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Credit Card Companies Specifically Target Less Educated And Less Sophisticated Americans

Credit Cards - Public DomainThe big credit card companies don’t make much money off of those that pay their bills on time, and so they often specifically target less educated and less sophisticated consumers that don’t really understand the dangers of credit card debt.  The goal is to find people that will carry credit card balances from month to month, because that is where the real money can be made.  The average U.S. household that carries balances from month to month has approximately $15,310 in credit card debt right now.  At an average interest rate of about 15 percent, the profits pile up very quickly for the big credit card companies.  After all these years, so many of us still have not learned the truth about credit cards, and so credit card debt is absolutely crippling tens of millions of American families.

In 2015, the total amount of credit card debt in this country increased by a staggering 71 billion dollars.  In a previous article, I explained to my readers that American consumers accumulated more new credit card debt during the fourth quarter of 2015 than they did during the entire years of 2009, 2010 and 2011 combined.

Many analysts are forecasting that the total amount of credit card debt will surpass a trillion dollars by the end of 2016.  This is why there is such a crying need for financial education in this nation.  Millions upon millions of us are being taken for a ride, and as I mentioned above, the big credit card companies often target those of us that are the least sophisticated about financial matters.  The following comes from Bloomberg

Credit-card companies need people to spend more than they can afford, but not so much that they default on their payments. So they could benefit from targeting individuals who are more likely to have cognitive failings. This is the dark side of behavioral finance.

Some new research by economists Antoinette Schoar of the Massachusetts Institute of Technology and Hong Ru of Nanyang Technological University claims to find exactly such a result. The authors use data from a private company that tracks credit-card offers. They find that less educated consumers — who are likely to be less financially sophisticated — are more frequently given offers that include back-loaded costs. Those are plans that start with low rates, but increase later, with extra-high over-limit and late-payment fees. In other words, those are likely to be the borrowers who make bad financial decisions — racking up debt and eventually paying much more in interest. Meanwhile, more educated households tend not to be offered these plans.

Do you understand what that is saying?

The large credit card companies want to find those of us that are the most vulnerable, because that is where their biggest profits can be made.

And of course most of us have gotten into trouble with credit card debt at some point.  They don’t teach us how to manage our finances in high school or in college, and so most of us are very financially naive when we first get out into the real world.  Card offers are being showered on our young people, and cash-strapped young adults can find it very easy to “buy now and pay later”

Psychologically, it can be easier for people to pay using a credit card because no paper money is involved, Danford said. A Dun & Bradstreet study found that people spend an average of 12 to 18 percent more when using a credit card instead of cash.

I think that’s one of the traps. It’s almost too easy to use a credit card,” Danford said. “You don’t have to think of the consequences.”

According to 2015 data from Experian, the average American had 2.24 credit cards, up from 2.18 in 2014.

Of all credit card users, what percentage do you think carries a balance from month to month?

30 percent?

40 percent?

Well, according to Time Magazine only 35 percent of those that use credit cards completely pay them off every single month.  That means that 65 percent of those that use credit cards do carry a balance…

Only 35% of credit card users don’t carry a balance–they pay off their bill every month, like you’re supposed to. They use credit cards for convenience, and perhaps to generate bonus points and rewards, not because they need to borrow. If you’re a member of this group, you’re known as a “convenience user.” (Go ahead and pat yourself on the back for not being on the hook for high interest rates, but don’t gloat.) The other, more typical credit card users are known as “revolvers” because they don’t pay off their bills in full so the debt revolves. To them, credit limit increases are essentially invitations to spend more. It’s unsettling: “for revolvers, a 10% increase in credit is followed by a 1.3 percent increase in debt within one quarter and a 9.99% increase in debt over the long term,” the study found.

Unfortunately for the big credit card companies and the overall U.S. economy, it appears that U.S. consumers are starting to get tapped out.

Retail sales fell 2.9 percent in April, and then they dropped by 3.9 percent in May.  As a result of these declining sales, corporate profits are suffering, and it is being projected that the final numbers for the second quarter of 2016 will show that corporate profits in the U.S. have now fallen for five quarters in a row.

That is not an “economic recovery”.  Rather, that is what normally happens at the beginning of a major recession.

And don’t expect this to turn around any time soon, because Americans just don’t have the kind of discretionary income that they once did.  The following comes from a New York Post article entitled “A staggering percentage of Americans are too poor to shop“…

Retailers have blamed the weather, slow job growth and millennials for their poor results this past year, but a new study claims that more than 20 percent of Americans are simply too poor to shop.

These 26 million Americans are juggling two to three jobs, earning just around $27,000 a year and supporting two to four children — and exist largely under the radar, according to America’s Research Group, which has been tracking consumer shopping trends since 1979.

So much of what is happening right now is very reminiscent of 2008.  There was an explosion of credit card debt just before that crash as well.

We should have learned some very hard lessons the last time around, but we didn’t, and so now the pain for American families will be even greater this time.

If you are in credit card debt at this moment, it would be wise to try to eliminate it as soon as you can, because you definitely don’t want to be drowning in debt when times get really, really hard.

George Soros Is Preparing For Economic Collapse – Does He Know Something That You Don’t?

George Soros - Photo by Niccolo CarantiWhy is George Soros selling stocks, buying gold and making “a series of big, bearish investments”?  If things stay relatively stable like they are right now, these moves will likely cost George Soros a tremendous amount of money.  But if a major financial crisis is imminent, he stands to make obscene returns.  So does George Soros know something that the rest of us do not?  Could it be possible that he has spent too much time reading websites such as The Economic Collapse Blog?  What are we to make of all of this?

The recent trading moves that Soros has made are so big and so bearish that they have even gotten the attention of the Wall Street Journal

Worried about the outlook for the global economy and concerned that large market shifts may be at hand, the billionaire hedge-fund founder and philanthropist recently directed a series of big, bearish investments, according to people close to the matter.

