The Economy – The Economic Collapse

10 Signs Of The Tremendous Economic Suffering That Is Quickly Spreading All Around Us

Michael — Thu, 05 Jun 2025 20:28:11 +0000

I am so tired of hearing that “everything is fine” when everything is most certainly not fine. Every day, I hear from people that are really suffering in this harsh economic environment. Some can’t find work, others are stressed out of their minds because they can’t make ends meet, and there are some that are even on the verge of losing everything. Because they are constantly being told that the economy is in good shape, many of them have been convinced that the suffering that they are going through is their fault. Of course it isn’t their fault. Economic conditions have been getting worse for the bottom 90 percent for many years, and that is the primary reason why the Democrats lost the election last November. If economic conditions were improving, they probably would have won that election. What we are facing is truly a historic crisis, and it is time to admit the truth. The following are 10 signs of the tremendous economic suffering that is quickly spreading all around us…

#1 Homelessness in the U.S. is at the highest level ever recorded, and the state of California is leading the way…

Californians have consistently cited homelessness as a top issue facing the state, and in 2024, homelessness reached record highs. Of the nation’s 771,500 people experiencing homelessness, over 187,000 (24%) were in California. Two in three were unsheltered, accounting for almost half of the country’s unsheltered population.

#2 According to a report that was recently published by CBS News, the “true rate” of unemployment in the United States was 24.3 percent in April…

But another indicator suggests those pieces of government data may be painting an overly rosy picture of the economy, with a recent report from the Ludwig Institute for Shared Economic Prosperity (LISEP) finding the “true rate” of unemployment stood at 24.3% in April, up slightly from 24% in March, while the official Bureau of Labor Statistics rate remained unchanged at 4.2% over the same period.

LISEP’s measure encompasses not only unemployed workers, but also people who are looking for work but can’t find full-time employment, as well as those stuck in poverty-wage jobs. By tracking functionally unemployed workers, the measure seeks to capture labor market nuances that other economic indicators miss, such as Americans who are left behind during periods of economic expansion.

#3 Due to current economic conditions, almost a quarter of the U.S. population is “canceling plans to make a major purchase”…

Nearly one in four U.S. residents are canceling plans to make a major purchase, such as a home or a car, because of President Trump’s new tariff policies. An additional one in three (32%) are delaying plans to make a major purchase.

That’s according to a Redfin-commissioned survey conducted by Ipsos between April 10-14, 2025. The nationally representative survey was fielded to 1,004 U.S. adults.

#4 Meat prices are soaring and the size of the U.S. cattle herd has fallen to a level that we have not witnessed since the 1950s…

“The number of head of cattle in the United States is at a low really not seen since the 1950s,” said Nate Rempe, president and CEO of Omaha Steaks, on “Mornings with Maria.”

“That supply pressure is really putting a lot of upward pressure on price, especially as demand is still so strong in the U.S.”

According to the Bureau of Labor Statistics, meat prices have increased year-over-year, with steak up 7%, ground beef 10%, chicken nearly 3% and ham over 4%. Rempe believes the issue goes beyond tariffs and trade policy.

#5 Restaurants that were once thriving are being boarded up all over the country. In fact, Hooters suddenly shut down 30 locations yesterday…

Restaurant chain Hooters abruptly closed over 30 locations across multiple states June 4.

Hooters said in a statement to USA TODAY that the closed stores were company owned and called the closures a “difficult decision.”

“Hooters will be well-positioned to continue our iconic legacy under a pure franchise business model,” the company said. “We are committed to supporting our impacted team members throughout this process and are incredibly grateful to our valued customers for their loyalty and dedication to the Hooters brand.”

#6 Major employers from coast to coast continue to conduct mass layoffs. For example, Procter & Gamble just announced that 7,000 of their employees will soon be hitting the bricks…

Procter & Gamble said Thursday it will cut 7,000 jobs over the next two years, or about 15% of its non-manufacturing workforce.

In a statement, the consumer products giant said it wants to boost productivity and cut costs as it competes in what the company describes as an “increasingly challenging environment.”

#7 You know that things are bad when even Walmart is conducting layoffs…

It isn’t just social media giants and life sciences startups laying off tech workers in the Bay Area. Walmart, the country’s largest brick-and-mortar retailer, is now cutting up to 106 staffers of its own.

The Arkansas-headquartered giant revealed the layoffs in a May 23 WARN document filed with California officials, as required by the Worker Adjustment and Retraining Notification Act, writing that some of the 106 office workers who report to San Bruno offices could relocate or find new work at Walmart, but for those who don’t, the layoffs will be permanent. Engineers and data scientists were listed in the document among the cuts, as were various managers in finance, marketing, creative and operations.

#8 “Quiet firing” has become a major trend in this nation. In fact, one recent survey discovered that 53 percent of U.S. companies “are using quiet firing to push employees out in 2025″…

Companies are “quiet firing” employees to trim staff without having to make severance payouts or as a way to tamp down negative press or public perceptions associated with layoffs.

That’s according to a recent ResumeTemplates survey of 1,128 business leaders, which found that 53% of companies are using quiet firing to push employees out in 2025. Quiet firing refers to the act of intentionally creating an unfavorable work environment to compel employees to leave their jobs rather than formally firing them or issuing layoffs.

#9 The housing market continues to be in a depressed state. At this point, the total dollar amount of unsold homes on the market is at the highest level ever…

More than $330 billion worth of listings have been sitting on the market for 60 days or longer. Rising inventory and slow homebuying demand is pushing up the total dollar amount of home listings, and will push down home-sale prices by the end of the year.

There’s a total of $698 billion worth of homes for sale in the U.S., up 20.3% from a year ago and the highest dollar amount ever.

#10 According to one recent survey, 70 percent of Americans are the most financially stressed that they have ever been in their entire lives.

When 70 percent of your population is the most financially stressed that they have ever been, you have a major crisis on your hands.

Nobody can deny this.

So why does the media continue to tell us that everything is just fine?

It simply is not true.

If we stay on the path that we are currently on, things are going to get a lot worse.

The economic suffering that we are witnessing now will be absolutely dwarfed by the economic suffering that is coming if we do not reverse course.

Unfortunately, for now the charade continues…

Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com. He has also written nine other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.

The post 10 Signs Of The Tremendous Economic Suffering That Is Quickly Spreading All Around Us appeared first on The Economic Collapse.

30 Trillion Dollars In 30 Years – The Greatest Party In The History Of The World Has Destroyed America’s Future

Michael — Tue, 03 Jun 2025 20:39:24 +0000

When you spend 30 trillion dollars that you do not have, it is easy to create an illusion of prosperity. In 1995, the nation was obsessed with the O.J. Simpson trial, “Toy Story” was the biggest movie of the year, the Sony Playstation made its debut in the United States, and Bill Clinton was in the White House. At that time, the U.S. national debt was right on the verge of crossing the 5 trillion dollar mark. Today, the U.S. national debt is sitting at 36.2 trillion dollars. That means that we have added more than 30 trillion dollars to the national debt in just 30 years.

