How to use 2024 Recession To Get Rich (Do This NOW)

Summary

The transcript discusses the looming possibility of a U.S. recession, despite the government's altered definition of it. It highlights the Federal Reserve's role in managing the economy and the concept of a 'soft landing,' where the economy gradually declines. The speaker argues that recessions can be opportunities for wealth creation, as seen with the expansion of the billionaire list during crises. The script also touches on the risks of large companies becoming complacent and losing sight of long-term growth. It emphasizes the importance of understanding market dynamics and taking calculated risks during economic downturns, suggesting that the U.S. economy's heavy reliance on debt and ongoing geopolitical tensions could lead to significant changes and investment opportunities.

Takeaways

• 📉 Recession rumors in the US have been circulating since 2012, with the Fed's rate hikes and changes in the definition of recession.
• 💹 Despite two consecutive negative GDP growths, the US economy is considered fine due to the Fed's careful rate adjustments.
• 📊 A 'soft landing' is predicted by some, where the economy gradually declines without a sudden crash, while others foresee a 'hard landing' with an instant economic crisis.
• 🌐 The stock market doesn't always reflect the economy's health, but in the long run, it will follow the economic trends.
• 🇬🇧🇯🇵 The UK and Japan, two major economies, have recently entered recessions, which could negatively impact the global economy, including the US.
• 💰 Recessions can be seen as opportunities for wealth creation, as history shows that crises often lead to an expansion of the billionaire list.
• 🚀 Large companies may lose competitive edge by focusing on short-term profits rather than long-term market conquest, as seen with Boeing and Lehman Brothers.
• 🔄 After every crisis, the market recovers and grows, with those who understand market dynamics and invest during downturns reaping significant returns.
• 💵 Since 2008, the US economy has become highly dependent on debt, with the Fed's money printing as a solution to economic crises.
• 🌍 Geopolitical changes, particularly the US's role as global police, could significantly affect the economy and present investment opportunities.

Q & A

What was the initial trigger for the rumors of a recession in the United States?

The rumors of a recession in the United States started in 2012 when the Federal Reserve hiked the interest rates.

How did the government change the definition of a recession?

The government changed the definition of a recession to not solely rely on two consecutive negative GDP growths, despite the United States experiencing this condition.

What is the Federal Reserve's role in managing the economy during a potential recession?

The Federal Reserve's role is to manage interest rates in a way that does not destroy the economy, even though market crashes, bankruptcies, and job losses may occur.

What does a 'soft landing' in economic terms mean?

A 'soft landing' refers to a gradual and controlled slowdown of the economy, avoiding an instant slide into a recession or financial crisis, minimizing the shock to the economy.

How does the stock market relate to the overall economy?

While the stock market is not always a direct reflection of the economy, it will eventually follow the economic trends. A struggling economy can lead to rising unemployment and less consumer spending, which negatively impacts company revenues and stock prices.

What impact do global economic conditions have on the United States?

The United States is affected by global economic conditions, as seen with the recent recessions in the United Kingdom and Japan, which can have a negative impact on the global economy, including the U.S.

Why is a recession sometimes seen as an opportunity for wealth creation?

A recession can be an opportunity because it often leads to a devaluation of assets. Risk-takers who understand market dynamics can buy assets at a discount and potentially make significant profits when the economy recovers.

What are the consequences of companies focusing solely on short-term profits?

Focusing solely on short-term profits can lead to a loss of long-term market position and competitiveness. Companies may cut corners or neglect product quality, which can ultimately harm their reputation and financial standing.

How did the Federal Reserve respond to the 2008 financial crisis and the COVID-19 pandemic?

In response to the 2008 crisis, the Federal Reserve printed trillions of dollars to bail out large companies. Similarly, during the COVID-19 pandemic, the Fed printed more money and distributed it widely to support the economy.

What is the current state of the U.S. economy in relation to debt and potential for a recession?

The U.S. economy is highly dependent on debt and has never been in such a position before. The amount of money printed during the COVID-19 pandemic alone far exceeds that of previous crises, such as World War II, which could potentially lead to inflation and economic instability.

How might geopolitical changes impact the U.S. economy in the near future?

Geopolitical changes, such as the outcome of the U.S. presidential election and shifts in global order, could significantly affect the U.S. economy. Changes in foreign policy, military spending, and the role of the U.S. as a global leader can influence economic stability and growth.

