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Living In A Van Down By The River – Time To Face The True State Of The Middle Class In America

van-public-domainDo you remember the old Saturday Night Live sketches in which comedian Chris Farley portrayed a motivational speaker that lived in a van down by the river?  Unfortunately, this is becoming a reality for way too many Americans.  As the middle class has shrunk and the cost of living has increased, a lot of people have decided to quite literally “live on the road”.  Whether it is a car, a truck, a van, a bus or an RV, an increasing number of Americans are using their vehicles as their homes.  Just recently, someone that I know took a trip down the west coast of the United States and stayed at a number of campgrounds along the way.  What she discovered was that a lot of people were actually living at these campgrounds.  Of course there are some that actually prefer that lifestyle, but many others are doing it out of necessity.

Earlier this week, Circa.com posted a story about “the van life”.  One of the individuals that they featured was a recent graduate of the University of Southern California named Stephen Hutchins.  Without much of an income at the moment, he decided that the best way to cut expenses was to live in his van

“The main expenses are insurance for the van, which is like $60 a month,” said Hutchins. “Then, I have a storage unit for like $60.”

That puts his monthly rent at $120. The van cost him just $125 at an auction.

Living in a van is certainly not the most comfortable way to go, and many of you are probably wondering how he performs basic tasks such as cooking and bathing.  Well, it turns out that he makes extensive use of public facilities

He showers at the gym, cooks on a portable stove on a sidewalk (he stores his butane at his friends’ place nearby) and uses wifi at nearby coffeeshops.

For a while such a lifestyle may seem like “an adventure”, but after a while it will start to get really old.  And not a lot of women are going to be excited about dating a man that lives in a van, and you certainly wouldn’t want to raise a family in a vehicle.

Sadly, just like during the last economic crisis many Americans are getting to the point where staying in their homes may not be an option.  Just check out the following excerpt from a recent New York Post article entitled “The terrifying signs of a looming housing crisis“…

The number of New Yorkers applying for emergency grants to stay in their homes is skyrocketing — as the number of people staying in homeless shelters reached an all-time high last weekend, records show.

There were 82,306 applications for one-time emergency grants to prevent evictions in fiscal 2016, up 26 percent from 65,138 requests the previous year, according to the Mayor’s Management Report.

I put a couple of phrases in that quote in bold because I really wanted you to notice a couple of things.

First of all, it is very alarming to hear that the number of New Yorkers staying in homeless shelters “reached an all-time high” last weekend.  I thought that we were supposed to be in an “economic recovery”, but apparently things in New York are rapidly getting worse.

Secondly, the fact that applications for emergency grants are up 26 percent compared to last year is another indication of how rough things are right now for average families in New York.  We all remember what happened when millions of families lost their homes to foreclosure across the nation during the last financial crisis, and nobody should want to see a repeat of that any time soon.

During this election season, Barack Obama and Hillary Clinton would like all of us to believe that the economy is doing just fine, but that is not true at all.  Even using the doctored numbers that the government gives us, Barack Obama is solidly on track to be the only president in all of U.S. history to never have a single year of 3 percent GDP growth, and he has had two terms to try to do that.

Gallup CEO Jim Clifton is also quite skeptical of this “economic recovery”, and he recently authored an article on this subject that is receiving a tremendous amount of attention.  The following is how that article begins

I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week.

I don’t think it’s true.

The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

Other surveys have found that it is even worse than that.

For example, a Pew Research Center study from the end of last year discovered that the middle class in America has now actually become a minority in this country.

Here are some other numbers that Clifton included in his article

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

Once upon a time, America was the land of opportunity.

We were the place where anything was possible and where entrepreneurship was greatly encouraged.

But today we strangle small businesses to death with rules, regulations, red tape and taxes.

If we want a stronger middle class, we need to create a much better environment for the creation of small businesses.  Small business ownership often lifts individuals into the middle class, and small businesses have traditionally been the primary engine for the growth of good jobs in this country.

If the middle class continues to shrink, poverty will continue to rise.  Previously I have written about how the number of homeless children in the United States has shot up by 60 percent since the last economic crisis, and Poverty USA claims that a staggering 1.6 million children slept either in a homeless shelter or in some other form of emergency housing during 2015.

If you will be sleeping in a warm bed in a comfortable home tonight, you should be thankful.  An increasing number of Americans are sleeping in tent cities, in their vehicles or on the streets.  These hurting people deserve our love, our compassion and our prayers.

Desperately Poor Teens In America’s Impoverished Inner Cities Are Trading Sex For Food

sad-girl-public-domainWhen people get hungry enough, they will do just about anything for some food.  According to brand new research that was just released this week from Feeding America and the Urban Institute, there are millions of teenagers in America that live in “food insecure” households, and researchers were stunned to learn what some of these teens are willing to do to feed themselves.  Some resort to shoplifting, others deal drugs, and there were a surprising number of participants in the study that actually admitted to trading sex for food.  It wouldn’t be a shock to hear that these kinds of things are going on in an economically-depressed nation such as Venezuela, but this is the United States of America.  We are supposed to be the wealthiest nation on the entire planet.  Sadly, even while the stock market has been soaring in recent years, poverty in America has been on the rise.  For those on the low end of the economic scale, things have gone from bad to worse since the end of the last recession, and millions of children are deeply suffering as a result.

