Can Donald Trump turn the U.S. economy around? This week Trump unveiled details of his new economic plan, and the mainstream media is having a field day criticizing it. But the truth is that we simply cannot afford to stay on the same path that Barack Obama, Hillary Clinton and the Democrats have us on right now. Millions of jobs are being shipped out of the country, the middle class is dying, poverty is exploding, millions of children in America don’t have enough food, and our reckless spending has created the biggest debt bubble in the history of the planet. Something must be done or else we will continue to steamroll toward economic oblivion. So is Donald Trump the man for the hour?
If you would like to read his full economic plan, you can find it on his official campaign website. His plan starts off by pointing out that this has been the weakest “economic recovery” since the Great Depression…
Last week’s GDP report showed that the economy grew a mere 1.2% in the second quarter and 1.2% over the last year. It’s the weakest recovery since the Great Depression – the predictable consequence of massive taxation, regulation, one-side trade deals and onerous energy restrictions.
And Trump is exactly right about how weak this economic recovery has been.
So how would he fix things?
The following are 10 things that every American should know about Donald Trump’s plan to save the U.S. economy…
#1 Donald Trump would lower taxes on the middle class
The tax savings under Trump’s plan would actually be quite substantial for middle class families. The following numbers come from a recent Charisma article…
• A married couple earning $50,000 per year with two children and $8,000 in child care expenses will save 35% from their current tax bill.
• A married couple earning $75,000 per year with two children and $10,000 in child care expenses will receive a 30% reduction in their tax bill.
• Married couple earning $5 million per year with two children and $12,000 in child care expenses will get only a 3% reduction in their tax bill.
#2 Donald Trump would lower taxes on businesses
Under his plan, no business in America would be taxed more than 15 percent. Alternatively, Hillary Clinton’s plan would tax some small businesses at a rate of close to 50 percent. So Trump’s plan would undoubtedly be good for businesses, and it would encourage many that have left the country to return.
But where would the lost tax revenue be made up?
#3 Childcare expenses would be exempt from taxation
For working families with children this would be a great blessing. Without a doubt this is an effort to win over more working women, and this is a demographic that Trump has been struggling with.
It is definitely an idea that I support, but once again where will the money come from to pay for this?
#4 U.S. manufacturers will be allowed to immediately fully expense new plants and equipment
This would undoubtedly lead to a boom in capital investment, but it would also reduce tax revenue. As an emergency measure this would be very good for encouraging manufacturers to stay in America, but it would also likely increase the budget deficit.
#5 A temporary freeze on new regulations
Red tape is one of my big pet peeves, and so I greatly applaud Trump for this proposal. I think that Bob Eschliman put it very well when he wrote the following about Trump’s planned freeze on new regulations…
In 2015 alone, federal agencies issued over 3,300 final rules and regulations, up from 2,400 the prior year. Studies show that small manufacturers face more than three times the burden of the average U.S. business, and the hidden tax from ineffective regulations amounts to “nearly $15,000 per U.S. household” annually. Excessive regulation is costing our country as much as $2 trillion dollars per year, and Trump will end it.
#6 All existing regulations would be reviewed and unnecessary regulations would be eliminated
In particular, Trump’s plan would focus on getting rid of regulations that inhibit hiring. The following are some of the specific areas that he identifies on his official campaign website…
- The Environmental Protection Agency’s Clean Power Plan, which forces investment in renewable energy at the expense of coal and natural gas, raising electricity rates;
- The EPA’s Waters of the United States rule, which gives the EPA the ability to regulate the smallest streams on private land, limiting land use; and
- The Department of Interior’s moratorium on coal mining permits, which put tens of thousands of coal miners out of work.
#7 Donald Trump would fundamentally alter our trade relationships with the rest of the globe
Donald Trump is the first major party nominee in decades to recognize that our trade deficit is absolutely killing our economy. I write about this all the time, and it is a hot button issue for me. So I definitely applaud Trump for proposing the following…
- Appoint trade negotiators whose goal will be to win for America: narrowing our trade deficit, increasing domestic production, and getting a fair deal for our workers.