So what did we get for 30 trillion dollars?

We got the greatest party in the history of the world.

Over the past three decades, we have been enjoying an obscenely inflated standard of living that we did not deserve.

When the government spends money, it provides a short-term boost to the economy. Those that get their hands on the money that the government spends end up using it to go shopping, repair their vehicles, eat at restaurants, etc.

If we could go back and pull 30 trillion dollars of extra government spending over the last 30 years out of the economy, we would be in a rip-roaring depression right now.

So for those of you that wish to avoid economic pain at all costs, you should thank our Congress critters for spending money like drunken sailors all these years.

But in the process, our leaders have destroyed America’s future.

We are broke, and we are absolutely drowning in debt.

The only way that we can meet our obligations is to go into ever larger amounts of debt.

Unfortunately, that cycle can only go on for so long before we reach a point where nobody wants to lend us money anymore.

If you have been paying attention to the bond market, you already know that there have been all sorts of red flags in 2025.

The clock is ticking. But instead of getting our spending under control, Congress seems determined to ramp our spending up to a much higher level…

The package of tax-and-spending measures sent to the Senate, now officially called the One Big Beautiful Bill Act, could act like budgetary wolf bait. It would add around $3 trillion to debt levels over the next decade compared with existing estimates and $5 trillion if certain temporary features were made permanent, according to the nonpartisan Committee for a Responsible Federal Budget.

For perspective, federal interest this fiscal year already will be more than the defense budget and more than Medicaid, disability insurance and food stamps combined.

If you are one of those that want to keep the party going for as long as possible, you probably support this bill.

But for those of us that want our children and grandchildren to actually have a future, we are absolutely horrified by what we are witnessing.

In fact, Elon Musk just called this bill a “disgusting abomination”…

Elon Musk is right.

Rand Paul has also spoken out against this bill, and he is right too.

What we have been doing to future generations of Americans over the past 30 years is beyond criminal.

It must stop.

If it doesn’t stop, it is just a matter of time before the entire system collapses.

We have been able to defy the laws of economics for many years, but now economic reality is catching up with us in a major way.

And even though we continue to spend giant mountains of money that we do not have, the illusion of prosperity that we have created is rapidly starting to crumble anyway.

This week, we learned that Disney is conducting “major layoffs”…

Major layoffs are underway Monday the Walt Disney Company, with several hundred employees impacted globally, Deadline has learned. The bulk of them are across divisions of Disney Entertainment, including marketing for both film and television as well as television publicity, casting and development. Also affected are Disney’s corporate financial operations.

Microsoft is even bigger than Disney, and they are conducting mass layoffs as well…

Microsoft Corp. cut hundreds more jobs just weeks after its largest layoff in years, underscoring the tech industry’s efforts to trim costs even as it plows billions of dollars into artificial intelligence.

More than 300 employees were told their positions had been eliminated on Monday, according to a Washington state notice reviewed by Bloomberg.

These latest layoffs by Microsoft are on top of the 6,000 job cuts that were revealed last month…

A Microsoft spokesperson said the latest headcount reduction is in addition to the 6,000 job cuts announced last month. “We continue to implement organizational changes necessary to best position the company for success in a dynamic marketplace,” the spokesperson said.

If you have a job that you value, hold on to it as tightly as you can, because a lot more people are going to be losing their jobs in the months ahead.

And that is really bad news, because we already have a major employment crisis in this country.

As I discussed the other day, nearly 1 out of every 4 Americans is “functionally unemployed” at this point.

Things are really tough out there right now.

In fact, things are so tough that Americans are eating meals at home at the highest level we have seen since the early days of the pandemic…

More Americans are cooking at home as growing economic concerns are forcing households to cut back, according to Campbell’s CEO Mick Beekhuizen.

Beekhuizen told analysts during the company’s third-quarter earnings call on Monday that consumer sentiment continued to soften throughout the quarter, with shoppers becoming even more deliberate about how they were spending money on food.

“A key outcome is a growing preference for home-cooked meals, leading to the highest levels of meals prepared at home since early 2020,” Beekhuizen said.

One way or another, we are going to have to take our medicine.

Either our leaders will have to get our financial house in order, or the bond market will force us to change.

But no matter how it plays out, nobody can deny that the party is ending.

It was fun while it lasted, but everybody knew that the wild spending would eventually have to come to an end.

Needless to say, the adjustment to our standard of living that we will soon experience will be exceedingly painful, and our society is not prepared for that at all.

The post 30 Trillion Dollars In 30 Years – The Greatest Party In The History Of The World Has Destroyed America’s Future appeared first on The Economic Collapse.

Traffic At U.S. Ports Has Absolutely Plummeted Compared To Last Year, And A New Crisis Threatens To Turn U.S. Relations With China Into A Massive Dumpster Fire

Michael — Fri, 30 May 2025 20:35:56 +0000

Did you know that we just witnessed the largest decline in U.S. imports in the entire history of our nation last month? Unfortunately, things didn’t get any better this month. In fact, during the final week of May imports at major ports on the west coast are down by almost a third compared to last year. This is going to have a dramatic impact on our economy in the months ahead, and meanwhile a new crisis with China has just erupted. The Chinese have been caught violating their 90 day trade agreement with the United States, and President Trump is extremely upset about this. Of course the Chinese are extremely upset that President Trump is planning to increase arms sales to Taiwan. Both sides deeply distrust one another at this stage, and if things continue to deteriorate our relations with China could soon resemble a gigantic dumpster fire.

According to the Census Bureau, U.S. imports fell by 68.4 billion dollars in April…

Indeed, last month, imports declined by a whopping $68.4 billion, according to advanced trade data released by the Census Bureau on Friday. This came after retailers stocked up on goods in March, aiming to get ahead of tariffs. But the stunning decline in imports could mean retailers have less of an inventory buffer, leaving them less able to avoid paying future tariffs — and that could lead to price increases for US consumers.

“I think there was an expectation that all of a sudden everything would start coming in again. I don’t think you’ve seen that huge rush to bring everything in again because I think folks are still being cautious on how this is going to proceed,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

A lot less stuff is coming into this country, and so there will be higher prices and thinner stock levels at U.S. retailers during the months ahead.

On a percentage basis, the decline in imports that we witnessed last month was the largest in the entire history of the United States…

BREAKING: US goods imports fall -19.8% in April as President Trump’s “reciprocal tariffs” effectively halted trade with many countries.

This marks the largest drop in history for US goods imports.

Unfortunately, imports have not bounced back in May.

In fact, import levels at major ports on the west coast are down by close to a third compared to last year during the last week of May…

Even after Trump lowered tariffs on China from 145% to 30% earlier this month, America’s largest ports have yet to see a rebound. The Port of Los Angeles reported a 30% import decline during the final week of May compared to last year. The Northwest Seaport Alliance, which represents the ports of Seattle and Tacoma, says imports also dropped by 30% from the last week in April to the first week in May, and volume is significantly lower compared to last year.