Let’s start with some of the hard numbers.  The following comes directly from the Urban Institute website

An estimated 6.8 million people ages 10 to 17 are food insecure, meaning they don’t have reliable access to enough affordable, nutritious food. Another 2.9 million are very food insecure, and roughly 4 million live in marginally food secure households, where the threat of running out of food is real.

Food insecurity takes a tremendous toll on teenagers. Poor nutrition—and the stress of hunger and poverty—can jeopardize their physical and mental health and development and their academic success. But despite the gravity and prevalence of teen food insecurity, we know very little about how these young people experience and cope with hunger.

The researchers already knew that lots of young people were hungry in America.  But what surprised them were the lengths that many of these youngsters said that they would go to in order to get food

Some of the youths said they or someone they know — mostly young men — have turned to shoplifting food, selling drugs or stealing items to sell.

The teens also reported knowing young women who have sold their bodies for food or had sex for money so they could buy food for their families.

Going to jail or failing a class in order to have to attend summer school were also some of the lengths teens went to.

Could you imagine your daughter or your granddaughter exchanging her body for food?

For most of us that is absolutely unthinkable, but the truth is that this is taking place on the streets of America every single day.

And this wasn’t just some blind random phone survey.  The researchers conducted personal interviews with focus groups, and what these kids were willing to admit doing was absolutely astounding.  Here is another excerpt directly out of the report

  • When faced with acute food insecurity, teens in all but two of the communities said that youth engage in criminal behavior, ranging from shoplifting food directly to selling drugs and stealing items to resell for cash. These behaviors were most common among young men in communities with the most limited job options.
  • Teens in all 10 communities and in 13 of the 20 focus groups talked about some youth selling sex for money to pay for food. These themes arose most strongly in high-poverty communities where teens also described sexually coercive environments. Sexual exploitation most commonly took the form of transactional dating relationships with older adults.
  • In a few communities, teens talked about going to jail or failing school (so they could attend summer classes and get school lunch) as viable strategies for ensuring regular meals.

Many of these young people understand that what they are doing is wrong.  Just consider what some of them told the researchers

A girl in Portland, Oregon told researchers: “It’s really like selling yourself. Like you’ll do whatever you need to do to get money or eat.”

Another comment from Portland: “You’re not even dating … they’ll be like … ‘I don’t really love him, but I’m going to do what I have to do.’”

Many prefer to rationalise what they are doing as dating of sorts. A boy in rural North Carolina said: “When you’re selling your body, it’s more in disguise. Like if I had sex with you, you have to buy me dinner tonight … that’s how girls deal with the struggle … That’s better than taking money because if they take money, they will be labeled a prostitute.”

When I read the information in this report, I was stunned.  Yes, I write about our economic decline and the rise in poverty all the time, but I didn’t know that things were this bad.

And the researchers were surprised by what they were hearing as well.  One of them said that the fact that girls are trading their bodies for food “was really shocking to me”, and she believes that things are “just getting worse over time”

“I’ve been doing research in low-income communities for a long time, and I’ve written extensively about the experiences of women in high poverty communities and the risk of sexual exploitation, but this was new,” said Susan Popkin, a senior fellow at the Urban Institute and lead author of the report, Impossible Choices.

“Even for me, who has been paying attention to this and has heard women tell their stories for a long time, the extent to which we were hearing about food being related to this vulnerability was new and shocking to me, and the level of desperation that it implies was really shocking to me. It’s a situation I think is just getting worse over time.”

But aren’t we being told that things are getting better?

Aren’t we being told that our leaders “fixed” the economy?

Of course the truth is that America is mired in a long-term economic decline that stretches back for decades.  With each passing year the middle class gets smaller as a percentage of the population, and poverty continues to grow.  Last year the middle class became a minority of the population for the first time ever, and a lot of formerly middle class Americans are now among those that aren’t sure that they are going to have enough food to eat this month.

Hunger in America is a major crisis and it is growing.  Just because you may live in a comfortable home in a wealthy neighborhood does not mean that this problem is not real.

Tonight there are millions of Americans that do not know where their next meal is going to come from, and they deserve our love and compassion.

Tent Cities Full Of Homeless People Are Booming In Cities All Over America As Poverty Spikes

HomelessJust like during the last economic crisis, homeless encampments are popping up all over the nation as poverty grows at a very alarming rate.  According to the Department of Housing and Urban Development, more than half a million people are homeless in America right now, but that figure is increasing by the day.  And it isn’t just adults that we are talking about.  It has been reported that that the number of homeless children in this country has risen by 60 percent since the last recession, and Poverty USA says that a total of 1.6 million children slept either in a homeless shelter or in some other form of emergency housing at some point last year.  Yes, the stock market may have been experiencing a temporary boom for the last couple of years, but for those on the low end of the economic scale things have just continued to deteriorate.

Tonight, countless numbers of homeless people will try to make it through another chilly night in large tent cities that have been established in the heart of major cities such as Seattle, Washington, D.C. and St. Louis.  Homelessness has gotten so bad in California that the L.A. City Council has formally asked Governor Jerry Brown to officially declare a state of emergency.   And in Portland the city has extended their “homeless emergency” for yet another year, and city officials are really struggling with how to deal with the booming tent cities that have sprung up

There have always been homeless people in Portland, but last summer Michelle Cardinal noticed a change outside her office doors.

Almost overnight, it seemed, tents popped up in the park that runs like a green carpet past the offices of her national advertising business. She saw assaults, drug deals and prostitution. Every morning, she said, she cleaned human feces off the doorstep and picked up used needles.

