The Economy Is Crashing... Here’s What You Should Do

Foreign.

Welcome to Capitalism.com I'm Ryan Daniel Moran and today I want to share with you something that is on my heart and my mind because a lot of my peers are feeling really afraid right now. I work with a ton of entrepreneurs all over the world and universally everyone is feeling chaotic right now. There's all kinds of things in the news right now like inflation and the debt ceiling and a pending election that nobody knows what is going to happen. And there's a lot of fear and uncertainty about what's going to happen in our country, in the world, and with the economy. And I want to speak to those of you who are feeling really afraid right now because I have dealt with this too. I have dealt with the same amount of concerns and fears as you. I've gone deep down rabbit holes about what could happen in the economy and conspiracy theories that might explain it all. I've gone deep down those rabbit holes multiple times in my life and I. I want to share some things that I've discovered with you. You see, I went to college originally to be a pastor, but then I ended up studying economics and I was also starting my first business at the same time. It was 2006 when I started my first business, and that was my first year of college as well. And that was a really good time in the economy. Things were booming and interest rates were healthy and there was a real estate boom and everything you touch turned to gold. And the Internet was still new. Internet marketing was this new industry and it was easy to throw up websites and sell whatever you wanted and everything was great and everything was booming. And then 2007 things continued to expand. And then 2008 happened and everything came crashing down. Now, this affected a lot of entrepreneurs, myself included. This affected a lot of stock portfolios, myself included. And I was also an economics student at the time, so I was studying the whole thing live as it was happening. I learned economics during the crash of 2008. It was a fascinating time to be a student of economics. Now, not only was I a student of economics, but I was a student of a specific type of economics called Austrian economics, which is basically the black sheep of the economics world because they think that the world's always about to crash. They're. They're very religious in their viewpoints, and anything that goes counter to their view means that the whole world is going to come crashing down. And they were proved right in 2008. In 2008, everything that they said was going to happen pretty much happened. And so I was in this weird Experience where I'm starting a business, I'm studying economics. And the school of thought that I came from was vindicated in their doomsday scenarios. And everybody else thought the economy was great and the boom would go on forever. And my school of thought said, no, there's going to be a crash. And they were right. And I used that as a reason to slow down and be fearful. And I went down some conspiracy theory rabbit holes in which I was very convinced for a long time that maybe the recession was manufactured, maybe there was a One World Government on its way at the time. One of the big theories was that there was going to be a currency like the euro, but in North America, and it was going to be called the Amaro. And there were these evil elites called the Bilderberg Group. And the Bilderberg Group was the group that was controlling the elections and was determining what was going to happen in the economy. And there were a lot of theories about how this crash was going to be used to usher in a time of control and microchips. And I went to a very religious school and the Austrian School of Economics, and there was a crash happening. And all this seemed very logical at the time. And so I internalized a lot of this and I used a lot of this bad news as a reason to not invest, a reason to be defensive. And it also made me feel vindicated or justified in my viewpoint of the world. And so one of the things I did was I stopped learning and I stopped investing, meaning investing in my own education or my own knowledge. I, I basically was like, I'm making money on the Internet and everybody else is going. And at the same time, I know how the economy works because I just graduated with an economics degree. And all of you were wrong and I was right. And I use this as a reason to keep a position in which I, I believed that I had it figured out. I knew it was going to happen. And I was wrong. Because what happened on the other side was that I again played defense and I waited for there to be a further crash. And. And meanwhile, also at the same time, I'm friends with all these Internet marketers who are selling digital newsletters about buying gold and how there's going to be this time of great peril. And the big. Actually, the biggest direct marketing campaign at the time was called the End of America. That's what it was called. It was huge. It was published by Stansberry Research. They brought on Ron Paul, my political hero. Dr. Paul cured my apathy. Ron Paul was the spokesperson Oh, I mean, could it be any more perfect than this? The end of America, the economy is going to go into the toilet. Ron Paul is our spokesperson. I mean, you couldn't have hit any more of my emotional hot buttons. But myself and my peers were wrong. We were wrong, as evidenced by the fact that There was a 12 year run after 2008 of a huge time of expansion. And so I've had, I had to