- Renegotiate NAFTA.
- Withdraw from the TPP.
- Bring trade relief cases to the world trade organization.
- Label China a currency manipulator.
- Apply tariffs and duties to countries that cheat.
- Direct the Commerce Department to use all legal tools to respond to trade violations.
#8 Donald Trump’s plan would be a tremendous boost for the U.S. energy industry
Barack Obama promised to kill the coal industry, and that is one of the few promises that he has actually kept. Obama also killed the Keystone Pipeline, and right now the energy industry as a whole is enduring their worst stretch since the last recession. To turn things around, Trump would do the following…
- Rescind all the job-destroying Obama executive actions including the Climate Action Plan and the Waters of the U.S. rule.
- Save the coal industry and other industries threatened by Hillary Clinton’s extremist agenda.
- Ask Trans Canada to renew its permit application for the Keystone Pipeline.
- Make land in the Outer Continental Shelf available to produce oil and natural gas.
- Cancel the Paris Climate Agreement (limit global warming to 2 degrees Celsius) and stop all payments of U.S. tax dollars to U.N. global warming programs.
#9 Trump would repeal Obamacare
Trump claims that Obamacare would cost our economy two million jobs over the next ten years. And without a doubt, it has already cost the U.S. economy a lot of jobs.
Not only that, but Obamacare has also sent health insurance premiums soaring, and this is putting a tremendous amount of financial pressure on many families.
Trump says that he would “replace” Obamacare, but that is a rather vague statement.
What exactly would he replace it with?
#10 Trump’s plan says nothing about the Federal Reserve
This is a great concern, because the Federal Reserve has far more power over the economy than anyone else does. It is at the very heart of our debt-based system, and unless something is done about the Fed our debt bubble will continue to get even larger.
Since the Federal Reserve was created in 1913, the value of the U.S. dollar has fallen by more than 96 percent and our national debt has gotten more than 5000 times larger. For Trump to not even mention the Federal Reserve in his economic plan is a tremendous oversight.
We are in the midst of a long-term economic decline, and things have not gotten better during the Obama years. If you can believe it, a study that was just released by Harvard even acknowledges this…
America’s economic performance peaked in the late 1990s, and erosion in crucial economic indicators such as the rate of economic growth, productivity growth, job growth, and investment began well before the Great Recession.
Workforce participation, the proportion of Americans in the productive workforce, peaked in 1997. With fewer working-age men and women in the workforce, per-capita income for the U.S. is reduced.
Median real household income has declined since 1999, with incomes stagnating across virtually all income levels. Despite a welcome jump in 2015, median household income remains below the peak attained in 1999, 17 years ago. Moreover, stagnating income and limited job prospects have disproportionately affected lower-income and lower-skilled Americans, leading inequality to rise.
That same study found that the percentage of Americans participating in the labor force peaked back in 1997 and has been steadily declining since that time…
If we continue to do the same things, we will continue to get the same results.
Donald Trump is promising change, and many of his proposals sound good, but there are also some areas to be concerned about.
Ultimately, just tinkering with the tax code and reducing regulations is not going to be enough to turn the U.S. economy around. We need a fundamental overhaul of our economic and financial systems, and Trump’s plan stops well short of that. But without a doubt what he is proposing is vastly superior to Hillary Clinton’s plan, and so he should definitely be applauded for at least moving in the right direction.
Why are so many men in their prime working years unemployed? The Obama administration would have us believe that unemployment is low in this country, but that is not true at all. In fact, one author quoted by NPR says that “it’s kind of worse than it was in the depression in 1940″. Most Americans don’t realize this, but more men from ages 25 to 54 are “inactive” right now than was the case during the last recession. We have millions upon millions of strong young men just sitting around doing nothing. They aren’t employed and they aren’t considered to be looking for employment either, and so they don’t show up in the official unemployment numbers. But they don’t have jobs, and nothing the Obama administration does can eliminate that fact.
