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.

U.S. Consumers On An Unprecedented Debt Binge As Credit Card Debt Soars To An All-Time Record High

Americans are on an absolutely spectacular debt binge.  Does this mean that the economy is getting better, or does this mean that U.S. consumers are totally tapped out and are relying on borrowed money to make it from month to month?  On Monday, the Federal Reserve announced that total consumer credit in the United States increased by a whopping 24.6 billion dollars in May, which was far greater than the 12.4 billion dollar gain that economists were anticipating.  Total U.S. consumer credit has now hit a grand total of 3.9 trillion dollars, but it is the “revolving credit” numbers that are getting the most attention.  Revolving credit alone shot up by 9.8 billion dollars in May, and that was one of the largest monthly increases ever recorded.  At this point, total “revolving credit” has reached a brand new all-time record high of 1.39 trillion dollars, and credit card debt accounts for nearly all of that figure.

The optimists will tell us that this is yet another sign that the U.S. economy is booming, and hopefully they are correct.

But does it really make sense for U.S. consumers to go on a historic debt binge when much of the country is already drowning in debt and just barely scraping by from month to month?

In a previous article, I pointed out that U.S. consumers have been spending more money than they make for 28 months in a row.

That certainly isn’t sustainable.

I also pointed out that 22 percent of all Americans cannot pay all of their bills in a typical month.

One way to keep things going is to use newer credit cards to pay off the older ones, and I am sure that most of us have been there at some point.

But we are getting to the point where American families are being absolutely overwhelmed by debt.

If you go all the way back to 1980, the average U.S. worker’s debt was 1.96 times larger than his or her monthly salary.  In 2018, that number has skyrocketed to 5.00.

Is that healthy or unhealthy?

Overall, American households are now collectively 13.15 trillion dollars in debt, which is the highest level ever recorded.

So I would submit that rising consumer debt is not a good sign.  Instead, I would suggest that it shows that our debt problems are accelerating.

And the numbers appear to support that hypothesis.

According to one recent survey, 42 percent of U.S. consumers said that they paid their credit card bill late “at least once in the last year”.  And that same survey also found that 24 percent of U.S. consumers made a late payment “more than once in the last year”.

When you pay a credit card bill late, what happens?

Late fees kick in and interest rates shoot up, and that is when debt problems can really start to escalate.

Sadly, the mainstream media continues to encourage Americans to acquire and use credit cards in order “to build credit”

Building your credit is one of the toughest but most necessary financial tasks when you’re entering the working world, and a credit card—when used correctly—can be a great tool to help you secure lower interest rates on a car or house loan.

According to Jill Gonzalez, an analyst at WalletHub, a credit card will help you in the long run. “Getting a credit card and using it responsibly helps people build their credit. Having good credit leads to getting better rates and paying less interest on loans such as mortgages, car loans, personal loans etc.”

Yes, credit cards can be useful tools as long as you keep them paid off.

Unfortunately, much of the country does not do that.

In fact, the same survey that I just referenced above discovered that 22 percent of all consumers believe that “carrying a balance on a credit card account actually helps improve a credit score”.

That isn’t true, but it is a myth that continues to float around out there, and the credit card companies are not exactly discouraging it.

Another reason to avoid using credit cards a lot is because thieves are becoming much more sophisticated.

This time of the year, electronic skimmers at gas stations are commonly used to steal credit card information

Skimmers are small, electronic devices installed secretly at pumps and able to capture a swiped payment card’s protected data, the agency said. Commercial keys purchased online let fraudsters access pumps often left unattended, according to a report from ABC News.

Thieves then return later to retrieve the devices or transmit it remotely via Bluetooth, before using the information to make purchases, Matthew O’Neil, a representative of the agency, told the network.

Of course I am not saying that people should never use credit cards.  They can make it much easier to shop and do business online, and I use them myself.  But I always pay them off each month because credit card debt is one of the most toxic forms of debt.

Today, the national average for credit card interest rates is 16.92 percent.  So let’s imagine a hypothetical for a few moments.  If you are carrying a $10,000 balance at 17 percent, your minimum payment would typically be around $240 a month.

If you only make the minimum payment each month, it will take you 340 months to pay that credit card off, and over that time you will pay $13,607.46 in interest.

In other words, you will ultimately pay the credit card company $23,607.46 for the privilege of originally borrowing $10,000.

We live at a time when there is so much uncertainty, and if things take a substantial turn for the worse you definitely do not want to be struggling with credit card debt.

Because it typically carries such a high interest rate, credit card debt is usually one of the very first forms of debt that you want to get paid off.  Unfortunately, they don’t teach our young people about the dangers of credit card debt in school, so many of them end up learning the hard way.

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.

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.

America’s Rapidly Accelerating Retail Apocalypse Is Being Fueled By One Enormously Painful Economic Problem

We are in the midst of the worst retail apocalypse in American history, and it seems to be getting worse with each passing month.  Many of the “experts” blame the growth of online retailers, and without a doubt online retail sales have been surging.  In fact, I sell far more through Amazon.com than I do through any other channel.  But the truth is that online retailers are not exactly taking over the world.  At this point, 91 percent of all retail sales still take place in brick-and-mortar stores, and that means that online retailers only account for about 9 percent of all retail sales.  Sadly, there is a much bigger reason why thousands of retail stores are closing down and millions upon millions of square feet of retail space is now sitting empty all over America.  The mighty U.S. consumer base was once primarily made up of middle class Americans, but the middle class in America has been on a slow, steady death spiral for many years.

