New Vehicle Sales “Collapse” And Pending Home Sales “Plunge” As America’s Economic Slowdown Accelerates

In late 2018, the bad economic news just keeps rolling in.  At a time when consumer confidence is absolutely soaring, the underlying economic numbers are clearly telling us that enormous problems are right around the corner.  Of course this is usually what happens just before a major economic downturn.  Most people in the general population feel like the party can go on for quite a while longer, but meanwhile the warning signs just keep becoming more and more obvious.  I have been hearing from people that truly believe that the economy is “strong”, but if the U.S. economy really was in good shape would new vehicle sales be “collapsing”?

According to the latest estimates released by Edmunds, new vehicle sales for September are expected to collapse both on a monthly basis and year-over-year basis. The company predicted that 1,392,434 new cars and trucks will be sold in the U.S. in September, which makes for a estimated seasonally adjusted annual rate (SAAR) of 17 million. This will be a 5.4% decrease from last month and an 8.3% drop from September of last year.

Those are absolutely terrible numbers.

And this news comes after all of the major automakers had already revised earnings guidance lower.  The following comes from Zero Hedge

The drop in sales capped another rough month for the auto industry during which Detroit’s carmakers all revised their earnings guidance lower and Ford embarked on a five-year restructuring plan. Earlier this week, we reported that Ford’s CEO claimed that President Trump’s auto tariffs had cost the company $1 billion in profits.

Sadly, this may just be the very beginning of the auto industry’s troubles.

It is now being projected that if this trade war with China continues, U.S. automakers could see total sales fall “by 2 million vehicles per year”

Retaliation by China to tariffs already in place have made some American auto exports uncompetitive, and could collapse US auto sales by 2 million vehicles per year, resulting in the loss of up to 715,000 American jobs and a devastating hit of as much as $62 billion to the US GDP.

As per NBC News, the Center for Automotive Research (CAR) warns that the auto industry could receive a devastating blow if Section 232 declares foreign-made cars and car parts a threat to national security.

Kristin Dziczek, a vice president and senior economist at CAR, said if Section 232 is enacted, it could trigger a “downward cycle” in the auto industry – not seen since the last great recession.

And needless to say, the thousands of companies that do business with those large automakers would also lose sales and jobs.

Once these downturns get rolling, the domino effect can be absolutely devastating.

On Thursday, we also learned that pending home sales “plunged in August”

Pending home sales plunged in August, dropping 1.8% MoM (almost four times worse than expected) to its lowest since Oct 2014 (and fell 2.5% YoY) – the fourth month of annual declines in a row…

If the U.S. economy truly is “strong”, then why have we seen four monthly declines in a row?

And it isn’t just one part of the nation that is experiencing a downturn.  According to Bloomberg, all four major regions of the country showed a decline…

As Bloomberg notes, the decline, which was broad-based across all four regions, shows that higher mortgage rates, rising prices and a shortage of affordable homes continue to squeeze buyers. Existing-home sales in August matched the lowest in more than two years, while revisions to new-home sales showed a slower market than thought, according to previously released figures.

Homes are not selling like they once were.  There is a reason why one out of every four home sellers in America slashed their prices in August.  Demand is way down, and that strongly indicates that an economic slowdown is here.

When it looks like the economy is headed for a major downturn, a lot of people go out and stock up on gold, and it turns out that is precisely what global central banks have been doing

Central banks have emerged as some of the biggest buyers of gold this year, buying a total of 264 metric tons this year to reach the highest level in six years, according to analysts at Macquarie.

Of course the Federal Reserve and other central banks are trying to assure us that everything is going to be okay, but meanwhile their actions are telling us a different story.

Much of the world is already in the midst of a crippling economic crisis, and every indicator seems to be pointing to the fact that the U.S. is headed down the same path.

Even without any extenuating circumstances, the truth is that we are way overdue for a recession.  But when you throw in political chaos, exploding debt levels, an emerging market currency crisis and a trade war between the two largest economies on the entire planet, you definitely have a recipe for a perfect storm.

If you do not believe that this trade war is a big deal, you should consider the words of former Reagan administration official David Stockman

Folks, it’s not a “skirmish”. On the scale of trade warfare we are now at DEFCON 2.

At this very moment, the US is taxing $250 billion of Chinese imports or nearly half the total flow; and China is taxing $110 billion of its imports from the US or 85% of the flow.

And it’s soon going full monte. The Donald has repeatedly threatened to tariff the remaining $267 billion of Chinese imports if Beijing retaliates against his $200 billion, but, self-evidently, they already have.

The U.S. economy has found a way to muddle through for the past couple of years, and we should all hope that the economy can find a way to navigate through these current problems.

But the storm clouds are growing more ominous with each passing day, and at some point time will run out.

About the author: 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 Last Days Warrior Summit is the premier online event of 2018 for Christians, Conservatives and Patriots.  It is a premium-members only international event that will empower and equip you with the knowledge and tools that you need as global events begin to escalate dramatically.  The speaker list includes Michael Snyder, Mike Adams, Dave Daubenmire, Ray Gano, Dr. Daniel Daves, Gary Kah, Justus Knight, Doug Krieger, Lyn Leahz, Laura Maxwell and many more. Full summit access will begin on October 25th, and if you would like to register for this unprecedented event you can do so right here.

Has The Next Recession Already Begun For America’s Middle Class?

