Speaker 1: It's been a bang-up couple of years for the people here on Earth. First the world got rocked by a global pandemic. This caused a three-month economic recession as global industry came to a screeching halt, with people in quarantine all around the world and COVID deaths piling up. A bit of good news came our way when in September 2020 it was announced that Keeping Up With the Kardashians was finally being cancelled. However, just as COVID started to wind down and the world could once more breathe a sigh of maskless relief, Russia decided to become the turd in the punchbowl by invading Ukraine and sending global markets reeling once again. And if that wasn't bad enough, three weeks after Russia's invasion of Ukraine, the Kardashian family returned with a brand new Hulu reality series. But things would only get worse from there, as the world began to reap what it had sown during the COVID pandemic. Global inflation is at highs not seen in nearly half a century, with inflation in the US reaching 8.58% as of the making of this video, a high previously reached in 1981. This staggering rise in inflation is driven largely by increasing costs of food and energy due to the slowdown of both industries during the COVID pandemic. Food prices increased by 12.6% just between February and March of this year, the highest level of inflation since 1990. Wheat and other grains were hit especially hard thanks to the war in Ukraine, with costs rising by 17.9% thanks to the direct effects of the war and a Russian embargo on Ukrainian shipping. As both Russia and Ukraine grow much of the world's wheat and other grains, the war has had devastating effects on commodity prices. Ukrainians have had their fields destroyed or mined by Russian troops, and what wheat has been able to be harvested has either been stolen by Russian troops or blockaded by Russian ships in the Black Sea. The situation is growing so dire, especially for poorer African nations who face a pending famine, that there has been a growing call in the West for Ukrainian trade convoys to be escorted by NATO warships to break through Russian blockades. The Russians would face a choice with significant consequences, take on the superior NATO fleets and broaden the war exponentially, or allow Ukrainian grain to be shipped abroad ending the threat to African nations and lowering food prices around the world. The world's ravenous appetite for goods has also fueled this historical inflation. Coming out of lockdowns and quarantines starting in late 2021, billions of people flooded stores all over the world with money they'd saved up during the quarantine. People everywhere were hungry for life, and the resulting surge in demand has caused a sympathetic surge in prices. Lastly, energy prices have skyrocketed in recent months thanks to Russia's invasion of Ukraine. Like a perfect storm, all these factors have come together at exactly the worst time, when people were ready to pick up where they left off before the pandemic. Resilience against Russia and disruption in Russian oil supplies has led to a sharp jump in the price of oil. Worsening the situation was the refusal by OPEC nations to increase production to offset Russia's disruption. For OPEC nations such as Saudi Arabia, the ever-increasing oil prices are an economic windfall, and they're making money hand over fist as the world suffers. Thankfully, and likely because nations like Saudi Arabia were reminded who really provides for their national defense against enemies like Iran, American President Joe Biden was able to negotiate an increase in oil production by OPEC, which should lower prices in the coming summer months. So how do you survive the coming recession? First, calm down. Recessions aren't permanent. Even the Great Depression only lasted several years before an economic uptick leading to the most prosperous era in US history. While World War II helped, an end to the depression was inevitable, and so is an end to this recession. With the average recession lasting 11 months, you should try to keep a perspective and not fall prey to what investors call FUD, or Fear, Uncertainty, and Doubt. Governments around the world are hiking up interest rates in order to help combat rising inflation. What this means is that loans for big-ticket items such as houses and cars will now come with greater interest rates, so you end up paying more. This is how central banks primarily fight inflation, as higher interest rates means consumers are less likely to spend money, which can in turn reduce demand for goods and bring prices back down again. So for the time being, don't plan on buying a car or a brand new house. This is the time to save and wait for the end of the recession, during which historically economic growth booms and interest rates come back down again. If you're an investor, this is probably a time of great fear. Traditional stocks have taken a severe beating, with the S&P 500 officially entering a bear market or a 20% drop from the most recent high. This has wiped out billions in value across the entire stock market, causing some portfolios to crash. If you invest in cryptocurrency, you're no doubt feeling this pain, as crypto has lost over $1 trillion in value since March 2022. The bottom seems to be nowhere in sight, as even Bitcoin, the largest cryptocurrency, has lost over $60 billion in market capitalization in the last few months. The collapse of some altcoins, most famously Luna, has led many to fear the crypto market only worsening the situation as new investors are scared away. But bear markets aren't necessarily bad for investors, if you can stick it out for the long run. Remember, you don't lock in any losses until you