00:00folks today's video might be the most
00:01important one I make this year and in
00:03today's video I'm going to be presenting
00:05you with the data on how the American
00:07Consumer is doing and what that means
00:10for the stock market if you want to be
00:12prepared for what is coming throughout
00:13the rest of this year I highly recommend
00:15you watch this video until the very end
00:17because very specifically I'm going to
00:19tie everything together in this video
00:21and at the end explain whether or not it
00:24Mak sense to sell everything what is a
00:26practical response to all of these
00:28emerging problems now that the stock
00:30market is still relatively at all-time
00:32highs we're going to get right to work
00:33and the only thing I ask in return is
00:35that you hit that ravishing like button
00:36and also don't forget to subscribe if
00:38you find Value in today's video okay so
00:40I want to start this video with the rug
00:41pull on Starbucks and what that says
00:43about the American Consumer and their
00:46health so Starbucks reported earlier
00:48this week that they took an L on
00:50basically everything they missed by 15%
00:52on earnings per share they missed by
00:536.5% on Revenue companywide same store
00:56sales fell by 4% traffic fell 6% market
01:00doing horrible International Market
01:02overall doing horrible they were
01:03supposed to have a 1.4% gain in
01:06international markets instead they saw a
01:086% drop and management saying this is
01:11going to continue to be bad the coffee
01:13chain also slashed its forecast for its
01:15fiscal 20124 earnings and revenue
01:17predicting that its cafes would keep
01:19underperforming for several quarters but
01:21look I don't personally care that much
01:22about Starbucks I lost my emotional
01:24connection to them when they introduced
01:25that weird olive oil drink but what I do
01:27care about is what these results say
01:29about about the American Consumer you
01:31see the bigger picture here folks is
01:32that Starbucks is a gauge for consumer
01:34health it's a great discretionary
01:36spending gauge and what Starbucks
01:39reports are trends that you could see in
01:41all of the other sectors of the economy
01:43in other words if the consumer is
01:44feeling good they have extra time and
01:46money on their hands and they'll go more
01:48often to a Starbucks if they are feeling
01:49bad they'll have less time and they'll
01:51spend less at a Starbucks when money was
01:54easy and there was a huge bounce back in
01:56spending and stimulus was everywhere
01:58while Starbucks peaked since then the
01:59consumer has gone back and forth but now
02:02the consumer is getting weaker and
02:03weaker and weaker in a trend and it's
02:05becoming a year-over-year thing and in
02:08fact if you look at the consumer
02:09confidence index it's pretty on par with
02:11Starbucks stock crazy enough I mean
02:14peaking in 2021 and then climbing down
02:16year over year over year the main
02:18difference between Starbucks and the
02:19consumer confidence reports is that the
02:21consumer confidence reports are surveys
02:23Starbucks are real traffic in the store
02:26real money going into the register right
02:28now we are in a market where consumer
02:30confidence is starting to decline and we
02:31are seeing that in the surveys and we
02:33are seeing that in real time with the
02:35buck of stars but don't take my word for
02:37it this is what Starbucks themselves
02:38said quote most loyal customers even are
02:40looking for discounts the CEO said in
02:43this environment many customers have
02:44been more exacting about where and how
02:46they choose to spend their money so
02:48there's a big consumer pullback right
02:50now and it's starting here but it's
02:51going to stretch everywhere and in fact
02:53it's already stretching to all of the
02:55big chains I mean you had McDonald's
02:56PepsiCo KFC all saying the same thing
02:59the consumer is dying McDonald said on
03:01their earnings quote consumers continue
03:03to be even more discriminating with
03:05every dollar that they spend as they
03:06faced elevated prices in their
03:08day-to-day spending so we are
03:10essentially entering an America where
03:12McDonald's is becoming more and more of
03:14a luxury My Generation kind of
03:15understands that the American dream no
03:17longer includes a house and a white
03:19picket fence but but they might be a
03:20little surprised that it no longer even
03:22includes McDonald's in fact I think a
03:24few more years of this trend and people
03:25are going to start seeing McDonald's as
03:26a status symbol you're going to have
03:28soccer moms that are going to casually
