Just 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.
Do you remember the subprime mortgage meltdown from the last financial crisis? Well, this time around we are facing a subprime auto loan meltdown. In recent years, auto lenders have become more and more aggressive, and they have been increasingly willing to lend money to people that should not be borrowing money to buy a new vehicle under any circumstances. Just like with subprime mortgages, this strategy seemed to pay off at first, but now economic reality is beginning to be felt in a major way. Delinquency rates are up by double digit percentages, and major auto lenders are bracing for hundreds of millions of dollars of losses. We are a nation that is absolutely drowning in debt, and we are most definitely going to reap what we have sown.
The size of this market is larger than you may imagine. Earlier this year, the auto loan bubble surpassed the one trillion dollar mark for the first time ever…
Americans are borrowing more than ever for new and used vehicles, and 30- and 60-day delinquency rates rose in the second quarter, according to the automotive arm of one of the nation’s largest credit bureaus.
The total balance of all outstanding auto loans reached $1.027 trillion between April 1 and June 30, the second consecutive quarter that it surpassed the $1-trillion mark, reports Experian Automotive.
The average size of an auto loan is also at a record high. At $29,880, it is now just a shade under $30,000.
In order to try to help people afford the payments, auto lenders are now stretching loans out for six or even seven years. At this point it is almost like getting a mortgage.
But even with those stretched out loans, the average monthly auto loan payment is now up to a record 499 dollars.
That is the average loan size. To me, this is absolutely infuriating, because only a very small percentage of wealthy Americans are able to afford a $499 monthly payment on a single vehicle.
Many middle class American families are only bringing in three or four thousand dollars a month (before taxes). How in the world do they think that they can afford a five hundred dollar monthly auto loan payment on just one vehicle?
Just like with subprime mortgages, people are being taken advantage of severely, and the end result is going to be catastrophic for the U.S. financial system.
Already, auto loan delinquencies are rising to very frightening levels. In July, 60 day subprime loan delinquencies were up 13 percent on a month-over-month basis and were up 17 percent compared to the same month last year.
Prime delinquencies were up 12 percent on a month-over-month basis and were up 21 percent compared to the same month last year.
We have a huge crisis on our hands, and major auto lenders are setting aside massive amounts of cash in order to try to cover these losses. The following comes from USA Today…
In a quarterly filing with the Securities and Exchange Commission, Ford reported in the first half of this year it allowed $449 million for credit losses, a 34% increase from the first half of 2015.
General Motors reported in a similar filing that it set aside $864 million for credit losses in that same period of 2016, up 14% from a year earlier.
Meanwhile, other big corporations are also alarmed about the economic health of average U.S. consumers. Just check out what Dollar General CEO Todd Vasos had to say about this just the other day…
I know that when we look at globally the overall U.S. population, it seems like things are getting better. But when you really start breaking it down and you look at that core consumer that we serve on the lower economic scale that’s out there, that demographic, things have not gotten any better for her, and arguably, they’re worse. And they’re worse, because rents are accelerating, healthcare is accelerating on her at a very, very rapid clip.
The stock market may seem to be saying that everything is fine (for the moment), but the hard economic numbers are telling a completely different story. What we are experiencing right now looks so similar to 2008, and this includes big institutions just dropping dead seemingly out of the blue. On Tuesday, we learned that ITT Technical Institute is immediately shutting down and permanently closing all locations. This is from a Los Angeles Times report…
The company that operates the for-profit chain, one of the country’s largest, announced that it was permanently closing all its campuses nationwide. It blamed the shutdown on the recent move by the U.S. Education Department to ban ITT from enrolling new students who use federal financial aid.
“Two quarters ago there were rumors about the school having problems, but they told us that anyone who was already a student would be allowed to finish,” said Wiggins, who works as the assistant manager for a family-run auto parts business and went to ITT to open new opportunities.
“Am I angry?” he said. “I’m like angry times 10 million.”
As a result of this shutdown, 35,000 students are suddenly left out in the cold and approximately 8,000 employees have lost their jobs.
This is what happens during a major economic downturn. Large institutions that may have been struggling under the surface for quite a while suddenly give up and drop a bomb on those that were depending on them. In the months ahead, there will be a lot more examples of this.