So now the experts tell us that retailers that cater to high income and low income Americans are thriving, and those that once did so well selling to the middle class are fading away

The middle is disappearing — low and middle-income customers increasingly shop at discounters and dollar stores, forcing retailers that once served these customers, like Bon-Ton and its subsidiary brands, to close shop,” analysts from intelligence firm Gartner L2 wrote in a recent report on department stores.

The slow decline of the middle class in America has had an impact on retailers that haven’t adapted to the change. Increasingly, the most successful businesses in the sector have become more distinctly split into two sections: luxury and budget stores.

When I was growing up, it seemed like almost everyone that I knew was “middle class”, and the mall was the place to go on the weekends.

But now shopping malls are dying all over the country.  In fact, one brand new report says that shopping malls have not been this empty in the U.S. since we were coming out of the last recession

U.S. malls haven’t been this empty since 2012, when the retail industry was clawing its way back after the Great Recession, according to a new report from real estate research firm Reis.

The vacancy rate at regional and super regional malls reached 8.6 percent in the second quarter of 2018, based on a survey by Reis of 77 metropolitan areas across the country. That was up from 8.4 percent in the prior period, and a high not seen since the third quarter of 2012, when the vacancy rate was 8.7 percent.

If the U.S. economy really is in “good shape”, why is this happening?

And the numbers for “local shopping centers” are actually even worse

The vacancy rate last quarter, 10.2%, was higher than at malls in part because of hundreds of Toys “R” Us store closures.

Vacancies at local shopping centers increased in more than 70% of metro areas. Indianapolis, Dayton, and Wichita had the highest rates in the country.

If you didn’t know any better, you would be tempted to think that “Space Available” and “Going Out Of Business” were two of the hottest new retailers in the entire nation.

And the numbers that I just shared with you are actually quite understated.  In one of his most recent articles, Wolf Richter explained why this is the case…

But these numbers are deceptive – because something counts as “vacant” only when the landlord tries to fill it with another retailer.

Stores that emptied out and became zombie stores in zombie malls, or the Toys ‘R’ Us stores in bad areas with zero hopes of finding another retail tenant, etc. – they’re not being counted as “vacant” retail space because they’re no longer being marketed as retail space, and the square footage of that retail space disappears from the vacant retail space stats.

That space may remain shuttered and vacant for years, with a fence around that is catching tumbleweeds, as lenders tussle over who gets what, if anything, until the land can hopefully be sold to a developer who might bulldoze the walls and build an apartment complex on it.

We have never been through anything like this in modern American history.

2017 was the worst year for retail store closings in the United States that we have ever seen.  The number of retail stores that closed approximately tripled the number from 2016, and this year we are definitely on pace to shatter the record that we set last year.

And yet Americans continue to be exceedingly optimistic.  A poll that was just released found that 55 percent of all Americans believe that our best days are still ahead of us.

Hopefully they are right, but in the short-term things are looking rather grim.

For example, just today we learned that Sears is shutting down even more stores

Sears Holdings, which owns both chains, said it informed employees Thursday that it would be shuttering nine Sears stores and one Kmart in late September. Liquidation is scheduled to begin as early as July 13, the company said in a statement.

With the additions, a total of 78 stores – 62 Sears and 16 Kmart locations – will close in September.

Of course Sears is not the only major retailer that is slowly liquidating.  Many of the biggest names in the entire retail world have announced that they are closing at least 100 locations in 2018.  The following comes from CNN

Six hundred Walgreens have closed this year, while Bon-Ton, Sears and Kmart, Best Buy, Signet Jewelers, Mattress Firm, and GNC have all closed 200 stores or more this year. Claire’s, Foot Locker, and The Children’s Place have closed 100 or more locations.

If we still had a strong middle class, this would not be happening.

Not too long ago, I shared with you some absolutely shocking numbers about the decline of the middle class, and I would like to share them with you again now…

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States.  But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary.  Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now.  That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

#15 Today, U.S. households are collectively 13.15 trillion dollars in debt.  That is a new all-time record.

This is why so many U.S. retailers are failing.

The once mighty U.S. consumer base is being hollowed out because the middle class in America is being eviscerated.

Yes, the wealthy are doing quite well for the moment, but an increasing number of signs indicate that things are about to take a negative turn for them as well.

For instance, just consider the following example from CNBC

Manhattan real estate had its worst second quarter since the financial crisis, with prices and sales dropping and inventory rising, according to a new report.

Total sales in Manhattan fell 17 percent in the second quarter from a year ago, according a report from Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants.

If we don’t find a way to turn things around, what we have witnessed so far is just the beginning.

The middle class will continue to die, retailers all over the country will continue to go out of business, and shopping malls will continue to turn into ghost towns.

And once we plunge into another recession, all of the trends that I have been talking about in this article are going to start moving much more quickly.  We truly are on the edge of disaster, and most Americans have absolutely no idea what is coming.

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.

