Millennials Are More Than A Trillion Dollars In Debt, And Most Of Them Don’t Even Own A Home

When compared to a similar point in time, Millennials are deeper in debt than any other generation that has come before them.  And the biggest reason why they are in so much debt may surprise you.  We’ll get to that in a minute, but first let’s talk about the giant mountain of debt that Millennials have accumulated.  According to the New York Fed, the total amount of debt that Millennials are carrying has risen by a whopping 22 percent in just the last five years

New findings from the New York Federal Reserve reveal that millennials have now racked up over US$1 trillion of debt.

This troubling amount of debt, an increase of over 22% in just five years, is more than any other generation in history. This situation may leave you wondering how millennials ended up in such a sorry state.

Many young adults are absolutely drowning in debt, but the composition of that debt is quite different when compared to previous generations at a similar point in time.

Mortgage debt and credit card debt levels are far lower for Millennials, but the level of student loan debt is far, far higher

While the debt levels accumulated by millennials eclipse those of the previous generation, Generation X, at a similar point in time, the complexion of the debt is very different.

According to a 2018 report from the St. Louis Federal Reserve Bank, mortgage debt is about 15% lower for millennials and credit card debt among millennials was about two-thirds that of Gen X.

However, student loan debt was over 300% greater.

Over the last 10 years, the total amount of student loan debt in the United States has more than doubled.

It is an absolutely enormous financial problem, and there doesn’t seem to be an easy solution.  Some politicians on the left are pledging to make college education “free” in the United States, but they never seem to explain who is going to pay for that.

But what everyone can agree on is that student loan debt levels are wildly out of control.  The following statistics come from Forbes

The latest student loan debt statistics for 2019 show how serious the student loan debt crisis has become for borrowers across all demographics and age groups. There are more than 44 million borrowers who collectively owe $1.5 trillion in student loan debt in the U.S. alone. Student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans. Borrowers in the Class of 2017, on average, owe $28,650, according to the Institute for College Access and Success.

What makes all of this even more depressing is the fact that the quality of “higher education” in the U.S. has gone down the toilet in recent years.  For much more on this, please see my recent article entitled “50 Actual College Course Titles That Prove That America’s Universities Are Training Our College Students To Be Socialists”.

Our colleges and universities are not adequately preparing our young people for their future careers, but they are burdening them with gigantic financial obligations that will haunt many of them for decades to come.

We have a deeply broken system, and we desperately need a complete and total overhaul of our system of higher education.

Due to the fact that so many of them are swamped by student loan debt, the homeownership rate for Millennials is much, much lower than the homeownership rate for the generations that immediately preceded them.  The following comes from CNBC

The homeownership rate for those under 35 was just 36.5 percent in the last quarter of 2018, compared with 61 percent for those aged 35 to 44, and 70 percent for those aged 45 to 54, according to the U.S. Census. The millennial homeownership rate actually dropped in the fourth quarter compared with the third quarter, but was unchanged year over year.

This is one of the big reasons why “Housing Bubble 2” is beginning to burst.  There are not enough Millennials buying homes, and it looks like things could be even worse for Generation Z.

If you are a young adult, I would encourage you to limit your exposure to student loan debt as much as possible, because the debt that you accumulate while in school can have very serious long-term implications that you may not even be considering right now.

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

Advanced Social Decay: You Will Cringe When You Read What Has Been Going On Behind Closed Doors All Across America

It is difficult for me to write this article, and I will warn you in advance that some of the things in this piece are going to make you cringe.  Today, there are an increasing number of signs that the very fabric of our society is rotting away all around us.  We witnessed a very clear example of this last week when Kyrsten Sinema paraded around on the floor of the U.S. Senate looking like a hooker, but far more telling is what is going on behind closed doors all across America.  The stories that I am about to share with you barely made a blip on the news, but they should have, because they are all indications of how far our nation has fallen.

Let’s start in Colorado.  A 27-year-old man named Christopher Wayne Cleary was just arrested on terrorism charges after he threatened to shoot “as many girls as I see”

Authorities said Christopher Wayne Cleary, of Denver, posted on his Facebook page that “Theres nothing more dangerous than man ready to die.”

“All I wanted was a girlfriend, not 1000 not a bunch of hoes not money none of that,” he wrote, according to a probable-cause statement cited by authorities. “All I wanted was to be loved, yet no one cares about me I’m 27 years old and I’ve never had a girlfriend before and I’m still a virgin, this is why I’m planning on shooting up a public place soon and being the next mass shooter cause I’m ready to die and all the girls the turned me down is going to make it right by killing as many girls as I see.”