03:29carry around McDonald's bags in place of
03:32Prada it's going to go from oh you eat
03:34at McDonald's every day to oh you eat at
03:36McDonald's every day now the economists
03:39the media the pundits and of course the
03:41politicians will say well American
03:42consumers they're just morons the
03:44economy is doing great they just don't
03:45realize it I mean you look at the
03:47stimulated stock market which look I'm
03:48happy about the stimulated stock market
03:50but you look at that you look at Nancy
03:51Pelosi's portfolio I mean that's in an
03:53etal bull market you look at the heavily
03:55curved unemployment rate you look at the
03:57weapons manufacturing industry all of
03:59these are doing doing so good the last
04:00couple of years so why do consumers feel
04:03so stingy they're obviously not aware
04:06that they're doing better than ever
04:07right that's what these folks would say
04:09well to State the obvious and to State
04:10what surveys have shown the American
04:12consumer's main concern is of course
04:14that their money is increasingly
04:15worthless and I don't need to say these
04:17to any of you I'm sure you already know
04:18these numbers but the truth is that
04:20100,000 in 2024 would be the equivalent
04:2381,50 in 2019 and 100,000 in 2019 would
04:28122,00 99 bucks in today's money which
04:31is an inflation rate of about 22.70% in
04:34a few short years and sure many folks
04:37got raises in this time span but in most
04:38cases people work very hard to get these
04:40raises and getting a raise just to have
04:42it eaten significantly by Higher Living
04:44costs isn't exactly inspiring and at
04:46least back pre 2023 you had very very
04:50very cheap interest rates now you got to
04:52pay way way way more for money you got
04:54to pay way more for that mortgage on the
04:55house that really hasn't come down that
04:57much in price yet you got to pay way way
04:59more for a car loan credit card debt
05:01blah blah blah blah so on and so forth
05:03so it's no shocker that consumers are
05:05upset another reason that some consumers
05:07are feeling the crunches because of
05:08federal assistance programs as you know
05:10of course federal aid ballooned during
05:12and after the pandemic but even in 2023
05:14I mean consumers benefited from highly
05:16highly elevated spending according to
05:17usafacts.org federal assistance to
05:19individuals was much higher in
05:212023 as compared to 2019 when adjusting
05:24for inflation it was 24.9% higher so in
05:28other words the government the Federal
05:29government was supporting people far far
05:31more in 2023 than they did in 2019 but
05:34in 2024 that assistance is really
05:35starting to drop off at the same time
05:37where that demand is starting to go up
05:39NBC News reported despite low
05:41unemployment and Rising wages Americans
05:43have increasingly been relying on
05:45safetynet programs that could come under
05:47further strain in the new year with
05:48growing demand and federal funding in
05:50Jeopardy so in other words the
05:51government essentially printed a ton of
05:53money said it was free got Americans
05:55dependent on them and then when the
05:57results of all that money printing
05:59happened prices shot up like 20% the
06:01government said hey we're going to give
06:03you a certain finger and it's not this
06:04one now I don't want to get into
06:06politics but I personally think that
06:07government and we as a society have a
06:09responsibility to take care of honest
06:11struggling folks who have fallen on
06:12temporary hard times but there's a big
06:14difference between helping struggling
06:16Americans and creating tons more
06:18struggling Americans the more people
06:20that are dependent on government the
06:21more the government has to print and the
06:23more government prints the more it
06:25creates middle class people that become
06:26more and more dependent on government
06:28it's a total nightmare that consistently
06:30adds more and more people onto the
06:32government's payroll and then whenever
06:33they try to cut back you get to a
06:35massive massive economic crisis which is
06:38what you're starting to see here with
06:39the consumers at the same time some of
06:41the programs that the government has
06:42that are the most effective at reducing
06:44poverty are seeing massive Cuts while we
06:46send tons of money abroad one of the
06:47most famous programs the food stamp
06:49program is around hundred billion a year
06:52and we regularly send more than that two
06:53foreign countries in the form of
06:55unaudited unaudited Aid and if and if
06:57you tell countries that we want our Aid
06:58audited they're going to be very very
