PREPARE for the Coming Recession & Market Reset (3 Steps)

in January of 2022 I predicted that the

market would crash sh the dancers shut

them I predicted that there would be

bank failures the water will spill over

the tops of the bulkheads at EC from one

to the next back and back there's no

stopping it the pumps if we open the

doors the pumps by a time but minutes

only failed stable

coins

I predicted the stock market would fall

that bonds would

suffer spaxs would

suffer and cash would be the best asset

to move into in fact you could see those

videos in full linked down below both

the Titanic crash part one and two which

I edited and posted in January of 2022

they're still live back then I was made

fun of for suggesting people should move

to cash because they thought oh well

inflation is so high why would I move to

cash of course that ended up being the

right answer moving to cash gave you the

opportunity to buy things cheaper in the

future now we are at a point in the

economy where at some point the market

will crash again but we don't have the

clarity that we did at the beginning of

2022 beginning of 22 it was pretty clear

that the market was going to crash

imminently presently we don't have that

imminence but we can predict how the

next crash will form so that way we

could be prepared when we start seeing

some of the early signs so in this video

we are going to go through the three

steps of how the next market crash could

unfold we are going to go through each

of these three step steps and explain

them starting now the first thing we

have to know is we have to throw up on

screen the history of the Federal

Reserve interest rates what you're going

to notice is that usually when the

Federal Reserve Cuts rates it very

nominally Cuts rates when it cuts rates

slowly if anything it's more likely to

raise rates again before cutting rates

dramatically instead Federal Reserve

usually Cuts rates when we're about to

move into a Panic into a disaster that's

when we get serious rate cuts and so

that's why in this video we're going to

explain how these three steps could lead

to the next Market meltdown again I want

to be very clear I'm not calling for a

mega crash or correction anytime soon I

don't have the best Clarity in terms of

when this next crash could come but I

think it will follow these three steps

on screen let's explain one at a time

First artificial intelligence there is a

lot of enthusiasm around artificial

intelligence today because we believe

that artificial intelligence will lead

to more productivity and therefore more

output faster vacine research uh faster

and more conclusive legal research

faster and more conclusive finan

Financial research or investing

strategies whatever it may be that could

entirely be possible and boosting

productivity will delay when our next

market crash occurs because the more

productive we are as a society the more

we can withstand the bumps along the

road that might otherwise be deemed

Black Swan events that could crash or

collapse an

economy productivity is everything we

need productivity to increase however

how can artificial intelligence actually

mislead Us in productivity well this is

where we get specul ative so we have to

make the argument that let's say

artificial intelligence is presumed to

do this for productivity it basically

means we get more and more productive

and productive and productive and

productive but artificial intelligence

in my opinion isn't actually growing in

this form of exponential trajectory I

think what we're getting a little bit

more is we're getting sort of

this advancement in processing big data

that looks a little more lumpy so we

have this slow growth in big data and

then we get these sort of stair step ups

and these stair step ups are really

useful they moments in artificial

intelligence like a chat a GPT where all

of a sudden we can take big data

analytics and make it happen much more

efficiently we can get to that next

level of neural Nets and machine

learning to really accelerate hopefully

productivity problem is when we get to a

market that assumes this trajectory for

artificial intelligence and the reality

is we're stair stepping well at some

point we are going to create this and

this segment right here is the mess of

malinvestment Mal investment is

basically where we throw money at

projects that we think are going to be

the future but the reality is the

progress of artificial intelligence is

nowhere near this

in fact it was Jensen Wong of Nvidia

himself who suggested that GPT was no

more than an imitator of the average or

the mass of society this is why even

though GPT can be fantastic at ingesting

an entire PDF and telling us and giving

us

suggestions can it really

Advance our ultimate productivity ah

well to understand our ultimate

productivity we have to understand what

productivity is and what it's not see

most of us think well of course if I can

ingest a whole PDF and into GPT and I

can get all of the answers that I need

versus reading it and I can get so much

more work done in an hour than I could

otherwise then of course my productivity

is going to go up but see that's not

necessarily true see we have to

understand the difference between

productivity and efficiency let's think

of this let's say you have one hour of

time so this right here is one hour and

let's say that you have 1 hour to read a

40 page PDF GPT enables you to ingest

the core parts and understand that PDF

in let's say 30 minutes so this is your

GPT effort right here and let's say

without

GPT it would take you the full hour so

this is your no GPT okay great so what

was the product of this hour of time

well let's say you spent 30 minutes with

GPT and you spent 60 Minutes without GPT

and then that next 30 minutes after you

finished your work with GPT you're kind

of like all right I'm done and you kind

of just stand around the water cooler

doing

nothing well in this case you were 2x as

efficient with GPT you essentially got

the same amount of work done in half the

time that's fantastic so you were twice

as efficient by using artificial

intelligence but your