Things Just Went Nuclear In Our Trade War With China, And A Giant Shockwave Is About To Hit The U.S. Economy

It is difficult to find the words to describe just how serious America’s trade war with China is becoming.  As you will see below, the two largest economies on the entire planet are on a self-destructive course that almost seems irreversible at this point.  The only way that this trade war is going to come to a rapid conclusion is if one side is willing to totally submit and accept an extremely bitter and humiliating defeat on the global stage, and that is not likely to happen.  So in the short-term, and probably beyond that, we are going to experience a tremendous amount of economic pain.  In fact, if one wanted to create a recipe for economic disaster, it would be hard to beat having the Federal Reserve dramatically raise interest rates at the exact same time that the U.S. government is starting trade wars with all of the other major economic powers simultaneously.  Unless something drastically changes in the very near future, there is no way that the U.S. is going to be able to get through this without experiencing severe pain.

Many had hoped that President Trump would settle down after the initial salvos in this new trade war, but instead on Sunday evening we learned that he has decided to go nuclear.  The following comes from CNBC

President Donald Trump plans to bar many Chinese companies from investing in U.S. tech and to block additional technology exports to China, The Wall Street Journal reported on Sunday evening, citing people familiar with the matter.

The two measures are set to be announced by the end of the week, and are intended to counter Beijing’s Made in China 2025 — a Chinese initiative to be a global leader in technology.

A report from Reuters included some additional very important details.  Apparently this new plan would ban any firm that has 25 percent Chinese ownership or greater from investing in any U.S. companies that have “industrially significant technology”…

The U.S. Treasury Department is drafting curbs that would block firms with at least 25 percent Chinese ownership from buying U.S. companies with “industrially significant technology,” a government official briefed on the matter said on Sunday.

So we are not just talking about “tech firms”.  The Trump administration is greatly concerned about Chinese theft of our technology, and without a doubt this has been rampant, and so the goal is to keep the Chinese from investing in any more of our companies that have important technology.

And theoretically that could include nearly all of them.

For years, the Chinese have been pouring massive amounts of money into the United States and have been investing very heavily in our industries.  Now that is going to come to an almost full stop, and the consequences are going to be enormous.

Yes, we certainly need to stand up to China, but it sure is going to be nearly impossible to try to replace all of that Chinese investment from other sources.

And of course this latest announcement comes less than two weeks before the U.S. and China are scheduled to begin imposing massive tariffs on one another.  The following comes from Bloomberg

On July 6, the U.S. is set to impose tariffs on $34 billion in Chinese goods. Tariffs on an additional $16 billion in Chinese products will go into effect after a public review period is completed. When Beijing vowed to retaliate on the same amount of U.S. goods and under the same timeline, Trump directed his U.S. Trade Representative to identify an additional $200 billion worth of Chinese goods that could be subject to a 10-percent tariff.

Donald Trump is playing hardball with China and is betting that they will fold.

I can already tell you that the Chinese will not fold.

So we are going to suffer some pretty severe consequences, and Finian Cunningham detailed some of these in a recent article.  First of all, Chinese tariffs on our agricultural products will likely hit our farmers really hard

If China goes ahead with threats to impose counter-tariffs on US agricultural products, such as soybeans, corn and meat, the impact on farm states like Iowa, Idaho and Illinois across the mid-west will be severe. Voters from these states were crucial to Trump getting elected to the White House in 2016. By taking the US into a trade war with China, Trump will end up hitting his own political base hardest.

Secondly, U.S. consumers will begin seeing significantly higher prices for consumer goods at our major retailers

Another repercussion is higher retail prices for consumer goods like televisions and footwear imported from China, if Trump slaps on punitive tariffs. That will inflate consumer prices and crimp household budgets, especially among the lower-income population, who again tended to vote for Trump. Net result is that the fragile American economy would likely tank from cash-strapped consumers, who are already living on the edge.

Thirdly, if the Chinese decide to start dumping U.S. Treasury bonds that could create a new crisis on Wall Street very rapidly

Yet, in this accounting, the real pain hasn’t even begun. China’s ultimate trade weapon is its massive holdings of US Treasury bonds. With nearly $1.2 trillion-worth in holdings of US federal debt, China is by far the world’s largest creditor for Washington. US-based news outlet Bloomberg calls it Beijing’s “nuclear option”.

Let me throw in another factor that I mentioned in a previous article.  China has a virtual monopoly on the production of rare earth elements, and if they totally cut us off they could almost instantly cripple a number of our high tech industries.  We have plenty of rare earths here in the United States, but we have not developed our mining or production capabilities to anywhere near a sufficient level for our needs.  This was a ghastly national security error, and in the short-term it could mean an absolutely immense amount of pain.

On top of everything else, China appears to be gearing up for a currency war.  It is already being said that the Yuan is being “weaponized”, and if the value of the Yuan continues to fall precipitously it is going to cause a tremendous amount of chaos globally.

So keep an eye on China and on the Chinese financial markets, because big trouble is already brewing

A slew of negative factors — from a trade war with the U.S. to the risk of a credit crunch — has weighed on China’s financial markets in recent weeks. The benchmark Shanghai stock index is on the brink of a bear market after tumbling almost 20 percent from its recent high, while analysts have started cutting their forecasts for the nation’s currency. Investors have been piling into the relative safety of government debt instead.