According to NPR, “nearly 100 percent of men between the ages of 25 and 54 worked” in the 1960s.
In those days, just about any dependable, hard working American man could get hired almost immediately. The economy was growing and the demand for labor was seemingly insatiable.
But today, one out of every six men in their prime working years does not have a job…
In a recent report, President Obama’s Council of Economic Advisers said 83 percent of men in the prime working ages of 25-54 who were not in the labor force had not worked in the previous year. So, essentially, 10 million men are missing from the workforce.
“One in six prime-age guys has no job; it’s kind of worse than it was in the depression in 1940,” says Nicholas Eberstadt, an economic and demographic researcher at American Enterprise Institute who wrote the book Men Without Work: America’s Invisible Crisis. He says these men aren’t even counted among the jobless, because they aren’t seeking work.
So why is this happening?
If you look at the inactivity rate for men in the 25 to 54 age bracket, it was sitting at just 8.1 percent in January 2000.
In January 2008, right at the beginning of the last recession, it was sitting at 9.2 percent, and by the end of the recession it had risen to 10.3 percent.
Today, it is sitting at 11.5 percent.
Remember, these are men that don’t even count toward the official unemployment rate. They are not working, but they are not considered to be “looking for work” either.
So what are these men doing?
You may be tempted to think that many of them have decided to stay home and raise the kids as their wives go off to work. But according to NPR, that is not what is happening…
What the missing men aren’t doing in large numbers is staying home to take care of family. Forty percent of nonworking women are primary caregivers; that’s true of only 5 percent of men out of the workforce.
We do have the largest prison population in the entire world by far, and without a doubt that does play a role in these numbers. However, a far bigger factor is the millions of men that have become content being dependents of the federal government. More than 100 million Americans receive money from the government each month, and a lot of people (both men and women) have found that it is just easier to sit back and collect government checks than it is to go out and try to work hard for a living.
But of course the number one factor is the lack of jobs available. I personally know people that have been looking for work in their fields for years and have not been able to get hired. We have a major employment crisis in this nation, and it is only going to get worse in the years ahead as we continue to lose jobs to technology and millions more good jobs get shipped overseas.
And a lot of the “jobs” that have been created during the Obama administration have been very low quality jobs. Since December 2014, we have gained about half a million jobs for waiters and bartenders, but meanwhile we have actually lost good paying manufacturing jobs. If we continue down this road, the middle class will continue to shrink.
In addition to everything that I have just shared, here are some other facts that are pertinent to this discussion…
-Right at this moment, there are approximately 102 million working age Americans that do not have a job.
-Nearly one out of every five young adults are currently living with their parents.
-The Wall Street Journal recently declared that this is the weakest “economic recovery” since 1949.
-Barack Obama is on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least 3 percent.
The economy is far weaker than you are being told, the employment crisis is far worse than you are being told, and as I mentioned yesterday, the stage is clearly set for a new financial crisis of epic proportions.
And if we are going to see markets crash, this time of the year is a good time for it. In fact, CNBC says that history tells us that this is the “worst period of the year for stocks”…
The worst period of the year for stocks has just begun — at least based on market history.
Over the entire 120-year history of the Dow Jones industrial average, Sept. 6 to Oct. 29 tends to be the worst period for the market. And more specifically, the last few weeks of September have been an especially bad time.
Someday when people look back at this time in history, they will not be surprised by how horrific the coming collapse will be. The truth is that anyone with a lick of common sense can see that the greatest debt bubble in the history of the world is going to end badly.
No, what is going to amaze them is that the system was able to hold together as long as it did. It truly is incredible that the debt-based, fiat currency Ponzi scheme that the central banks of the world have been desperately trying to prop up has been able to keep chugging along all the way to the middle of 2016.
How much longer can they keep the magic going?
