The Economic Collapse

Inflation is going down!  Let’s all celebrate!  We all knew that when the Federal Reserve began aggressively hiking interest rates it would have an impact on inflation.  Higher rates have caused a new housing crash, they have crushed the tech industry, and they have sparked the biggest wave of layoffs that we have seen since the Great Recession.  We have entered a significant economic downturn, so it was inevitable that the annual rate of inflation would start to moderate.  But as I will explain below, that doesn’t mean that inflation is now “under control”.  The real rate of inflation is much higher than we are being told, and people all over the country are being absolutely crushed by the rising cost of living. (Read More...)

Food has become a prime target for thieves, and that should deeply alarm all of us.  Once upon a time, shoplifting was a minor nuisance for most retailers in the United States.  But today the game has completely changed.  Highly organized gangs of thieves are systematically looting stores all over the country, and this is costing retailers billions upon billions of dollars.  Authorities call it “organized retail crime”, but I call it complete and utter lawlessness.  When you have large groups of people storming retail stores all over the nation on a regular basis, that is a major crisis. (Read More...)

Do you remember when you could buy a dozen eggs for 99 cents?  It seems like it was only yesterday, but unfortunately those days are now gone for good.  Thanks to a variety of factors, egg prices have risen to levels that we have never seen before, and in some areas of the country significant shortages are being reported.  In fact, things are so bad that Whole Foods is apparently “now limiting egg carton purchases to two per person”.  This is extremely alarming, because millions of U.S. households have traditionally relied on eggs as a cheap source of protein.  Unfortunately, it appears that eggs will not be “cheap” for the foreseeable future.  According to an article that originally appeared in the Los Angeles Times, the average price of a dozen eggs in California actually reached $7.37 this week… (Read More...)

The tech industry has become one of the central pillars of our economy, and tech stocks led the way up during the stock market boom.  But now tech stocks have been crashing and many of our biggest tech industry companies have been laying off large numbers of workers.  If the strongest sector of our economy continues to rapidly deteriorate in 2023, what will that mean for our weaker sectors?  I think that the answer to that question is obvious.  The truth is that we are in far bigger trouble than “the experts” realize, but most people still assume that everything will work out just fine somehow. (Read More...)

This is my rebuttal to those in the federal government and elsewhere that are attempting to claim that the job market is in good shape.  No matter how many workers get laid off, the Bureau of Labor Statistics always seems to find a way to post a positive jobs number each month.  We were told that the U.S. economy somehow added 256,000 jobs in November even though Challenger, Gray & Christmas determined that the number of layoffs in November 2022 was actually 417 percent higher than it was during the same month a year earlier.  And even though the tsunami of layoffs continued in December, the Bureau of Labor Statistics is telling us that the U.S. economy somehow added 223,000 jobs last month.  It is almost as if there is a certain number that the BLS refuses to go below.  For each of the last five months, the number of jobs that the U.S. has “added” has miraculously come in between 200,000 and 300,000 each time.  But meanwhile large companies all over America have been laying off workers at a staggering rate. (Read More...)

How bad do things have to get before people start realizing that we are in the midst of a full-blown economic crisis?  The “experts” on television are endlessly debating about whether or not we are going to have a “recession” this year, and meanwhile economic activity is imploding all around us.  The number of homes being sold in this country each month has already fallen by a third.  The number of job cuts in November was 417 percent higher than it was during the same month a year earlier, and at this point even Amazon is laying off thousands of workers.  The Federal Reserve has declared war on inflation, but prices continue to spiral out of control.  In fact, vegetables are 80 percent more expensive now than they were 12 months ago.  Meanwhile, the financial markets continue to plunge.  A third of the value of the Nasdaq has already been wiped out, and more than two-thirds of the value of all cryptocurrencies is already gone. (Read More...)

A lot of people tend to use the phrase “here we go” when they think that something really good is about to happen, and others tend to use it when they think that something really bad is about to happen.  Needless to say, in this case I am using the phrase “here we go” as my overall theme for 2023 because I believe that we are going to be facing a really rough year.  I expect that so many of the trends that have been percolating throughout 2022 will greatly accelerate over the next 12 months.  So if you were not pleased with 2022, it is likely that you are really not going to enjoy what is ahead of us in 2023. (Read More...)

I hope that I am wrong about our immediate economic future, and I hope that all of the other respected voices that are warning of economic doom in 2023 are wrong too.  It would be wonderful if things turn in a positive direction at some point during the next 12 months and 2023 turns out to be a year of peace and prosperity for the entire world.  Of course virtually nobody is expecting the year to start well.  As I discussed yesterday, there is a growing consensus among the “experts” that the months ahead will be quite rough.  But even though it has become exceedingly obvious that short-term economic conditions will not be good, some optimists are still trying to put a positive spin on things.  For example, Moody’s Analytics chief economist Mark Zandi is trying to convince us that we will only have to endure a “slowcession” before things finally turn around… (Read More...)