The Trade War Is Already Having A Huge Impact On The U.S. Economy

The trade war has barely just begun, and yet significant ripple effects are already being felt all across the U.S. economy.  Once thriving businesses are on the verge of failure, workers are being laid off, and some sectors of the economy are witnessing enormous price hikes.  Right now the mainstream media is absolutely fixated on the drama surrounding the recently concluded Trump-Putin summit meeting, but the consequences of this trade war will ultimately be far more important for the lives of most ordinary Americans.  As more tariffs continue to be implemented, this will perhaps be the biggest disruption to the global economic system that we have seen in decades.  Perhaps you have not been affected personally yet, but for many Americans this trade war has changed everything.  For example, just consider the plight of soybean farmer Tim Bardole

The U.S. is China’s second-biggest source of soybeans at 34% of the imports, after Brazil, which ships 53%. The staple is used to make cooking oil and seasoning, and soybean meal is found in pig feed.

Now the tariffs have taken the bottom out of U.S. soybean prices, delivering a gut punch to farmers like Tim Bardole. He was already $100,000 in the red last year due to a yearslong slump in cereal prices, and the current predicament has driven him into a corner.

“I’m not sure if I can get a loan from the bank to finance our next year’s crop,” said Bardole.

If this trade war had not happened, perhaps Bardole would have been able to eventually get out of debt.  But now he is facing financial ruin and the potential loss of his entire farm.

Switching gears, U.S. consumers will soon discover that common electronics such as phones and computers cost a lot more.  The following comes from CBS News

Buyers in the U.S. will soon see price hikes on computers, phones, thermostats and “everyday items,” according to the Information Technology Industry Council, a group that represents tech companies.

Hundreds of Chinese components that the Trump administration penalized are used to make everything from LEDs to sensors to printer and scanner components. When manufacturers pay more for their parts, the costs are typically passed on to consumers, the ITI said.

Are you ready to pay 50 dollars for your next phone to support this trade war?

Maybe.

50 dollars is ultimately not that big of a deal.

But what about paying $9,000 more for your next house?

Tariffs on lumber coming from the evil Canadians are adding about $9,000 to the cost of a new house, according to the National Association of Home Builders.

Washing machine prices have jumped some 15% this year, the fastest increase ever recorded by the Bureau of Labor Statistics.

Are you starting to understand why starting trade wars with all of our major trading partners simultaneously was a really bad idea?

We are about to see major price hikes in just about every sector of the economy.  According to the Alliance of Automobile Manufacturers, the average American could pay over $5,000 more for their next vehicle

Consumers may see an average price increase of $5,800 if a 25 percent import tariff that Mr. Trump has threatened goes into effect, according to estimates cited by the Alliance of Automobile Manufacturers (AAM), a lobbying group for carmakers.

That’s a “$45 billion tax on consumers,” the group said, citing an analysis of Commerce Department data.

U.S. consumers are already stretched to the max, and they will not be able to easily absorb these price increases.

Meanwhile, farm incomes all across the interior of the country are going to be absolutely devastated by this trade war.  Just check out these numbers

The American Farm Bureau says it expects farm incomes to drop to a 12-year low this year, largely because of the trade war.

An agricultural economist at Purdue University, Christopher Hurt, added that 1,000 acres of corn and soybeans would have made a farmer a $42,000 profit on June 1. Now, it could net him a $126,000 loss.

And as I mentioned above, many businesses all over the United States that rely heavily on exports are already struggling so mightily that they have to lay off workers.  The following comes from USA Today

In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.

Yes, we desperately needed to do something about China and other trade partners that were taking advantage of us.  But there is a right way to handle things and a wrong way to handle things, and starting a trade war with everyone at the same time is a really, really bad idea.

I think that a recent piece by Thomas Grennes, a professor of economics at North Carolina State University, made this point quite well

The Trump administration has said that tariffs are a negotiating technique that need not be implemented. Now that tariffs are in place, they say other countries will soon back down. However, trading partners have not backed down, and, in fact, retaliatory tariffs against U.S. exports are already in place. Foreign officials have expressed confusion about exactly what concessions the US government wants. Currently, no formal negotiations are taking place. Higher future tariffs are being announced regularly. There are no signs of an end to this tariff war. When will both sides recognize that interfering with voluntary trade is harmful to both parties? Trade wars are lose-lose propositions.

Unfortunately, I don’t think that most Americans have any idea how exceedingly painful this trade war could potentially become.

The longer it lasts, the worse things will get, and ultimately it could tip the U.S. economy into the worst recession that any of us have ever experienced.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

An Absolutely Epic Escalation Of The Trade War Has Us On The Precipice Of A Cataclysmic Global Economic Crisis

If Americans really understood how much their standard of living was about to change, the streets of our major cities would be packed with protesters by tomorrow morning.  For the past several decades, China and other low cost exporters have been flooding our shores with hundreds of billions of dollars worth of cheap goods.  This is the only reason why you can go to Wal-Mart and buy a shirt for three bucks.  But since we buy far more stuff from the rest of the world than they buy from us, we ultimately have to go back to those other nations and beg them to lend our money back to us so that we can pay our bills.  This sick, twisted co-dependent relationship has enabled Americans to live a debt-fueled standard of living that is far beyond what we deserve, and now our rapidly escalating trade war with China is going to bring the party to a crashing halt.  On Tuesday, the Trump administration released a list of $200,000,000,000 worth of Chinese exports that will be hit with 10 percent tariffs.  Those tariffs are in addition to the 25 percent tariffs that had previously been announced on 50 billion dollars worth of Chinese exports.  These new tariffs are scheduled to go into effect on August 30th, and the Chinese have already pledged to retaliate.

In essence, our trade war with China has now “gone nuclear”, and this is going to have extremely serious implications for the U.S. economy.  The following is a short excerpt from the statement that U.S. Trade Representative Robert Lighthizer released about these new tariffs…

On Friday, in response to unfair Chinese practices, the United States began imposing tariffs of 25 percent on approximately $34 billion worth of Chinese imports. These tariffs will eventually cover up to $50 billion in Chinese imports as legal processes conclude. The products targeted by the tariffs are those that benefit from China’s industrial policy and forced technology transfer practices.

China has since retaliated against the United States by imposing tariffs on $34 billion in U.S. exports to China, and threatening tariffs on another $16 billion. It did this without any international legal basis or justification.

As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies.

Without a doubt, something needed to be done about China’s unfair trade practices.  The Chinese manipulate currency rates, they impose very high tariffs on U.S. goods, and they have been stealing our intellectual property for decades.

