You’re in your car, driving along the highway, when, all of a sudden, black ice comes out of nowhere. Your tires slip out from beneath you, your car spins out of control, and you go airborne. You fly off a cliff and crash into pieces, barely surviving.
This is the economy… or at least how everyone expects it to look.
What’s going on?
Inflation is rampant, interest rates are soaring, and the talking heads on SquawkBox are predicting the next Great Financial Crisis. Even GaryVee and Jeff Bezos are warning Americans about the impending crash on Instagram and Twitter. “Batten down the hatches.” Everyone has become obsessed with our imminent doom.
When COVID turned the world upside down, the FED reacted quickly. They printed 13 trillion dollars to stabilize the economy, and, while it helped for a time, it also resulted in the highest rates of inflation since 1982 – up to 9.1%.
The FED, however, is trying to reverse the trend by cooling the economy. They’ve raised interest rates to levels we haven't seen since before the GFC to slow consumer spending. As a result, analysts expect housing prices to fall through the floor, triggering another financial crash. Millions of jobs lost, a market in shambles, and a nation in ruin.
But what if, actually, they’re wrong?
Instagram vs reality
What if, instead, you see the black ice before it hits? Would you keep speeding along? No! You would buckle your seatbelt, adjust your tires, and slow down so that when it does hit, you spin — but only momentarily. Although you might briefly lose control, you quickly regain composure and leave with only minor scratches.
This is REALITY.
Look at 9/11, the Great Financial Crisis, or COVID. What do they have in common? Surprise. 99.9% of people had NO IDEA they were coming. Very few expected the markets to crash because these events were totally unforeseen!
When COVID hit, the government pumped us full of free money (and they’re doing it again right now). We knew it would cause inflation, push people toward alternative assets, and create an unsustainable bubble. We’ve been waiting for that bubble to pop for TWO YEARS.
We’ve seen this coming.
In fact, we’ve been talking about a recession since 2018. So compared to 14 years ago, our situation is very different. Jobs are relatively secure. A record number of people have become entrepreneurs. Workers are shifting to the gig economy at 3x the historical rate. 90% of home mortgages signed in the past 10 years have been 30-year, fixed-rate. And even if there were a risk of defaults, banks have billions of dollars of cash on hand (thanks to Dodd-Frank).
This recession is not the one we’ve been anticipating.
Am I telling you the markets won’t crash? No. I’m saying it’s not going to be the pileup everyone expects.
The FED triggered this recession to protect us from COVID. Now, they’re preparing to keep us out of it for too long. We should trust them. They’re slowly raising rates to fight inflation, and once they understand where we are and determine how to control the economy, they’ll set us up for a softer landing.
Act now
This recession is going to be far milder than you think. So instead of looking at it as something to fear, see it as an opportunity. Prepare for it. Because it’s the best shot you’ll ever get to start something new.
Launching a business or making a big investment is never easy – especially in a downturn. But it’s also the perfect time to act. Prices are down, competition is scarce, and creativity is abundant. It’s where fortunes are made. In fact, some of the most respected billion-dollar companies were created on the heels of turmoil. Look at HP (1939), Microsoft (1975), Airbnb (2008), or Uber (2009). All created in a recession.
In reality, the best opportunities are rarely the most convenient. They show up unexpectedly, often when we don’t want them to. Everyone begged for stocks to go lower and housing to get cheaper. People have been screaming, “Buy the dip!” for a decade. Well, now’s your chance.
Since the beginning of time, markets have gone up, down, and then up again. So, if you really want to win, be long-term greedy. Dive in while others are running away in fear.