Outlines

00:00

📉 Recession Rumors and Economic Indicators

This paragraph discusses the ongoing rumors of a recession in the United States, which began in 2012. It mentions the Federal Reserve's rate hike and the government's changed definition of a recession. Despite two consecutive negative GDP growths, the U.S. was not officially in a recession. The Fed's actions are credited with preventing economic collapse, although there was a market crash, company bankruptcies, and job losses. The paragraph also touches on the concept of a 'soft landing' and the possibility of a 'hard landing,' where the economy falls into crisis. It emphasizes that the stock market does not always reflect the economy's health, and a weak economy can lead to a stock market crash. The script also notes that two major economies, the UK and Japan, have recently entered a recession, which could negatively impact the global economy, including the U.S.

05:01

💡 Opportunities in Recessions

The second paragraph explores the idea that recessions can be opportunities for wealth creation. It argues that recessions and financial crises have historically expanded the list of billionaires and millionaires. The wealth in the economy does not disappear during a crisis; instead, it becomes undervalued due to negative perceptions. Those who understand market dynamics and take risks during uncertain times can accumulate wealth by investing in undervalued assets. The paragraph also highlights the importance of not giving in to fear and making decisions based on facts and logic. It uses the examples of Boeing and Lehman Brothers to illustrate how large companies can lose their competitive edge by focusing on short-term profits.

10:02

💸 The Impact of Debt and Government Policy

This paragraph delves into the U.S. economy's dependency on debt since the 2008 financial crisis. It explains how the Federal Reserve's aggressive money printing post-2008 led to economic growth but also to inflation. The script contrasts the amount of money printed during World War II with the amounts printed during the COVID-19 pandemic, highlighting the unprecedented scale of recent monetary policy. It also discusses the potential for geopolitical changes, such as the outcome of the U.S. presidential election, to significantly alter the economic landscape and create investment opportunities.

15:03

🌐 Geopolitical Shifts and Economic Future

The final paragraph addresses the geopolitical tensions and the U.S.'s role as a global police force. It contrasts the Democratic candidate's stance on maintaining this role with Trump's desire to reduce U.S. involvement in global security. The paragraph suggests that the current global order, maintained by U.S. military spending, provides American companies with a competitive advantage. It warns that upcoming geopolitical changes could have significant economic implications for the U.S. and advises investors to be prepared to capitalize on these shifts.

Keywords

💡Recession

A period of economic downturn where there is a significant decrease in economic activity, typically measured by a fall in GDP. In the video, it is discussed that the US is facing the possibility of a recession, which is a concern due to its impact on jobs, businesses, and the stock market.

💡FED (Federal Reserve)

The central banking system of the United States, responsible for implementing monetary policy. The video mentions the FED's role in hiking rates and its influence on the economy, including its actions during the 2008 financial crisis and the COVID-19 pandemic.

💡Soft Landing

An economic term referring to a scenario where an economy slows down gradually without entering a severe recession or depression. The video discusses the prediction of a soft landing for the US economy, which would be a preferable outcome to a sudden economic crash.

💡Stock Market Crash

A sudden and significant drop in the value of stocks, often signaling broader economic problems. The video connects the health of the economy to the performance of the stock market, suggesting that an unhealthy economy can lead to a stock market crash.

💡Inflation

A general increase in prices and fall in the purchasing value of money. The video explains that the Fed's actions, such as printing money, can lead to inflation, which erodes the value of the dollar and affects the economy.

💡Debt

An amount of money borrowed by one party from another, with the expectation that it will be repaid with interest. The video highlights the US economy's dependency on debt for growth, which could be a vulnerability in the face of economic challenges.

💡Global Geopolitical Changes

Shifts in the political landscape on a global scale that can impact economic stability and international relations. The video suggests that upcoming elections and potential changes in US foreign policy could have significant effects on the economy.

💡Risk Takers

Individuals or entities willing to take on significant risks in the hopes of achieving higher rewards. The video emphasizes the role of risk takers in capitalizing on opportunities during economic crises, such as recessions.

💡Wealth Redistribution

The process by which wealth is transferred from one group to another, often as a result of economic upheaval. The video discusses how recessions can lead to a redistribution of wealth, with some individuals and companies gaining while others lose.

💡Economic Recovery

The period during which an economy regains its previous level of output and employment after a downturn. The video suggests that despite economic crises, the US economy has a history of recovering and growing, providing opportunities for those who understand market dynamics.

💡Investment Opportunities

Situations in which assets can be purchased at a lower price with the expectation of future gains. The video encourages viewers to recognize and seize investment opportunities during economic downturns, as these periods can offer significant potential for profit.

Highlights

The United States is facing potential recession, with rumors starting as early as 2012.

The government changed the definition of a recession, despite two consecutive negative GDP growths.

