How to Survive the New Economy (Before It’s Too Late)

May 19, 20250

How to Survive the New Economy (Before It’s Too Late)

Since 2020, the U.S. economy has shifted dramatically—debt is soaring, currency is weakening, and inflation is eroding your purchasing power. Ken and Danille McElroy break down how government spending, monetary policy, and asset inflation are reshaping wealth—and why only investors, not consumers, will thrive in the years ahead.

Summary:

Since 2020, a silent economic shift has been underway. While most people focused on the pandemic, the real story was the historic levels of money printing, inflationary pressure, and a weakening U.S. dollar. In this video, Ken McElroy breaks down how global sentiment toward the U.S. dollar is changing, why gold and hard assets are surging, and what investors must do to stay ahead of rising inflation, tariffs, and a shrinking middle class. This isn’t about fear—it’s about adapting to survive in a completely new economy.


Top Highlights:

  1. The True Cost of Stimulus
    The pandemic-era stimulus checks and suppressed supply chains didn’t just drive demand—they masked a massive devaluation of the dollar. Goods didn’t get more expensive. The dollar got weaker.

  2. The Dollar’s Decline Is Global News
    Exchange rates are falling fast. A $100 bill now gets you far fewer euros than it did just months ago. Outside the U.S., this loss in purchasing power is impossible to ignore—and foreign governments are responding.

  3. China’s Strategic Gold Move
    China is quietly increasing gold import quotas while holding $800B+ in U.S. treasuries. If they shift even a portion of that into gold, it could spark a global market shock—and that’s already underway.

  4. Why Gold, Bitcoin, and Hard Assets Are Climbing
    With inflation still brewing and confidence in the dollar slipping, capital is moving into hard assets. Gold hit $3,500/oz. Bitcoin is gaining traction. And Ken’s team is buying real estate using fixed-rate debt as a hedge.

  5. The Middle Class Is Disappearing
    The gap between asset holders and wage earners is widening. Those who bought homes or rentals before 2021 are safe. Everyone else—especially those without assets—will feel the squeeze of inflation without the upside.

  6. A Housing Supply Cliff Is Coming
    New construction has slowed dramatically due to high rates and costs. Projects started in 2021–2022 will finish soon… and then supply will fall off a cliff. Expect rents to surge again by late 2025 into 2026.

  7. Now Is the Time for Fixed-Rate Debt
    Locking in long-term, fixed-rate loans on cash-flowing properties below replacement cost is Ken’s top play. Inflation will erode debt value while increasing property value and rents.

  8. Ignore the Headlines, Play the Game
    From tariffs to tax policy, the rules are changing fast. Investors must stop reacting emotionally and instead position themselves for the realities of a new, more divided economic system.

TRANSCRIPT:

Everything changed in 2020. People were so focused on the virus that they didn’t realize the government was printing money and devaluing the currency. The truth is, we’ve always been printing—regardless of who’s in office. You can trace it back to the 1970s during the oil embargo. That led to massive inflation and double-digit interest rates.

More recently, during the lockdowns, people stayed home and saved money. Then they received stimulus checks, and after the pandemic, pent-up demand surged. But supply chains were still broken, shipping costs were high, and that drove prices up. Corporate America jumped on board, raising prices across the board. Inflation peaked at 9.1% in June 2022. The government responded with rate hikes, but the reality is: prices didn’t just go up—our currency’s purchasing power went down.

That’s the real issue.

We’re hosting a mastermind soon with George Gammon, Mike Maloney, and Dana Samuelson to dive deeper into this. One major focus will be gold. The U.S. dollar index (DXY) has been sliding—it dropped from 107 down into the 90s recently and is now hovering around 100. That affects people using U.S. dollars abroad. Just today, we exchanged $100 for 89 euros. A few months ago, it was 96 euros. That’s a loss in purchasing power.

This isn’t just a U.S. issue. China, for instance, has increased its gold import quotas. They hold nearly $800 billion in U.S. treasuries. As the dollar weakens, they lose value. If they start offloading treasuries and replacing them with gold, the global financial ripple could be massive. That’s partly why gold recently hit $3,500 an ounce before settling near $3,200.

