Wild And Unprecedented Price Fluctuations Are Causing Financial Chaos For U.S. Businesses

In every war there is a high price to pay, and this trade war will not be any different.  The normal flow of goods and services around the globe is being severely disrupted, and even though this trade war has barely just begun, it is already having an enormous impact on the U.S. economy.  Even if we ultimately win this trade war and the Trump administration is able to achieve all of the goals that it is targeting, there will still be a great cost in the short-term.  We are going to see businesses fail, we are going to see workers get laid off, and global economic activity will inevitably contract.  Heck, at this point even Fox News is calling this trade war “economic suicide”.  We live at a time when a delicately balanced formula of economic factors allows us to live a debt-fueled standard of living that is far beyond what we actually deserve.  Now we are messing with that formula, and the consequences are likely to be far more severe than most Americans are anticipating.

Let’s start by talking about steel and aluminum.  One of the chief goals of the tariffs was to help the steel and aluminum industries, and thanks to those tariffs we have seen the price of U.S. steel rise 36 percent since the beginning of 2018…

For instance, US steel and aluminum prices have soared since the imposition of tariffs. US midwest hot-rolled coil steel price, the US steel price benchmark, soared 36% between the start of the year and the start of July. This in turn causes prices of goods made with the metal to rise.

That is good news for the U.S. economy, right?

Actually, it isn’t.

Every product that uses steel and aluminum is now going to cost more.

In many cases, a lot more.

For instance, one grill company is reporting that they have had to raise prices “by almost $350 per grill”

Middleby Residential, a California-based company that makes Lynx grills, told the Dallas Morning News that even though the company uses US steel, the recent price pressures have driven up costs by almost $350 per grill.

Do you want to pay an extra $350 for your next grill?

Retail prices for washer and dryers are surging as well.  They have increased by 20 percent compared to a year ago, and that is because prices for raw materials are skyrocketing

Whirlpool Corp trimmed its full-year profit outlook as it booked a large charge on its European operations and said it wouldn’t be able to offset the effect of steel tariffs with higher prices for consumers.

The company said Monday it now expects to pay about $350 million more this year from rising raw-material costs as it faces “a very challenging cost environment.”

Anybody that purchases any products that contain steel and/or aluminum will be feeling these prices increases.

And any business that uses steel and/or aluminum on a regular basis is going to be feeling an enormous amount of pain.  For example, the largest nail company in America is already laying off workers

When President Trump imposed a 25 percent tariff on steel imports last month, America’s largest nail manufacturer had little choice but to raise its prices. Mid Continent Nail Corporation quickly lost 50 percent of its orders as customers opted for cheaper suppliers. Within weeks, the firm had to lay off 60 workers. Up to 200 more might lose their jobs by the end of this month.

All over the country, companies are going to be forced to either raise prices, fire workers or move production facilities out of the United States.

Meanwhile, farmers all over America are facing a different problem.  Thanks to a massive decline in demand from China (thanks to tariffs that they have hit us with), prices are plummeting and warehouses are filling up with food that doesn’t have anywhere to go.

Every year, the U.S. usually imports about 14 billion dollars worth of soybeans to China, and I covered the plight of soybean farmers in a previous article.  But of course soybean farmers are far from alone.  It is being reported that more than 2.5 billion pounds of meat and poultry products that have been produced by our farmers is being stockpiled in cold-storage warehouses.  To help the agricultural community, President Trump announced 12 billion dollars in aid to farmers on Tuesday

As President Donald Trump embarks on a multistate tour through parts of the country hit heavily by trade battles, his administration said Tuesday it will direct $12 billion to farmers whose harvests have been hurt by tariffs.

But the idea faced immediate criticism from Republicans on Capitol Hill.

Responding to farm groups and the Republican discontent, administration officials said they have been working since April on a short-term plan to shore up slipping prices for soybeans, pork and other crops hit with retaliatory tariffs from China.

Sure, this will help farmers get through the trade war in the short-term, but isn’t this exactly the kind of big government socialism that we are always railing against?

And who is going to bail out the real estate industry?

CNBC is reporting that home sales fell a whopping 11.8 percent year over year in southern California last month…

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

And do you know who has been fueling the extremely hot real estate market on the west coast?

The Chinese.

At one time they were buying up everything in sight, but now they have become net sellers of U.S. real estate.

And there are rumblings that we could soon see some sort of “national boycott” of American goods in China.  The following comes from Zero Hedge

The survey found that 54 percent of 2,000 respondents in 300 cities across China would “probably” or “definitely” stop buying US-branded goods “in the event of a trade war”. Just 13 percent said they would not.

The remaining 33 percent said they were unsure or did not at present buy US branded goods, according to the survey, conducted for FT Confidential Research (FTCR), a research unit at the Financial Times.

