The Economy Is Changing - What They're NOT Telling You
Published: 2024-07-30
Status:
Available
|
Analyzed
Published: 2024-07-30
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Customers are expected to feel economic pressure and higher living costs for at least the next few quarters.
""At the end of the day, we expect customers will continue to feel the pinch of the economy and a higher cost of living for at least the next several quarters in this very competitive landscape.""
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Businesses are increasingly competing for the limited and stretched budgets of low-income consumers.
""And we're seeing a growing competition between businesses fighting for the limited dollars of lowincome people because those dollars are being stretched very thin.""
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Major fast food chains are reintroducing or creating value menus to attract price-sensitive, lower-income customers.
""McDonald's, Taco Bell, Burger King, and Wendy's all very recently come up with their own version of a value menu or revive their $5 value menu thing as a way to attract lower income people with lower discount prices.""
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Consumers are reaching their spending limits and seeking discounts, leading companies to adjust pricing strategies.
""people are saying, 'I can't keep affording spending this money. I am maxed out on my credit card. I need an alternative and that alternative is a discount which is why you're seeing so many companies out starting to change their pricing models.""
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Aggressive discounting strategies, like Subway's former $5 footlong, can harm business profits, brand perception, and the ability to increase prices or quality later.
""what ended up happening with this $5 foot long was after it destroyed a lot of profits for a lot of businesses, a lot of Subway businesses, it created a lot of issues with the brand. And then it was very difficult for Subway to raise the prices and quality of their subs, which then kind of helped hurt the brand.""
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McDonald's required Coca-Cola's financial support to subsidize its $5 value menu promotion, indicating operational challenges and pushback from franchisees concerned about profitability.
""So, in order to impose this $5 value menu, McDonald's had to partner with Coca-Cola. And Coca-Cola had to subsidize this $5 value promotion in order for it to actually work with the operators.""
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Investors are concerned that declining corporate profits from strategies like value menus will negatively impact their returns, dividends, and stock appreciation.
""And we've also seen a push back from investors because if you're an investor, you own a piece of the entire corporation. And if the corporation is making smaller and smaller profits, well, that means your gains are also going to be hurt. Your dividends might get hurt. Your stock appreciation might get hurt.""
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A fierce competition exists for low-income consumers as they are running out of money and their capacity to spend.
""Because the difficult part here is there's a war for the lowincome customer because the lowincome customer, the lowincome American is running out of money. The running out of ability to keep spending money.""
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Higher-income individuals continue to spend significantly, contrasting with the financial strain on lower-income consumers.
""And we also have a very different story on the higher income American because the higher income American or higher earner is still spending money like crazy.""
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Despite warnings from Delta about potentially shrinking sales in 2024, reports from Delta and Hilton indicate that sales are currently growing.
""We've seen in the most recent reports from Delta and Hilton that sales are growing even though Delta has come out and put out warnings say we think that sales in 2024 are going to be shrinking.""
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The cumulative effect of inflation over multiple years is significantly impacting consumers' financial resources.
""The compounding inflation is now starting to burn a hole in a lot of people's pockets.""
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Many anticipate the Federal Reserve will cut interest rates in September, believing inflation has been effectively managed.
""A lot of people are predicting that the Federal Reserve Bank is going to hit at cutting interest rates in September because they feel that they have won this fight on inflation.""
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The Federal Reserve's goal in combating inflation is to slow the rate of price increases, not to revert prices to previous levels.
""Winning the fight on inflation means the prices of things keep going up from here, just not as fast as it was last year.""
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The Federal Reserve's target for inflation is 2%, aiming for gradual price increases rather than price stagnation or deflation.
""The Federal Reserve Bank says that they want a 2% inflation target, not a 0% inflation target to keep the prices of things the same, not a negative 5% inflation target to try to bring things back to normal prices as to what a lot of people would consider normal.""
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Inflation benefits investors by increasing the money supply and asset values, while it negatively impacts the average person's purchasing power.
""Inflation benefits some and it hurts others. Americans going into debt to buy a bunch of dumb things benefits some people and hurts others. ... Investors benefit from inflation. The average person doesn't.""
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The current economic system is structured in a way that perpetuates financial hardship for individuals and allows others to profit from it.
""This system is designed to keep people poor. And the system, the system is designed to profit off of people that are poor financially.""
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To build wealth, individuals should reduce unnecessary spending, avoid debt for non-income-generating items, invest in assets, increase cash flow, and make financial sacrifices.
""And the way that you do that is by stopping spending all of your money. Stop going into debt to fund consumer liabilities, meaning things that don't make you any money. Buy assets, stack cash flow, make some sacrifices, earn more money, buy more cash flow, build wealth...""
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Consumers often desire goods and services immediately, even before they have the financial means to purchase them.
""But the second part of the sword is everybody wants to have it now before they can afford it.""
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Companies' financial reports provide a more immediate indication of economic conditions than official economic data, due to their need to track profits and market dynamics in real-time.
""economic data is slow. But companies have to report what's going on much faster than the economy because those companies are in the business of making a profit. And so they have to have their pulse on what's happening.""
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