Hey, this is Tom Nash and history is about to repeat itself. And trust me, it ain't gonna be pretty. We are headed into a significant economic crisis. one of.

Epic Proportions Now this video is not to scare you, it's not to shock you, it's to allow you to prepare in time for what's coming because a storm is headed our way. Now in this video, I'm going to show you actual evidence and proof of what I'm seeing. This is not about my opinion or my hunch. this is hard evidence, hard data, verifiable evidence of what I'm about to share with you.

So let's not waste a second more and jump straight into the data. But before we do I Want to thank today's sponsor a free research tool for investors called 10ds. As you can see, 2022 was an absolute crazy, crazy year and it seems things are just getting more hectic. Obviously, making sense of all this insanity and chaos is critical for any good investor and this is why you need to check out Tandy's This is an absolutely free research stool with tons of resources to help you do better as an investor in this crazy Market which is ultimately the goal of my channel and it's literally why I Think you should check it out.

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The PMI is a massive index covering 14 000 companies in 40 countries and it accounts for about 98 of global manufacturing. so it's kind of a big deal. Now, the there's an elaborate point system that is super boring and it's not that relevant for this video. But simply put, this index is an indicator of global economic health.

Its sole purpose is to provide insight about current Global macroeconomic conditions. Simple as that. Now, according to the latest PMI data, we're headed into a major recession. The numbers show that the economic downturn is not only here, it is actually getting worse.

The average composite PMI was about 52 points in the past 10 years, which is all we got since this thing only exists from 2009. In fact, before the pandemic, we've never went below 50. Now, the first covet year was crazy. PMI data went absolutely ballistic.

In April 2020, it shortly dropped to 26 points all-time low, and just a year later, it was at 58. an all-time high. However, except as a normality of the first coveted year, it pretty much remains stable and that 50 to 55 region ever since it got created. Now here's the alarming part.

if we completely ignore the covet Year, we're now at an all-time low of 49 points. ever since we hit that 58. Point High In April 2020, we have been steady, going down and down and down in a constant economic decline. This decline is not only reality, you can't just wish it away.

In fact, this decline is getting worse. It accelerated significantly during the second half of this final quarter of 2022. Basically, since mid-november things have gotten progressively worse and the trend does not look good. In this case, the trend is definitely not your friend.

Rising cost of living, higher interest rates, deteriorating geopolitical conditions, and residual covert restrictions in places like China have sent the global economy into a severe slowdown, and at this point, there's no end in sight. now. According to the PMI, every single industry except Pharmaceuticals and software services contracted in 2022, Essentially, it's shrinking. This includes real estate, the Auto industry, construction, tourism, food, Beverages, and the list goes on.

And the most alarming part here is that both globally and in the US the financial activity have shrunk in 2022 at the fastest Pace we have seen since the start of the pandemic and it keeps on shrinking with every passing month. But you know PMI is just one data point. Let's add some more information into this analysis before we start screaming: we're all gonna Die I Get it? Let's say focus and analytical here, right? Let's not be emotional. Let's talk about real estate, because if there's one thing that can bring down whole economies is the real estate market.

Just as people who have been around the financial industry in 2008. Now the problem is very simple. The central banks around the world and in the US are raising interest rates. This makes boring money much more expensive, meaning no more cheap mortgages.

Also, this sends the economy into slowdown as I just showed you a second ago. which means people are losing jobs. They have much less disposable income. The result is simple: demand for Real Estate keeps dropping as mortgage prices actually keep going up, Prices of real estate plummet, and people with expensive mortgages that used to have a valuable underlying asset are now stuck with no money paying a lot for a property that's not worth that much anymore.

Some homeowners will eventually default, some properties will eventually be foreclosed by Banks, and the banks will inevitably dump these properties into the market, which is already beaten down in the hopes of salvaging whatever is possible, crashing the real estate prices even more, making the problem even worse. Don't believe me. Here's some data to back it up in my last video: I'm going to put the picture right here: I Actually told you about how Blackstone is now limiting the amount of money investors can withdraw from its 70 billion dollar real estate fund. well as I explained that video, that's happening because a lot of their investors are heading for the door.

Having said that, it's important for me to explain here that Blackstone is not an isolated case at all. It's actually a very good example of what's going on in the entire real estate industry. Right after Blackstone, another 15 billion dollar real estate fund called Starwood Capital notified investors, it was also restricting withdrawals. Now, coincidentally or not, Blackstone and Starwood are the two largest privately held Real Estate Investment Trust REITs in existence.

So if these guys are struggling, you gotta wonder what's going on with the rest of the industry. Well, exactly a year ago, during the fourth Quarter of 2021, non-traded Private Reads paid out 380 million dollars in redemptions. One quarter later, this amount went up to 880 million, then to 2.8 billion, and finally in the third quarter of 2022, we had 3.7 billion dollars of redemptions from privately held reads. Simple math will show you that withdrawals from private Reads have increased by one thousand percent in nine months.