The survey was carried out between June 27 and July 10, mostly before the US imposed 25 percent tariffs on $34bn of Chinese goods on July 6. The move elicited an immediate tit-for-tat response from Beijing.

Of course something similar could be tried in the United States, but most Americans simply do not care if a product comes from China or not.  They are simply going to buy the cheapest stuff no matter what anyone tells them to do.

Look, I very much understand that we have been sending businesses and jobs overseas for a very long time.  I have been writing about this for years, and something had to be done.

But trying to fight trade wars with virtually everyone else on the planet simultaneously is madness, and the consequences for the U.S. economy are going to cause all of us an immense amount of pain.

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.

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

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

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

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

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

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

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

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

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

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

Maybe.

50 dollars is ultimately not that big of a deal.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Do you buy any of those things?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Either move would be absolutely catastrophic for the United States.

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

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

And guess what?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Once these escalations begin, where will they end?

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

Would they really go that far?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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.

Global Crisis: Goldman Sachs Says That Brazil Has Plunged Into ‘An Outright Depression’

Global RecessionOne of the most important banks in the western world says that the 7th largest economy on the entire planet has entered a full-blown economic depression.  Brazil’s economy has now contracted for three quarters in a row, and many analysts believe that things are going to get far worse before they have a chance to get any better.  Earlier this year, I warned about “the South American financial crisis of 2015“, and now it is in full swing.  The surging U.S. dollar is absolutely crushing emerging markets such as Brazil, and if the Fed raises interest rates this month that is going to make the pain even worse.  The global financial system is more interconnected than ever before, and the decisions made by the Federal Reserve truly do have global consequences.  So much of the “hot money” that was created by the Fed poured into emerging markets such as Brazil during the good times, but now the process is starting to reverse itself.  At this point, it is hard to see how much of South America is going to avoid a complete and total economic disaster.

It is one thing for Michael Snyder from the Economic Collapse Blog to say that the Brazilian economy has entered a “depression”, but it is another thing entirely when Goldman Sachs comes out and publicly says it.  The following comes from a Bloomberg article that was just posted entitled “Goldman Warns of Brazil Depression After GDP Plunges Again“…

Latin America’s largest economy shrank more than analysts forecast, as rising unemployment and higher inflation sapped domestic demand, pulling the nation deeper into what Goldman Sachs now calls “an outright depression.”

Gross domestic product in Brazil contracted 1.7 percent in the three months ended in September, after a revised 2.1 percent drop the previous quarter, the national statistics institute said in Rio de Janeiro. That’s worse than all but three estimates from 44 economists surveyed by Bloomberg, whose median forecast was for a 1.2 percent decline. It also marks the first three-quarter contraction since the institute’s series began in 1996, and a seasonally adjusted annual drop of 6.7 percent.

And when you look deeper into the numbers they become even more disturbing.

Unemployment is rising, consumer spending is way down, and investment spending is absolutely collapsing.  Here is some of the data that Goldman Sachs just released that comes via Zero Hedge

Private consumption has now declined for three consecutive quarters (at an average quarterly rate of -8.5% qoq sa, annualized), and investment spending for nine consecutive quarters (at an average rate of -10.0% qoq sa, annualized). Overall, gross fixed investment declined by a cumulative 21% from 2Q2013. The declining capital stock of the economy (declining capital-labor ratio) hurts productivity growth and limits even further potential GDP. The sharp contraction of real activity during 3Q was broad-based: both on the supply and final demand side. Final domestic demand weakened sharply during 3Q2015 (-1.7% qoq sa and -6.0% yoy) with private consumption down 1.5% qoq sa (-4.5% yoy) and gross fixed investment down 4.0% qoq sa (-15.0% yoy). Finally, on the supply side, we highlight that the large labor intensive services sector retrenched again at the margin (-1.0% qoq sa; -2.9% yoy).

The term “economic depression” is not something that should be used lightly, because it conjures up images of the Great Depression of the 1930s.  And the Brazilian economy is very important to the global economic system.  As I mentioned above, there are only six countries in the entire world that have a larger economy, and Brazil accounts for more than 242 billion dollars worth of exports every year.

So if Brazil is feeling pain, it is going to affect all of us.

Up to this point, everyone had been calling what has been going on in Brazil a “recession”, but now Goldman Sachs is the first major bank to label it “an outright economic depression”

“What started as a recession driven by the adjustment needs of an economy that accumulated large macro imbalances is now mutating into an outright economic depression given the deep contraction of domestic demand,” Alberto Ramos, chief Latin America economist at Goldman Sachs Group Inc., wrote in a report Tuesday.