over the years kind of come back and relook at recessions and economics and where we are in sort of the evolution of the economy and the markets. And the interesting thing is that I see a very similar setup in the psyche of entrepreneurs today as what existed in 2008. Now, in 2008 we had a crash in which the stock market fell by about 50%. Stock markets fell from highs of about 13,000 to about 6,000, so just over 50%. We saw a very similar correction during the COVID pandemic. From the height before COVID to the low during COVID we fell from about 29,000 to about 18,000. Maybe we may have gone a little bit lower than that, so about 50%. So if we just look at the stock market, we had about, we had a similar correction, but we also had this pandemic thing that kept us all in our homes and we had political tension and we had all of this bad news and people dying and it was terrible. Right? I mean, I think we will be figuring out the long term repercussions of our mental and physical health from COVID for years. It'll be fascinating to see how all of this evolves over the coming decades. But psychologically, in the minds of entrepreneurs, specifically the ones that, that got into the game over the last 10 years, I saw something very interesting that I went through during my first recession, my first recession of 2008, when I'm freaking out, when I see reason for all kinds of conspiracy theories and I see all my peers doing the exact same thing, I see my peers going down rabbit holes and the theories about the economy and what's going to happen are exactly the same as they were 13 or 14 years ago, 15 years ago. Jeez, makes me feel old. But the names have changed. Instead of the Bilderberg Group running everything, it's the World Economic Forum. Instead of the Amaro or the one world currency, it's the CBDC or Fed now, or the digital currency that is going to give government more control now. These things are worth considering, these things are worth exploring, these things are worth diving into so that we can keep our government in check. But when they run our lives, when they run our decisions, specifically about how we will invest or run our businesses, this is where we get into trouble. And we get into trouble because we start to play defense. We start to believe that the growth period of the world, the growth period of the economy is over. And so what I would like to do for the next few minutes is give you a little bit of perspective. Because what I didn't have in 2008 was any perspective at all. I was 20 and 21 years old. I'm a new college grad, I'm starting a business, I'm making six figures from my tiny apartment. I'm hot shit. I'm so cool. I thought I knew how the world worked. I had no perspective at all. Now I have a little, I have a little bit of perspective. But let's zoom out to give us all some more perspective. Because when in doubt, zoom out. Whether it is your personal life and you feel like you haven't made it yet, just zoom out and look at your progress in your business. You feel like things haven't aren't moving as fast as you want. Zoom out, look at everything that you've accomplished up to this point. That will give you a really good indication of where you're going. Because people say history doesn't repeat. Yes it does. The history. History is the best indicator of the future. Where else are you getting your indicators from? Looking at history from a proper perspective and a proper lens gives us a very good indication about where we might go. So let's zoom out a little bit. Here's a fun fact for you. The idea of capitalism really became mainstream around the year 1800. 1800, not 1500, not 1200, not BC. About 200 years ago, the idea of capitalism and free markets freedom was introduced. The first big publication to introduce the idea of free markets was Adam Smith's wealth of Nations. It was published in 1776. Now back then, this is going to stun you. In 1776 they did not have the Internet. In fact, they didn't have, they didn't even have chat GPT. So information spread much slower back then. And so the ideas of capitalism did not gain a foothold until the early 1800s. And you know, back then it wasn't like trade was very easy. We had ships and ports and tulips and stuff like that. So the idea of free markets is still a very new idea, a brand spanking new idea. And when this thing called the Internet came along, ideas started to spread much Faster. And the idea of open markets, free markets, free trade, e commerce accelerated at a rate that we've never seen before. And in the last 20 years, in the last 20 years, the overall US economy has tripled. Now you can say inflation, you can say government intervention, you could say we're no longer on the gold standard. You can cut that up and doubt it however you want. And I like to play those games too. I have plenty of things that I am unhappy about. About how our government is run, about how the Fed runs policy. But the fact of the matter is we have three times the economic activity today than we have in the year 2000. Now try this on for size. This is where it gets really crazy. I know someone, I know someone who was a big fan of apple in the 1980s. I was born in the 1980s. I was Born in 1987. And in the year 1987, this person was a fan of Apple and they bought Apple stock. And at the time it was this little podunk company that everybody doubted. And that stock today is worth 1500 times what it was in 1987. So if you want to run some numbers here, $100,000 investment in Apple