productivity changed zero so zero change

in

productivity now we need to be able to

fill in this

segment with more work so a second PDF

for you to actually become more

productive then you could be twice as

productive in the same hour well the

problem with this is there's a limit to

how much we actually need to get done as

employees and see this is where the

problem begins take a look at this if

our efficiency expands too rapidly and

we could get so much more done in time

then more people are standing around

doing nothing for a while well at some

point offices businesses corporations

begin to realize they are vastly

overstaffed because they don't

necessarily have twice as many PDFs to

read that is where the growth problem

comes in in step two we're going to talk

about that but I really want you to

First internalize this and understand

this for a moment let's say I'm a real

estate agent and I can do 50

transactions per year alone and with AI

let's say I could do 75 transactions

per year that's great my capacity to do

75 transactions went up that's

fantastic but what if I can only get my

hands on 55 transactions of business

well yes then I have more time for

leisure or doing something else maybe

being a consumer in the economy that'll

come up in the next part as well but the

point is just because I am more

efficient does not guarantee I will be

more productive because businesses take

time to grow road to get more customers

to expand just if let's put it let's

phrase it another way let's say you are

a factory and you sell paper towels okay

you sell the best paper towels in your

city and you

sell 100,000 paper towel rolls every

single month okay so 100,000 per month

that's great you're killing it now ai

comes in and it lets your employees be

more efficient so that you now have the

capacity of selling

150,000 per month that's fantastic but

again what if the Demand only grew to

110,000 well if we overproduce all we're

going to do is reduce the prices because

we've created over supplies so we reduce

prices well that doesn't really help our

revenue or a margin because price

declines then just be get more price

declines it creates deflation defl in

the long term is great for consumers and

it could be get more competition but did

it really grow the amount of demand for

paper tows no no it didn't now again

maybe people have more time for leisure

because they're so much more uh

efficient and so they're using paper

towels more for some

reason but AI does not necessarily grow

demand for goods and services we call

that gas right Goods and services

there's a limit to how much demand we

have for goods and services so again if

our

efficiency stair steps with AI but

Demand only grows like this then we

create eventually a gap where there are

a lot of people who are getting paid to

get a lot of stuff done that doesn't

actually need to get done we only need

this much stuff done in the economy that

means we have a problem of

overemployment at some

point and if you attach malinvestment to

that malinvestment because people

believe that artificial intelligence in

Revolution is going to do this and it'll

go up and up and up and up forever then

more and more people are getting hired

right now thanks to the artificial

intelligence Revolution when the reality

is the opposite will likely end up

happening layoffs Mass layoffs but when

does that happen well folks that

actually happens in phase two I call

this the depletion and profit phase so

when companies even with artificial

intelligence realize wait a minute we've

got so much more efficiency but our

demand curve is not all of a sudden

growing twice as fast it's hopefully

growing or Worse your demand curve is

doing this and it's just sort of lumpy

and barely growing that's not good

especially when you start having

negative year-over-year numbers kind of

like something like Tesla might have for

q1 or Q2 this year compared to last

something starts happening when you hit

this kind of growth

curve businesses start cutting expenses

for example Tesla started slowing down

its Chinese Shanghai autom manufacturing

plant from its usual 6 and 1/2 days of

work down to just five that's a red flag

we've talked about that in the Tesla

videos topic for really a different

video uh and of course if you want sort

of my insights into specific fundamental

analysis or my Trading alerts make sure

you join those courses on building your

wealth we do have an expiring coupon

code on Easter that's March 31st take

advantage of that before we raise the

price you get all the buy sell alerts if

you're in stocks and psych got questions

to bundle up email us at staff ofme

kevin.com and join us in the course

member live stream for this sort of

perspective okay so Dem demand not

growing the way companies would hope

creates Cuts why would demand not

continue to grow well that's where

depletion comes in see remember how

everybody said oh my gosh everybody has

so much excess

savings well the spending of that excess

savings has really taken a long time

excess savings went up and we've been

able to kind of milk those excess

savings for a very long time

and quite frankly even after we get to

the point where we were before the

pandemic and we've spent through all of

our excess savings from pre- pandemic or

from during the pandemic we'll still

have savings to go through some extent

of savings to go through just like we

had some savings beforehand doesn't mean

a lot but eventually excess savings

deplete and debt goes up right so excess

savings slowly bleed out and debt

continues to go up so those are your buy

now pay laters eventually I'm very

concerned that we're going to end up

with quite frankly the next derivative

of buy now pay later where basically you

have people who bought a bunch of stuff

on buy now pay later like groceries or

other necessities and then they need to

get another buyout pay later loan to pay

off their first buy out pay later loan

so it's kind of like refinancing buy out

pay later with buy out pay later boy

take a shot every time I just said B

later okay maybe don't do that anyway

this becomes obviously a strain on

consumers okay but that's no problem if