“The yuan is faced with a double whammy –- escalating trade tensions are hurting sentiment and the easier monetary policy is also pressuring the currency,” said Gao Qi, a currency strategist at Scotiabank in Singapore. “Traders will step up shorting the yuan in the offshore market, but we won’t likely see massive fund outflows considering the capital curbs in place.”

As one surveys the current state of the global economic chessboard, it is easy to see that we are just two or three moves away from a major global economic crisis.

Just like in 2008, that could mean dramatically falling stock prices, surging corporate bankruptcies and millions of Americans losing their jobs.

And this time around, we could be facing much higher prices and a greatly reduced standard of living.

We are way overdue for the next great economic crisis, and now the powers that be seem absolutely determined to bring it on.

Anyone that is optimistic about the global economy in light of these most recent developments is simply not being rational, because we have never seen storm clouds this big on the horizon in all of modern American history.

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 Real Economic Numbers: 21.5 Percent Unemployment, 10 Percent Inflation And Negative Economic Growth

Every time the mainstream media touts some “wonderful new economic numbers” I just want to cringe.  Yes, it is true that the economic numbers have gotten slightly better since Donald Trump entered the White House, but the rosy economic picture that the mainstream media is constantly painting for all of us is completely absurd.  As you are about to see, if honest numbers were being used all of our major economic numbers would be absolutely terrible.  Of course we can hope for a major economic turnaround for America under Donald Trump, but we certainly are not there yet.  Economist John Williams of shadowstats.com has been tracking what our key economic numbers would look like if honest numbers were being used for many years, and he has gained a sterling reputation for being accurate.  And according to him, it looks like the U.S. economy has been in a recession and/or depression for a very long time.

Let’s start by talking about unemployment.  We are being told that the unemployment rate in the United States is currently “3.8 percent”, which would be the lowest that it has been “in nearly 50 years”.

To support this claim, the mainstream media endlessly runs articles declaring how wonderful everything is.  For example, the following is from a recent New York Times article entitled “We Ran Out of Words to Describe How Good the Jobs Numbers Are”

The real question in analyzing the May jobs numbers released Friday is whether there are enough synonyms for “good” in an online thesaurus to describe them adequately.

So, for example, “splendid” and “excellent” fit the bill. Those are the kinds of terms that are appropriate when the United States economy adds 223,000 jobs in a month, despite being nine years into an expansion, and when the unemployment rate falls to 3.8 percent, a new 18-year low.

Doesn’t that sound great?

It would be great, if the numbers that they were using were honest.

The truth, of course, is that the percentage of the population that is employed has barely budged since the depths of the last recession.  According to John Williams, if honest numbers were being used the unemployment rate would actually be 21.5 percent today.

So what is the reason for the gaping disparity?

As I have explained repeatedly, the government has simply been moving people from the “officially unemployed” category to the “not in the labor force” category for many, many years.

If we use the government’s own numbers, there are nearly 102 million working age Americans that do not have a job right now.  That is higher than it was at any point during the last recession.

We are being conned.  I have a friend down in south Idaho that is a highly trained software engineer that has been out of work for two years.

If the unemployment rate is really “3.8 percent”, why can’t he find a decent job?

By the way, if you live in the Boise area and you know of an opening for a quality software engineer, please let me know and I will get the information to him.

Next, let’s talk about inflation.

According to Williams, the way inflation has been calculated in this country has been repeatedly changed over the decades

Williams argues that U.S. statistical agencies overestimate GDP data by underestimating the inflation deflator they use in the calculation.

Manipulating the inflation rate, Williams argues in Public Comment on Inflation Measurement , also enables the US government to pay out pensioners less than they were promised, by fudging cost of living adjustments.

This manipulation has ironically taken place quite openly over decades, as successive Republican and Democratic administrations made “improvements” in the way they calculated the data.

If inflation was still calculated the way that it was in 1990, the inflation rate would be 6 percent today instead of about 3 percent.

And if inflation was still calculated the way that it was in 1980, the inflation rate would be about 10 percent today.

Doesn’t that “feel” more accurate to you?  We have all seen how prices for housing, food and health care have soared in recent years.  After examining what has happened in your own life, do you believe that the official inflation rates of “2 percent” and “3 percent” that we have been given in recent years are anywhere near accurate?

Because inflation is massively understated, that has a tremendous effect on our GDP numbers as well.

If accurate inflation numbers were being used, we would still be in a recession right now.

In fact, John Williams insists that we would still be in a recession that started back in 2004.

And without a doubt, a whole host of other more independent indicators point in that direction too.  The following comes from an excellent piece by Peter Diekmeyer

Williams’ findings, while controversial, corroborate a variety of other data points. Median wage gains have been stagnant for decades. The U.S. labour force participation rate remains at multi-decade lows. Even our own light-hearted Big Mac deflator suggests that the U.S. economy is in a depression.

Another clue is to evaluate the U.S. economy just as economists would a third world nation whose data they don’t trust. They do this by resorting to figures that are hard to fudge.

There, too, by a variety of measures—ranging from petroleum consumption to consumer goods production to the Cass Freight Index—the U.S. economy appears to have not grown much, if at all, since the turn of the millennium.

In the end, all that any of us really need to do is to just open our eyes and look at what is happening all around us.  We are on pace for the worst year for retail store closings in American history, and this “retail apocalypse” is hitting rural areas harder than anywhere else

This city’s Target store is gone.