Soros Fund Management LLC, which manages $30 billion for Mr. Soros and his family, sold stocks and bought gold and shares of gold miners, anticipating weakness in various markets. Investors often view gold as a haven during times of turmoil.

Hmmm – it sounds suspiciously like George Soros and Michael Snyder are on the exact same page as far as what is about to happen to the global economy.

You know that it is very late in the game when that starts happening…

One thing that George Soros is particularly concerned about that I haven’t been talking a lot about yet is the upcoming Brexit vote.  If the United Kingdom leaves the EU (and hopefully they will), the short-term consequences for the European economy could potentially be absolutely catastrophic

Mr. Soros also argues that there remains a good chance the European Union will collapse under the weight of the migration crisis, continuing challenges in Greece and a potential exit by the United Kingdom from the EU.

If Britain leaves, it could unleash a general exodus, and the disintegration of the European Union will become practically unavoidable,” he said.

The Brexit vote will be held two weeks from today on June 23rd, and we shall be watching to see what happens.

But Soros is not just concerned about a potential Brexit.  The economic slowdown in China also has him very worried, and so he has directed his firm to make extremely bearish wagers.

According to the Wall Street Journal, the last time Soros made these kinds of bearish moves was back in 2007, and it resulted in more than a billion dollars of gains for his company.

Of course Soros is not alone in his bearish outlook.  In fact, Goldman Sachs has just warned that “there may be significant risk to the downside for the market”

Goldman Sachs is getting nervous about stocks.

In a note to clients, equity strategist Christian Mueller-Glissmann outlined the firm’s fears that there may be significant risk to the downside for the market.

Ultimately, George Soros and Goldman Sachs are looking at the same economic data that I share with my readers on a daily basis.

As I have been documenting for months, almost every single economic indicator that you can possibly think of says that we are heading into a recession.

For instance, just today I was sent a piece by Mike Shedlock that showed that federal and state tax receipts are really slowing down just like they did just prior to the last two recessions…

US federal personal tax receipts receipts are falling fast. So is the Evercore ISI State Tax Survey.

The last two times the survey plunged this much, the US was already in recession.

Is it different this time?

Tax Receipts - Mish Shedlock

And online job postings on LinkedIn have now been falling precipitously since February after 73 months in a row of growth

After 73 consecutive months of year-over-year growth, online jobs postings have been in decline since February. May was by far the worst month since January 2009, down 285k from April and down 552k from a year ago.

Last week, the government issued the worst jobs report in nearly six years, and the energy industry continues to bleed good paying middle class jobs at a staggering rate.  The following comes from oilprice.com

That may seem counterintuitive in an industry that has been rapidly shedding workers, with more than 350,000 people laid off in the oil and gas industry worldwide.

Texas is one place feeling the pain. Around 99,000 direct and indirect jobs in the Lone Star state have been eliminated since prices collapsed two years ago, or about one third of the entire industry. In April alone there were about 6,300 people in oil and gas and supporting services that were handed pink slips. Employment in Texas’ oil sector is close to levels not seen since the aftermath of the financial crisis in 2009. “We’re still losing big chunks of jobs with each passing month,” Karr Ingham, an Amarillo-based economist, told The Houston Chronicle.

At this point it is so obvious that we have entered a new economic downturn that I don’t know how anyone can possibly deny it any longer.

Unfortunately, the reality of what is happening has not sunk in with the general population yet.

Just like 2008, people are feverishly racking up huge credit card balances even though we stand on the precipice of a major financial crisis…

American taxpayers are quick to criticize the federal government for its ever-increasing national debt, but a new study released Wednesday found taxpayers are also saddled with debt, and are likely to end 2016 with a record high $1 trillion in outstanding balances.

Wallethub, a site that recommends credit cards based on consumers’ needs, said that will be the highest amount of credit card debt on record, surpassing even the years during and before the Great Recession. The site said the record high was in 2008, when people owed $984.2 billion on their credit cards.

Will we ever learn?

This has got to be one of the worst possible times to be going into credit card debt.

Sadly, the “dumb money” will continue to act dumb and the “smart money” (such as George Soros) will continue to quietly position themselves to take advantage of the crisis that is already starting to unfold.

We can’t change what is happening to the economy, but we do have control over the choices that we make.

So I urge you to please make your choices wisely.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

EBT Card Outage?: It Is 8 Days Into June And Many Americans Are STILL Waiting For Food Stamp Money

Supermarket Bananas - Public DomainWidespread reports continue to pour in from all over the nation of “glitches” with the food stamp system.  It is eight days into the month and large numbers of people still have not received their benefits, and in other instances it is being reported that EBT cards are simply not working correctly.  So what in the world is going on here?  On downdetector.com there are scores of reports of problems with the EBT system from people all over the nation.  Could this simply be another example of government incompetence, or is something else at work here?

I had heard some rumblings about this over the past few days, but I had not really taken them seriously until I read an article from highly respected author Ray Gano

It interesting over the weekend I got several emails telling me about cell phones being down, internet being down, and get this, EBT cards not working and having no money associated to them.

This is a concern because when the US Government has payment failures, then there is possibly something happening that the press is not telling you about.

Now, we know that computers have problems and that states, counties and cities run on computers. But what is interesting is that since the beginning of 2016, The US government has had over 2,700 reports on downdetector.com showing that they have been late loading the money onto these EBT cards.

Folks, we are now going on 8 days where the Government has not paid the EBT payments so that people have food.

So I went over to downdetector.com myself, and I was stunned to see that reports of EBT outages continue to pour in every hour.  Here are just a few of the recent comments that have been left by people that are still waiting for their food stamp benefits for June…

Heidi Lynn: I was supposed to get mine on the 5th and still nothing. Even ebt NJ site says $0 as well as my EBT card says $0. I’m on disability. I forgot to add I tried calling NJ Board of Services and was on hold for over an hour. I had to hang up to take dog out, etc. Does anyone know what’s going on yet?