RecessionHas the next major economic downturn already started?  The way that you would answer that question would probably depend on where you live.  If you live in New York City, or the suburbs of Washington D.C., or you work for one of the big tech firms in the San Francisco area, you would probably respond to such a question by saying of course not.  In those areas, the economy is doing great and prices for high end homes are still booming.  But in most of the rest of the nation, evidence continues to mount that the next recession has already begun for the poor and the middle class.  As you will read about below, major retailers had an absolutely dreadful start to 2014 and home sales are declining just as they did back in 2007 before the last financial crisis.  Meanwhile, the U.S. economy continues to lose more good jobs and 20 percent of all U.S. families do not have a single member that is employed at this point.  2014 is turning out to be eerily similar to 2007 in so many ways, but most people are not paying attention.

During the first quarter of 2014, earnings by major U.S. retailers missed estimates by the biggest margin in 13 years.  The “retail apocalypse” continues to escalate, and the biggest reason for this is the fact that middle class consumers in the U.S. are tapped out.  And this is not just happening to a few retailers – this is something that is happening across the board.  The following is a summary of how major U.S. retailers performed in the first quarter of 2014 that was put together by Jim Quinn

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

That is quite a startling list.

But plummeting retail sales are not the only sign that the U.S. middle class is really struggling right now.  Home sales have also been extremely disappointing for quite a few months.  This is how Wolf Richter described what we have been witnessing…

This is precisely what shouldn’t have happened but was destined to happen: Sales of existing homes have gotten clobbered since last fall. At first, the Fiscal Cliff and the threat of a US government default – remember those zany times? – were blamed, then polar vortices were blamed even while home sales in California, where the weather had been gorgeous all winter, plunged more than elsewhere.

Then it spread to new-home sales: in April, they dropped 4.7% from a year ago, after March’s year-over-year decline of 4.9%, and February’s 2.8%. Not a good sign: the April hit was worse than February’s, when it was the weather’s fault. Yet April should be the busiest month of the year (excellent brief video by Lee Adler on this debacle).

We have already seen that in some markets, in California for example, sales have collapsed at the lower two-thirds of the price range, with the upper third thriving. People who earn median incomes are increasingly priced out of the market, and many potential first-time buyers have little chance of getting in. In San Diego, for example, sales of homes below $200,000 plunged 46% while the upper end is doing just fine.

As Richter noted, sales of upper end homes are still doing fine in many areas.

But how long will that be able to continue if things continue to get even worse for the poor and the middle class?  Traditionally, the U.S. economy has greatly depended upon consumer spending by the middle class.  If that continues to dry up, how long can we avoid falling into a recession?  For even more numbers that seem to indicate economic trouble for the middle class, please see my previous article entitled “27 Huge Red Flags For The U.S. Economy“.

Other analysts are expressing similar concerns.  For example, check out what John Williams of shadowstats.com had to say during one recent interview

We’re turning down anew. The first quarter should revise into negative territory… and I believe the second quarter will report negative as well.

That will all happen by July 30 when you have the annual revisions to the GDP. In reality the economy is much weaker than that. Economic growth is overstated with the GDP because they understate inflation, which is used in deflating the number…

What we’re seeing now is just… we’ve been barely stagnant and bottomed out… but we’re turning down again.

The reason for this is that the consumer is strapped… doesn’t have the liquidity to fuel the growth in consumption.

Income… the median household income, net of inflation, is as low as it was in 1967. The average guy is not staying ahead of inflation…

This has been a problem now for decades… You were able to buy consumption from the future by borrowing more money, expanding your debt. Greenspan saw the problem was income, so he encouraged debt expansion.

That all blew apart in 2007/2008… the income problems have continued, but now you don’t have the ability to borrow money the way you used to. Without that and the income problems remaining, there’s no way that consumption can grow faster than inflation if income isn’t.

As a result – personal consumption is more than two thirds of the economy – there’s no way you can have positive sustainable growth in the U.S. economy without the consumer being healthy.

The key to the health of the middle class is having plenty of good jobs.

But the U.S. economy continues to lose more good paying jobs.

For example, Hewlett-Packard has just announced that it plans to eliminate 16,000 more jobs in addition to the 34,000 job cuts that have already been announced.

Today, there are 27 million more working age Americans that do not have a job than there were in 2000, and the quality of our jobs continues to decline.

This is absolutely destroying the middle class.  Unless the employment situation in this country starts to turn around, there does not seem to be much hope that the middle class will recover any time soon.

Meanwhile, there are emerging signs of trouble for the wealthy as well.

For instance, just like we witnessed back in 2007, things are starting to look a bit shaky at the “too big to fail” banks.  The following is an excerpt from a recent CNBC report

Citigroup has joined the ranks of those with trading troubles, as a high-ranking official told the Deutsche Bank 2014 Global Financial Services Investor Conference Tuesday that adjusted trading revenue probably will decline 20 percent to 25 percent in the second quarter on an annualized basis.

“People are uncertain,” Chief Financial Officer John Gerspach said of investor behavior, according to an account from the Wall Street Journal. “There just isn’t a lot of movement.”

In recent weeks, officials at JPMorgan Chase and Barclays also both reported likely drops in trading revenue. JPMorgan said it expected a decline of 20 percent of the quarter, while Barclays anticipates a 41 percent drop, prompting it to announce mass layoffs that will pare 19,000 jobs by the end of 2016.

Remember, very few people expected a recession the last time around either.  In fact, Federal Reserve Chairman Ben Bernanke repeatedly promised us that we would not have a recession and then we went on to experience the worst economic downturn since the Great Depression.

It will be the same this time as well.  Just like in 2007, we will continue to get an endless supply of “hopetimism” from our politicians and the mainstream media, and they will continue to fill our heads with visions of rainbows, unicorns and economic prosperity for as far as the eyes can see.

