A market correction Coming ?
The case for sustainability to save the poor.
Disclaimer: I hold no US stocks. This is an opinion piece based on history and past experience of a airborne infantryman serving in Iraq 05-06 with the 101st band of brothers, and a federal police officer for Airforce, with 5 years of travel abroad, working in jobs as a beekeeper in New Zealand, and wheat and barley farmer, and installing solar in Australia. I am an American I love my country and have some advice to protect yourself in the event of economic crisis.
Right now, the cares act has just expired, with 40 million Americans on the verge of eviction. A presidential election less than 30 days away. President Trump recovering from Covid-19, with so many evictions looming the second housing crisis is at the door. Undoubtedly it will be a time for the super wealthy to extract wealth from the bottom middle class who just became the poor, due to pandemic and evictions more houses are about to flood the market. My house in Texas already lost 15,000 in equity in the last month alone. So the bubble is here, the question is what to do about it.
(https://www.statista.com/chart/22385/eviction-crisis-us/) "EVICTION CRISIS Up to 40 Million Americans Face Eviction in 2020"
If last crisis of 2008 was any consolidation and history usually repeat itself, we can just take data from that crisis and extrapolate the data into this one.
We can see from the data a V-shape recovery. My recommendation is to get in on this gravy train. The market crash is but it is not the end, we see the market always corrects itself fairly quickly.
The second indicator is President Trump, I will not get into policy too much, because I myself did not vote for Trump, I truly believed president Trump was a demagogue and he was going to fail his 4 years in, I thought the market would collapse 4 years ago. But it actually went higher than ever before. I even left US in 2016 and moved to New Zealand, I spent the last 5 years traveling abroad, settling in Australia. Because Australia has an extremely rational government with no recession in 40 years until Covid, I was sure Australia would be a much safer bet than USA.
The one thing I can say is economic crises are not something to be too worried about, they can be seen as a really sad situation for the poorest in society who can take years to recover, but they are also a huge opportunity for people to eat all the gravy. And if the market is higher than its ever been there is a lot of gravy to be had. I don't know anyone who doesn't love biscuits and gravy so I would encourage you to take some proactive approach to spread this gravy across the middle class and not just let the hedge fund real estate tycoons scoop it all up for themselves.
First, we need to talk about some potential factors that will point to the crash coming. Number 1 would be this housing crisis already here, the equity in my home has crashed 15,000 in the last month alone. So, we know that one is here already. Number 2 would be this election, It is my opinion that the market loves Trump, for some reason it’s gone higher than ever before, perhaps its him treating it like a business and cutting the fat, or at least giving a good enough illusion of selling that ideal to the public to make them believe he is good at business. Regardless the market seems to love him, when he got covid-19 the markets around the world tanked a bit and recovered swiftly when it was said he recovered. That is in the last week alone. If him getting covid-19 could tank the markets I imagine him losing the election would have the same effect. He himself has alluded to this several times threatening the market would crash if he lost. Rather his is misleading for votes or being serious like when he said the 2016 election was rigged but he won, is up for debate.
"https://www.bbc.com/news/election-us-2016-37673797 " Claiming the 2016 election was rigged but he won.
Regardless, I do believe if he lost the markets would crash significantly they are already making incuations the results won't even be found on election day, and it could take up to a month to count the ballots, even go as far as saying he won't accept the loss so that leaves even more room for market chaos, during the investigation into the count and seeing if there is any foul play. Unless of course he wins the election, I think this would have a massive positive effect on the market and it may surge higher than ever before.
These are the two factors that will decide the fate of the next year or two in USA as far as the market is concerned. The housing crisis with 40 million Americans on the verge of selling due to foreclosure, and the election. The third factor is the US, the Public. What will we do? Since we, the public are the driving force behind the market, we ultimately decide its fate. We have the power to control it, while the market has always been controlled by the public, it's the public opinion and narrative that decides what the public does to raise or lower it. Since al the news organizations in USA are controlled by just a few companies less than 10, these news companies have all the power to control the public. But social media, and sites like vocal can give the public a voice. Of course, it would take a lot of people to SHARE the articles for them to have any real effect. Nonetheless there was an old saying in wall street that a shoe shining boy has the power to collapse the market based on overhearing conversation and sharing it with others.
My recommendation inherently is to not wait the two years for the V shape recovery, my recommendation is to CREATE IT as fast as possible. For instance, the two factors mentioned such as the housing crisis already at the door, if people are in the market with some savings they could easily scoop up some of the properties and use them as rental income. A person with equity in a home could take out second mortgage, use it as down payment to scoop up a rental home from the average owner so the hedge fund cont-glomerates can’t get it. And use it as a rental property, you could even find homes on the verge of foreclosure make contact with the current owners, scoop up the property foreclosed at a huge discounted rate and let the current owners rent it from you. The would only have to move during the foreclosure to a storage unit, then as soon as you closed you contact them with a rental agreement and let them move right back in with no work even done on the home.