It appears that import numbers could bounce back a bit in June, but not to previous levels.

But then the 90 day pause on reciprocal tariffs ends on July 9th, and the 90 day negotiating period with China ends on August 12th.

In other words, we could potentially be just a couple of months away from a complete and total nightmare at our ports.

Meanwhile, President Trump just posted a blistering message on his Truth Social account that accuses China of violating the agreement that we had made with them for this 90 day negotiating period…

Two weeks ago China was in grave economic danger! The very high Tariffs I set made it virtually impossible for China to TRADE into the United States marketplace which is, by far, number one in the World. We went, in effect, COLD TURKEY with China, and it was devastating for them. Many factories closed and there was, to put it mildly, “civil unrest.” I saw what was happening and didn’t like it, for them, not for us. I made a FAST DEAL with China in order to save them from what I thought was going to be a very bad situation, and I didn’t want to see that happen. Because of this deal, everything quickly stabilized and China got back to business as usual. Everybody was happy! That is the good news!!! The bad news is that China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!

This shouldn’t be a surprise to anyone.

China has been lying, cheating and stealing for decades.

In this case, U.S. Trade Representative Jamieson Greer says that China has been extremely slow to implement their obligations and that this is “completely unacceptable and has to be addressed”…

U.S. Trade Representative Jamieson Greer, in a CNBC interview Friday morning, echoed Trump’s allegation, saying “we’re very concerned with” China’s purported non-compliance with the temporary trade deal.

The “United States did exactly what it was supposed to do, and the Chinese are slow rolling their compliance,” said Greer.

He called that “completely unacceptable and has to be addressed.”

If we can’t trust the Chinese to do what they say they are going to do, how can we make any sort of an agreement with them?

Needless to say, the Chinese are very angry with us right now too.

After learning that President Trump was planning to increase arms sales to Taiwan, China issued a very stern warning…

China has warned the U.S. of its “first red line that cannot be crossed” after a report that President Donald Trump intends to increase arms sales to Taiwan.

The Trump administration will lift weapons sales to Taiwan to higher levels than during his first administration, Reuters reported, citing U.S. officials, to put more military pressure on Beijing and to help deter a Chinese invasion of the island.

It also came out this week that the U.S. military currently has about 500 troops in Taiwan.

The Chinese are very upset about this as well.

The Chinese do not like the Trump administration at all, and the Trump administration is clearly not fond of China.

At this point, it certainly isn’t going to take much to turn our relationship with China into a major dumpster fire.

For those that have been paying attention, you already know why that would be such an ominous sign.

The post Traffic At U.S. Ports Has Absolutely Plummeted Compared To Last Year, And A New Crisis Threatens To Turn U.S. Relations With China Into A Massive Dumpster Fire appeared first on The Economic Collapse.

All Of This Uncertainty Is Causing A Tremendous Amount Of Chaos For Businesses Of All Sizes

Michael — Thu, 29 May 2025 20:27:57 +0000

How are businesses supposed to plan for the future if they have no idea what the rules of the game are going to be? Businesses thrive in a predictable environment, but we have entered a period of time of extreme uncertainty. One day we are facing high tariffs, the next day one court strikes them all down, and then the next day another court temporarily reverses that decision. How is anyone supposed to make solid business decisions in such an environment? Our economy has been heading in the wrong direction for a long time, and we need to take bold action to fix things. But if legal battles are going to be constantly upending the rules of the game, there is no way that we are going to be able to pull out of our economic death spiral.

On Wednesday, three judges at the U.S. Court of International Trade made headlines all over the world when they dramatically struck down all of President Trump’s tariffs…

A federal court on Wednesday ruled that President Donald Trump overstepped his authority to impose sweeping tariffs that have raised the cost of imports for everyone from giant businesses to everyday Americans.

But the administration immediately appealed the decision on Wednesday night, leaving the situation uncertain for consumers and companies and potentially prolonging the battle over whether Trump’s import duties will stand – and possibly reshape the global economy.

A three-judge panel at the US Court of International Trade, a relatively low-profile court in Manhattan, stopped Trump’s global tariffs that he imposed citing emergency economic powers, including the “Liberation Day” tariffs he announced on April 2. It also prevents Trump from enforcing his tariffs placed earlier this year against China, Mexico and Canada, designed to combat fentanyl coming into the United States.

Many news outlets on the left were in a celebratory mood once this decision was announced.

For example, the following comes from Politico…

The U.S. Court of International Trade’s unanimous ruling against Trump’s signature tariffs is not the first judicial rebuke of Trump’s second term administration — and it will not be the last — but it may be the most serious and consequential to date. For the time being, the decision provides a major source of relief to the large majority of Americans who opposed Trump’s tariffs; to the U.S. businesses, both large and small, whose operations were existentially threatened by a policy that changed by the day; to the country’s foreign trading partners, whose economies were thrown into disarray; and to international financial markets, which quickly rose after the decision came down.

And the Chinese were quite thrilled by the decision as well…

China reiterated its call for the U.S. to abolish its tariffs after a panel of federal judges ruled that President Donald Trump did not have the authority to introduce them under the emergency powers he had used. The Trump administration is appealing the decision.

He Yongqian, spokesperson for the Chinese Commerce Ministry, said Beijing has “noticed that the court ruled that tariffs imposed over [the] fentanyl issue and Trump administration’s worldwide reciprocal tariffs are illegal and blocked them from going into effect.”

“China has always maintained that there are no winners in a trade war and that protectionism has no way out,” He said, according to state media outlet Global Times.

But the truth is that this court decision really didn’t change much at all.

Economists at Goldman Sachs quickly pointed out that the Trump administration has other ways to impose tariffs and that this ruling “might not change the final outcome for most major US trading partners”…

Goldman Sachs economists said the White House has a few tools at its disposal that could ensure the court ruling is only a temporary problem.

“This ruling represents a setback for the administration’s tariff plans and increases uncertainty but might not change the final outcome for most major US trading partners,” Goldman Sachs economists said in a research note.

“For now, we expect the Trump administration will find other ways to impose tariffs,” they added.

In particular, the Trump administration could use “Section 122 of U.S. trade law, Section 301 investigations and Section 338 of the Trade Act of 1930” to impose new tariffs in place of the tariffs that were struck down…

The Trump administration nevertheless has other legal means of imposing tariffs, Goldman says, flagging Section 122 of U.S. trade law, Section 301 investigations and Section 338 of the Trade Act of 1930.

Section 122 of the Trade Act of 1974 does not require a formal investigation and could therefore be one of the swiftest ways to get around the court roadblock.

“The administration could quickly replace the 10% across-the-board tariff with a similar tariff of up to 15% under Sec. 122,” analysts at Goldman said.

