Why the economic threat from the gulf is now much worse: prepare for a recession

[00:00] Believe it or not,

[00:00] the next economic shock

[00:03] and the news isn't telling

[00:05] I'm talking about the Iran war

[00:07] and the economic chain reaction

[00:10] because even if the situation

[00:13] the real financial consequences

[00:15] haven't hit the average person yet.

[00:17] This is gonna hit your finances hard

[00:19] and most people won't see it

[00:22] That's why today I thought

[00:24] what's actually going on,

[00:26] break down the direct impacts on you,

[00:28] and give you my thoughts on

[00:31] from the storm.

[00:32] I'm prioritizing getting

[00:34] so don't expect the editing

[00:37] It's far more important

[00:38] for you to hear all

[00:40] rather than later

[00:41] so you can take action quickly.

[00:43] Trust me, if you watch one video today,

[00:46] make it this one.

[00:47] Right, so I've identified six main impacts

[00:50] the Iran war will have on your finances,

[00:52] but for those to make sense,

[00:57] Have you ever noticed that

[00:59] seems to contradict the last one?

[01:01] It's almost like the mainstream media

[01:03] is purposely trying to

[01:06] so that we don't connect

[01:08] that actually matters.

[01:09] That's why I'm gonna give you a rundown

[01:11] of everything you need to

[01:13] in the shortest time possible

[01:15] before we get into the direct impacts

[01:17] on you and your finances.

[01:18] So on February 28th,

[01:19] the US and Israel launched

[01:23] code-named operation Epic Fury,

[01:26] firing nearly 900

[01:29] targeting military sites,

[01:32] and senior leadership.

[01:33] And as you can probably imagine,

[01:34] Iran didn't just sit there and take it,

[01:37] they fired back immediately,

[01:38] sending missiles and

[01:41] and allies across the Middle East.

[01:43] But the move that really

[01:46] came on March 2nd

[01:47] when Iran closed the Strait of Hormuz.

[01:49] Now, if you don't know what

[01:52] picture it like this.

[01:53] Imagine there's a single

[01:56] that 20% of the world's

[01:59] every single day with no alternative

[02:02] and someone just parked a

[02:04] Well, in this analogy, Iran is the lorry

[02:07] and the effects on everyday

[02:10] than most people realize.

[02:11] Within weeks, oil went

[02:14] at the start of the year to

[02:18] that's nearly doubling just three months

[02:20] and the biggest rise in nearly 40 years.

[02:23] And then just as everyone

[02:25] Trump announced a two-week ceasefire.

[02:28] Oil prices dropped, markets rallied,

[02:30] and people breathed a huge sigh of relief.

[02:33] It felt like the reset button

[02:36] except nobody can agree if it actually was

[02:38] because even now the

[02:42] Both sides have declared the strait open,

[02:44] but they can't even

[02:46] who is really in control,

[02:48] or how long it lasts.

[02:50] And even the US Navy is

[02:52] to avoid the waterway entirely

[02:54] because the sea mine threat

[02:57] So, is it open?

[02:59] Technically maybe

[03:02] but practically, the world isn't sure.

[03:04] And that uncertainty alone

[03:06] is enough to keep the damage going,

[03:08] because no matter what happens next,

[03:10] the shockwave is already on its way.

[03:12] The damage has been done,

[03:14] and that's what I wanna

[03:17] not the politics or the military tactics,

[03:19] I'm really not interested in that,

[03:21] what I'm interested in is

[03:24] for your money, your job,

[03:26] and your day-to-day life

[03:29] Because there are six

[03:32] that I think every single

[03:36] Let's get into them.

[03:37] (lively music)

[03:39] The biggest lie people

[03:41] is that the situation is cooling off

[03:43] when financially it's

[03:46] Yes, the fighting might be calming down,

[03:48] but that doesn't mean your

[03:51] and transport costs will also go down,

[03:53] that's not how this kind of shock works.

[03:55] Think of it like food poisoning.

[03:57] The moment you stop eating a dodgy prawn,

[03:59] it doesn't mean you suddenly feel fine,

[04:01] the poison is already in your system

[04:03] and it takes time to work its way through

[04:05] before you feel the full effects.