But then the next recession will strike and most Americans will be completely blindsided by it.

27 Huge Red Flags For The U.S. Economy

Red FlagIf you believe that the U.S. economy is heading in the right direction, you really need to read this article.  As we look toward the second half of 2014, there are economic red flags all over the place.  Industrial production is down.  Home sales are way down.  Retail stores are closing at the fastest pace since the collapse of Lehman Brothers.  U.S. household debt is up substantially, and in 20 percent of all U.S. families everyone is unemployed.  In so many ways, what we are witnessing right now is so similar to what we experienced during the build up to the last great financial crisis.  We are making so many of the very same mistakes that we made the last time, and yet our “leaders” seem completely oblivious to what is happening.  But the warning signs are very clear.  All you have to do is open your eyes and look at them.  The following are 27 huge red flags for the U.S. economy…

#1 Despite endless assurances from the Obama administration that we are in an “economic recovery”, the number one concern for U.S. voters is “Unemployment/Jobs” according to a recent Gallup survey.

#2 Historically, sales for construction equipment manufacturer Caterpillar have been a pretty good indicator of where the global economy is heading next.  Unfortunately, sales were down 13 percent last month and have now experienced year over year declines for 17 months in a row.

#3 During the first quarter of 2014, profits at office supply giant Staples fell by 43.5 percent.

#4 Foot traffic at Wal-Mart stores fell by 1.4 percent during the first quarter of 2014.  Analysts seem puzzled as to why Wal-Mart is “underperforming“.  Perhaps it is because the U.S. middle class is being steadily destroyed and U.S. consumers are tapped out at this point.

#5 It is being projected that Sears will soon close hundreds more stores and will eventually go out of business altogether…

The company said this week that it may sell its 51% stake in Sears Canada, which operates nearly 20% of the company’s stores worldwide. It has quietly closed nearly 100 U.S. stores in the last year. Next week, it’s expected to announce dismal fiscal first quarter results and possibly yet more store closings.

“They have too many stores and they’re losing a lot of money, burning cash,” said John Kernan, an analyst with Cowen.
Kernan expects the company to close 500 of its 1,980 U.S. stores in a few years and, ultimately, to go out of business.

“The lights are going off at Sears and Kmart,” he said. “There are tumbleweeds blowing through the parking lots at Kmart. They’re basically completely irrelevant.”

The “retail apocalypse” just continues to roll on, but the mainstream media is treating this like it is not really a big deal.

#6 The labor force participation rate for Americans from the age of 25 to the age of 29 has fallen to an all-time record low.

#7 According to official government numbers, everyone is unemployed in 20 percent of all American families.

#8 As families struggle to pay their bills, many of them are increasingly turning to debt in order to make ends meet.  Earlier this month we learned that total U.S. household debt has increased for three quarters in a row.  And as I noted in one recent article, total consumer credit in the United States has increased by 22 percent over the past three years, and 56 percent of all Americans have “subprime credit” at this point.

#9 Interest rates on student loans are scheduled to increase substantially on July 1st

As of July 1, federal student loan rates will edge up. Rates overall will be up 0.8% compared to current rates.

Federal Stafford Loans for undergraduate students will be 4.66% — up from 3.86%. Federal Stafford Loans for graduate students will be 6.21% — up from 5.41%.

Federal Grad PLUS and Federal Parent PLUS Loans will be at 7.21% — up from 6.41%.

This is going to put even more pressure on the growing student loan debt bubble.

#10 U.S. industrial production fell by 0.6 percent in April.  This should not be happening if the economy truly was “recovering”.

#11 Manufacturing job openings in the United States have declined for four months in a row.

#12 Existing home sales have fallen for seven of the last eight months and seem to be repeating a pattern that we witnessed back in 2007 prior to the last financial crash.

#13 In the real estate bubble market of Phoenix, sales in April were down 12 percent year over year, and active inventory was up 49 percent year over year.  In other words, there are tons of homes on the market, but sales are going down.

#14 The homeownership rate in the United States has dropped to the lowest level in 19 years.

#15 Trading revenue at big banks all over the western world is way down

Late Friday, it was JPMorgan who said trading revenues will be down 20 percent this quarter. Now Barclays says trading revenues in the first three months were down 41 percent. The company cited “challenging trading conditions resulting in subdued client activity.” Like JPMorgan, Barclays also warned they were seeing no improvement in trading in the second quarter.

#16 Jan Loeys, JPMorgan’s head of global asset allocation, is warning that the Federal Reserve is creating a huge financial bubble which could “push us into a credit crisis“…

Where do we go from here? To this analyst, still very subdued economic growth, both at the US and global level, implies continued easy monetary policy. The risk is that bond yields rise no faster than the forwards. Financial overheating (asset inflation) proceeds much faster than economic overheating (CPI inflation). Before CPI inflation has a chance to emerge, and before monetary policy is truly above neutral, a financial bubble will have popped up somewhere and will have corrected, pushing the economy down. That is what has happened in the past 25 years. The behavior of central banks gives us no confidence that this time will be different: Central banks talk about financial instability, but appear to define this mostly in term of bank leverage. Each successive boom and bust is always in another place. A bubble can emerge without leverage. It is not possible to project exactly where this boom and bust cycle will take place as knowing where it will be would induce evasive actions that should prevent it from occurring. One possible ending, among many, is that ultra-easy rates having induced credit markets to grow much faster than equity markets, combines with reduced market making by banks (many of whom have become like brokers) to create a liquidity crisis when the Fed starts the first set of rate hikes. This could then be bad enough to close primary markets, and thus push us into a credit crisis.

