Why 2023 Will be Worse than 2008 (Mega Asset Crash)

The Asset Price Crash in the Housing & Stock Market is about to get Worse. Even worse than 2008. I expect both Home Prices and Stock Prices to keep falling into 2023 – perhaps by as much as 40% further.

This asset crash is about to get worse much worse i’m talking even worse than 2008 is when i take a look at the combined value of the u.s housing market and stock market i see that they’re valued at over 80 trillion dollars right now in the fall of 2022 which is absolutely insane because the size of the us economy the gdp of america is only 25 trillion dollars so

Literally asset prices are three times higher than the size of our economy indicating that we have another 30 40 maybe even 50 percent to go in this market crash and the problem right now for stock owners and homeowners and those who have a lot of assets is that as the fed increases interest rates that is going to incrementally degrade the value of their asset

Because the important thing to understand about all the value you see across the u.s economy today whether it’s stocks housing crypto cars you got to understand that those valuations were all based off artificially low interest rates and artificially low in interest rate environment that lasted for the last 20 to 25 years as you can see on this graph interest rates

Have just continually been going down over the last three to four decades we’re basically close to zero for much of the pandemic and that’s what created the asset price bubble as you can see on this graph they’re inversely related the more that interest rates went down the more that asset prices went up but now that interest rates are starting to go up we’re seeing

The asset prices go down which means there’s going to be some great buying opportunities for those of you who have been patiently saving your money and stockpiling cash and the metric that i am looking at to tell me when the time to buy is going to be is a stat i developed called the asset price to gdp ratio you can see today we’re at 320 percent 80 trillion in value

In the housing and stock market compared to 25 trillion gdp and the way you’re going to know that it’s time to buy is when this asset price to gdp ratio gets closer to the yellow dotted line 200 percent of gdp that is a more normal level historically that’s been the average of the last 50 years to get to that average we would need to see a 40 combined correction

In both the housing and the stock market now before going further into this video i need to address kind of a question an elephant in the room that i think is on a lot of your minds you might be saying nick wait a minute how could this crash be worse than 2008 like that seems almost crazy to suggest right 2008 was so bad how could 2022 and 2023 be worse well folks

It’s all about the data it’s all about the fundamentals right because when we look back at this asset price to gdp graph we can see 320 today is lower than what it was six months ago when it was 380 but it’s still above the peak of the 2007 bubble it’s still above the peak of the 2000 bubble which is absolutely crazy everyone that even with the recent correction in

The stock market and housing market we are still in the biggest asset bubble of all time and this is ultimately why i think this crash is going to be worse than 2008 because home prices stock prices they have a long way to go down still to get to a level that is more fundamentally supported by the size of our economy and the amount of money people make and that’s

Ultimately what we’re doing by comparing value to gdp we’re setting a standard for what asset prices should be given the size of the economy and these fed rate hikes that are causing the initial decline in asset prices this is just the start is right around the corner after these fed rate hikes is a recession that’s about to get a lot worse there’s going to be job

Losses there’s going to be unemployment claims they’re going to cause consumption and demand in the economy to go down further which is of course going to lower asset prices back down to a more long-term sustainable level and the warning signs for this are just getting louder and louder and louder for instance we have credit suisse one of the biggest banks in the

World having all types of issues right now they’re having difficulty raising money their credit default swap spreads are surging their stock prices collapsing a lot of people are betting that credit suisse could be this recession’s version of lehman brothers where we see a big world financial institution go under that causes a contagion effect and that causes the

Downturn to be even worse additionally we’re seeing problems globally great britain almost had its own lehman brothers event just two weeks ago when they had a bond market route that caused bond yields to surge from three and a half percent to almost five percent in a matter of days that was due to the new british government announcing tax cuts that were unfunded

That were going to increase the debt by 50 billion dollars bond buyers said screw you we’re not going to buy uk guilts anymore that caused interest rates in britain to go up which almost crashed their pension fund system and the bank of england had to step in and say we’re going to buy bonds as a last resort to support the market so these things are canaries in

The coal mine they’re big warning signs that real problems are ahead in the overall economy and of particular concern to me right now is what is going on in the energy sector with prices of oil in gas we saw oil went down actually by quite a bit over the last couple months there was some deflationary pressure in oil prices but now oil prices are starting to shoot

