Name: Why All Millionaires Are Preparing for a Stagflation
Uploaded: 2025-08-05T17:52:39.000Z
Duration: 22 min 17 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The US economy is on the brink of stagflation.

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Stagflation is the worst thing that could possibly happen to the economy.

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Because getting out of the stagflation is really difficult.

Last time the United States experienced a stagflation, it lasted for almost 10 years.

And the federal reserve had to increase the interest rates to almost 20 percent to finally crush inflation.

And it took almost a decade to fix that problem.

So if the United States this time is also going to experience stagflation, then we are looking into one of the worst crises in the history of the United States.

But if you position yourself correctly, you will not only just protect yourself, but you also stand a chance to profit out of it.

Now, you might say that I am exaggerating with these claims, but if you give a closer look to the US economy, you will see very clear signs of stagflation.

Stagflation doesn't just randomly happen out of nowhere.

There are clear signs that the US economy is headed into that.

If the US government and the federal reserve will take the right steps, it is very possible to avoid that stagflation.

But based on what I see that is happening, there isn't a single indicator that either the federal reserve or the government of the United States is trying to avoid this stagflation.

In fact, I would tell you more than that, it seems like the US government right now is doing everything possible for the United States to experience that stagflation.

Stagflation is when inflation is rising on one side, on the other side, the economy is falling down.

Overall, when inflation rises, the economy rises as well.

Because inflation rises as a result of people spending their money.

More people spending money, more economic opportunity, more economic growth.

But in this case, we have a very interesting scenario that inflation is rising, but people are not spending that much money, so the economy contracts and it shrinks.

And that's why it's so dangerous to be in that situation.

If you go back to the US history, you will see that from 1970s and early 1980s, for almost about 10 years, the United States had some of the highest inflation in history.

Now take this inflation and compare it to today or the rest of the period after that, and you will see that inflation during that period wasn't this high.

At its peak, inflation has reached almost 14 percent.

And it wasn't just one single year of 14 percent inflation, like we had in 2022 when inflation reached 9.5 percent or 9.4 percent.

Back in 1974, inflation also was double digits, and for multiple years, it was very high.

At the same time, if you look at the economic growth, you won't see a huge economic growth or whatsoever.

And the easiest way to measure that is by looking at the unemployment rate.

So unemployment rate in early 1970s was 6 percent.

For comparison, unemployment rate today is about 4.2 percent.

You can clearly see that unemployment in early 1970s was very high.

But that was just the beginning because unemployment kept rising.

In 1975, it almost reached like 8 to 9 percent.

Back in 1981 or 82, it reached almost 11 percent.

So this was clearly a decade of high unemployment and when people are not working, they don't have jobs, then the economy is surely not growing and it's actually contracting.

So why on earth did we have such a strange situation?

On the other side, unemployment is going down.

Now, the only way to fix this problem was that the federal reserve had to jump in and take very strict measures.

The measures that the fed took back in the days are very strict compared to today.

Because first of all, they tried to increase the interest rates to 13 percent.

People are complaining about interest rates today, but take the 4.5 percent that we have and compare it to 13 percent, and you can see a clear difference.

But it didn't work out because in the following years, they tried to lower down interest rates to about 5 percent because high interest rates are preventing the economy from growing.

And yet inflation got out of control again and Paul Walker had to raise the interest rates to almost 20 percent to fix that inflation.

Just for the context that prior to that, the US had very moderate interest rates of about 2 to 3 percent.

So it happened for multiple reasons because back in 1970s, the United States went through multiple economic crises, if you want to call it like that.

First of all, 1971, the United States abandons the gold standard and the value of the dollar instantly diminishes.

In 1970s, the Middle Eastern countries stopped supplying the United States with oil.

It's today that the United States is the world's largest producer of oil.

Back in 1970s, the United States was heavily dependent on countries such as Saudi Arabia and the neighboring countries to import its oil.

Those countries no longer import oil to export oil to the United States.

You have huge price increases in oil prices, which created that inflation.

And there were other crises that helped to grow this inflation.

So it was fixed at the end of the day, but it took almost 10 years.

And if you look at the US economy today, you can see very clear and very similar signs that we might be experiencing something similar to that.

First of all, we might already be in a recession and we simply don't know about it.

And it's normal because we don't have all the data instantly.

The bureau of labor statistics, the bureau of economic analysis, they try to get us the best possible data as soon as possible.

But those data can easily be revised later on when additional data kicks in.

So if you look at the GDP growth, you see that there is a contraction in the GDP growth.

Negative 0.5% in the first quarter of 2025.

A recession when you have two negative GDP growth that are consecutive.

So if the second GDP growth quarter is also negative, then you are officially in a recession.

But if you look at the data, it was about 3%.

However, here's what is interesting to pay attention to is that the jobs reports have been revised both for the May and June.

So first they told us that, oh, we have 145,000 or 150,000 number of jobs being added in both of these months.

And now they got additional data and they found out that it's not true that the number of jobs were added during this period was 19,000 for June and 14,000 for May, which is very, very small.

It is probably the lowest number of jobs that are being added in a very long time.

For July, the numbers are like 73,000 and this number could easily be revised later on when additional data kicks in.

So the trend is very clear that less jobs are being added and the economy is contracting because everything is happening.

Part of them is, of course, tariffs, but it's not just about the tariffs.

It could simply be that the US economy is slowing down after that huge boom that it got in 2020 and 2021.

Yes, that contraction started back in 2022 because the data on that is very clear.

Unemployment has been going down since then.

If in another couple of months, we have additional data and we find out that we are in recession, that is part of what stagflation is.

Now let's take a look at the second component.

However, based on the recent data, inflation right now, adjusted to the last 12 months, is about 2.7%.

And this number isn't actually really huge.

Especially if you compare this number to what was happening back in 1970s and early 1980s, then 2.7% is actually really great.

You see, CPI also within itself includes services.

But there are different, let's say, methods to manipulate those numbers.

If you look at how an average person spends his money, you will see that this is the total paycheck and almost 70% of that paycheck goes into paying off the services.

So if inflation for services is rising faster than inflation on the goods, then maybe the inflation is a bit higher than that.

But overall, those numbers are still manipulated to a certain extent.

Inflation for services right now, adjusted to the last 12 months, is about 4%.

So the average Americans are actually paying way more.

And that's why when you talk to people and you tell them, oh, inflation has cooled down to 2.7%, people look at you like this, like, what are you talking about?

Because if I look at the prices and the things that I'm spending my money on, it is very clear that I'm spending way more than 2.7%.

I probably spend by, I mean, by extra 10 or 15%, maybe even more than that for some people.

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Why All Millionaires Are Preparing for a Stagflation

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