#17 Peter Boockvar, the chief market analyst at the Lindsey Group, is warning that the U.S. stock market could experience a 20 percent decline once quantitative easing completely ends.

#18 A lot of other big names are telling CNBC that they expect a significant stock market “correction” very soon as well…

A bevy of high-profile names have warned lately that the market is on the doorstep of a major move lower. From long-term market bulls such as Piper Jaffray to short-term traders such as Dennis Gartman, expectations are high that the major averages are poised for a big dip, with calls varying from 10 percent or so all the way up to 25 percent.

#19 The number of Americans enrolled in the Social Security disability program exceeds the entire population of the nation of Greece and has just hit another brand new record high.

#20 Poverty continues to grow all over the country, and right now there are 49 million Americans that are dealing with food insecurity.

#21 According to Pew Charitable Trusts, tax revenue in 26 U.S. states is still lower than it was back in 2008 even though tax rates have gone up in many areas since then.

#22 Barack Obama is doing his best to keep his promise to destroy the U.S. coal industry

The EPA is about to impose a new regulation that will reduce carbon emissions from existing power plants starting June 2 and will become permanent in 2015. The new regulation, according to Politico, is the “most dramatic anti-pollution regulation in a generation.” Because the new regulation will further cripple the coal industry, as coal-burning plants will be severely affected, American power will become more dependent on natural gas, solar and wind.

#23 Climatologists are now saying that the state of Texas is going through the worst period of drought that it has experienced in 500 years.

#24 It is being reported that “dozens of Texas communities” are less than 90 days away from being completely out of water.

#25 It is being projected that the drought in California will cost the agricultural industry 1.7 billion dollars and that approximately 14,500 agricultural workers will lose their jobs.

#26 Due in part to the drought, the price of meat rose at the fastest pace in more than 10 years last month.

#27 According to recent surveys, only about a quarter of all Americans believe that the country is heading in the right direction.

Exactly Like 7 Years Ago? 2014 Is Turning Out To Be Eerily Similar To 2007

Bubble - Photo by Jeff KubinaThe similarities between 2007 and 2014 continue to pile up.  As you are about to see, U.S. home sales fell dramatically throughout 2007 even as the mainstream media, our politicians and Federal Reserve Chairman Ben Bernanke promised us that everything was going to be just fine and that we definitely were not going to experience a recession.  Of course we remember precisely what followed.  It was the worst economic crisis since the days of the Great Depression.  And you know what they say – if we do not learn from history we are doomed to repeat it.  Just like seven years ago, the stock market has soared to all-time high after all-time high.  Just like seven years ago, the authorities are telling us that there is nothing to worry about.  Unfortunately, just like seven years ago, a housing bubble is imploding and another great economic crisis is rapidly approaching.

Posted below is a chart of existing home sales in the United States during 2007.  As you can see, existing home sales declined precipitously throughout the year…

Existing Home Sales 2007

Now look at this chart which shows what has happened to existing home sales in the United States in recent months.  If you compare the two charts, you will see that the numbers are eerily similar…

Existing Home Sales Today

New home sales are also following a similar pattern.  In fact, we just learned that new home sales have collapsed to an 8 month low

Sales of new single-family homes dropped sharply last month as severe winter weather and higher mortgage rates continued to slow the housing recovery.

New home sales fell 14.5% to a seasonally adjusted annual rate of 385,000, down from February’s revised pace of 449,000, the Census Bureau said.

Once again, this is so similar to what we witnessed back in 2007.  The following is a chart that shows how new home sales declined dramatically throughout that year…

New Home Sales 2007

And this chart shows what has happened to new homes sales during the past several months.  Sadly, we have never even gotten close to returning to the level that we were at back in 2007.  But even the modest “recovery” that we have experienced is now quickly unraveling…

New Home Sales Today

If history does repeat, then what we are witnessing right now is a very troubling sign for the months to come.  As you can see from this chart, new home sales usually start going down before a recession begins.

And don’t expect these housing numbers to rebound any time soon.  The demand for mortgages has dropped through the floor.  Just check out the following excerpt from a recent article by Michael Lombardi

One of the key indicators I follow in respect to the state of the housing market is mortgage originations. This data gives me an idea about demand for homes, as rising demand for mortgages means more people are buying homes. And as demand increases, prices should be increasing.

But the opposite is happening…

In the first quarter of 2014, mortgage originations at Citigroup Inc. (NYSE/C) declined 71% from the same period a year ago. The bank issued $5.2 billion in mortgages in the first quarter of 2014, compared to $8.3 billion in the previous quarter and $18.0 billion in the first quarter of 2013. (Source: Citigroup Inc. web site, last accessed April 14, 2014.)

Total mortgage origination volume at JPMorgan Chase & Co. (NYSE/JPM) declined by 68% in the first quarter of 2014 from the same period a year ago. At JPMorgan, in the first quarter of 2014, $17.0 billion worth of mortgages were issued, compared to $52.7 billion in the same period a year ago. (Source: JPMorgan Chase & Co. web site, last accessed April 14, 2014.)

It is almost as if we are watching a replay of 2007 all over again, and yet nobody is talking about this.

Everyone wants to believe that this time will be different.

The human capacity for self-delusion is absolutely amazing.

There are a lot of other similarities between 2007 and today as well.

Just the other day, I noted that retail stores are closing in the United States at the fastest pace that we have seen since the collapse of Lehman Brothers.

Back in 2007, we saw margin debt on Wall Street spike dramatically and help fuel a remarkable run in the stock market.  Just check out the chart in this article.  But that spike in margin debt also made the eventual stock market collapse much worse than it had to be.

