The Economy

Are You Ready For The Great Depression Of The 2020s?

For those of you that were expecting just a “deep recession”, I am afraid that you are going to be very disappointed.  It took years for the U.S. economy to fully unravel in the 1930s, but now we have witnessed a similar level of economic devastation in just a matter of weeks.  More than 26 million Americans have already lost their jobs, economic activity has come to a standstill, people are lining up for miles at food banks all over the nation, and businesses are being permanently shuttered at a staggering pace.  But the good news is that some states will attempt to “reopen” their economies in the weeks ahead.  In most instances, there will be several stages before all of the restrictions are finally lifted, and that means that economic suffering will be stretched out for an extended period of time.  And of course if cases and deaths start spiking again we could see another wave of strict lockdowns all over the country, and needless to say that would greatly escalate this economic downturn.

At this moment, so many hard working people all over America are deeply hurting.

I personally know people that have lost their jobs, and you probably do too.  And because virtually nobody is hiring right now, it is going to be exceedingly difficult for newly unemployed workers to find other jobs.

Because it has an economy that is so dependent on the entertainment industry, Nevada is being hit particularly hard by this downturn.  The New York Times spoke to one Nevada resident named Valicia Anderson, and she hardly knows anyone that is still actually working…

When Valicia Anderson starts to count the people she knows in Las Vegas who have lost their jobs, she runs out of fingers fast.

Her husband, the breadwinner of her family and a restaurant worker in the Rio casino. All 25 of his co-workers. Her grown son, in a temp agency. The technician who does her nails. The barber who cuts her husband’s hair. Her best friend, a waitress. The three servers and a manager at the TGI Friday’s that is her family’s favorite treat.

It has been estimated that the current unemployment rate in the state is “about 25 percent”, and that number is almost certainly going to go higher in the months ahead.

Down in Texas, they are also dealing with an oil crash at the same time that they are wrestling with this coronavirus pandemic, and this has created the worst budget crisis that the city of Houston has ever seen…

On the same day that the price for U.S. crude oil fell to about $30 below zero — a mind-bending concept and the first time oil prices had ever turned negative — Mayor Sylvester Turner of Houston, the self-proclaimed energy capital of the world, stood before reporters. His words were grim and muffled by the black mask covering his face.

The mayor announced that city employees would soon be furloughed, but he declined to say how many. The Houston Zoo, he said, could expect to see funding deferred under what he called “the worst budget that the city will deal with in its history.”

The high paying energy industry jobs that fueled an incredible real estate boom in Texas are now disappearing by the thousands, and it is being reported that many of those that are being laid off are learning the news “during painful Zoom sessions from home”…

Thousands of energy workers, some of whom only lately moved to the region to take advantage of the recent prosperity, have been laid off. Many of them were told the bad news during painful Zoom sessions from home.

Warning letters from energy companies have been flooding the Texas Workforce Commission about layoffs and furloughs: 3,500 at Halliburton, 223 at Tenaris, 184 at Baker Hughes, 102 at Diamond Offshore Drilling, 95 at Energy Transfer.

By the way, when did Zoom become such a big thing?

It seems like so many people are using it now, and I don’t understand why it is so popular.

Perhaps my readers will help me to understand this.

Getting back to the economy, at this point even the Trump administration is admitting that the unemployment rate will soon be approaching levels that “we saw during the Great Depression”…

White House senior advisor Kevin Hassett says US economy is in “grave situation” and the unemployment rate could be hitting the same numbers seen during the Great Depression due to the Covid-19 pandemic.

“We’re going to be looking at an unemployment rate that approaches rates that I think we saw during the Great Depression,” Hassett told ABC’ ‘The Week’ on Sunday.

Let’s put that into perspective for a moment.

During the last recession, we thought that things were really, really bad when the unemployment rate got up to about 10 percent.

But back in 1933 the unemployment rate peaked at 25 percent, and now we are being told that we should expect something similar here in 2020.

Wow.

And of course low income Americans are being hit harder than anyone else.  Just check out these numbers…

Most Americans support stay-at-home restrictions to protect public health. And yet the burden of the country’s shutdown is disproportionately falling on those least prepared to handle it: About 52 percent of low-income Americans say they or someone in their household has experienced job upheaval, compared to 43 percent of the broader adult population, the Pew Research Center found. Only 23 percent of low-income Americans say they have enough emergency funds to last them three months.

Hopefully as some states attempt “reopenings” it will help to slow down this enormous tsunami of unemployment.

But as I pointed out the other day, millions of Americans are now making much more money being unemployed than they did when they were working, and so that is going to provide an incentive for millions of Americans to stay unemployed for the foreseeable future.

And even if all of the coronavirus restrictions in the entire country were lifted tomorrow, fear of the coronavirus would cause economic activity to be greatly depressed for many months to come.

As I discussed yesterday, the meat processing industry is a perfect example of this.  Meat processing facilities are being shut down all over the nation, and one expert just told NBC News that we should expect shortages of meat in our grocery stores “around May 1″…

Beef, chicken and pork could be as scarce as toilet paper soon because so many meat processing plants have been temporarily shut down amid the coronavirus pandemic, industry experts are warning.

“We’ve just completed our third week of reduced slaughter and production,” Dennis Smith, a commodity broker/livestock analyst with Archer Financial Services in Chicago, said. “My guess is that about one week out, perhaps around May 1, shortages will begin developing at retail meat counters.”

So many of the things that we have been warning about for a long time are starting to happen, but most Americans still do not grasp the seriousness of this crisis.

All of the economic dominoes are starting to fall, and even if the remainder of this pandemic goes much more smoothly than anticipated, it will not fundamentally alter our current economic trajectory.

The “Everything Bubble” lasted far longer than it should have, but now that it has burst the pain is going to be absolutely immense.