The FED's rate hike strategy aimed to avoid economic destruction, despite market crashes and bankruptcies.

A soft landing is predicted, where the economy gradually falls into crisis without sudden shock.

Data suggests a hard landing is possible, with the economy instantly falling into crisis.

The stock market does not always reflect the economy's health, and a struggling economy can lead to a market crash.

The UK and Japan, two major economies, have officially fallen into a recession, impacting the global economy.

Recessions can be seen as opportunities for wealth creation, as seen in the expansion of billionaire lists during crises.

Wealth during a recession doesn't disappear; it's just perceived negatively, leading to lower spending and asset value.

Risk-takers understand crises and invest when the future is uncertain, potentially leading to significant gains.

Large companies may lose out during recessions due to short-term profit focus and complacency.

Boeing and Lehman Brothers are examples of companies that lost out due to a lack of long-term focus.

The US economy's dependence on debt growth since 2008 has led to a unique economic position.

The Federal Reserve's money printing post-2008 has been a significant factor in economic growth.

The 2020 pandemic led to the Fed printing trillions of dollars, causing significant inflation.

The US economy is currently not showing signs of immediate recession, but its debt dependency is a concern.

Geopolitical changes, such as the US election outcome, could significantly impact the US economy.

Investors should be prepared to take advantage of opportunities during economic crises.

