“What’s coming is worse than a housing crash” is a warning that there is a major economic downturn on the horizon, and that it could be even more severe than the housing crisis of 2008. This could be due to a number of factors, including:
- Rising interest rates: The Federal Reserve is raising interest rates in an effort to combat inflation. This is making it more expensive to borrow money, which could slow down economic growth and lead to a recession.
- High inflation: Inflation is at a 40-year high, and this is putting a strain on household budgets. If inflation continues to rise, it could lead to a decrease in consumer spending, which could further damage the economy.
- Supply chain disruptions: The COVID-19 pandemic and the war in Ukraine have caused major disruptions to the global supply chain. This has made it more difficult and expensive to produce and transport goods, which could lead to higher prices and shortages.
- Geopolitical tensions: The war in Ukraine and other geopolitical tensions are increasing uncertainty and risk in the global economy. This could lead to a decrease in investment and business confidence, which could further slow down economic growth.
In addition to these factors, there are a number of other potential risks that could lead to a major economic downturn, such as a debt crisis or a financial shock.
If there is a major economic downturn, it could have a number of negative consequences for individuals, families, and businesses. For example, it could lead to job losses, foreclosures, and bankruptcies. It could also make it more difficult for people to save for retirement and pay for their children’s education.
It is important to note that economists are divided on whether or not a major economic downturn is inevitable. However, the risks are clearly rising, and it is important to be prepared for the possibility of a recession.
Here are some things you can do to prepare for a potential economic downturn:
- Pay down debt: If you have debt, try to pay it down as quickly as possible. This will give you more financial flexibility if you lose your job or experience a reduction in income.
- Build up an emergency fund: Aim to save at least three to six months of living expenses in an emergency fund. This will give you a financial cushion if you lose your job or experience another unexpected financial setback.
- Invest wisely: If you are investing for retirement, make sure your portfolio is diversified and that you are investing in a risk level that you are comfortable with.
- Update your resume and network with people in your field: If you lose your job, it will be important to have a plan in place for finding a new one. Make sure your resume is up to date and that you are networking with people in your field.
It is also important to stay informed about the economy and the potential risks that could lead to a recession. This will help you make informed decisions about your finances and prepare for the possibility of a difficult economic period.