Of course Brazil is far from alone.  The third largest economy on the globe, Japan, has also now slipped into recession territory.  So has Russia.  And just today we learned that Canadian GDP is plunging

Who could have seen that coming? It appears, for America’s northern brethren, low oil prices are unequivocally terrible. Against expectations of a flat 0.0% unchanged September, Canadian GDP plunged 0.5% – its largest MoM drop since March 2009 and the biggest miss since Dec 2008.

It is just a matter of time before this global economic downturn catches up with us here in the U.S. too.

In fact, there is evidence that this is already happening.

According to brand new numbers that just came out, manufacturing activity in the U.S. is contracting at the fastest pace that we have seen since the last recession

Manufacturing in the U.S. unexpectedly contracted in November at the fastest pace since the last recession as elevated inventories led to cutbacks in orders and production.

The Institute for Supply Management’s index dropped to 48.6, the lowest level since June 2009, from 50.1 in October, a report from the Tempe, Arizona-based group showed Tuesday. The November figure was weaker than the most pessimistic forecast in a Bloomberg survey. Readings less than 50 indicate contraction.

Another indicator that I am watching is the velocity of money.

When an economy is healthy, money tends to flow fairly freely.  I buy something from you, and then you buy something from someone else, etc.

But when economic conditions start to get tough, people start to hold on to their money.  That means that money doesn’t change hands as quickly and the velocity of money goes down.  As you can see below, the velocity of money has declined during every single recession since 1960…

Velocity Of Money M2

When a recession ends, the velocity of money normally starts going back up.

But a funny thing happened when the last recession ended.  The velocity of money ticked up slightly, but then it started going down steadily.  In fact, it has kept on declining ever since and it has now hit a brand new all-time record low.

This is not normal.  Yes, Wall Street is temporarily flying high for the moment, but the underlying economic fundamentals are all screaming that something is horribly wrong.

A global crisis has begun, and the U.S. will not be immune from it.  I truly believe that we are heading toward the worst economic downturn that any of us have ever experienced.

But there are many out there that insist that nothing is the matter and that happy times are ahead.

So who is right and who is wrong?

We will just have to wait and see…

89 Tips That Will Help You Prepare For The Coming Economic Depression

89 Tips That Will Help You Prepare For The Coming Economic DepressionWhat do we need to do in order to prepare for the coming economic collapse?  Are there practical steps that we can take right now that will help us and our families survive the economic depression that is approaching?  As the publisher of The Economic Collapse Blog, I get asked these kinds of questions a lot.  Once people become convinced that an economic collapse is coming, they want to know what they should do.  And so in this article I am going to share some key pieces of advice from some of the top experts in the entire country.  If you are not convinced that economic disaster is on the way, this article might not be for you.  Instead, I would encourage you to go to my website where you will find more than 1,200 articles that set out the case for the coming economic collapse in excruciating detail.  For those of you that are interested in getting prepared, I apologize in advance for the outline format of this article.  To examine each of these points in detail would take an entire book.  In fact, I am the co-author of a book that will soon be published that discusses many of these things in great depth.  But you don’t have to wait for a book to get prepared.  Mostly, it comes down to common sense.  In this article, I share 89 common sense tips that will help you get prepared for the coming economic depression.  Hopefully a lot of people will find these to be very helpful.

This first set of tips are 11 things that I strongly encourage my readers to do…

#1 Have An Emergency Fund – This is so important that I wrote an entire article about this recently.

#2 Don’t Put All Of Your Eggs Into One Basket – In addition to having an emergency fund, you will also want to have gold, silver and other hard assets.  It is also a very good idea to keep a limited amount of cash at home in case you can’t access an ATM during a major emergency of some sort.

#3 Reduce Your Expenses And Get Out Of Debt – During a time of crisis you want to be as “lean and mean” as possible.  If you simplify your life and reduce your debt load now, you will be in much better shape when the next economic depression does arrive.

#4 Move Your Money Away From Unsafe Investments – When the financial world falls apart, you don’t want your finances to be exposed.  Markets tend to go down much faster than they go up, and during the next great financial crisis millions of Americans that have their life savings in stocks and bonds are going to get totally wiped out.

#5 Store Food And Supplies – Your dollars will never stretch farther than they do right now.  You probably will not need emergency food and supplies in the short-term, but the truth is that none of us ever knows when a major emergency will strike.  During 2014, my wife and I felt more of an urgency to stock up then ever before, and I hope that people are using this brief period of relative stability to do what they can to get prepared.

#6 Learn To Grow Your Own Food – Anything that you can do to become more independent of the system is a good thing.  This includes growing your own food.  And the truth is that some of the most expensive items in the grocery store these days are fresh fruits and vegetables.

#7 Defending Yourself And Your Family – As our world become increasingly unstable, people are going to become a lot more desperate.  And desperate people do desperate things.  You are going to need to have a plan for that.