back when I was born is now worth $15 million. Is that right? $15 million. That person didn't need to do anything except buy it and hold it. Now that's a 35 year run of. And of course it's the biggest company in the world, right. But that's how much the economy has expanded. And if you look at the last 10 years, in the last 10 years, first of all, one stat that I found while I was preparing this for you is that the United States has reduced their carbon emissions back to the levels of the 1970s and 80s. Which I was like, wait a minute, let me fact check this. Are you telling me that while we're all worried about global warming, the United States has reduced its carbon emissions back to the levels of the 1970s and 80s? And the answer is yes, we made tremendous progress here. And some of it is due to companies like Tesla, which if you look back at their history over the last 10 to 15 years, if you had invested in that company, you'd be up like a billion percent right now. These numbers haven't been fact checked. Don't listen to anything that I say. And the same is true with things like early industries like cryptocurrency web3 if we look at where we are in the overall trend of history rather than what is just in front of us over the next two or three years, we, we start to see that the trend of freedom, the trend of capitalism, the trend of the growth part of humanity is picking up steam, not slowing down. So now that we've established some context about where we are in terms of history, let's look at some context of where we are on a shorter timeframe, like where we are over the last 18 to 24 months. Because before COVID we had these crazy record highs in the economy. Everything looked great. Then we had Covid, obviously we had the big crash and then we saw this big artificial bubble recovery that was fueled by low interest rates. Now we have actually appropriate interest rates and things have come crashing down in some cases and some people think that there's going to be a further crash and correction. And there might be, but let's look at some context for this. Interest rates have gone from 0% to 5%. 5% is like a healthy interest rate. That is a modest interest rate that is appropriate for right now. They're probably not going to go higher. They might, maybe, but the Federal Reserve has said probably not going to raise interest rates. And economically speaking there's really no reason right now to go higher. Inflation is now coming down. We had fears that inflation was going to continue to run rampant because of all the quote, money that we printed. Well, that money is being destroyed now. So a lot of the fears that we I had, that we had, that a lot of entrepreneurs had was that was going to be this crazy inflation run where we would have hyperinflation, we'd print the dollar away, they'd introduce one world currency, etc. This was a lot of the use case for buying Bitcoin. But that thesis didn't play out. Might still play out long term, but there's really no reason for it to play out anytime soon because the Fed actually acted appropriately. The Fed actually did the right thing. And so the fears that many of us had can go away or be satisfied because exactly what we didn't think would happen happened. In fact, on my podcast I interviewed my like one of the people who, who changed my thinking the most, my economics professor from college, Dr. Tom Lehman. And he said even if we do have high inflation, I don't expect the Fed to raise rates because the government is printing so much money. And he was wrong. I was wrong. The Fed did raise interest rates from 0 to 5%, which is healthy, normal and appropriate. And we're probably not going any higher. So we're basically at the peak of high interest rates probably. There's really no reason to go higher. And so any fears of hyperinflation getting away from us may be satisfied. I also would like to point out here, I think it's a very healthy thing for us to be having this conflict about the debt in the United States. I think the one thing that I'm really glad the Republicans are doing is digging in their heels about the debt ceiling and having a strong case against giving the left what they want. I think the Republicans cause a lot of noise on things that don't matter that much. But I'm really glad that they're digging in their heels about the debt ceiling. Why? Because inflation doesn't just come from the Federal Reserve's interest rates. Inflation comes from the deficit that we have on our spending and balance sheet. When we're running trillion dollar deficits, that money has to come from somewhere. And so that money gets created and is now debt on our balance sheet. So I'm actually glad that we're having this argument. Maybe we'll get spending in the right direction. All this to say these are anti inflationary signals. Higher interest rates, battling over how much debt we can have. These are anti inflationary signals. Also, when you have things like AI driving down the price of things and driving up the productivity of things, these are deflationary, anti inflationary signals. Okay, enough about that. Also, you have crypto down 80% from its highs. That is a full retracement, 80% from its highs. Bitcoin in particular went from about 65,000 at its highs to 15,000 at its lows in this cycle. That's a full 80% retracement. Tech stocks, which are the next riskiest asset class, are down 50 to 80% in some cases. Go look at the chart of PayPal or Zoom. Tech stocks have been crushed in the last year. Zoom has gone from $400 to $60. And during that time they tripled their business and became profitable for the first time. So the asset prices in comparison to value have come cratering down to earth. And real estate in some areas, including where I live, Austin, Texas is down 30%. 