And it is those at the bottom of the economic food chain that are going to be hit the hardest.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

We Have Never Seen An Economic Collapse Quite Like This, And It Is Largely A Self-Inflicted Wound

The rate at which the U.S. economy is unraveling is absolutely breathtaking.  On Thursday, we learned that another 4.4 million Americans filed new claims for unemployment benefits last week, and that means that a grand total of more than 26 million Americans have lost their jobs during this pandemic so far.  To get an idea of just how dramatically this record-setting unemployment spike dwarfs what we witnessed during the last recession, check out these charts.  Prior to this year, the record for new unemployment claims in a single week was just 695,800, and now each of the last five weeks has been at least four times larger than that old record.  And as I discussed in an article earlier today, millions of those workers have absolutely no incentive to go back to work any time soon, because thanks to Congress they are bringing home more money now than when they were actually working.  So even if efforts are made to return the economy “to normal”, millions of workers will want to stay home until the $600 per week “unemployment bonus” finally expires.  The sad thing is that this new economic crisis is largely a self-inflicted wound, and I will explain why that is true later in this article.

But first let’s talk about where things currently stand.  Based on the unemployment claim numbers that we have been seeing, experts are now projecting that the current rate of unemployment in the U.S. “is about 16 percent”…

With a labor force that totals about 162 million people, the claims figures suggest the unemployment rate is about 16 percent, or roughly one in six Americans — significantly higher than the 10 percent peak seen during the 2008 financial crisis. The previous one-week high for jobless claims was 695,800 in 1982.

For a long time I have been warning that the next crisis would make the last recession look like a Sunday picnic, and now that has actually happened.

In addition to an unprecedented number of initial claims for unemployment benefits, we have also absolutely smashed the all-time record for the number of “continuing claims”…

A person who has filed an “initial claim” for Unemployment Insurance (UI) and still doesn’t have a job a week later is added to “insured unemployment.” The number of the “insured unemployed” – often called “continued claims” – skyrocketed to 15.98 million, by far the highest in the history of the data series. The high before this Covid-19 era was 6.63 million in May of 2009.

And now that Congress has given workers a tremendous financial incentive to stay unemployed, the number of “continuing claims” is likely to keep going higher with each passing week.

Of course this isn’t just happening in the United States.  Over in Europe, business activity is falling at the fastest pace ever recorded…

“The eurozone economy suffered the steepest falls in business activity and employment ever recorded during April as a result of measures taken to contain the coronavirus outbreak,” it said.

The company’s purchasing manager’s index (PMI) dived to a record low of 13.5 in April, from the previous all-time low of 29.7 in March, confirming private sector gloom that is savaging the 19-nation eurozone.

To put those numbers in perspective, any reading below 50 indicates a contraction.

Needless to say, these absolutely horrific statistics are the result of the coronavirus lockdowns, but were these lockdowns actually necessary in the first place?

As I discussed yesterday, the only reason why any sort of a lockdown should be implemented is if the hospitals in a particular area are being overwhelmed, because if people are unable to get medical treatment that could definitely push the ultimate death toll from the pandemic higher than it otherwise would have been.

But in most parts of the U.S. and Europe right now, hospitals are not being even close to overwhelmed.

Keeping everyone at home is not going to defeat this virus or end this pandemic.  When you are dealing with a virus that spreads from person to person this easily, there is no way that you are going to contain it.  In fact, the U.S. just had 31,900 newly confirmed cases in the 24 hour period that just ended even though most of the nation has already been locked down for weeks.

Yes, these lockdowns have temporarily slowed down the spread of the virus, but the lockdowns have also extended the duration of this pandemic.  Ultimately, this pandemic is never going to be over until it sweeps through the population and “herd immunity” is achieved.  And as I discussed yesterday, 70 to 90 percent of the population is going to have to develop antibodies in order to get to that point.

And if you are waiting for a “vaccine” to get us out of this mess, you are going to be waiting for a very, very long time.  There has never been a successful vaccine for any coronavirus in all of human history, and the task of trying to develop one for COVID-19 has become exceedingly more difficult now that scientists have discovered that there are 30 different strains of the virus.

So the truth is that this outbreak is going to rip through our population, and nothing that our politicians can do will be able to stop that from happening.

But the good news is that new numbers from New York seem to indicate that we are closer to “herd immunity” than we previously thought…

Preliminary results from New York’s first coronavirus antibody study show nearly 14 percent tested positive, meaning they had the virus at some point and recovered, Gov. Andrew Cuomo said Thursday. That equates to 2.7 million infections statewide — more than 10 times the state’s confirmed cases.

The study, part of Cuomo’s “aggressive” antibody testing launched earlier this week, is based on 3,000 random samples from 40 locations in 19 counties. While the preliminary data suggests much more widespread infection, it means New York’s mortality rate is much lower than previously thought.

However, another study that was conducted in L.A. County found that only 4 percent of their residents had developed antibodies, and that is probably more representative of the nation as a whole.

In any event, everyone agrees that the vast majority of the U.S. population has not developed antibodies, and that means that there will be many more cases and many more deaths in the months ahead.

And that is going to happen no matter how our politicians respond to this crisis.

So as long as our hospitals are not being overwhelmed, there isn’t a need for any lockdowns.  The final case total and the final death toll will be roughly the same whether there are lockdowns or not.

But these lockdowns are definitely killing our economy, and tens of millions of American workers now find themselves unemployed.

And if we continue to try to keep the U.S. economy shut down for a few more months, the economic damage will be incalculable.

Please don’t misunderstand what I am saying.  I am not saying that we should sacrifice lives in order to save the economy.  What I am saying is that about the same number of people are eventually going to die whether we have the lockdowns or not.  And if we can’t handle this, how in the world are we going to deal with what else is coming?

If you are elderly, have a compromised immune system or are in some other high risk group, you are going to have to quarantine yourself for the foreseeable future, but that would be true whether there are lockdowns or not.  The mortality rates for high risk groups are much, much higher than for the general population as a whole, and the danger is very real.

But everyone else should be allowed to get back to work, because most of the population is eventually going to catch this virus no matter what we do.  As long as our hospitals can handle it, we should proceed with life as normal.