Already, some of the biggest corporate names in America have been laying off thousands of workers in 2016. Mass layoffs are usually an early warning sign that big trouble is ahead, so keep a close eye on those companies.
The pace of the economic decline has been a bit slower than many (including myself) originally anticipated, but without a doubt it has continued.
And it is undeniable that the stage is set for a crisis that will absolutely dwarf 2008. Our national debt has nearly doubled since the beginning of the last crisis, corporate debt has doubled, student loan debt has crossed the trillion dollar mark, auto loan debt has crossed the trillion dollar mark, and total household debt has crossed the 12 trillion dollar mark.
We are living in the greatest debt bubble in world history, and there are signs that this giant bubble is now starting to burst. And when it does, the pain is going to be greater than most people would dare to imagine.
Things have not been this bad for the Canadian economy since the last global recession. During the second quarter of 2016, Canada’s GDP contracted at a 1.6 percent annualized rate. That was the worst number in seven years, and it was even worse than most analysts were projecting. This comes at a time when bad news is pouring in from all corners of the global economy. While things in the United States are still relatively stable for the moment, the same cannot be said for much of the rest of the planet. Canada in particular has been hit very hard by the collapse in oil prices, and the massive wildfire in northern Alberta back in May certainly did not help things. The following comes from the BBC…
The recent drop in GDP was larger than analysts had projected, but not far off the predicted 1.5% loss.
“[The figure] could have been worse, given the hit from the wildfire, and clearly confirms the disappointing downward trend in exports over the last few months,” said Sal Guatieri, senior economist at BMO Capital Markets.
In May, wildfires devastated the parts of northern Alberta where much of Canada’s oil and natural gas is produced.
For many years, high oil prices and booming exports enabled the Canadian economy to significantly outperform the U.S. economy. But now conditions have changed dramatically, and all of the economic bubbles up in Canada are starting to burst. This includes the housing bubble, as we have seen home sales in the hottest markets such as Vancouver drop through the floor late in the summer. In fact, it is being reported that home sales during the first two weeks of August in British Columbia were down a whopping 51 percent on a year over year basis.
Do you remember the housing bubble in the U.S. that helped fuel the last financial crisis? Well, a very similar bubble is now bursting up in Canada, and some investors have positioned themselves to make a tremendous amount of money when the whole thing comes violently crashing down. The following comes from Wolf Richter…
This summer, famed short seller Marc Cohodes came out of retirement (he now raises chickens on a farm in Sonoma County, CA, and sells the eggs for a fortune in San Francisco) and jumped into ring with a number of interviews on TV and in the print media, and this too rattled some nerves – largely because it hit home.
“I think it’s a money laundering-induced market,” he said as we reported at the time. “Where the local politicians, or the BC Liberals, are kept or in cahoots with the real estate brokers, developers, lawyers, that angle. And they have sought Chinese money to keep the market propped up and it won’t last,” he said. “China has capital controls on, and Vancouver has become the money laundering mecca of either the world or North America, and something is going to change and change drastically.”
If the price of oil does not rebound in a major way, the Canadian economy is going to continue to deeply struggle.
Meanwhile, one of the biggest economies in Africa is also shrinking. Nigeria is yet another oil-dependent economy that has fallen on really hard times, and during the latest quarter their GDP shrunk by 2.06 percent on an annualized basis…
Nigeria has slipped into recession, with the latest growth figures showing the economy contracted 2.06% between April and June.
The country has now seen two consecutive quarters of declining growth, the usual definition of recession.
Its vital oil industry has been hit by weaker global prices, according to the Nigerian Bureau of Statistics (NBS).
There are so many signs that indicate that the global economy has entered a new major downturn. Yes, the U.S. is doing better than almost everyone else for the moment, but this will not last indefinitely. Our planet is more interconnected than ever before, and just as we saw in 2008, big trouble on one side of the globe quickly affects the other side.
