They have so much further to fall, because if we take a look at 140 years of historical data from the case shiller home price index, we can see that the u.s housing market adjusted for inflation is 50 percent. Above its long run historical average, which implies potentially 50 crash downside from here on out. Meanwhile, the stock market, even with its recent correction in 2022, is still 38 overvalued in inflation and earnings adjusted terms according to its 140 year average, and i want to be clear about what this means. It means that theres going to be lots of buying opportunities for you all out there. The time is coming for you to buy and later in this video im going to tell you when that time is, when youre going to have the green light to buy into this down market. But first you all need to understand why this is happening. Why is there a massive stock sell off right now? Why did the mortgage market in america shut down over the weekend? Well, it has everything to do with two principal things: number one is raging inflation, the red hot may 2022, inflation report came in at a 40 year record 8.6 year over year and in response to this inflation report, investors panicked, they freaked out bond yields exploded the 10 year u.s treasury yield is now up to 3.3 percent its highest level in a decade. Meanwhile, the 30 year fixed mortgage rate spiked all the way up to nearly six percent.

These spiking yields and mortgage rates mean that the cost to borrow money is exploding out of control and ultimately, this increase in the cost of debt. While i believe its healthy in the long run is going to mean a big economic and asset crash, especially because investors have now woken up to the fact that the federal reserve is not gon na, be there to rescue them this time over the last year, ive Seen a lot of people say: oh as soon as things get bad as soon as the stock market declines and the housing market wobbles the feds going to step in cut rates and print money and save the day, but more and more investors are realizing. That is not going to happen due to the record high inflation. The fed cant come and save the day. They cant push asset prices back up because after all, right now the inflation rate is 8.6 percent compared to a 3.6 unemployment rate. This is the first time in 30 years that the inflation rate, the orange line, has been above the unemployment rate, the blue line, and until this changes until the unemployment rate goes up substantially and the inflation rate goes down substantially, the feds going to keep tightening theyre Going to increase interest rates by 50 basis points, maybe 75 basis points theyre, going to enact quantitative, tightening and strip money supply out of the system, which is ultimately going to cause an asset bubble recession and cause these record high values in the housing market and stock Market that we talked about to come crashing down, and this asset crash is what i call recession number one because were in the midst of an asset crash recession.

This is going to be a white collar recession that basically vaporizes the net worth of the wealthy in america, but folks pay attention to this. What makes the current economic situation so dire and why im so bearish on the u.s economy and housing, market and stock market is that recession number one. The white collar recession is occurring nearly simultaneously with recession number two, which is a consumer confidence and spending recession. Its a blue collar recession born out of the fact that inflation for over 12 straight months has outstripped the growth in wages in america, which means that the average american is getting poorer and poorer. Every single month were seeing. Their savings rate is now at a record. Low american consumer sentiment is now at a record low. Why arent americans able to save money? Why are they so pessimistic? Well, when gas prices are up at five dollars a gallon when food prices are increasing at the most? In 40 years, thats gon na drain savings accounts and make it very hard for americans to live and spend on a day to day basis and thats. Why its so important that you all are preparing for this crash. This is real its happening as we speak. For instance, just over the weekend, the u.s mortgage market ground to a halt it broke. This is a story that the mainstream media isnt covering yet, but they will, by the end of the week, is take a look at what this 40 year mortgage veteran in the housing market just said during my last 44 years in the mortgage industry, four painful moments Stand out today makes five the red hot inflation report from may was so awful that it changed the bond markets, view of fed trajectory and, as a result, the mortgage backed security market went no bid.

There were no buyers for mortgage backed securities and no buyers for mortgage backed securities. That means that banks are not going to be able to make new loans and make new mortgages going forward. This is going to mean that the housing crash, which has already gotten well underway, is going to get worse. Mortgage purchase applications a forward, looking indicator of housing demand have already crashed down to 2016 levels, while the crash in the mortgage backed security market on wall street means that we can expect this mortgage application figure to crash even further down to the same levels we experienced At the depths of the last housing crash in 2009 and 2010., this crash in housing is occurring simultaneously with a crash in the stock market in the crypto market. Its also going to occur simultaneously with a crash in consumer spending because, as i mentioned to you all before, the personal savings rate in america is now near a record low 4.4, meaning that americans are only saving four percent of their income on average. The last time personal savings was this low was 2007 2008 right before the worst financial crash, the worst recession since the great depression. Similarly, consumer sentiment is now at an all time, low level. The confidence that americans have in their finances in the future of the economy is now lower in june 2022, according to the university of michigan than it was in 2007 2008 before that crash, and, ultimately, the weak financial state of the u.