Thankfully authorities were able to arrest him before he was able to carry out his threats, but the sad truth is that there are thousands upon thousands more young men out there just like him.

These young men feel like failures if they can’t get young women to sleep with them, and this message is reinforced by popular culture over and over again.

But that isn’t what “being a man” is all about.

Unfortunately, the only values that many of our young men have are the values that they have been fed by Hollywood, and Christopher Wayne Cleary was so frustrated with his inability to live up to the Hollywood ideal that he was ready to go on a mass shooting spree.

Next, let me share a story with you about a young mother in Florida.  When police recently arrived at the home of Angelica Crites, she didn’t respond.  So they entered the home and when she still didn’t respond they had to pry her bedroom door open.

But she still didn’t wake up when they did that.  In fact, it took authorities several minutes to finally wake her up.

And when they looked around the house, what they discovered was like something out of a horror movie

There was an “overwhelming odor of ammonia and feces,” and large spider webs were along the ceilings and door frames. Food and dirt was all over the floor in the living room and dining room. A mop bucket filled with dirty water and food pieces was in the dining room, the report said.

The dining room had a large amount of trash in the corner and underneath a table to make food. The refrigerator was unsanitary with food, dirt and stains all over the inside and outside. Numerous insects were flying around the house.

The condition of her children was even worse.  They were filthy dirty and their teeth “were black and gray” from a lack of care.

On top of everything else, animal feces had literally been smeared throughout the house

The floor leading to the bathroom had animal feces smeared on it. Mold and animal feces was in the corner of the hall by the bathroom door.

Crites and her children shared a bedroom, where there was a large pile of clothes in the corner, dirt on the floor and several red cups on a shelf containing an unknown black liquid and cigarette butts, the report said.

In her bathroom, there were several piles of animal feces on the floor and in the bathtub, and some smeared on the floor, the report said.

It is easy to criticize anyone that lives like that, but the truth is that what we are doing to ourselves as a nation is even worse.

We need to be praying for children all across America, because so many of them are living in absolutely horrific situations and they have no way to escape.

For example, consider what recently happened to one precious child in Indiana

Back on January 14th, a young child was taken to Union Hospital.

That’s according to court documents.

Police, DCS, and emergency room staff say the child had a split tongue, several bruises, and other injuries.

That child was later transported to Riley Hospital in Indianapolis.

While there, hospital staff determined an object, most likely scissors, were used to split the child’s tongue.

How evil do you have to be to do something like that?

But this is who we have become as a nation.  And things like this happen so frequently that this story barely made a blip on the national news.

Almost everyone can put up a pretty decent facade in public, but it is the things that happen behind closed doors that define who we truly are.  And what one man in Arizona recently did is almost too sickening for words

A nurse has been arrested in the sexual assault of an incapacitated woman who gave birth at a Phoenix nursing facility, Arizona police said Wednesday.

Nathan Sutherland, 36, was a licensed practical nurse at Hacienda Skilled Nursing Facility, where the woman gave birth.

The female patient had been in a vegetative state facility for at least 14 years after a near-drowning incident.

Some of you may be thinking that “this is just one guy”, but the truth is that there are more than 850,000 registered sex offenders in the United States today.

And that is just the people that have been caught.  Imagine how many more there are that have not been caught.

So no, this is not just “an isolated incident”.  We are a nation that is literally teeming with sexual predators.

Lastly, I want to share with you the story of Logan and Daley South.  They both wear fangs and they both drink blood, and they opened up about their relationship with their “girlfriend” Ilona on a recent episode of Extreme Love

‘I don’t like the way blood tastes. I find it inconvenient to have to do regularly,’ Daley admits. ‘I’m someone that needs it, but I’m not a big fan of it. For Logan, it can be very sexual for him.’

Although Logan and Daley both wear fangs, they don’t need to bite into Ilona’s neck and gorge on her blood like a scene in a horror movie to feel satisfied.

In the clip, Daley uses the same tool that diabetics use to prick their fingers to draw Ilona’s blood before she and Logan begin hungrily sucking on her fingers.

If you took Americans from 200 years ago and showed them this, how do you think that they would react?

Needless to say, they would think that we have completely lost our minds.

And the sad truth is that we have definitely lost our way as a nation.  Our lack of values is producing absolutely horrific results, and it is getting worse with each passing day.

Get Prepared NowAbout the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters.  His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News.  From there, his articles are republished on dozens of other prominent websites all over the nation.  If you would like to republish his articles, please feel free to do so.  The more people that see this information the better, and we need to wake more people up while there is still time.