[04:07] That's exactly what's

[04:09] But Mark, aren't you

[04:12] This is just about oil prices, right?

[04:14] Well, yes, it's about oil prices,

[04:17] but no, I'm not being over the top

[04:19] because oil affects so much

[04:22] it's the invisible ingredient

[04:26] Think about your last grocery shop.

[04:28] Every single item on

[04:31] processed, packaged, and

[04:34] and every step of that

[04:37] And the moment oil gets more expensive,

[04:39] the steps get more expensive too

[04:41] until it finally lands on your receipt.

[04:43] Energy prices have already

[04:46] and I'm genuinely concerned

[04:49] over the next three to six months

[04:51] as a shock works its

[04:54] That means higher energy

[04:57] and pricier transport

[05:00] So what can you actually do about it?

[05:02] Well, the most important

[05:04] is be very careful about making

[05:07] based on the assumption

[05:08] that things are about to get cheaper,

[05:10] because realistically,

[05:12] your monthly expenses are

[05:15] before they come down.

[05:16] If you are thinking about

[05:19] taking on debt, or making a big purchase,

[05:22] just pause for a moment and

[05:25] to give yourself some breathing room.

[05:27] That's also why it's

[05:30] because a lot of what's

[05:33] fast moving, and easy to misunderstand,

[05:36] which means most people

[05:38] The ones who take the

[05:41] will definitely make better

[05:43] And that's exactly why I started

[05:45] a new YouTube channel recently

[05:46] called Mark Tilbury Economics

[05:48] where I break down the biggest things

[05:50] happening in the economy

[05:51] and explain what they actually

[05:54] So definitely consider subscribing

[05:57] with the stuff that actually matters.

[05:59] I'll leave a link in the description

[06:00] for those that are serious

[06:03] I actually think this is

[06:05] which is exactly why the second

[06:09] because it hits your paycheck.

[06:11] (lively music)

[06:13] If you are not where you

[06:15] this next part is gonna be hard to hear

[06:18] because your income might not

[06:21] You see, when your bills go up

[06:23] and spending goes down,

[06:24] naturally, something in

[06:27] which could result in you losing your job

[06:30] right at the worst possible moment.

[06:31] And if you think your job is secure,

[06:33] let me tell you why it might

[06:36] You see, when energy prices

[06:39] businesses get hit from

[06:42] On one side, their costs go up,

[06:43] like transport,

[06:46] things like that,

[06:47] and on the other side,

[06:49] because their bills are going up too.

[06:51] It's like a sandwich being squeezed

[06:53] from both sides at the same time,

[06:55] and when this happens,

[06:56] businesses have to make decisions fast.

[06:58] It usually starts small

[07:00] and freezing hiring,

[07:02] but as the crisis continues,

[07:04] it'll almost certainly lead to layoffs.

[07:06] And look, I'm not saying

[07:08] I'm saying this because the

[07:10] before the oil shock even hit.

[07:12] Job growth has been slowing down,

[07:14] companies have been quietly pulling back,

[07:16] and the last time the hiring rate

[07:18] was sustained at this level

[07:19] was during the financial

[07:23] If you have a job right now,

[07:25] you're probably safe,

[07:26] at least for the meantime,

[07:28] but my concern is that when you layer

[07:30] an energy shock like this

[07:31] on top of an already struggling market,

[07:33] everything accelerates.

[07:35] Historically, when

[07:37] energy spikes, businesses get squeezed,

[07:40] hiring slows, and people get fired,

[07:42] it's like a chain reaction.

[07:44] It's pretty worrying stuff,

[07:46] but luckily there are

[07:48] to protect yourself.

[07:49] First, don't assume your

[07:52] Even if your job feels solid right now,

[07:55] this is the kind of environment

[07:56] where things can change quickly.

[07:58] Second, if you're employed,

[08:00] focus on becoming harder to replace.

[08:02] That can mean picking

[08:05] improving your skill set,

[08:06] or just making sure you are

[08:09] not just someone they have.

[08:11] Third, start an online side

[08:14] to make you at least $10,000 per month.