But for now, none of that will be necessary, because the U.S. Court of Appeals for the Federal Circuit has temporarily stopped the decision by the US Court of International Trade from taking effect…

A federal appeals court on Thursday granted the Trump administration’s request to temporarily pause a lower-court ruling that struck down most of President Donald Trump’s tariffs.

The Trump administration had earlier told the U.S. Court of Appeals for the Federal Circuit that it would seek “emergency relief” from the Supreme Court as soon as Friday if the tariff ruling was not quickly put on pause.

The judgment issued Wednesday night by the U.S. Court of International Trade is “temporarily stayed until further notice while this court considers the motions papers,” the appeals court said in its order.

What a mess.

White House Press Secretary Karoline Leavitt is insisting that this is a matter that will ultimately need to be decided by the U.S. Supreme Court…

“There is a troubling and dangerous trend of unelected judges inserting themselves into the presidential decision making process,” she said. “America cannot function if President Trump, or any other president for that matter, has their sensitive diplomatic or trade negotiations railroaded by activist judges.”
She added, “But ultimately, the Supreme Court must put an end to this for the sake of our Constitution.”

She is right.

The Supreme Court will need to get involved.

But how long will that take?

And at this stage, it is very unclear what the Supreme Court will choose to do…

“At the moment, it is anyone’s guess as to whether these very unpopular tariffs will be reinstated on appeal or by the Supreme Court,” said Carl Weinberg, chief economist at High Frequency Economics, in a May 29 research note. “So, uncertainty is now poised to escalate.”

It could take weeks or even months before a final decision is reached.

So what are U.S. businesses supposed to do during that time?

I have heard from a number of U.S. business owners that are experiencing quite a bit of stress right now.

Sadly, the numbers show that the U.S. economy had shifted into contraction mode even before the global trade war erupted…

According to the Commerce Department’s Bureau of Economic Analysis (BEA), the advanced GDP Growth Rate is expected to have contracted by 0.2% in the January-March period. The readings show a marked pullback from the prior quarter’s 2.4% expansion.

The drama that has played out right in front of our eyes this week is yet another example of how broken our system has become.

In the months ahead, there will be many more matters that directly affect our economy that will end up in the courts, and unelected judges will get to decide what happens.

It is not good for our society to have endless battles between the executive branch and the judicial branch.

Meanwhile, Congress is so paralyzed that it literally can’t seem to get much of anything done.

If you are trying to run a business in the midst of this madness, you definitely have my sympathy, and I have a feeling that a lot more uncertainty is ahead of us.

The post All Of This Uncertainty Is Causing A Tremendous Amount Of Chaos For Businesses Of All Sizes appeared first on The Economic Collapse.

The Middle Class Is Collapsing: Nearly 1 Out Of Every 4 Americans Is Now “Functionally Unemployed”

Michael — Tue, 27 May 2025 18:51:19 +0000

Do you ever feel like you are “functionally unemployed”? If so, you are definitely not alone. There are lots of people out there that cannot pay the bills each month even though they have jobs. In fact, there are lots of people out there that literally cannot afford to put a roof over their heads even though they are employed. Yes, there are many hard working Americans that are now living in their vehicles or in “tent communities” because that is all they can afford. In recent years, the cost of living has been rising much faster than paychecks have, and so now a substantial percentage of the population is living in a state of constant financial stress. The middle class has been collapsing all around us, and we are witnessing an extraordinary amount of economic suffering all over the country right now.

For years, the federal government has been telling us that the unemployment rate in the U.S. is very low.

Everyone knows that is a bunch of hogwash.

According to a report that was recently released by the Ludwig Institute for Shared Economic Prosperity, the true rate of unemployment in the U.S. was 24.3 percent last month…

But another indicator suggests those pieces of government data may be painting an overly rosy picture of the economy, with a recent report from the Ludwig Institute for Shared Economic Prosperity (LISEP) finding the “true rate” of unemployment stood at 24.3% in April, up slightly from 24% in March, while the official Bureau of Labor Statistics rate remained unchanged at 4.2% over the same period.

LISEP’s measure encompasses not only unemployed workers, but also people who are looking for work but can’t find full-time employment, as well as those stuck in poverty-wage jobs. By tracking functionally unemployed workers, the measure seeks to capture labor market nuances that other economic indicators miss, such as Americans who are left behind during periods of economic expansion.

Today, there are millions upon millions of Americans that are “functionally unemployed”.

According to Gene Ludwig, you can literally “be homeless and in a tent community and have worked one hour” and be counted as “employed” by the federal government…

“The unemployment data, as it’s put out, has some flaws,” LISEP chairman Gene Ludwig told CBS MoneyWatch. “For example, it counts you as employed if you’ve worked as little as one hour over the prior two weeks. So you can be homeless and in a tent community and have worked one hour and be counted, irrespective of how poorly-paid that hour may be.”

I know that a lot of you can really identify with what I am talking about in this article, because you are experiencing deep economic pain on a daily basis.

Earlier this month, I heard from a reader that is essentially “functionally unemployed” at this point.

I asked him if I could share an excerpt from his email to me with all of you, and he gave me permission. If you are suffering too, hopefully his story will help you to realize that you aren’t alone…

Last year my income was $19,000. If I didn’t have a mortgage/rent free house to live in, I would be homeless!!!

I try to stock up on food when ever my local Grocery Store puts items on sale.

I shop at Thrift Stores and only on the half price days.

In 8 years my Real Estate Taxes have gone from $1,400 to $2,000.

In 8 years my Real Estate Insurance has gone from $1,500 to $2,200.

I haven’t had a Vacation in DECADES!!!

I seldom eat out.

I drive a 40 year old Pickup with 220,000 miles on it.

I try to combine errands and shopping in one trip to conserve on gasoline and not put as many miles on my old Pickup.

During the hot summer months I take a shower out of the end of a garden hose to cut my water bill.

I wear my clothes day after day until they get so dirty I can’t stand it or they start to stink.

I can only dream about living a normal American middle class lifestyle.

I hear of people making $100,000 a year and how they cannot pay their bills. MY GOODNESS MAN, I WOULD CONSIDER MYSELF RICH IF I COULD MAKE $100K A YEAR!!!!!!

Countless others are living a similar lifestyle.

As I discussed earlier this month, one survey discovered that 70 percent of Americans are the most financially stressed that they have ever been in their entire lives.

And the cost of living just continues to soar.

In fact, the average price of a pound of ground beef just surged to another brand new record high…

The average cost of one pound of ground beef reached a record-high of $5.80 in April, according to numbers from the Bureau of Labor Statistics. That is up nearly 50% from five years ago.

Ouch.

Our cost of living crisis never seems to end.

Inflation is one of the primary reasons why consumer sentiment in the U.S. just hit the second lowest level ever recorded…

The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022.

The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%.

And the outlook for the months ahead is not promising at all.

Last month, the Conference Board’s index of leading economic indicators fell for a fifth month in a row…

The short-term outlook for the U.S. economy worsened significantly in April, according to the Conference Board’s latest Leading Economic Index (LEI).