Wild And Unprecedented Price Fluctuations Are Causing Financial Chaos For U.S. Businesses

In every war there is a high price to pay, and this trade war will not be any different.  The normal flow of goods and services around the globe is being severely disrupted, and even though this trade war has barely just begun, it is already having an enormous impact on the U.S. economy.  Even if we ultimately win this trade war and the Trump administration is able to achieve all of the goals that it is targeting, there will still be a great cost in the short-term.  We are going to see businesses fail, we are going to see workers get laid off, and global economic activity will inevitably contract.  Heck, at this point even Fox News is calling this trade war “economic suicide”.  We live at a time when a delicately balanced formula of economic factors allows us to live a debt-fueled standard of living that is far beyond what we actually deserve.  Now we are messing with that formula, and the consequences are likely to be far more severe than most Americans are anticipating.

Let’s start by talking about steel and aluminum.  One of the chief goals of the tariffs was to help the steel and aluminum industries, and thanks to those tariffs we have seen the price of U.S. steel rise 36 percent since the beginning of 2018…

For instance, US steel and aluminum prices have soared since the imposition of tariffs. US midwest hot-rolled coil steel price, the US steel price benchmark, soared 36% between the start of the year and the start of July. This in turn causes prices of goods made with the metal to rise.

That is good news for the U.S. economy, right?

Actually, it isn’t.

Every product that uses steel and aluminum is now going to cost more.

In many cases, a lot more.

For instance, one grill company is reporting that they have had to raise prices “by almost $350 per grill”

Middleby Residential, a California-based company that makes Lynx grills, told the Dallas Morning News that even though the company uses US steel, the recent price pressures have driven up costs by almost $350 per grill.

Do you want to pay an extra $350 for your next grill?

Retail prices for washer and dryers are surging as well.  They have increased by 20 percent compared to a year ago, and that is because prices for raw materials are skyrocketing

Whirlpool Corp trimmed its full-year profit outlook as it booked a large charge on its European operations and said it wouldn’t be able to offset the effect of steel tariffs with higher prices for consumers.

The company said Monday it now expects to pay about $350 million more this year from rising raw-material costs as it faces “a very challenging cost environment.”

Anybody that purchases any products that contain steel and/or aluminum will be feeling these prices increases.

And any business that uses steel and/or aluminum on a regular basis is going to be feeling an enormous amount of pain.  For example, the largest nail company in America is already laying off workers

When President Trump imposed a 25 percent tariff on steel imports last month, America’s largest nail manufacturer had little choice but to raise its prices. Mid Continent Nail Corporation quickly lost 50 percent of its orders as customers opted for cheaper suppliers. Within weeks, the firm had to lay off 60 workers. Up to 200 more might lose their jobs by the end of this month.

All over the country, companies are going to be forced to either raise prices, fire workers or move production facilities out of the United States.

Meanwhile, farmers all over America are facing a different problem.  Thanks to a massive decline in demand from China (thanks to tariffs that they have hit us with), prices are plummeting and warehouses are filling up with food that doesn’t have anywhere to go.

Every year, the U.S. usually imports about 14 billion dollars worth of soybeans to China, and I covered the plight of soybean farmers in a previous article.  But of course soybean farmers are far from alone.  It is being reported that more than 2.5 billion pounds of meat and poultry products that have been produced by our farmers is being stockpiled in cold-storage warehouses.  To help the agricultural community, President Trump announced 12 billion dollars in aid to farmers on Tuesday

As President Donald Trump embarks on a multistate tour through parts of the country hit heavily by trade battles, his administration said Tuesday it will direct $12 billion to farmers whose harvests have been hurt by tariffs.

But the idea faced immediate criticism from Republicans on Capitol Hill.

Responding to farm groups and the Republican discontent, administration officials said they have been working since April on a short-term plan to shore up slipping prices for soybeans, pork and other crops hit with retaliatory tariffs from China.

Sure, this will help farmers get through the trade war in the short-term, but isn’t this exactly the kind of big government socialism that we are always railing against?

And who is going to bail out the real estate industry?

CNBC is reporting that home sales fell a whopping 11.8 percent year over year in southern California last month…

Southern California home sales hit the brakes in June, falling to the lowest reading for the month in four years. Sales of both new and existing houses and condominiums dropped 11.8 percent year over year, as prices shot up to a record high, according to CoreLogic. The report covers Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties.

And do you know who has been fueling the extremely hot real estate market on the west coast?