So is Kmart, MC Sports, JCPenney, Vanity and soon Herberger’s, a department store.

“The mall is pretty sad,” says Amanda Cain, a teacher and mother. “Once Herberger’s closes, we’ll have no anchors.”

About two-thirds of Ottumwa’s Quincy Place Mall will be empty with Herberger’s loss.

Of course it isn’t just the U.S. economy that is troubled either.

We are living in the terminal phase of the greatest debt bubble in global history, many nations around the globe are already experiencing a very deep economic downturn, and our planet is literally in the process of dying.

So please don’t believe the hype.

Yes, we definitely hope that things will get better, but the truth is that things have not been “good” for the U.S. economy for a very, very long time.

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.

When They Shall Say “Peace And Safety”: Polls Show Americans Are The Most Optimistic They Have Been In A Very Long Time

By a very wide margin, this is the most optimistic that Americans have been about the future since I started The Economic Collapse Blog in late 2009.  Even though the middle class is shrinking, 102 million working age Americans do not have a job, and we are now 21 trillion dollars in debt, most people are feeling really good about things right now.  Especially among Republicans, there is an overwhelming consensus that the United States is starting to head in the right direction and that better times are ahead.  As a result, so many of the exact same people that were “prepping” while Barack Obama was in the White House are now partying now that Donald Trump is president.  But none of the long-term trends that are systematically destroying our nation have been significantly altered, and none of our long-term problems have been solved.  We are still steamrolling down a path toward national suicide, but most Americans simply do not care.

What Americans do care about is that it seems to be easier to find a job at the moment than it has in a very long time.  In fact, the percentage of Americans that believe that it is “a good time to find a quality job” is at the highest level that Gallup has ever recorded

Sixty-seven percent of Americans believe that now is a good time to find a quality job in the U.S., the highest percentage in 17 years of Gallup polling. Optimism about the availability of good jobs has grown by 25 percentage points since Donald Trump was elected president.

Gallup has asked Americans to say whether it is a good time or bad time to find a quality job monthly since August 2001. Prior to 2017, the percentage saying “good time” never reached 50%, but since Trump took office in January that year, the percentage has stayed at or above 50% and has been higher than 60% in eight of the past nine months.

A Rasmussen survey that asked a similar question came up with very similar results.

Of course the reality of the matter is that 66 percent of all jobs in the United States pay less than 20 dollars an hour, and 78 million Americans are participating in the “gig economy” because they need to supplement their normal incomes in order to make ends meet.

But perception is sometimes more powerful than reality, and right now the perception is that the U.S. economy is doing well

“Nothing is better for the issues about trade wars or issues about G-7 than a good economy,” Omar Aguilar, chief investment officer for equities at Charles Schwab Investment Management, said by phone. “The jobs report on Friday gave a lot of people confidence that the U.S. economy is still pretty solid.”

Small businesses in the United States are also feeling extremely optimistic right now.

In fact, one survey found that small business optimism has surged to record highs

The Q2 MetLife & U.S. Chamber of Commerce Small Business Index (Index) released today recorded an overall score of 68.7, up 2.4 points from the Q1 score of 66.3, driven in part by the strongest local economic outlook on record, a firmer hiring environment, and a stronger backdrop for investing. Two out of every three small business owners are optimistic about their company and the small business environment in the United States.

That is definitely a good sign, because we desperately need small businesses to do well, but is all of this optimism really warranted?

The financial markets continue to be filled with optimism as well.  Despite the outbreak of an international trade war and tremendous turmoil over in Europe, the Nasdaq closed at a brand new record high on Tuesday.

In recent years stock prices have just continued to go up and up and up no matter what news breaks, and now we are facing the greatest stock market bubble in our history.

How long do we have until it finally bursts?

There is a lot of optimism in the housing market as well.  At this point, a staggering 64 percent of all adults in this country believe that housing prices will continue to go up over the next year.  The following comes from Marketwatch

A majority of U.S. adults (64%) continue to believe home prices in their local area will increase over the next year, a recent survey released by polling firm Gallup concluded. That’s up nine percentage points over the past two years and is the highest percentage since before the housing market crash and Great Recession in the mid-2000s.

The level of optimism is edging closer to the 70% of adults in 2005 who said prices would continue rising. That, of course, was less than one year before the peak of the housing market bubble in early 2006, which was largely fueled by a wave of subprime lending.

Moving beyond short-term concerns, Americans are also becoming increasingly optimistic about the long-term future too.  A recent Gallup survey discovered that approximately 60 percent of all Americans believe that our young people “will have a better life than their parents did”…

About six in 10 Americans say it is very or somewhat likely that today’s young people will have a better life than their parents did. The latest reading marks continued improvement since the low of 44% in 2011 but is still not back to the level of 66% measured in February 2008.

Hopefully the optimists will be correct, but I do not believe they will be.  If we keep doing the same things that we have been doing as a nation, it is simply not possible that there will be any sort of a bright future for America.

And I will tell you one area where Americans are quite pessimistic.  One recent survey found that 77 percent of all Americans believe that morality is in decline in this country.  Our national character continues to deteriorate at a frightening pace, and most Americans appear to be quite aware that this is happening.