On Monday, the D.C.-based research said that the index—a closely monitored composite of several economic indicators—had fallen by 1.0 percent to 99.4 in April, registering the fifth consecutive monthly decline and the steepest drop since March 2023. Over the six months ending in April 2025, the LEI fell by two percent, matching the pace of decline posted over the previous six months.

Let me try to end this article on a positive note.

If you are “functionally unemployed”, I know that it is tough right now.

In this difficult economic environment, we are all just going to have to get lean and mean.

Do your best to try to earn as much money as you can, and once you have got it hold on to it very tightly.

The middle class has been getting eviscerated for years, but we must never give up.

It won’t be easy, but if you are willing to fight you can survive in this economy.

Just keep putting one foot in front of the other every day, and just keep looking for more opportunities to make things better for you and your family.

The post The Middle Class Is Collapsing: Nearly 1 Out Of Every 4 Americans Is Now “Functionally Unemployed” appeared first on The Economic Collapse.

Here Are 6 Signs That The Housing Market Depression In The United States Is Getting Even Worse

Michael — Thu, 22 May 2025 20:33:09 +0000

America’s housing market has been in a “deep freeze” for more than a year. The combination of very high interest rates and very high home prices has frozen millions of potential buyers out of the market. As a result, home sales have fallen to extremely depressed levels. When I first warned that we were heading into a housing market depression, a lot of people thought that I was exaggerating. But now the numbers show that is exactly what has happened. The following are 6 signs that the housing market depression in the United States is getting even worse.

#1 Sales of previously-owned homes in the U.S. just fell again. In fact, we just witnessed the slowest April that we have seen since 2009…

The spring housing market continues to struggle amid high interest rates and low consumer confidence.

Sales of previously owned homes in April declined 0.5% from March to a seasonally adjusted, annualized rate of 4 million units, according to the National Association of Realtors. That is the slowest April pace since 2009.

In 2009, there were 306 million people living in the United States.

Today, there are 340 million people living in the United States.

So the fact that we have fallen to a level that we haven’t seen since the Great Recession should deeply trouble all of us.

#2 Sales of previously-owned homes are falling even though active listings and new listings are both rising…

Active listings—the total number of homes for sale—last month hit the highest level since March 2020. They climbed 1.2% from a month earlier on a seasonally adjusted basis and rose 16.7% year over year.

New listings rose to the highest level since July 2022, increasing 1.3% month over month on a seasonally adjusted basis and 8.6% year over year—the largest annual gain since May 2024.

“A lot of people are selling their homes and downsizing because they’re worried about the economy,” said Meme Loggins, a Redfin Premier real estate agent in Portland, OR. “During the pandemic, everybody wanted more space for a home office or for their kids to run around, but now people are more focused on saving money. A lot of folks are getting rid of their investment properties, and I’m working with a couple of federal employees who are afraid of losing their jobs, so they’re selling their homes and thinking of moving into condos.”

#3 Most potential young homebuyers have been completely forced out of the market. Shockingly, the average age of a homebuyer in the U.S. has surged to an all-time record high of 56…

The average age of homebuyers in the U.S. has risen by six years since July 2023 — another sign that younger Americans are being priced out of the market due to escalating ownership costs.

The average age of homebuyers is now 56, up from 49 in 2023, according to the National Association of Realtors’ annual state-of-the-market report released Monday. That’s a historic high, up from an average age in the low-to-mid 40s in the early 2010s.

#4 The median age of first-time homebuyers is spiking as well…

The median age of first-time buyers also rose from 35 to 38, while the share of first-timers dropped from 32% to 24% of all buyers for the year ending July 2024. That marks the lowest percentage since NAR started tracking the metric in 1981.

“In my two decades in the mortgage business, I’ve never seen a more difficult time for millennials to purchase a home,” says Bob Driscoll, senior vice president and director of residential lending at Massachusetts-based bank Rockland Trust.

This is a really bad thing for our society.

If most young couples cannot purchase a home until they are in their late thirties, something has gone horribly, horribly wrong.

#5 Zillow is reporting that home values have fallen in 27 U.S. states so far this year. Is this the beginning of a price crash?…

Home values fell in half the country as the housing market faces a nationwide downturn.

According to Zillow, monthly home values dropped in 27 out of the 50 states this year. While Florida, Colorado, Washington, D.C., California and Washington state experienced the greatest value declines from March to April, the data could foreshadow a larger housing market shift.

#6 Meanwhile, employers continue to conduct mass layoffs all over the nation, and this is only going to increase pressure on the housing market. For example, Walmart just announced that it will be laying off about 1,500 very well paid corporate employees…

Walmart is laying off around 1,500 corporate employees across various departments within its home office in Bentonville, Arkansas, multiple reports say.

In a memo shared with associates on May 21, Walmart executives said the company is “reshaping” some of its teams in an effort to modernize its business and enhance “associate, customer and member experiences.”

Most of the U.S. population simply cannot afford to shell out several thousand dollars for a mortgage payment every month.

Either interest rates will have to come down or housing prices will.

And if housing prices start falling like we saw in 2008 and 2009, that will cause all sorts of problems for our major financial institutions.

So hopefully the Federal Reserve will cut interest rates before it is too late.

One recent survey discovered that financial stress is at an all-time high for 70 percent of the U.S. population.

Absurdly high housing costs are one of the biggest reasons why so many people are financially stressed right now.

Home prices are way too high and so are rental prices.

If you were able to purchase a home and lock in a mortgage more than five years ago, you were extremely fortunate.

Those that wish to relocate now are facing ridiculously high prices and painfully high interest rates.

It has been said that he who hesitates is lost.

In this case, that is so true.

A lot of people out there that waited to pull the trigger have completely missed their chance.

Now the housing market is entering a very difficult chapter, and a tremendous amount of pain is ahead.

The post Here Are 6 Signs That The Housing Market Depression In The United States Is Getting Even Worse appeared first on The Economic Collapse.

We Are Looking Down The Barrel Of A Worldwide Credit Market Crisis That Threatens To Be Absolutely Horrific

Michael — Wed, 21 May 2025 20:19:15 +0000

National governments around the world are collectively more than 100 trillion dollars in debt. The United States accounts for about 35 percent of that total, China accounts for about 16 percent of that total, and Japan accounts for about 10 percent of that total. For a long time, national governments were able to fund their debt binges very cheaply, but now nervous investors are demanding higher interest rates to hold long-term government debt. This is driving up borrowing costs, and it has thrown credit markets around the globe into a state of chaos. If bond yields continue to rise at a very brisk pace, there is a risk that investors could become so nervous that credit markets actually start freezing up. If that were to happen, the entire global financial system would go completely haywire.

Yesterday, I specifically warned that we need to keep “a close eye on Japanese bond yields”.

Today, tepid demand for 20-year Japanese bonds pushed Japanese bond yields into extremely alarming territory…

The Tokyo tremor began on Tuesday, when the government tried to sell 1 trillion yen (£5.2bn) of March 2045 bonds and encountered lacklustre demand.