The second market indicator is Trump election, hate him or love him, the markets for some reason love his crazy demagoguery, and if he loses or there is any indication of foul play, the market will act accordingly. Or if he passed away from Covid I believe the market would tank, which would not be good.
So my recommendation is to short sell as soon as they start to tank, and roughly after a 20-30 % crash, everyone and their mothers buy, buy, buy. Even if you have never got into stocks before, it could be a great opportunity to get into the market. Instead of waiting 2 years for a V shape recovery we could pump that market after 2 weeks and make it go crazy higher than even its current state. When people see it rising they will also want to jump on the gravy train, and this could turn a V-shape recovery into an J. Which no doubt would be good for everyone.
The last recommendation for people in trouble during this crisis. Sustainability.... If your facing economic trouble, find yourself needing food assistance, or help from the government during this crisis, my deepest recommendation to you would be to use this time as an awakening moment, perhaps the crisis was not foreseeable to you, perhaps you lived above your means pay check to paycheck with no savings, or perhaps the pandemic wipe out your income completely and destroyed you financially. There is a word called sustainability , this word will help you lift yourself out of poverty fairly quickly, if you learn about sustainability and self-sufficiency and your willing to get your hands dirty , you can come roaring back into the middle class and not stay in the poverty class forever.
Sustainable actions such as cooking at home, eating less meat and more veggies, even getting a few chickens for free eggs, anything you can do to reduce your food or electricity costs will allow you to save money , pay off debt and come right back into the middle class. In the rest of the world, most people do not use dryers, they hang their clothes to dry outside. This one step alone has the potential to save a few hundred per year on electricity costs depending on the size of your family and how often you do laundry. The number 1 goal is to save money to cut costs, so if your part of this group, that means no more 5$ coffees, eating out, or wasting energy, or money on luxury items, second hand stores should be your new shopping centre. If your poor and you don't want to be poor, then you need to save money and become an investor, you can't be an investor if your still buying luxury goods. Just remember if you do not want to say poor forever these are what is going to help lift you out of poverty.
A family could buy eggs to eat every week, to provide breakfast. Or the same family could have a few hens to provide free eggs and just feed them scraps. Even if you let some of those eggs hatch and have some roosters now you also have free chicken roast. A garden goes a long way, if your poor, you need to save money to escape your poverty. So, self-sufficiency should be your new religion. It takes 3 lbs of potatoes to grow 60 lbs of potatoes. 3 lbs of potatoes planted in some tilled dirt and watered, takes 3 months to grow 60 lbs of potatoes. That is a 20X return on investment in 3 months you cannot buy any stock in the world without pure luck to get that kind of return.
It may cost 30 dollars for 2 hens from your local farmer, you could buy an incubator and become a new chicken breeder, selling chickens for 30$ a head, it only takes 21 days to hatch chicken eggs. Waiting until a month old to sell, 1 chicken can lay a few eggs per week, if you let them hatch after two months 2 chickens could turn into 14 chickens. That’s a 7X return on investment after 60 days. It is just impossible to get that return on investment in the market. Same thing with tomatoes, 1 tomato has 150-300 tomato seeds, if you were able to plant all those seeds and only 30% sprouted which is very conservative. 1 tomato from the grocery store has the potential to grow 40 tomato plants, each producing their own tomatoes with 150-300 seeds, you’re talking now about a ROI of 10,000%, remember it only takes 60 days to grow tomatoes.
Taking just tomatoes into account and extrapolating the data we can see that mother nature provides a ROI 100,000,000 times anything the stock market can do. Now just imagine your poor, you’re on unemployment, you have no work , nothing but time, but you have some room in your backyard to plant a garden, it only takes 60 days to harvest, in less than 3 months you could easily produce enough food to greatly lower your food costs, even to sell to your neighbours. Now you are on unemployment, you can barter your garden veggies, spare chickens, get your hands dirty, soak in the sun and easily lift yourself out of poverty within a year. Turning a crisis into an opportunity is what sustainability is all about. Converting the poor back into the middle class will literally be good for everyone. Let’s say you’re not poor, your blessed to have a job, you could buy food from your local gardener neighbour cheaper than from the store and you don't even need to use gas to drive there. This is what sustainability is all about.
I am not in the business of hurting people or taking advantage of anyone, my insight from spending 5 years in the military, and traveling the world has lead me to these conclusions. I am not a market expert. But I did have a garden myself and my daughter loved eating the fresh cherry tomatoes, the sky's the limit with sustainability I hope you take my advice to heart, and begin to take steps now to protect your family and make it more sustainable, something tells me with national guard getting activated some major civil unrest, and pandemics we are not out of the woods yet. It would behove everyone to embrace sustainability even with inflation on the horizon and the cost of meat prices increasing 30% in the pandemic alone. It would help you not to get left behind. Sustainability can truly save humanity or at least the people in poverty.
I also run a website sustainablescott.com providing off grid solar energy for cell phones and Bluetooth speakers. If you feel so inclined.
Portable solar for emergency off grid energy .