Unfortunately, that isn’t going to happen.  Most of the current lockdowns are going to remain in place for quite some time, and this new economic depression is just going to get deeper and deeper.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Killed By The Coronavirus Lockdowns: 1000s Of U.S. Businesses That Were Shut Down Will Be Closed Permanently

This economic downturn is turning out to be far deeper and far more severe than most experts were originally anticipating.  More than 22 million Americans have filed claims for unemployment benefits, and economists are telling us that the U.S. economy is contracting at the fastest rate that we have seen since the Second World War.  We are already starting to see some high profile companies move toward bankruptcy, but the real story is what is happening to thousands upon thousands of small and mid-size businesses because of the lockdowns.  Many of them were barely surviving even before this pandemic, and now these lockdowns have delivered a death blow.

The restaurant industry is a perfect example.  Prior to the pandemic, there were more than a million restaurants in the United States, and about half of them were independent.  Those independent restaurants employed approximately 11 million workers, and now the vast majority of those workers have been laid off.

Once the lockdowns are over, it would be wonderful if all of those independent restaurants would spring back to life, but the results of a recent survey suggest that simply is not going to happen.  In fact, that survey found that 28 percent of all independent restaurants are probably not going to survive if the lockdowns last for another month…

A survey released Thursday by the James Beard Association found independent restaurants laid off 91% of their hourly employees and nearly 70% of salaried employees as of April 13 – double-digit increases in both categories since March. The poll of 1,400 small and independent restaurants found 38% of have closed temporarily or permanently, and 77% have seen their sales drop in half or worse.

Perhaps most troubling: 28% of restaurants said they don’t believe they can survive another month of closure, and only 1 out of 5 are certain they can sustain their businesses until normal operations can resume.

28 percent of 500,000 is 140,000, and so if these lockdowns are not lifted soon we could be facing a scenario is which tens of thousands of independent restaurants are lost forever.

Of course a lot of restaurants that do reopen will face a really tough struggle because fear of the coronavirus is going to keep customers away for the foreseeable future.  So even if all of the lockdowns were lifted tomorrow, the restaurant industry would still not fully recover.

Sadly, the same could be said for the fitness industry.  In fact, we just learned that one of the biggest fitness chains in the nation is getting ready to file for bankruptcy…

Gym chain 24 Hour Fitness is working with advisors at investment bank Lazard and law firm Weil, Gotshal & Manges to weigh options including a bankruptcy that could come as soon as the next few months, people familiar with the matter tell CNBC.

The chain is grappling with a heavy debt load, deteriorating performance and a coronavirus pandemic that forced it to shut its more than 400 clubs.

Yes, a certain segment of the population is quite eager to resume all of their normal pre-pandemic activities, but even a 20 or 30 percent drop off in revenue will be fatal for many gyms.

And the truth is that a lot of people are simply not going to be in the mood to share exercise equipment with others for a long time to come.

The entertainment, tourism and retail industries have also been hit extremely hard by this pandemic.  The other day I was quite stunned when I learned that Neiman Marcus “is reportedly ready to file bankruptcy”…

Neiman Marcus Group, one of the largest retailers in the United States, is reportedly ready to file bankruptcy amid the COVD-19 pandemic after defaulting millions in bond payments last week and furloughing 14,000 employees.

Neiman Marcus would become the first major US department store to crumble amidst the economic set backs from the coronavirus outbreak.

No, things are definitely not going to be returning to “normal” in America, and there will be a lot more big corporate names among the victims in the days to come.

At this point, even some of the most prominent corporations in the entire country are “indefinitely” sidelining their workers…

Indefinite furloughs began this weekend for more than 100,000 Disney, Best Buy and CarMax workers as businesses make cuts to survive the coronavirus pandemic and subsequent mandatory closures.

But most Americans are not in any position to handle “indefinite furloughs”.

In fact, one survey discovered that a whopping 50 percent of all Americans will run through their savings “by the end of April”…

One of the largest concerns on most homeowners minds right now is how they are going to pay bills — specifically their monthly mortgage payments. 50% of Americans reported their savings will run out by the end of April. Prior to the COVID-19 outbreak, 30% of homeowners had less than $1,000 in an emergency fund, with 22% reporting they didn’t have enough in savings to cover their mortgage payment for one month.

Just like during the last recession, countless numbers of Americans will go from living a comfortable middle class lifestyle to being desperately needy in just a matter of weeks.

I have been writing a lot about the absolutely massive lines that we have been seeing at food banks all over the nation, and we just witnessed another example in Miami.  In one of the wealthiest areas of the entire city, vehicles were lined up for a mile as people waited patiently to receive handouts from a local food bank…

Talk about a Norman Rockwell painting idea come to life — a parade of cars filled with hungry people in Miami … smack dab in the middle of two of the city’s ritziest hotels.

Check out this surreal scene down in Miami Beach, where a MILE-long line of cars were arranged in a giant U-curve in between the W Hotel and Setai Hotel — two of MB’s most high-end go-to spots for celebrity out-of-towners … like Kim K, Justin Bieber and more.

You can see photos from that event right here, and if you look closely you will see that some of those vehicles are quite nice.

As I have warned so many times over the years, if you don’t have any sort of a financial cushion you can “suddenly” find yourself in a whole lot of trouble when disaster finally strikes.

Unfortunately, we have now entered a time when there will be one crisis after another, and every new crisis will significantly escalate our woes.

For a very long time, there have been very loud warnings that our debt-fueled economic bubble would burst, and now it has happened.

The road ahead is going to be filled with immense pain, and most Americans are not going to be able to handle it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

U.S. Economy Contracting “At Its Sharpest Pace Since World War Two” And “The Worst Is Yet To Come”

Fear of COVID-19 has unleashed economic chaos on a scale that has already surpassed anything that we witnessed during the last recession, and as you will see below, we are now being warned that “the worst is yet to come”.  Many Americans are hoping that things can start to return to normal as the U.S. economy “reopens” in the weeks ahead, but the truth is that we are still in the very early chapters of this crisis.  In fact, it is being estimated that we are only one-tenth of the way through this pandemic, and by “flattening the curve” we have actually extended the economic pain.  You see, the truth is that most Americans are going to end up catching this virus one way or another.  All of the “shelter-in-place” orders have temporarily slowed down the spread of this coronavirus, but once they are lifted it is inevitable that we will see new waves of people becoming infected.  And if you think that a vaccine will be the golden ticket that gets us out of this mess, you might want to reconsider that belief, because there has never been a successful vaccine for any coronavirus.  Of course it is possible that scientists could come up with something this time around, but if the virus mutates significantly that could render any potential vaccine absolutely useless.