“It started in June and by July it was full-blown. The park was mobbed,” she said. “We’ve got a problem here and the question is how we’re going to deal with it.”

But of course it isn’t just Portland that is experiencing this.  The following list of major tent cities that have become so well-known and established that they have been given names comes from Wikipedia

Most of the time, those that establish tent cities do not want to be discovered because local authorities have a nasty habit of shutting them down and forcing homeless people out of the area.  For example, check out what just happened in Elkhart, Indiana

A group of homeless people in Elkhart has been asked to leave the place they call home. For the last time, residents of ‘Tent City’ packed up camp.

City officials gave residents just over a month to vacate the wooded area; Wednesday being the last day to do so.

The property has been on Mayor Tim Neese’s radar since he took office in January, calling it both a safety and health hazard to its residents and nearby pedestrian traffic.

“This has been their home but you can’t live on public property,” said Mayor Tim Neese, Elkhart.

If they can’t live on “public property”, where are they supposed to go?

They certainly can’t live on somebody’s “private property”.

This is the problem – people don’t want to deal with the human feces, the needles, the crime and the other problems that homeless people often bring with them.  So the instinct is often to kick them out and send them away.

Unfortunately, that doesn’t fix the problem.  It just passes it on to someone else.

As this new economic downturn continues to accelerate, our homelessness boom is going to spiral out of control.  Pretty soon, there will be tent cities in virtually every community in America.

In fact, there are people that are living comfortable middle class lifestyles right at this moment that will end up in tents.  We saw this during the last economic crisis, and it will be even worse as this next one unfolds.

Just like last time around, the signs that the middle class is really struggling can be subtle at first, but when you learn to take note of them you will notice that they are all around you.  The following comes from an excellent article in the New York Post

Do you see grocery stores closing? Do you see other retailers, like clothing stores and department stores, going out of business?

Are there shuttered storefronts along your Main Street shopping district, where you bought a tool from the hardware store or dropped off your dry cleaning or bought fruits and vegetables?

Are you making as much money annually as you did 10 years ago?

Do you see homes in neighborhoods becoming run down as the residents either were foreclosed upon, or the owner lost his or her job so he or she can’t afford to cut the grass or paint the house?

Did that same house where the Joneses once lived now become a rental property, where new people come to live every few months?

Do you know one or two people who are looking for work? Maybe professionals, who you thought were safe in their jobs?

Don’t look down on those that are living in tents, because the truth is that many “middle class Americans” will ultimately end up joining them.

The correct response to those that are hurting is love and compassion.  We all need help at some point in our lives, and I know that I am certainly grateful to those that have given me a helping hand at various points along my journey.

Sadly, hearts are growing cold all over the nation, and the weather is only going to get colder over the months ahead.  Let us pray for health and safety for the hundreds of thousands of Americans that will be sleeping in tents and on the streets this winter.

Painful To Watch: This Is The Weakest U.S. Economic ‘Recovery’ Since 1949

Dollar Bending - Public DomainMost of us have never witnessed an economic “recovery” this bad.  As you will see below, the average rate of economic growth since the last recession has been the lowest for any “recovery” in at least 67 years.  And unfortunately, the economy appears to be slowing down even more here in 2016.  On Friday, I talked about how the U.S. economy grew at a painfully slow rate of just 1.2 percent in the second quarter after only growing 0.8 percent during the first quarter.  And last week we also learned that the homeownership rate in the United States has dropped to the lowest level ever.  This is not what a recovery looks like.  Instead, it very much appears that a new economic downturn has already begun.

But don’t just take my word for how painful this economic “recovery” has been.  The following comes from a Wall Street Journal article that was just posted entitled “Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era“…

Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.

The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.

This entire seven year stretch has come while Barack Obama has been in the White House.  After more than seven and a half years, he is solidly on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least three percent.

And unlike many presidents, he has had two terms in which to try to accomplish that feat.

One of the industries that had been doing fairly well during this recovery was the auto industry, but now in early 2016 they have found themselves struggling too

Now, the auto sector, which has propped up GDP growth for years, is slowing down. For the first six months, total car and light truck sales, at a seasonally adjusted annual rate (SAAR) of 17.5 million vehicles, are lagging behind last year by 100,000 units. Over the first half, fleet sales to rent-a-car companies and big fleet buyers were up industry wide. But retail sales fell 2%.

All over the corporate world, earnings are down.

In some cases, they are way down.

It is being projected that this will be the fifth quarter in a row when corporate earnings have declined, and even mainstream analysts are now admitting that it is “evident” that we have entered “a global slowdown”

“Earnings season in the U.S. confirms the overall macro picture that we have. We have a global slowdown. It’s evident in all of the major economies,” said Peter Garnry, head of equity strategy at Saxo Bank, on a Bloomberg podcast.

Of course I have been saying this exact thing for the past 12 months, but a lot of people have tuned me out because the stock market in the United States has been doing so well.

But the stock market is not an accurate barometer for the real economy.  It never has been, and it never will be.

If stocks accurately reflected the health of the U.S. economy, they would have already crashed really hard a long time ago.  At this moment, stock prices are completely disconnected from economic reality, and this has many of the most respected names on Wall Street scratching their heads.  One of them is Jeffrey Gundlach, the chief executive of DoubleLine Capital.  Just check out what he told Reuters on Friday

Noting the recent run-up in the benchmark Standard & Poor’s 500 index while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.”