And just like 2007, consumer credit is totally out of control.  As I noted in one recent article, during the fourth quarter of 2013 we witnessed the biggest increase in consumer debt in the U.S. that we have seen since 2007.  Total consumer credit in the U.S. has risen by 22 percent over the past three years, and 56 percent of all Americans have “subprime credit” at this point.

Are you starting to get the picture?  It is only 7 years later, and the same things that happened just prior to the last great financial crisis are happening again.  Only this time we are in much worse shape to handle an economic meltdown.  The following is a brief excerpt from my recent article entitled “We Are In FAR Worse Shape Than We Were Just Prior To The Last Great Financial Crisis“…

None of the problems that caused the last financial crisis have been fixed.  In fact, they have all gotten worse.  The total amount of debt in the world has grown by more than 40 percent since 2007, the too big to fail banks have gotten 37 percent larger, and the colossal derivatives bubble has spiraled so far out of control that the only thing left to do is to watch the spectacular crash landing that is inevitably coming.

You can read the rest of that article right here.

For a long time, I have been convinced that this two year time period is going to represent a major “turning point” for America.

Right now, 2014 is turning out to be eerily similar to 2007.

Will 2015 turn out to be a repeat of 2008?

Please feel free to share what you think by posting a comment below…

Meet 5 People Who Made A Decision To Shine A Light In The Darkness

Heart - Photo by Louise Docker from Sydney, AustraliaAre you ready for some inspirational stories that will make your heart jump for joy?  These days, it is so easy to get down.  Both individually and as a nation, we have so many problems and it often seems like things just keep getting worse.  For example, this week we learned that pending home sales in the United States just dropped by the most in 3 years and that they have now been declining for 8 months in a row.  And without a doubt, incredibly challenging times are on the horizon.  In response, a lot of people are going to choose to complain bitterly and curse the darkness.  Others are going to respond with fear and will try to hide from the world as much as they can.  But I don’t think that either of those approaches is a good way to react to the problems that we will be facing.  Rather, I believe that the right choice is to be a light in the darkness and to try to make a difference.  As you will see below, there are many ways that this can be done.  You don’t have to be famous, or run for political office, or have a million dollars.  All that it takes is a willingness to reach out and love the one in front of you.  If all of us decided to do what we could to truly make a difference in the life of one other person, our nation would be a far better place.  The following are 5 people who made a conscious decision to shine a light in the darkness…

Kelly Nixon Mayr

It takes a lot of love and compassion to adopt a child into your own home.  When that child has special needs, it can be especially challenging.  That is why the story of Kelly Nixon Mayr is so inspiring.  Along with her husband, she has made a lifestyle out of helping children with special needs

Kelly Nixon Mayr of Colorado has birthed five children, adopted one troubled teen and fostered several special-needs infants. On Tuesday, she and husband Paul announced, through their family blog, that they had finalized their adoption of Angie, a 2-year-old who was born drug-exposed and clubfooted, whom they had fostered on and off since she was 1.

Now they are preparing for their next adoption—of Rita, an 8-year-old Eastern European orphan with arthrogryposis (a rare syndrome causing unbendable joints) and a case of post-traumatic stress disorder.

But Nixon Mayr, 45, who speaks about her close-knit brood with equal parts passion and humor, insists that she and her husband are not extraordinary.

“I yell at my kids, and I think one might have had Goldfish for breakfast the other day,” she tells Yahoo Shine with a laugh. “The only thing we are is willing.”

It takes a lot of money to raise those children.  Kelly and her husband could have used that money on a larger house, luxury cars and expensive vacations.  But instead, they willingly chose to live their lives in service to others.

Rahat

Younger Americans are capable of feats of great compassion as well.  For example, a YouTube personality known as “Rahat” could have easily ignored the homeless man that he would often see at the local shopping mall.  But instead, he decided to do something about it

On March 4, a YouTube magician and prankster name Rahat set aside his mischievous pranks to do something really kind for a homeless man he’d often seen hanging around his shopping mall.

He heard that the man named Eric was a “nice and respectable guy,” so he gave him a lottery ticket telling him it was a winner and that he should come to the shop and claim his prize. The store clerk was privy to the stunt and pretended the ticket was indeed a winner and handed over $1,000 in cash to the homeless gentleman.

Rahat, who had secretly given the clerk the cash to give to Eric recorded a video of how excited Eric was to “win” the money.

And thanks to Rahat’s YouTube video and fundraising efforts, a total of $42,000 has been raised for that homeless man, and his future is looking bright for the first time in a very long while.

Annie Hart

Sometimes it is an animal that desperately needs some love and compassion.  In this economic environment, there are a lot of people that are abandoning their pets, and there are a lot of homeless dogs and cats that are in a tremendous amount of pain right now.

That is why what people like Annie Hart are doing is so wonderful

When Annie Hart rescued a sick, homeless pit bull, not even she could have predicted the miraculous transformation the animal would undergo.

Hart is the executive director of the Bill Foundation and is no stranger to rescuing animals.

She ended up naming the pit bull Gideon. The dog was in such bad shape that he actually trembled at the sight of humans.

Doctors also discovered that Gideon was suffering from multiple severe bacterial and highly contagious fungal infections. He was put in quarantine.

As you watch the video of the transformation of this dog that I have posted below, you might just find yourself getting choked up over it…

Mark A. Mayo

How many of you would be willing to give your life so that someone else could live?