[08:16] I know this might sound

[08:19] especially if you're

[08:21] However, you can learn an online skill

[08:23] in 20 hours of focused work

[08:26] and be better than 90% of

[08:29] I'm running a free online

[08:32] where I talk you through

[08:34] how to package it as a service

[08:36] and send it to businesses so

[08:40] If you wanna join me,

[08:41] I'll leave a link in the

[08:43] And fourth, don't sit around

[08:45] waiting for the government to step in,

[08:47] which leads me to the third impact.

[08:49] (dramatic music)

[08:51] If you don't wanna be like everyone else,

[08:54] then you've gotta assuming someone

[08:56] or something is gonna fix this for you.

[08:58] You see, if you've been through

[09:01] whether it was 2008 or the pandemic,

[09:04] you probably remember

[09:06] okay, this is bad,

[09:08] but surely the government

[09:10] and they did.

[09:11] Interest rates got cut, money was printed,

[09:14] stimulus checks got sent,

[09:15] and things stabilized fairly quickly.

[09:18] It wasn't pretty, but

[09:20] and most importantly, it held strong.

[09:23] But this time around,

[09:24] I'm worried that that safety

[09:27] You see, in a normal crisis,

[09:29] the first thing central banks usually do

[09:31] is cut interest rates.

[09:32] If you don't know what that means,

[09:34] a simple way to think about it

[09:35] is the price of borrowing money.

[09:37] When rates are low,

[09:40] so businesses take out

[09:43] people apply for mortgages,

[09:47] and the economy keeps going.

[09:48] So when something goes wrong,

[09:50] central banks cut rates to

[09:53] which gets the economy moving again.

[09:55] It's actually the most

[09:57] and it normally works a treat.

[09:59] But the problem right now is

[10:02] when inflation is rising

[10:04] because cutting rates pumps

[10:07] and more money chasing

[10:10] pushes prices up even further.

[10:12] And because oil just had its biggest spike

[10:14] in nearly 40 years,

[10:15] inflation is rising.

[10:17] So if you can't cut rates,

[10:18] why not just print more money

[10:21] Well, the US is currently

[10:25] in national debt,

[10:27] and the interest payments alone

[10:28] come to about $88 billion a month.

[10:31] That's roughly a trillion

[10:35] not funding hospitals,

[10:38] just interest.

[10:39] To put that into context

[10:40] because I know throwing

[10:43] can feel a bit alien,

[10:44] for every dollar the

[10:47] 19 cents of it now goes straight

[10:50] Think of it like someone who's maxed out

[10:52] every credit card they own

[10:55] to make the minimum payments every month.

[10:57] Would you tell that person

[11:00] Of course you wouldn't,

[11:01] and that's the position

[11:04] Every option they have to fix the crisis

[11:06] could cause a domino

[11:08] So what does this mean for you?

[11:10] Well, I suggest not waiting around

[11:12] for the government to make things easier.

[11:14] This isn't 2008 or the pandemic

[11:16] and the playbook has completely changed.

[11:19] To clarify, I'm not saying it's impossible

[11:21] for the government to step in and help,

[11:23] but the usual interventions

[11:24] just don't make as much

[11:26] Now, when you put all three

[11:29] rising prices, a weakening job market,

[11:32] and a government with limited tools,

[11:34] you start to get a scenario

[11:36] that economists actually have a name for,

[11:38] and that leads me to impact four.

[11:40] (lively music)

[11:43] Imagine it's a random Tuesday morning

[11:46] and you've just found out

[11:48] Then on the same day,

[11:50] an energy bill comes through your door

[11:51] and it's gone up by 30%.

[11:53] That's not just bad

[11:56] and it's one of the

[11:59] a country can find itself in,

[12:01] when prices are high,

[12:04] because the tools that fix one problem

[12:06] directly make the other one worse.

[12:08] Most people have heard

[12:10] being thrown around,

[12:11] but I don't think many fully

[12:14] so let's break it down.

[12:16] This might get a bit complicated,

[12:17] but I promise it'll all make sense soon,

[12:20] so just stick with me.

[12:21] In a normal recession,

[12:23] which has happened loads

[12:25] the economy shrinks, people lose jobs,

[12:27] and spending jobs,

[12:29] but at the same time,

[12:30] prices tend to come down too

[12:32] as a result of the decrease in spending.

