*NEW* Shocking FLIP is GAME CHANGER for *Fed.*

oh now here's some useful data we want

to pay attention to because this data

can help us understand oh wow this is

when a really big inflection point could

happen you want to mark your calendar

for this one because this is a big deal

and the FED is paying close attention to

this particular metric before we talk

about this metric though let's talk

about some things that relate to it like

Dollar Tree suffering so bad in the last

quarter of earnings that they're

actually now resorting to discounting at

the dollar store

they're seeing so much theft on top of

that then how it makes you wonder if

people are going to start stealing from

the dollar store more than they're

already stealing from Target Target

already facing 400 million dollars in

Theft amid also declines in revenues

Nordstrom sales down substantially

digital sales down over 16 factor in

inflation you're down over 24 at

Nordstrom for digital sales and in-store

sales also not looking too pretty some

companies are reporting decently but

don't look to AP HP who's now firing 10

percent of their Workforce on not only

slow PC sales but PC sales that are so

slow they actually think the weakness is

going to extend into 2023

that's kind of what Dell told us

yesterday as well

it even goes to real estate agents with

we know 80 percent of which uh just like

most consumers 80 of which are living

paycheck to paycheck now all of a sudden

because real estate transactions are

starting to dry up 37 of real estate

agents can't pay their office rent

37 that's one in three real estate

agents can't pay their rent and the

amount of people pulling money out of

their 401ks for hardship withdrawals is

now up 24 now those numbers are those

hardship withdrawals are still

relatively low but we see an inflection

point

Nike is discounting like crazy and sure

some smaller brands with pricing power

companies like Enphase or Lulu are just

absolutely killing it and they're

crushing it and they probably still will

since they're small companies getting

larger but what you're not seeing folks

is the Fed u-turning yet until

potentially a U-turn in this data that's

starting to have a massive shift fed

talked about it briefly this morning but

almost nobody touched on it but that's

okay I'm here and I'ma break it down

but you have to remember when the FED

pays attention to it it doesn't mean

they're going to react super fast so you

want to mark your calendar for this data

I want to talk about this data but

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below so what did the FED tell us

well Esther George had the following to

say today quote the Dynamics of excess

savings are going to be a key factor for

the economic Outlook if consumer

spending stays strong due to high

savings then rates might have to go

higher we already know that when

terminal fed funds rates go up the stock

market go down not great well Esther

George who's very concerned about

consumers and consumer spending I have

some phenomenal news for you about the

complete Wipeout of excess consumer

savings that's happening let's take a

look at some charts first

the savings rate for individuals during

the pandemic was 33 percent now it's at

an all-time low 3.1 percent and when the

savings rates but when the savings rate

plummet it's it also tends to align with

a plummet of excess income characterized

by disposable income charts this is a

chart showing you disposable income and

what you really want to look at is the

fact that we have just gone negative my

friends look down here at this little

green section here let's go ahead and go

in deep here look at that we have

finally gone negative you can barely see

it right there but we finally gone

negative and this is excellent because

it is finally an end to this insane

growth of disposable income growth which

if you have less money that's disposable

meaning you could spend it on stuff and

you're now saving less money than you

were before the pandemic savings rates

today being at 3.1 percent or well below

what we saw before the pandemic not only

are you saving less money but you have

less money to spend guess what happens

spending tends to roll over but it's not

just spending that tends to roll over we

know that people are borrowing more

money to sustain some of their savings

or sustain some of their spending but

what metrics when we just look at credit

borrowing and we see credit borrowing

explode what those metrics Miss is this

right here

us households are paying off debt at the

highest annual level

ever well actually with the exception of

that tiny little Peak right there with

the exception of that we are right now

uh and that was during the pandemic when

people like oh my gosh pay everything

off right uh and then we got like big

stimmy payments and stuff like that but

other than that we the household debt

repayments are really high right now

people are paying off credit cards

they're getting out of debt which is a

smart thing to do especially this is

like so critical you look if you want to

buy a house you want to get into

multi-family real estate you got to pay

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very exciting but anyway these debt