30%. Now, if you listen to all my podcasts, if you're a very loyal listener, you may have heard me get into a debate with my mentor, JP Newman. He thought there would be about a 5% drop. I said 30, and we're sitting right at about 30 right now. A 30% drop in the market. In some cases, the whole market hasn't dropped a full 30, but in some cases dropped 30. And I think we'll continue to come down all of this to say we're all afraid of a recession or a crash. We're in it now. Crypto came down 80%. Tech stock say down 50%. Real estate's down 10 to 30%. Interest rates are at 5%. It, it, it's happening now. Which means that in my, in my evaluation, we could probably stop fearing that it is going to be this great meltdown and so we can build for the future knowing that we may have a slower economy, we may have a recession, but we're already in it. We're in it now, we're dealing with it now, and it might be long, but we don't have to fear it because we're already in it. So let's start building through it. A few things that I'm keeping in mind during this next period is I, I think, I think we'll have about a two year slowdown, maybe three, before we have another big acceleration and expansion. And so I'm using this to accumulate, accumulate things that I think are going to expand in value for the next 10 years. If you're betting on what worked or expanded in the previous years.

You may get crushed. But if you're betting on the future, if you're creating the future, if you're looking at companies that are going to expand through the future, this can be a really exciting time. And the last point to make here is now is not the time for most people to be expanding their lifestyles, but it is the time to be expanding your wealth. This is, this is springtime. This is when the winter's over. My belief, winter's over. We've seen the worst of it. This is the time to plant seeds. Knowing that is, we're going to work like hell through summer to get a reap of a harvest come fall. I don't mean seasonality in terms of the year. I mean it's springtime in the economy. It's time to plant new seeds. It's time to plant them and work like cowl for the next two to three years. And there will be another harvest in a couple of years. That would be the time to expand your lifestyle. And when we're in a bad place, when we feel fearful about our own lives, when we feel fearful about the economy, when the person that we don't like is in charge in the White House, we tend to project our fear onto every other thing in the world, including the economy and our business. And so we start to play defense. And when we play defense, we stop investing. We stop investing in companies, including our own we stop playing ball like we're going to win, and we start playing ball like we're trying not to lose. And I'm sharing this with you because I lost out on millions of dollars by playing not to lose. If I could go back in time and give advice to the version of myself that was worried about the world, worried about the economy, I would have said, the broad trend is great. The broad trend is positive. Bet on the things that are changing the world, you being one of them. So be guarded with your thoughts, be guarded with your mindset, be guarded with your friends. Be guarded with your investments. Guarded in a way that protects them from the negativity. That protects them from the things that want to take the focus away from growth and positivity and optimism. And the same question for the year 2020, when there is so much uncertainty in the world. What do you wish you had told yourself back then? Would you have told yourself to stay on the sidelines and not play ball? Or would you have told yourself, buy everything because asset prices are going up? Would you have told yourself to double down on E Commerce because there's about to be a huge boom? Would you have told yourself, hey, this might be the best time ever in your lifetime to sell a business, because valuations are going to be absurd. Now we're on the other side of that. We see things starting to soften and there might be a meltdown. There may be some black swan event in the economy that we don't see coming. And the thing about black swans is that we don't usually see them coming. So all the ones that people are predicting, they almost never happen. The things that we don't see are the ones that kick us in the face. So all of the theories about what might happen are unlikely to actually happen because we don't see black swans ahead of time. But I'll be honest, there are some things that really concern me. Like having this much debt in the US and having a. A fight over the debt ceiling. Like that gives me reason for concern. I'm concerned about that. I'm concerned about the possibility of Donald Trump being president again, not because I actually liked a lot of his policies. I'm not concerned about that. I'm concerned about the psyche of the country and the conflict that will happen between two very polarized sides of the political aisle. That concerns me. That gives me pause. These are things that might result in a total breakdown of the economy. But when things melt, it's our job as entrepreneurs to rebuild them. It's our job to Start building things again, to