The S&P 500 on Friday touched an all-time high of 2,177.09, while the government reported that U.S. gross domestic product in the second quarter grew at a meager 1.2 percent rate.

“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”

If you follow Gundlach, you probably already know that he has been dead on accurate with regard to the financial markets over the past couple of years.

So when he says that the stock market “should be down massively” and that it is time to “sell everything”, we should all take him very, very seriously.

All throughout history, a huge decline in corporate earnings has almost always resulted in a huge decline in stock prices.  As Jesse Felder has noted, “we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices” during the last 50 years.

To any rational observer, it is quite obvious that stock prices should have already started collapsing quite some time ago.

And to a large extent this has already happened around the planet, but here in the United States stocks continue to defy the laws of economics.

But at this point it isn’t going to do much good to warn people about this.  Those that could see the danger coming have already pulled their money out of stocks, and most of those that want to stick their heads in the sand and pretend that things are somehow going to be different this time are not likely to be persuaded this late in the game.

In the end, we should all be grateful that this absurd financial bubble has lasted for as long as it has, because stability is much more pleasant than instability.  The U.S. economy and the U.S. financial system have enjoyed a prolonged period of stability that has defied all the odds, and let us hope that it lasts for at least a little while longer…

Bye Bye Middle Class: The Rate Of Homeownership In The United States Has Hit The Lowest Level Ever

Abandoned House - Public DomainThe percentage of Americans that own a home has fallen to the lowest level ever recorded.  During the second quarter of 2016, the non-seasonally adjusted homeownership rate fell to just 62.9 percent, which was exactly where it was at when the U.S. Census began publishing this measurement back in 1965.  This is not what a “recovery” looks like.  All throughout the Obama years, the percentage of Americans that own a home has gotten smaller and smaller and smaller.  The reason for this, of course, is that the middle class in America is dying.  Last year, we learned that middle class Americans now make up a minority of the population for the first time ever.  In order to have a high rate of homeownership, you need a thriving middle class, and you can’t have a thriving middle class without good paying middle class jobs.  This is why I write about the evisceration of the middle class so extensively, because the U.S. economy is systematically being hollowed out and most Americans don’t understand what is happening.

Traditionally, owning a home has been a sign that you have arrived as a member of the middle class, but under Barack Obama the percentage of Americans that own a home has fallen every single year.  In the past, we have talked about how it had fallen to the lowest level in decades, but now it has officially fallen to the lowest level ever.  The following comes from CNBC

After rising just over a decade ago to its highest level ever, the nation’s homeownership rate fell to match its all-time low and could drop even further in the months to come.

In the second quarter of this year, the rate fell to 62.9 percent, not seasonally adjusted, which is the same as it was in 1965, when the U.S. Census started tracking the metric. During the epic housing boom in the mid-2000s, the rate soared as high as 69.2 percent. That was when politicians touted the so-called “ownership society.”

So why is this happening?

Well, according to Wolf Richter analysts are blaming many factors…

  • Rising home prices in an economy of stagnant wages (for the lower 80%) have pushed entry-level homes out of reach for many people.
  • Lower priced homes in many urban areas entail a huge and costly ($ and time) commute every day. And even then, these homes may be too much of stretch for big parts of the population in expensive urban areas.
  • First time buyers are having trouble saving for a down payment since they spend their last available dime to meet soaring rents.
  • Millennials have been blamed. They always get blamed for everything. They saw their parents deal with the American Dream as it turned into the American Nightmare, and they learned their lesson early in life.
  • The super-low interest rate environment hasn’t made homes more affordable because home prices, in response to super-low interest rates, have soared, and in the end, mortgage payments are higher than they were before.
  • Higher home prices entail other costs that are higher, including taxes, brokerage fees, and insurance.

Certainly all of those points are legitimate, but the truth is that what we are facing is much broader than all of that.  The middle class in the United States has been dying for decades, and in recent years the long-term trends that have been slowly eating away at the middle class like cancer have accelerated significantly.  Just consider these numbers…

-In America today, nobody has a job in one out of every five families.

-At this moment, 102 million working age Americans do not have a job.

-According to the Social Security Administration, 51 percent of American workers currently make less than $30,000 a year.

-In 1970, the middle class brought home approximately 62 percent of all income. Today, that number has plunged to just 43 percent.

-The Federal Reserve says that 47 percent of Americans could not pay an unexpected $400 emergency room bill without borrowing the money from somewhere or selling something.

-One recent survey discovered that 62 percent of all Americans have less than $1,000 in savings.

-If you currently have no debt and you also have ten dollars in your pocket, that gives you a greater net worth than about 25 percent of all Americans.

-According to Kathryn J. Edin and H. Luke Shaefer, the authors of a book entitled “$2.00 a Day: Living on Almost Nothing in America“, there are 1.5 million “ultrapoor” households in the United States that live on less than two dollars a day.  If you can believe it, that number has doubled since 1996.

-Back in 2007, approximately one out of every eight children in America was on food stamps. Today, that number is one out of every five.

-Things continue to get worse for the middle class as we head into the second half of 2016.  Gallup’s U.S. economic confidence index just hit the lowest level so far this year.

I could keep quoting numbers at you all day, but hopefully you are getting the picture.

The middle class in America just keeps getting smaller and smaller and smaller, and our politicians just keep on conducting business as usual.  They don’t seem to care that they are strangling the life out of what was once the largest and most thriving middle class in the history of the planet.