Transcripts

report after report is showing that that

the United States is about to face a

recession the rumors of a recession

started way back in 20122 when the FED

just hiked the rates but then the

government changed the definition of a

recession even though that the United

States actually experien two consecutive

negative GDP growth which is what a

recession is that's a brilliant way to

say that the United States is not in a

recession we're doing fine however we

have to give credit to the FED for

accurately hiking the rate in such a way

that they did not destroy the economy

yes of course there was a market crash a

lot of companies went bankrupt a lot of

people lost their jobs but overall the

economy is doing fine and a lot of

economies since then started predicting

a soft Landing even the chairman of the

FED himself J Paul a soft Landing is

when the economy doesn't instantly

slides into a recession or a depression

or any kind of financial crisis but

gradually falls into a crisis

that will be perfect for the economy

because no one is going to experience a

shock when everything is falling down

when the stock market is collapsing but

a lot of other economies are saying that

there will not be a soft Landing yes

everyone wants a soft Landing but the

data is indicated to the fact that there

could be a hard Landing where the

economy will instantly fall into a

crisis it will instantly fall into a

recession the economy isn't always a

reflection of the stock market sometimes

the stock market might be doing perfect

it might be keep growing but the economy

is suffering people losing their jobs

however in the long run the stock market

will always follow the economy I mean

when the economy is in a crisis

unemployment starts rising and when

unemployment Rises people will have less

money to spend they will have to dig

deep into their pockets in order to put

food on the table and that will reflect

in the revenue of these companies these

multi- trillion dollar companies are

traded in the stock market so when they

start showing less Revenue in the next

quarter investors will be scared to

invest more and that will reduce the

demand for their stocks and will lead

these stocks to collapse and fall down

and when that happens on a massive level

we will have a stock market crash so

unhealthy economy will always lead to a

stock market crash anyways if you have

been watching the news you probably

realize that two major economies just

this week have fallen into a recession

the United Kingdom one of the world's

largest economies out there and Japan

which is the world's third largest

economies them falling into recession

will definitely have negative impact on

the global economy including the United

States I mean these two countries have

been stagnating for the last decade or

so but officially they have just fallen

into a recession but a lot of people

don't understand that a recession isn't

always something bad yes of course

there's a long list of negative

consequences of a recession while people

start losing their jobs they will have

less money they will have to spend their

savings however if you look at it from a

whole different perspective you will

realize that recession is actually an

opportunity an opportunity to make a lot

of money I mean there is nothing that

gives you more opportunity than a

recession nothing creates more rich

people than financial crisis especially

when it's a recession if you take a look

at the list of billionaires you will

realize that every single time when

there is a crisis the list of

billionaires suddenly starts expanding

it starts growing in fact you will also

realize that some billionaires will be

replaced it doesn't just happens with

billionaires it happens with regular

rich people remember for every

billionaire that's out there they like

thousands of millionaires so whenever

there is a crisis if even if we have one

billionaire joining the fobes Leist we

have thousands of people who took

advantage out of this crisis and made

millions of dollars when there is a

crisis remember the wealth that is there

in the economy doesn't disappears it's

still there part of the economy what

happens to that wealth is that the

perception of people about the future of

the economy starts being negative so

they start spending less that will drop

the value of that wealth in the economy

but it's still there in the economy

because people are afraid to spend

people are afraid to buy stocks in fact

they start selling stocks so the value

of that wealth during that period will

fall down and the people who understand

how crisises work people who understand

who are not afraid who are Risk Takers

they understand that sooner or later the

economy will recover they start jumping

in and buying those assets and that's

what taking risk means when the future

is uncertain when the future looks

blurry that's when you jump in and start

investing and start buying and start

opening a business if you have

analytical mind and you understand the

nature of crisises and you understand

the nature of the market instead of

giving up to the emotions you start

thinking with your mind you start taking

decisions based on fact and logic and

the circumstances on the ground yes

everything is falling down right now but

that's not a forever thing it will

recover because you have done your mouth

and you know what's happening the media

will of course start exaggerating the

crisis but because you understand how

everything works you're not going to

give up to the emotions of fear but the

question that a lot of people have in

mind is that how on Earth do these

newcomers actually take advantage out of

this CR is while the world's largest

companies sometimes do not I mean these

companies have more money they have more

resources they have more people but

somehow these newcomers are able to take

advantage out of this opportunity and

the wealth changes hence I mean isn't

that something weird well what happens

usually is that all of these

multi-billion or sometimes

multi-trillion dollar companies get

comfortable they stop seeing the big

picture they start focusing on the

short-term profits in instead of

actually Conquering the market over the

long run and that's how they lose

competition take a look at boing it's

one of the most successful companies out

there it's literally an American icon

when you think of the United States you

think of boing and they have built boing

737 it went on to become the most

successful plane in history over 10,000

of them were produced and even today 50

years later 5,000 Airlines across 200

countries are using boing 737 but guess

what's happening today Boeing is losing

competition why because they have

focused on building the next plane with

the mindset to make as much profit as

possible it's absolutely normal when

companies are focused on making more

money but when making more money becomes

the only priority and you stop focusing

on create on making a great product

that's when you start losing and that's

what happened to boing they started

cutting a lot of Corners when building

that plane and that product has a lot of

problems today it's actually causing

boing a lot of money every single day

for not being able to produce a proper

plane that could challenge Airbus today

lemon Brothers is another example I mean

if you just go back to 2007 ask anyone

that will lemman Brothers go bankrupt

nobody will ever believe you because

this is an American icon this company

has been out there for over a hundred

years this was the biggest shark on Wall

Street and in 2008 it went bankrupt why

because the CEO the management of that

company focus on filling their pockets

instead of growing the company and

that's why it went bankrupt so don't be

discouraged by the fact that you're a

small fish in this fast ocean filled

with Wall Street Sharks even if you

don't have as much money as Wall Street

even if you don't have as much resources

as they have that doesn't mean that you

cannot take advantage out of that crisis

you might not be building the next

billion doll company but every single

person during this period have the

ability to actually take advantage and

build some wealth no matter how bad it

gets no matter how dark it gets the

economy will bounce back take a look at

this chart what you see here is that all

of the crisises that happened over the

last 50 years what you see constant here

