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what's up everybody just pretty sing here and kathy wood has come out and said that we are in a recession right now and the economists and strategists that are saying that we're not in a recession right now are wrong we have a lot of economists saying that we might be seeing a recession in 2023 and what kathy wood says is that she disagrees she says that in 2023 it'll be us coming out of the recession now kathy wood for those of you who are unfamiliar is the celebrity investor behind the arc ark and ark and all the other arc innovation funds so she invests in technology innovation and a lot of those types of startups when the covent pandemic hit the ark innovation fund saw a massive boom because they're part of you know a lot of that speculative side of things so when the money printer opened up when interest rates dropped the valuation of the speculative startups soared and so her funds made a ton of money and then over the last year or so when interest rates started to rise as we started to see the federal reserve bank change course those speculative investments also got hit extremely hard so kathy wood has been on the news a lot because first she was making a lot of money then because of her fund was losing a lot of money and now she's been pretty vocal about the economic slowdown and what she's saying is that the united states is already in a recession but she says it's going to be very different than the 2008 and 2009 recession the 2008-2009 recession she calls that a systemic recession and a financial crisis she says that what we're going to see is nothing like that instead she calls it a quote garden variety where it's more of an inventory crisis because we're having all the supply chain issues and we're facing a lot of other issues in the economy which uh make it difficult for people to purchase things get access to things and that's causing the price of things to go up and so what she's saying is that it's going to take another year to 18 months for that to fix itself and then the economy will start to recover so she's saying essentially that we are going to enter a recession or no we are in a recession but it's going to be a mild recession and it will be completed by the end of 2023 so you can kind of see how there's like a different spectrum of opinions of what's gonna happen and it's important for you to listen and pay attention to the different ones that way you can make smart decisions for yourself because someone's gonna be right someone's gonna be wrong and only time will tell you have some people that say no recession it's not possible no economic slowdown some people that are saying that we're in a recession right now but it's going to be mild this is what kathy wood is saying and then you have some people that are more uh kind of on the really bad scenario we're saying that we are going to enter a bad recession if we're not in one already and we're going to see a lot more inflation and things are going to get a whole lot worse we could risk potential hyperinflation we have a potential currency crisis we could see a depression so you have a whole different range of like temperature scale of how bad this recession will be this is where you want to be educated about the different opinions that way you can just understand and not be shocked by what could potentially happen now an interesting thing that kathy wood brought up is that the concern for her is not inflation it's deflation and this is kind of what she was saying back a couple years ago as well where she kept saying we need more inflation that the federal reserve bank shouldn't be raising interest rates that inflation is a good thing because technology will create deflation because she's a big tech person so her whole thesis is that if tech companies and innovation companies can grow they can reduce the cost of products because we can make things faster cheaper easier and that will cause the price of things to go down so we don't want to try to fight inflation in fact we should try to embrace it and let technology reduce inflation that's her thesis and the reason why she says that inflation is not a concern has to do with metals prices gold prices because what she said is that in august of 2020 gold prices peaked at about two thousand dollars an ounce and then they have been falling in is around 17 to 18 hundred dollars an ounce now so it gold prices have fallen so if there is so much inflation why hasn't gold prices gone up now i am an investor in physical gold i'm also have some money in the arc fund so it was great when the 2020 pandemic happened it sucked over the last couple of years but again looking at things for the long term this is where you never know who's going to be right and you want to be able to invest in a way where no matter what's happening in the economy you will always be a winner sure some things are not going to do well in every part of the economy some things are going to do well in the boom economy other things are going to do well in a bad economy but this is where you want to be able to position yourself in a way that you can take advantage of opportunities that might come no matter which type of economy that you're in now of course if you're looking for an easy way to do that the first thing you have to do is you got to stay up to date on what's happening in the finance and business news then the best way to do that is to actually read the press releases it's to stay up to date on the actual data and keep up with the raw data what's happening now if you don't want to do all that the next best thing is to join market briefs which is my free financial newsletter that's keeping you up to date on what's happening in the top finance and business news into a fun easy to read and witty newsletter even if you don't have a financial degree i promise you're going to love reading it so if you have enjoyed market briefs yet it's completely free and the link to join it is right in the description below so now the question is what's going to determine if we're in a recession because traditionally the definition of a recession has been two quarters aka six months of gdp decline and we already have that however we're essentially now saying that in order to have a recession there has to be much more i see more of a broad-based decline and so we haven't officially gone into a recession and this is where now the question is what's going to determine if we're in a recession because once it gets determined that we are in a recession then the start date of the recession gets backdated to when the economic decline started so let's assume that the economy continues to go down and four months from now that it gets announced that we are in a recession if that happens four months from now they're going to look back and they're going to say oh the economy started to shrink back in february of 2022 not in november or december of 2022 so then they'll say that the recession actually started in january or february of 2022.
so that's how it works uh in the recession side of how it works but this is where now you want to pay attention to the federal reserve bank like i've been saying because they are going to help determine how far down and how drastically down we go with interest rates because the faster they increase interest rates the slower the economy is going to get and the harder it's going to burst the bubble because as interest rates go up it makes borrowing money more expensive and that slows down business right so in terms of an economy an economy runs on spending the more money somebody has the more money they can spend the more money i spend the more money somebody else makes well when you increase interest rates spending money becomes more expensive because we live in a credit based system which means that people spend money not based off of how much cash they have on the bank but based off of how much credit or debt they can qualify for and so if people spend money based off how much debt or credit they can qualify for and now your debt is more expensive people will spend less money so people are spending less money because interest rates are higher that then slows down the economy even more and right now the federal reserve bank is working to raise interest rates in order to fight inflation and so inflation has come down slightly but we're still at extremely high inflation like still near record highs and until inflation comes down the federal reserve bank says that they're not going to stop raising interest rates now this brings up the next question how far down does inflation have to go the federal reserve bank as of today is saying that they're not going to stop the inflation fight until they bring inflation down to two percent so we have quite a bit of ways to go for inflation to come down which means that the federal reserve bank if they stay true to their word are going to get much more aggressive with interest rates to bring down inflation and another driving factor of that is the fact that according to the federal reserve bank's data our economy is extremely strong because they're looking at jobs and according to the way that they analyze jobs the job market is great more people have jobs than ever so the economy is strong so if the economy is strong that's more motive or at least it's more okayness to go and raise interest rates and if inflation is high that's more reason to raise interest rates so they have a reason to raise interest rates because inflation is high and it's okay for them to do that because according to the fed that job support is strong so this gives them the green light to go and raise interest rates and as long as you see these two factors they will continue to raise interest rates and the faster they raise interest rates the faster spending will slow the faster spending slows the more the economy will go down the more the economy goes down the more kind of this negative spiral we'll see of an economic slowdown and recession so these are the factors that you want to be paying attention to where it's inflation levels it's the economic levels and that's what the battery reserve bank does because there's also a chance that they change course and some way down the line they say all right we need to worry more about the economy then we do inflation and then they switch the fight so this is where you really want to stay up to date on what's happening we're keeping you updated on market briefs so if you haven't joined yet make sure you do that if you're talking about real generational wealth this is the way that is done and i'm just talking about building a system that is foolproof and the way that you can do that is you need an income stream that way now you're not worried about pulling out all of your principle while you're alive you want to be living off of the cash flow the income the dividends or the royalties
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