In the days ahead, there will be a tremendous amount of debate about the correct way to fight this virus, but meanwhile the U.S. economy will continue to deteriorate.

In fact, Reuters is reporting that economists are now projecting that the U.S. economy is contracting “at its sharpest pace since World War Two”…

The deepening economic slump was also amplified by other data on Thursday showing manufacturing activity in the mid-Atlantic region plunged to levels last seen in 1980 and homebuilding tumbling by the most in 36 years in March.

The reports followed dismal reports on Wednesday of a record drop in retail sales in March and the biggest decline in factory output since 1946. Economists are predicting the economy, which they believe is already in recession, contracted in the first quarter at its sharpest pace since World War Two.

Yesterday, I documented the fact that we are in the midst of the largest tsunami of job losses in U.S. history by a very wide margin.

In fact, we are absolutely obliterating the old records, and that truly puts us in unchartered territory.  And as bad as things have already gotten, one prominent expert told Reuters that “the worst is yet to come”…

Economists are estimating the economy contracted as much as 10.8% in the first quarter, which would be the steepest drop in gross domestic product since 1947. They say the massive fiscal package will likely provide little cushion for the economy.

“The economy is in a downward spiral where job losses beget job losses and the federal government emergency relief checks will not be enough to turn the tide,” said Chris Rupkey, chief economist at MUFG in New York. “The recovery is looking less V-shaped by the day as the deeper we fall, the harder it will be for the nation to climb back out of this deep hole the pandemic has dug for the economy. The worst is yet to come.”

As areas around the country start “reopening for business”, some of the jobs that were lost will come back.

But the truth is that millions of those jobs are gone permanently, and large numbers of the businesses that were closed down will never open again.

For the foreseeable future, a lot of Americans are going to avoid going to restaurants, bars, movie theaters, shopping malls and other businesses that require close human interaction.  One expert that was interviewed by the Los Angeles Times says that for the next few years we need to accept the fact that the world “will be totally different than what we are used to”…

“The world that we are going to live in for at least the next two to three years will be totally different than what we are used to,” said Sung Won Sohn, president of SS Economics and professor at Loyola Marymount University.

“Because of the psychological shock that we have experienced, we are going to be more cautious, and we will probably spend less and save more, and we will have fewer contacts with other individuals,” he said. “We are going to be suspicious about things, [such as] whether people we are meeting have the virus and will the economy fall back down again.”

The fear that this pandemic has created is going to be with us for a very long time, and it is going to cause enormous shifts in economic behavior even after the U.S. starts “reopening”.

In an environment like this, very few people are buying vehicles, the housing market is already imploding all over the nation, and retailers are having a very difficult time envisioning any sort of a positive future for their industry at this point.

But at least we will all be getting big, fat socialist bailout checks from the government, right?

Actually, they won’t be that big, and for most Americans the checks will only get them through about one month.

So once that money is gone, will the federal government send us another round of “universal basic income” checks?

Now that they have gone down this rabbit hole, the federal government is in danger of sparking civil unrest if they don’t keep the checks coming.  In fact, Jim Rickards is entirely convinced that large scale “social disorder” is on the way…

Looting, burglary and violence in the midst of a state of emergency are the shape of things to come.

The veneer of civilization is paper-thin and easily torn. Most people don’t realize how fragile it is. But they’re going to learn that lesson, I’m afraid.

Expect social disorder to get worse long before it gets better.

Unfortunately, Rickards is right on point, and I have also been warning about “great civil unrest” for a very long time.  The delicately balanced debt-fueled prosperity that we had been enjoying for so many years has now been shattered, and things are going to get really ugly in this country.

And this coronavirus pandemic is not going away any time soon.  Over the last 24 hours, the number of confirmed cases in the U.S. has jumped by more than 30,000 and the death toll has risen by more than 2,400 even though most of the nation is currently shut down.

Ending the lockdowns will give a boost to the economy, but it will also cause the virus to start spreading faster, and once that happens we could see another round of lockdowns.

In the end, our battle with COVID-19 will not be over until the virus has swept through most of the population, and we are not going to reach that point for quite a while.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

This Is The Worst Employment Collapse In U.S. History By A Very Wide Margin

We have never seen an “employment apocalypse” in the United States like we are witnessing right now, and it is not going to end any time soon.  Over the past several days, “coronavirus shutdowns” have officially been extended all over the nation, and the longer these shutdowns last the more jobs our economy is going to lose.  And because most Americans were living paycheck to paycheck before this pandemic hit us, many unemployed workers are already unable to pay their bills.  Yes, our authorities may be slowing down the spread of the virus, but in the process they have absolutely killed the economy.  On Thursday, I was stunned to learn that another 5.2 million Americans filed initial claims for unemployment benefits last week.  That brings the grand total for the last four weekly reports “to a staggering 22 million”…

About 5.2 million people filed for unemployment benefits last week, the Labor Department said Thursday.  Jobless claims provide the best measure of layoffs across the country. Economists surveyed by Bloomberg had estimated that 5.5 million Americans would file initial applications for unemployment insurance last week.

That brings the total claims over the past four weeks to a staggering 22 million. By comparison, the labor market added 21.5 million jobs since the Great Recession.

Just think about that.

22 million jobs wiped out in one month.

And the true number of jobs lost is actually even higher, because not everyone that loses a job files for unemployment benefits.

Prior to this year, the highest number of initial claims for unemployment benefits during any four week period that we had ever witnessed was 2.7 million during the fall of 1982.

So 22 million in four weeks truly puts us in uncharted territory.  Just look at this chart.

We aren’t just beating the old records, we are absolutely obliterating them.