But it is very unlikely that anyone is going to “win” this trade war, and in the short-term all it is going to mean is a whole lot of economic and financial pain.

According to Politico, the new tariff list that was just released hits a very broad range of products…

The new tariff list broadens the types of goods caught up in the trade war by targeting items like seafood, minerals, chemicals, and personal care items, such as shampoo and soap. It also includes a number of consumer products such as handbags, luggage, gloves and paper.

Do you buy any of those things?

Well, expect to pay significantly more in the not too distant future.

When compiling this new list, the Trump administration specifically “took into account what could cause disruptions to China’s economy”.  The following comes from CNBC

Some of the products on the list facing tariffs are from Made in China 2025 sectors, the official said. Made in China 2025 is a strategic plan to make China a leader in key global industries, including technology.

When compiling the list of goods, the U.S. Trade Representative took into account what could cause disruptions to China’s economy.

So what do you think that the Chinese are going to do in response?

Yes, they are going to look at measures that will “cause disruptions to America’s economy”.

The Chinese are a very proud people, and they aren’t stupid.  They know where our pain points are, and they will not be afraid to go for the jugular.

China cannot match this round of U.S. tariffs dollar for dollar, because China only imports approximately 130 billion dollars worth of U.S. goods a year.

But China could decide to cut off some or all agricultural imports from the United States, and that would be absolutely devastating to many farming states.  In fact, many farming states are already feeling substantial pain from the tariffs that China has already imposed…

“Agricultural states, I think, are being hit the hardest,” said Rodney Ludema, a Georgetown University professor and former senior international economist in the White House Council of Economic Advisers under President Barack Obama. The tariffs spare states “that are heavily service-dependent, like New York.”

In terms of value, some 38 percent of products on the tariff list are agricultural, including soybeans, sorghum, tobacco and meat, said Chad Bown, a senior fellow at the Peterson Institute for International Economics. That’s bad news for farm-belt states, primarily in the Midwest.

In addition, China could decide to “go nuclear” by cutting off U.S. investment in China, by restricting our access to rare earth elements, or by dumping our debt.

The only reason why we have even been able to get to 21 trillion dollars in debt is because nations such as China have been buying our debt at ultra-low interest rates that are way below the real rate of inflation.

If China quit buying our debt and started dumping their current holdings, interest rates would start skyrocketing and we would be in a world of hurt almost immediately.

We don’t have the kind of leverage that some people seem to think that we have.  And there are many prominent experts that are warning that we are heading for catastrophic consequences.  For example, just consider what David Stockman recently told CNBC…

The United States is heading to a “massive trade war” because President Donald Trump “doesn’t know what he’s doing,” said former Reagan budget director David Stockman.

“We have an absurd policy — dangerous, stupid. The worst that I’ve seen since my whole career started in 1970 under [President Richard] Nixon, and he did some crazy things,” Stockman said Tuesday on CNBC’s “Closing Bell.”

The financial markets have reacted very strongly to these latest developments.  As soon as the new tariffs were announced, Asian stocks began to drop and Dow futures plummeted about 300 points from the closing highs.

Unfortunately, most ordinary Americans simply do not grasp the importance of what is happening, because we have never seen anything like this in modern American history.  The two largest economies on the entire planet are now in a state of economic conflict, and there is no way that this is going to end well.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Experts Warn Of Chaos For The U.S. Economy As China Declares That “The Biggest Trade War In Economic History” Has Begun

Nothing is going to be the same after this.  On Friday, the United States hit China with 34 billion dollars in tariffs, and China immediately responded with similar tariffs.  If it stopped there, this trade war between the United States and China would not be catastrophic for the global economy.  But it isn’t going to stop there.  Donald Trump is already talking about hitting China with an additional 500 billion dollars in tariffs, which would essentially cover pretty much everything that China exports to the U.S. in a typical year.  The Chinese have accused Trump of starting “the biggest trade war in economic history”, and they are pledging to fight for as long as it takes.  As I discussed yesterday, the only way that one side is going to “win” this trade war is if the other side completely backs down, and that simply is not going to happen.  So there is going to be economic pain, and that pain is likely to intensify for as long as this trade war persists.  U.S. businesses that will be affected by foreign tariffs are already cutting back production and laying off workers, and CNN is reporting that 1,300 products have suddenly become more expensive for U.S. consumers.  There will be nowhere that anyone can hide from this trade war, and it will ultimately affect every single man, woman and child in the entire country.

Most Americans are not paying any attention to these ongoing developments, but the Chinese sure are.

Earlier today, the Chinese Ministry of Commerce called the U.S. tariffs “typical trade bullying”, and it warned that this trade war could trigger “global market turmoil”

“This act is typical trade bullying,” the spokesperson said, before adding: “It seriously jeopardizes the global industrial chain … Hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers.”

China’s primary English language newspaper was even more direct with their criticism

The government-run English language China Daily newspaper said: “The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China.”

Here in the United States, the start of a major trade war with China really doesn’t seem like that big of a deal if you listen to the mainstream media.  Most people just seem to think that things will continue to go well for our country no matter how many stupid decisions we make.  It is almost as if a lot of Americans no longer understand that extremely reckless acts can have exceedingly severe consequences.

One man that understands what is happening is the founder of the largest hedge fund on the entire planet.  On Friday, Ray Dalio posted the following ominous message on Twitter

“Today is the first day of the war with China.”

Please note that he did not say “the trade war with China”.

The truth is that trade wars can often lead to shooting wars, and we need to hope that cooler heads will prevail.

But for now, it looks like things will continue to escalate

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals. On Thursday, he suggested the possibility of tariffs on almost $500 billion more of Chinese goods.

He described the potential escalation to reporters aboard Air Force One: “Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?” Trump said. “So we have 50 plus 200 plus almost 300.”

If we hit China with 500 billion dollars in tariffs, there is no telling what the Chinese might do.

As I discussed the other day, the Chinese could start dumping our debt or cut off our access to rare earth elements.

Either move would be absolutely catastrophic for the United States.

We don’t know how this trade war will ultimately end, but as Reuters has pointed out, “it’s going to get ugly”…

The U.S.-China trade war will be fought in the trenches, and it’s going to get ugly. The first round of tariffs hits on Friday, and U.S. President Donald Trump says they might come to cover more than $500 billion of goods. Exporters will feel the pain first, but uncertainty will also dampen investment, impede research and twist reform. It marks a moment of mourning for those who hoped the world’s two largest economies could work things out.

And guess what?