07:00offended and politicians here are going
07:02to be very very offended for me as
07:03somebody that pays the highest tax rate
07:05I would much rather have my taxes go to
07:07helping a struggling American family or
07:09veteran get back on their feet than to
07:11send that money to foreign countries
07:13that don't want audits but nonetheless
07:15that's not how things work but if you're
07:17looking at this from a consumer
07:18standpoint it's very very easy to
07:21understand why they're not so happy
07:24right now and why they have to cut back
07:27on McDonald's and Starbucks and all of
07:30these bottom of the tier type fast food
07:32restaurants that really aren't much of a
07:34luxury now the other problem that you
07:35have to understand here is that if we
07:36head into any kind of major economic
07:39crisis while the American Consumer is
07:41less able to stomach that than almost
07:43ever before the US personal savings rate
07:45is around its lowest level that it's
07:47been since the data collection even
07:49started I mean us Consumer Debt is at
07:51some of its highest levels ever people
07:52are paying more and more in interest
07:54payments than ever before and people
07:55have less and less savings every single
07:57month and if you look at the media's
07:58response to this they'll say something
07:59along the lines of well Americans are
08:01just spending spending spending and not
08:03thinking and maybe that was true during
08:05the Easy Money days but increasingly
08:07tier after tier after tier of economic
08:09class here in America is having to cut
08:11back and you're starting to see that
08:13with even McDonald's you're seeing that
08:15with KFC you're seeing that with pepsic
08:17Co the reason this is all happening is
08:19because Americans right now are looking
08:20at how much money they take in and then
08:22how much money they have to pay to
08:23Simply live and they're like well
08:25there's a massive discrepancy I'm taking
08:27in about this much I'm spending about
08:28this much and my credit cards are about
08:30maxed out and and the rates are coming
08:32down anytime soon now for folks that
08:35have a lot of capital the stock market
08:36has done great people that have tons of
08:38money are doing well in this economic
08:40environment a lot of us here on the
08:42channel that have Assets in the stock
08:43market and real estate well all that is
08:45doing well but when you're getting into
08:46the core American Consumer that doesn't
08:48have that much in terms of resources and
08:50assets well guess what getting eroded
08:52and eroded and eroded so then that leads
08:54us to the main point of this video and
08:57what I want to tie everything into which
08:58is if the American Consumer is
09:00struggling why continue to buy American
09:03stocks does that make sense or does it
09:05not make sense now that the stock market
09:07is Rally to all-time highs and you're
09:08seeing another round of consumers
09:10struggling and consolidating their
09:12Financial Health well does it make sense
09:15now to lock in profits and sell
09:16everything obviously it depends on the
09:18assets that you are holding and how
09:20exposed you are to different segments of
09:21the market but bigger picture it does
09:23not make sense to sell good assets that
09:25you acquired at good prices if you
09:27employed this logic that the American
09:29consumer is struggling and that's an
09:30indicator to sell stocks well you would
09:33have missed out on the massive massive
09:342020 2021 Bull Run you would have missed
09:37out on the dip when everybody was locked
09:38in their house in order to be successful
09:40in the American Stock Market you need to
09:42understand that our economy is no longer
09:45primarily based on hard work prudent
09:47responsible saving or even Innovation
09:49our economy is now based on the US
09:51government and to some extent citizens
09:53buying things with money they don't have
09:55and doing that consistently over decade
09:57after decade after decade and when the
09:58government gets bored or they can't
10:00borrow any more money what do they do
10:01they print more money of course our
10:03economy is also increasingly based on
10:05the government printing endless amounts
10:06of money to make the economy look good
10:08and then when the ramifications come who
10:10gets the blame well the opposite party
10:12the opposite politician the corporations
10:14foreign countries get blamed or even in
10:16some cases they blame consumers they
10:18blame the middle class you look at the
10:20primary reason that we've avoided a lot
10:21of the dire recessionary predictions the