Today we also learned that the 7th largest container shipping company in the entire world has completely imploded. Total global trade has been declining for quite some time now, and it was inevitable that this sort of thing would start happening…
After years of relentless decline in the Baltic Dry index…
… today the largest casualty finally emerged on Wednesday when South Korea’s Hanjin Shipping, the country’s largest shipping firm and the world’s seventh-biggest container carrier, filed for court receivership after losing the support of its banks, leaving its assets frozen as ports from China to Spain denied access to its vessels.
Over in Europe, an emerging banking crisis continues to simmer just under the surface.
Most Americans are completely oblivious to the fact that major global financial problems could be just around the corner, but CNBC is reporting that banks over in Europe are “preparing for an economic nuclear winter situation”…
European banks, in particular, have had a very tough six months as the shock and volatility around Brexit sent banking stocks south. Major European banks like Deutsche Bank and Credit Suisse saw their shares in free-fall after the referendum’s results were announced. In the U.K., RBS was the worst-hit, with its shares plunging by more than 30 percent since June 24.
The current uncertainty over when the U.K. will start the process of quitting the EU has banks on tenterhooks. But a source told CNBC that banks are “preparing for an economic nuclear winter situation.”
Speaking on the condition of anonymity due to the sensitive nature of the topic, a source from a major investment bank told CNBC that financial services firms have put together a strategy in place that takes into account the worst-case scenario that could happen by the end of this year.
So precisely what would an “economic nuclear winter” look like?
I don’t know, but it certainly does not sound good.
We should be thankful that things have been as calm and stable as they have been so far in 2016, but nobody should be fooled into thinking that our problems have been fixed.
The truth is that the global debt bubble is at an all-time high, the banks are being more reckless and are more vulnerable than ever before, and troubling economic numbers continue to pour in from all over the planet.
The stage is certainly set for the next major global economic crisis, and it isn’t going to take much to push the world over the edge.
One day in the not too distant future, a major emergency will strike this nation, and that will set off a round of hoarding unlike anything we have ever seen before. Just think about what happens when a big winter storm or a hurricane is about to hit one of our major cities – inevitably store shelves are stripped bare of bread, milk, snow shovels, etc. Even though winter storms and hurricanes are just temporary hurdles to overcome, they still cause many people to go into panic mode. So what is going to happen when we have a real crisis on our hands?
We can get some clues about which items will disappear first during a major national emergency by taking a look at where such a scenario is already playing out. One recent survey found that over 80 percent of all basic foodstuffs are currently unavailable in Venezuela, and about half the country can no longer provide three meals a day for their families. Thankfully, some stores still have a few things that they are able to offer, but other key items are completely gone. The following comes from USA Today…
Oh, there are some things to buy. Besides salt, there are fresh vegetables and fruits, dairy products but no milk, some cereal, lots of snacks and a few canned goods.
The only meat is sausages; there are three kinds of cheese. The only problem: A kilogram of each costs more than a fourth of our monthly minimum wage of 15,050 bolivars.
But basic foodstuffs – the things most Venezuelans want to eat such as corn meal, wheat flour, pasta, rice, milk, eggs, sugar, coffee, chicken, mayonnaise, margarine, cooking oil and beef – are conspicuous by their absence. And there is no toilet paper, no sanitary napkins, no disposable baby diapers, no shampoo, no toothpaste, no hand soap and no deodorant.
Do you have plenty of the items in bold above stored up?
If not, you may want to stock up while you still can.
Someday similar things will happen in the United States and Europe too.
When that day arrives, will you be prepared?
One of the things that got my attention from the article quote above was the lack of milk. My wife is always telling me that we should store up more dried milk, and I believe that she is right.
Just imagine not having any milk and not being able to get any more.
What would you do?
Another thing that really stood out to me in the article was the fact that there is a severe shortage of personal hygiene items. Most people don’t really think of those as “prepper goods”, but the truth is that life will become very uncomfortable without them very rapidly.
What would you do if there was no more toilet paper?
And if you have a little one, how are you going to manage without any diapers?
In general, it is wise to always have an extra supply of just about everything that you use on a daily basis stored away somewhere in your home. The generation that went through the Great Depression of the 1930s understood this concept very well, but most of us that are younger have had it so good for so long that we don’t even really grasp what a real crisis looks like.