[12:35] Stagflation, on the other

[12:38] the economy slows down

[12:40] and prices keep rising at the same time.

[12:42] So your income is under threat,

[12:44] but the cost of living

[12:46] Now, the tools that fix inflation,

[12:48] which is typically raising interest rates,

[12:51] make the recession worse.

[12:53] And the tools that fix a recession,

[12:55] typically cutting rates

[12:57] make inflation worse.

[12:59] It's kind of like being

[13:01] the more you struggle,

[13:03] It's pretty crazy, right?

[13:05] But let me bring it back to

[13:08] US inflation just jumped to 3.3% up

[13:11] from 2.4% the month before.

[13:13] And Goldman Sachs has cut

[13:16] down to 2.1.

[13:18] So put simply,

[13:19] prices are rising while

[13:22] which is a textbook setup

[13:25] Don't get me wrong,

[13:26] I'm not saying this

[13:28] but there's some interesting

[13:30] that I'd like to share with you.

[13:32] There's a company called Moody's

[13:34] and they've built an AI model

[13:35] that's been tested against

[13:39] to predict recessions.

[13:40] Every single time this model has crossed

[13:42] the 50% probability threshold,

[13:45] a recession has followed within 12 months,

[13:47] not just a few times,

[13:49] every single time.

[13:51] And right now that

[13:54] one percentage point away from a threshold

[13:57] that's never been wrong.

[13:59] And the worst part,

[14:00] that 49% reading was calculated

[14:02] before the Iran war even started.

[14:04] The last time the world

[14:07] was the 1970s

[14:09] and it lasted an entire decade.

[14:12] That's 10 years of high

[14:15] and shrinking standards of

[14:18] So how do you position yourself here?

[14:20] Well, the key thing to understand

[14:22] is that during stagflation,

[14:23] cash loses value

[14:25] because inflation is eaten away at it,

[14:28] but risky growth investments can also fall

[14:30] because the economy is shrinking.

[14:32] The people who survived the

[14:35] who own things that held

[14:38] basically, real assets that people need

[14:40] regardless of what the economy is doing.

[14:42] I'm not saying to go out and

[14:46] but if your entire financial

[14:49] or growth stocks,

[14:51] this might be the moment to

[14:54] rather than just riding it out.

[14:55] Now, one of the ways governments

[14:57] typically try to escape stagflation

[14:59] is by weakening their own currency,

[15:01] and that brings us to an impact

[15:03] that could affect every single

[15:08] Right now, every dollar

[15:11] every pension payment you are expecting,

[15:13] and every investment you

[15:16] as a system holding it up,

[15:17] and as things stand,

[15:20] are starting to question that system.

[15:22] The US dollar is what's known

[15:24] as the world's reserve currency,

[15:26] which sounds complicated,

[15:27] but all it basically means

[15:29] is when countries around the

[15:32] they mostly use dollars,

[15:33] and when governments want

[15:36] they do it in dollars.

[15:37] Think of USD like the

[15:41] Every country speaks their

[15:44] but when they need to do

[15:46] they all speak the same language,

[15:48] and that language is the dollar,

[15:50] which is incredibly powerful for America,

[15:53] but also very important

[15:56] And due to the war in Iran

[15:59] the US is trapped between three options

[16:02] and none of them are good for the dollar.

[16:04] Option one is to keep

[16:06] to control inflation,

[16:07] which would eventually bring prices down,

[16:10] but in the process, likely

[16:13] make borrowing more expensive,

[16:15] and push the economy

[16:18] Option two is to print

[16:21] but printing money into an

[16:24] could send inflation into double digits,

[16:26] which would eat away at

[16:29] Option three is to declare

[16:32] and step back from the Iran situation.

[16:34] But if the US can't reopen a

[16:38] that the world's oil depends on,

[16:39] other countries will start asking

[16:41] a very uncomfortable question.

[16:43] Is the US as strong as it used to be?

[16:45] And do we even need the dollar anymore?

[16:48] And that question is already being asked.

[16:50] You see, countries don't

[16:53] and instead they store

[16:55] in something called US Treasuries.