10:23last few years and that's because of
10:25massive amounts of government spending
10:27sure the FED raised rates quickly and
10:29the lack of a massive recession beat a
10:31lot of the odds and historical data but
10:32at the same time we printed so much
10:34money and when you give people money the
10:36funny thing happens that money moves
10:38around the economy intense government
10:40spending under both the Trump and Biden
10:42Administration is what caused what would
10:44otherwise be zombie economies to
10:46continue walking but the problem with
10:48zombies is eventually they start eating
10:49the middle class up and then everybody
10:51becomes a zombie and then the whole
10:52world is like of course it's not a
10:54shocker that if you give people money
10:56they spend it and the economy looks good
10:58but eventually you have ramifications
11:00somebody eventually has to pay for it
11:02biggest line item is increasingly just
11:04the interest on borrowing so if you're
11:06the government right now you really have
11:07three options in the long term you can
11:09either substantially cut all of the
11:10spending which that's never going to
11:12happen number two you can print more
11:13money to pay for everything which that's
11:15definitely going to continue happening
11:17and they're already doing that or three
11:19you can put someone in charge of the fed
11:21that's going to lower rates again to cut
11:22your borrowing costs eventually that's
11:24going to happen too so here's the thing
11:25right number two printing more money and
11:27number three lowering rates what are
11:30both of those going to do they're both
11:31going to cause long-term inflation
11:34they're both going to cause a continued
11:35devaluation of the dollar and more
11:37dollars chasing fewer assets which means
11:40that if you are somebody that doesn't
11:41have your money in companies that are
11:43able to pass on the cost to Consumers
11:45companies that own real valuable assets
11:47if you're somebody that doesn't have
11:48real estate so on and so forth well
11:51guess what you're going to be stuck
11:52holding the bag and that's why you can't
11:54have the idea at least in my view that
11:56you should sell everything in the stock
11:57market instead of selling everything you
11:59should look at the stock market as one
12:00of the best ways to protect yourself you
12:02should look at the S&P 500 as a great
12:04way to protect yourself you should look
12:05at some of the up and down volatility as
12:07a great way to trade and benefit from
12:09the movements instead of just holding
12:11the bag on these movements today's
12:13consumer right now is stuck with the
12:14bill for the 2020 2021 ER printting and
12:17we can debate whether or not it was
12:18excessive or not but the bill is and has
12:20come due and that is already getting
12:22paid with inflated asset prices really
12:24high borrowing costs and an overall
12:26system that is much much much more
12:28volatile today than it was before this
12:30whole situation happened and in the
12:32future years you're going to see more
12:33and more volatility and instability
12:35because of what's going on today so
12:36again the only thing that can be all but
12:38guaranteed is that more and more dollars
12:40are going to be into the system which
12:41will inevitably find their way into
12:43companies and assets that have the
12:44biggest strong strong hold on the
12:45American economy so if your idea to
12:48avoid all of the dire situations
12:50happening in the next couple years is to
12:51go all cash I can't see how that would
12:53be a effective strategy companies that
12:55are going to do the best are the
12:56companies that can offer innovative ways
12:58to save money or increased productivity
13:00think AI companies companies that are
13:02going to do the best are also the ones
13:03that have real world assets like real
13:05estate Commodities real production of
13:07goods that consumers need and they have
13:09to buy companies that are going to do
13:11good are the ones that can offer
13:12solutions to Consumers that have been
13:14more and more hollowed out that are
13:16cheap and can provide a quick fix for
13:19those consumers so on and so forth so
13:21the bigger picture story here is there's
13:22a lot of shite going on the best way to
13:24protect yourself is not to sell
13:26everything but rather to diversify
13:28strategically into assets that are going
13:29to hold through rain or shine in the
13:32coming years when you see more and more
13:34inflation and more and more money
13:35printing so that's my take here today
13:36let us know your thoughts down below and
13:38we will see you in the next video