#8 Move Away From The Big Cities If Possible – For a lot of people that are dependent on their current jobs, this is simply not possible right now.  But if it is possible for you, this is something that I strongly recommend that you think about.  Being stuck in the middle of a major city is not going to be a good place to be in the years ahead.

#9 Be Ready To Bug Out – There may come a time when you are forced to evacuate from your current location.  This may happen with very short notice.  If this ever does happen to you, the key will be to be prepared for it.

#10 Build A Community – Your neighbors and close friends can be an invaluable resource.  A cord of multiple threads is not easily broken, and if you have people that you can depend upon during a crisis that can make a world of difference.

#11 Have A Back-Up Plan And Be Flexible – Mike Tyson once aptly observed that everyone has a plan until they get punched in the mouth. The years ahead are going to require a great deal of flexibility, and you may find that the plans that you have made need to be altered.  So don’t get fixated on just one approach.

When there is a major emergency, some of the most simple items suddenly become some of the most important.

The following are 11 items that I recommend that every household have on hand…

– an axe

– a can opener

– flashlights

– battery-powered radio

– extra batteries

– lighters or matches

– fire extinguisher

– blankets

– sewing kit

– duct tape

– tools

And here are about a dozen more key items that should be on your list from Survival Mom

  • Lightsticks.  You can pick up one of these every time you wander into a Home Depot.  They don’t need batteries and can be hung around the neck with a string making it easier to spot everyone in your party when it gets dark. An alternative is the UVPaqlite, which never needs batteries.
  • Wool socks and sweaters.  People have literally frozen to death wearing their layers of cotton knit tees and hoodies.  For true survival conditions, nothing beats wool.
  • Upholstery needles and thread.  What if a sleeping bag or tent rips and you have no way of mending it?
  • Roll of quarters.  Handy for phone calls, although payphones aren’t as common as they used to be, and laundromats, but if you put it in a sock and wield it like a sling, you have a handy-dandy weapon! If the quarters are pre-1965 and 90% silver, you have a whole new type of currency.
  • Pencils.  Forget the pens.  They can run out of ink and freeze in cold weather.  With a pocket knife, you’ll always have a sharp pencil.
  • Super glue.  Professional hockey players always have this on hand to seal up small cuts, and the glue itself is harmless.  Unless you get it in your eye, like I did.  But that’s a story for a different type of post!
  • Rubber bands.  String just doesn’t cut it when what you really need is a rubber band
  • Tampons in a cardboard tube.  Did you know a tampon can be fit snugly into a bullet wound?  Guys on the battlefield carry these with them.  Just be aware that the blood in the wound will begin to clot.  Leave it to a medical professional to remove the tampon from the wound.  They’re also good for kindling.
  • Paracord belt.  It’s an accessory and survival tool in one!
  • Waterproof wrist watch.  Makes perfect sense.  I had just never thought of it.
  • Animal repellant trash bags.  Use these when you’re camping and animals will stay the heck away from your trash.
  • Safety pins.
  • Dental floss.  Besides helping to keep your teeth clean, it makes sturdy thread for mending.

But don’t just get focused on acquiring things.

Some of the most important elements of preparation involve things that we need to do for ourselves.

Acclaimed survival expert James Wesley Rawles has put together a “personal list” of things that everyone should think about before a crisis strikes.  A lot of these things are topics that “preppers” never seem to write about…

*****

Spare glasses.

Prescription and nonprescription medications.

Birth control.

Keep dentistry up to date.

Any elective surgery that you’ve been postponing

Work off that gut.

Stay in shape.

Back strength and health—particularly important, given the heavy manual tasks required for self-sufficiency.

Educate yourself on survival topics, and practice them. For example, even if you don’t presently live at your retreat, you should plant a vegetable garden every year. It is better to learn through experience and make mistakes now, when the loss of crop is an annoyance rather than a crucial event.

“Comfort” items to help get through high stress times. (Books, games, CDs, chocolates, etc.)

*****

If you have a serious illness or disease, that is going to need to be one of your top priorities when making preparations for the coming crisis.

This next tip comes from an excellent article that Dave Hodges published recently…

If you or your family has a chronic health condition, it is critical that you have 6 months to a year in medicine. Also, you should research natural alternatives to treatment for health conditions in case you are not able to meet this goal due to the inability to obtain prescriptions. Don’t forget to obtain some pain medication and antibiotics in case of unforeseen emergencies.

Probably one of the most popular topics for preppers to write about is food storage.

But those that are new to prepping are often very confused about how to get started.