Russia just joined the trade war against the United States as well.  The following comes from Zero Hedge

Whether this is a coordinated response is unclear – and certainly on a much smaller scale – but Bloomberg reports that Russian Prime Minister Dmitry Medvedev signed a decree this morning imposing higher tariffs on U.S. products in retaliation for U.S. duties on metals imports, according to Economy Ministry statement.

Reuters reports that Russia’s additional duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining, according to an economy ministry statement.

These tariffs are going to have very real consequences for U.S. businesses and U.S. workers.

Even though this trade war just started, some firms are already being hit very hard.  Here is one example from USA Today

Trans-Matic, of Holland, Michigan, shapes metal, mostly into auto parts, as well as components for door locks. It has paid higher steel costs for several months as U.S. steelmakers raised prices in anticipation of higher American tariffs on metal imports, company Chief Financial Officer Steve Patterson says.

Trans-Matic has passed along the price hikes to its auto-supplier customers, but some have scaled back orders, reducing Trans-Matic’s revenue in that key sector by 5 to 10 percent, Patterson says. As a result, the company is giving its 300 U.S. employees about five hours a week in overtime instead of their usual 10.

For other firms, layoffs have already become a reality.  Just ask the largest nail maker in the United States

In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.

The longer this trade war lasts, the worse things are going to get.

Fighting a trade war just with China would have been bad enough.  But instead, we have decided that we are going to take on pretty much the entire world simultaneously, and I don’t know if I have the words to describe how painful that is going to be for all of us.

Many Americans seem to believe that the U.S. economy is an unsinkable ship, and at this moment we are heading directly for an absolutely enormous iceberg.

Let us hope that someone is able to pull a rabbit out of a hat, because right now things are looking quite bleak.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The U.S. Trade War With China Officially Goes To The Next Level As Financial Markets Around The World Continue To Implode

Up until now, the U.S. trade war with China has simply been a bunch of threats and counter-threats, but now things are about to get very real.  On Friday, the first round of U.S. tariffs on Chinese goods becomes official, and these tariffs are going to fundamentally alter the economic relationship between the two largest economies on the entire planet.  Over the past several decades, U.S. consumers have loved gobbling up super-cheap goods from China, and the Chinese have used many of the dollars that they have been accumulating to fund our exploding national debt.  This symbiotic relationship has been bad for the United States in a lot of ways, and something had to be done, but in the short-term this trade war is going to be enormously painful.  Sadly, most Americans are completely oblivious to what is happening.  The following comes from Bloomberg

President Donald Trump is preparing to slap tariffs on Chinese goods early Friday, the first shot in a trade war between the world’s two biggest economies.

Tariffs on $34 billion of Chinese goods are scheduled to take effect at 12:01 a.m. in Washington, the U.S. Trade Representative confirmed in an email Thursday. The milestone marks a new and damaging phase in a conflict that has roiled markets and cast a shadow over the global growth outlook.

Another way should have been found to deal with our trade imbalances with China, because a trade war is not going to work.

Instead of giving in, the Chinese are promising to respond with measures of “equal scale, equal intensity”, and President Trump is already pledging to hit the Chinese with another 500 billion dollars in tariffs if the Chinese hit back in this manner…

Aboard Air Force One on his way to a rally in Montana, Trump told reporters he would also consider imposing additional tariffs on $500 billion in Chinese goods, should Beijing retaliate.

Once these escalations begin, where will they end?

The Chinese can really, really hurt us by dumping our debt and by cutting off our access to rare earth elements.

Would they really go that far?

And what would Trump do in response if the Chinese pull the trigger and decide to “go nuclear”?

It would be hard to overstate the pain that these tariffs will cause for U.S. businesses.  In fact, Bloomberg is reporting that some sectors are already being hit really hard in anticipation of what is going to happen…

The tariffs are already having an effect. As an example, Chinese companies are reselling U.S. soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the U.S. in the year ending Aug. 31, once the extra tariffs take effect.

Of course the U.S. is not just fighting a trade war with China.  The United States has decided to wage trade wars with almost all of the major economic powers around the world simultaneously, and economic experts in France are warning that this could plunge the globe into a new economic crisis that “would likely be as devastating for the world economy as the 2008-2009 recession”

A full-scale trade war would likely be as devastating for the world economy as the 2008-2009 recession, warned France’s Council of Economic Advisors, a body which gives input to the country’s prime minister.

The United States and China could see a permanent loss of three percent of economic output and the European Union (EU) four percent in the case of a full-blown trade war, it estimated on Tuesday.

The wheels are in motion, and it is going to take a miracle to reverse course now.

In fact, it is being reported that “global trade is already collapsing”

While the US prepares to unleash its latest salvo in the trade war against China at midnight tonight, business surveys suggest that global trade is already collapsing

JPMorgan’s Global Purchasing Managers’ Index (PMI) data suggest that trade growth has already slowed dramatically this year, as tensions over tariffs have escalated.

To get an idea of what they are talking about, just check out this chart.

And this comes at a time when financial markets around the planet are already imploding.  According to Egon von Greyerz, stock markets in China, Brazil and Turkey are already hovering around bear market territory…

But change starts in the periphery where very few are looking. Look at China where the Shanghai composite is down 23% since January. And look at Brazil where the Bovespa is off 17% so far this year and Turkey which has lost 20%.

What is important to understand is that most major markets are now looking extremely vulnerable, be it Japan, Germany or the US. Fundamentally most markets are overvalued with the help of central bank liquidity. Also, technically we are not far from crashes in most markets. Whilst there is always a possibility of a last hurrah, it looks like all markets have topped, including the US, and that later in 2018 we will see major falls. Once the bear markets start, they are likely to turn into secular trends that last many years and result in falls of 75% to 95%. Difficult to believe for most investors today, but nobody in 1929 believed that the Dow would fall 90% in the ensuing years and take 25 years to recover.

If our trade wars continue to escalate, and if the Federal Reserve continues to raise interest rates, and if civil unrest continues to grow in major cities all across America, it is only a matter of time before U.S. markets implode as well.

During a recent interview, Michael Pento was asked when things might really start falling apart, and he pointed to the month of October

“Well, I have put a check on the calendar for October because of the fact the rate of quantitative tightening goes to $50 billion per year, because the trade war will reach a crescendo, then because I believe, unfortunately because I am conservative, the Republicans lose the House of Representatives, because the Chinese credit boom will be in full reverse by October.

It is a confluence of events coming in October… we’ve already entered into the beginnings of a bear market around the world. The top 22 banks in the world are in a bear market. There are many, many examples of banks around the world that are in a bear market. You have a bear market in Chinese shares. 20% of the S&P 500 is in a bear market. This is an incipient bear market that is already beginning. I believe it manifests clearly to even the people on CNBC by October.