sell, and unless you have a solid reason to believe your investment is headed in the single digits, you should fight the urge to sell and cut losses. Instead, it might be time to refocus priorities and shift investments into different assets. Consumer goods, healthcare, and energy are always solid investments during bear markets, as these things are vital to the average Joe and will likely see less loss. In fact, you might even get a small return in the midst of a bear market. People need critical consumer goods, no matter what their financial situation is. If you're a crypto investor, you might be better off simply throwing your money directly into a dumpster. Just kidding, it's time to re-evaluate what projects you're backing financially, and refocus from more risky assets to more tried and proven assets. Major coins such as Bitcoin, Ethereum, and Solana are unlikely to go under given their widespread adoption. People want to use these coins, and while still very risky, there is an inherent less risk in a well-established cryptocurrency than in your cousin's altcoin he airdropped to you last week at Starbucks. A good way to determine what coins are likely to survive this crypto crash is to look at total market capitalization. This will tell you what coins people are using or holding. Whether you invest in traditional investments such as stocks, or riskier options such as crypto, the key during a bear market is to avoid trying to time the market. Stop looking for the bottom, believing you can get in at a dirt-cheap price and make a killing on the bounce back. It's time to stop chasing moons and lambos, and invest like a grown-up by using the tried-and-true strategy of dollar-cost averaging. What this means is you invest a set amount, no matter the price, at a set time. If you get paid on the 1st and 15th, then you invest on the 1st and 15th, no matter what the price is. In the long run, this is far more successful than hoarding capital and trying to time the market. The next way to survive a recession is to pay off your credit card debt as fast as possible. This may be difficult, but it's critically important as interest rates are increasing. This means that what you end up owing is only going to increase every month. If you're making low payments over the long term, you might end up paying hundreds or even thousands more in interest with just a few percentage points increase. So put a taper on spending and get that credit card debt down fast. Next you're going to want to make sure you save money. Recessions can have a knock-on effect across a wide variety of industries, and the last thing you want is to be out of a job with no savings. It's time to tighten your belt and cut expenses to make sure you've got a nice cushion should things go south in a hurry. If you're fortunate enough to have a significant amount of capital, then this is the time to be looking for assets that can store your wealth while not depreciating. Gold and real estate are traditionally good inflation and recession shelters, though hoarding property at the moment may be its own risk due to fears of a housing bubble collapse. With home and rent prices across the US and even the world reaching record highs, don't be surprised if social unrest and demand for government action leads to a severe drop in the value of your real estate. So perhaps read the room and park your money elsewhere. Plus, by buying real estate simply to store your money, all you're doing is making the problem worse for everyone else by lowering supply and increasing price. During a recession, stocks take a beating, but bonds are traditionally very solid investments even during economic turmoil, though bond prices have also been hurt by the recession. If you're wondering what the difference between the two is, stocks represent partial ownership of a company. So if you buy stock in Apple, you now own a percentage of that company, unless your percentage is sizable, don't expect to be invited to the next board meeting. Bonds, however, are loans from you to the company or government you purchased the bond from. When you buy a bond from an entity, that company or government is now in debt to you for the amount that you bought, and you'll receive interest paid on that loan for a set period of time, after which the bond will be paid back in full. Bonds are excellent investments for those looking for a set income, as every year you're guaranteed a set interest on the bond. If you buy a 10-year bond for $2,500 at an interest rate of 2%, then every year you'll get back $50 until the 10-year mark, when you'll get back the original $2,500 as well, giving you a $500 profit. Both stocks and bonds come with their own risk-reward ratio. Stocks can often yield significantly better results as your return increases as the company's own value increases. However, the opposite is also true. As the company's value decreases, so does the value of your stock. A bond, on the other hand, offers an extremely safe return on your investment, even if that return is often much smaller. The only real risk with a bond is if the entity you bought the bond from goes completely under for some reason, such as the collapse of a company or government. During a recession, switching your investments from stocks to bonds can be a smart move, and should continue to provide a small but appreciative return to help you weather the economic storm. Whatever your survival strategy, the most important part is to remember not to give in to panic. When the seasons end, the sun will come out and shine again, unless you invested in Luna. Now you need to watch Funeral Home Secrets They Don't Want You To Know, or have a look at, What Happens When You Die?