Yep, everything is fine. Nothing to see here. No problem at all. Now, what about the Job Market? The last remaining argument for people claiming there will be no recession because it's not possible with such a strong employment? Market Well, the job market is doing great right.

Not exactly if you look a little bit deeper. Just a couple of days ago, we got news that Morgan Stanley is firing 2 000 employees. Meta formerly known as Facebook is firing 11 000 of its own employees. Amazon is terminating ten thousand Elon Musk just fired 8 000 Twitter employees.

and the list continues. Carvana Doordash Tribe Salesforce Just a few of the many companies announcing layoffs in November this year and that is just the tech sector. Since the start of the year, a hundred thousand employees lost their jobs in the tech sector in the Us alone and the trend is not getting better. Ten thousand employees got fired this September and now the 23 000 in October and sixty thousand literally six times more in November.

This is not a good sign for the job market. The crazy part is it is happening by Design This is intentional and the FED is 100 behind it. And guess what? It's not even a secret. Look, the President of the Federal Reserve Bank of New York and the Vice Chair of the Fomc John Williams who is kind of the second in command after John Powell just said it himself.

He just gave his speech the economic Club of New York earlier this week, and in that speech, Williams said that the unemployment rate would need to go up to a range of four and a half to five percent from the current rate of 3.7 percent. Now, the problem with that statement is that it guarantees a massive recession in 2023, at least as far as the FED is concerned. Now, according to the same rule, the unemployment rate is very, very critical to a recession If the unemployment rate rises from its three-month average by more than half a percentage Point within less than a year. This means that the economy is heading into recession or an even bigger recession if it is already in one.

So the FED might say all the things you want to hear or the right things, but action speaks louder than words. They're actively pushing the US from 3.7 unemployment to 5 unemployment. and that means we have as much of a chance of a soft Landing as my Grandpa getting a major record deal. Now, what about if unemployment rates increase from 3.7 to 5 slowly? What if it takes more than a year? Tom We can do it right.

Not really, at least not since 1966. Historically speaking, the unemployment rate is either falling or Rising sharply. it doesn't move slow. You see businesses are like a branch on a tree.

They Bend and bend and bend and bend until they finally snap. All of a sudden, when bad times start, businesses are reluctant to fire employees and consumers are not that excited about cutting their own spending. so consumer spending still barely holds up, which allows businesses to just barely hold up and keep employees on the payroll, hoping things will get better eventually. However, there's only so much stress this relationship can take, and once people run out of money, that breaking point is reached and the fit hits the Shan very, very quickly.

Consumers cut back on spending right away, dramatically, forcing businesses to fire employees right away dramatically. Which sends the economy into a death spiral. Because you know what happens: People lose jobs, less disposable income. They spend less more people get fired and so forth.

But Tom How do you know people are running out of money? No, yes, we're paying more for Less that's for sure. Inflation took a toll on everyone, but look, the restaurants are full, the movies are jam-packed the resorts are full to the brim, and the US printed over five trillion dollars of money since 2020. that money is burning nicely through the system. What's the problem? How do you know that This is the end of the party? Luckily, there's no need for me to speculate or guess since we have data to show exactly what's going on at any given moment.

We know exactly how much Americans have in their savings plans. On the other hand, we also measure the disposable income, which is pretty much the percentage of Americans income left after they pay taxes and spend money on everyday living. Just to give an example, let's say I made a hundred dollars I paid 30 for tax I paid 40 for my cost of living. That leaves me with disposable income of thirty dollars.

Very straightforward. Now here's the cherry on top. When you combine these two data points, you get the US personal savings rate as a percentage of disposable personal income. Now that may sound like a complicated metric, but that's just fancy talk.

It means something extremely basic and simple. It is the ratio of personal savings to disposable income. how much you got saved. Compared to how much free income you generated just two years ago, the ratio was 14.

right now it's 2.3 which is not just seven times smaller than what we had in 2020. It's also the lowest figure we've had since November 2007, just before the 2008 crash. Now, the data does not care, it doesn't get angry. It doesn't lie, it's just data.

And it shows quite clearly people are running out of savings to keep their spending habits alive. But just like in November 2007, this can't last any much longer and the end is near. Now a recession is coming. A stock market crash is inevitable.

But that doesn't mean you have to scream and run for the hills. The strategies you can actually Implement to benefit from it to protect yourself to mitigate the risk. All that good stuff. In fact, I've made a whole video I'm going to put it right here on the screen of how to handle your personal finances and your investment strategy during a recession.

Go check out that video right now. I'll see you there in just a second.