I don’t know, but history tells us that time is not on their side…
Happy days are here again? On Friday, the mainstream media was buzzing with the news that the U.S. economy had added 255,000 jobs during the month of July. But as you will see below, the U.S. economy did not add 255,000 jobs during the month of July. In fact, without an extremely generous “seasonal adjustment”, the number of jobs added during the month of July would not have even kept up with population growth. But the pretend number sounds so much better than the real number, and so the pretend number is what is being promoted for public consumption.
Why doesn’t the government ever just tell us the plain facts? Unfortunately, we live at a time when “spin” is everything, and just about everyone in the mainstream media seemed quite pleased with the “good jobs report” on Friday. However, as Zero Hedge has pointed out, the truth is that the “unadjusted” numbers tell a very different story…
As Mitsubishi UFJ strategist John Herrmann wrote in a note shortly after the report, the “jobs headline overstates” strength of payrolls. He adds that the unadjusted data show a “middling report” that’s “nowhere as strong as the headline” and adds that private payrolls unadjusted +85k in July vs seasonally adjusted +217k.
In Herrmann’s view, the government applied a “very benign seasonal adjustment factor upon private payrolls to transform a soft private payroll gain into a strong gain.”
He did not provide a reason why the government would do that.
Every month, the U.S. economy must create at least 150,000 new jobs just to keep up with population growth. According to the unadjusted numbers, we did not hit that threshold, and so the employment situation in this country actually got worse last month.
In America today, there are 7.8 million Americans that are considered to be officially unemployed, and another 94.3 million working age Americans that are considered to be “not in the labor force”.
When you add those two numbers together, you get a grand total of 102 million working age Americans that do not have a job right now.
Rather than focusing on the headline “unemployment” figure, we get a much fairer look at the employment crisis in the United States when we examine the employment-population ratio. The following chart comes directly from the Bureau of Labor Statistics, and it shows that the percentage of Americans that are employed has never even come close to getting back to where it was just prior to the last recession…
Over the past couple of years we have seen a slight bump in this number, and that is good, but normally after a recession ends the employment-population ratio goes back to at least as high as it was before. Unfortunately, this has not happened after the last two recessions. The following comes from Wolf Richter…
The ratio always drops during recessions, but before 2001, it always climbed to higher highs during the recoveries. The 2001 recession and subsequent recovery changed this. For the first time, the ratio never fully recovered, never got even close to fully recovering. That was a new phenomenon: employment growth could no longer keep up with population growth.
When the Great Recession hit, the ratio plunged from its lower starting point at the fastest pace on record (going back to 1948). The Fed’s efforts were all focused exclusively on bailing out bondholders, re-inflating the stock market, re-inflating the housing market, and generally creating what had become the official Fed policy at the time, the Wealth Effect (here’s Bernanke himself explaining it). This has re-inflated asset prices – many of them way beyond their prior bubble peaks.
But the Fed’s astounding focus on capital accelerated the already changing dynamics of the economy, at the expense of labor.
Even the Wall Street Journal admits that we are in the weakest “economic recovery” since 1949, and now there are lots of signs that we have entered a brand new economic downturn. Here are just a few examples from Chad Shoop…
- Ford, GM and Chrysler — three of the U.S.’ largest auto companies — reported sales for July that missed estimates: down 3%, 1.9% and up 0.3%, respectively.
- Delta Airlines, one of the largest airlines in the world, said revenue fell 7% in July as part of its monthly performance update.
- Macy’s, the biggest department store company, reported a decline in sales for July, leading to more aggressive markdowns and an industry-wide sell-off.
And lots of ominous signs continue to pop up on Wall Street as well. For one thing, the Libor rate has surged to the highest level since the last financial crisis. If you are not familiar with Libor, here is a pretty good explanation of it from Business Insider…
The Libor, or London Interbank Offered Rate, measures the interest rate at which banks lend to each other at different durations, and its sharp jump was a harbinger of the financial crisis.
