In this video, Joe Brown, of Heresy Financial ,YouTube channel explains why he thinks we will not only see inflation pull back, but will actually see deflation, prices on many things actually dropping, in coming months.
For 3-4 years now, I've been blogging about a major recession, possibly a depression, I saw coming. My views are based on what I call The Big Transition. This is my name for the continuation of the concept that the late futurist, Alvin Toffler, explained in his 1980 book, The Third Wave. After a decade of research, Toffler came to the conclusion that we were leaving an industrial-based society, and moving into an information-based society. In today's terms, we were leaving the Industrial Age and moving into the Information Age. We're all familar with the idea now. Most people think that happened long ago. Most of the factories shut down, the internet got invented, and that was it.
Toffler published his last book, Revolutionary Wealth, in 2006, and 17 years after The Third Wave, still adding more depth and nuance to that idea. I believe this transition is still going on, now 43 years after he first explored the idea in print. I also believe the peak decade of this change will be the 2020's. This is one of my reasons I believed this recession will be much bigger, and much more transformative, than any since the 1930's. I wrote on this basic idea in some depth in late 2019 and early 2020.
Now I'm just some guy who first got interested in investing when I bought an ounce of silver, as a junior high kid, in 1981, after the big price spike and crash. I was hoping the price would spike again. Then, in the late 1980's, I got interested in real estate, which was soaring when I moved to southern California. I didn't make enough money to buy a house, but I began reading about real estate. A few years later, in 1989, I got fascinated by the dynamics of the economic world, business, investing, and long term trends that may exist in the markets. I've been watching and learning about these subjects ever since.
Don't listen to me. Listen to other smart people who have been studying the economy their whole lives, and who actually run businesses and do consulting.
In late 2019, while blogging about my thoughts on the economy, I began looking for more details and nuances about what was going day to day and month to month. I found The Money GPS YouTube channel in late 2019. I've been watching it almost every day since. In the months and years since, I've found that investors Ray Dalio, Jim Rogers, investor/journalist Nomi Prins, and analyst/scholar Mohamed El-Erian are also really good people to listen to on investing and the economy, on a continuing basis.
After the big moves up in interest rates and down in stock and some real estate prices in 2022, 2023 has been harder to figure out. I had been trying to figure out myself , recently, just where inflation was going, and Joe Brown's argument in this video above makes sense to me. Personally, I think we are most likely to dive into a deep recession, with inflation continuing to drop. It looks now like that will lead to a few months of deflation, actual dropping prices on many big items and investments.
This will wreak a lot of havoc on most everything and most everyone, financially. The Fed will have to pivot, that is, lower interest rates over time, and create a lot of new money, to bail out banks and major corporations (maybe even cities and whole states). Just like they did in 2022, they will do another about face, this time from raising interest rates to lowering them. This will set the stage for more, and even higher, inflation, 12 to 18 months after the pivot. The timing is hard to pin down now, it depends on The Fed's timing, but I think rising inflation by late 2024 or early to mid-2025, is likely. The stage is already set for the next president of the U.S., whomever that is, to have an even bigger inflation battle to deal with then Joe Biden got hit with. While many like ot blame this inflation on the 2020 stimulus package, all that money built upon a base of money creation and historically low interest rates through the Obama and Trump administrations. The Biden administration was in office as we hit the tipping point. Just for the record, presidents don't have that much to do with the economy, central banks have much more influence, the Federal Reserve here in the U.S., and others in other countries. Both parties in the U.S. spend ludicrous amounts of money, mostly debt passed on to future generations, the just put lots of money into different programs, while racking up trillions in debt.
Last year, as interest rates started to rise, I began to look on YouTube for other smart people with knwloedge about real estate, and other areas. Here are the best videos, people, and YouTube channels I like, to build a comprehensive picture of the economy world in these turbulent times.
Here's the best info this year on real estate in 2023. Adam Taggart of Wealthion channel interviews Nick Gerli of Reventure Consulting channel, who is the single best source of real estate info that I've seen anywhere. This video is from January 2023, before the first four bank collapses, but this is the best overview of real estate I've seen this year. Wealthion does multiple long interviews with really smart investment and finance people every week. Reventure focuses on real estate, and Nick spent the winter building Reventure App, a database, which still free as I write this, where you can see exactly what real estate is doing in your area, or any area, of the U.S.. If you are thinking of buyng a home to live in or for investment in the coming years, check out this app.