The Chinese.

At one time they were buying up everything in sight, but now they have become net sellers of U.S. real estate.

And there are rumblings that we could soon see some sort of “national boycott” of American goods in China.  The following comes from Zero Hedge

The survey found that 54 percent of 2,000 respondents in 300 cities across China would “probably” or “definitely” stop buying US-branded goods “in the event of a trade war”. Just 13 percent said they would not.

The remaining 33 percent said they were unsure or did not at present buy US branded goods, according to the survey, conducted for FT Confidential Research (FTCR), a research unit at the Financial Times.

The survey was carried out between June 27 and July 10, mostly before the US imposed 25 percent tariffs on $34bn of Chinese goods on July 6. The move elicited an immediate tit-for-tat response from Beijing.

Of course something similar could be tried in the United States, but most Americans simply do not care if a product comes from China or not.  They are simply going to buy the cheapest stuff no matter what anyone tells them to do.

Look, I very much understand that we have been sending businesses and jobs overseas for a very long time.  I have been writing about this for years, and something had to be done.

But trying to fight trade wars with virtually everyone else on the planet simultaneously is madness, and the consequences for the U.S. economy are going to cause all of us an immense amount of pain.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The Trade War Is Already Having A Huge Impact On The U.S. Economy

The trade war has barely just begun, and yet significant ripple effects are already being felt all across the U.S. economy.  Once thriving businesses are on the verge of failure, workers are being laid off, and some sectors of the economy are witnessing enormous price hikes.  Right now the mainstream media is absolutely fixated on the drama surrounding the recently concluded Trump-Putin summit meeting, but the consequences of this trade war will ultimately be far more important for the lives of most ordinary Americans.  As more tariffs continue to be implemented, this will perhaps be the biggest disruption to the global economic system that we have seen in decades.  Perhaps you have not been affected personally yet, but for many Americans this trade war has changed everything.  For example, just consider the plight of soybean farmer Tim Bardole

The U.S. is China’s second-biggest source of soybeans at 34% of the imports, after Brazil, which ships 53%. The staple is used to make cooking oil and seasoning, and soybean meal is found in pig feed.

Now the tariffs have taken the bottom out of U.S. soybean prices, delivering a gut punch to farmers like Tim Bardole. He was already $100,000 in the red last year due to a yearslong slump in cereal prices, and the current predicament has driven him into a corner.

“I’m not sure if I can get a loan from the bank to finance our next year’s crop,” said Bardole.

If this trade war had not happened, perhaps Bardole would have been able to eventually get out of debt.  But now he is facing financial ruin and the potential loss of his entire farm.

Switching gears, U.S. consumers will soon discover that common electronics such as phones and computers cost a lot more.  The following comes from CBS News

Buyers in the U.S. will soon see price hikes on computers, phones, thermostats and “everyday items,” according to the Information Technology Industry Council, a group that represents tech companies.

Hundreds of Chinese components that the Trump administration penalized are used to make everything from LEDs to sensors to printer and scanner components. When manufacturers pay more for their parts, the costs are typically passed on to consumers, the ITI said.

Are you ready to pay 50 dollars for your next phone to support this trade war?

Maybe.

50 dollars is ultimately not that big of a deal.

But what about paying $9,000 more for your next house?

Tariffs on lumber coming from the evil Canadians are adding about $9,000 to the cost of a new house, according to the National Association of Home Builders.

Washing machine prices have jumped some 15% this year, the fastest increase ever recorded by the Bureau of Labor Statistics.

Are you starting to understand why starting trade wars with all of our major trading partners simultaneously was a really bad idea?

We are about to see major price hikes in just about every sector of the economy.  According to the Alliance of Automobile Manufacturers, the average American could pay over $5,000 more for their next vehicle

Consumers may see an average price increase of $5,800 if a 25 percent import tariff that Mr. Trump has threatened goes into effect, according to estimates cited by the Alliance of Automobile Manufacturers (AAM), a lobbying group for carmakers.

That’s a “$45 billion tax on consumers,” the group said, citing an analysis of Commerce Department data.

U.S. consumers are already stretched to the max, and they will not be able to easily absorb these price increases.

Meanwhile, farm incomes all across the interior of the country are going to be absolutely devastated by this trade war.  Just check out these numbers

The American Farm Bureau says it expects farm incomes to drop to a 12-year low this year, largely because of the trade war.

An agricultural economist at Purdue University, Christopher Hurt, added that 1,000 acres of corn and soybeans would have made a farmer a $42,000 profit on June 1. Now, it could net him a $126,000 loss.