Ann Wilson: Now that it’s been a whole week since I was supposed to get my June benefits, and haven’t, I’m planning on going to my Illinois FCRC office. I hope they will be able to fix this difficulty.

Jenn Johnson: I always get mine on time. I was due to get mine today June 7th and nothing. I am from kentucky. Why is there nothing on the news about this?

Jarrett Manhart: Havnt received mine either. They are never late. And my fone is off so i cant call em. Im on Wi-Fi down the street from me.

Sunny Nicole Jones: I haven’t gotten mine either! I’m glad it’s not just me though because then I would really be worried!

But when I went to confirm these widespread outages with articles from the mainstream media, I came up empty.

Either the mainstream media does not know what is going on yet, or it is being ignored.

If you have not gotten your EBT benefits for this month yet or you know someone that is in that position, please feel free to let me know.  I want to get to the bottom of this.  There are people all over the nation that are reporting problems with the food stamp system, but nobody seems to know exactly how widespread this issue is just yet.

Today there are well over 40 million Americans on food stamps, and a lot of them would start rioting tomorrow if you told them that their food stamp cards were being turned off permanently.

EBT cards are the modern equivalent of the bread lines of the 1930s.  Instead of having to wait in long lines for food, the government just zaps money on to EBT cards each month, and those that are hurting are able to get something to eat.

But down in Venezuela, extremely long food lines are a daily reality for much of the population right now.  The following comes from the Daily Mail

Venezuela was once South America’s richest nation, but a fall in oil prices combined with other economic problems has led to desperate citizens taking drastic measures.

Nearly half of Venezuelans say they can no longer afford to eat three meals a day, according to a recent poll by the local firm Venebarometro. The poll surveyed 1,200 adults at their homes during the first week of April and had a margin of error of plus or minus of about two percentage points

Those who can, cross the border into Colombia to buy, bring back and then use or sell food and other basic commodities.

Could you imagine not being able to provide three meals a day for your family any longer?

Close to half the population of Venezuela is already in that position, and the economic collapse down there grows worse with each passing day.

Most Americans just assume that nothing like that could ever happen here.

Most Americans just assume that the government will always have plenty of money to give out.

As I mentioned above, there are well over 40 million Americans that receive EBT benefits.

However, when you factor in all government programs, more than 100 million Americans get some form of money or benefits from the federal government each month.

So what would happen someday if suddenly the spigot was turned off?

What would those 100 million people do?

How would they survive?

Hopefully this current EBT outage is just a temporary technical glitch, and hopefully the government will get it fixed in short order.

But someday there will be a major crisis that will cause food stamp benefits to be cut off either permanently or for an extended period of time.

When that day arrives, what will that do to our communities?

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

*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.*

A New Digital Cash System Was Just Unveiled At A Secret Meeting For Bankers In New York

Secret - Public DomainLast month, a “secret meeting” that involved more than 100 executives from some of the biggest financial institutions in the United States was held in New York City.  During this “secret meeting“, a company known as “Chain” unveiled a technology that transforms U.S. dollars into “pure digital assets”.  Reportedly, there were representatives from Nasdaq, Citigroup, Visa, Fidelity, Fiserv and Pfizer in the room, and Chain also claims to be partnering with Capital One, State Street, and First Data.  This “revolutionary” technology is intended to completely change the way that we use money, and it would represent a major step toward a cashless society.  But if this new digital cash system is going to be so good for society, why was it unveiled during a secret meeting for Wall Street bankers?  Is there something more going on here than we are being told?

None of us probably would have ever heard about this secret meeting if it was not for a report in Bloomberg.  The following comes from their article entitled “Inside the Secret Meeting Where Wall Street Tested Digital Cash“…

On a recent Monday in April, more than 100 executives from some of the world’s largest financial institutions gathered for a private meeting at the Times Square office of Nasdaq Inc. They weren’t there to just talk about blockchain, the new technology some predict will transform finance, but to build and experiment with the software.

By the end of the day, they had seen something revolutionary: U.S. dollars transformed into pure digital assets, able to be used to execute and settle a trade instantly. That’s the promise of a blockchain, where the cumbersome and error-prone system that takes days to move money across town or around the world is replaced with almost instant certainty.

So it is not just Michael Snyder from The Economic Collapse Blog that is referring to this gathering as a “secret meeting”.  This is actually how it was described by Bloomberg.  And I think that there is a very good reason why this meeting was held in secret, because many in the general public would definitely be alarmed by this giant step toward a cashless society.  Here is more on this new system from Bloomberg

While cash in a bank account moves electronically all the time today, there’s a distinction between that system and what it means to say money is digital. Electronic payments are really just messages that cash needs to move from one account to another, and this reconciliation is what adds time to the payments process. For customers, moving money between accounts can take days as banks wait for confirmations. Digital dollars, however, are pre-loaded into a system like a blockchain. From there, they can be swapped immediately for an asset.

“Instead of a record or message being moved, it’s the actual asset,” Ludwin said. “The payment and the settlement become the same thing.”

Why this is so alarming is because we are seeing other major moves toward a cashless system all over the planet.  In Sweden, 95 percent of all retail transactions are already cashless, and ATM machines are being removed by the hundreds.  In Denmark, government officials actually have a stated goal of “eradicating cash” by the year 2030.  And in Norway, the biggest bank in the country has publicly called for the complete elimination of all cash.

Other nations in Europe have already banned cash transactions over a certain amount. Here are just a couple of examples

As I have written about previously, cash transactions of more than 2,500 euros have already been banned in Spain, and France and Italy have both banned all cash transactions of more than 1,000 euros.

Little by little, cash is being eradicated, and what we have seen so far is just the beginning. 417 billion cashless transactions were conducted in 2014, and the final number for 2015 is projected to be much higher.