is that after every single crisis yes

the market has tanked into a crisis but

it literally recovered and kept growing

when the crisis just happened it created

a panic in the market and the people who

gave up to their emotions who did not

understand how the market Works they

started selling their assets but at some

point the market cannot just keep

crashing because the US economy has

solid foundations and it start growing

especially when the people who've been

waiting for this opportunity who've been

saving their money jumped in and started

buying those assets the market starts

recovering and starts growing and the

same thing repeats over and over the

people who understand how everything

works the people who actually been

saving their money in order to buy those

assets at a huge discount made a lot of

money but the people who did not

understand how everything works the

people who gave up to their emotions

lost their assets and sold them at a

huge discount as one of the legendary

investors once said Nathan rild buy when

there is blood in the streets and that's

the definition of a risk when you buy

something and the future is a bit blurry

when you don't know what exactly is

waiting for you the higher the risk the

higher is the reward the higher is the

return that you can make on your

investment of course you can go out

there and buy and invest in the safest

assets for example such as Government

bones you know for a fact that you will

get your money back especially if you're

buying a US Government Bond you know

that the United States is not going to

go bankrupt they have the FED that is

ready to print any amount of money that

the government wants people might say

that fed is independent it's privately

owned but guess what who appoints the

head of the fed the president of the

United States in 99% of the cases when

the FED says that it's going to print

money they're printing money because the

government told them to do so so if the

government runs out of money to pay you

back they will just ask the FED to print

that money and they will give you back

and the worst case scenario is that

unlike your friend who might actually

lose his job and might not be able to

pay you back the government can simply

raise the taxes and pay you back the

government literally has the best source

of passive income people are constantly

working they have their jobs and they're

paying their taxes and if the government

needs money urgently they will just

raise the taxes and pay that money

easily and that's why you cannot expect

higher returns when it comes to Safe

investments just government bones but

when it comes to a recession you can

easily make like a 100% of your money

some people who are so good at

predicting recessions and are preparing

for it can actually make like 1,000% in

a single year so how close is the US

economy from a recession since 2008 the

US economy got hooked on cheap money up

until 2008 cheap money wasn't really

playing such a big role like it's today

up until 2008 the total printed money

was less than a trillion dollars all of

the money that the FED has printed was

less than a trillion dollars but then in

2008 you will see a spike overnight the

Federal Reserve printed another trillion

dollar

it went to up to like 2.3 or $2.5

trillion that's when the FED realized

that you don't have to work hard to grow

the economy all you can do is that just

press on that printing press and the

money will come out and the GDP will

start growing the economy will start

growing companies will start showing

more profits and guess where that money

was going to exactly it went on to bail

out some of the largest companies in the

country including Wall Street including

General mors or Fort now the logic

behind it was very simple all of these

multi-billion dollar companies are

employing hundreds of thousands if not

millions of people so if they go

bankrupt all of these people will lose

their jobs and that will just destroy

the US economy wait a second what does

2008 crisis has to do with 2024 most of

the economic crisises that the United

States experience since then have the

roots to 2008 because the US economy

today highly depends on debt to grow

which was not the case before the 2008

since then the FED is simply solving

every single major crisis by just

printing more money why no one thought

of that before because that creates

inflation every extra dollar that enters

into the economy makes the existing

dollars less valuable and that's known

as inflation when there's so many

dollars the actual value the real value

of the dollars can literally go to zero

and that's why the Fed stopped printing

all of that money in 2016 and realized

that it's time to pay back our debts if

we don't do that sooner or later the

dollar will become worthless but in 2020

something happened that the FED couldn't

just do anything about it yes a global

pandemic hit the world and the United

States and the US government had to

somehow lock people in their homes I

mean you cannot force people to stay at

home when they have to put food on the

table otherwise they will just starve to

death and that's why the inting press

started working actively again that's

when the FED printed trillions of

dollars and distributed that money not

just to people but rather to companies

to everyone else the US economy was

filled with dollars it created the

biggest inflation in decades so if you

want to know when the FED is going to

lower down interest rates again just

take a look at fed's balance sheet

unless the FED is going to be confident

that lowering the rates will not create

massive inflation it's not going to do

that but from the other side the US

economy is doing perfectly fine it's

doing way better than most of the world

it's not falling into a recession today

like the UK or Japan so what's the big

deal here while the US economy is not

really showing a clear sign of another

recession in the foreseeable future you

have to understand that the US economy

is highly dependent on debt and that

could change everything overnight it's

really difficult to say anything exact

about the US economy to make any exact

forecast because the United States has

never been in such a position that it's

today it has never been as dependent on

dead as it's today just for the records

the United State printed around $240

billion during World War II now World

War II was the literally the biggest war

the biggest crisis in human history and

the United States printed just $240

billion now if you adjust that to

inflation to 2024 it's around $3

trillion but during covid alone the

United State printed much more money

than it did during World War II can you

imagine the amount of debt that the

United States has today now the second

problem that the United States is facing

is that it's having its most

controversial election in the last 30 or

40 or even 50 years now we have two

candidates now the first candidate who

is Biden or the Democrats in general who

wants the United States to keep Bing the

Global police but that requires a lot of

money that's one reason why the United

States is borrowing so much money why

it's spending so much money on the

military and literally just holding the

global order that it created way back

after World War II on the other side we

have Trump while Trump is having his

ideas about how to run the country he

does not want the United States to be

the global police he does not want the

US taxpayers to keep paying for

everyone's security across the globe I

don't want to take s side here but you

have to understand that the current

Global Order is giving us companies a

competitive advantage over everyone else

because the United States controls the

Global Financial system the United

States controls the global supply chain

and literally the United States has the

strongest negotiation power than any

other country on the face of the Earth

and part of the reason the US has such a

power is because it's spending so much

money on its military and is playing the

role of the global police so while the

United States might not face any

immediate risk of falling into a

recession in the foreseeable future the

global geopolitical changes that could

happen over the next 12 month or 24

month could actually change everything

for the United States and that's when

you should jump in and start investing

and start buying and take advantage out

of that opportunity