And as I mentioned above, many businesses all over the United States that rely heavily on exports are already struggling so mightily that they have to lay off workers.  The following comes from USA Today

In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.

Yes, we desperately needed to do something about China and other trade partners that were taking advantage of us.  But there is a right way to handle things and a wrong way to handle things, and starting a trade war with everyone at the same time is a really, really bad idea.

I think that a recent piece by Thomas Grennes, a professor of economics at North Carolina State University, made this point quite well

The Trump administration has said that tariffs are a negotiating technique that need not be implemented. Now that tariffs are in place, they say other countries will soon back down. However, trading partners have not backed down, and, in fact, retaliatory tariffs against U.S. exports are already in place. Foreign officials have expressed confusion about exactly what concessions the US government wants. Currently, no formal negotiations are taking place. Higher future tariffs are being announced regularly. There are no signs of an end to this tariff war. When will both sides recognize that interfering with voluntary trade is harmful to both parties? Trade wars are lose-lose propositions.

Unfortunately, I don’t think that most Americans have any idea how exceedingly painful this trade war could potentially become.

The longer it lasts, the worse things will get, and ultimately it could tip the U.S. economy into the worst recession that any of us have ever experienced.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

An Absolutely Epic Escalation Of The Trade War Has Us On The Precipice Of A Cataclysmic Global Economic Crisis

If Americans really understood how much their standard of living was about to change, the streets of our major cities would be packed with protesters by tomorrow morning.  For the past several decades, China and other low cost exporters have been flooding our shores with hundreds of billions of dollars worth of cheap goods.  This is the only reason why you can go to Wal-Mart and buy a shirt for three bucks.  But since we buy far more stuff from the rest of the world than they buy from us, we ultimately have to go back to those other nations and beg them to lend our money back to us so that we can pay our bills.  This sick, twisted co-dependent relationship has enabled Americans to live a debt-fueled standard of living that is far beyond what we deserve, and now our rapidly escalating trade war with China is going to bring the party to a crashing halt.  On Tuesday, the Trump administration released a list of $200,000,000,000 worth of Chinese exports that will be hit with 10 percent tariffs.  Those tariffs are in addition to the 25 percent tariffs that had previously been announced on 50 billion dollars worth of Chinese exports.  These new tariffs are scheduled to go into effect on August 30th, and the Chinese have already pledged to retaliate.

In essence, our trade war with China has now “gone nuclear”, and this is going to have extremely serious implications for the U.S. economy.  The following is a short excerpt from the statement that U.S. Trade Representative Robert Lighthizer released about these new tariffs…

On Friday, in response to unfair Chinese practices, the United States began imposing tariffs of 25 percent on approximately $34 billion worth of Chinese imports. These tariffs will eventually cover up to $50 billion in Chinese imports as legal processes conclude. The products targeted by the tariffs are those that benefit from China’s industrial policy and forced technology transfer practices.

China has since retaliated against the United States by imposing tariffs on $34 billion in U.S. exports to China, and threatening tariffs on another $16 billion. It did this without any international legal basis or justification.

As a result of China’s retaliation and failure to change its practices, the President has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports. This is an appropriate response under the authority of Section 301 to obtain the elimination of China’s harmful industrial policies.

Without a doubt, something needed to be done about China’s unfair trade practices.  The Chinese manipulate currency rates, they impose very high tariffs on U.S. goods, and they have been stealing our intellectual property for decades.

But it is very unlikely that anyone is going to “win” this trade war, and in the short-term all it is going to mean is a whole lot of economic and financial pain.

According to Politico, the new tariff list that was just released hits a very broad range of products…

The new tariff list broadens the types of goods caught up in the trade war by targeting items like seafood, minerals, chemicals, and personal care items, such as shampoo and soap. It also includes a number of consumer products such as handbags, luggage, gloves and paper.

Do you buy any of those things?

Well, expect to pay significantly more in the not too distant future.

When compiling this new list, the Trump administration specifically “took into account what could cause disruptions to China’s economy”.  The following comes from CNBC

Some of the products on the list facing tariffs are from Made in China 2025 sectors, the official said. Made in China 2025 is a strategic plan to make China a leader in key global industries, including technology.

When compiling the list of goods, the U.S. Trade Representative took into account what could cause disruptions to China’s economy.

So what do you think that the Chinese are going to do in response?

Yes, they are going to look at measures that will “cause disruptions to America’s economy”.

The Chinese are a very proud people, and they aren’t stupid.  They know where our pain points are, and they will not be afraid to go for the jugular.

