, diversified, kept some cash on the sidelines and made sure that no matter what, they weren't forced to sell. Like, here's the part that nobody talks about.
Stocks will outperform cash over the long term, but there are periods of sometimes a decade or more where you lose money in the stock market or it goes absolutely nowhere. And a lot of people out there are not as patient as they think. That's why I just think it's best to keep buying in, stay diversified, always keep a margin of safety on the sidelines just in case, and don't base your entire financial future on a viral Reddit post, including this one. But then again, I'm just a random dude on YouTube and I have no idea what I'm talking about. So, let me know what you think down below in the comment section. I will do my best to read and reply to as many of you as I can. And also, if you want early access
to videos like this along with a bonus video every single week on the markets, channel member financial audits or personal investments, feel free to join as a channel member. I'm posting a lot of extra topics there that just aren't YouTube algorithm friendly. So, feel free to join. That would mean a lot. And I'm reading all of your channel member comments, by the way. I just get a notification on my phone when you guys comment. So, I really appreciate it. Thank you so much.