That is precisely what Master-at-Arms 2nd Class Mark A. Mayo recently did.  It is this kind of heroism that America desperately needs more of

Master-at-Arms 2nd Class Mark A. Mayo, 24, was killed during a shooting incident at Naval Station Norfolk Monday. Mayo was assigned to Naval Security Forces, Naval Station Norfolk.

Norfolk Naval Base commander Robert Clark said the young sailor sacrificed himself to save others.

“It was incredibly extraordinary,” says Clark.

The shooting happened around 11:20pm Monday night at Pier 1 onboard the USS Mahan.

Mark Mayo was protecting a sailor who first confronted a civilian intruder. That man, a truck driver, tried to board the destroyer Mahan. He disarmed the watch stander and then turned the watch stander’s gun at Mayo.

“He jumped into the way between the gunman and the petty officer of the watch. She fell to the ground. He covered her and he basically gave his life for hers,” says Clark.

“Doing that, that’s something he would do,” says Virgil Savage, a fellow sailor and close friend of Mayo. “He always stood up for the little guy.”

You can read more about Mayo’s incredible act of bravery right here.

Dan And Linda Catlin

It takes a very special individual to commit your entire life to serving the homeless.

But that is exactly what Pastor Dan Catlin and his wife Linda have been doing for many years.

The following is an excerpt from a profile of the Messiah’s Branch homeless ministry in Wichita, Kansas that was written by Jessiqua Wittman

Messiah’s Branch is a family-owned homeless ministry. Since the year 2000, Dan and Linda Catlin have been traveling an hour, at least twice a week, to help the homeless in the city of Wichita, Kansas.

When I was a teenager (before we were homeless ourselves), my family had the privilege of working with this family.

We’d arrive at the mission building (a renovated bar), around 12:30 on Tuesdays and Fridays. The homeless people of the city, usually about 50 to 70 of them, would already be trickling into the area. There are a lot more homeless people than that in Wichita. Those were just the people from the surrounding area that could walk there, and had no other ministry that they could go for food. Most churches (besides Messiah’s Branch) require identification before they feed people off the street, and oftentimes homeless people have lost their identification long ago, whether because of drugs, mugging, or police raids (many of the police in Wichita are very hostile towards homeless people).

When you serve the homeless, there are no vacations.  It is just a relentless battle against human pain and suffering.  To do this year after year, you have got to be driven by compassion…

Sister Linda can hold a knife and cut a potato at the same time, in the same hand! The whole time seasoning her stew and chatting and laughing with a young homeless couple that are hanging around the kitchen door, hungry for more than just food.

And Pastor Dan? What does he do? He takes some people to doctor’s appointments, some to the hospital. Sometimes he buys shoes, or makes sure they find a coat that will fit just right. The way I remember him most is being the resident jar-opener.

In the wintertime, when it reaches a certain temperature, Pastor Dan and Sister Linda open up the building full time. There are so many people that come, they lay them all side-by-side in rows on the floor. For a week sometimes, it’s like this.

I have personally talked to Pastor Dan and I know how hard he has worked to help the homeless of Wichita for so many years.

But the need just keeps getting greater.

All over the country, the middle class is shrinking and more people are falling into poverty.

We are going to need a lot more people like the ones you just read about above.

And you don’t have to do exactly what they are doing.  Find your own way to make a difference.  We all have different gifts, and together we can make this country a better place.

So make a conscious decision to shine a light in the darkness.

In the end, you will be glad that you did.

How QE3 Will Make The Wealthy Even Wealthier While Causing Living Standards To Fall For The Rest Of Us

The mainstream media is hailing QE3 as a great victory for the U.S. economy.  On nearly every news broadcast, the “talking heads” are declaring that Ben Bernanke’s decision to pump 40 billion dollars a month into our financial system is definitely going to help solve our economic problems.  The money for QE3 is being created out of thin air and this round of quantitative easing is going to be “open-ended” which means that the Federal Reserve is going to keep doing it for as long as they feel like it.  But is this really good for the average American on the street?  No way.  Despite two previous rounds of quantitative easing, median household income has still fallen for four years in a row, the employment rate has not bounced back since the end of the last recession, and new home sales have remained near record lows.  So what have the previous rounds of quantitative easing accomplished?  Well, they have driven up the prices of financial assets.  Those that own stocks have done very well the past couple of years.  So who owns stocks?  The wealthy do.  In fact, 82 percent of all individually held stocks are owned by the wealthiest 5 percent of all Americans.  Those that have invested in commodities have also done very nicely in recent years.  We have seen gold, silver, oil and agricultural commodities all do very well.  But that also means that average Americans are paying more for basic necessities such as food and gasoline.  So the first two rounds of quantitative easing made the wealthy even wealthier while causing living standards to fall for all the rest of us.  Is there any reason to believe that QE3 will be any different?

Of course not.

This time the Federal Reserve is focused on buying mortgage-backed securities.  Yes, the same financial garbage that helped cause the last crisis.  The Fed plans to gobble up tens of billions of dollars of that trash every month from now on.

But will the Fed pay true market value for those mortgage-backed securities?  If you believe that, I have a bridge to sell you.

So this is going to be a huge windfall for some people, and that does not include us.

Not a single penny of this 40 billion dollars a month will go directly into our hands.  The theory is that it will “filter down” to us eventually.

But that hasn’t happened with previous rounds of quantitative easing.

So where does the money go?

A recent CNBC article discussed a very interesting report from the Bank of England about the effects of quantitative easing….

It said that the Bank of England’s policies of quantitative easing – similar to the Fed’s – had benefited mainly the wealthy.

Specifically, it said that its QE program had boosted the value of stocks and bonds by 26 percent, or about $970 billion. It said that about 40 percent of those gains went to the richest 5 percent of British households.