Another thing that we are seeing happen right now in Venezuela is the rise of a barter economy…
Many of my urban friends are now planting vegetables in their outdoor spaces – if they have any – or in pots. Another friend, who is a hairdresser, is charging clients food to do their hair. For a shampoo and dry, she charges a kilo of corn meal, saying that she doesn’t have time to stand in line like some of her clients.
As you prepare for what is ahead, you may want to consider stocking up on some items that would specifically be used for bartering in a crisis situation.
For example, you may not drink coffee, but there are millions upon millions of people that do. In a crisis situation, there will be many that will be extremely desperate to get their hands on some coffee, and so any coffee that you store away now may become a very valuable asset.
We live in a world where one out of every eight people already goes to bed hungry each night, and where one out of every three children is underweight. As global weather patterns become more extreme, as natural disasters continue to become more frequent and more intense, and as terror and war continue to spread, it is inevitable that the stress on the global food system is going to continue to grow.
Today you can waltz into Wal-Mart and buy giant cartloads of very inexpensive food, but it will not always be that way.
Unfortunately, more than half the country is currently living paycheck to paycheck, and most Americans do not have any emergency food stored up at all.
In addition to food and personal hygiene supplies, here are some other items that are likely to disappear very rapidly during a major national emergency…
-Anything Related To Self-Defense
-First Aid Kits
So in addition to food and personal hygiene items, you may want to do an inventory of the items that I have listed above and see where you may have some holes in your preparation plans.
I understand that there will be some people that will read this article and think that all of us “preppers” are being just a tad ridiculous.
But when a major emergency strikes this nation and you haven’t done anything to prepare, you will dearly wish that you had bothered to take action while there was still time remaining to do so.
If you were hungry enough, would you kill and eat zoo animals? To most of us such a notion sounds absolutely insane, but this is actually happening in Venezuela right now. This is a country where people are standing in lines for up to 12 hours hoping that there will be food to buy that day, and where rioting and looting have become commonplace. So even though the U.S. economy is in dreadful shape at this moment, we should be thankful for what we have, because at least we are not experiencing a full-blown economic collapse yet like Venezuela currently is.
Black stallions can be some of the most beautiful horses on the entire planet, but things are so desperate down in Venezuela this summer that everything looks like food to some people at this point. What happened at the Caricuao Zoo on Sunday is so horrible that I actually debated whether or not to share it with you. Desperate people do desperate things, and when people get hungry enough they will do things such as this…
Venezuela’s worsening food shortages had tragic consequences for a rare show horse last weekend, when a group of intruders broke into the zoo, pulled the black stallion from its cage, then slaughtered it for meat.
Prosecutors say the crime occurred in the small hours of Sunday morning at Caracas’ Caricuao Zoo, when “several people” sneaked into the state-run park under the cover of darkness and busted into the stallion’s pen. The horse, the only one of its kind in the zoo, was then led to a more secluded area and butchered on the spot. Only its head and ribs were left behind in a gruesome pile for zookeepers to find after sunrise.
Unfortunately, this precious animal was not even the first victim at that particular zoo.
Sadly, this horse wasn’t the first zoo animal to suffer the effects of Venezuela’s crippling food shortages. Some Vietnamese pigs and sheep were reportedly stolen from the same zoo earlier this month.
Dozens of other zoo animals are slowing starving to death because there is no food available to give to them. In fact, it is being reported that at least 50 animals have died from lack of food at one zoo alone…
At least 50 animals have died in the last six months at the Caricuao zoo in Caracas, Venezuela, due to widespread food shortages that are affecting both man and beast in the socialist nation.
Marlene Sifontes, a union leader for employees of state parks agency Inparques which oversees zoos, told Reuters that the zoo lost Vietnamese pigs, tapirs, rabbits and birds after the animals went weeks without eating. Others animals at the zoo are in danger of severe malnutrition. Lions and tigers, which should be on a carnivorous diet, are being fed mango and pumpkin just to get something in their empty stomachs, while an elephant is being fed tropical fruit instead of its usual diet of hay, the union leader said. According to one report, the big cats are being fed slaughtered thoroughbred racehorses from a nearby race track.
If what you have just read hurts your heart, let us not forget that it is not just the animals that are suffering. There are millions of precious people down there that are living on the very edge of starvation as you read this article.