[16:57] If you've never heard that word before,

[16:59] think of it like this.

[17:00] It's basically a country

[17:03] into a special American bank account,

[17:05] and the US government then uses that money

[17:07] and pays them interest on it.

[17:09] For decades, it's been seen

[17:10] as one of the safest places

[17:13] but that seems like it might be changing

[17:16] because some countries

[17:18] their savings out.

[17:19] Foreign central bank

[17:21] just hit their lowest level since 2012.

[17:24] And instead of putting the money back in,

[17:26] they're moving it somewhere else, gold.

[17:29] And this is where it

[17:31] because gold now makes up 24%

[17:33] of central bank reserves worldwide,

[17:36] while US Treasuries only make up 21%.

[17:39] That's a complete reversal of

[17:43] when treasuries were 33%

[17:47] Now, I'm not saying the

[17:50] but it is worth asking,

[17:52] if the smartest

[17:53] and most powerful money

[17:55] are reducing their dollar exposure,

[17:57] should you at least be

[17:59] I'm not talking about panic selling

[18:01] or making any dramatic moves,

[18:03] but just asking whether your savings

[18:05] and investments are too

[18:08] or one type of asset,

[18:09] because every single one

[18:12] available to the US weakens the dollar

[18:14] in one way or another.

[18:16] And a weaker dollar means

[18:18] wherever you are in the world,

[18:20] which is why people often use the term,

[18:22] when America sneezes,

[18:25] And that brings me on to the final impact.

[18:28] (dramatic music)

[18:30] Let me ask you something,

[18:32] when your grocery bill went up recently,

[18:34] how did it feel?

[18:35] For some people watching this,

[18:37] it was annoying,

[18:38] maybe a bit jarring,

[18:39] but overall, just something

[18:42] And for others, it raised questions like,

[18:45] can we still take the

[18:47] That gap between annoying

[18:50] is exactly what I wanna talk about,

[18:53] because an economic crisis

[18:56] for everyone,

[18:57] in fact, it's not even close.

[18:59] I wanna be upfront here,

[19:00] this isn't a political point,

[19:02] and I'm not approaching this

[19:03] from any particular ideological angle,

[19:05] I just wanna walk you through the numbers

[19:07] because the story they

[19:09] If you are on a lower income,

[19:11] energy and food don't just take up

[19:13] a bigger chunk of your budget,

[19:14] they completely dominate it.

[19:16] Research shows that low-income households

[19:19] spend almost 33% of their

[19:22] compared to about 13% for

[19:26] So when oil doubles and food prices jump,

[19:28] someone earning a high

[19:31] but someone on a lower

[19:33] that changes their daily life.

[19:36] It's the difference

[19:36] between checking the price

[19:39] and wondering if you can

[19:41] Now, the obvious response is

[19:44] with subsidies and price

[19:47] but here's what actually

[19:49] During the Ukraine energy crisis,

[19:51] 95 of the world's biggest

[19:54] made $306 billion in unexpected

[20:00] and 84% of that went

[20:03] Think about what's

[20:05] The government takes money from taxes

[20:07] and uses it to cap what

[20:11] Meanwhile, the energy companies

[20:13] to the government and

[20:16] The money meant to protect ordinary people

[20:18] ends up flowing to the people

[20:21] It's like filling a bucket

[20:22] with a massive hole in the bottom.

[20:24] You're pouring as much in as you can,

[20:26] but the water's going somewhere

[20:29] It's the same pattern over and over.

[20:31] During the recovery of the

[20:34] the top 1% of US earners

[20:40] during that period.

[20:41] The reality is the middle class

[20:43] are being squeezed out of existence

[20:45] and nobody is coming to save you,

[20:47] that's why you need to take responsibility

[20:49] for your own income,

[20:52] So please take advantage

[20:53] of all the videos I've got on my channel

[20:55] because those that level

[20:57] and financial knowledge

[21:00] stronger and richer than ever before.

[21:02] If you wanna know why I'm changing

[21:03] how I invest my money because of AI,

[21:05] then I'm gonna leave that

[21:07] But don't click on it just yet,

[21:09] make sure to subscribe if you

[21:12] I'll see you over there.