start selling things again, to start thinking about our customers again, to start thinking about how we can serve our families and our communities. It's our job. We're the people who rebuild. If there is a total collapse, that's when we win the most. Because bear markets and collapses on average last for about 18 months. Bull markets and expansions on average last between five and 10 years. So when there are crashes like Covid, you see a total meltdown for 12 to 18 months. And then you see a big run, you see bull market expansion. Recessions are like the pruning of the tree that give room for the good fruit to blow, to be ready to be a good fruit. And one way that you could do that is to ask yourself the question, what decisions would you be making in your business right now if there was not a crash coming? But it was the opposite. We were on the precipice of a huge time of expansion. What would you be doing in your business? How would you be planning for the future if you were betting on the growth that we've experienced over the last 200 years to accelerate? If the last 20 years were actually a sign of what was to come? Because capitalism is alive and well and there are new emerging technologies coming, like AI, like Web3, like genomics and gene editing, like space travel and asteroid mining. Do you know that there are, there are asteroids that can be mined that have the same level of precious metals on them that would be valued at many times the total GDP of the world? The total GDP of the world many times over. And there are companies planning on mining them now. What does that mean? That means that we're going to see huge times of expansion and opportunity as new technologies gain foothold. Capitalism doesn't slow down. Freedom doesn't slow down. Governments can try to stop it, but all they can do is hold it back temporarily. The trend of freedom is too strong and you are one of the participants in that. If you see yourself as separate from the overall trend, if you see yourself as an isolated piece away from all of the expansion that is happening, it would be easy to fall in the trap of feeling afraid of it, of feeling protective of what you have, of not placing bets, of not investing for the long term, of not betting on optimism, it would make sense to do that if you see yourself as isolated from the rest of the world. But if you see yourself as part of the expansion, then we're creating this together and we'll create the next bull run. Whether we have massive expansion or we have A slowdown. Now, I will just tell you from my personal bias that I do see reasons for there to be a slowdown. I've said here that I think that there is going to be a recession that hurts and it's going to last for about two to three years. And I see that as the time to plant seeds. I see that as the time to get aggressive. I see that as the time to buy advertising and to hire people. Because during slow times are when things go on sale. I see that as the time to pause and really align with your vision and what you want to create. Because we have more opportunities to make money doing what you enjoy than we've ever had before. These are the times to pause and explore and bet on the things that you want to create rather than chase how things used to be. So what I would like for you to take from this is the context that in the broad view of history.

Capitalism expands and rarely contracts. And when it does contract, it contracts for a very short period of time before the next new emerging trend becomes possible. And it's our job to bet on those. It's our job to seek them out. It's our job to create them. It's our job to partner with others that can help create that next trend. And we're sitting on the verge of that next one. I personally am using this as a time to place place bets on things that I think are going to expand for the next 10 years, to make bets in industries, to make relationships, to bet on the next big run. Because it's our job to create that expansion. You're an entrepreneur. You're a capitalist. This is when we thrive the most. This is when the best businesses are built. And I hope that you can take away from this, that even if there is a slowdown, it still is the greatest opportunity. And I hope you can take away from this that even if there is a slowdown or a crash or a correction, it's still an opportunity. Because you're the opportunity. I'm Ryan Daniel Moran with capitalism.com thanks for listening today and I'll see you next time. Take care. If you've read my book, listen to the podcast or or watch any of my YouTube videos and you're asking yourself, where the heck do I start? Where do I begin my journey to my million dollar business? We got you today. My team and I just completed a new Kickstart class called five Days seven Figures. This is the best on ramp class for any of you who are ready to begin your seven figure journey in this five day class. You're going to choose your ideal market, what products to launch. Come up with a plan to get each one of them to 25 sales a day, and you'll know at the end of the class exactly what your business is going to be, how you're going to get it to a million, and exactly what your next steps are to get it off the ground. It's a five day class. It costs 100 bucks. And when you're done, a member of my team will get on the phone with you and review your homework directly with you. When you're ready to start, go take the challenge@capitalism.com 5 that's the number 55 days 7 figures capitalism.com 5.