Many said the BOE’s easing added to social anger and unrest. Dhaval Joshi, of BCA Research wrote that  “QE cash ends up overwhelmingly in profits, thereby exacerbating already extreme income inequality and the consequent social tensions that arise from it.”

Wow.

Who benefits from quantitative easing?

According to the Bank of England, it is “mainly the wealthy” who benefit.

As I noted the other day, Donald Trump said essentially the same thing when he told  CNBC the following….

“People like me will benefit from this.”

As I already discussed above, a lot of quantitative easing money gets into the financial markets where it pumps up the prices of financial assets.

But not all of it goes there.

We were told that the whole idea behind quantitative easing was that it was supposed to get banks lending again, but this has not happened.  Instead, banks are sitting on unprecedented amounts of money.  Just look at how the first two rounds of quantitative easing have caused excess reserves being held by banks to explode from close to zero to over 1.5 trillion dollars….

Of course one of the biggest problems is that the Federal Reserve is still paying banks not to lend money.

Yes, you read that correctly.

The Federal Reserve is paying banks to park money with them.  So instead of risking their money by lending it out to us, the banks can just park it at the Fed and make risk-free profits for as long as they want.

Must be nice.

If the Federal Reserve really wanted banks to start lending again, all the Fed has to do is to stop paying banks not to lend money.

But of course if more than 1.5 trillion dollars suddenly started flooding into our economy (especially after you consider the multiplier effect) we would be dealing with nightmarish inflation unlike anything we have ever seen before.

So if you want to know why inflation was not even worse after QE1 and QE2 it is because more than a trillion and a half dollars is being parked with the Fed.

So did QE1 and QE2 do any good for average Americans?

Let’s go to the charts.

This first chart shows that the percentage of working age Americans with a job has stayed extremely flat since the end of the last recession.

Does it look like QE1 and QE2 made a difference to you?  I don’t see any difference….

Okay, but what about new home sales?

Did QE1 and QE2 help them?

Nope….

But the mainstream media is still buying the baloney the Fed is pushing.

The mainstream media is promising us that home sales will soon rise and that lots of new jobs are on the way.

Sadly, the truth is that things have steadily gotten worse for average Americans over the past 4 years despite all of the money printing the Fed has been doing.  If you doubt this, just read this article.

But this is all that Ben Bernanke seems to have left.  When printing money doesn’t work, his answer is to print even more money.

QE3 is likely to cause agricultural commodities and the price of oil to rise even further.

So unless you can convince your employer to give you a corresponding raise, this is going to mean that your paychecks are not going to go as far as they did before.

And so that means a lower standard of living.

In a recent article, Bruce Krasting issued an ominous warning….

Higher inflation expectations in the US will filter around the globe. Post the extraordinary steps Ben took yesterday, people will be stocking up on “stuff”. Things like rice, flour, cooking oil, soy, wheat and sugar. If you can eat it, buy it now. It will be more expensive in a month. While your at it, fill up the gas tank, the price is going up next week and every week for the next few months.

In addition, the policy of the Federal Reserve of keeping interest rates as low as possible is absolutely crippling the finances of many retirees.  Even the former president of the Federal Reserve Bank of Atlanta, William F. Ford, recognizes this….

One of the overlooked consequences of the Federal Reserve’s recent rounds of monetary stimulus is the adverse impact those policies have had on the interest income of savers. The prolonged and abnormally low interest-rate structure put in place by the Fed has made life particularly difficult for retirees and others who depend on conservative interest-sensitive investments. But the negative effects do not stop there. They spillover into the overall performance of the economy.

Just about everything that the Federal Reserve does these days is bad for ordinary Americans.

But the Fed is not going to stop.  The Fed is addicted to money printing now, and as a recent article by Peter Schiff explained, the Fed is just going to “up the dosage” until it gets what it wants….

The Fed will try to conjure a recovery on the backs of currency debasement. It will not stop or alter from this course. If the economy fails to respond to the drugs, Bernanke will simply up the dosage. In fact, he is so convinced we will remain dependent on quantitative easing that he explicitly said he won’t turn off the spigots even if things noticeably improve.

This is complete and total incompetence by Ben Bernanke and his cohorts over at the Fed.

Economist Marc Faber believes that Ben Bernanke should resign, and I agree with him….

“If I had messed up as badly as Bernanke I would for sure resign. The mandate of the Fed to boost asset prices and thereby create wealth is ludicrous — it doesn’t work that way. It’s a temporary boost followed by a crash.”

And yes, a crash is coming.

Bernanke can try to put it off for a while, but every action he takes is just making the eventual crash even worse.

And some in the financial community clearly recognize this.  For example, credit rating agency Egan-Jones downgraded the credit rating of the United States to AA- on Friday.

The primary reason they gave for the downgrade was QE3.

Ben Bernanke and the Federal Reserve are destroying the U.S. dollar and destroying our financial system for a short-term economic sugar high.

It is utter insanity.

That is why we desperately need to get the American people educated about the Federal Reserve system.  It is at the very heart of our economic problems and yet neither major political party is willing to blame the Fed for the problems that it is causing.

A bunch of unelected bankers that are not accountable to the American people are running our economy into the ground and the American people do not even realize what is happening.

Please share this article with as many people as you can.  Hopefully we can get the American people to understand that more money printing is definitely not the solution to our problems.