The global push toward a cashless society is only going to intensify, because banks and governments both tend to really like the idea of such a system.

Banks really like the concept of a cashless society because it would force everyone to be their customers.  There would be no more hiding cash in a mattress at home or trying to pay all of your bills with paper money.  Under a cashless system, we would all be dependent on the banks, and they would make lots of money whenever we swiped our cards or our “chips” were scanned.

Governments see a lot of advantages in a cashless society as well.  They tell us that they would be able to crack down on drug dealers, tax evaders, terrorists and money launderers, but the truth is that it would enable them to watch, track, monitor and control virtually all of our financial transactions.  Our lives would become open books to the government, and financial privacy would be a thing of the past.

In addition, the potential for tyranny would be absolutely off the charts.

Just imagine a world where the government could serve as the gatekeeper for who is allowed to use the cashless system and who is not.  They could require that we all submit to some sort of government-issued form of identification before being permitted to operate within the system, or it is even conceivable that a loyalty oath would be required.

Of course if you did not submit to their demands, you could not buy, sell, open a bank account or get a job without access to the cashless system.

Hopefully people can understand where this is going.  Paper money is a very important component of our freedom, and if it is taken away from us that will open the door for all sorts of abuse.

Even now, cash is slowly being “criminalized” in America.  For example, if cash is used to pay for a hotel room that is considered by federal authorities to be “suspicious activity” that should be reported to the government.  Of course it isn’t against the law to pay your hotel bill in cash just yet, but according to the government it is something that “terrorists” do so it needs to be closely watched.

It doesn’t take a whole lot of imagination to see where all of this is going.  And for those of us that understand what time it is, this is a clear indication that it is getting late in the game.

*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.*

47 Percent Of Americans Cannot Even Come Up With $400 To Cover An Emergency Room Visit

One Dollar Bill - Public DomainIf you had to make a sudden visit to the emergency room, would you have enough money to pay for it without selling something or borrowing the funds from somewhere?  Most Americans may not realize this, but this is something that the Federal Reserve has actually been tracking for several years now.  And according to the Fed, an astounding 47 percent of all Americans could not come up with $400 to pay for an emergency room visit without borrowing it or selling something.  Various surveys that I have talked about in the past have found that more than 60 percent of all Americans are living to paycheck to paycheck, but I didn’t realize that things were quite this bad for about half the country.  If you can’t even come up with $400 for an unexpected emergency room visit, then you are just surviving from month to month by the skin of your teeth.  Unfortunately, about half of us are currently in that situation.

Earlier today someone pointed me toward an excellent article in The Atlantic that discussed this, and I have to admit that The Atlantic is one of the last remaining bastions of old school excellence in journalism that you will find in the mainstream media.  Of course I don’t see eye to eye with them on a lot of things philosophically, but there are some really hard working journalists over there.

The article where I found the 47 percent figure comes from The Atlantic, and it is entitled “The Secret Shame of Middle-Class Americans“.  It was authored by Neal Gabler, and he says that he can identify with the 47 percent of Americans that don’t have $400 for an unexpected emergency room visit because he is one of them

I know what it is like to have to juggle creditors to make it through a week. I know what it is like to have to swallow my pride and constantly dun people to pay me so that I can pay others. I know what it is like to have liens slapped on me and to have my bank account levied by creditors. I know what it is like to be down to my last $5—literally—while I wait for a paycheck to arrive, and I know what it is like to subsist for days on a diet of eggs. I know what it is like to dread going to the mailbox, because there will always be new bills to pay but seldom a check with which to pay them. I know what it is like to have to tell my daughter that I didn’t know if I would be able to pay for her wedding; it all depended on whether something good happened. And I know what it is like to have to borrow money from my adult daughters because my wife and I ran out of heating oil.

To me, this is yet more evidence that the middle class in America is dying.

Last year, it was reported that middle class Americans make up a minority of the population for the very first time in our history.

But back in 1971, 61 percent of all Americans lived in middle class households.

So what happened?

Well, the big corporations started shipping millions of good paying manufacturing jobs overseas.  Millions of other good paying jobs were replaced by technology, and the competition for the good jobs that remained became extremely intense.

During the good times, the U.S. economy still created new jobs, but most of those jobs were low paying service jobs.

At this point, a majority of American workers have jobs that would be considered low paying.  In fact, 51 percent of all American workers make less than $30,000 a year according to the Social Security Administration.

And once you account for inflation, the truth is that our incomes have been going down for years.  According to a study that was released by Pew Charitable Trusts, median household income in the United States decreased by 13 percent between 2004 and 2014.

That isn’t “progress” any way that you slice it.

If you go all the way back to 1970, the middle class took home approximately 62 percent of all income in the United States.

Today, that number has fallen to just 43 percent.

So the fact that 47 percent of Americans can’t even pay for an unexpected emergency room visit is not exactly a surprise.  To be honest, a whole host of other surveys have come up with similar numbers.  Here is more from Neal Gabler

A 2014 Bankrate survey, echoing the Fed’s data, found that only 38 percent of Americans would cover a $1,000 emergency-room visit or $500 car repair with money they’d saved. Two reports published last year by the Pew Charitable Trusts found, respectively, that 55 percent of households didn’t have enough liquid savings to replace a month’s worth of lost income, and that of the 56 percent of people who said they’d worried about their finances in the previous year, 71 percent were concerned about having enough money to cover everyday expenses.

What all of these numbers tell us is that the middle class is disappearing.  I tend to compare it to a game of really bizarre musical chairs.  With each passing month more chairs are being pulled out of the circle, and those members of the middle class that haven’t fallen into poverty yet are just hoping that a chair will still be there for them when the music stops.