In the end, the exact timing does not matter that much, because if we continue down the road that we are on right now it is only a matter of time before disaster strikes.

We simply cannot continue to enjoy a massively inflated debt-fueled standard of living if we decide to provoke all of the other nations that are funding our debt by starting trade wars with them.

What we are doing does not make any sense at all, and there will most certainly be severe consequences in the not too distant future.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

12 Signs The Economic Slowdown The Experts Have Been Warning About Is Now Here

Since the election there has been this perception among the American public that the economy is improving, but that has not been the case at all.  U.S. GDP growth for the first quarter was just revised up to 1.2 percent, but that is even lower than the average growth of just 1.33 percent that we saw over the previous ten years.  But when you look even deeper into the numbers a much more alarming picture emerges.  Commercial and industrial loan growth is declining, auto loan defaults are rising, bankruptcies are absolutely surging and we are on pace to break the all-time record for most store closings in a single year in the United States by more than 20 percent.  All of these are points that I have covered before, but today I have 12 new facts to share with you.  The following are 12 signs that the economic slowdown that the experts have been warning about is now here…

#1 According to Challenger, the number of job cuts in May was 71 percent higher than it was in May 2016.

#2 We just witnessed the third worst drop in U.S. construction spending in the last six years.

#3 U.S. manufacturing PMI fell to an 8 month low in May.

#4 Financial stocks have lost all of their gains for the year, and some analysts are saying that this is “a terrible sign”.

#5 One new survey has found that 39 percent of all millionaires “plan to avoid investing in the coming month”.  That is the highest that figure has been since December 2013.

#6 Jobless claims just shot up to a five week high of 248,000.

#7 General Motors just reported another sales decline in May, and it is being reported that the company may be preparing for “more job cuts at its American factories”.

#8 After an initial bump after Donald Trump’s surprise election victory, U.S. consumer confidence is starting to fall.

#9 Since Memorial Day, Radio Shack has officially shut down more than 1,000 stores.

#10 Payless has just increased the number of stores that it plans to close to about 800.

#11 According to the Los Angeles Times, it is being projected that 25 percent of all shopping malls in the United States may close within the next five years.

#12 Over the past 12 months, the number of homeless people living in Los Angeles County has risen by a  staggering 23 percent.

And in case those numbers have not persuaded you that the U.S. economy is heading for rough times, I would encourage you to go check out my previous article entitled “11 Facts That Prove That The U.S. Economy In 2017 Is In Far Worse Shape Than It Was In 2016” for even more eye-popping statistics.

During a bubble, it can feel like the good times are just going to keep rolling forever.

But that never actually happens in reality.

The truth is that we are in the terminal phase of the greatest debt bubble of all time, and the evidence is starting to mount that this debt bubble has just about run its course.  The following comes from Zero Hedge

A recurring theme on this website has been to periodically highlight the tremendous build up in US corporate debt, most recently in April when we showed that “Corporate Debt To EBITDA Hits All Time High.” The relentless debt build up is something which even the IMF recently noted, when in April it released a special report on financial stability, according to which 20% of US corporations were at risk of default should rates rise. It is also the topic of the latest piece by SocGen’s strategist Andrew Lapthorne who uses even more colorful adjectives to describe what has happened since the financial crisis, noting that “the debt build-up during this cycle has been incredible, particularly when compared to the stagnant progression of EBITDA.”

Lapthorne calculates that S&P1500 ex financial net debt has risen by almost $2 trillion in five years, a 150% increase, but this mild in comparison to the tripling of the debt pile in the Russell 2000 in six years. He also notes, as shown he previously, that as a result of this debt surge, interest payments cost the smallest 50% of stocks in the US fully 30% of their EBIT compared with just 10% of profits for the largest 10% and states that “clearly the sensitivity to higher interest rates is then going to be with this smallest 50%, while the dominance and financial strength of the largest 10% disguises this problem in the aggregate index measures.”

The same report noted that net debt growth in the U.S. is quickly headed toward negative territory, and the last time that happened was during the last recession.

We see similar things when we look at the 2nd largest economy on the entire planet.  According to Jim Rickards, China “has multiple bubbles, and they’re all getting ready to burst”…

China is in the greatest financial bubble in history. Yet, calling China a bubble does not do justice to the situation. This story has been touched on periodically over the last year.

China has multiple bubbles, and they’re all getting ready to burst. If you make the right moves now, you could be well positioned even as Chinese credit and currency crash and burn.

The first and most obvious bubble is credit. The combined Chinese government and corporate debt-to-equity ratio is over 300-to-1 after hidden liabilities, such as provincial guarantees and shadow banking system liabilities, are taken into account.

We just got the worst Chinese manufacturing number in about a year, and it looks like economic conditions over there are really starting to slow down as well.

Just like 2008, the coming crisis is going to be truly global in scope.

It is funny how our perspective colors our reality.  Just like in 2007, many are mocking those that are warning that a crisis is coming, but just like in 2009, after the crisis strikes many will be complaining that nobody warned them in advance about what was ahead.

And at this moment it may seem like we have all the time in the world to get prepared for the approaching storm, but once it is here people will be talking about how it seemed to hit us so quickly.

My hope is that many Americans will finally be fed up with our fundamentally flawed financial system once they realize that we are facing another horrendous economic crisis, and that in the aftermath they will finally be ready for the dramatic solutions that are necessary in order to permanently fix things.

I Feel Sick, Because The U.S. Is On The Verge Of Making An Extremely Costly Mistake

All day long I have just felt sick.  Right at this moment, we are closer to war with North Korea than we have been at any point since the Korean War ended in 1953.  If Donald Trump decides to launch a military strike against North Korea’s nuclear facilities, the consequences could be absolutely catastrophic.  The North Koreans have already promised to launch nukes at South Korea and at U.S. military bases in the region in return, and they also have vast stockpiles of chemical and biological weapons that they could use as well.  To get an idea of the chaos that just a handful of North Korean agents armed with biological weapons could unleash inside the United States, just see this article.  A military strike on North Korea could be the spark that sets off a global war in which millions of people die, and so we need to do all that we can to prevent this from happening.  My hope is that if people make enough noise that Trump will back down and decide not to attack.

Earlier today, I was sent the following piece of intel.  I was told that I could share it with all of my readers as long as I kept the name of the individual that sent it to me out of it.  According to this source, it certainly looks as though an attack is being prepared…

An O-5 silver maple leaf Air Force puke says the bomb buses in Guam are maximum loaded, fully fueled and reserves are topped off.  ‎ Reserves are only topped off just before the buses go airborne.