Earlier this year, one mayor came forward and admitted to the world that some people are so hungry that they are actually hunting “cats, dogs and pigeons” for food…
Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food.
Through Twitter, Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger. People are also reportedly gathering vegetables from the ground and trash to eat as well.
The crisis in Venezuela is worsening everyday due in part to shortages reaching 70 percent […] six Venezuelan military officials were arrested for stealing goats to ease their hunger, as there was no food at the Fort Manaure military base.
With each passing week, the situation in Venezuela keeps on getting worse.
And even though the United States has made many of the exact same mistakes that Venezuela has made, most of us just assume that what is happening down there could never happen up here.
After all, we have “the greatest economy in the world” and we are “the wealthiest nation on the entire planet”, right?
And Barbra Streisand is so thrilled that Hillary Clinton is going to be our next president that she launched into a rousing rendition of “Happy Days Are Here Again” as she kicked off her farewell tour in Los Angeles. The following account comes from the Drudge Report…
So long sad times Go along bad times We are rid of you at last Howdy gay times Cloudy gray times You are now a thing of the past Happy days are here again The skies above are clear again So let’s sing a song of cheer again…
Streisand suddenly interrupted the lyric, realizing a Democrat was currently in the White House!
“By the way, I love Obama.”
Altogether shout it now There’s no one Who can doubt it now So let’s tell the world about it now Happy days are here again
So what is the truth?
Are we going to end up just like Venezuela, or are happy days here once more?
Unfortunately, I have a feeling that we are not going to have to wait too long to find out…
We just got another extremely disappointing GDP number. It was being projected that U.S. GDP would grow by 2.5 percent during the second quarter of 2016, but instead it only grew by just 1.2 percent. In addition, the Census Bureau announced that GDP growth for the first quarter of 2016 had been revised down from 1.1 percent to 0.8 percent. What this means is that the U.S. economy is just barely hanging on by its fingernails from falling into a recession. As Zero Hedge has pointed out, the “average annual growth rate during the current business cycle remains the weakest of any expansion since at least 1949″. This is not what a recovery looks like.
In addition, Barack Obama remains solidly on track to be the only president in all of U.S. history to never have a single year when the economy grew by at least 3 percent. Every other president in American history, even the really bad ones, had at least one year when U.S. GDP grew by at least 3 percent. But this has not happened under Obama even though he has had two terms in the White House.
And many are anticipating that this latest extremely disappointing GDP number will discourage the Federal Reserve from raising interest rates any time in the near future…
The disappointing report could keep the Federal Reserve on hold longer as it considers another interest rate hike. The Fed lifted its key rate in December for the first time in nine years but has held it steady since.
According to the pundits in the mainstream media, this was supposed to be the year when the U.S. economy finally returned to “normal”, but that has not happened at all. In fact, in recent days we have gotten a spate of bad news about the economy. We just learned that the homeownership rate in the United States has hit the lowest level ever, and Gallup’s U.S. economic confidence index has fallen to the lowest level so far this year.
With the election coming up rapidly, this is the kind of news that Hillary Clinton definitely does not need. She needs to be able to sell the American people on the idea that the Obama years have been very good for the U.S. economy. If things take a sharp turn down in the coming months, that may be enough to cost her the election.
So far, Hillary Clinton’s economic agenda has not received that much scrutiny, but the truth is that she hopes to increase taxes in a whole bunch of ways which would be very harmful for the economy. The following comes from an excellent piece by John Kartch and Alexander Hendrie…
Hillary has endorsed several tax increases on middle income Americans, despite her pledge not to raise taxes on any American making less than $250,000. She has said she would be fine with a payroll tax hike on all Americans, she has endorsed a steep soda tax, endorsed a 25% national gun tax, and most recently, her campaign manager John Podesta said she would be open to a carbon tax. It’s no wonder that when asked by ABC’s George Stephanopoulos if her pledge was a “rock-solid” promise, she slipped and said the pledge was merely a “goal.” In other words, she’s going to raise taxes on middle income Americans.
Hillary’s formally proposed $1 trillion net tax increase consists of the following:
Income Tax Increase – $350 Billion: Clinton hasproposed a $350 billion income tax hike in the form of a 28 percent cap on itemized deductions.