Even during the “Obama recovery”, we have seen poverty in America absolutely explode.  In fact, some brand new numbers just came out that are quite startling.  The following comes from another author for The Atlantic named Gillian B. White

Recently, the Brookings Institution published a report looking at the same idea but giving it a different name. The paper, builds on research from the British economist William Beveridge, who in 1942 proposed five types of poverty: squalor, ignorance, want, idleness, and disease. In modern terms, these could be defined as poverty related to housing, education, income, employment, and healthcare, respectively. Analyzing the 2014 American Community Survey, the paper’s co-authors, Richard Reeves, Edward Rodrigue, and Elizabeth Kneebone, found that half of Americans experience at least one of these types of poverty, and around 25 percent suffer from at least two.

To underscore this point, let me just run five quick facts about the growth of poverty in this country by you…

The number of Americans that are living in concentrated areas of high poverty has doubled since the year 2000.

In 2007, about one out of every eight children in America was on food stamps. Today, that number is one out of every five.

46 million Americans use food banks each year, and lines start forming at some U.S. food banks as early as 6:30 in the morning because people want to get something before the food supplies run out.

The number of homeless children in the U.S. has increased by 60 percent over the past six years.

According to Poverty USA, 1.6 million American children slept in a homeless shelter or some other form of emergency housing last year.

That last number really gets me every time.

How can “the wealthiest and most powerful nation on the planet” have more than a million homeless children?

This is one of the reasons why I hammer on our ongoing economic collapse over and over and over.  It is affecting real families with real children that have real hopes and real dreams.

This is not the way our country is supposed to work.

It is supposed to be “the land of opportunity”.

It is supposed to be a place where anyone can live “the American Dream”.

But instead it has become an economic wasteland where the largest and most prosperous middle class in the history of the world is being systematically eviscerated.

So no, the U.S. economy is not doing “just fine” – anyone that tries to tell you that lie is simply peddling fiction.

*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.*

Robert Kiyosaki And Harry Dent Warn That Financial Armageddon Is Imminent

Alarm Clock Globe - Public DomainFinancial experts Robert Kiyosaki and Harry Dent are both warning that the next major economic crash is in our very near future.  Dent is projecting that the Dow will fall to “5,500 to 6,000 by late 2017″, and Kiyosaki actually originally projected that a great crash was coming in 2016 all the way back in 2002.  Of course we don’t exactly have to wait for things to get bad.  The truth is that things are not really very good at the moment by any stretch of the imagination.  Approximately one-third of all Americans don’t make enough money to even cover the basic necessities, 23 percent of adults in their prime working years are not employed, and corporate debt defaults have exploded to the highest level that we have seen since the last financial crisis.  But if Kiyosaki and Dent are correct, economic conditions in this country will soon get much, much worse than this.

During a recent interview, Harry Dent really went out on a limb by staking his entire reputation on a prediction that we would experience “the biggest global bubble burst in history” within the next four years…

There will be… and I will stake my entire reputation on this… we are going to see the biggest global bubble burst in history in the next four years…

There’s only one way out of this bubble and that is for it to burst… all this stuff is going to reset back to where it should be without all this endless debt, endless printed money, stimulus and zero interest rate policy.

And of course he is far from alone.  Without a doubt, we are currently in the terminal phases of the greatest financial bubble the world has ever known, and it is exceedingly difficult to see any way that it will not end very, very badly.

Ultimately, Dent believes that we could see U.S. stocks lose two-thirds of their value by late next year

The Dow, I’m projecting, will hit 5,500 to 6,000 by late 2017… just in the next year and a half or so. 

That’ll be most of the damage… then it will rally and there’ll be some aftershocks into 2020… my four cycles point down into early 2020 and then they start one after the other to turn up… I think the worst will be over by 2020, but the worst of that will be by the end of 2017.

If that does happen, it will be a far worse crash than what we experienced back in 2008, and the economic consequences will be absolutely terrifying.

Another highly respected financial expert that is making similar claims is Robert Kiyosaki.  My wife is a big fan of his books, and I have always held him in high regard.

But what I didn’t realize is that he had actually predicted that there would be a major financial crash all the way back in 2002

Fourteen years ago, the author of a series of popular personal-finance books predicted that 2016 would bring about the worst market crash in history, damaging the financial dreams of millions of baby boomers just as they started to depend on that money to fund retirement.

Broader U.S. stock markets are recovering from the worst 10-day start to a year on record. But Robert Kiyosaki — who made that 2016 forecast in the 2002 book “Rich Dad’s Prophecy” — says the meltdown is under way, and there’s little investors can do but buy gold or silver and hope the Federal Reserve slows the slide.

I agree with Kiyosaki that one way that investors can shield their wealth is by getting gold and silver.  In a recent article, I explained exactly why I believe that silver in particular is ridiculously undervalued right now.

Kiyosaki also believes that the coming crash could be delayed a bit if the Federal Reserve decided to embark on another round of quantitative easing.  But even if that happens, Kiyosaki is absolutely convinced that eventually “it’s all going to come down”

Kiyosaki told MarketWatch that the combination of demographics and global economic weakness makes the next crash inevitable — but the Fed could stave it off with another round of quantitative easing, which might stimulate the economy.

The Fed turned more dovish at its March meeting, with the central bank penciling in fewer interest-rate hikes this year than were previously part of its implied framework. The Fed signaled those hikes would happen more slowly than had been anticipated earlier, owing to a weak global economic environment and a volatile stock market.

“The big question [whether] we do ‘QE4,’” said Kiyosaki. “If we do, the stock market will come roaring back, but it’s not rocket science. If we stop printing money, it crashes; if we print money, it goes up. But, eventually, it’s all going to come down.”

Another voice that I have come to respect is Jim Rickards.  He is not quite as apocalyptic as Kiyosaki or Dent, but without a doubt he is deeply concerned about where the global economy is headed…

Global growth is slowing both because of weakness in developed economies like Europe and Japan, and weakness in some of the emerging markets champions such as China, Brazil and Russia. The limits of monetary policy have been reached.