It doesn’t have to be complicated.  If you start out by focusing on staples that you eat all the time, you should be in great shape.  The following are some recommendations about food storage that Pat Henry of the Prepper Journal has shared…

  • Rice – First off, buy a 50lb. bag of rice. These contain 504 servings and I don’t know too many people who won’t eat rice. It is simple to cook and stores for years if you keep it cool and dry. This bag at Sam’s costs about $19 now.
  • Beans – Next buy a bag of dry beans. This will check off the Beans part of your Beans, Bullets and Band-Aids list. A good size bag is about $5 and makes 126 servings. Buy two if you think your family would like them.
  • Canned meat – Cans are great for fruits and vegetables and anyone can find something they will eat. For canned meat, I recommend tuna or chicken because it tastes a heck of a lot better than Spam and you can easily mix that into your rice. For the meat you will need approximately 35 cans. Each can has about 3 servings and this will be the most costly, but they last over a year usually and your family probably eats chicken or tuna on a semi-regular basis anyway so restocking this should be simple.
  • Canned Vegetables – you will need about 40 cans of vegetables and again this can be whatever your family will eat. Expect to pay around a dollar each so $40 for veggies to last your family a month.
  • Canned Fruit – again, simple fruits that your family will eat. These can even be fruit cocktail if that is the safest thing. At Costco they have the #10 cans of fruit like pears or apple slices and each of these has 25 servings. 5 of these will cost about $25 and give your family their daily dose of fruit.
  • Oatmeal – Good old-fashioned oatmeal is simple to cook and store. A normal container has 30 servings each so purchase about 4 of these and your family won’t starve for breakfast. At $2 each that is about $8 for breakfast for a month for a family of four. Could you exchange Pop-tarts? Maybe, but I find oatmeal more filling and less likely to be snacked on.
  • Honey– Honey is a miracle food really as it will never go bad if you keep it dry and cool. Honey will last you forever and Sam’s has large containers that hold 108 servings. You can use this in place of sugar to satisfy the sweet tooth. Honey even has medicinal properties and you can use this to add some flavor to your oatmeal for breakfast.
  • Salt – Same as honey, salt will never go bad if you keep it dry and helps the flavor of anything. You can buy a big box of salt for around $1 and that will last your whole family a month easily.
  • Vitamins – I recommend getting some multivitamins to augment your nutrition in the case of a disaster or emergency. Granted, rice and beans aren’t the best and you won’t be getting as many nutrients from canned fruit and vegetables so the vitamins help to fill in the gaps and keep you healthy. One big bottle costs about $8. You will need to get a kids version too if you have children small enough that they can’t or won’t swallow a big multivitamin.

And as I mentioned above, another key to getting prepared is self-defense.  If you make all the preparations in the world, but somebody comes along and steals them from you, they won’t end up doing you any good.

The following are some basic tips about home security from prepping expert Todd Sepulveda

*****

Front Door – Your front door is a layer. But it shouldn’t be your only layer. Besides reinforcing the strike plate with 2 inch screws, you should have a solid deadbolt. Another layer could be a storm door with a lock or even burglar bars. A good latch is valuable too! If you want to add even more layers, utilizing a security door bar is a good idea. But you don’t only want to make sure that your front door is securely layered. Take some time to layer all the doors in your home.

Windows – Every window has a lock. But you can add a layer by including sliding window locks for about $5. Other options would include tint or blinds, which would make it harder for someone to look inside your house.

Burglar Alarm – A burglar alarm is a serious layer. Alarms can be monitored by an alarm company or they can be self-monitored. Self-monitored systems have greatly advanced and will even allow you to view your home on your smartphone.

Dogs – A dog or dogs can be a great layer, especially if they bark. My dogs alert me the minute someone is in the front of the yard. They run and bark at the door and don’t stop until I open it. Outside dogs are a layer to your perimeter. A big dog on the other side of the fence will make any criminal think twice.

Outside Lights – Lights that are mounted on the outside of your home, especially ones that are triggered by motion sensors are a must! Roaches run when you turn on the lights! Someone who is watching your house will not want to approach it if they know the lights are going to draw attention to them.

Outside Landscaping – Bushes can be a layer around windows. It is important that you don’t create an environment that will create a hiding place for someone to lay in waiting. Make sure that the bushes you choose to plant are thorny and cause a lot of discomfort if someone wants to go through them.

Personal Defense – A firearm is a layer that you would want to have if needed. If you want to use something that is not so deadly, you can always pick up a can of ColdSteel Inferno to spray in someone’s face. Having a few of these cans hidden in different parts of the house is a good idea.

Safe Room – A safe room would be a last ditch layer. Some people are putting them into their homes. If this is a scenario you want to take, you should research the necessary components for a “safe” safe room.

Neighborhood Watch – Although a Neighborhood Watch isn’t just focused on your home, it is a layer that could cause the bad guys to go looking in a different neighborhood altogether. Neighborhoods that have a Neighborhood Watch usually post signs in the entrances of their neighborhood.

Neighbors – Even if you don’t have a Neighborhood Watch, you should get to know your neighbors, especially those pesky ones that stay in everyone’s business…because they are going to keep a lookout! You gotta take some bad with the good!