Bad News

The bad news about the economy just keeps rolling in.  If this is an economic recovery, what in the world is the next “recession” going to look like?  Today there was another huge truckload of bad economic news.  The stock market had another 400 point “correction”, applications for unemployment benefits are up again, inflation is higher than expected, home sales have dropped again and Europe is coming apart at the seams.  The financial markets have been in such a state of chaos recently that days like today don’t even seem “unusual” anymore.  But we should all be alarmed at what is happening.  We haven’t seen anything quite like this since the darkest days of 2008 and 2009.  If more bad news keeps pouring in, we may soon have a very real panic on our hands.

I would have thought that my article yesterday, “20 Signs That The World Could Be Headed For An Economic Apocalypse In 2012“, would have contained enough bad economic news to last for a while.  But today there was another huge bumper crop of depressing numbers.

Are you ready for the carnage?

*The Dow fell 419 points today.  That was a 3.7% drop.  The S&P 500 shot down 4.5% and the Nasdaq plummeted by a whopping 5.2%.

*European bank stocks got absolutely hammered.

*The number of Americans applying for unemployment benefits jumped back above 400,000 last week.

*The recent inflation numbers have really taken analysts by surprise.  The consumer price index rose at a 6.0% annual rate during the month of July. As I mentioned yesterday, the producer price index in the U.S. has increased at an annual rate of at least 7.0% for the last three months in a row.

So now we have high unemployment and high inflation.  Oh goody!  All of this stagflation is almost enough to make one nostalgic for the 1970s.

*The housing market is getting even worse.  According to the National Association of Realtors, sales of previously owned homes dropped 3.5 percent during July.  That was the third decline in the last four months.  Sales of previously owned homes are even lagging behind last year’s pathetic pace. Mortgage rates are now the lowest they have been since the 1950s, but there are very few interested buyers in the marketplace.

*The Philadelphia Fed’s latest survey of regional manufacturing activity was absolutely nightmarish….

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, decreased from a slightly positive reading of 3.2 in July to -30.7 in August. The index is now at its lowest level since March 2009

*Morgan Stanley now says that the U.S. and Europe are “hovering dangerously close to a recession” and that there is a good chance we could enter one at some point in the next 6 to 12 months.

All of this bad news is sending the price of gold through the roof.  The price of gold soared to a brand new all-time high of $1,829.70 an ounce on Thursday morning.  So far, the price of gold is up almost 30 percent in 2011.

Meanwhile, millions of average American families are deeply suffering and are desperately hoping that things won’t get even worse.  Everywhere you turn, there is a tremendous amount of stress in the air.

According to the New York Times, 25 million Americans “could not find full-time jobs last month”.

As the economy crumbles, good paying full-time jobs are becoming increasingly scarce.  People are hurting and they are looking for leadership.

Well, Barack Obama is running around the country promising that he will unveil some “solutions” very shortly.

So what are those solutions going to include?  Well, the plans are still in the development stage, but the Obama administration is reportedly considering the following….

-The creation of a new government agency that will be dedicated to job creation.  This will entail more government spending and more government paper pushers, but it will probably not do much to create good paying full-time jobs.

-Pushing even more free trade agreements through Congress.  That way even more of our good jobs can be shipped to countries on the other side of the globe where paying slave wages to workers is still legal.

-A “reverse boot camp” that will train military veterans for civilian jobs.  That sounds like a good idea, but we already have millions and millions of highly trained Americans that can’t get jobs.

-An extension of the payroll tax cut for at least another year.  That will put more money into the pockets of U.S. workers, but it will also mean less revenue for the federal government.  The existing payroll tax cut has not exactly resulted in a “jobs boom”, but removing that tax cut is certainly not going to help the economy either.

-An extension of long-term unemployment benefits.  Yes, that will help the unemployed survive and will give them some money to spend into the economy, but it will not create many jobs for them.  Plus it will put the government into even more debt.

-The creation of an infrastructure bank.  Like most of the proposals above, this will entail even more government spending.  I know that a “shovel-ready” joke is called for about now, but I can’t think of one at the moment.

The ironic thing is that Barack Obama is riding around on his multistate “jobs tour” in a $1.2 million bus that was made in Canada.

You just can’t make this stuff up.

Things have gotten so bad out there that even Wal-Mart is suffering now.  Sales at Wal-Mart stores that have been open for at least a year have fallen for nine quarters in a row.

Not that anyone should have much sympathy for Wal-Mart, but it is a sign of just how bad things are getting out there.

So is there much hope for the future?  Well, considering the fact that only 32 percent of 15-year-olds in the United States are proficient in math, things don’t look good.

Our education system is a joke, tens of thousands of factories have already closed, more are closing every day, millions of jobs have been shipped overseas and most of our politicians are either incompetent or corrupt (or both).

So you would think that with all of our problems, authorities would be focused on the big issues.

But no, time after time they just keep picking on average Americans.

For example, a woman that lives in the Salem, Oregon area that is fighting terminal bone cancer tried to raise some money for her medical bills by holding a few garage sales on the weekends.

Well, the authorities in Salem got wind of this and now they are shutting her down.

This is absolutely unbelievable.  A video news report about this incident is posted below….

Massive fraud and corruption at the big banks caused a worldwide financial crisis in 2008 and yet not a single Wall Street executive has gone to prison because of it.

Yet a cancer-stricken lady tries to hold a few yard sales to pay her bills and authorities come down on her like a ton of bricks.

Does that seem fair to you?

Our world is getting crazier every day.  The bad news is going to keep pouring in.  Global financial markets are being held together with chicken wire and duct tape.  At some point the pyramid of corruption and con games is going to come crashing down.

If you still have faith in the system, you are not very wise.  We are heading for an economic collapse that will be absolutely unprecedented, and you need to be getting prepared.