The average bid-to-cover ratio, which measures investor appetite, dropped to 2.5 – the lowest since 2012. The 1.14-point gap between the average and lowest-accepted prices, known as the “tail”, was the longest since 1987.

Investors responded by pushing the Japanese government 20-year yield to the highest this century, and the 30-year yield to a record.

This is a monster story.

I don’t understand why this isn’t front page news all over the planet.

The shaking of the financial system in Japan is unlike anything that we have seen in decades.

Of course the U.S. financial system is being shaken as well.

Moody’s just downgraded our credit rating, and Treasury bond yields continue to rise…

The 30-year Treasury bond yield last traded around 5.08%, the highest level going back to October 2023. The benchmark 10-year Treasury note yield traded at 4.59%.

Long-dated bonds sold off as traders worried a new budget bill would worsen the U.S. deficit. The measure is expected to pass as lawmakers reach a compromise on state and local tax deductions as investors head into Speaker Mike Johnson’s Memorial Day deadline. Yields spiked even higher after a poor afternoon auction for 20-year debt, raising fears investors may be losing their appetite for funding America’s deficits.

Just like we are witnessing in Japan, investors are quickly losing their appetite for our bonds.

We are already spending about a trillion dollars a year just in interest on the national debt, and now our borrowing costs could be headed a lot higher.

This is extremely bad news.

One analyst is warning that we have entered a time when “bond traders are willing to punish high-debt nations with large deficits”…

“The pressure on both Japanese and US bonds this week is a sign bond traders are willing to punish high-debt nations with large deficits,” says Kathleen Brooks, an analyst at XTB.

In other words, the party is ending.

But our politicians in Washington don’t seem to have gotten the memo.

The spending bill that is currently going through Congress would add another 20 trillion dollars to the national debt in the years ahead.

That is suicidal.

We just can’t do that.

We have been able to defy the laws of economics for a long time, but now economic reality is catching up with us in a major way.

Needless to say, the Europeans are in the same boat, and Google AI says that their bond yields have been rising as well this month…

European government bond yields have generally increased this month, particularly for longer-dated bonds. For example, TradingView reports that Eurozone government bond yields rose on Wednesday due to oil price increases, with Germany’s 10-year yield up 4 basis points. Over the month, Germany’s 10-year yield has increased by 18 basis points, while the UK’s 10-year yield has increased by 19 basis points.

What we are witnessing is truly a worldwide phenomenon.

The global trade war has made everyone very jittery. GDP projections have turned negative all over the planet, and some nations such as Japan have already entered contraction territory.

In an environment where global economic activity is slower, that is going to make it even more difficult for national governments to bring in sufficient revenue to service their debts.

So investors are demanding higher rates, and that is going to push up borrowing costs.

Of course higher borrowing costs will put additional pressure on the finances of national governments.

We could potentially be entering a vicious cycle of higher rates and higher borrowing costs, and that wouldn’t be good for any of us.

If interest rates rise too quickly, that could spark a major derivatives crisis. According to Google AI, interest rate derivatives account for “about 80% of the total global OTC derivatives notional outstanding”…

The global market for interest rate derivatives (IRDs) is a significant portion of the overall derivatives market. At the end of 2023, the notional outstanding for IRDs was approximately $579 trillion. This figure represented about 80% of the total global OTC derivatives notional outstanding, as of mid-year 2023. IRDs, including interest rate swaps, forward rate agreements (FRAs), and options, are used by financial institutions to manage interest rate risk.

A major derivatives crisis would be extremely destructive.

For a moment, try to imagine a giant financial tsunami that smashes one enormous financial institution after another with no end in sight.

That is what we are potentially facing.

For years, I have been warning about the enormous amount of exposure that the largest U.S. banks have to derivatives.

But for a long time, it seemed like everything would be just fine.

Unfortunately, a day of reckoning is now upon us, and it appears that this crisis could soon get really, really messy.

The post We Are Looking Down The Barrel Of A Worldwide Credit Market Crisis That Threatens To Be Absolutely Horrific appeared first on The Economic Collapse.

Is Japan’s Financial System On The Verge Of Collapsing?

Michael — Tue, 20 May 2025 20:14:03 +0000

Is the long-awaited implosion of the Japanese financial system beginning? Japanese bond yields are spiking dramatically, Japan’s debt to GDP ratio is now above 230 percent, the Japanese economy has started contracting, and Japanese Prime Minister Shigeru Ishiba just publicly stated that the financial condition of his nation is worse than the financial condition of Greece. When I heard that he had said this, I knew that I had to find his direct quote and share it with all of you…

“It’s important to recognise the dangers of a society and a world with interest rates. The government is not in a position to comment on interest rates, but the reality is we are facing a world with them. Our country’s fiscal situation is undoubtedly extremely poor, worse than Greece’s,” the prime minister told the parliament on Monday.

That is really an extreme thing to say.

But it is accurate. Greece has a debt to GDP ratio of 142.2 percent while Japan has a debt to GDP ratio of 234.9 percent…

According to the International Monetary Fund, Japan’s general government debt as a percentage of gross domestic product stood at 234.9 per cent as of 2025 while it was at 142.2 per cent for Greece.

This is a crisis that has been building for a long time, but now it appears that we have reached a tipping point.

Since the beginning of April, Japanese bond yields have been going completely nuts…

Japan, which now has substantially more inflation than the US – 3.6% overall CPI and 3.2% core CPI – is watching in astonishment as its very-long-term bond yields spike in a dramatic manner, while the Bank of Japan has accelerated QT this year, which it started in mid-2024.

The superhero is the 40-year JGB yield, which jumped another 11 basis points at the moment, for a spike of 100 basis points since the beginning of April, to 3.56% at the moment. A rising yield means a falling price.

Major financial institutions all over the globe are now facing gigantic unrealized losses on their Japanese bond holdings.

Meanwhile, Japan’s economy has now fallen into contraction mode…

Japan’s economy shrank for the first time in a year, contracting 0.2% in the March quarter as exports declined sharply, preliminary government data showed Friday.

The gross domestic product data was poorer compared to the 0.1% contraction expected by economists polled by Reuters.

On an annualized basis, Japan’s GDP contracted 0.7% in the first quarter, also more than the 0.2% fall expected in the Reuters poll.

Japan’s economy is expected to keep shrinking in the second quarter due to the pressure that the global trade war is putting on it.

But Prime Minister Ishiba is insisting that Japan will not rush into a bad trade deal with the United States…

Prime Minister Shigeru Ishiba spoke to reporters after being briefed by economic revitalisation minister Ryosei Akazawa on the second round of talks in the US.

“There is still a wide gulf between [Japan’s and the United States’] positions and no common ground has emerged,” he was quoted as saying.