And things could soon get much worse for the middle class as this new global economic crisis accelerates.  In fact, highly respected economist Peter Schiff believes that a major downturn in the U.S. is imminent

HERE IS THE REALITY: The world has caught on, and the gig is up. Under Obama’s stewardship, the U.S. national debt has gone from $10 Trillion, to what will be $20 Trillion by the time he leaves office, with nothing more than 100 MILLION Americans out of work, and 50 MILLION in poverty and on food stamps. That’s what cheap money bought for us. It was all “borrowed” cheap money too, making it infinitely worse, and the world is tired of lending.

There are so many families out there that are really struggling right now, and more than two-thirds of all Americans believe that the country is on the wrong track.

I would like to tell you that happy days are here again and that the best times for America are just around the corner, but unlike the politicians at the Republican and Democratic national conventions, I am not going to lie to you.

Very rough times are coming, and things are going to get much harder for the middle class.

Plan accordingly, and get prepared while you still can.

Working 60 Hours A Week At 3 Part-Time Jobs And Still Living Paycheck To Paycheck

Woman Face Skyline - Public DomainWhat can you do when you are working 60 hours a week at three part-time jobs and it is still not enough?  In America today, many people have taken on more than one job in a desperate attempt to make ends meet, but they still come up short at the end of the month.  And those that are actually working are the fortunate ones, because in one out of every five families in the United States nobody has a job.  There are more than 100 million working age Americans that are currently not employed (yes this is true), and as I pointed out yesterday, job cut announcements by major firms are currently running 24 percent ahead of last year’s pace.  But unemployment is just part of the overall problem.  There is this growing misconception out there that if you “have a job” that you must be doing okay.  Unfortunately for the growing number of “working poor” in America, that is not true at all.

Just consider the case of 55-year-old Erlinda Delacruz.  At one time she had a good full-time manufacturing job, but then her factory closed down.  Millions of other Americans have also seen their good paying jobs sent out of the country in recent years, and yet our politicians refuse to do anything about it.  Today, she works 60 hours a week at three different part-time jobs and she still makes less than she once did at the manufacturing plant…

For 15 years, Erlinda Delacruz had a full-time manufacturing job in rural Winters, Texas.

It gave her health benefits and four weeks of paid vacation along with a salary that supported a good life. Then the rug was pulled from under her in 2009, when the plant closed. Since then, it’s been a battle of survival as Delacruz worked a string of part-time jobs. Last summer, she even lost her home to foreclosure.

Delacruz, 55, still works part-time. Except at three different places — Monday through Wednesday she works eight hours a day at a senior citizens center serving meals, and Thursday through Sunday Delacruz divides her time between two other jobs as a cashier at Walmart (WMT) and the Wes-T-Go convenience store.

She told CNN that she lives paycheck to paycheck”, and just like half the country, she is basically flat broke at this point.

Barack Obama promised to be the hero of the working class when he was elected, but it seems like almost everything that he has done has hurt the working class even more.

Take Obamacare for example.  Health insurance premiums have soared through the roof since Obamacare was implemented, and many struggling families now find that they can no longer afford health insurance at all.

And many of those that have signed up for Obamacare are often discovering that many doctors and hospitals won’t even accept their coverage.  The following comes from the New York Times

AMY MOSES and her circle of self-employed small-business owners were supporters of President Obama and the Affordable Care Act. They bought policies on the newly created New York State exchange. But when they called doctors and hospitals in Manhattan to schedule appointments, they were dismayed to be turned away again and again with a common refrain: “We don’t take Obamacare,” the umbrella epithet for the hundreds of plans offered through the president’s signature health legislation.

“Anyone who is on these plans knows it’s a two-tiered system,” said Ms. Moses, describing the emotional sting of those words to a successful entrepreneur.

“Anytime one of us needs a doctor,” she continued, “we send out an alert: ‘Does anyone have anyone on an exchange plan that does mammography or colonoscopy? Who takes our insurance?’ It’s really a problem.”

Unfortunately, things are not going to be getting any better for the working class because we have now entered the early stages of the next major economic downturn.

Earlier today, I received an email from someone that works for a very large company that provides produce for some of the biggest grocery chains in America.  According to him, there has been a dramatic decline in orders coming in recently, and this is something that didn’t even happen during the depths of the last major recession.

So why in the world would that be happening if the economy was in good shape?

I have been receiving similar anecdotal reports from people all over America.  We may not be experiencing a full-blown economic implosion like Venezuela is quite yet, but we are starting to slide in that direction.

And just like in Venezuela and elsewhere around the globe, when economic conditions get harder violent crime goes up.  I have warned that this would happen over and over again, and it is already starting to happen in major cities all over the nation

According to new reports, 2016 is shaping up to be an even more murderous year than last in over two dozen major U.S. cities as homicides rise at their fastest pace yet.

Chicago, Los Angeles, Dallas and Las Vegas have seen the worst, all of which experienced increased homicides in 2015, evidenced by acceleration of murders in the first three months of 2016.

Law enforcement officials and experts are saying the increase over the last year is due to many factors, including an uptick in gang and drug-related violence. Yet, many believe cops and citizens are now interacting differently since the rise of the Black Lives Matter movement has shifted attitudes to distrust police.

Of course we haven’t even gotten to the bad stuff yet.

What we have seen so far is just the very beginning of the chaos that is coming to America.