Business Tax Increase — $275 Billion: Clinton has called for a tax hike of at least $275 billion through undefined business tax reform, as described in a Clinton campaigndocument.
“Fairness” Tax Increase —$400 Billion: According to her published plan, Clinton has called for a tax increase of “between $400 and $500 billion” by “restoring basic fairness to our tax code.” These proposals include a “fair share surcharge,” the taxing of carried interest capital gains as ordinary income, and a hike in the Death Tax.
Taxes tend to be a pet peeve of mine, so looking at that list of proposed taxes definitely makes me cringe.
If Donald Trump wants to hit the Democrats really hard on the economy, all he has to do is point out the fact that Barack Obama is going to be the only president in American history to never see 3 percent economic growth for an entire year, and he had two entire terms in which to try to turn things in a positive direction.
Sadly, things are very likely going to be worse for the economy no matter who wins the election. Under Obama, our national debt, our trade deficit, and most of our other long-term economic problems have gotten much, much worse, and so the table is set for a major economic disaster during the next presidential administration.
And if what I have to share about the future of America in my new book is correct, we are definitely moving into a “perfect storm” that will not just be economic in nature. The things that are coming are going to shake this nation to the very core, and I believe that we will soon face the consequences for decades of exceedingly foolish decisions.
So in the end, we may look back and long for the days of 1.2 percent economic growth, because what is on the horizon is going to make that look like a Sunday picnic.
When less stuff is being bought, sold and shipped around the country with each passing month, how in the world can the U.S. economy be in “good shape”? Unlike official government statistics which are often based largely on projections, assumptions and numbers seemingly made up out of thin air, the Cass Freight index is based on real transactions conducted by real shipping companies. And what the Cass Freight Index is telling us about the state of the U.S. economy in 2016 lines up perfectly with all of the other statistics that are clearly indicating that we have now shifted into recession mode.
Since 1995, the Cass Freight Index™ has been a trusted measure of North American freight volumes and expenditures. Our monthly Cass Freight Index Report provides valuable insight into freight trends as they relate to other economic and supply chain indicators and the overall economy.
Data within the Index includes all domestic freight modes and is derived from $25 billion in freight transactions processed by Cass annually on behalf of its client base of hundreds of large shippers. These companies represent a broad sampling of industries including consumer packaged goods, food, automotive, chemical, OEM, retail and heavy equipment. Annual freight volume per organization ranges from $1 million to over $1 billion. The diversity of shippers and aggregate volume provide a statistically valid representation of North American shipping activity.
When they say “all domestic freight modes”, that includes air, rail, truck, etc. As you are about to see, the total amount of stuff that is being bought, sold and shipped around the country by all these various methods has now been declining for 15 months in a row.
If it was just one or two months you could say that it was just an anomaly, but how in the world can anyone explain away 15 consecutive months?
Not only that, but the brand new number that just came out for May 2016 is the lowest number that we have seen for the month of May in 6 years.
Of course the number for April was the lowest number that we have seen for that month in 6 years too, and the number for March was also the lowest number that we have seen for that month in 6 years.
The Index is not seasonally or otherwise adjusted, so it shows strong seasonal patterns. In the chart below, the red line with black markers is for 2016. The colorful spaghetti above that line represents the years 2011 through 2015. The only month this year that was not the worst month since 2010 was February; only February 2011 was worse. That’s how bad it has gotten in the Freight sector:
“Truck tonnage continues to slide for both linehaul and spot markets,” according to the report. And railroads are also singing the blues.
To me, these numbers are absolutely staggering. How anyone can look at them and then attempt to claim that the U.S. economy is heading for good times is a mystery to me.
And this is especially true considering all of the other news that is pouring in. Just today, we learned that new home sales have fallen by the most in 8 months. If you are trying to sell your home, hopefully you will get that done very quickly, because this latest property bubble is starting to burst in a major way.