repayment moments are huge because

they're signaling that not only do

consumers have less money coming in for

savings or spending but the money that

they do have they're now dumping into

debt payoff which is really really

interesting because those two things

combined mean less consumer spending and

come march to April of 2023 we expect to

have year-over-year negative real estate

appreciation even though real estate

prices are already down eight to twelve

percent off their q1 Q2 Peak depending

on where you are you actually still have

year-over-year growth in home prices

that means home prices went kind of like

this and they've started coming down but

when you compare year over year they're

still at a higher level today but we

expect that to be negative when we get

to march to march to May so come Q2 of

2023 you're going to be in a situation

where excess savings or plummeting debt

payoff is skyrocketing and people are

realizing that household balance sheets

are actually starting to look worse

because real estate Equity is starting

to shrink and Robert who is famous for

the case Shiller index and a Princeton

Economist has told us that it's not

stocks going down that tends to lead

people to spend less money it's real

estate going down that leads people to

spend more less money so combine these

three three things you've got a setup

for something very very beautiful

it's this I'm going to explain this but

I want you to think about those three

things quickly because I want you to

remember these three things number one

we talked about this is real estate

Equity leads consumption to go down but

number two having less money leads

consumption to go down and number three

uh increasing debt we'll put it down

debt payoff leads consumption to go down

consumption going down down down down is

a big deal because that's what the FED

is looking for and all of these things

are pointing to consumption going down

but as of Q2 of 2022 that's this summer

we were still sitting at about 1.7

trillion dollars of excess savings

I realize this says billions but it's in

thousands so I'm translating it for you

just like that 60 off coupon code is

translated to a really good deal but

anyway

what's fascinating about this

is the following watch this we're gonna

erase this I want you to see this

see here in 2021 when the stemi payments

stopped you kind of had a slow decline

here in excess savings right well what

would you call this right here in Q4 of

2021 Q4 of last year Well friends this

is an inflection point

an inflection point is when all of a

sudden the rate of decline actually

accelerates and it not only accelerated

here accelerated here with a minor

acceleration again and so we could

actually see this line again inflect

down to fall even faster

but before we think about this line and

speculate about this line falling faster

let's just consider this

by Q4 of 2021 we were sitting at about

2.2 trillion 2.3 trillion dollars of

excess savings that leads to a decline

of about 250 to 300 billion dollars of

excess savings per quarter

but this chart only goes to Q2 which if

the chart only goes to Q2 then we

probably have another 600 billion

dollars of excess savings that have

already been evaporated off of this

which means we could already be sitting

right here at 1.1 trillion dollars of

excess savings and that means when we go

into q1

Q2

by Q3 somewhere between Q2 and Q3

assuming the excess savings don't

evaporate even faster

excuse me which is possible somewhere

between Q2 and Q3 of 2023 excess savings

will be zero that's the expectation

right now

now why is that bad

well if excess savings go to zero and

start going negative then people are

going to look at their bank accounts and

go oh my gosh we have less money in 2023

than we had in 2019 because see this

chart is an excess savings chart back to

2020.

insane at the same time we expect

inflation will still be high not on a

month over month or annual basis where

we're looking at the change in CPI but

prices could remain high

consider this Dell and their earnings

report told us actually in their

earnings call told us that hey

we are actually starting to see

disinflation component prices are coming

down this is why we saw a softening PPI

report

so does that mean computers are going to

become cheaper Dell said no even though

demand has been weak they don't actually

expect to reduce the price of their PCS

they want to hold the price of their PCS

high and as prices come down for the

components oh more profit margin

consumers still spending at high levels

or or having to spend at high prices

elevated prices now combine all of this

together

excess savings going to zero pain in

real estate no disposable income right

all of these things the debt payoff all

of these things combined and what you

have is probably a Q3

of

no money left

no money left by Q3 2020.

but the FED realizes that their policy

tends to operate with a six to nine

month lag that means those High interest

rates really take about six to nine

months to really get through the economy

and hit consumers

with the exception of stock market hits

the stock market faster this is why

generally stocks lead us out of a

recession they also lead us into a

recession When Things fall right

anyway

six to nine months of a lag would

actually suggest that the FED needs to

peek out their Hawking between

now ish to January maybe to March

so by now we're really talking about

December Jan or March so sometime within

the next four months

we think the FED has to flip and they're

going to flip big if these consumer

excess savings numbers continue down

this trajectory and that debt payoff

continues to be high because if these

numbers go negative combined with high

prices

buy by spending and then you could have

real pain in 2023 where you actually

potentially start knocking on the door

of a depression which the Federal

Reserve does not want to push us into a

depression they are forcing a recession

to get rid of inflation or potentially

near recession

but they don't want to push us into a

depression

which means my expectations are the FED

is very very very very likely to flip

within the next four months if we get a

soft CPI report in December they could

flip even sooner

that is very bullish I'm very excited

about what the future holds I'm very

excited about my five million dollar

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thanks so much for watching check out

the programs linked Down Below on

building your wealth and folks we'll see

in the next one goodbye