Before I go today, I want to mention a couple of things.

First of all, the Dow was down another 180 points today, and someone out there is betting unprecedented amounts of money that a major market crash is imminent.  Just check out this chart.  You buy shares of financial instruments such as UVXY because you think that the market is going to implode.  So if there is a giant market crash in our very near future, whoever purchased all of those shares of UVXY stands to make an enormous amount of money.

Secondly, I really started to sound the alarm about German banking giant Deutsche Bank back in September.  And sure enough – their stock price plunged to an all-time record low earlier this year.

But now the whispers are getting louder that even bigger trouble is ahead for this pillar of the European financial system.  The following originally comes from Berenberg analyst James Chappell

Too many problems still: The biggest problem is that DBK has too much leverage. On our measures, we believe DBK is still over 40x levered. DBK can either reduce assets or increase capital to rectify this. On the first path, the markets do not exist in the size nor pricing to enable it to follow this route. Going down the second path also seems impossible at the moment, as the profitability of the core business is under pressure. Seeking outside capital is also likely to be difficult as management would likely find it hard to offer any type of return on new capital invested.

Keep a close eye on Deutsche Bank.  They may very well end up providing us with the next “Lehman Brothers moment” that so many people have been waiting for.

There is so much going on “under the surface” right now, and I am convinced that it will not stay “under the surface” for very much longer.

The global financial system is starting to come apart at the seams even as you read this article, and this is going to have enormous implications for every man, woman and child on the planet in the years ahead.

So as bad as things are for the working class in America right now, the truth is that they are about to get a whole lot worse.

47 Percent Of Americans Cannot Even Come Up With $400 To Cover An Emergency Room Visit

One Dollar Bill - Public DomainIf you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere?  Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now.  And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something.  Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country.  If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth.  Unfortunately, about half of us are currently in that situation.

Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media.  Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.

The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“.  It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them

I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.

To me, this is yet more evidence that the middle class in America is dying.

Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.

But back in 1971, 61 percent of all Americans lived in middle class households.

So what happened?

Well, the big corporations started shipping millions of good paying manufacturing jobs overseas.  Millions of other good paying jobs were replaced by technology, and the competition for the good jobs that remained became extremely intense.

During the good times, the U.S. economy still created new jobs, but most of those jobs were low paying service jobs.

At this point, a majority of American workers have jobs that would be considered low paying.  In fact, 51 percent of all American workers make less than $30,000 a year according to the Social Security Administration.

And once you account for inflation, the truth is that our incomes have been going down for years.  According to a study that was released by Pew Charitable Trusts, median household income in the United States decreased by 13 percent between 2004 and 2014.

That isn’t “progress” any way that you slice it.

If you go all the way back to 1970, the middle class took home approximately 62 percent of all income in the United States.

Today, that number has fallen to just 43 percent.

So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise.  To be honest, a whole host of other surveys have come up with similar numbers.  Here is more from Neal Gabler

A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.

What all of these numbers tell us is that the middle class is disappearing.  I tend to compare it to a game of really bizarre musical chairs.  With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.

Even during the “Obama recovery”, we have seen poverty in America absolutely explode.  In fact, some brand new numbers just came out that are quite startling.  The following comes from another author for The Atlantic named Gillian B. White

Recently, the Brookings Institution published a report looking at the same idea but giving it a different name. The paper, builds on research from the British economist William Beveridge, who in 1942 proposed five types of poverty: squalor, ignorance, want, idleness, and disease. In modern terms, these could be defined as poverty related to housing, education, income, employment, and healthcare, respectively. Analyzing the 2014 American Community Survey, the paper’s co-authors, Richard Reeves, Edward Rodrigue, and Elizabeth Kneebone, found that half of Americans experience at least one of these types of poverty, and around 25 percent suffer from at least two.

To underscore this point, let me just run five quick facts about the growth of poverty in this country by you…

The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.

In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.

The number of homeless children in the U.S. has increased by 60 percent over the past six years.

According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.

That last number really gets me every time.

How can “the wealthiest and most powerful nation on the planet” have more than a million homeless children?

This is one of the reasons why I hammer on our ongoing economic collapse over and over and over.  It is affecting real families with real children that have real hopes and real dreams.

This is not the way our country is supposed to work.

It is supposed to be “the land of opportunity”.

It is supposed to be a place where anyone can live “the American Dream”.

But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.

So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.

*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.*

Credit Card Debt In The United States Is Approaching A Trillion Dollars

Credit Card Debt - Public DomainFor the first time ever, total credit card debt in the United States is approaching a trillion dollars.  Instead of learning painful lessons from the last recession, Americans continue to make the same horrendous financial mistakes over and over again.  In fact, U.S. consumers accumulated more new credit card debt during the 4th quarter of 2015 than they did during the years of 2009, 2010 and 2011 combined.  That is absolutely insanity, because other than payday loans, credit card debt is just about the worst kind of debt that consumers could possibly go into.  Extremely high rates of interest, combined with severe penalties and fees, can choke the financial life out of almost any family in no time at all.

These days, most Americans use credit cards for various purposes, and they can be very convenient.

And if you pay them off every single month, they don’t become a problem.

Unfortunately, a lot of people are not doing this.  According to CNBC, total U.S. credit card debt rose by an astounding 71 billion dollars last year alone…

Last year, credit card debt in the U.S. surged by approximately $71 billion to $917.7 billion, according to a new study from CardHub.com. The research also found that most of the debt accrued in 2015 came in the fourth quarter, when Americans tacked on more than $52 billion.