But instead of changing our ways, we proudly believe that our “greatness” will allow us to continue to enjoy a massively inflated debt-fueled standard of living for a very long time to come.

Unfortunately for us, it simply does not work that way, and as a nation we are way overdue for a very serious wake up call.

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.

 

15 Signs That The Middle Class In The United States Is Being Systematically Destroyed

If your family is really struggling right now, you are far from alone.  I have been publishing The Economic Collapse Blog for more than eight years, and all throughout that time I have seen the middle class in America get smaller and smaller and smaller.  It is almost as if we are all playing a really bizarre game of musical chairs and every month someone pulls a few more chairs from the game.  Yes, there are some people that have gotten exceedingly wealthy over the past eight years, and most of that wealth is concentrated in places such as New York, Washington D.C. and San Francisco.  But meanwhile, most of the rest of the country has been steadily getting poorer.  Just take a look at Detroit – at one time it had the highest per capita income in the entire nation and now it is a rotting, decaying war zone.  Of course dozens of other formerly great manufacturing cities all over the nation have suffered a similar fate.  Since 2001, we have lost more than 70,000 manufacturing facilities and millions of good paying manufacturing jobs.  Those good paying jobs have been replaced by lower paying “service jobs”, and you can’t support a middle class lifestyle on those types of jobs.

In order to have a thriving middle class, you need middle class jobs, and our country is in desperate need of more of those jobs.  At this point most American families are living on the edge, and more are falling into poverty with each passing month.  The following are 15 signs that the middle class in the United States is being systematically destroyed…

#1 78 million Americans are participating in the “gig economy” because full-time jobs just don’t pay enough to make ends meet these days.

#2 In 2011, the average home price was 3.56 times the average yearly salary in the United States.  But by the time 2017 was finished, the average home price was 4.73 times the average yearly salary in the United States.

#3 In 1980, the average American worker’s debt was 1.96 times larger than his or her monthly salary.  Today, that number has ballooned to 5.00.

#4 In the United States today, 66 percent of all jobs pay less than 20 dollars an hour.

#5 102 million working age Americans do not have a job right now.  That number is higher than it was at any point during the last recession.

#6 Earnings for low-skill jobs have stayed very flat for the last 40 years.

#7 Americans have been spending more money than they make for 28 months in a row.

#8 In the United States today, the average young adult with student loan debt has a negative net worth.

#9 At this point, the average American household is nearly $140,000 in debt.

#10 Poverty rates in U.S. suburbs “have increased by 50 percent since 1990”.

#11 Almost 51 million U.S. households “can’t afford basics like rent and food”.

#12 The bottom 40 percent of all U.S. households bring home just 11.4 percent of all income.

#13 According to the Federal Reserve, 4 out of 10 Americans do not have enough money to cover an unexpected $400 expense without borrowing the money or selling something they own.

#14 22 percent of all Americans cannot pay all of their bills in a typical month.

#15 Today, U.S. households are collectively 13.15 trillion dollars in debt.  That is a new all-time record.

When you think of “poverty in America”, you probably think of our blighted inner cities, but that is not where poverty is growing the fastest.

According to author Scott Allard, it is actually our suburbs where poverty is growing more rapidly than anywhere else…

According to a May report from the Pew Research Center, since 2000, suburban counties have experienced sharper increases in poverty than urban or rural counties.

This is consistent with research across the U.S. over the past decade – as well as my own book, “Places in Need.”

This is why tens of millions of square feet of retail space is being closed down and why formerly great shopping malls all over America now resemble ghost towns.

When I was growing up, the shopping mall was the place to be for average middle class kids.  My family was middle class and virtually everyone that I knew was middle class.  In fact, I don’t remember any really wealthy or really poor kids in my school at all.

But today most families have little to no financial cushion and are deep in debt.  As a result, discretionary income has really dried up and that means less shopping.

So we are on pace for the worst year for store closings in American history, and yet the mainstream media keeps telling us that the economy is in “good shape”.

That is a load of nonsense.  The numbers don’t lie, and the U.S. economy is never going to be in “good shape” until the middle class starts growing again.

Is there a solution?

Well, the mayor of Stockton, California seems convinced that the solution is just to give people free money.  The following comes from Reuters

Michael Tubbs, the 27-year-old mayor of Stockton, California, has a radical plan to combat poverty in his cash-strapped city: a “no strings” guaranteed basic income of $500 a month for its residents.

Starting in early 2019, Tubbs plans to provide the monthly stipend to a select group of residents as part of a privately funded 18-month experiment to assess how people use the money.

Wouldn’t it be wonderful if we all just started getting big, fat checks from the government every month?

Why didn’t somebody think about this before?

Of course the truth is that we simply cannot afford to do that.  State and local government debt levels have surged to record highs, and the federal government is now 21 trillion dollars in debt.  We are on a path that leads to national suicide, and we desperately need to start living within our means.

We have been consuming far more wealth than we have been producing for a very long time, but we have been doing it for so long that many of us now think that this is “normal”.  Meanwhile, our long-term debt problems continue to escalate and our once thriving middle class continues to shrink.

If we continue to do the same things, we will continue to get the same results, and right now we are in the process of absolutely destroying the greatest economic machine that the world has ever seen.

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.