China cannot match this round of U.S. tariffs dollar for dollar, because China only imports approximately 130 billion dollars worth of U.S. goods a year.

But China could decide to cut off some or all agricultural imports from the United States, and that would be absolutely devastating to many farming states.  In fact, many farming states are already feeling substantial pain from the tariffs that China has already imposed…

“Agricultural states, I think, are being hit the hardest,” said Rodney Ludema, a Georgetown University professor and former senior international economist in the White House Council of Economic Advisers under President Barack Obama. The tariffs spare states “that are heavily service-dependent, like New York.”

In terms of value, some 38 percent of products on the tariff list are agricultural, including soybeans, sorghum, tobacco and meat, said Chad Bown, a senior fellow at the Peterson Institute for International Economics. That’s bad news for farm-belt states, primarily in the Midwest.

In addition, China could decide to “go nuclear” by cutting off U.S. investment in China, by restricting our access to rare earth elements, or by dumping our debt.

The only reason why we have even been able to get to 21 trillion dollars in debt is because nations such as China have been buying our debt at ultra-low interest rates that are way below the real rate of inflation.

If China quit buying our debt and started dumping their current holdings, interest rates would start skyrocketing and we would be in a world of hurt almost immediately.

We don’t have the kind of leverage that some people seem to think that we have.  And there are many prominent experts that are warning that we are heading for catastrophic consequences.  For example, just consider what David Stockman recently told CNBC…

The United States is heading to a “massive trade war” because President Donald Trump “doesn’t know what he’s doing,” said former Reagan budget director David Stockman.

“We have an absurd policy — dangerous, stupid. The worst that I’ve seen since my whole career started in 1970 under [President Richard] Nixon, and he did some crazy things,” Stockman said Tuesday on CNBC’s “Closing Bell.”

The financial markets have reacted very strongly to these latest developments.  As soon as the new tariffs were announced, Asian stocks began to drop and Dow futures plummeted about 300 points from the closing highs.

Unfortunately, most ordinary Americans simply do not grasp the importance of what is happening, because we have never seen anything like this in modern American history.  The two largest economies on the entire planet are now in a state of economic conflict, and there is no way that this is going to end well.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

Experts Warn Of Chaos For The U.S. Economy As China Declares That “The Biggest Trade War In Economic History” Has Begun

Nothing is going to be the same after this.  On Friday, the United States hit China with 34 billion dollars in tariffs, and China immediately responded with similar tariffs.  If it stopped there, this trade war between the United States and China would not be catastrophic for the global economy.  But it isn’t going to stop there.  Donald Trump is already talking about hitting China with an additional 500 billion dollars in tariffs, which would essentially cover pretty much everything that China exports to the U.S. in a typical year.  The Chinese have accused Trump of starting “the biggest trade war in economic history”, and they are pledging to fight for as long as it takes.  As I discussed yesterday, the only way that one side is going to “win” this trade war is if the other side completely backs down, and that simply is not going to happen.  So there is going to be economic pain, and that pain is likely to intensify for as long as this trade war persists.  U.S. businesses that will be affected by foreign tariffs are already cutting back production and laying off workers, and CNN is reporting that 1,300 products have suddenly become more expensive for U.S. consumers.  There will be nowhere that anyone can hide from this trade war, and it will ultimately affect every single man, woman and child in the entire country.

Most Americans are not paying any attention to these ongoing developments, but the Chinese sure are.

Earlier today, the Chinese Ministry of Commerce called the U.S. tariffs “typical trade bullying”, and it warned that this trade war could trigger “global market turmoil”

“This act is typical trade bullying,” the spokesperson said, before adding: “It seriously jeopardizes the global industrial chain … Hinders the pace of global economic recovery, triggers global market turmoil and will affect more innocent multinational companies, general companies and consumers.”

China’s primary English language newspaper was even more direct with their criticism

The government-run English language China Daily newspaper said: “The Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China.”

Here in the United States, the start of a major trade war with China really doesn’t seem like that big of a deal if you listen to the mainstream media.  Most people just seem to think that things will continue to go well for our country no matter how many stupid decisions we make.  It is almost as if a lot of Americans no longer understand that extremely reckless acts can have exceedingly severe consequences.

One man that understands what is happening is the founder of the largest hedge fund on the entire planet.  On Friday, Ray Dalio posted the following ominous message on Twitter

“Today is the first day of the war with China.”

Please note that he did not say “the trade war with China”.

The truth is that trade wars can often lead to shooting wars, and we need to hope that cooler heads will prevail.