Today, I also came across a stunning IMF report that was just released that criticized the U.S. for our shrinking middle class and our rising levels of poverty…
A rising share of the U.S. labor force is shifting into retirement, basic infrastructure is crumbling, productivity gains are scanty, and labor markets and businesses appear less adept at reallocating human and physical capital. These growing headwinds are overlaid by pernicious secular trends in income: labor’s share of income is around 5 percent lower today than it was 15 years ago, the middle class has shrunk to its smallest size in the last 30 years, the income and wealth distribution are increasingly polarized, and poverty has risen.
If you follow my work on a regular basis, you already know that everything that the IMF said in that paragraph is true.
A little bit later in the report, the IMF shared some absolutely startling facts about the growth of poverty in this country…
There is an urgent need to tackle poverty. In the latest data, 1 in 7 Americans is living in poverty, including 1 in 5 children and 1 in 3 female-headed households. Around 40 percent of those in poverty are working.
This distressing growth in our poverty numbers has taken place during Barack Obama’s so-called “economic recovery”.
So how bad are things ultimately going to get for America’s poor now that a new economic crisis has begun?
Before I wrap up this article, I have to mention the early returns from the Brexit vote. All day on Thursday, global news sources were reporting that the latest polls had “Remain” comfortably in the lead, and global financial markets soared on that news.
But now that the actual votes are being reported, it looks like it is going to be much, much closer than anticipated. In fact, as I write this article “Leave” is ahead by a 54.16 percent to 45.84 percent margin. Only a relatively small fraction of the votes have been counted so far, but global financial markets are already being spooked by these results.
If “Leave” does actually win, that is going to have enormous implications for the markets and for the future of Europe. So let’s keep a close eye on what is happening. If “Leave” does prove to be victorious, that will be one of the biggest things to hit Europe in decades, and I am sure that I will be posting an article about it tomorrow.
We live at a time when global events are beginning to accelerate, and there is much uncertainty in the air. If you do not have a solid foundation on which to stand, the events of the coming months will likely shake you greatly. I encourage everyone to start focusing on the things that really matter, because a lot of the other things that we obsess over will soon become quite insignificant.
UPDATE: It is official – the United Kingdom has voted to leave the European Union. They are to be greatly congratulated for declaring their independence, but without a doubt this vote is going to cause some very serious short-term economic and financial pain. Already we have witnessed the greatest one day crash in the history of the British pound, and stock markets all over the world are crashing. For much more, please see our latest video update…
You are about to see undeniable evidence that the U.S. economy has been slowing down for quite some time. And it is vital that we focus on the facts, because all over the Internet you are going to find lots and lots of people that have opinions about what is going on with the economy. And of course the mainstream media is always trying to spin things to make Barack Obama and Hillary Clinton look good, because those that work in the mainstream media are far more liberal than the American population as a whole. It is true that I also have my own opinions, but as an attorney I learned that opinions are not any good unless you have facts to back them up. So please allow me a few moments to share with you evidence that clearly demonstrates that we have already entered a major economic slowdown. The following are 15 facts about the imploding U.S. economy that the mainstream media doesn’t want you to see…
1. Industrial production has now declined for nine months in a row. We have never seen this happen outside of a recession in all of U.S. history.
2. U.S. commercial bankruptcies have risen on a year over year basis for seven months in a row and are now up 51 percent since September.
3. The delinquency rate on commercial and industrial loans has been rising since January 2015.
4. Total business sales in the United States have been steadily dropping since the middle of 2014. No, I did not say 2015. Total business sales have been in decline for nearly two years now, and we just found out that they dropped again…
Total business sales in the US did in April what they’ve been doing since July 2014: they dropped: -2.9% from a year ago, to $1.28 trillion (not adjusted for seasonal differences and price changes), the Censuses Bureau reported on Tuesday. That’s where sales had been in April 2013!
15. The number of temporary workers in the United States peaked and started falling precipitously before the recession of 2001 even started. The exact same thing happened just prior to the beginning of the 2008 recession. So would it surprise you to learn that the number of temporary workers in the United States peaked in December and has fallen dramatically since then?
Earlier today, we learned that two of our biggest corporations will be laying off even more workers. Bank of America, which is holding more of our money than any other bank in the country, has announced that it is going to be cutting about 8,000 more workers…
Bank of America is expected to reduce staffing in its consumer banking division by as many as 8,000 more jobs.