Kunsan has everything pointed north and ALL gates are closed…no traffic in or out.

7 air wings have been moved into the area and an augmented Carl Vinson CVN-70 (not alone) (per CMC x 2  and an O-5) has also moved into the area.

An O-5 barker and an O-6 Marine says all Easter leave has been cancelled with ALL‎ loaded up, geared up and warming up in several theaters.

Castle is locked and loaded.

Seoul is moving essential government and military personnel, as is true for U.S. Command Components and Personnel located at Yongsan‎, further south to Daegu.

AND…Red Cloud is ready to go on the war path with nobody sleeping in the wigwams, all the arrows have been taken from the box.

For those that don’t know, “Kunsan” refers to a U.S. Air Force base that is located at Gunsan Airport on the west coast of the Korean peninsula.

But just because these preparations are being made does not mean that a strike will actually happen.  In fact, there are some signs that indicate that we will not see a U.S. attack over the next several days.

For one thing, Vice President Mike Pence is scheduled to be in South Korea on Sunday and Monday.  So it would seem that it would be quite unlikely that anything would happen during that time.

In addition, Fox News is reporting that the Trump administration has come to the conclusion that military force should not be used against North Korea…

But a U.S. military official, who requested anonymity to discuss planning, said the U.S. doesn’t intend to use military force against North Korea in response to either a nuclear test or a missile launch. The official said plans could change in the unlikely event a North Korean missile targets South Korea, Japan or U.S. territory.

But of course things seem to shift hour to hour with the Trump administration.  On Thursday, NBC News was reporting that the U.S. military was poised “to launch a preemptive strike with conventional weapons against North Korea” if it looked like the North Koreans were about to conduct a nuclear weapons test…

The U.S. is prepared to launch a preemptive strike with conventional weapons against North Korea should officials become convinced that North Korea is about to follow through with a nuclear weapons test, multiple senior U.S. intelligence officials told NBC News.

North Korea has warned that a “big event” is near, and U.S. officials say signs point to a nuclear test that could come as early as this weekend.

So I don’t know what is going to happen.  But without a doubt we are very close to war with North Korea at this moment, and I am going to join with millions of others to do whatever we can to prevent that from happening.

A war with North Korea would be far different from the wars that the U.S. military has been fighting in the Middle East.  An ideology known as “Juche” is essentially the national religion of North Korea.  In Juche, the people are put at the center of everything, and “the leader” is considered to be at the center of the people.  In other words, “the leader” is almost put at the level of a deity.

It is a very sick and twisted philosophy, but here in the western world we need to understand that when we openly talk about killing Kim Jong-Un on television and on the Internet, we are essentially threatening to kill their “god”.

And the reason that is a problem is because Kim Jong-Un is surrounded by throngs of brainwashed supporters that will carry out any order that he gives them.

Here in the western world, we consider it to be highly immoral to use chemical and biological weapons against innocent civilian populations, but the North Koreans do not share those moral values.

The North Koreans consider the United States to be the great force for evil in the world, and if they feel like their way of life is being threatened by the U.S. they will not hesitate to use those sorts of weapons.

And of course they are constantly threatening to use nuclear weapons against us.  Just today I saw a report that talked about how the North Koreans are threatening to unleash “nuclear thunderbolts”, and in another report the North Koreans were quoted as saying they would “ruthlessly ravage” the United States if they are attacked…

North Korea upped its warmongering with Donald Trump today in a series of menacing boasts threatening to ‘ravage’ US troops amid fears the two countries are heading for war.

The secretive state vowed to ‘pulverize’ US bases and South Korean capital Seoul if it was threatened by the US military, which is carrying out drills on the Korean peninsula. A US aircraft carrier group is steaming towards the region.

It claimed it would ‘ruthlessly ravage’ the US if Washington attacked.

North Korea is one of the most wicked nations on the entire planet, and I would certainly greatly rejoice if their government were to fall.

But I don’t see any way that a military strike on North Korea would be successful.

If the North Koreans were able to fire even a single nuclear or chemical warhead at a major city such as Seoul or Tokyo it would be the worst foreign policy disaster in the history of the United States.  The North Koreans would certainly be blamed, but the Trump administration would also be blamed for conducting such a reckless attack in the first place.  Our relationships with our allies in the region would be permanently destroyed, and this would benefit China greatly.

Without using nukes in an overwhelming first strike (which would be unthinkable), I don’t believe that there is any possible way that we could take out all of North Korea’s nukes before they had a chance to at least fire some of them off.

And if North Korea did nuke Seoul or Tokyo or any U.S. military bases in the region, we would almost be forced to respond with nukes of our own, and that would have to be followed up by a massive ground invasion to topple the regime.

So if Donald Trump is reading this, for the good of humanity I would like to strongly urge him not to conduct a military strike on North Korea at this time.  The risk is just way too great, and if things go wrong we could easily be looking at a scenario in which millions of people end up dead.

Is The United States About To Bomb North Korea? The White House Says ‘The Clock Has Now Run Out’

I got chills when I saw a CNN report that said that a White House official has just warned that “the clock has now run out” on North Korea’s nuclear program and that “all options are on the table”.  That second phrase has been repeatedly used by members of the Trump administration in recent days, and everyone knows what it means.  When I wrote that a conflict with North Korea could be “Trump’s first war” last month, I was still hoping that cooler heads would prevail and that a military conflict could be avoided.  Unfortunately, it appears that a peaceful solution is not in the cards, and that means that the United States may soon start bombing North Korea.  And of course if that happens the North Koreans will strike back with whatever they can, and that includes nuclear weapons.

I don’t know if I have the words to effectively communicate how serious this situation could become.  We have gotten to the point where the White House is openly talking of going to war with a nuclear power

A senior White House official issued a dire warning to reporters Tuesday on the state of North Korea’s nuclear program, declaring “the clock has now run out and all options are on the table.”

“The clock has now run out, and all options are on the table,” the official said, pointing to the failure of successive administration’s efforts to negotiate an end to North Korea’s nuclear program.

Later this week, President Trump is going to meet with Chinese President Xi Jinping in Florida.  The eyes of the entire world will be on this summit, because everyone knows that Trump is going to press the Chinese leader for help on resolving the crisis with North Korea.

But what can China actually do?

The Chinese could cut off trade with North Korea, and that would definitely hurt, but North Korean leader Kim Jong Un appears to have become convinced that long range nuclear missiles are the key to the survival of his regime, and so he will never give up his nuclear program.

And the Chinese will certainly not strike North Korea militarily, and so ultimately if something is going to be done to stop North Korea from getting long range nuclear missiles it will be up to the United States.