people have jobs you can have a lot of

debt you can spend all of the money

money you make as long as you have a job

in fact you could spend more than you

make if you have a job and savings

because your job slows the bleeding so

to speak but you're bleeding So

eventually you're going to bleed out

because your excess savings will deplete

your debt will be high and then you'll

be left with your just basically

subsisting on your job to pay your debt

okay well this creates really really big

problems because when we now combine a

consumer that's becoming more indebted

with an artificial intelligence

Revolution that the stock market says is

going to exponentially grow forever and

the world has changed and all the

greatest advances are all going to

happen within the next two

years which mind you is total

like the stock market tries to price

ahead 18 months usually right the AI

Revolution will last the rest of our

lifetime but our robots going to be here

tomorrow doing all of our work for us no

quite frankly that might take 50 years

look how long full self driving took I

bought my first full self-driving car a

Tesla Model X in 2017 and I'm like this

self is amazing it's going to be so much

better uh in just a few years we'll have

Robo taxis it's 2024 now I still have

version

1231 doing stupid knucklehead stuff like

yesterday I come up to an intersection

that looks

like this this is going to be a little

hard hard to get right there we go Okay

so we've got the number one lane here

we've got the number two lane here we've

got a bike lane here and then a giant

curb kind of right here uh this is sort

of like a crosswalk curb and we've got

uh the number three lane we'll call it

which is a right turn lane okay so I got

the latest version of

FSD and this freaking car pulls up and

it's like uh yeah bro we're just going

to go straight right here and basically

follows the bike lane into the curb

until I hit the bra I'm like come on we

should be pass this by now but no this

is why it's still called a supervised

full self-driving artificial

intelligence software because even after

70 years we're still doing stupid stuff

yes have we taken leaps forward

absolutely but it is as much as we

expected no so the same thing will be

true again with artificial intelligence

so again let's start putting this recipe

together we have artificial intelligence

where expectations are here and reality

is going to be way lower so everything's

going to take a lot more time a lot more

patience okay patience in the stock

market usually don't go hand inand

patience in the stock market is

something that uh people don't like

people want their returns

now okay well that sets up for problems

okay fine next companies realize wait a

minute we have all this staff that's

more efficient but are we really more

productive well our productivity is

limited by demand but consumers are

constrained for our products whether

they're commercial consumers or

individual retail consumers they're

constrained for our products because

they're potentially highly indebted the

only sort of companies that aren't

highly indebted or your Apple Microsoft

and Google and Facebook who are going

and buying all of the crazy AI

chips because the expectation again is

this when the reality is we're going to

have a stair stepper expectation okay

great and they'll be setbacks along the

way so what happens

after we start realizing dang we're

really starting to grow like this rather

than that exponential that we thought

what happens profit becomes the focus

and when profit becomes the focus at

businesses and businesses are not

raising revenue what is the first thing

that they go to they need to cut SG and

a and their costs of goods sold and also

potentially their R&D well guess what's

in all of these

segments people labor labor gets cut is

hey we got AI now we made everybody 20%

more efficient that doesn't mean we're

20% more productive so let's cut 20% of

people and this is when you get to a

phase that the Federal Reserve usually

runs into unfortunately it happens very

very very very very quickly at some

point and I don't know when that is but

at some point we will get Negative job

reads right now economy still seems to

be booming jobs reports are coming in

great and strong a lot of them are being

filled by uh government and Social

Services as well as healthare fine

that's fine it's usually an end of cycle

jobs kind of reading but we are still

seeing a pickup in retail and

Hospitality some of the construction's

coming back so it's sort of a weird

environment that's why I'm not making

this video saying oh everything's going

to crash and go to hell tomorrow I don't

know when this is going to happen and

unfortunately I think trying to bet on

when this is going to happen is is very

difficult because if you bet too early

you'll lose a lot of money if you bet

too late you'll lose a lot of money so

the timing of this is very challenging

but at some point we will get Negative

jobs reports and unfortunately the first

declines in the jobs

reports

Unfortunately they are

self-fulfilling because here's what

happens let's say our average job gain

right now is been $240,000 a year or

sorry 240,000 jobs per month let's

clarify that2 40,000 jobs per month what

happens when that all of a sudden goes

down to

150,000 people are going to start paying

attention not just people but companies

they're going to go wait a minute wow

jobs are really starting to slow oh no

next month

75 oh oh no that's usually a bad sign

that we might start going into recession

what sets in fear well what do people

not want when there's fear less profit

so what happens more cuts and all of a

sudden you get a snowball of a

joblessness recession we don't know when

that's going to come that's the problem

at some point it will come and it will

come when conditions are not ideal in my

opinion you're going to have ai driven

valuations that are absolutely maxed out

so you have Max AI valuations quite

frankly with more again efficiency but

not more productivity so now you have a

capacity to cut because think about it

the businesses can still get the same