You know that things are really, really bad when even NBC News sounds just like The Economic Collapse Blog…

“The labor market is obviously very, very important, and has a high correlation with what is going on in the economy,” Jay Bryson, the acting chief economist at Wells Fargo, told NBC News. “It is showing us what I think we all know, that the economy is falling off a cliff at an unprecedented rate.”

In other words, the chief economist at Wells Fargo is saying that the U.S. economy is completely and utterly collapsing.

According to Zero Hedge, “we have lost 710 jobs for every confirmed US death from COVID-19 (30,985).”  Our politicians have prioritized saving lives over saving the economy, and many people out there seem convinced that was the right choice, but the economic devastation has been immense.

The socialist “stimulus payments” and unemployment benefits will help all of these unemployed workers temporarily, but the payments from the federal government are supposedly just a one time deal, and it won’t be too long before many states start running out of unemployment money…

Six states — including New York, which has the highest number of cases in the US — can only fund up to 10 weeks of unemployment benefits from their state coffers before money runs out and they have to turn to the federal government for additional funding, according to a recent estimate from the Tax Foundation.

Another 15 state trust funds don’t meet the federal Department of Labor’s recommended minimum solvency standard, which requires being able to pay benefits for a year in an economic downturn similar to the Great Recession.

So what will the federal government do once we get to that point?

I imagine that Congress will eventually want to borrow and spend trillions more dollars that we don’t have, and it is likely that “conservatives” and “liberals” will both be quite eager to vote for another pork-filled bill.

But it is probably going to take some time for Congress to get through the process of passing another crazy spending package, and meanwhile deep economic suffering is erupting all over the nation.

On Thursday, vehicles were lined up for two miles in Miramar, Florida as needy individuals waited for hours to get handouts from a local food bank.  We are starting to see food lines like this all over the country, and if things are this bad already, what will things look like a few months from now?

The chief economist at Grant Thornton in Chicago is calling this “the deepest, fastest, most broad-based recession we’ve ever seen”, and I can’t argue with that assessment one bit.

For a moment, I would like for you to consider just a few of the economic news items that we have seen over the past few days…

-United Airlines has reduced its schedule of flights for May and June “by about 90%” as demand for air travel has absolutely plummeted.

-U.S. retail sales were down 8.7 percent in March.

-J.C. Penney is “considering bankruptcy”.

-Housing starts just collapsed by the most that we have seen in 36 years.

-The mayor of Los Angeles says that large gatherings in his city will likely be banned until 2021.

-Facebook has canceled all large events until June 2021.

-Chinese GDP just experienced the largest drop ever recorded.

Of course nearly every nation will soon report absolutely staggering declines in GDP.  The shutdowns have brought economic activity to a standstill all over the globe, and no region is immune.

The following is how the Daily Mail is describing the current state of global trade…

The coronavirus pandemic is crippling global trade because crews on transport ships have been stranded at sea for months and food processing plants have been forced to close, threatening to bring the world’s supply chain to a grinding halt.

Shipping workers at sea are denied entry into ports, truckers can’t get to work in some countries or are confronted with complications at borders, food plants are closing and farm harvests going to waste in the crisis.

Does that sound like a “perfect storm” to you?

Well, the truth is that it is just getting started.

Eventually this pandemic will subside, but now that all of the economic dominoes are starting to tumble it will be exceedingly difficult to reverse that momentum.

And as I pointed out the other day, most Americans are not likely to resume all of their normal daily activities once the restrictions are finally lifted, and fear of this virus is going to be a dominant economic force for the foreseeable future.

What all of this means is that we are facing incredible economic pain for the short-term, the mid-term and for a long time to come.

At this point, we should no longer speak of “economic collapse” as something that will happen in the future.

It is here.

It is now.

And it is going to get a lot worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Now They Are Telling Us That Life In America Will Definitely Not Be Returning To Normal “For The Foreseeable Future”

If you thought that this pandemic would pass quickly and that life in America would soon return to “normal”, I am afraid that you are in for quite a shock.  Some of the restrictions currently in place will eventually be lifted, and efforts will be made to get people back to work, but life is still going to be radically different from what we had become accustomed to before COVID-19 started sweeping across the globe.  Authorities are telling us that there may be “rolling shutdowns” for up to 18 months, that social distancing guidelines will be necessary for a long time to come, and that this crisis will not ultimately be resolved until they can inject everyone with a vaccine.  If all of this greatly alarms you, please be assured that you are not alone.

In recent days there has been a tremendous amount of debate about when to “reopen the U.S. economy”, and organizations all along the political spectrum have drafted plans for how to do that.

Ezra Klein actually read quite a few of those plans, and he discovered that none of them would return our lives to normal “for the foreseeable future”…

Over the past few days, I’ve been reading the major plans for what comes after social distancing. You can read them, too. There’s one from the right-leaning American Enterprise Institute, the left-leaning Center for American Progress, Harvard University’s Safra Center for Ethics, and Nobel Prize-winning economist Paul Romer.

I thought, perhaps naively, that reading them would be a comfort — at least then I’d be able to imagine the path back to normal. But it wasn’t. In different ways, all these plans say the same thing: Even if you can imagine the herculean political, social, and economic changes necessary to manage our way through this crisis effectively, there is no normal for the foreseeable future. Until there’s a vaccine, the United States either needs economically ruinous levels of social distancing, a digital surveillance state of shocking size and scope, or a mass testing apparatus of even more shocking size and intrusiveness.

Over and over again, a “vaccine” is being touted as the golden ticket that will get us out of this mess.

The head of the Federal Reserve Bank of Minneapolis, Neel Kashkari, is another prominent voice that is warning that there won’t be a return to normalcy until a vaccine comes along.  And until that time comes, he believes that we are potentially facing “an 18-month strategy of rolling shutdowns”…

Kashkari, while acknowledging the downside of what a prolonged shutdown could mean for the economy, said the U.S., “barring some health-care miracle,” is looking at an 18-month strategy of rolling shutdowns based on what has happened in other countries.

“We could have these waves of flare-ups, controls, flare-ups and controls, until we actually get a therapy or a vaccine,” he said. “We need to find ways of getting the people who are healthy, who are at lower risk, back to work and then providing the assistance to those who are most at risk, who are going to need to be quarantined or isolated for the foreseeable future.”