The nation’s largest retail bank by deposits has already reduced the staffing in its consumer division from more than 100,000 in 2009 to about 68,400 as of the end of the first quarter of 2016, said Thong Nguyen, Bank of America’s president of retail banking and co-head of consumer banking at the Morgan Stanley Financials Conference Tuesday.
Walmart is going to cut some back-office accounting jobs at about 500 stores in a bid to become more efficient.
The job cuts will occur mostly at stores mostly in the West and involve accounting and invoicing workers, says spokesman Kory Lundberg. Instead, bookkeeping functions will be switched to Walmart’s home office in Bentonville, Ark. Cash at the stores will be counted by machine.
Day after day we are hearing about more layoffs like this. So why would this be happening if the U.S. economy truly was in “recovery mode”?
Even with how manipulated the GDP numbers are these days, Barack Obama is on course to be the only president in all of U.S. history to never have a single year when the economy grew by at least 3 percent. The truth is that our economy has been stuck in the mud ever since the end of the last recession, and now a major new downturn has clearly already begun.
Foreign investors sold a record amount of U.S. Treasury bonds and notes for the month of April, according to U.S. Treasury Department data on Wednesday, as investors priced in a few more rate increases by the Federal Reserve this year.
Foreigners sold $74.6 billion in U.S. Treasury debt in the month, after purchases of $23.6 billion in March. April’s outflow was the largest since the U.S. Treasury Department started recording Treasury debt transactions in January 1978.
Absent a major “black swan event” of some sort, we won’t see that happening in the United States for at least a while yet, but without a doubt we are steamrolling toward a major economic depression.
Unfortunately for all of us, there isn’t anything that any of our politicians are going to be able to do to stop it.
*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.*
Why is George Soros selling stocks, buying gold and making “a series of big, bearish investments”? If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money. But if a major financial crisis is imminent, he stands to make obscene returns. So does George Soros know something that the rest of us do not? Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog? What are we to make of all of this?
The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal…
Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.
Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors often view gold as a haven during times of turmoil.
Hmmm – it sounds suspiciously like George Soros and Michael Snyder are on the exact same page as far as what is about to happen to the global economy.
You know that it is very late in the game when that starts happening…
One thing that George Soros is particularly concerned about that I haven’t been talking a lot about yet is the upcoming Brexit vote. If the United Kingdom leaves the EU (and hopefully they will), the short-term consequences for the European economy could potentially be absolutely catastrophic…
Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.
“If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said.
The Brexit vote will be held two weeks from today on June 23rd, and we shall be watching to see what happens.
But Soros is not just concerned about a potential Brexit. The economic slowdown in China also has him very worried, and so he has directed his firm to make extremely bearish wagers.
According to the Wall Street Journal, the last time Soros made these kinds of bearish moves was back in 2007, and it resulted in more than a billion dollars of gains for his company.
After 73 consecutive months of year-over-year growth, online jobs postings have been in decline since February. May was by far the worst month since January 2009, down 285k from April and down 552k from a year ago.
That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide.
Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. “We’re still losing big chunks of jobs with each passing month,” Karr Ingham, an Amarillo-based economist, told The Houston Chronicle.
At this point it is so obvious that we have entered a new economic downturn that I don’t know how anyone can possibly deny it any longer.
Unfortunately, the reality of what is happening has not sunk in with the general population yet.
American taxpayers are quick to criticize the federal government for its ever-increasing national debt, but a new study released Wednesday found taxpayers are also saddled with debt, and are likely to end 2016 with a record high $1 trillion in outstanding balances.
Wallethub, a site that recommends credit cards based on consumers’ needs, said that will be the highest amount of credit card debt on record, surpassing even the years during and before the Great Recession. The site said the record high was in 2008, when people owed $984.2 billion on their credit cards.
Will we ever learn?
This has got to be one of the worst possible times to be going into credit card debt.
Sadly, the “dumb money” will continue to act dumb and the “smart money” (such as George Soros) will continue to quietly position themselves to take advantage of the crisis that is already starting to unfold.
We can’t change what is happening to the economy, but we do have control over the choices that we make.
So I urge you to please make your choices wisely.
*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.*