“We are [pushing to negotiate] all the tariffs, including those on automobiles, steel and aluminium,” Ishiba said, adding that new duties on auto parts were “extremely regrettable” and Japan would “continue to demand that they be reversed.”

The 25 percent automotive tariffs are hitting Japan really hard, and the Japanese want them to be removed.

But U.S. officials have clearly stated that the Japanese will not be getting any special treatment…

The 25% automotive duty has been applied to every country, and Washington has said it will not grant Japan any special treatment.

But Tokyo has said autos are the country’s core industry and carmakers have an extensive supply chain for parts makers. If the tariffs remain it “could cause the entire Japanese economy to stall,” the report said.

At this stage, I would not expect to see a trade deal between the U.S. and Japan any time soon.

With elections looming in July, Prime Minister Ishiba simply cannot afford to look weak right now…

Unlike the UK, Japan is in no hurry to reach a disadvantageous or incomplete trade deal with US President Donald Trump, particularly with elections to the upper house of Japan’s national assembly coming up in July. And unlike the South Koreans, the Japanese are not seeking a low-key compromise.

The impact of 25% tariffs on autos and auto parts on the Japanese economy is simply too great, and America’s renewed assault on Japan’s rice farmers is too sensitive to tolerate.

Ishiba already leads a minority government, his Liberal Democratic Party having lost its majority in the lower house last October. Now he must either stand up for Japan or risk losing the party’s majority in the upper house as well.

In 2008 and 2009, the U.S. experienced a major financial crisis and a major recession simultaneously.

It appears that Japan could be headed for the same fate.

Of course the U.S. economy is not faring very well at the moment either.

In fact, we just learned that the Conference Board’s index of leading economic indicators has now fallen for five months in a row…

The short-term outlook for the U.S. economy worsened significantly in April, according to the Conference Board’s latest Leading Economic Index (LEI).

On Monday, the D.C.-based research said that the index—a closely monitored composite of several economic indicators—had fallen by 1.0 percent to 99.4 in April, registering the fifth consecutive monthly decline and the steepest drop since March 2023. Over the six months ending in April 2025, the LEI fell by two percent, matching the pace of decline posted over the previous six months.

Even if a global trade war had not erupted, it was clear that a worldwide economic slowdown was coming in 2025.

But now the trade war threatens to transform that slowdown into something much worse.

In addition, we could soon be facing an enormous global financial crisis.

Keep a close eye on Japanese bond yields.

If they continue to shoot higher, that is going to put a tremendous amount of strain on global financial institutions that were hoarding Japanese bonds when yields were very low.

Bond yields have also been rising in the U.S. and Europe, and this could be setting the stage for an unprecedented meltdown.

We aren’t there yet, but things are starting to move very quickly now.

The post Is Japan’s Financial System On The Verge Of Collapsing? appeared first on The Economic Collapse.

Walmart And Target Are Really Jacking Up Their Prices

Michael — Mon, 19 May 2025 20:02:25 +0000

Are you ready to pay 80 percent more for a USB-C cord? Unfortunately, Walmart, Target and other major retailers have decided to start dramatically raising the prices of thousands of imported products. Of course our paychecks are not going up dramatically as well, and so our standard of living is going to go down. We live at a time when 70 percent of Americans are already more financially stressed than they have ever been before, and now big corporations are going to be hitting us with a tsunami of enormous price hikes.

If prices of many imported goods go up by 5 or 10 percent, we can handle that.

But apparently Target is going nuts with their price hikes. For example, it is being reported that the price of one popular USB-C cord is being increased by 80 percent…

Now, thanks to insider information from Target workers, the extent of the raises are becoming apparent. Staff say it is just the beginning.

A $9.99 USB-C cord from the store’s in-house Heyday brand is now ringing up at $17.99, according to a self-identified employee on Reddit.

‘It’s happening,’ the worker wrote, sharing a photo of the price tag update. ‘All of Heyday is going up.’

Seriously?

Did Target really need to do this?

And Target CEO Brian Cornell has also warned that prices will be going up on many common grocery items…

The company’s CEO, Brian Cornell, started warning customers during a March earnings call, when the US was staring down potential 25 percent tariffs on Mexican and Canadian products.

At the time, he warned that everyday grocery items that frequently cross borders before making their way to Target’s aisles — like strawberries, avocados, bananas, and coffee beans — were set to increase.

Of course Target is not the only major retailer that is raising prices.

Last week, Walmart CFO John David Rainey told CNBC that customers should expect price increases “towards the tail end of this month, and then certainly much more in June”…

In an interview with CNBC, Chief Financial Officer John David Rainey said tariffs are “still too high” – even with the recently announced agreement to lower duties on imports from China to 30% for 90 days.

“We’re wired for everyday low prices, but the magnitude of these increases is more than any retailer can absorb,” he said. “It’s more than any supplier can absorb. And so I’m concerned that consumer is going to start seeing higher prices. You’ll begin to see that, likely towards the tail end of this month, and then certainly much more in June.”

When President Trump heard about this, he went ballistic.

On his Truth Social account, he insisted that Walmart should “EAT THE TARIFFS”…

After Walmart last week said it would have to jack up some prices because of high costs of the global trade war, Trump on Saturday responded forcefully in a Truth Social post, demanding Walmart reverse its decision.

“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump said. “Between Walmart and China they should, as is said, “EAT THE TARIFFS,” and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”

Trump believes that Walmart should be able to absorb the tariffs since the company is making so much money. But it has also been pointed out that Walmart’s margins are very thin…

“Walmart made “BILLIONS OF DOLLARS last year, far more than expected,” Trump posted on social media on Saturday. That’s accurate — Walmart is America’s biggest retailer and had a strong 2024 on the back of inflation-weary customers seeking out its notoriously low prices.

But Walmart’s profit is a function of its massive scale, rather than artificially high prices. As a percentage of sales, Walmart’s operating income last quarter was just a little over 4%. Its net profit margin was less than 3% — razor-thin by business standards.

When I visited a local Walmart recently, I was stunned by how much prices had changed.

And if Walmart CFO John David Rainey is telling the truth, the price increases that we have seen so far are just the beginning.

Sadly, the truth is that prices are rising to absurd levels just about everywhere.

One father in Florida recently made headlines all over the world when he revealed that he spent $1,400 to take his family of four to Disney World for a single day…

A Florida father-of-three was utterly disgusted at the $1,400 he had to pay to take his family of four on a ‘bargain’ day out to Walt Disney World.

Craig Stowell took his three kids and his wife to the self-proclaimed ‘Happiest Place on Earth’ in Orlando while family was in town visiting them, but he quickly found out just how deep the one-day trip was going to hit his pocket.

‘It started with the ticket purchase, and then it ran right into the parking, and then it just was like a cash cow for the rest of the day,’ the small business owner told Fox and Friends.

I remember my parents taking me to Disney World when I was a child.

But these days only the wealthy can afford to take their kids to our ridiculously overpriced theme parks.