On Tuesday morning, North Korea once again showed their defiance by firing yet another test missile into the Sea of Japan

The missile was fired from the Sinpo region at 10.40pm GMT (6.10am local time) on the communist nation’s east coast and landed into the sea off the Korean peninsula, South Korean military officials confirmed.

The rocket is believed to have flown around 37 miles before crashing into the sea. Specific details about the type of projectile were not immediately available.

Kim Jong Un conducted more missile tests in 2016 than his father did in nearly two decades.

It has become crystal clear that North Korea is not going to back down.

President Trump is still hoping that China will step up to the plate, but if the Chinese don’t he has already stated that the United States is fully prepared to “act alone”.  In fact, he made headlines all over the planet when he told the Financial Times the following: “Well if China is not going to solve North Korea, we will. That is all I am telling you.”

It doesn’t take much imagination to figure out what Trump is saying there.

Previous administrations have tried sanctions and negotiations for decades, and they all failed.

In the end, Trump is going to be faced with a choice whether to bomb North Korea or not, and four-star general Jack Keane says that bombing North Korea “may be the only option left”

A four-star general with close ties to Donald Trump has warned that military strikes are ‘rapidly’ becoming the only solution to North Korea’s nuclear program.

Jack Keane, who declined the President’s offer to become Defense Secretary last year, said bombing Kim Jong-un’s nuclear facilities ‘may be the only option left.’

But bombing North Korea is not like bombing Afghanistan, Iraq, Libya or Syria.

The North Koreans already have nuclear weapons, and the U.S. better destroy them all in an overwhelming initial assault, because Kim Jong Un will use any that survive to strike back.

If you doubt this, just consider what a very high level North Korean defector just told Lester Holt of NBC News

A senior North Korean defector has told NBC News that the country’s “desperate” dictator is prepared to use nuclear weapons to strike the United States and its allies.

Thae Yong Ho is the most high profile North Korean defector in two decades, meaning he is able to give a rare insight into the secretive, authoritarian regime.

According to Thae, North Korean dictator Kim Jong Un is “desperate in maintaining his rule by relying on his [development of] nuclear weapons and ICBM.” He was using an acronym for intercontinental ballistic missiles — a long range rocket that in theory would be capable of hitting the U.S.

North Korea is currently developing an intercontinental ballistic missile known as the “Taepodong 2” that will have a range of approximately 8000 kilometers.

In other words, it would be capable of striking cities in the western portion of the United States.

It is unthinkable that we would allow a tyrannical leader that is literally insane and that is obsessed with destroying the United States to have such a weapon.

But the moment that we start dropping bombs on North Korea we will start a war in which millions could die.  Whatever nuclear weapons are missed in the first assault will likely be fired at U.S. military bases in Japan or at South Korea’s capital city of Seoul.  Approximately 10 million people live in Seoul, so the death toll would be absolutely enormous.  And even if all North Korean nuclear devices are destroyed by the first attack, the North Koreans still have thousands of artillery guns and rocket launchers trained on Seoul, and they would not hesitate to use their vast stockpile of chemical warheads.

After the initial North Korean barrage, the fourth largest military on the entire planet would start pouring across the border in a massive invasion of South Korea.  The U.S. military would be forced to respond with large scale ground forces if South Korea would have any chance of surviving, and just like in the first Korean War the Chinese may decide to respond to that move by committing their own troops to the war on the side of North Korea.

This is a season of “wars and rumors of wars”, and most Americans have no idea how dangerously close we are to the beginning of World War III.  My hope is that a peaceful way out of this crisis can still be found, but at this point that is becoming increasingly difficult to imagine.

If Donald Trump decides to go to war with North Korea, he needs to hit them with an absolutely overwhelming first strike that takes out every single North Korean nuke, the bulk of North Korea’s artillery and rockets, and the entire North Korean leadership team within the first few minutes of the attack.

It is hard to imagine a scenario that does not involve nukes that would accomplish that.

And Donald Trump better get the public approval of South Korean and Japanese leadership before ever attempting such an attack, because they will likely pay the highest price if North Korea is able to strike back.

If South Korea or Japan balk at backing such an operation and then they get hit by North Korean nukes, the United States could lose them as friends and allies forever.

The stakes are incredibly high, and there are so many things that could go wrong.

So let us pray for peace, because the alternative is almost too horrible to imagine.

The Bank For International Settlements Warns That A Major Debt Meltdown In China Is Imminent

chinese-money-public-domainThe pinnacle of the global financial system is warning that conditions are right for a “full-blown banking crisis” in China.  Since the last financial crisis, there has been a credit boom in China that is really unprecedented in world history.  At this point the total value of all outstanding loans in China has hit a grand total of more than 28 trillion dollars.  That is essentially equivalent to the commercial banking systems of the United States and Japan combined.  While it is true that government debt is under control in China, corporate debt is now 171 percent of GDP, and it is only a matter of time before that debt bubble horribly bursts.  The situation in China has already grown so dire that the Bank for International Settlements is sounding the alarm

A key gauge of credit vulnerability is now three times over the danger threshold and has continued to deteriorate, despite pledges by Chinese premier Li Keqiang to wean the economy off debt-driven growth before it is too late.

The Bank for International Settlements warned in its quarterly report that China’s “credit to GDP gap” has reached 30.1, the highest to date and in a different league altogether from any other major country tracked by the institution. It is also significantly higher than the scores in East Asia’s speculative boom on 1997 or in the US subprime bubble before the Lehman crisis.

Studies of earlier banking crises around the world over the last sixty years suggest that any score above ten requires careful monitoring.

If you are not familiar with the Bank for International Settlements, just think of it as the capstone of the worldwide financial pyramid.  It wields enormous global power, and yet it is accountable to nobody.  The following is a summary of how the Bank for International Settlements works that comes from one of my previous articles entitled “Who Controls The Money? An Unelected, Unaccountable Central Bank Of The World Secretly Does“…

An immensely powerful international organization that most people have never even heard of secretly controls the money supply of the entire globe.  It is called the Bank for International Settlements, and it is the central bank of central banks.  It is located in Basel, Switzerland, but it also has branches in Hong Kong and Mexico City.  It is essentially an unelected, unaccountable central bank of the world that has complete immunity from taxation and from national laws.  Even Wikipedia admits that “it is not accountable to any single national government.”  The Bank for International Settlements was used to launder money for the Nazis during World War II, but these days the main purpose of the BIS is to guide and direct the centrally-planned global financial system.  Today, 58 global central banks belong to the BIS, and it has far more power over how the U.S. economy (or any other economy for that matter) will perform over the course of the next year than any politician does.  Every two months, the central bankers of the world gather in Basel for another “Global Economy Meeting”.  During those meetings, decisions are made which affect every man, woman and child on the planet, and yet none of us have any say in what goes on.  The Bank for International Settlements is an organization that was founded by the global elite and it operates for the benefit of the global elite, and it is intended to be one of the key cornerstones of the emerging one world economic system.