But for now, it looks like things will continue to escalate

But Trump has said his administration will respond to retaliation from Beijing with much bigger waves of tariffs, raising the prospect of worsening tit-for-tat reprisals. On Thursday, he suggested the possibility of tariffs on almost $500 billion more of Chinese goods.

He described the potential escalation to reporters aboard Air Force One: “Thirty-four, and then you have another 16 in two weeks and then, as you know, we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. OK?” Trump said. “So we have 50 plus 200 plus almost 300.”

If we hit China with 500 billion dollars in tariffs, there is no telling what the Chinese might do.

As I discussed the other day, the Chinese could start dumping our debt or cut off our access to rare earth elements.

Either move would be absolutely catastrophic for the United States.

We don’t know how this trade war will ultimately end, but as Reuters has pointed out, “it’s going to get ugly”…

The U.S.-China trade war will be fought in the trenches, and it’s going to get ugly. The first round of tariffs hits on Friday, and U.S. President Donald Trump says they might come to cover more than $500 billion of goods. Exporters will feel the pain first, but uncertainty will also dampen investment, impede research and twist reform. It marks a moment of mourning for those who hoped the world’s two largest economies could work things out.

And guess what?

Russia just joined the trade war against the United States as well.  The following comes from Zero Hedge

Whether this is a coordinated response is unclear – and certainly on a much smaller scale – but Bloomberg reports that Russian Prime Minister Dmitry Medvedev signed a decree this morning imposing higher tariffs on U.S. products in retaliation for U.S. duties on metals imports, according to Economy Ministry statement.

Reuters reports that Russia’s additional duties will apply to imports of fiber optics, equipment for road construction, oil and gas industry, metal processing and mining, according to an economy ministry statement.

These tariffs are going to have very real consequences for U.S. businesses and U.S. workers.

Even though this trade war just started, some firms are already being hit very hard.  Here is one example from USA Today

Trans-Matic, of Holland, Michigan, shapes metal, mostly into auto parts, as well as components for door locks. It has paid higher steel costs for several months as U.S. steelmakers raised prices in anticipation of higher American tariffs on metal imports, company Chief Financial Officer Steve Patterson says.

Trans-Matic has passed along the price hikes to its auto-supplier customers, but some have scaled back orders, reducing Trans-Matic’s revenue in that key sector by 5 to 10 percent, Patterson says. As a result, the company is giving its 300 U.S. employees about five hours a week in overtime instead of their usual 10.

For other firms, layoffs have already become a reality.  Just ask the largest nail maker in the United States

In Poplar Bluff, Missouri, Mid-Continent Nail, the nation’s largest nail maker, laid off 60 workers last month. Sales plunged 70 percent after Trump placed a 25 percent tariff on steel from Mexico and Canada. When the company boosted its prices, customers defected. Now, Mid-Continent is strongly considering a second round of 200 layoffs, company spokeswoman Elizabeth Heaton says, and all 500 employees could be axed by Labor Day.

The longer this trade war lasts, the worse things are going to get.

Fighting a trade war just with China would have been bad enough.  But instead, we have decided that we are going to take on pretty much the entire world simultaneously, and I don’t know if I have the words to describe how painful that is going to be for all of us.

Many Americans seem to believe that the U.S. economy is an unsinkable ship, and at this moment we are heading directly for an absolutely enormous iceberg.

Let us hope that someone is able to pull a rabbit out of a hat, because right now things are looking quite bleak.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.

The U.S. Trade War With China Officially Goes To The Next Level As Financial Markets Around The World Continue To Implode

Up until now, the U.S. trade war with China has simply been a bunch of threats and counter-threats, but now things are about to get very real.  On Friday, the first round of U.S. tariffs on Chinese goods becomes official, and these tariffs are going to fundamentally alter the economic relationship between the two largest economies on the entire planet.  Over the past several decades, U.S. consumers have loved gobbling up super-cheap goods from China, and the Chinese have used many of the dollars that they have been accumulating to fund our exploding national debt.  This symbiotic relationship has been bad for the United States in a lot of ways, and something had to be done, but in the short-term this trade war is going to be enormously painful.  Sadly, most Americans are completely oblivious to what is happening.  The following comes from Bloomberg

President Donald Trump is preparing to slap tariffs on Chinese goods early Friday, the first shot in a trade war between the world’s two biggest economies.

Tariffs on $34 billion of Chinese goods are scheduled to take effect at 12:01 a.m. in Washington, the U.S. Trade Representative confirmed in an email Thursday. The milestone marks a new and damaging phase in a conflict that has roiled markets and cast a shadow over the global growth outlook.