And according to that same article, the Libor rate is now the highest that we have seen since early 2009…
In the past month, the Libor rate has spiked to rates not seen since the first quarter of 2009, the heart of the banking meltdown.
Not to mention, the spread between the Libor and the Overnight Index Swap rate, which tracks the lending rate from the Federal Reserve, has widened, another potentially worrying sign.
But of course I have been quoting facts and figures like this for months, and yet U.S. financial markets continue to hold it together.
There are literally dozens of parallels between the global financial crisis of 2008 and what is happening in 2016, but Wall Street continues to defy the laws of economics.
Of course it won’t last forever, but it certainly has been a sight to behold.
And I am certainly not alone in my analysis. As I noted the other day, DoubleLine Capital CEO Jeffrey Gundlach is entirely convinced that stocks “should be down massively”…
“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”
For the moment, investors continue to pay extremely irrational prices for stocks, and the mainstream media is just giddy about the state of the economy.
So let us enjoy this very strange period of stability for however much longer it lasts, but let us also protect ourselves from the horrible crash that will inevitably follow.
What you are about to see is major confirmation that a new economic downturn has already begun. Last Friday, the government released the worst jobs report in six years, and that has a lot of people really freaked out. But when you really start digging into those numbers, you quickly find that things are even worse than most analysts are suggesting. In particular, the number of temporary jobs in the United States has started to decline significantly after peaking last December. Why this is so important is because the number of temporary jobs started to decline precipitously right before the last two recessions as well.
You see, when economic conditions start to change, temporary workers are often affected before anyone else is. Temporary workers are easier to hire than other types of workers, and they are also easier to fire.
In this chart, you can see that the number of temporary workers peaked and started to decline rapidly before we even got to the recession of 2001. And you will notice that the number of temporary workers also peaked and started to decline rapidly before we even got to the recession of 2008. This shows why the temporary workforce is considered to be a “leading indicator” for the U.S. economy as a whole. When the number of temporary workers peaks and then starts to fall steadily, that is a major red flag. And that is why it is so incredibly alarming that the number of temporary workers peaked in December 2015 and has fallen quite a bit since then…
In May, the U.S. economy lost another 21,000 temporary jobs, and overall we have lost almost 64,000 since December.
If a new economic downturn had already started, this is precisely what we would expect to see. The following is some commentary from Wolf Richter…
Staffing agencies are cutting back because companies no longer need that many workers. Total business sales in the US have been declining since mid-2014. Productivity has been crummy and getting worse. Earnings are down for the fourth quarter in a row. Companies see that demand for their products is faltering, so the expense-cutting has started. The first to go are the hapless temporary workers.
Another indicator which is pointing to big trouble for American workers is the Fed Labor Market Conditions Index. Just check out this chart from Zero Hedge, which shows that this index has now been falling on a month over month basis for five months in a row. Not since the last recession have we seen that happen…
Of course I have been warning about this new economic downturn since the middle of last year. U.S. factory orders have now been falling for 18 months in a row, job cut announcements at major companies are running 24 percent higher up to this point in 2016 than they were during the same time period in 2015, and just recently Microsoft said that they were going to be cutting 1,850 jobs as the market for smartphones continues to slow down.
As I have been warning for months, the exact same patterns that we witnessed just prior to the last major economic crisis are playing out once again right in front of our eyes.
Perhaps you have blind faith in Barack Obama, the Federal Reserve and our other “leaders”, and perhaps you are convinced that everything will turn out okay somehow, but there are others that are doing what they can to get prepared in advance.
It may surprise you to learn that George Soros is one of them.
According to recent media reports, George Soros has been selling off investments like crazy and has poured tremendous amounts of money into gold and gold stocks…
Maybe the best argument in favor of gold is that American legendary investor and billionaire George Soros has recently sold 37% of his stock and bought a lot more gold and gold stocks.