The evidence is now clear that negative interest rates don’t stimulate spending; they are only good for devaluation in the ongoing currency wars. World trade is shrinking; a rare phenomenon usually associated with recession or depression.

And he is exactly right.  The economic downturn that we are witnessing is truly global in scope.  Brazil has plunged into an economic depression, the Italian banking system is in the process of completely melting down, and Japan has implemented negative interest rates in a desperate attempt to keep their Ponzi scheme going but it really isn’t working.  In fact, Japanese industrial production just crashed by the most that we have seen since the tsunami of 2011.

Here in the United States, investors are generally feeling pretty good right now because stocks have rebounded substantially in recent weeks.  However, Rickards is warning that this rebound is very temporary

Stocks are clearly in a bubble. The stock market is ignoring the strong dollar, which in turn hurts exports and devalues overseas earnings. It is also ignoring declining corporate earnings, imminent defaults in the energy sector, and declining global growth in general.

Never mind. As long as money is cheap and leverage is plentiful, there’s no reason not to bid up stock prices, and wait for the greater fool to bid them up some more.

There is so much that we could learn from all these three men.

Sadly, just like we saw in 2008, most Americans are ignoring the warnings.

The mainstream media has conditioned the public to trust them, and right now the mainstream media is insisting that everything is going to be just fine.

So will everything be just fine as the months roll along?

We will just have to wait and see…

Helicopter Money: Global Central Banks Consider Distributing Money Directly To The People

Helicopters 2 - Public DomainShould central banks create money out of thin air and give it directly to governments and average citizens?  If you can believe it, this is now under serious consideration.  Since 2008, global central banks have cut interest rates 637 times, they have injected 12.3 trillion dollars into the global financial system through various quantitative easing programs, and we have seen an explosion of government debt unlike anything we have ever witnessed before.  But despite these unprecedented measures, the global economy is still deeply struggling.  This is particularly true in Japan, in South America, and in Europe.  In fact, there are 16 countries in Europe that are experiencing deflation right now.  In a desperate attempt to spur economic activity, central banks in Europe and in Japan are playing around with negative interest rates, and so far they seem to only have had a limited effect.

So as they rapidly run out of ammunition, global central bankers are now openly discussing something that might sound kind of crazy.  According to the Telegraph, central banks are becoming increasingly open to employing a tactic known as “helicopter money”…

Faced with political intransigence, central bankers are openly talking about the previously unthinkable: “helicopter money”.

A catch-all term, helicopter drops describe the process by which central banks can create money to transfer to the public or private sector to stimulate economic activity and spending.

Long considered one of the last policymaking taboos, debate around the merits of helicopter money has gained traction in recent weeks.

Do you understand what is being said there?

The idea is basically this – central banks would create money out of thin air and would just give it to national governments or ordinary citizens.

So who would decide who gets the money?

Well, they would.

If you are anything like me, this sounds very much like Pandora’s Box being opened.

But this just shows how much of a panic there is among central bankers right now.  They know that we are plunging into a new global economic crisis, and they are desperate to find something that will stop it.  And if that means printing giant gobs of money and dropping it from helicopters over the countryside, well then that is precisely what they are going to do.

In fact, the chief economist at the European Central Bank is quite adamant about the fact that the ECB can print money out of thin air and “distribute it to people” when the situation calls for it…

ECB chief Mario Draghi has refused to rule out the prospect, saying only that the bank had not yet “discussed” such matters due to their legal and accounting complexity. This week, his chief economist Peter Praet went further in hinting that helicopter drops were part of the ECB’s toolbox.

All central banks can do it“, said Praet. “You can issue currency and you distribute it to people. The question is, if and when is it opportune to make recourse to that sort of instrument“.

Apparently memories of the Weimar Republic must have faded over in Europe, because this sounds very much like what they tried to do.  I don’t know why anyone would ever want to risk going down that road again.

Here in the United States, the Federal Reserve is not openly talking about “helicopter money” just yet, but that is only because the stock market is doing okay for the moment.

Most Americans don’t realize this, but the primary reason why stocks are doing better in the U.S. than in the rest of the world is because of stock buybacks.  According to Wolf Richter, corporations spent more than half a trillion dollars buying back their own stocks over the past 12 months…

During the November-January period, 378 of the S&P 500 companies bought back their own shares, according to FactSet. Total buybacks in the quarter rose 5.2% from a year ago, to $136.6 billion. Over the trailing 12 months (TTM), buybacks totaled $568.9 billion.

When corporations buy back their own stocks, that means that they are slowly liquidating themselves.  Instead of pouring money into new good ideas, they are just returning money to investors.  This is not how a healthy economy should work.

But corporate executives love stock buybacks, because it increases the value of their stock options.  And big investors love them too, because they love to see the value of their stock holdings rise.

So we will continue to see big corporations cannibalize themselves, but there are a couple of reasons why this is starting to slow down.

Number one, corporate profits are starting to fall steadily as the economy slows down, so there will be less income to plow into these stock buybacks.

Number two, many corporations have used debt to fund buybacks, but now it is getting tougher for corporations to get new funding as corporate defaults rise.

As stock buybacks slow, this is going to put downward pressure on the market, and we will eventually catch up with the rest of the planet.  At this point, many experts are still calling for stocks to fall by another 40, 50 or 60 percent from current levels.  For example, the following comes from John Hussman

From a long-term investment standpoint, the stock market remains obscenely overvalued, with the most historically-reliable measures we identify presently consistent with zero 10-12 year S&P 500 nominal total returns, and negative expected real returns on both horizons.

From a cyclical standpoint, I continue to expect that the completion of the current market cycle will likely take the S&P 500 down by about 40-55% from present levels; an outcome that would not be an outlier or worst-case scenario, but instead a rather run-of-the-mill cycle completion from present valuations. If you are a historically-informed investor who is optimistic enough to reject the idea that the financial markets are forever doomed to extreme valuations and dismal long-term returns, you should be rooting for this cycle to be completed. If you are a passive investor, you should at least align your current exposure with your investment horizon and your tolerance for cyclical risk, which we expect to be similar to what we anticipated in 2000-2002 and 2007-2009.