Federal Reserve: More Than 4 Out Of 10 Americans Do Not Even Have Enough Money To Cover An Unexpected $400 Expense

The U.S. economy is not doing nearly as well as the mainstream media would have you believe.  A few days ago I wrote about a new study that discovered that nearly 51 million U.S. households “can’t afford basics like rent and food”, and just yesterday I discussed the fact that we are on pace for the worst year for retail store closings ever.  Now we have just gotten new numbers from the Federal Reserve which are absolutely staggering.  According to the Fed’s latest study, more than 4 out of every 10 Americans do not even have enough money to cover an unexpected $400 expense without borrowing the funds or selling something.  In essence, nearly half the country has no significant financial cushion whatsoever.  So what are all of those people going to do when the next economic crisis hits?

Sadly, living on the edge has become a daily reality for tens of millions of Americans.  The following is from a CNN article about the Fed’s new report…

Can you cover an unexpected $400 expense?

Four in ten Americans can’t, according to a new report from the Federal Reserve Board. Those who don’t have the cash on hand say they’d have to cover it by borrowing or selling something.

According to the report, the exact figure is 41 percent.

41 percent of all U.S. adults cannot cover an unexpected $400 expense.

Let that number sink in for a moment.

I am sorry – if you can’t come up with $400 right now without borrowing it, you are broke.  And as of right now that is the financial condition of 41 percent of all Americans.

Amazingly, the Federal Reserve is actually trying to spin this report as good news

“This year’s survey finds that rising levels of employment are translating into improved financial conditions for many but not all Americans,” Fed Governor Lael Brainard said.

Really?

Fortunately, there are others that are seeing right through the spin and are telling it like it is

“The finding that four-in-ten adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, chief financial analyst at Bankrate.com. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”

And that wasn’t the only bad news in the report.

Here are some more incredible facts from the report as summarized by Zero Hedge

  • One-third of those with varying income, or 10 percent of all adults, say they struggled to pay their bills at least once in the past year due to varying income
  • Over three-fourths of whites were at least doing okay financially in 2017 versus less than two-thirds of blacks and Hispanics.
  • Over a quarter of young adults ages 25 to 29, and slightly more than 1 in 10 in their 30s, live with their parents.
  • Over two-fifths of young adults in their late 20s provide financial assistance to their parents
  • Nearly 25 percent of young adults under age 30, and 10 percent of all adults, receive some form of financial support from someone living outside their home.
  • While 8 in 10 adults living in middle- and upper-income neighborhoods are satisfied with the overall quality of their community, only 6 in 10 living in low- and moderate-income neighborhoods are satisfied
  • Seven in 10 low-income renters spend more than 30 percent of their monthly income on rent

And on top of all of that, here is one more really alarming number to chew on

Even without an unexpected expense, the report reveals, 22% of adults expected to forgo payment on some of their bills in the month of the survey. “One-third of those who are not able to pay all their bills say that their rent, mortgage, or utility bills will be left at least partially unpaid.”

When 22 percent of the people in your country cannot pay their bills this month, that is called a crisis.

Yes, we are hopeful for better things for the U.S. economy under President Trump.  But the current blind optimism that we are witnessing out there right now is simply absurd

A new poll shows an overwhelming number of Americans believe President Trump is playing a positive role in the current state of the economy.

The CBS survey reveals almost 70% of respondents think the president is –either mostly or somewhat– responsible for the current economic climate.

Additionally, around 65% of Americans believe the economy is doing well, compared to under 10% who think it’s doing ‘very poorly.’

Ladies and gentlemen, the U.S. economy has not had a full year of 3 percent GDP growth since the middle of the Bush administration.

This is the longest stretch of below 3 percent growth in all of U.S. history by a very wide margin.

So please don’t try to tell me that the U.S. economy is “doing well” until we can get back above that 3 percent number.

The sad truth is that we have been in a very long period of economic stagnation, and during this period wealth is being increasingly concentrated at the very top of the pyramid and the middle class is being systematically eviscerated.

Tens of millions of families are just barely scraping by from month to month, and when an unexpected emergency happens that is often enough to push a lot of families completely over the edge.

In fact, my good friend Daisy Luther recently wrote about how this actually happened to her own family…

Before my daughter’s illness, I was doing everything “right.”

  • I had enough money in my emergency fund to carry me through 3 lean months
  • I had numerous credit cards with zero balances
  • My only debt was my car
  • My kids are going to school without student loans
  • I opted out of health insurance because it was more financially practical to pay cash (and I still agree with that decision)

Everything was great.

Until it wasn’t.

I am sure that many of you can identify with Daisy.

Most of us have had a life-altering event cause serious financial stress at some point.  And close to half the country is completely unprepared for such an event.

For years, I have been strongly encouraging my readers to build up their emergency funds, because one thing that you can count on in life is that the unexpected will happen.  Having a good financial cushion is one of the best things that you can possibly do for yourself and your family financially, and if you haven’t gotten started on that yet, I would urge you to do so as soon as possible.

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.

