Hello, fellow Off-Grid Income family. Please forgive the unformatted post. I wanted to get this information out to you ASAP as I see it unfolding.
Stocks plummeted today following the release of a significantly weaker-than-expected July jobs report, sparking concerns that the economy might be heading towards rough times.
It is no surprise that we are now entering a very different phase of the global economy: contraction. This official phase of the economy is called a “recessionary” period.
Let me put on my prophetic hat and tell you how the media will sound come Monday.
In the next couple of weeks, you will hear corporate leaders confirming a softening in demand, meaning consumers have slowed down their purchases of high-priced items.
Second, you will hear these same executives express concern about their ability to pass on these high costs to their customers. By October, all financial data will reflect the statements made by these major company representatives.
Third, despite this bad situation, you will hear mainstream economists say the risk of recession is now at 50%, up from a 35% prediction in the previous quarter of 2024.
To further downplay growing fears, you will hear them speak about a “positive productivity shock” due to advancements in various sectors such as:
life sciences
generative AI
sustainable energy
These newfound realizations from the financial media establishment will result in increased pressure on Powell to begin rate cuts to ease the pain of a recession.
When Powell begins to cut rates, professional Wall Street traders will start to worry that something is actually wrong with the economy.
Due to this growing fear on Wall Street, the first indicator traders will look at is the current unemployment rate, which is currently inching up towards 5%.
Note: If unemployment hits 10%, it is considered a full-blown crisis.
What you need to understand is that the most important thing to any country is economic growth. This type of growth depends on three key factors:
population growth
productivity growth
debt growth
Currently, we are suffering in all three areas simultaneously. Birth rates globally are significantly down. We are in a phase where technology, specifically generative AI, is fueling growth instead of humans. Additionally, borrowing is becoming increasingly difficult as we speak.
In the next newsletter, I will tell you how professional investors (public and private) are positioning themselves to win no matter what unfolds.
Until next time,
Off-Grid Income