“George Soros, who once called gold ‘the ultimate bubble,’ has resumed buying the precious metal after a three-year hiatus. On Monday, the billionaire investor disclosed that in the first quarter he bought 1.05 million shares in SPDR Gold Trust, the world’s biggest gold exchanged-traded fund, valued at about $123.5 million,” Fortune and Reuters reported Tuesday.
George Soros didn’t make his fortune by being a dummy.
Obviously he can see that something big is coming, and so he is making the moves that he feels are appropriate.
If you are waiting for some type of big announcement from the government that a recession has started, you are likely going to be waiting for quite a while.
How it usually works is that we are not told that we are in a recession until one has already been happening for an extended period of time.
For instance, back in mid-2008 Federal Reserve Chairman Ben Bernanke insisted that the U.S. economy was not heading into a recession even though we found out later that we were already in one at the moment Bernanke made that now infamous statement.
On my website, I have been documenting all of the red flags that are screaming that a new recession is here for months.
You can be like Ben Bernanke in 2008 and stick your head in the sand and pretend that nothing is happening, or you can honestly assess the situation at hand and adjust your strategies accordingly like George Soros is doing.
Of course I am not a fan of George Soros at all. The shady things that he has done to promote the radical left around the globe are well documented. But they don’t call people like him “the smart money” for no reason.
Down in Venezuela, the economic collapse has already gotten so bad that people are hunting dogs and cats for food. For most of the rest of the world, things are not nearly that bad, and they won’t be that bad for a while yet. But without a doubt, the global economy is moving in a very negative direction, and the pace of change is accelerating.
Those that are wise have already been getting prepared, and those that are convinced that everything is going to be just fine somehow have not been getting prepared.
In the end, most people end up believing exactly what they want to believe, and we are not too far away from the time when those choices are going to have very severe consequences.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
This is exactly what we have been expecting to happen. On Friday, the Bureau of Labor Statistics announced that the U.S. economy only added 38,000 jobs in May. This was way below the 158,000 jobs that analysts were projecting, and it is also way below what is needed just to keep up with population growth. In addition, the number of jobs created in April was revised down by 37,000 and the number of jobs created in March was revised down by 22,000. This was the worst jobs report in almost six years, and the consensus on Wall Street is that it was an unmitigated disaster.
The funny thing is that the Obama administration says that the unemployment rate actually went down last month. Almost every month since Obama has been in the White House, large numbers of Americans that have been unemployed for a very long time are shifted from the “unemployment” category to the “not in the labor force” category. This has resulted in a steadily falling “unemployment rate” even though the percentage of the population that is actually working has not changed very much at all since the depths of the last recession.
The Bureau of Labor Statistics claims that the number of Americans “not in the labor force” increased by 664,000 from April to May. If you believe that, I have a giant bridge on the west coast that I would like to sell you. The labor force participation rate is now down to 62.6, and it is hovering just above a 38 year low.
When you add the number of working age Americans that are “officially unemployed” (7.4 million) to the number of working age Americans that are considered to be “not in the labor force” (an all-time record high of 94.7 million), you get a grand total of 102.1 million working age Americans that do not have a job right now.
This is not a game.
So far in 2016, three members of my own extended family have lost their jobs.
According to Challenger, Gray & Christmas, layoffs at major firms are running 24 percent higher up to this point in 2016 than they were during the same time period in 2015.
It was only a matter of time before those layoffs started showing up in the official employment numbers, and I fully expect that this trend will accelerate in the months ahead.
And here are some other brand new numbers for you to consider…
-Since Barack Obama entered the White House, 14,179,000 Americans have “left the labor force” according to the Bureau of Labor Statistics.
-The quality of our jobs continues to deteriorate. In May, 59,000 full-time jobs were lost, but 118,000 part-time jobs were gained.
-Since September 2014, 207,000 mining jobs have been lost.
-We just learned that U.S. factory orders have declined once again. This marks the 18th month in a row that this has taken place, and we have never seen such an extended decline outside of a major recession.
-JPMorgan’s “recession indicators” have just soared to the highest level that we have seen since the last recession.
