Hold on, America

America’s Economic Contraction … Just getting started

America’s current economic woes need no introduction, but consider this shortened summary of the country's economic struggles in 2022:

1.) Rising Inflation and shortages, a double-barreled problem, in:

• Food
• Durable goods
• Energy – (and we haven't seen anything yet)
• Residential Housing

2.) Rising prime interest rates, resulting in:

• Higher mortgage rates for residential & business real estate
• Huge number of mortgage companies going out of business or scaling way back.
• Banks have lost enormous amounts of business, many are struggling

3.) Investment Markets crashing

• Stock Market – almost all stocks in all markets have had enormous negative numbers in 2022 – (we’re talking about “historical-sized losses”)
• Many stocks which are still “alive” are only alive because of increased investor money infusion, but return no profit at all (“Zombie” stocks)
• Crypto industry has been virtually burned to the ground
• Professional brokers admit that the “inverted treasury bill rates” make no sense
• Federal Reserve’s newfound “quantitative tightening” and “balance sheet reduction” will relentlessly decimate almost everything related to finances, month after month
• Housing Market curves all dropping off a cliff, with upcoming corrections just getting underway
• Foreclosures coming to a neighborhood near you
• Housing sales stalling and house inventory rising for the first time in a decade (for who can afford to buy now?)

4.)???Business opportunities under attack

• Federal Income Tax rates are increasing
• 80,000+ new IRS workers being hired to audit everyone’s books and find more money to tax, more penalties to assess, more spending money for the US government
• Higher cost of capital for business operations expansion.? "Sorry, no expansion this year; we’ll look at it again next year, maybe.”

5.)???Savings rate of Americans decreasing

• Lower-income Americans struggling to meet monthly bills
• Middle-class Americans saving less into 401K’s each month
• Retirement savings lost three trillion dollars in 2022 alone
• 10,000 Baby-Boomers reaching retirement age every day, but many are not financially sound

6.)???Employment Woes

• Many employers claim they can’t find qualified workers
• Many Seniors must re-enter workforce due to economic pressure
• Older skilled workers disappearing from work force with little knowledge transfer
• Unemployment numbers reported by Dept. of Labor appear questionable at best. (More detail below.)
• Large number of prime-aged workers have been living off of “unemployment checks” and willfully turning-down job opportunities which were brought to them on a silver platter.
• H1-B increases – not because America has no available workers, but because the newcomers work for a lower price.
• Fortune 500 CEO's tell lawmakers on Capitol Hill, “We need more H1-B workers; we can't find qualified workers in America.” ?(“Do you hear these executives, Mr. Chairman??What more proof do we need?")
• Large number of jobs being filled by workers who’ve illegally entered America, all looking for work.?(“They’re just trying to support their families.?So, here’s a Social Security Number; now go.”)
• Enormous outsourcing business via Internet, completely unregulated, shipping many American jobs to India, China, Eastern Europe, South America and elsewhere.
• Wage increases are low or non-existent.
• Tax hikes and regulations on American businesses are pushing factories overseas.?(Businesses need to do it so as to stay afloat.)????????????????????????????

More bullet-items could be listed, but this list above should suffice to make the point: there is an economic storm in-progress in America, and it’s getting worse.

Yet another Conspiracy?

I will go down on record, here, in stating that all of those items in the list above are going to be eclipsed by one thing … upcoming Job Losses.?Few are talking about it.?Maybe it’s not sexy-enough for the mainstream media??And it can’t be blamed on the “other” political party from any media outlet (as can tax increases, Social Security changes, etc.)?

Watch out: when a person loses his/her stream of income, no other economic thing really matters any more.?Cash flow is the “king of the hill” and for unemployed workers nothing is as important as getting reinstated with cash flow.?But the media is barely talking about it, and sadly, the US Government is practically lying about it.

The US Labor Dept. appears to be feeding the American public incomplete and even deceptive information.?Headlines everywhere claim that the American job market is “very tight” and the unemployment rate is close to the lowest in recorded history.?The Dept. of Labor reports that the unemployment rate is (as of this writing) 3.5%. This is the so-called "U-3" rate. But the “U-6” rate is widely considered to be more real-world, and it is about double that.?Other sources claim that the “real unemployment rate” is actually over 10%.? (Why don't we hear this from the mainstream media?)

Then, based upon this foundational claim from the Labor Dept. (3.5% unemployment) the Federal Reserve has designed an “inflation-fighting strategy” for America which unashamedly states that people must lose their jobs so as to lower inflation. Of course, it’s all “for the good of the country.” ?Apparently, the Fed thinks that “employment” is a zero-sum game, as if to say:?“Employment cannot be a win-win situation; if someone gets a job, someone must lose a job.”?Instead, when the Fed gets involved, unemployment plays out like a game of poker … there are winners and losers; you can be one or the other.

