A financial storm is about to hit. This is what you need to know.

I want you to quickly imagine this scenario with me you are given a warning that an earthquake is coming soon you don't know exactly when you just know that it will happen soon now you also know where and it's going to be right in your backyard so the question is what do you do differently to prepare how does your focus change for the next few years do you try to ignore the issue laugh it off pretend it's not coming or do you start actually preparing I think it's sad but fair to say that a lot of people would probably do nothing because thinking about bad things is not very fun well I never do videos like these but a storm is coming and I feel obligated to talk about it what if I told you that Jamie Diamond he's the CEO of Chase Bank the largest bank in America and probably the world called what we're going to talk about in this video the most predictable crisis ever in history and just weeks before that Jerome pal the chair of the Federal Reserve and one of the most powerful people in the world warned that we are on a dangerous and unsustainable path now since we are in a super politically in charged environment let's talk about drill pal for a minute he's basically the guy in charge of making sure the US Financial system runs smoothly and it's probably worth noting he was nominated by President Obama promoted by President Trump and renominated by President Biden he's not just some bloke on the political fringes now the issue both of these men were speaking about was the US national debt so in this video we're going to take this sequence step by step so you understand what is happening what will happen soon and how you're going to be impacted wherever you are in the world by this the first trigger you're going to start to see is interest payments on US debt if you've ever had a credit card you know you've got to pay interest and the government is no different now in 2024 they're guessing those interest payments will be in the range of $870 billion for the year and if you're thinking that's not really that much money for a government here's two step that might help you we're going to spend less than that earn on our entire National Defense for the entire year a billion dollars is a million dollar a th000 times it's a lot of money and we're spending 870 of those on nothing but interest that means that if you pay taxes about 20 cents of every dollar that you're paying in taxes is going to just pay interest on government debt so those payments are quickly getting very big and here's how this starts to play out first the US will need to start printing or creating more money to keep up with those debt payments if they don't take care of it soon now we know from history just a few years ago that putting a bunch more money into the economy will Kickstart inflation again which is something we were just kind of getting sort of starting to beat now in order to combat inflation the US Federal Reserve will raise interest rates and again this is not something that's far out this is exactly what happened just a few years ago with Co and they've already raised interest rates and left them there as of the time of this video this is what the Federal Reserve does they don't really have a choice they have a mandate to maintain a certain inflation rate and if it goes above that they need to raise interest rates because that will slow down the inflation rate now a smart government here would probably also maybe spend a little less and perhaps tax a little more but that's going to require compromise so that's not going to be an assumption we're going to make here but as interest rates go up there's going to be three big things that happen first you're going to see businesses spend less and borrow less that essentially means they're going to invest Less in growth it's expensive now for them to do that so they're going to do it less second you're going to see investors invest Less in business because they can get an 8% guaranteed return on a savings account why would they go make these risky investments in business and third regular Schmucks like me and you are going to spend less because credit is expensive and we'll just see an overall slowdown in spending so the natural effect here is we start to see business growth start to slow down they're making less it's harder for them to borrow money and harder for them to grow and if you combine that with the next 5 years of job loss due to AI which I think we all can agree is going to happen things start to get pretty tough in America number one it's going to be very natural that unemployment will start to go up and number two buying things becomes more expensive because of inflation and we've already seen that and number three borrowing money even helocs is becoming more expensive so that becomes less of an option too now let's talk about how this starts to impact the housing market if you've been alive for 15 20 years you've seen this for houses interest rates start to get too high to buy houses at current prices honestly it's kind of there already but somehow we're kind of holding on and things will more than likely get worse if inflation kicks in again I've been buying houses every year for about 5 years and mortgage prices have almost doubled and most of it's just coming from interest so houses aren't going to be able to sell for what they were selling for because there's this extra $1 to $22,000 in interest payments tacked on the natural effect there right is the actual value of a house starts to drop now you might think that's good but let's continue on here what happens is we get all these people that are now underwater on their mortgages so they can't go sell because instead of selling putting money in their pocket they would actually owe the bank money they'd owe a lump sum if they sell right they can only sell a house for $200,000 but they're mortgage is 250 so they lose 50 when they sell they also can't refinance because one they probably don't have equity and two interest rates are really high they can't get a helck again Equity interest rate but we have all these people that can't afford their homes because of job loss and inflation so they need something cheaper so again the natural sequence here is we start to see for closures start to pick up and we've actually already started to see that now now there's still not a ton of demand because interest rates are high and when Supply goes up demand doesn't follow economic kicks in and they can very easily go into a mega freef fall and that's what happened in 2008 if you take a look back 15 years at a housing chart they were in a freef fall now the way we stopped this in 2008 and by the way i' recommend the movie The Big Short if you want to get a little bit of an understanding of this but essentially the government spent a ton of money they did major tax cuts and they cut interest rates to zero and that helped things get moving again it kind of greased the wheels again but we can't do t

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