When the S&P 500 does fall that much eventually, the Federal Reserve will respond with emergency measures.

So yes, we may see “helicopter money” employed in Japan and in Europe first, but we will see it here someday too.

I know that a lot of people out there are feeling pretty good about things for the moment because U.S. stocks have rebounded quite a bit lately.  But remember, the fundamental economic numbers just continue to get even worse.  Just today we learned that existing home sales in the United States had fallen by the most in six years.  That is definitely not a sign that things are “getting better”, and I keep trying to warn people that tumultuous times are dead ahead.

And if global central bankers did not agree with me, they would not be talking about the need for “helicopter money” and other emergency measures.

Dot-Com Bubble 2.0 Is Bursting: Tech Stocks Are Already Down Half A Trillion Dollars Since Mid-2015

Tech Bubble 2.0Do you remember how much stocks went down when the first dot-com bubble burst?  Well, it is happening again, and tech stocks are already down more than half a trillion dollars since the middle of 2015.  On Friday, the tech-heavy Nasdaq dropped to its lowest level in more than 15 months, and it has now fallen more than 16 percent from the peak of the market.  But of course some of the biggest names have fallen much more than that.  Netflix is down 37 percent, Yahoo is down 39 percent, LinkedIn is down 60 percent, and Twitter is down more than 70 percent.  If you go back through my previous articles, you will find that I specifically warned about Twitter again and again.  Irrational financial bubbles like this always burst eventually, and many investors that got in at the very top are now losing extraordinary amounts of money.

On Friday, tech stocks got absolutely slammed as the bursting of dot-com bubble 2.0 accelerated once again.  The following is how CNBC summarized the carnage…

The Nasdaq composite fell 3.25 percent, as Apple and the iShares Nasdaq Biotechnology ETF (IBB) dropped 2.67 percent and 3.19 percent, respectively.

Also weighing on the index were Amazon and Facebook, which closed down 6.36 percent and 5.81 percent, respectively.

LinkedIn shares also tanked 43.63 percent after posting weak guidance on their quarterly results.

Overall, LinkedIn is now down a total of 60 percent from the peak of the market.  But they are far from the only ones that have already seen their bubble burst.

Many of the biggest names in the tech world have gotten mercilessly hammered over the past six months of so.  Just look at some of the famous brands that have already lost between 20 and 40 percent of their market caps…

Yahoo (YHOO) shares are off 39%, and Netflix (NFLX), the best-performing stock in the S&P 500 last year, is now off by 37% from its 52-week high.

Likewise, Priceline.com (PCLN) is off 31% and eBay (EBAY), 22%.

But there are other very big tech companies that have seen stock collapses that completely dwarf those numbers.  Here are some more absolutely stunning statistics from USA Today

Twitter and Groupon are the biggest dogs of this boom, both off 70% from 52-week highs and well below their IPO prices.

FitBit shares have collapsed 70%, while Yelp’s valuation has shrunk by two-thirds.

Box, which has the distinction of posting quarterly net losses in excess of revenue, is down by half.

Match.com, the holding company for dating sites owned by parent Interactive Corp. that went public late last year, is down 39% from its high.

When your stock loses 70 percent of its value, that is a complete and utter collapse.

In the past, I have specifically singled out Twitter, Yelp and LinkedIn as tech stocks that were irrationally priced.

Hopefully people listened to those warnings and got out while the getting was good.

At the top of this article, I mentioned that tech stocks have already fallen in value by more than 500 billion dollars.  The financial crisis that began in the middle of last year is now greatly accelerating, and Wall Street is starting to panic.

As stocks crash, many hedge funds are being absolutely pummeled.  The following are just a few of the high profile names that are experiencing massive losses right now

Some of the biggest names to get trounced include:

►Pershing Square Capital Management, the publicly traded investment vehicle of billionaire hedgie Bill Ackman, fell 11% last month following a 20% decline last year, data from the web site shows.

►Larry Robbins’ Glenview Capital, famous for picking stocks that could benefit from Obamacare, dropped 13.65% in January following a decline of 18% last year, according to data from HSBC’s Hedge Weekly report, a copy of which was obtained by USA TODAY.

►Marcato International, a well-known activist fund run by Ackman protege Mick McGuire, fell 12.1% last month following a 9% loss last year, according to HSBC.

When you lose more than 10 percent of your money in a single month, that is not good.

And if I am right, this is just the beginning of our troubles.

And of course I am far from the only one warning that big problems are on the horizon.  In fact, analysts at Citigroup just made international headlines by warning that the global economy was now trapped in a “death spiral”

Some analysts — including those at Citi — have turned bearish on the world economy this year, following an equity rout in January and weaker economic data out of China and the U.S.

The world appears to be trapped in a circular reference death spiral,” Citi strategists led by Jonathan Stubbs said in a report on Thursday.

Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)… and repeat. Ad infinitum, this would lead to Oilmageddon, a ‘significant and synchronized’ global recession and a proper modern-day equity bear market.”

Signs of a significant economic downturn are all around us, and so many of the exact same patterns that played out during the last two stock market crashes are happening again, and yet most people continue to refuse to acknowledge what is taking place.

If you are waiting for this new dot-com bubble to crash, you can stop waiting, because it has already happened.

When your stock falls by 50, 60 or 70 percent, the game is already over.

But just like 2001 and 2008, many people out there will end up being paralyzed by indecision.  Once again the mainstream media is insisting that there is no reason for panic and that everything will be just fine, and once again millions upon millions of ordinary Americans will be wiped out as the financial markets implode.

This is now the third time this has happened since the turn of the century.