amount of work done with less people so

valuations at Max with the capacity to

cut companies could just go you know

what we got too fat cut thousands of

jobs gone because they'll put the work

on the other people who can then use AI

to do the job of the others again 20%

more efficient without being 20% more

productive means you have excess fat

people standing around the water cooler

and they get cut

all right so valuations at Max a

capacity to cut declining profit combine

this with fear what happens the job

recession starts the job recession

starts when the job recession starts

what's next to go single family

housing multif family housing is already

going through its little pooper right

now mostly because of high interest

rates have really sort of destroyed

developers and you had this really weird

thing happen in housing which I'm going

to talk about in a moment but when job

Cuts hit the jobs recession single

family becomes almost impossible to

afford and also potentially Max

valuations and then you get a housing

correction now I want to say something

very interesting about where the housing

market and especially multif family

Market uh is worst in my opinion so a

lot of people this is sort of just a

pandemic reference a lot of people

during the pandemic they moveed from

States like I'll just use these as an

example California to Texas it could be

Florida it could be Nevada whatever

right and so what happened is a lot of

people went there and so what they did

is then you built more oh my gosh prices

went up let's build a lot okay well now

you're actually starting to get some

reversal which is just a normalization

I'm not saying Texas is bad it's just

normal you get a reversal so you

actually get people going to California

again okay well what did you not do in

California over the last few years you

didn't build so no build so that means

in California you're now left with less

homes and potentially again more people

as you go back to growth okay well that

creates a supply challenge so it

actually drives prices up whereas in

Texas you're actually left with more

homes easier construction red State's a

lot easier to build in and less people

once it normalizes which means lower

prices so I think there are a lot of

areas in the country that got overbuilt

and these overbuilt areas are going to

have the greatest pain uh in in the next

cycle we're already starting to see some

of that in multifam so ironically these

blue states that didn't build a lot

because they have bad building policies

I do think they should be building more

I ran for governor on that premise this

is not a surprise these states are going

to end up with actually weirdly less

pain than some of these other states

that's just a

theory okay so what we have here is

really a road map for issues we have ai

increasing efficiency but not

necessarily productivity now yes can the

economy keep going can productivity go

up efficiency keep going up and and the

bubble keep going on for a long time

absolutely but at the same time A lot of

people are seeing their Consumer Debt go

way up and their capacity to keep

repaying go down and their consumer

savings go down their excess savings

deplete and go down what you really need

to keep the Ponzi going so to speak is

you need more profit as soon as the

profit starts drying up at

companies and you get consumer depletion

you start getting jobs Cuts once that

starts you start the cycle you start the

next recession this is exactly how the

next recession starts because Max

valuations on AI which will not come to

fruition Max valuations on single family

housing which won't be affordable

combined with the fact that the

companies that are wanting to survive

can get enough done with AI and the

efficiency they have without extra

demand means a lot of people are going

to be out of a job so what do you

personally do to protect yourself from

this well you have to work on your

skills you have to do absolutely

everything in your power to make sure

you are not only building a war chest of

assets it doesn't have to be cash but

assets even if the market goes down 50%

you want that 50% to still be enough to

where you could survive so I'm not

saying don't invest just saying have

lots of assets use the good time now to

minimize your debt maximize your assets

build the businesses the startups the

side hustles build everything you can

now in the good time because this AI

Euphoria is very likely way ahead of

itself

and when you combine that with the debt

cycle and the difference between product

and efficiency productivity and

efficiency you are going to have at some

point in the future I don't know when

but a massive correction and these are

the signs you want to look for it all

starts with jobs as a result of AI

driven efficiencies and a lack of

productivity I not advertise these

things that you told us here I feel like

nobody else knows about this we'll we'll

try a little advertising and see how it

Go congratulations man you have done so

much people love you people look up to

you Kevin PA there financial analyst and

YouTuber meet Kevin always great to get

your

take even though I'm a licensed

financial adviser licensed real estate

broker and becoming a stock broker this

video is not personalized advice for you

it is not tax legal or otherwise

personalized advice tailored to you this

video provides generalized perspective

information and commentary any

third-party content I show shall not be

deemed endorsed by me this video is not

and shall never be deemed reasonably

sufficient information for the purposes

of evaluating a security or investment

decision any links or promoted products

are either paid affiliations or products

or Services we may benefit from I also

personally operate an actively managed

ETF I may personally hold or otherwise

hold long or short positions in various

Securities potentially including those

mentioned in this video however I have

no relationship to any issuer other than

house act nor am I presently acting as a

market maker make sure if you're

considering investing in house Haack to

always read the PPM at house.com