Street Lights – Sticking with your neighborhood, it would be a good idea to immediately report any street lights that are out to the city or county that manages them. Again, light causes the roaches to run for cover!

Signs – Don’t underestimate the power of a cheap sign. A sign on a fence that reads “Beware of Dog” or a Security company sign on the front lawn somewhere will cause the bad guys to think twice before attempting to break into your house.

*****

If you do need to leave your home during a crisis, you should have a “bug out bag” ready for each member of your family.

The following are 7 key items that Survival Cache recommends including in each bug out bag…

1. Water

2. Food

3. Clothing

4. Shelter

5. First Aid Kit

6. Basic Gear

7. Weapons

Finally, it is important to remember that nobody is perfect and that everyone makes mistakes.

The following are 14 common mistakes that Backdoor Survival says a lot of preppers make…

1. Failure to inventory stored food supplies

2. Failure to perform a risk analysis and prepping for the most likely disruptive events first

3. Preparing mostly to bug out rather than bugging in

4. Failure to evacuate at just the right time

5. Having the gear but not knowing how to use it

6. Underestimating other humans as a threat

7. Spending your entire budget on gear instead of on food, water, and medical supplies

8. Lacking the knowledge to properly store your food supplies

9. Buying gear and supplies while ignoring the need to develop skills

10. Relying only on yourself and ignoring like-minded members of your community

11. Just because someone else does something does not mean that you should do it to

12. Falling victim to prepper procrastination

13. Obsessing about being behind the curve-ball

14. Forgetting that there is a life beyond prepping

Are there any additions that you would make to this list of tips?

Please feel free to add to the discussion by posting a comment below…

 

11 Predictions Of Economic Disaster In 2015 From Top Experts All Over The Globe

2015 - Public DomainWill 2015 be a year of financial crashes, economic chaos and the start of the next great worldwide depression?  Over the past couple of years, we have all watched as global financial bubbles have gotten larger and larger.  Despite predictions that they could burst at any time, they have just continued to expand.  But just like we witnessed in 2001 and 2008, all financial bubbles come to an end at some point, and when they do implode the pain can be extreme.  Personally, I am entirely convinced that the financial markets are more primed for a financial collapse now than they have been at any other time since the last crisis happened nearly seven years ago.  And I am certainly not alone.  At this point, the warning cries have become a deafening roar as a whole host of prominent voices have stepped forward to sound the alarm.  The following are 11 predictions of economic disaster in 2015 from top experts all over the globe…

#1 Bill Fleckenstein: “They are trying to make the stock market go up and drag the economy along with it. It’s not going to work. There’s going to be a big accident. When people realize that it’s all a charade, the dollar will tank, the stock market will tank, and hopefully bond markets will tank. Gold will rally in that period of time because it’s done what it’s done because people have assumed complete infallibility on the part of the central bankers.”

#2 John Ficenec: “In the US, Professor Robert Shiller’s cyclically adjusted price earnings ratio – or Shiller CAPE – for the S&P 500 is currently at 27.2, some 64pc above the historic average of 16.6. On only three occasions since 1882 has it been higher – in 1929, 2000 and 2007.”

#3 Ambrose Evans-Pritchard, one of the most respected economic journalists on the entire planet: “The eurozone will be in deflation by February, forlornly trying to ignite its damp wood by rubbing stones. Real interest rates will ratchet higher. The debt load will continue to rise at a faster pace than nominal GDP across Club Med. The region will sink deeper into a compound interest trap.”

#4 The Jerome Levy Forecasting Center, which correctly predicted the bursting of the subprime mortgage bubble in 2007: “Clearly the direction of most of the recent global economic news suggests movement toward a 2015 downturn.”

#5 Paul Craig Roberts: “At any time the Western house of cards could collapse. It (the financial system) is a house of cards. There are no economic fundamentals that support stock prices — the Dow Jones. There are no economic fundamentals that support the strong dollar…”

#6 David Tice: “I have the same kind of feel in ’98 and ’99; also ’05 and ’06.  This is going to end badly. I have every confidence in the world.”

#7 Liz Capo McCormick and Susanne Walker: “Get ready for a disastrous year for U.S. government bonds. That’s the message forecasters on Wall Street are sending.”

#8 Phoenix Capital Research: “Just about everything will be hit as well. Most of the ‘recovery’ of the last five years has been fueled by cheap borrowed Dollars. Now that the US Dollar has broken out of a multi-year range, you’re going to see more and more ‘risk assets’ (read: projects or investments fueled by borrowed Dollars) blow up. Oil is just the beginning, not a standalone story.

If things really pick up steam, there’s over $9 TRILLION worth of potential explosions waiting in the wings. Imagine if the entire economies of both Germany and Japan exploded and you’ve got a decent idea of the size of the potential impact on the financial system.”