Normally the Bank for International Settlements is not prone to making extremely bold pronouncements, and so this warning about China seems a bit out of character.

Is something going on behind the scenes that we don’t know about?

Without a doubt, the global financial system is shakier and more vulnerable than most people would dare to imagine.  Global central banks have been on the greatest money creation spree in recorded history, and interest rates have been pushed to ridiculously low levels.

If you can believe it, approximately 10 trillion dollars worth of bonds are trading at negative interest rates right now.  This is completely and utterly irrational, and when this giant bond bubble finally explodes it is going to create a crisis unlike anything the world has ever seen before.

Just recently, Michael Pento of Pento Portfolio Strategies commented on this bubble

He said the current financial conditions are “the most dangerous markets i have ever witnessed in my entire life – and i’ve been investing for over 25 years… The membrane has been stretched so wide and so tight that its about to burst.”

Pento believes that once the bond crash happens, it will trigger a cataclysmic wave of crashes throughout the entire global financial system

Mr Pento has now warned that when policymakers signal they are set to stop buying, which will stop bond prices rising, there is going to be a devastating crash – not just in bond markets but across all investment assets.

He said: “When the bond market breaks, when that bubble bursts, it will wipe out every asset, everything will collapse together… I mean diamonds, sports cars, mutual funds, municipal bonds, fixed income, reits, collateralised loan obligations, stocks, bonds – even commodities – will collapse in tandem along with the bond bubble burst.”

Many had been anticipating that we would have already seen a major financial crash in 2016, but so far things have been pretty stable, and this has lulled many into a false sense of complacency.

But it is important to remember that we have seen corporate earnings fall for five quarters in a row, and it is expected to be six when the final numbers for the third quarter come in.

Never before in history have we had a stretch like this without major economic and financial consequences.  The following comes from a recent Fortune article which referred to an earlier piece authored by Jim Bianco…

None of this, however, is apparent from how stock market indexes have been moving lately, which unlike the charts above have been going up and to the right. “Since 1947, every time profits fell this much, or for this long, a recession was either underway or about to begin,” writes Bianco. “The only exception was the middle of 1986 to early 1987.”

If you remember, there was a pretty important event that happened in 1987: A massive stock market crash that sapped close to 30% of the S&P 500’s value in just five days.

It is only a matter of time before this earnings recession takes a major bite out of Wall Street.

Stock prices can stay at irrationally high levels for quite a while, but history has shown that every bubble bursts eventually.

And when this bubble bursts, it is going to make 2008 look like a walk in the park.

The Stock Market Crash Of 2016: Stocks Have Already Crashed In 6 Of The World’s 8 Largest Economies

Network Earth Continents - Public DomainOver the past 12 months, stock market investors around the planet have lost trillions of dollars.  Since this time last June, stocks have crashed in 6 of the world’s 8 largest economies, and stocks in the other two are down as well.  The charts that you are about to see are absolutely stunning, and they are clear evidence that a new global financial crisis has already begun.  Of course it is true that we are still in the early chapters of this new crisis and that there is much, much more damage to be done, but let us not minimize the carnage that we have already witnessed.

In general, there have been three major waves of financial panic over the past 12 months.  Late last August we saw the biggest financial shaking since the financial crisis of 2008, then in January and February there was an even bigger shaking, and now a third “wave” has begun in June.  Not all areas around the globe have been affected equally by each wave, but without a doubt this new financial crisis is a global phenomenon.

The charts that I am about to show you come from Trading Economics.  It is an absolutely indispensable website that is packed full of useful data, and I encourage everyone to check it out.

Let’s talk about China first.  The Chinese economy is the second largest on the entire planet, and since this time last year Chinese stocks are down an astounding 40 percent

Chinese Stocks

As things have started to unravel in China, the Chinese have been selling off U.S. debt and U.S. stocks like crazy.  The following comes from Bloomberg

For the past year, Chinese selling of Treasuries has vexed investors and served as a gauge of the health of the world’s second-largest economy.

The People’s Bank of China, owner of the world’s biggest foreign-exchange reserves, burnt through 20 percent of its war chest since 2014, dumping about $250 billion of U.S. government debt and using the funds to support the yuan and stem capital outflows.

While China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines.

Unfortunately for China, their economy just continues to slow down, and George Soros is so alarmed by this and a potential “Brexit” that he has been selling off stocks and buying enormous amounts of gold in anticipation of an even bigger global downturn.

Japan has the third largest economy in the world, and over the past year Japanese stocks are down a total of 26 percent from the peak…

Japan Stocks

Personally, I have been extremely alarmed by what has been happening in Japan lately.  Japanese stocks were down almost 500 points last night, and overall the Nikkei is down a whopping 1,800 points so far in June.

Of course the Japanese economy as a whole is essentially a basket case at this point.  For a detailed analysis of this, please see my previous article entitled “Watch Japan – For All Is Not Well In The Land Of The Rising Sun“.

Germany has the fourth largest economy in the world, and over the past year their stocks have fallen 19 percent from the peak of the market…

German Stocks

The key thing to watch for in Germany are serious troubles at their biggest bank.  I wrote a long article about the slow-motion implosion of Deutsche Bank last month, and just this week Deutsche Bank stock hit an all-time low.

The fifth largest economy on the planet belongs to the United Kingdom, and since last June their stocks have fallen about 13 percent

British Stocks

One week from today, the “Brexit” vote will be held in the UK, and if they vote to leave the EU that could have very serious economic and financial implications for them and for the rest of Europe as well.  For an in-depth look at this, please see my previous article entitled “June 23, 2016: The Brexit Vote Could Change EVERYTHING And Plunge Europe Into Financial Chaos“.

France has the sixth largest economy in the world, and over the past year French stocks are down 20 percent from the peak of the market…

French Stocks

The French economy is really struggling these days, and we have not heard much about it in the U.S. media, but there have been tremendous riots in major cities in France in recent weeks.

The seventh largest economy on our planet belongs to India.  Even though India is facing some very serious economic problems, their stocks are doing okay for the moment.  Even though stocks in India are down over the past 12 months, we have not seen a major financial crisis over there just yet.