Needless to say, the financial community is pretty horrified by all of this news. They were expecting a much better jobs report, and many of them are not hiding their disappointment. Here is one example from the Wall Street Journal…
“This was an unqualified dud of a jobs report,” said Curt Long, chief economist at the National Association of Federal Credit Unions, noting “the unemployment rate fell, but for the wrong reason as labor force participation declined for the second consecutive month.”
And here is another example that comes from David Donabedian, the chief investment officer at Atlantic Trust Wealth Management…
“We can’t find a positive nugget in today’s job report. If we were looking for signs of strength in this report, there is nothing to hang onto here.”
But of course the mainstream media is doing their best to put a positive spin on these numbers. For instance, CNN just published a laughable article entitled “America’s economy is stronger than weak jobs report“.
And the White House insists that this new employment report really isn’t that big of a deal…
The White House doesn’t get “too disappointed” over the number of unemployed and underemployed Americans.
“I’ve been reacting to jobs numbers here at the White House for more than seven years, and what is true today has been true in the past, which is, we don’t get too excited when jobs numbers are better than expected and we don’t get too disappointed when jobs numbers one-month are lower than expected,” White House Press Secretary Josh Earnest told CNBC.
But of course the truth is that it is a really big deal. We just received major confirmation that the U.S. economy has slipped into recession mode.
For months, I have been writing about how virtually every other indicator has been screaming that a new economic crisis had already begun.
But the employment numbers had remained fairly decent up until now. Employment is typically considered to be a “lagging indicator”, which means that it isn’t one of the first places we would expect to see signs of a recession show up. However, it is inevitable that the official unemployment numbers will reflect an economic downturn eventually, and that is what we are starting to see now.
What this means is that you probably have even less time to get prepared for what is ahead than you may have originally thought.
The U.S. economy has already entered the early chapters of the next great economic crisis, and most of the population is going to be caught totally off guard and will suffer tremendously.
If our leaders had made better decisions since the last crisis, things could have turned out differently. But instead, they continued to conduct business as usual, and now we will reap what they have sown.
*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*
What can you do when you are working 60 hours a week at three part-time jobs and it is still not enough? In America today, many people have taken on more than one job in a desperate attempt to make ends meet, but they still come up short at the end of the month. And those that are actually working are the fortunate ones, because in one out of every five families in the United States nobody has a job. There are more than 100 million working age Americans that are currently not employed (yes this is true), and as I pointed out yesterday, job cut announcements by major firms are currently running 24 percent ahead of last year’s pace. But unemployment is just part of the overall problem. There is this growing misconception out there that if you “have a job” that you must be doing okay. Unfortunately for the growing number of “working poor” in America, that is not true at all.
Just consider the case of 55-year-old Erlinda Delacruz. At one time she had a good full-time manufacturing job, but then her factory closed down. Millions of other Americans have also seen their good paying jobs sent out of the country in recent years, and yet our politicians refuse to do anything about it. Today, she works 60 hours a week at three different part-time jobs and she still makes less than she once did at the manufacturing plant…
For 15 years, Erlinda Delacruz had a full-time manufacturing job in rural Winters, Texas.
It gave her health benefits and four weeks of paid vacation along with a salary that supported a good life. Then the rug was pulled from under her in 2009, when the plant closed. Since then, it’s been a battle of survival as Delacruz worked a string of part-time jobs. Last summer, she even lost her home to foreclosure.
Delacruz, 55, still works part-time. Except at three different places — Monday through Wednesday she works eight hours a day at a senior citizens center serving meals, and Thursday through Sunday Delacruz divides her time between two other jobs as a cashier at Walmart (WMT) and the Wes-T-Go convenience store.
She told CNN that she lives paycheck to paycheck”, and just like half the country, she is basically flat broke at this point.
Barack Obama promised to be the hero of the working class when he was elected, but it seems like almost everything that he has done has hurt the working class even more.