#9 Rob Kirby: “What this breakdown in the crude oil price is going to spawn another financial crisis.  It will be tied to the junk debt that has been issued to finance the shale oil plays in North America.  It is reported to be in the area of half a trillion dollars worth of junk debt that is held largely on the books of large financial institutions in the western world.  When these bonds start to fail, they will jeopardize the future of these financial institutions.  I do believe that will be the signal for the Fed to come riding to the rescue with QE4.  I also think QE4 is likely going to be accompanied by bank bail-ins because we all know all western world countries have adopted bail-in legislation in their most recent budgets.  The financial elites are engineering the excuse for their next round of money printing . . .  and they will be confiscating money out of savings accounts and pension accounts.  That’s what I think is coming in the very near future.”

#10 John Ing: “The 2008 collapse was just a dress rehearsal compared to what the world is going to face this time around. This time we have governments which are even more highly leveraged than the private sector was.

So this time the collapse will be on a scale that is many magnitudes greater than what the world witnessed in 2008.”

#11 Gerald Celente: “What does the word confidence mean? Break it down. In this case confidence = con men and con game. That’s all it is. So people will lose confidence in the con men because they have already shown their cards. It’s a Ponzi scheme. So the con game is running out and they don’t have any more cards to play.

What are they going to do? They can’t raise interest rates. We saw what happened in the beginning of December when the equity markets started to unravel. So it will be a loss of confidence in the con game and the con game is soon coming to an end. That is when you are going to see panic on Wall Street and around the world.”

If you have been following my website, you know that I have been pointing to 2015 for quite some time now.

For example, in my article entitled “The Seven Year Cycle Of Economic Crashes That Everyone Is Talking About“, I discussed the pattern of financial crashes that we have witnessed every seven years that goes all the way back to the Great Depression.  The last two major stock market crashes began in 2001 and 2008, and now here we are seven years later.

Will the same pattern hold up once again?

In addition, there are many other economic cycles that seem to indicate that we are due for a major economic downturn.  I discussed quite a few of these theories in my article entitled “If Economic Cycle Theorists Are Correct, 2015 To 2020 Will Be Pure Hell For The United States“.

But just like in 2000 and 2007, there are a whole host of doubters that are fully convinced that the party can continue indefinitely.  Even though our economic fundamentals continue to get worse, our debt levels continue to grow and every objective measurement shows that Wall Street is more reckless and more vulnerable to collapse than ever before, they mock the idea that a financial collapse is imminent.

So let’s see what happens in 2015.

I have a feeling that it is going to be an extremely “interesting” year.

If Everything Is Just Fine, Why Are So Many Really Smart People Forecasting Economic Disaster?

Apocalyptic Disaster - Public DomainThe parallels between the false prosperity of 2007 and the false prosperity of 2014 are rather striking.  If we go back and look at the numbers in the fall of 2007, we find that the Dow set an all-time high in October, margin debt on Wall Street had spiked to record levels, the unemployment rate was below 5 percent and Americans were getting ready to spend a record amount of money that Christmas season.  But then the very next year the worst economic crisis since the Great Depression shook the entire planet and everyone wondered why most people never saw it coming.  Well, now a similar pattern is unfolding right before our eyes.  The Dow and the S&P 500 both hit record highs on Monday, margin debt on Wall Street is hovering near record levels, the unemployment rate has ticked down a little bit and Americans are getting ready to spend more than 600 billion dollars this Christmas season.  The truth is that the economy seems pretty stable for the moment, and most people cannot even imagine that an economic collapse is coming.  So why are so many really smart people forecasting economic disaster in the near future?

For example, just consider what the Jerome Levy Forecasting Center is saying.  This is an organization with a tremendous economic forecasting record that goes all the way back to the Great Depression.  In fact, it predicted ahead of time the financial trouble and the recession that would happen in 2008.  Well, now this company is forecasting that there is a 65 percent chance that there will be a global recession by the end of next year…

In 1929, a businessman and economist by the name of Jerome Levy didn’t like what he saw in his analysis of corporate profits. He sold his stocks before the October crash.

Almost eight decades later, the consultancy company that bears his name declared “the next recession will be caused by the deflating housing bubble.” By February 2007, it predicted problems in the subprime-mortgage market would spread “to virtually all financial markets.” In October 2007, it saw imminent recession — the slump began two months later.

The Jerome Levy Forecasting Center, based in Mount Kisco, New York, and run by Jerome’s grandson David, is again more worried than its peers. Its half-dozen analysts attach a 65 percent probability of a worldwide recession forcing a contraction in the U.S. by the end of next year.

Could they be wrong?

It’s certainly possible.

But I wouldn’t bet against them.

