You look at the data. Every time there's been a drop in gdp for for two quarters in a row in other words a prolonged shrinkage in our economy recession has followed without fail a few days. Ago our worst fears were confirmed as the gdp fell a further 09. In the second quarter of 2022 now conventionally a recession is defined as two consecutive quarters of negative gdp growth.

So we must already be in a recession right well technically no as the national bureau of economic research who are the big dogs that are responsible for announcing recessions are unwilling to confirm our current situation leaving everyone more than a bit confused this is after they called the 2020 coveted crasher recession which turned out to be the shortest downturn in us history lasted only two months it's even got to the point where big celebrities like cardi b. Are calling for some clarity as she recently tweeted. When you all think they're going to announce that we're going into a recession. Interestingly treasury.

Secretary. Janet yalin actually replied to cardi stating. There's nothing to suggest a recession is in the works really. However.

It's not just cardi. B voicing concerns more than 80 percent of americans believe the us. Will fall into a recession by the end of the year a 2022 recession is clearly something we have never encountered before and there is so much more going on than first meets. The eye to get to the bottom of this i'm going to share what's going on behind closed doors in my million dollar businesses as well as showing you all the research.

I've conducted as an experienced investor so that you know the best way to prepare. We'll be breaking down all the clues hidden in this data. Hi guys. It's mark so i think our first clue lies in this graph it shows the unemployment trend.

These shaded sections represent recessions so every time unemployment rises and people lose their jobs. It seems a recession occurs however at the moment unemployment is actually falling more people are getting jobs than losing them leading to an uncommonly low unemployment rate of only 36. This is the key difference between this recession and the 12 previous ones over the last 70 years. But why is this well one answer to this is that workers are harder to come by this is shown by the 11 million job vacancies currently in the us i'm not recruiting in my businesses at the moment.

However i'm also not willing to let anyone go. This is definitely because it's so hard to find good quality employees at the moment. If someone was to leave. Then i would most likely have to get my existing team to feel their responsibilities.

My friends in business are all saying the same thing. Most of them actually recruiting and think. It's extremely hard to find anyone that fits the standards required this reduction in job seekers could be in part due to the great resignation. People seem a lot less willing to travel for a job.

Now. The pandemic has allowed people to work from home and many people want to maintain that flexibility. But it's not possible in all positions. This is leading to a shortage of workers in manual jobs such as painters builders and electricians.

There.'s also been a huge generational shift as many of my fellow boomers have decided to press that retire button and exit the workforce for good there's a lot of us old people so it's had a noticeable impact on the amount of job seekers. However the economy isn't without layoffs across the board as elon musk announced. He wants to cut 10 percent of tesla jobs netflix braces itself for more layoffs and peloton is replacing its ceo and cutting 2 800. Jobs interestingly.

These layoffs are coming from companies that experience huge unsustainable growth during the pandemic. So it seems they took on an excess amount of employees to meet the increased demand. And now that things are slowing down demand is returning to a more normal level. It's almost like they had the growth of five years condensed into one so it's no wonder they're having some trouble adapting so other than these.

Exceptions. Why are we seeing companies either maintain or actually hire more staff when gdp is decreasing. It seems to go against all logic. Well the answer to that could lay in this graph which shows corporate profit margins as you can see most recessions occur.

When profit margins reach a breaking point. We aren't anywhere near that yet however we are seeing a recent decline. So companies are more or less maintaining their margins therefore they may feel like they can weather the coming storm and not need to lay off employees. This is great news because if jobs start being cut.

It could lead us into a downward spiral. As people have less money leading to less demand for products and services. Meaning. Business profits take a hit and more people lose their jobs.

This cycle would just keep going if businesses can hold out long enough we may start to see the gdp begin to grow again fuelling a positive spiral upwards my profit margins are holding strong at the moment and we're currently up three percent on last year which considering all the doom and gloom talks around in recession. I'm pretty happy with bear in mind that this is keeping up with the pace of a record year during covert when gdp grew by 74. Percent. I've been concentrating on the core selling products that i know have a strong demand.

Rather than fluffing up my stock list with unnecessary extras coming into 2023. I'll be thin in my product range as i've identified quite a few lines that aren't selling well this will give me extra capital to deploy into more profitable products and hopefully drive my business income through the roof. But why are we seeing profit margins at such high levels well. I've never gone into a recession.

When there is a major shortage of products. It's normally the opposite so many products and very little demand. We'll discuss exactly why that is right after i. Thank today's sponsor publiccom.

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That i've been working with for a long time now and the best part is they have zero dollar fees on standard stock trades and you can get a free stock slice worth up to a thousand dollars. Once you've funded your account with my link in the description. So back to the mystery of these abnormally high profit margins. This could hold the clue it shows the schedule reliability of our supply chains as you can see it's not recovered from the pandemic slump.

It's been attempting to rebound. However it's just not able to reach the pre pandemic levels of reliability. This isn't a small problem a recent study found that 75 of companies felt a negative business impact due to supply chain disruption since the covid outbreak in 2020 things have just been getting worse for global supply chains russia of course. Invaded ukraine in addition to this being a humanitarian disaster.