For a look at Southern California real estate, Christian Walsh of WIRE Associates puts out good videos. He's an agent in this area, and comes across like a guy-next-door type, low key and without the hype of many YouTubers. He explains the latest data and trends in the 5 main Southern California counties, on a continuing basis.
Robert Kiyosaki and his wife Kim interview silver enthsusiast @SilverSlayer on Rich Dad Radio Show on The Rich Dad Channel in the linked video. His channel is, you guessed it, Silver Slayer channel. This interview is from October 2022. As I write this, silver spot price is $25.66 per troy ounce. While gold is near its all time high price, silver has been over $47 per ounce in 2011, and $36 per ounce way back in 1980, which would be about $138 per ounce in today's dollars. Robert and @SilverSlayer talk about the one investment that many people think is completely undervalued, and the investment that anyone can afford in today's world.
You've probably heard of the personal finance book, Rich Dad, Poor Dad, one of the best selling investment books of all time. I think this book should be taught in high school, to give kids a basic idea about money and investing, and what an asset is, and isn't. Here's my favorite story about the author of that book, Robert Kiyosaki, and his wife Kim. Robert ran into troubles with his first business, importing nylon wallets and selling them. After that, he and Kim actually lived in their car for a few weeks, in the 1980's. They were actually technically homeless fo ra bit. Then some friends let them live in a basement for several months. Instead of getting jobs, they wrote a business plan, found investors, and started a business. Robert and Kim were doing really well a few years later. That set them up to begin buying real estate in the long, 1990's recession, when prices were really low. Robert and Kim have been serial entrepreneurs and investors, and then financial educators, ever since. Robert tells this story in his book Cashflow Quadrant. My point is that they are not people born rich, they actually have hit bottom, and built their businesses and wealth back up themselves.
What about the Big Picture? Here are my favorite macro thinkers and analysts in recent interviews, looking at the financial chaos that is 2023.
Blockworks Macro channel interviews macro researcher/analyst Danielle DeMartino Booth in this interview, from mid-April 2022. She gives and incredible view of the Big Picture going on in today's crazy economic world. Danielle was a employee of The Fed, years ago, and has a wide range of sources ot back up her views.
Adam from Wealthion interviews macro researcher/analyst Stephanie Pomboy in this interview, from early February, 2023. Recorded before the four (so far) bank collapses, Stephanie sees a hard landing ahead, and gives lots of nuances of her view, with a lot of info from corporate America.
A big worry of many investors right now is the future of the U.S. dollar. There is a move by Russia, China and other countries for a BRICs reserve currency, to move away from the dollar, and the worry of possible sanctions in the future. Is the dollar doomed in the next couple of years?
Jack at Blockworks Macro's Forward Guidance show interviews Brent Johnson, who figured out the "Dollar Milkshake Theory" several years ago, in this interview. Recorded in late April 2023, Brent gives his case while the dollar should still be the world's reserve currency for quite a while to come.
Other YouTube channels I think have really good information investors, and anyone else interested in the crazy economic world playing out in the 2020's.
Daniella Cambone of Stansberry Research channel interviews many really knowledgeable investors and analysts.
Stoic Finance, Eurodollar University, and George Gammon's Rebel Capitalist channel are three more I've found recently that also have some really insightful ideas on the economic world today.
Those are the main places I look, and videos I watch, on a regular basis, because I'm a futurist and economics geek, though not an investor. Personally, I think we are now 43 months into a great depression, which I've been calling The Phoenix Great Depression, since early 2020. That's just my opinion, and I could very well be wrong. My belief in some really obscure, ultra-long term cycles, led me to that conclusion. It takes a 5 year economic contraction to officially form a great depression, which means we have 2 to 3 years before that is even possible, let alone likely. Time will tell.
We are definitely heading into the worst part of the major economic downturn I've been droning on about for four years or so. All of these people and channels linked above are much better sources for up-to-date data and ideas on where the financial world is heading, in the short and mid term.
I'm pivoting to spending more time thinkng and writing about what I call call Creative Scenes, the little groups of people who create things. Some of these turn into major and influential businesses or movements, and many of the smaller ones create the businesses and products that will build our way out of this long period of economic chaos. For any of you trying to figure out what's going on in the business, financial, and ecnoomic world, I hope this post is really helpful.
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