In other words, Kashkari believes that all or part of the nation will be shut down over and over again whenever the number of coronavirus cases starts to spike too high.

Of course the WHO is eagerly looking forward to global vaccination as well, and the head of the WHO just told the media that he believes that this virus is ten times deadlier than the swine flu pandemic of 2009…

Coronavirus is ten times deadlier than the 2009 swine flu pandemic and a vaccine will be needed to halt it, the World Health Organisation has said.

WHO chief Tedros Adhanom Ghebreyesus told a virtual briefing from Geneva the organisation was constantly learning about the bug sweeping the globe.

Over and over again, officials are telling us that we are facing an 18 month timeframe until a vaccine will be ready.  Just check out what New York Governor Andrew Cuomo said during his press conference earlier today…

On Monday, governor Cuomo was joined on a conference call by the other Northeast governors. The recovery must be careful, incremental and guided by experts rather than politics, Cuomo said, and the pandemic won’t be truly “over” until a vaccine is available, which could take as long as 18 months. Ideally, a plan would also involve widespread testing, he said, to allow those without the virus – and those who have recovered and may now be resistant to it – to return to work first.

By the time 18 months goes by, most of the general population will be so desperate to feel safe from this virus that they will race out to get the vaccine as fast as they possibly can.

And until then, we can expect economic conditions to steadily deteriorate.

Yes, hopefully most businesses in the country will be allowed to reopen in a matter of weeks, but that doesn’t mean that the customers will come back.

Prior to this pandemic, we were already witnessing the worst “retail apocalypse” in U.S. history, and now one research firm is warning that an all-time record 15,000 stores could be permanently shuttered in 2020…

Coresight Research predicts that 15,000 U.S. stores will permanently close this year, setting a new record and nearly doubling its earlier forecast of 8,000 store closings.

‘Retail has hung a closed sign on the door literally and metaphorically,’ Neil Saunders, managing director of GlobalData Retail, said.

Pretty soon, our communities are going to be absolutely littered with abandoned buildings, and “space available” signs will start popping up everywhere.

Meanwhile, millions upon millions of U.S. consumers will be falling on very hard times.  We are in the midst of the greatest spike in unemployment in all of American history, and the number of people taking advantage of the federal government’s mortgage forbearance program has gone through the roof…

With unemployment claims hitting nearly 17 million over the last three weeks, the number of Americans applying for the government’s mortgage forbearance program under the COVID-19 relief plan spiked 73% for the week ending April 5 vs. the previous week – jumping from 2.73% to 3.74%, according to new data from the Mortgage Bankers Association.

For context, the total number of loans in forbearance was just 0.25% for the week of March 2 – an increase of 1,496% in just six weeks, with the number of borrowers in forbearance now topping 2 million according to CNBC.

Realizing that we are on the verge of another massive wave of mortgage defaults, mortgage lenders all over the nation are rapidly tightening standards.  JPMorgan is just one example…

Over the weekend our skepticism was confirmed when Reuters reported that JPMorgan, the country’s largest lender by assets and which will kick off earnings season tomorrow, will raise borrowing standards this week for most new home loans as the bank “moves to mitigate lending risk stemming from the novel coronavirus disruption.”

Starting Tuesday, customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value (something which we thought was the norm after the last financial crisis, but apparently lending conditions had eased quite a bit in the past decade).

For a very long time I have been warning that the flow of credit would get really tight when the next crisis hit.

Now we are here, and Americans are going to have a much harder time getting loans to buy homes, vehicles or anything else.

Everything that I have been warning about in my books is beginning to transpire, and a tremendous amount of pain is ahead.

My hope is that all of the pain that is ahead will cause a mass awakening and America will turn in a more positive direction.

But to most people, the immediate future looks really bleak right now, and that is not going to change any time soon.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

Deep Economic Suffering Has Erupted All Over America, But Guess Who The Federal Reserve Is Helping?

As millions upon millions of Americans lose their jobs in the greatest wave of unemployment in U.S. history, the Federal Reserve has decided that now is the time to spend trillions of newly created dollars in a desperate attempt to protect financial asset values.  In other words, as much of the country suddenly plunges into poverty, the Federal Reserve is working exceedingly hard to protect the wealth of the elite.  Approximately fifty percent of all stock market wealth is owned by the wealthiest one percent of all Americans, and the amount of stock market wealth owned by the poorest 50 percent of all Americans is so small that it really doesn’t matter.  And those running the Fed certainly understand that their reckless policies will create very painful inflation that will hit average American families extremely hard, but they don’t seem to care.  At this point, they figure that asset values must be protected at all costs, and that is going to continue to expand the absolutely massive gap between the rich and the poor in this country.

Over the past 3 weeks, more than 16 million Americans have filed new claims for unemployment benefits.

Prior to this year, the highest number that we had ever seen in any 3 week span in all of American history was about 2 million.

It is a collapse of unprecedented magnitude, and things have already gotten so bad that even “the Happiest Place on Earth” is conducting mass layoffs…

Walt Disney World Resort will furlough 43,000 union workers while its theme parks remain closed as authorities restrict large gatherings due to the coronavirus pandemic, according to the Service Trades Council Union.

Because most U.S. workers live paycheck to paycheck, many of the newly unemployed have fallen on hard times very rapidly.  Food banks all over the nation are seeing an alarming surge in demand, and in many cities people are literally lining up before the sun rises in order to ensure that they will get some food…

In many cities, lines outside food pantries have become glaring symbols of financial precarity, showing how quickly the pandemic has devastated working people’s finances.

In San Antonio, 10,000 families began arriving before dawn on Thursday at a now-shuttered swap meet hall to receive boxes of food. Normally, 200 to 400 families might show up during a normal food distribution.

For many other similar examples, please see my previous article entitled “America’s ‘Food Lines’ Are Being Measured In Miles As Desperation Sets In All Over The Country”.  Yes, things got bad during the last recession, but they were never as bad as we are witnessing now.  In fact, the CEO of Feeding America says that demand is already at the highest level that she has ever seen…

‘I’ve never witnessed a system being more strained,’ Feeding America CEO Claire Babineaux-Fontenot said.