It also meant that lots of commodities such as wheat. Sunflower oil and barley became harder to acquire as well as 30 percent of the globe supply of platinum. Including palladium. 13 of titanium and 11 of nickel palladium is a critical component of catalytic converters for cars try saying that 10 times.

This has climbed as much as 80 in price since the war started a new coveted outbreak in shenzhen has also forced 100 manufacturers into a closed loop system. Larger manufacturers have the resources to host their staff in their facilities to maintain production. However smaller factories that can't do this will be forced to shut. The problem is larger manufacturers rely on smaller producers for vital parts.

If those smaller factories shut down or reduce production the larger manufacturers can't run their assembly lines right now in my businesses. I'm experiencing the tail end of all of this which is further fuel in my expectations. That this recession will be unlike anything i've ever seen before in a normal recession. There's an abundance of stock available that suppliers can't seem to shift.

Which means i can buy what i want when i want in whatever quantity. I desire. But actually at the moment. I'm having to buy as much as i can when it's available because i know i can sell it as long as i have it this is causing me to have less cash on hand.

But if i don't buy what people need then i'll be missing out on opportunities left right and center. Not only would this cause me to lose profit. It would also force my customers to buy from my competitors. Which isn't good for the long term growth of my businesses.

With that said supply chain issues combined with increased money printing during the pandemic has caused this as we can see inflation started to grow in 2021 but exploded in 2022. Hitting the highest 12 month increase since june 1981 essentially things are getting much more expensive at a scary rate causing people's money to not stretch as far the federal reserve's main purpose is to slow this inflation and their late response has led to some of the biggest interest rate increases in us. History. The general idea of increasing interest rates is to reduce the money supply as more is being used to pay back debts over time this should cause businesses to reduce their prices as they are unable to sell their products at the previous levels.

I have actually increased the price of my own product ranges. Three times due to the increased raw material costs low supply and outsized demand. I'm yet to feel the need to reduce my prices as currently things are selling before i get them in stock. Unfortunately.

This is causing consumer confidence to be eroded as we can see here when people feel more pessimistic about the economy. A recession usually follows and right now they're feeling worse than they were during the depths of the 2008 financial crisis with more than 70 percent of adults in the us believing will be in a recession by the end of the year. This is causing people to spend less on discretionary items such as new clothes in any recession. People will typically always buy the thing they really want as opposed to something that's just been discounted for the sake of it i'm currently seeing far less impulse buying in my stores in the golden days people would come in and just buy a new car or a plane for the sake of it.

Whereas. Now people are far more interested in having one high quality item that will last this signals that people are valuing quality over quantity due to their outlook on the economic future. This is also linked with escapism people know that buying the one thing they really want will keep them entertained throughout the economic downturn. I'm also seeing more pre owned luxury items on sale such as supercars boats and rvs.

This suggests to me that people are hunkering down for tough times. And increasing their cash reserves in addition to this fewer people are traveling. Now i mean. It's becoming a nightmare.

With council flights and long queues. This may mean the recession becomes a self fulfilling prophecy. As the cutback on discretionary spending will cause demand to be sucked from the economy. Something interesting i keep hearing people whisper in my shops is we've got the money so why not buy it if you really want it.

This is another strong sign that people are hoarding cash for hard. Times. This may not be the best idea as we can see by this graph the top line represents. The s p 500 and the bottom section represents how much cash people are holding as we can see at the point.

When the stock market hit its lowest in september 2002. People were instead holding cash. This is known as the point of capitulation in financial circles. Many experts consider this to be a sign of a bottom in the prices and therefore a good time to buy stocks since almost everyone who wanted or felt forced to sell stock has already done so only buyers are left and they're expected to drive the prices up as we can see a new bull market began in october 2002.

However investors kept an above average level of cash until february 2004. Meaning in aggregate. Investors missed out on a 30 rise in stocks now i'd be willing to bet this same pattern emerges. Every time we hit the point of capitulation because we are emotional creatures driven by herd mentality.

This causes us to invest more when everyone is making money. However. We fail to realize that this is actually the riskiest time as prices are at their highest whereas. When people aren't buying.

There are deals to be had meaning. It's quite often the least risky point now i'm no financial advisor. But i am a businessman and investor and personally i think. This is the opportunity of a lifetime.

Which should be snapped up now i understand that maybe your income might take a hit. But do everything you can to invest consistently into an index fund like the s p 500. Over my many years of investing. I haven't regretted any of my long term plays.

I'm even investing the same amount each month into bitcoin and ethereum as i believe they'll be worth a lot more in the future with the ftx app. I also get free crypto on every trade over ten dollars. If you want to snap that up too. Then just use the code mark tilbury.

When you sign up whatever you do don't follow the herd. This is a marathon not a sprint yes sometimes it's harder and you may struggle. But when you look back you will see how far you've come so i'm going to leave the next video right up there. But don't click on it just yet make sure to subscribe if you want to grow your wealth.

Okay. I'll see you over there.