Most of the country is just trying to find a way to scrape by financially from month to month. Consumer sentiment just fell to the second lowest level ever recorded, and the rising cost of living was the biggest reason for the drop…

U.S. consumers are becoming increasingly worried that tariffs will lead to higher inflation, according to a University of Michigan survey released Friday.

The index of consumer sentiment dropped to 50.8, down from 52.2 in April, in the preliminary reading for May. That is the second-lowest reading on record, behind June 2022.

The outlook for price changes also moved in the wrong direction. Year-ahead inflation expectations rose to 7.3% from 6.5% last month, while long-term inflation expectations ticked up to 4.6% from 4.4%.

After four years of steadily rising prices, we really are facing a historic economic crisis.

Unfortunately, it appears that prices are just going to keep going even higher.

I wish that I could tell you that there is an easy way out of this mess, but I cannot do that.

We are all just going to have to find ways to tighten our belts even more, because the purchasing power of our dollars is just going to continue to go down.

The post Walmart And Target Are Really Jacking Up Their Prices appeared first on The Economic Collapse.

The Truth About The “Trade Deal” With China

Michael — Mon, 12 May 2025 21:54:16 +0000

Everybody is so happy right now. The Dow Jones Industrial Average was up more than 1,000 points today, the talking heads on television are bubbling over with optimism, and even many of President Trump’s harshest critics are cheering. It warms my heart to see everyone so happy, and so there is part of me that is not inclined to dump rain on everyone’s parade. But I am not going to tell people what they want to hear just to tickle their ears. I have got to tell the truth about the agreement that has just been made with China, and the truth is not all rainbows and lollipops.

First of all, we don’t actually have a “trade deal” with China. What we have is a 90 day “cooling off period” during which we could potentially negotiate a “trade deal” with China.

There is an enormous difference between those two things.

For 90 days, both sides will reduce tariffs dramatically.

Without a doubt, that is a good thing.

If we had continued to impose a 145 percent tariff rate on most Chinese products, there would have been empty shelves and shortages all over America.

Thanks to this “cooling off period”, we have been able to avoid such a scenario at least for now.

During the “cooling off period”, there will still be tariffs.

Most U.S. exports to China will be hit with a 10 percent tariff rate.

That is definitely a win.

Major news outlets are reporting that most Chinese exports to the United States will be hit with a 30 percent tariff rate during the “cooling off period”, but that is not accurate.

On the War Room, Jason Miller explained what is actually happening. According to Miller, “we have 50 percent tariffs on China, they have 10 percent on us”.

He got to that figure by adding the 10 percent baseline tariff rate plus the 20 percent fentanyl tariff rate plus the 20 percent tariff rate from Trump’s first term.

And this is actually confirmed on the official White House website. It states that the only tariffs that are being removed by the United States are the “additional tariffs” that were imposed on April 8th and April 9th…

The United States will remove the additional tariffs it imposed on China on April 8 and April 9, 2025, but will retain all duties imposed on China prior to April 2, 2025, including Section 301 tariffs, Section 232 tariffs, tariffs imposed in response to the fentanyl national emergency invoked pursuant to the International Emergency Economic Powers Act, and Most Favored Nation tariffs.

So that leaves us with a 50 percent tariff rate on Chinese imports during the “cooling off period”, and that is about where U.S. officials were projecting that we would end up.

According to U.S. Treasury Secretary Scott Bessent, the current tariff rate on Chinese imports is a “floor”.

In other words, even if a permanent trade deal with China is reached, we shouldn’t expect the tariff rate on Chinese imports to go any lower.

Bessent is also telling us that the U.S. is purposely making a strategic decision to become less dependent on Chinese products…

Treasury Secretary Scott Bessent said Monday that the trade agreement reached over the weekend represents another stage in the U.S. shaking its reliance on Chinese products.

Though the U.S. “decoupling” itself from its need for cheap imports from China has been discussed for years, the process has been a slow one and unlikely to ever mean a complete break.

However, Bessent said there are now specific elements of decoupling in place that are vital to U.S. interests.

So things are never going to go back to the way they once were.

The Trump administration is framing this “cooling off period” with China as a big win, and stock prices absolutely soared today.

Interestingly, the Chinese are also framing this “cooling off period” as a big win for them too…

Chinese officials, influencers and state-run media on Monday were casting the initial trade agreement and 90-day tariff pause with the United States as a victory and a vindication of Beijing’s negotiating strategy.

They’re arguing that their defiant public posture worked — and was a major reason they were able to strike a deal with U.S. officials in Switzerland with relatively few concessions.

“China’s firm countermeasures and resolute stance have been highly effective,” said a social media account linked to China’s national broadcaster CCTV.

Tariff rates have been temporarily slashed by both sides for a period of 90 days.

Does that put us in a better position than last week?

It most certainly does.

But the tariff rate on Chinese imports is now far higher than it was just a couple of months ago.

That is not good news at all.

Prices on thousands upon thousands of products that we import from China will be going up.

In some cases, the price increases will be quite dramatic.

Those that are on the bottom levels of the economic spectrum will be hit the hardest.

If you shop at Walmart, Target, Home Depot or at any of our dollar stores, you will feel the pain.

Our standard of living has been going down for years, and it is about to go down even more.

According to CBS News, even after accounting for lower tariffs on Chinese goods “Americans today face an overall effective tariff rate of 17.8%”…

Even with the contours of a U.S-China deal potentially in place, Americans today face an overall effective tariff rate of 17.8%, the highest since 1934, according to the nonpartisan Yale Budget Lab.

High tariff rates deepened the Great Depression in the 1930s, and the global economy is far more interconnected today than it was back then.

Even if a permanent trade deal with China can be secured, and even if that permanent trade deal does not raise tariffs from where they are at this moment, we are still going to experience a lot of economic chaos in the months ahead.

Economic activity is slowing down all over the planet, and layoff announcements just keep rolling in. For example, Nissan just announced that they will be giving the axe to approximately 20,000 workers…

Nissan is to cut almost 20,000 jobs globally as it sharply ratchets up plans to slash costs – and has not said whether its UK plant could be hit.

The Japanese car maker, which operates a factory in Sunderland, is planning to axe over 10,000 more jobs than originally planned as it seeks to make 400 billion yen (£2billion) in savings.

In November, the company launched a restructure which aimed to cut 9,000 positions – but reports from Japanese national broadcaster NHK suggest the firm has now more than doubled the number of workers it intends to cut.

So what is the bottom line?

The bottom line is that we should definitely be glad that the U.S. and China have dramatically reduced tariff rates for a period of 90 days.

If this had not happened, we would have soon been facing empty shelves and shortages.

But a 50 percent tariff rate on Chinese imports is still really going to sting.

The U.S. economy has been heading in the wrong direction for years, and this is certainly going to accelerate our problems.

There is much rejoicing for the moment, but it won’t be too long before the reality of what we are facing becomes undeniable.

The post The Truth About The “Trade Deal” With China appeared first on The Economic Collapse.