Another global concern? Tariffs. In Europe, people are openly frustrated about U.S. tariffs. Walmart even announced price hikes last week. Retailers are already adjusting prices in anticipation of further tariff escalation. Expect this to start hitting consumers by summer—especially in electronics, toys, and household goods.

Official inflation numbers are sitting around 2.3%–2.4%, but many investors are skeptical. If you’re holding U.S. treasuries or being paid in dollars, you’re watching this play out in real time. That’s why gold is surging, and why we’ve invited experts like Jim Rickards to speak at Limitless this year. His book Currency Wars is a must-read.

Outside the U.S., people no longer treat the dollar as a safe haven. When we exchange dollars on our travels, we see firsthand how much weaker the currency has become. That’s why there’s increasing interest in gold and even Bitcoin—people are looking for alternatives.

We’re also facing a fiscal problem in the U.S. As rates stay high, the government either has to cut spending, print more money, or raise taxes. None of those are good options. That’s another reason hard assets like real estate and gold are becoming more appealing.

We’re not telling anyone to go out and buy gold today. It’s expensive right now, and some people are waiting for a dip. But this trend reflects a loss of confidence in the dollar.

We’re also seeing a clear divide emerge between people who own assets and those who don’t. If you bought a home before 2021, you likely have a low payment and solid equity. If you didn’t—or if you’re renting—you’re much more vulnerable to rising costs.

That divide is about to widen even more.

New housing construction has slowed dramatically due to high financing and material costs. There’s a lag between when a project starts and when it’s completed. Projects that began in 2021–2022 will be delivered soon, but after that, we’re going to hit a supply cliff. The result? Higher rents. Renters are in a good spot now with lots of inventory and competition, but that will change by 2026. Rent increases are coming back.

We’re building now to open new developments in 2026–2027, during that expected supply shortage. That’s when you want to be leasing.

In today’s economy, you can’t just be a consumer—you need to be an investor. That might mean renting out rooms, starting a side hustle, or buying hard assets. If you’re just saving money in cash, you’re falling behind due to currency devaluation.

Even people with strong incomes are living paycheck to paycheck. That’s why I tell people: you have to play the game based on the current rules. Whether you like it or not, this is the environment we’re in.

Watch what happens with the new tax proposals. Also pay attention to the Eurodollar market—there’s more U.S. currency circulating outside the country than inside. That’s a big deal.

This round of inflation is different. Last time, wages were rising. This time, companies are laying off workers. We’re seeing wage stagnation while inflation still simmers. That’s going to hit people hard.

The U.S. just bought $43.6 billion in bonds last week. They won’t call it QE, but that’s what it is. Meanwhile, China’s economy is struggling. It’s not a democracy, so their response to tariffs and currency manipulation could be swift and significant.

Construction has slowed because the cost to build and borrow has gone up. If you can still build profitably, you’ll win. But developers in places like Austin are getting crushed with unsold inventory.

We’re locking in fixed-rate debt on below-market real estate deals. On one recent $97 million purchase, we secured $50 million in fixed-rate debt in the low fives. That interest rate is locked for years—and if inflation rises, we’ll be repaying it with cheaper dollars.

Buying below replacement cost with fixed-rate debt and positive cash flow is the winning formula. As the dollar weakens, asset prices rise—not because they’re more valuable, but because your dollars are worth less.

We’re entering a two-tier economy. Those with assets will thrive. Those without will struggle. That’s the game.

Always fix your debt if you can. Predictable mortgage payments bring peace of mind. If rates drop, you can refinance. If they rise, you win.

Someone asked: should you hold a break-even property with 30% equity? My answer: probably yes. If you’re not bleeding money, you’re gaining equity, and you’d pay taxes if you sold. Plus, where else are you going to park that money safely?

And on the topic of student loans and government forbearance ending—yes, there may be some defaults, but people prioritize rent over loan payments. Housing is still the top priority.

What worries me more are buy-now-pay-later schemes being used for groceries. That’s where people are starting to crack. But again, rent will still get paid.

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