How to use 2024 Recession To Get Rich (Do This NOW)
Summary
TLDRThe 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
📉 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.
💡 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.
💸 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.
🌐 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.
Mindmap
Keywords
💡Recession
💡FED (Federal Reserve)
💡Soft Landing
💡Stock Market Crash
💡Inflation
💡Debt
💡Global Geopolitical Changes
💡Risk Takers
💡Wealth Redistribution
💡Economic Recovery
💡Investment Opportunities
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
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