s household and consumer in 2022 Is one key difference between todays inflationary environment and then the inflation in the 1970s, because i want you all to take a look at this pay special attention. This is so important for you to understand the future direction of the economy to understand this difference between now and the 70s that back then personal savings rate in america. How much americans were able to save was 10 11 12 13 14 americans. Even during the 1970s, inflation were able to save more than the cost of goods was going up today, its the exact opposite. The cost of goods is going up much faster than american savings, which ultimately means that the inflation is not going to be able to sustain itself, as americans at some point are going to run out of money and theyre not going to be able to buy gas At five dollars, a gallon theyre not going to be able to buy food at exorbitant costs, theyre not going to be able to take trips theyre not going to be able to buy a house theyre going to default on their leases and mortgages. If this inflation continues. Above the savings rate and the wage growth rate and thats, why? Ultimately, ironically, the end result of this inflation is going to be a deflationary crash, because the limiting factor is income and wages? Do people have enough money to support the cost of goods and services? If yes like they did in the 1970s, then the inflation can continue raging for a decade, because americans have the money, if no like.

Today, then a deflationary crash is guaranteed because ultimately theres not enough money to go around in consumers, bank accounts and wallets to support. All the economic activity thats occurring and the end result is then going to be a deflationary recession where the prices of goods plummet, the prices of houses plummet. I actually think by this time. Next year, gas prices are going to be half what they are today. Now you might say, oh, that sounds great. Well, itll, be great. In one respect, the prices of things are going to go down, but were going to have a recession attached to that theres going to be a lot of layoffs, a lot of job losses. Companies are going to shut down its going to be pandemonium out there, so in the madness of all of that, its going to be hard to take solace in the fact that goods are cheaper. But for those of you who prepared for those of you who saved money stockpiled cash didnt take out debt over the last one to two years. This is going to be your time to shine. This is going to be your buying opportunity. I believe, starting in the next six months, we are going to see the real buying opportunities unfold, both in the stock market in the housing market and to support this point. I want to reference a tweet from michael bury the man who called the last housing bubble, who called the last financial crash.

He just tweeted this the theater took more than a decade to overstuff, thus its not likely everyone gets out in less than a year. What michael bury is saying there is that this asset bubble the biggest bubble of all time. This took a decade to build, and actually it took decades to build. So, while were gon na see, the buying opportunities really start in six months, its gon na take longer than that to hit the bottom, because people are still delusional theres, still a lot of cognitive dissonance out there. Despite the fact that the fed is telling you that theyre gon na hike interest rates and take money out of the system, i still see a lot of people saying to themselves. Oh, that cant happen, and as long as theres, a lot of people still saying that its a sign. We have not yet reached something called market capitulation, which ultimately is a broader acknowledgement among everyone in the market that its going down and thats when the true buying opportunities start so youre going to want to have cash on hand for the initial buying opportunities that come Up later in 2022 and then for the rock bottom price buying opportunities that come about in the middle of 2023 youre going to want to have cash on hand for this. Because let me tell you folks: the debt markets are going to dry up its going to be hard to get a loan, its going to be hard to trade stocks on margin its going to be hard to get a mortgage youre going to want cash to be Able to take advantage of these opportunities over the next 12 months.

Additionally, before i sign off today, i want to reveal some opportunities, some investment opportunities that are available right now, actually not by buying companies and going long on the market, but by shorting certain companies in the stock market. I think there are several zombie companies right now that are in danger of going out of business and theyre great options for a put option or a short that could yield a great return, while youre waiting for the other buying opportunities to crop up. So, if youre interested in hearing about the companies that i am bending against, that, i think are gon na go out of business. Make sure your subscriber to this channel hit that subscribe. Button turn on your notifications and, lastly, smash that like button, because i got that video coming for you over the next week.