John Hussman is another expert that is warning of financial disaster on the horizon.  He believes that we are experiencing a massive stock market bubble right now and that stocks are approximately double the value that they should be

If you look at corporate profits and especially corporate profit margins, they’re one of the most cyclical and mean-reverting series in economics. Right now, we have corporate profits that are close to about 11% of GDP, but if you look at that series you will find that corporate profits as a share of GDP have always dropped back to about 5.5% or below in every single economic cycle including recent decades, including not only the financial crisis but 2002 and every other economic cycle we have been in.

Right now stocks as a multiple of last year’s expected earnings may look only modestly over valued or modestly richly valued. Really if you look at the measures of valuation that are most correlated to the returns that stocks deliver over time say over seven years or over the next 10 years the S&P 500 in our estimation is about double the level of valuation that would give investors a normal rate of return.

Could you imagine the chaos that would ensue if stocks really did drop by 50 percent?

Well, Hussman says that this is precisely what must happen in order for stock prices to return to historical norms…

Right now, like I say, we are looking at stocks that have been pressed to long-term expected returns that are really dismal. But more important than that, in every market cycle that we’ve seen with the mild exception of 2002, we’ve seen stocks price revert back to normal rates of return. In order to get to that point from here, we would have to have equities drop by about half.

If that does happen, it will make the crisis of 2008 look like a Sunday picnic.

Meanwhile, other very prominent thinkers are also warning that an economic nightmare is rapidly approaching.

Economic cycle theorist Martin Armstrong foresees major economic problems in 2015 which will ultimately lead to “civil unrest”  in 2016

It looks more and more like a serious political uprising will erupt by 2016 once the economy turns down. That is the magic ingredient. Turn the economy down and you get civil unrest and revolution.

And of course there are a whole lot of other economic cycle theorists that are forecasting that we are about to experience a massive economic downturn as well.  For much more on this, please see this article and this article.

What is truly frightening is that we have never even come close to recovering from the last economic crisis.  One poll that was taken just prior to the recent election found that only 28 percent of Americans said that their families were doing better financially.  In addition, here are some more survey numbers about how Americans are feeling about the economy

According to voter exit polls conducted by CNN, 78% said they are worried about the economy, with 69% saying that, in their view, economic conditions are not good. 65% responded that the country is on the wrong track vs. only 31% who believed that it is headed in the right direction.

Even though we are repeating so many of the same patterns that we experienced back in 2007, we are doing so with a fundamentally weaker economy.  The last crisis did a tremendous amount of permanent damage to us.  For an extensive look at this, please see my previous article entitled “12 Charts That Show The Permanent Damage That Has Been Done To The U.S. Economy“.

And there are lots of signs that much of the planet is already entering another major economic slowdown.  In a recent article, Brandon Smith summarized some of these.  He says that we are currently witnessing “the last gasp of the global economy“…

Global exports, and thus consumer demand, are plunging. Germany, the only pillar left to prop up the failing European Union, has experienced a severe decline in exports not seen since 2009.

China, the largest exporter and importer in the world, and Chinese companies, have been caught in a number of instances using fraudulent invoices to artificially inflate their own export numbers, in some cases reporting 50% more exported goods than had actually existed.

China’s manufacturing has also declined for the past five months, exposing the nature of its inflated export stats and indicating a global slowdown.

The Baltic Dry Index, a measure of global shipping rates for raw goods, and thus a measure of demand for shipping, continues to drag along near historic lows.

The U.S. consumer (the only economic asset the U.S. has besides the dollar’s world reserve status), has seen declines in spending as well as wages.

In the meantime, long term jobless Americans continue to fall off welfare rolls by the millions, making unemployment numbers look good, but the overall future picture look terrible as participation rates dissolve into the ether of government statistics.

How is such poverty being hidden? Foodstamps. Plain and simple. Nearly 50 million Americans now subsist on food stamp programs today, and this number shows no signs of dropping. In states like Illinois, two people sign up for food assistance for every citizen that happens to find a job.

From time to time, I get accused of “spreading fear” and of being obsessed with “doom and gloom”.

But that is not the case at all.

I actually want our economy to stay stable for as long as possible.  Many Americans don’t realize this, but even the poorest of us live in luxury compared to much of the rest of the world.  It would be wonderful if we could all live out our lives in peace and quiet and safety.

Unfortunately, it is simply not going to happen.

And it does not take an expert to see what is coming.

Anyone with half a brain should be able to see the economic disaster that is approaching.

There is hope in understanding what is happening and there is hope in getting prepared.  Millions of Americans that are willingly blind to our problems are going to have their lives absolutely destroyed when they get blindsided by the coming crisis.  So please use this brief period of relative stability to get prepared and to warn others.

Once this false bubble of hope runs out, all of our lives are going to dramatically change.