How clueless have we become?  The exact same thing keeps happening to us over and over and yet we still don’t get it.

Only this time around there isn’t going to be any sort of a “recovery” afterwards.

This is essentially our “third strike”, and the years ahead are going to be extremely bitter and painful for most people.

But if you want to believe that one of these politicians is going to come along and save America, you go ahead and keep on believing that.

Most people believe what they want to believe, and the capacity that many Americans have demonstrated for self-delusion is absolutely remarkable.

The Rapture, Donald Trump, Hillary Clinton And 50 Other Excuses People Use For Not Prepping

Four Horsemen Of The Apocalypse - Public DomainHave you ever come away discouraged after trying to talk about prepping with friends or family members that just don’t seem to be interested?  Over the years, I have heard countless excuses from people for why they aren’t getting prepared for what is about to happen to America.  Some of the excuses, like a lack of money, are definitely legitimate.  But in many other instances, the objections don’t seem to make a lot of sense.  In America today, most people let others do most of their thinking for them.  And in general, our political, religious and cultural leaders are telling Americans that there really is no reason to be overly concerned about the future.  They assure us that they have everything under control, and that life is only going to get better in the years ahead.  Bad beliefs lead to bad decisions which in turn lead to bad actions, and most Americans have chosen to believe what the elite are telling them at this point.  As a result, only a small fraction of society is getting physically, mentally, emotionally and spiritually prepared for the exceedingly hard times that are rapidly approaching.  The following are 53 common excuses that people like to use for not prepping…

1. “Obama fixed everything that was wrong with America”

2. “When Hillary Clinton is elected she will put this nation back on the right track”

3. “Donald Trump will make America great again”

4. “I don’t have to prepare because the rapture is going to happen before anything really bad happens to this country”

5. “Everybody told me that the world was going to end in September and that didn’t happen”

6. “I don’t have enough money to buy emergency food and supplies”

7. “I’m too exhausted after working hard all day to do anything else”

8. “There is never enough time, and I would rather spend my precious free time doing something else”

9. “The U.S. economy is the greatest economy in the history of the world – there is no way that it could ever possibly collapse”

10. “Whenever we have had a major economic downturn in the past we have always recovered”

11. “Things are never going to get THAT bad”

12. “When things fall apart the federal government will take care of us”

13. “I am going to spend my extra money on fun rather than on fear”

14. “While you guys are sitting on stockpiles of expired food, I will be counting all of the money that I made in the stock market”

15. “When disaster strikes I will simply steal food from everyone else that has been prepping”

16. “The people at the Federal Reserve are very highly educated and they know precisely what they are doing”

17. “Wal-Mart will always be there when I need it”

18. “I’m too lazy to get prepared”

19. “Preppers don’t have a positive mental attitude”

20. “It is anti-faith to get prepared for an economic collapse”

21. “If the economy does collapse, I will just go on welfare”

22. “Nobody can get prepared for every possible scenario, so why bother?”

23. “I would rather save money for retirement”

24. “Obama told me that anyone that says the economy is heading for hard times is just peddling fiction”

25. “The stock market always rebounds to new highs after every crash, so why worry?”

26. “I don’t have room to store anything at my place”

27. “Prepping is something that crazy people do”

28. “I’m not a conspiracy theorist”

29. “I am afraid that all of the food that I store is going to go bad”

30. “All of the people that got freaked out about Y2K look really foolish right about now, don’t they?”

31. “Instead of being ultra-paranoid, I would rather just enjoy my life”

32. “If things get really bad, the people in my community will just band together to take care of everyone”

33. “If society did completely collapse, I would not want to go on living anyway”

34. “I’m too lazy to learn how to grow a garden”

35. “If you assume that the worst is eventually going to happen, then you don’t really believe in America”

36. “If something happens I will just run out to the store and grab what I need”

37. “If all of my debts are wiped out during an economic collapse I might as well live it up now”

38. “When things hit the fan I will just go live with my relatives that have been prepping”

39. “My spouse does not believe that prepping is a good idea”

40. “Prepping seems so complicated and I don’t know where to start”

41. “I don’t have to worry about preparing for a major disaster because that is what FEMA is for”

42. “There is no way that the supermarkets could ever possibly run out of food”

43. “Once I get my student loans and credit card debt paid off then maybe I will start thinking about prepping”

44. “My relatives are already convinced that I am a nutjob – I don’t need to make it worse by stockpiling buckets of food in my garage”

45. “What would the people at work think?”

46. “If there really was a reason to get prepared they would have told us about it on the news”

47. “People have been predicting doom and gloom for years, and yet nothing has happened”

48. “If I do prepare, angry mobs will just come and steal it all at some point anyway”

49. “Look at how fast technology is advancing – there is no way that things could completely fall apart now that humanity has so much advanced knowledge”

50. “We live in the greatest country on the entire planet during the greatest time for humanity in the history of the world”

51. “I have no intention of becoming a card carrying member of the Tin Foil Hat Brigade”

52. “If we are all going to die anyway, what is the point of prepping?”

53. “There is always more time – if I don’t get prepared today I can always get prepared tomorrow”

If you would like to learn more about how you can get prepared for what is immediately ahead of us, you may want to check out an article that I recently did entitled “70 Tips That Will Help You Survive What Is Going To Happen To America“.  It contains quite a few little “nuggets” that many people don’t commonly think about when it comes to prepping.

Personally, I think that it would be very nice if normal life were to just continue indefinitely in America.  That way I could just sit up on my mountain and enjoy a nice quiet life with my family.

But the truth is that we are moving into the greatest time of chaos that any of us have ever experienced, and those of us that have been preparing are going to need to step forward as leaders.  It is during times of great darkness that light is needed the most, and during the hard years ahead there is going to be a crying need for people that have great strength, great courage and great love.

So do you have any excuses that you have heard that you think would make good additions to this list?  Please feel free to share them with the rest of us by leaving a comment below…

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