Back up because opec just announced that they’re going to cut production by 2 million barrels a day so that’s likely going to cause your gas prices at the pump to increase significantly over the next month or two which is a big problem for the u.s economy because potentially the one positive in all of the things that have happened over the last couple months was

That gas prices went down well now if gas prices go back up just as the federal reserve is aggressively hiking interest rates well that’s going to be curtains on the u.s economy especially for the u.s consumer everyone i mean the u.s consumer is already running out of money or has run out of money the statistics we’re seeing on things like credit card debt on the

Personal savings rate in america are suggesting that there is not much left in the tank for the average american to spend to support this economy and that personal savings rate metric is one that i’m watching closely it’s one that you should be paying attention to because it’s really a signal a barometer of how the average american household is doing the statistics

Reported by the bureau of economic analysis and they simply measure the percentage of disposable income that’s saved into a savings account or a bank account by the average american right now in the most recent month that was 3.5 percent a 3.5 savings rate which is well below the long run average of nearly eight percent and almost as low as what occurred in 0.506

Before the great financial crisis and so the less that americans are saving the more that’s telling you they are having financial difficulty they are having financial problems they’re not going to be able to afford discretionary spending they’re not going to be able to afford to go to a restaurant americans aren’t going to be able to afford to go to a ball game or

To buy a tv or to buy a house and it’s going to cause the prices actually of all these things to go down into the future in my opinion because i am predicting despite the surge in gas prices and despite the stubbornly high inflation i’m predicting deflation is right around the corner because you can only increase prices so much until you break the economy in half

And that’s essentially what opec is doing right now they want to cut supply to boost prices well okay good for you but people around the world don’t have money to pay higher prices i mean how could the average american if the savings rate is three and a half percent pay more in gas prices it’s not going to happen americans are going to drive less they’re going

To consume less in the worldwide economy is going to crash which is going to create a deflationary episode that actually in the long run is going to cause interest rates and mortgage rates to go back down and finally everyone i want to leave you all with just some actionable advice in this video like what can you do with the information i presented on the asset

Bubble and where the economy is going and how can you make better decisions with your money and with your career and my number one suggestion as it’s been for the last six months is to stockpile cash cash has been one of the best performing assets actually despite inflation cash has done much better than the stock market than crypto it’s done better than silver

It’s done better than gold by the end end of the year it’s going to be doing better than housing so holding cash is so key because it’s going to give you the opportunity to pounce on these declines and stock prices on these declines and home prices they’re going to continue into the future but additionally perhaps even more importantly cash gives you flexibility

In your life in your career because we have very uncertain times ahead there’s going to be lots of layoffs there’s going to be lots of bankruptcies i don’t say that to scare anyone i say that because it will be the reality we’re already starting to see it and if you are someone who potentially gets laid off into the future or maybe struggles at your job maybe your

Wages get cut or your hours get cut or maybe this downturn reorients what you want to do in your life you’re going to want to have cash on hand to pay your bills to give you the flexibility to shift and change your career as needed and this is something i feel very strongly about given my experience in 2020 when i quit my old job and started reventure consulting

Before this youtube channel really started taking off and before i had clients for consulting i made very little money i had to spend about 20 out of my savings in 2020 and early 2021 to cover my living expenses because i didn’t have income coming in and that was a period where i wasn’t feeling great where you know my prospects for the future i was unsure about

But it was a period that was so necessary and allowing me to develop my company in this youtube channel and it was made possible by me having cash on hand to give myself some flexibility and so i just wanted to put that out there i know a lot of people think of this squarely in terms of having cash to buy a house or buy stocks when they get cheaper but it’s

Also really valuable in case you’re someone who’s going to go through a life transition or a career transition during this downturn to have that cash and that flexibility to do it now lastly guys i would love your feedback and your help actually in the comments section below if you are someone who is starting to see signs of the recession in your city in your

Neighborhood in your state in your country even if you live out of america can you comment below and let me know what you’re seeing because i’m starting to hear more and more things about a friend of a friend got laid off or a friend of a friend got their hours cut and we’re not really seeing this show up yet in the government jobs data the government jobs data

Still looks strong but i suspect there’s something boiling under the surface and i would love to hear some feedback if you guys are seeing certain things out there or maybe you’re not actually seeing signs of a recession out there either way comment below you guys are my eyes and ears on the ground i want to hear what you’re seeing when you guys comment it makes these videos better

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Why 2023 Will be Worse than 2008 (Mega Asset Crash) By Reventure Consulting