‘For the first time probably in our history, we’ve had to turn some people away,’ she said, not that ‘We don’t want to do that, ever.’

Unfortunately, this economic collapse is still in the very early chapters.  If you can believe it, JPMorgan is actually projecting that U.S. GDP “will fall by 40 percent” on an annualized basis during the second quarter…

According to CNBC, JPMorgan economists are forecasting that the GDP will fall by 40 percent through the spring months. They also predict unemployment will reach 20 percent in April, with 25 million jobs lost overall.

Such a drop would be, by far, the worst in U.S. history. For context, according to Credit Suisse (via Business Insider), the worst quarterly drop of the 2008 crash was 8.4 percent.

And even once the “shelter-in-place” orders are finally lifted, that will not mean that things will go back to normal.  As Nobel-prize winning economist Robert Shiller has noted, fear of the coronavirus is going to cause many Americans to avoid restaurants, sporting events and other businesses where public interaction is required for a long time to come…

“The shortage of supplies is generating horrible news stories that put us all on edge,” said Shiller. “It may mean people won’t go to restaurants or sporting events in good numbers for years. You know the disease might not well be eradicated for several years from now.”

So the truth is that we are heading into a very deep economic depression, and the economic suffering in this country is going to be off the charts.

As events have begun to spiral out of control, the Federal Reserve has sprung into action on a scale unlike anything that we have ever seen before, and this has pushed the Fed’s balance sheet above 6 trillion dollars…

The Federal Reserve’s balance sheet increased to a record $6.13 trillion this week as the central bank used its nearly unlimited buying power to soak up assets and keep markets functioning smoothly, even as efforts to contain the coronavirus pandemic cut deeply into employment and economic output.

In the four weeks since the Fed slashed interest rates to zero, restarted bond purchases and rolled out an unprecedented range of programs to limit the economic damage from the outbreak, the central bank’s balance sheet has jumped by about $1.7 trillion.

Let me try to put those numbers in perspective.

During QE3, the Fed’s balance sheet increased by 1.7 trillion dollars over the course of an entire year, and now the Fed has achieved that same feat in just four weeks.

What the Fed is doing is completely and utterly insane, but to a certain extent it is working.

Even though we are in the midst of the most dramatic unemployment spike in American history, last week was the best week for the stock market in decades thanks to the Fed.

Isn’t that nuts?

I know that this also sounds incredibly absurd, but last week’s surge actually pushed P/E values back near record highs.

In other words, stock prices are incredibly overvalued at this moment.

And if everything that we have already witnessed was not enough, on Thursday the Fed announced that it will now be spending trillions of dollars to voraciously buy up bonds of all types…

The Federal Reserve is not leaving any corner of the U.S. bond market behind in this crisis.

There’s no other way to interpret the central bank’s sweeping measures announced Thursday, which together provide as much as $2.3 trillion in loans to support the economy. It will wade into the $3.9 trillion U.S. municipal-bond market to an unprecedented degree, can now purchase “fallen angel” bonds from companies that have recently lost their investment-grade ratings, and has expanded its Term Asset-Backed Securities Loan Facility to include top-rated commercial mortgage-backed securities and collateralized loan obligations.

In other words, moving forward we will no longer have a “bond market”.  What we will have is a Fed-manipulated sham in which the Fed picks winners and losers.

Of course many believe that it is only a matter of time before the Fed starts buying stocks as well.

Those that love free markets should be absolutely disgusted by all of this, because the Fed is coming up with lots of new ways to give handouts to the very wealthy.

Meanwhile, the poor are rapidly getting poorer.

But don’t worry too much, because you will soon receive your $1,200 socialist handout from the federal government.

Try not to spend it all in one place.

Needless to say, $1,200 won’t last very long in the hands of most Americans, and one recent survey found that “63% of respondents said they will need another check within the next three months”.

Like I warned from the very beginning, these sorts of direct payments set a very dangerous precedent, and if a Democrat wins the presidency in November they may become permanent.

That may sound really good to you, but what are you going to do when it gets to the point where you have to spend 500 dollars a week just to feed your family?

At that point many of you will also be lining up at the crack of dawn to receive whatever the food banks have available to give you…

Outside of Pittsburgh, Danielle Small pulled up 90 minutes early to a food distribution, but found two long rows of cars already ahead of her. Money was getting tight after her boyfriend had to take a pay cut, and she decided to make her first trip to a food bank this week.

She said the line moved efficiently as cars pulled ahead in clusters of 10. After Ms. Small, 32, received a box filled with chicken fajita strips, preserved peaches, fruit, nuts and juice, she mouthed, “Thank you,” to the volunteers and drove away.

Millions of Americans driving nice vehicles and wearing nice clothes are suddenly being forced to spend hours waiting in food lines because fear of the coronavirus has crashed our economy.

A day of reckoning has finally arrived, and a lot more pain is on the way.

Sadly, many Americans will just go along with whatever “solutions” are proposed as long as it looks like they may provide short-term relief.  What remains of our free markets is being obliterated, Congress is openly embracing socialism, and our rights are being stripped away at a staggering rate, but most people don’t seem concerned by any of this.

Most people just want the pain to end and for life to go back to normal, but that is simply not going to happen.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

They Shut Down America To Slow Down The Coronavirus, But In The Process They Killed The Economy

Will our economy ever be the same again?  At this moment, we are still in the midst of the most comprehensive nationwide shutdown in American history, and nobody knows when it will finally end.  The primary reason why governors all over the country issued “shelter-in-place” orders was because they wanted to “flatten the curve”, and this was done to keep millions of people from getting the virus all at once so that our hospitals would not be completely overwhelmed.  But these “shelter-in-place” orders are not going to completely end this pandemic.  In order to do that, a complete and total national “lockdown” would be needed, and that is not going to happen.  So the coronavirus is going to keep cycling through our population for an extended period of time until we get to the point where the vast majority of the population has built up immunity and the pandemic naturally burns itself out.  So in the end, the total number of people that will catch this virus will be about the same whether the “shelter-in-place” orders were issued or not.  But if the number of cases at any one time isn’t enough to overwhelm our medical resources, the overall death toll could potentially be less than it otherwise would have been.