Equally insane is the fact that the mainstream media is practically embracing the Fed’s strategy, as if to imply:?“Well, since it won’t be you who will be hurt by the Fed’s unemployment-push, there’s no need to worry about it.”??Excuse me? It won’t be me? ?Says who?? If the Fed is going to push “someone” onto the unemployment line so as to "lower inflation,” who's to say it won't be me ... or you?

So Now What?

Let me state emphatically that:?“I am not a registered or certified fiduciary, lawyer, accountant or financial advisor.?All communications coming from me or my firm should be considered ‘entertainment and opinion’ only.?Nothing should be taken as advice.”

OK, with that said, here are some “opinions:”

A.?????Do what you can to secure your own employment.?Don’t take it for granted.?Don’t fool around.?Don’t be lazy.?Don’t be arrogant. Don’t presume you’ll have that job until you decide to quit.?Be the best you can be.?Go the extra mile.?Keep a helpful, uplifting attitude.?Treat your job like it’s your own private business, and care about it like you care for your own belongings.

B.?????Invest when and where you can, but be cautious.?Be careful about trusting anyone until vetted and proven, and don’t invest in anything without doing significant due diligence and thinking things through carefully.?Every investment manager has “somebody’s best interest at heart.”?You decide who that “somebody” is.?Don’t be swayed by their titles, certifications, charisma, charm, smooth talk, demeanor or anything unrelated to the offer at hand.

C.?????Consider getting an alternative stream of income going for yourself.?This is no simple thing but it is vital.?Here are two fundamentally different ways to do this:

a.??????Active Income:?It’s the equivalent to establishing for yourself a second job in tandem with your main job. This may cost you significant time, work, learning, and preparation along with blood, sweat, tears and hustling to make things happen.?Your stress-level may increase, along with your blood pressure, fear and worry.?Once you start down this path, your “home life” may take a hit.? Only you can decide how big a hit you’re willing to absorb.?If you went to college, grad school, trade school, or other formal education: remember how much time, effort and money you spent.?But you probably did it without a second thought.?But long, drawn-out, complex things like that seem to get harder and scarier as we age.?Fortunately, you probably don’t have to go through all of that again, but some of it might be necessary.

b.?????Passive Income: Fortunately, if you can pull off the task of making that alternative income stream to be passive then by definition it won’t take extra time, skill or effort on your part.?This could be the ideal form of an alternative income stream.??Passive investing may not offer returns which are as high as that of active investing, but the fact that it takes no time, no skill and no work makes it worth anyone's consideration.?For many busy people it may be the only realistic option.?Passive investing is what this newsletter is all about.?

D.?????Get your life in order with God.?Does it surprise you that I’d say that??If you knew me personally it would make perfect sense.?If you can “accept” this, please do; if you can’t, OK, but remember that all things have consequences.?I am certain it’s the most important thing that I do, and I firmly believe it’s meant for others, too.?If you embrace this one, you’re going to get much more benefit than you expected.?If you want more detail on this, I’ll share it with you – but please don’t expect me to initiate this conversation with you – you'll have to start it if you want to discuss it.

Investment Opportunities at Hand

Lastly, I’ll say that there are enormous opportunities at hand in the mortgage note investing business.?That’s the industry where I do my side hustle.?

"Opportunity" is like the water of a huge lake with a dam on it.?That dam empties into river called “America.”? Under normal circumstances, the "water of opportunity" flows into America at a controlled rate, like the way a dam normally operates. Now imagine a non-stop rainstorm over the lake.?The lake rises.?At some point, water flows over the top of the dam. ?When it does, America experiences fantastic opportunity, not just "everyday" opportunity. ?It is my firm belief that the "water level of opportunity" is going to "breach the dam" for America. I can't predict when. Once the "water of opportunity" starts coming over the dam, all will see it, but many will not be ready to capitalize on it. We need to prepare in advance so we can seize the opportunity at the earliest point in time. If you do, you'll be so glad you were ready to roll when the time comes. And in the meantime, there are plenty of deals available now, as the "water is rising."

Consider communicating with me.?We could knock off “B” and “C” (above) for you.

If you’d like to talk further, consider setting up a free call with me at: https://calendly.com/david-straley . There’s no obligation.

Get a free subscription to my online newsletter, “Passive Income Forever” https://www.dhirubhai.net/newsletters/passive-income-forever-6953527937304326144/

Don't forget to add your comments below!

Take care and kind regards,

David Straley ([email protected])

Manager, Sky Finance LLC

#mortgagenotes #investing #mortgage #recession