“With 7 of the past 10 quarters reflecting year-over-year regression in consumer performance, evidence is mounting to support the notion that credit card users are reverting to pre-downturn bad habits,” CardHub CEO Odysseas Papadimitriou said in a statement.

And as noted above, things were particularly gruesome during the 4th quarter of last year.

According to Alternet, Americans added more credit card debt during those three months than during the entire years of 2009, 2010 and 2011 combined…

Not since we headed into the Great Recession of 2008 have we been quite so loosey-goosey with our credit cards, racking up debt with stunning speed. Of our 4Q totals, CardHub notes, “during this one quarter, we added more debt than in 2009, 2010 and 2011 put together.” That brings dollars owed to credit card companies by each debt-saddled American family up to $7,879, the highest since the Great Recession.

I can’t even begin to describe how unwise this is.  When I was in my twenties, I made the same mistakes that so many other Americans are making right now.  I very foolishly racked up large balances on my credit cards, and it took years of extremely painful payments to fix those mistakes.

In America today, 37 percent of all households maintain credit card balances from month to month, and the average level of credit card debt for those households is $15,700.  The following comes from CBS Minnesota

According to NerdWallet, 37 percent of American households have credit card debt, which is defined as not paying off the full balance every month. Using data from the Federal Reserve of New York, U.S. Census and its own poll, NerdWallet found the average balance for those in credit debt is $15,700.

What most people don’t realize is that by letting balances run from month to month, you can end up paying just about as much in interest as you did for the original purchases.

Here is one credit card repayment scenario that comes from NerdWallet

For the sake of simplicity in calculating the cost of the average credit card debt, let’s assume an APR of 16% and a fixed payment. We’ll also assume a minimum payment of 2% of the principal balance of $15,762, the average as of the end of 2015, or $315.

Based on those terms — and assuming you don’t add any more to your credit card balance — it would take 84 months, or seven years, to pay off the balance in full. During that time, you’ll pay $10,402 in interest — about two-thirds of the original balance — for a total of $26,164. This averages out to about $124 in interest per month.

The scenario above assumes that all payments are made on time.  But a single late payment can trigger higher interest rates, penalties and fees that can be absolutely suffocating.

In fact, some people end up paying back three, four or five times as much as they originally borrowed to the credit card companies.

If you use credit cards for convenience or to buy things online or to automatically pay bills, that is fine.  Just don’t let balances accumulate.  As you can see, that can be financial suicide.

And as we head into a new global recession, you definitely don’t want to be saddled with high levels of debt.  All of us have little luxuries that we can cut back on, and now is not the time to be living on the financial edge.

Just look at some of the troubling signs that we have seen in the news in recent days…

-The U.S. oil and rig count just dropped to the lowest level ever recorded

-One Houston CEO told employees that he was laying off that we have entered a “depression

-It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy

-Unemployment in Canada just hit a three year high

-The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas

-U.S. manufacturing activity has been in contraction for four months in a row

-U.S. factory orders have now fallen for 15 months in a row

-Subprime auto loan delinquencies have hit their highest level since the last recession

-Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January

-The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008

-Major retailers all over America are shutting down hundreds of stores

And this list does not even include all of the signs of severe economic trouble from around the rest of the planet that I have been writing about lately.

Credit card debt truly is financial poison, and it is not something that you want to have during the hard times that are coming.

Unfortunately, most Americans never learn, and they continue to rack up credit card debt as if there is no tomorrow even as the global economy starts to spiral downhill all around them.

The Bitter, Crushing Poverty Of Appalachia Is A Preview Of What Is Coming To The Rest Of The Country

Appalachia - Photo from the Appalachian Regional CommissionWhat do you say to people that have completely lost all hope that things will ever get any better?  The mountains of Appalachia stretch all the way from southern New York to northern Mississippi, and nestled within those mountains are dozens upon dozens of little towns that are so impoverished that they look like they have been through a war.  Thanks to Barack Obama’s relentless assault on the coal industry and the ongoing collapse of our industrial infrastructure, Appalachia has lost millions of good paying jobs over the past several decades.  Today, more than 40 percent of the population is living in poverty in some areas of eastern Kentucky, and addiction to “hillbilly heroin” (Oxycontin) is absolutely out of control throughout the region.  Yes, poverty is on the rise all over America, but it has especially been cruel to those that make the mountains of Appalachia their home.

An article that was published in the Guardian on Thursday profiled the deeply impoverished town of Beattyville in eastern Kentucky.  Life is very hard in Beattyville today, and it seems to be getting harder all the time…

The town’s poverty rate is 44% above the national average. Half of its families live below the poverty line. That includes three-quarters of those with children, with the attendant consequences. More than one-third of teenagers drop out of high school or leave without graduating. Just 5% of residents have college degrees.

Surrounding communities are little better. Beattyville is the capital of Lee County, named after the commander of the Confederate army of Northern Virginia in the civil war, General Robert E Lee.

Five of the 10 poorest counties in the US run in a line through eastern Kentucky and they include Lee County. Life expectancy in the county is among the worst in the US, which is not unconnected to the fact that more than half the population is obese. Men lived an average of just 68.3 years in 2013, a little more than eight years short of the national average. Women lived 76.4 years on average, about five years short of national life expectancy.