In other words, these “shelter-in-place orders” are likely saving lives, but they are also killing the economy.

On April 3rd, it was announced that more than 6 million Americans had filed new claims for unemployment benefits the previous week, and I told my readers that we would probably never see a week like that ever again.

I was wrong.

This Thursday, it was announced that another 6.6 million Americans filed new claims for unemployment benefits during the previous week…

Another 6.6 million people filed for unemployment benefits last week, according to the US Department of Labor, as American workers continue to suffer from devastating job losses, furloughs and reduced hours during the coronavirus pandemic.

It was the second largest number of initial unemployment claims in history, since the Department of Labor started tracking the data in 1967.

Prior to this year, the all-time record for a single week was just 695,000.

So what we are witnessing right now is completely nuts.

Overall, a total of approximately 16.8 million Americans have filed new claims for unemployment benefits over the last 3 weeks…

Altogether, about 16.8 million American workers, making up about 11% of the US labor force, have filed initial claims for jobless benefits in just the prior three weeks alone. About 7.5 million workers filed for their second week of benefits or more last week.

We already have more unemployed workers than we did at any point during the last recession, and it is only going to get worse with each passing week.

Meanwhile, other economic numbers have been absolutely abysmal as well.  National demand for gasoline has declined to the lowest level since 1968, and U.S. vehicle sales have plunged to levels that are absolutely catastrophic…

For the whole month of March, total new vehicle sales plunged 37.9% year-over-year, with fleet sales (rental, commercial, and government) down 27.6% and retail sales down 40.5%. In terms of daily retail sales volume, according to estimates by Cox Automotive, early March sales had been well above the sales on the same day of the week, same week last year.

But by March 13, they were below the year-ago-level and then plunged. By April 1, they were down 71% from a year ago.

I am having difficulty finding the words to describe how bad those numbers are.

If things are this horrific already, what will happen if the U.S. stays shut down for another month or two?

With millions upon millions of Americans out of work and businesses all over the nation currently shuttered, rent payments are not being made on a scale that is unlike anything we have ever seen before.  The following comes from Zero Hedge…

Previously we described that over 30% of US renters didn’t pay their April apartment rent as the fallout of coronavirus-induced mass unemployment claims continues to ripple across various key sectors. Despite that some tenants will receive temporary protection from evictions “by a patchwork of federal and local laws” the reality is that as unpaid rents pile up, so will mortgage defaults as landlords struggle to satisfy their obligations – which will in turn affect fixed-income investments backed by said mortgages.

On the commercial side, Bloomberg estimates that about $81 billion in commercial rent comes due on average each month, but of course this is anything but a typical month, resulting in “The delay of a sizable portion of that will put an enormous strain on the complex systems for financing real estate and highlight how quickly the pain caused by social distancing has spread,” as Bloomberg observes.

Domino after domino is going to fall, and the economic pain is going to be off the charts.

And with each passing week, the economic forecasts by the big banks just continue to get even worse.

At this point, JPMorgan is projecting that U.S. GDP will plunge at a 40 percent annualized rate during the second quarter…

JPMorgan economists issued an even more dire forecast, now foreseeing a 40% decline in the nation’s gross domestic product for the second quarter and a surge in April’s unemployment rate to 20% with 25 million jobs lost.

In an earlier forecast, they said second-quarter GDP would be down 25%.

The only period in all of U.S. history when we witnessed anything that even comes close to resembling this was during the Great Depression of the 1930s.

Of course Congress has tried to help by passing several relief bills, but in many instances they aren’t working quite as anticipated.

For example, a loan program for small businesses was originally supposed to provide up to 2 million dollars in emergency help for each business, but there has been so much demand that loans are now being capped at $15,000…

A federal disaster loan program offering up to $2 million in relief is now capping out at $15,000 — and is leaving some borrowers wondering if they’ll even get that.

The Economic Injury Disaster Loan program, an offshoot of the Small Business Administration’s emergency funds system, has faced an unprecedented number of requests amid the COVID-19 pandemic, and is having trouble keeping up and following through with promised loan amounts, The New York Times reports.

As this pandemic stretches on, it is probably inevitable that Congress will pass even more emergency measures, and needless to say the Federal Reserve is going completely bonkers when it comes to flooding the system with money.

Ultimately, what they are doing will create inflation like we have never seen before, but most Americans aren’t worrying about that right now.

What most Americans really want is to get back to work, but Dr. Anthony Fauci and other medical “experts” are warning that may not happen for some time.

The longer the economy is shut down, the deeper this economic downturn is going to become.  And we certainly don’t want it to get too much deeper, because the IMF is already warning that it looks like this economic downturn will be the worst since the Great Depression…

The International Monetary Fund sees the world economy suffering its worst recession since the Great Depression this year, with emerging markets and low-income nations in Africa, Latin America and Asia at particularly high risk.

With half of the IMF’s 189 member countries seeking aid, the executive board has agreed to double access to its emergency financing to meet expected demand of about $100 billion, Managing Director Kristalina Georgieva said in a speech on Thursday.

Needless to say, I have been warning of an economic crisis of this magnitude for a very long time.

Let us hope that the “shelter-in-place” orders will be lifted as soon as possible, because that would certainly give the economy some relief.

But things will not be going back to “normal”.  COVID-19 will start spreading faster once again once the restrictions are lifted, and a large percentage of the population will remain huddled in their homes because they will be extremely afraid of catching the virus.

So economic activity will remain depressed for an extended period of time no matter what else happens, and meanwhile Congress and the Federal Reserve are absolutely flooding the system with fresh money.

That is a recipe for an inflationary disaster, and our standard of living will experience a very painful adjustment as a result.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  During these very challenging times, people will need hope more than ever before, and it is our goal to share the gospel of Jesus Christ with all many people as we possibly can.

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