But there is definitely a major crisis in the eighth largest economy in the world.  Italian stocks are down a staggering 32 percent from the peak of the market.  That means approximately a third of all stock market wealth in Italy is already gone…

Italian Stocks

Earlier this year, I wrote about the horrifying collapse of the Italian banking system that has greatly accelerated since the start of 2016.  It looks like virtually all of their big banks will ultimately need to be bailed out, and this threatens to become a far bigger crisis than the crisis in Greece ever was.

And let us not leave off the ninth largest economy in the world.  Not too long ago, CNN ran an article entitled “Brazil: Economic collapse worse than feared“.  So not only are they admitting that the ninth largest economy on the globe is collapsing, they are also admitting that it is even worse than what the experts had anticipated.

So did I leave anyone off the list?

Ah yes, I haven’t even addressed what has been going on in the United States yet.

U.S. stocks did crash last August, but then they recovered.

Then they crashed again in January, but then they recovered again.

Now U.S. stocks have been taking another tumble here in June, but we are being assured that there is nothing to worry about.

Meanwhile, the underlying numbers for the U.S. economy just continue to get worse and worse and worse.  If you have any doubt about this, please see the article that I posted yesterday entitled “15 Facts About The Imploding U.S. Economy That The Mainstream Media Doesn’t Want You To See“.

Hopefully this article will clear a lot of things up.  In this piece, I have presented undeniable evidence that a new global financial crisis has begun over the past 12 months.  We have not seen global stock declines of this nature since the great financial crisis of 2008, but much worse is still to come.

I would love to be wrong about that last part.

It would be wonderful if the worst was now behind us and good times for the global financial system were ahead.

Unfortunately, every single indicator that I am watching is telling me just the opposite.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

Dozens Of Large Earthquakes Strike As Speculation Mounts That Japan’s Southern Island May Split

Kyushu EarthquakesOver the past 48 hours, our planet has been hit by literally dozens of earthquakes of magnitude 4.0 or greater, and scientists are acknowledging that what is taking place is highly unusual.  This strange shaking began toward the end of last week when the globe was struck by five major earthquakes over the space of just two days, and over the weekend the seismic activity just continued to escalate.  Very early on Saturday, Japan’s southern island of Kyushu was hit by a magnitude 7.3 earthquake, and on Saturday night a magnitude 7.8 earthquake struck off Ecuador’s Pacific coast.  It was the worst earthquake that Ecuador had experienced since 1979, and it was followed by at least 163 aftershocks.  Unfortunately, there are indications that what we have seen so far may be just the beginning.

Because the Ecuador earthquake was bigger, it is getting most of the headlines at the moment, but the truth is that what is going on in Japan is potentially far more dangerous.

Over the past week, Japan’s southern Island of Kyushu has been rocked by a series of devastating quakes, including two major ones in less than 48 hours.  The following comes from the Guardian

A second major earthquake in less than two days has shaken Japan’s southern island of Kyushu, with at least 34 people thought to have been killed, about 1,500 injured and more feared buried after building collapses and landslides.

The 7.3 magnitude earthquake struck at about 1.30am on Saturday, waking people across the island – including the thousands already in crisis centres. It caused widespread damage, with several landslides and a village evacuated over fears a dam might burst.

The mainstream media in the United States is using the term “landslides” to describe what has happened all over Kyushu, but the truth is that in many instances it would be far more accurate to say that “giant cracks” or “vast chasms” have formed.  The geography of Japan’s southern island has been fundamentally transformed, and this is beginning to cause huge concerns.  Here is more from the Guardian

One major landslide tore open a mountainside in Minamiaso village in Kumamoto prefecture, destroying a key bridge that could cut off food and other relief transport to the worst-hit area.

Another landslide hit a road, collapsing a house that fell down a ravine. In another part of the village, houses were left hanging precariously at the edge of a huge hole.

I want to show you a map which comes directly from the U.S. Geological Survey.  This map shows all of the earthquakes of magnitude 2.5 or greater that have hit Japan’s southern island over the past week.  As you look at this map, do you see a pattern?…

Kyushu Earthquakes

The dozens of earthquakes that have hit Japan’s southern island over the past week appear to form something of a straight line that divides the island in two.  Many are now speculating that geological forces are beginning to tear Kyushu in half, and if that is true, the earthquake activity that we have seen in Japan so far is probably just the tip of the iceberg.

We could potentially be talking about an event that could ultimately have far more of an impact on Japan than the tsunami of 2011.  By the time it is all said and done, entire cities could be wiped off the map and millions upon millions of Japanese citizens could be displaced.

Already, the seismic activity that has rocked Kyushu is having quite an impact on the Japanese economy

Earlier today Toyota was one of many Japanese companies to announce that it will suspend most car production across Japan as a result of critical supply chain disruptions caused by the recent destructive earthquake and numerous aftershocks. All of the major assembly lines will be shut down across its four directly-run plants, and Toyota will be halting production in stages at other group companies as well.

According to the Nikkei Asian Review, most of the Toyota group in Japan will be effectively shut down through at least the end of this upcoming week, with a production loss of as many as 50,000 vehicles, including brands such as Prius, Lexus, and Land Cruiser.

Our planet resembles something of a giant cracked egg, and the enormous tectonic plates that we are all living on are constantly in motion.  So if Japan’s southern island is in the process of slowly splitting in half, that shouldn’t exactly be a surprise.  After all, scientists assure us that Los Angeles and San Francisco will be directly next to one another someday.

And it isn’t just Japan that we need to be concerned about.  All along the “Ring of Fire”, seismic activity is increasing, and this has many of the experts completely puzzled.  The following comes from an excellent piece by Alvin Conway

This has continued to baffle many of the world’s leading geologists, who still attest the rise in the number of large earthquakes is merely a random natural occurrence. For instance, the number of large earthquakes doubled in 2014. However, here’s what scientists had to say about it: “If you think there have been more earthquakes than usual this year, you’re right. A new study finds there were more than twice as many big earthquakes in the first quarter of 2014 as compared with the average since 1979.

We have recently experienced a period that has had one of the highest rates of great earthquakes ever recorded,” said lead study author Tom Parsons, a research geophysicist with the U.S. Geological Survey (USGS) in Menlo Park, California.

If you are familiar with my work, then you already know that I believe that we have entered a period of time during which we will see seismic activity on a scale that none of us have ever experienced before.

This great shaking will combine with other factors such as financial collapse, geopolitical instability and civil unrest to produce what many have described as a “perfect storm”.  Life as we know it is in the process of fundamentally changing, and right now we are only in the very early chapters of this change.

Unfortunately, most people are ignoring the warnings and will continue to ignore them until it is far too late.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*