Because life can be so bitter in little towns like Beattyville, many have chosen to turn to alcohol and drugs in an attempt to escape reality.  The following description of what life is like in the region today comes from Kevin D. Williamson

Thinking about the future here and its bleak prospects is not much fun at all, so instead of too much black-minded introspection you have the pills and the dope, the morning beers, the endless scratch-off lotto cards, healing meetings up on the hill, the federally funded ritual of trading cases of food-stamp Pepsi for packs of Kentucky’s Best cigarettes and good old hard currency, tall piles of gas-station nachos, the occasional blast of meth, Narcotics Anonymous meetings, petty crime, the draw, the recreational making and surgical unmaking of teenaged mothers, and death: Life expectancies are short — the typical man here dies well over a decade earlier than does a man in Fairfax County, Va. — and they are getting shorter, women’s life expectancy having declined by nearly 1.1 percent from 1987 to 2007.

Many of you that are reading this article know exactly what Williamson is talking about, because you are living in one of those communities.  It can be absolutely soul crushing to look into the hollow eyes of those that have long since given up on life day after day.  There are some communities in America where you can feel the bitterness the moment that you drive into them.  It is almost as if all of the life has been sucked out of the entire town.  If you have ever experienced this, you know what I mean.

If there is hope, most people can endure just about anything.  But when there is no hope, that is when deep depression sets in.  And for many of those living in Appalachia, hope has long since departed.  Just consider the words of long-time Beattyville resident Ed Courier

“It’s bad. I don’t think rural America has a future,” said Courier. “The advantage rural areas had in the past of cheap labour is gone. We used to have a lot of little factories in this area but they’ve gone to Mexico or China. In rural areas housing is cheap but everything else costs more. Utility rates are higher. Food and transport are higher. Management doesn’t want to live in rural areas. Education is horrible here. This is a third-world county. My kids grew up here until they were eight or nine, then they went to school in Louisville [a 145-mile drive away]. I wouldn’t send them to school here.”

Sadly, what has already happened in Appalachia is slowly happening to the rest of the country as well.  There is a chronic lack of good jobs, poverty is exploding, and more Americans than ever are giving into depression.

As economic conditions continue to deteriorate, people are starting to become more desperate.  In many large cities, crime rates are already up by double digit percentages in 2015, and the thin veneer of civilization that we all take for granted is beginning to disappear.  For example, down in Tampa it is being reported that there is an epidemic of house squatting going on right now…

Crooks find empty houses all over Tampa Bay and make themselves at home. And now, 8 On Your Side uncovered training manuals on the internet. They teach how to get away with squatting.

The handbooks are brazen. A pamphlet for sale on Amazon for $61.20. An entry on Wiki-How entices tells squatters how to “take a whole house from someone if you’re willing to take the risk.”

It points out the best areas to squat and even advises to spruce up the home to throw off suspicious neighbors.

And a tragic incident that just happened in Indianapolis really touched my heart.  The following comes from ABC News

A family in Indianapolis was torn apart when Amanda Blackburn, 28, died after being shot in the head by a mystery gunman.

Her husband, Pastor Davey Blackburn, returned to their home from the gym Tuesday and found his home broken into and his wife on the ground, officials said.

She died Wednesday, 12 weeks pregnant.

The couple, who have a child, appeared to be madly in love, posting YouTube videos on the way to a “romantic getaway” in Chicago and Amanda even offering marriage advice: “You can lead your wife best, by just being a really, really good Godly example to her.”

Please pray for Pastor Davey.

I can’t even imagine the pain that he must be going through right now.

Meanwhile, there are more signs that this new economic downturn that we are experiencing is about to get even worse…

-Four large U.S. energy companies with combined debt of 4.8 billion dollars have been warned that they are all on the verge of totally collapsing and falling into bankruptcy.

-Unfortunately for all energy companies, the price of oil is not likely to go up significantly any time soon.  The amount of oil being stored offshore has approximately doubled from earlier this year, and more supertankers full of unsold oil are joining the party almost every day

While the crude oil tanker backlog in Houston reaches an almost unprecedented 39 (with combined capacity of 28.4 million barrels), as The FT reports that from China to the Gulf of Mexico, the growing flotilla of stationary supertankers is evidence that the oil price crash may still have further to run, as more than 100m barrels of crude oil and heavy fuels are being held on ships at sea (as the year-long supply glut fills up available storage on land).

-The amount of goods being shipped by rail, freight and air inside the United States continues to decline.  For the month of October, the Cass Shipping Index was down 5.3 percent on a year over year basis.

-And it also looks like a new housing crisis is beginning to emerge.  From September to October, the number of newly initiated foreclosures in the United States rose by 12 percent.

-Of course the elite understand what is happening, and they are working hard to get prepared.  According to Bloomberg, global central banks are buying up gold “at a near-record pace”…

Central banks and other institutions boosted gold purchases to the second-highest level on record in the quarter to September as countries including China and Russia sought to diversify their foreign-exchange reserves.

Net purchases were 175 metric tons, nearing the record 179.5 tons in the same quarter a year earlier, and up from 127.9 tons in the preceding three-month period, the World Gold Council said in a report on Thursday. Still, over the first nine months central banks’ net purchases dropped 6.7 percent to 425.8 tons, according to the council.

When you add these items to the list that I shared with you yesterday, a very disturbing picture begins to develop.

We are clearly heading into an extremely difficult economic period, and that means that the suffering in Appalachia and elsewhere in America is about to get even worse.

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