Another way should have been found to deal with our trade imbalances with China, because a trade war is not going to work.

Instead of giving in, the Chinese are promising to respond with measures of “equal scale, equal intensity”, and President Trump is already pledging to hit the Chinese with another 500 billion dollars in tariffs if the Chinese hit back in this manner…

Aboard Air Force One on his way to a rally in Montana, Trump told reporters he would also consider imposing additional tariffs on $500 billion in Chinese goods, should Beijing retaliate.

Once these escalations begin, where will they end?

The Chinese can really, really hurt us by dumping our debt and by cutting off our access to rare earth elements.

Would they really go that far?

And what would Trump do in response if the Chinese pull the trigger and decide to “go nuclear”?

It would be hard to overstate the pain that these tariffs will cause for U.S. businesses.  In fact, Bloomberg is reporting that some sectors are already being hit really hard in anticipation of what is going to happen…

The tariffs are already having an effect. As an example, Chinese companies are reselling U.S. soybeans, and Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the U.S. in the year ending Aug. 31, once the extra tariffs take effect.

Of course the U.S. is not just fighting a trade war with China.  The United States has decided to wage trade wars with almost all of the major economic powers around the world simultaneously, and economic experts in France are warning that this could plunge the globe into a new economic crisis that “would likely be as devastating for the world economy as the 2008-2009 recession”

A full-scale trade war would likely be as devastating for the world economy as the 2008-2009 recession, warned France’s Council of Economic Advisors, a body which gives input to the country’s prime minister.

The United States and China could see a permanent loss of three percent of economic output and the European Union (EU) four percent in the case of a full-blown trade war, it estimated on Tuesday.

The wheels are in motion, and it is going to take a miracle to reverse course now.

In fact, it is being reported that “global trade is already collapsing”

While the US prepares to unleash its latest salvo in the trade war against China at midnight tonight, business surveys suggest that global trade is already collapsing

JPMorgan’s Global Purchasing Managers’ Index (PMI) data suggest that trade growth has already slowed dramatically this year, as tensions over tariffs have escalated.

To get an idea of what they are talking about, just check out this chart.

And this comes at a time when financial markets around the planet are already imploding.  According to Egon von Greyerz, stock markets in China, Brazil and Turkey are already hovering around bear market territory…

But change starts in the periphery where very few are looking. Look at China where the Shanghai composite is down 23% since January. And look at Brazil where the Bovespa is off 17% so far this year and Turkey which has lost 20%.

What is important to understand is that most major markets are now looking extremely vulnerable, be it Japan, Germany or the US. Fundamentally most markets are overvalued with the help of central bank liquidity. Also, technically we are not far from crashes in most markets. Whilst there is always a possibility of a last hurrah, it looks like all markets have topped, including the US, and that later in 2018 we will see major falls. Once the bear markets start, they are likely to turn into secular trends that last many years and result in falls of 75% to 95%. Difficult to believe for most investors today, but nobody in 1929 believed that the Dow would fall 90% in the ensuing years and take 25 years to recover.

If our trade wars continue to escalate, and if the Federal Reserve continues to raise interest rates, and if civil unrest continues to grow in major cities all across America, it is only a matter of time before U.S. markets implode as well.

During a recent interview, Michael Pento was asked when things might really start falling apart, and he pointed to the month of October

“Well, I have put a check on the calendar for October because of the fact the rate of quantitative tightening goes to $50 billion per year, because the trade war will reach a crescendo, then because I believe, unfortunately because I am conservative, the Republicans lose the House of Representatives, because the Chinese credit boom will be in full reverse by October.

It is a confluence of events coming in October… we’ve already entered into the beginnings of a bear market around the world. The top 22 banks in the world are in a bear market. There are many, many examples of banks around the world that are in a bear market. You have a bear market in Chinese shares. 20% of the S&P 500 is in a bear market. This is an incipient bear market that is already beginning. I believe it manifests clearly to even the people on CNBC by October.

In the end, the exact timing does not matter that much, because if we continue down the road that we are on right now it is only a matter of time before disaster strikes.

We simply cannot continue to enjoy a massively inflated debt-fueled standard of living if we decide to provoke all of the other nations that are funding our debt by starting trade wars with them.

What we are doing does not make any sense at all, and there will most certainly be severe consequences in the not too distant future.

Michael Snyder is a nationally syndicated writer, media personality and political activist. He is the author of four books including The Beginning Of The End and Living A Life That Really Matters.