 

77 Million Square Feet Of Retail Space And Counting – America’s Retail Apocalypse Is Spiraling Out Of Control In 2018

In 2017 we absolutely shattered the all-time record for retail store closings in a single year, and this year it looks like we are going to shatter the record once again.  In fact, there are some that are projecting that up to 9,000 retail stores could close by the time that we get to the end of this calendar year.  Already, the amount of retail space that has shut down is simply jaw-dropping.  If you total up all of the retail store closings that have been announced so far in 2018, it accounts for 77 million square feet of retail space.  Let that number sink in for a bit.  Many shopping centers and strip malls around the country already have a post-apocalyptic feel to them, and more “space available” signs are going up with each passing day.  And in case you are tempted to think that I am making this figure up, here it is straight from Bloomberg

At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.

In the end, we could shatter the all-time record that was established just last year by 20 or 30 million square feet.

At moments such as this, the phrase “retail apocalypse” doesn’t really seem to fit the gravity of what is actually taking place.

And unfortunately for the retail industry, it doesn’t appear that this crisis is going to end any time soon.  Here is more from Bloomberg

And with shifts to internet shopping and retailer debt woes continuing, there’s no indication the shakeout will end anytime soon. “A huge amount of retail real estate in the U.S. is going to meet its demise,” says James Corl, managing director and head of real estate at private equity firm Siguler Guff & Co. Property owners will “try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield.”

Will retail real estate be the trigger for the next great debacle on Wall Street?

Some people think so.

A lot of major retail projects are going to go belly up, and somebody is going to be left holding the bag.

And the warning signs are definitely there.  In fact, retail sector debt defaults set a brand new record during the first quarter of 2018…

Financial stress in the retail industry is at a historic high.

Moody’s said in a report on Tuesday that retail sector defaults hit a record high during the first three months of 2018 as the rise of e-commerce and decline of malls continues to eat away at profits.

But the mainstream media is telling us that the U.S. economy is in great shape, and so everything is going to work out okay, right?

Sadly, nothing has changed regarding the long-term trends that are eating away at our economy like a cancer.  Just a few days ago I wrote about a brand new report that found that nearly 51 million U.S. households “can’t afford basics like rent and food”.  The real reason why our retailers are in decline is because the middle class is being systematically destroyed.  Once upon a time the middle class had plenty of discretionary income, but now the middle class is disappearing right in front of our eyes, but most of us are in such a state of denial that we won’t even admit what is happening.

Hopefully as stores continue to close by the hundreds people will start waking up.  The following is a list of just some of the major retailers that are closing stores in 2018

  • Abercrombie & Fitch: 60 more stores are charted to close
  • Aerosoles: Only 4 of their 88 stores are definitely remaining open
  • American Apparel: They’ve filed for bankruptcy and all their stores have closed (or will soon)
  • BCBG: 118 stores have closed
  • Bebe: Bebe is history and all 168 stores have closed
  • Bon-Ton: They’ve filed for Chapter 11 and will be closing 48 stores.
  • The Children’s Place: They plan to close hundreds of stores by 2020 and are going digital.
  • CVS: They closed 70 stores but thousands still remain viable.
  • Foot Locker: They’re closing 110 underperforming stores shortly.
  • Guess: 60 stores will bite the dust this year.
  • Gymboree: A whopping 350 stores will close their doors for good this year
  • HHGregg: All 220 stores will be closed this year after the company filed for bankruptcy.
  • J. Crew: They’ll be closing 50 stores instead of the original 20 they had announced.
  • J.C. Penney: They’ve closed 138 stores and plan to turn all the remaining ones into toy stores.
  • The Limited: All 250 retail locations have been closed and they’ve gone digital in an effort to remain in business.
  • Macy’s: 7 more stores will soon close and more than 5000 employees will be laid off.
  • Michael Kors: They’ll close 125 stores this year.
  • Payless: They’ll be closing a whopping 800 stores this year after recently filing for bankruptcy.
  • Radio Shack: More than 1000 stores have been shut down this year, leaving them with only 70 stores nationwide.
  • Rue 21: They’ll be closing 400 stores this year.
  • Sears/Kmart: They’ve closed over 300 locations.
  • ToysRUs: They’ve filed for bankruptcy but at this point, have not announced store closures, and have in fact, stated their stores will remain open.
  • Wet Seal: This place is history – all 171 stores will soon be closed.

A lot of people are blaming online retailers such as Amazon.com for the decline of brick and mortar stores, and without a doubt online sales are rising, but they still account for less than 10 percent of the entire retail industry.

And it isn’t just retailers that are closing locations.

Personally, I was greatly saddened when it was announced that Subway was planning on shutting down 500 locations in the United States…

Feeling the need to improve its store fleet amid intense competition in the sandwich industry, Subway is planning to close 500 U.S. locations this year, according to Bloomberg News.

Subway restaurants are small in size, but ubiquitous. The chain is the largest in the U.S. by store count of any quick-service chain with nearly 26,000 locations, well above the 14,000 McDonald’s (mcd, +0.29%) restaurants in this country. This has long been a point of pride for the company.

I have always been a big fan of Subway, and if they ever closed my hometown location I would be seriously distressed.

And banks are closing locations at an astounding rate as well.  In fact, from June 2016 to June 2017 the number of bank branches in the United States fell by more than 1,700.

That was the biggest decline that we have ever seen.

If the U.S. economy really was in good shape, none of this would be taking place.  Something really big is happening, and what we have seen so far is just the very small tip of a very large iceberg.

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.