Take Obamacare for example. Health insurance premiums have soared through the roof since Obamacare was implemented, and many struggling families now find that they can no longer afford health insurance at all.
And many of those that have signed up for Obamacare are often discovering that many doctors and hospitals won’t even accept their coverage. The following comes from the New York Times…
AMY MOSES and her circle of self-employed small-business owners were supporters of President Obama and the Affordable Care Act. They bought policies on the newly created New York State exchange. But when they called doctors and hospitals in Manhattan to schedule appointments, they were dismayed to be turned away again and again with a common refrain: “We don’t take Obamacare,” the umbrella epithet for the hundreds of plans offered through the president’s signature health legislation.
“Anyone who is on these plans knows it’s a two-tiered system,” said Ms. Moses, describing the emotional sting of those words to a successful entrepreneur.
“Anytime one of us needs a doctor,” she continued, “we send out an alert: ‘Does anyone have anyone on an exchange plan that does mammography or colonoscopy? Who takes our insurance?’ It’s really a problem.”
Unfortunately, things are not going to be getting any better for the working class because we have now entered the early stages of the next major economic downturn.
Earlier today, I received an email from someone that works for a very large company that provides produce for some of the biggest grocery chains in America. According to him, there has been a dramatic decline in orders coming in recently, and this is something that didn’t even happen during the depths of the last major recession.
So why in the world would that be happening if the economy was in good shape?
I have been receiving similar anecdotal reports from people all over America. We may not be experiencing a full-blown economic implosion like Venezuela is quite yet, but we are starting to slide in that direction.
And just like in Venezuela and elsewhere around the globe, when economic conditions get harder violent crime goes up. I have warned that this would happen over and over again, and it is already starting to happen in major cities all over the nation…
According to new reports, 2016 is shaping up to be an even more murderous year than last in over two dozen major U.S. cities as homicides rise at their fastest pace yet.
Chicago, Los Angeles, Dallas and Las Vegas have seen the worst, all of which experienced increased homicides in 2015, evidenced by acceleration of murders in the first three months of 2016.
Law enforcement officials and experts are saying the increase over the last year is due to many factors, including an uptick in gang and drug-related violence. Yet, many believe cops and citizens are now interacting differently since the rise of the Black Lives Matter movement has shifted attitudes to distrust police.
Of course we haven’t even gotten to the bad stuff yet.
What we have seen so far is just the very beginning of the chaos that is coming to America.
Before I go today, I want to mention a couple of things.
First of all, the Dow was down another 180 points today, and someone out there is betting unprecedented amounts of money that a major market crash is imminent. Just check out this chart. You buy shares of financial instruments such as UVXY because you think that the market is going to implode. So if there is a giant market crash in our very near future, whoever purchased all of those shares of UVXY stands to make an enormous amount of money.
Secondly, I really started to sound the alarm about German banking giant Deutsche Bank back in September. And sure enough – their stock price plunged to an all-time record low earlier this year.
But now the whispers are getting louder that even bigger trouble is ahead for this pillar of the European financial system. The following originally comes from Berenberg analyst James Chappell…
Too many problems still: The biggest problem is that DBK has too much leverage. On our measures, we believe DBK is still over 40x levered. DBK can either reduce assets or increase capital to rectify this. On the first path, the markets do not exist in the size nor pricing to enable it to follow this route. Going down the second path also seems impossible at the moment, as the profitability of the core business is under pressure. Seeking outside capital is also likely to be difficult as management would likely find it hard to offer any type of return on new capital invested.
Keep a close eye on Deutsche Bank. They may very well end up providing us with the next “Lehman Brothers moment” that so many people have been waiting for.
There is so much going on “under the surface” right now, and I am convinced that it will not stay “under the surface” for very much longer.
The global financial system is starting to come apart at the seams even as you read this article, and this is going to have enormous implications for every man, woman and child on the planet in the years ahead.
So as bad as things are for the working class in America right now, the truth is that they are about to get a whole lot worse.