Overall, more than 52 million Americans have filed new claims for unemployment benefits over the past 18 weeks, and that makes this the biggest spike in unemployment in U.S. history by a very wide margin.

In fact, this dwarfs all previous spikes by so much that the others are not even worth mentioning.

Of course it isn’t just the employment numbers that are depressingly bad.  According to Jefferies, in late June 19 percent of all U.S. small businesses were closed, but now that number has risen to 24.5 percent…

As of Sunday, 24.5% of small businesses in the United States were closed, according to Jefferies. That is worse than late June, when only 19% were closed. Jefferies pointed to “particular weakness in COVID hot spots” and noted that small business employment had dropped to levels unseen since the end of May.

Just think about that number for a minute.

Nearly a quarter of all small businesses in the entire country are closed.

And the really bad news is that many of them will never end up reopening.

At the beginning of the pandemic, I received a lot of criticism for stating that many of the small businesses that were shutting down at that time would never open again, but over the long-term the numbers have shown that I was correct.

In fact, Yelp says that a whopping 60 percent of the restaurants that were initially listed as “temporarily closed” on their site are now classified as permanently closed…

It’s tough out there for restaurants and other small businesses.

Yelp’s Economic Average report out Wednesday shows exactly how tough: 60 percent of the 26,160 temporarily closed restaurants on the business review site as of July are now permanently shut. Temporary closures are dropping, and permanent shutdowns are increasing.

Fear of COVID-19 is going to cause a large portion of the population to continue to avoid restaurants for as long as this pandemic persists, and it is becoming clear that it is likely to persist for a long time to come.

We are going to lose so many small and independent places to eat.  Many of the big corporate chains that have very deep pockets will survive, at least for a while, but there is simply no replacing what small and independent restaurants mean to our communities.

Bars and clubs are being hit extremely hard as well.  According to Yelp, 44 percent of the bars and clubs on their site that were initially listed as “temporarily closed” have now been shut down on a permanent basis…

Bars and clubs are also closing forever at high rates: 44 percent (as of July) of 5,454 temporarily shuttered bars and other nightlife establishments are shut for good.

Other sectors of the economy are doing relatively better, but the overall outlook for small businesses in America is exceedingly bleak.

In New York City, it is being projected that one-third of all small businesses will never be able to open again…

As many as 76,000 small businesses in New York City – a third of the 230,000 citywide – may never reopen after forced to close during the COVID-19 lockdown, business leaders have warned.

The Partnership for New York City, a not-for-profit organization that connects business leaders with local government, predicted that 76,000 small businesses will never be able to reopen in a report produced by 14 consulting firms.

I know that number is hard to believe, but this is actually happening.

Our politicians want to encourage people “to go back to work”, but for millions upon millions of Americans the jobs that they once had are gone forever.

Air travel is another industry that is being absolutely devastated by this pandemic.  After a modest bounce in June, the number of air passengers is starting to fall again…

The resurgence of coronavirus infections is derailing the travel industry’s modest recovery. The number of air passengers processed through TSA security lines fell during the week ended July 20, compared with the prior week, according to Bank of America. This metric is down more than 70% from a year ago.

United (UAL) CEO Scott Kirby told CNBC on Wednesday that the airline doesn’t “expect to get anywhere close to normal until there’s a vaccine that’s been widely distributed to a large portion of the population.”

All of the numbers that I have shared in this article tell us that we are in an economic depression.

Many had hoped that this economic downturn would be short-lived and that a “V-shaped recovery” would commence once the coronavirus lockdowns were lifted.

But instead a resurgence of cases has caused new restrictions to be implemented, and economic activity is slowing down again.

The bottom line is that all of us need to get prepared to weather a long-term economic storm that is going to be incredibly painful.

The last recession was bad, but it isn’t even worth comparing to the times that we are entering now.  All of our lives are being turned upside down, and a lot of people are not going to be able to handle what comes next.

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 as many people as we possibly can.

The post The Numbers Tell Us That The ‘Economic Recovery’ Is Dead And Businesses Are Failing At A Staggering Pace appeared first on The Economic Collapse.

The 35 percent figure is a nugget that I discovered in a CNN article about Detroit that I was reading earlier today…

And the city’s troubles have left a mark on the financial stability of its residents in a big way, according to a new report from the Urban Institute.

About 66% of residents have debt in collections — meaning more than 180 days past due — at a median amount of $1,847. Across the U.S., 35% of Americans have debt in collections.

It is hard to believe that 66 percent of the residents of one of our largest cities could have debt in collections, but without a doubt the city of Detroit is a complete and utter economic wasteland at this point.

But to me, the 35 percent figure for the nation as a whole is a much greater concern.

And much of the debt that is in collections is credit card debt.

In the immediate aftermath of the last financial crisis, many Americans started getting out of debt, and that was a very good thing.

Unfortunately, that trend has completely reversed itself over the past few years, and now credit card balances are rising at a pace that is quite alarming…

Using data from the U.S. Census Bureau and the Federal Reserve, ValuePenguin found that the average credit card debt for households that carry a balance is a shocking $16,048 — a figure that has risen by 10% over the past three years. At the average variable credit card interest rate of 16.1%, this translates to nearly $2,600 in credit card interest alone. And many credit cards have interest rates much higher than the average.

Even scarier, consider that based on the average interest rate and a minimum payment of 1.5% of the balance, it would take nearly 14 years for the typical indebted household to pay off its existing credit card debt, at a staggering cost of more than $40,200. Keep in mind that this assumes no additional credit card debt is added to the tab along the way.

Those that have been there know exactly how it feels to be drowning in credit card debt.

You know, they don’t teach you about credit cards in high school or in college.  At least they didn’t in my day.  So once I got out into the “real world” and discovered the joy of instantly getting whatever I wanted with a credit card, I didn’t understand how painful it would be to pay that money back someday.

If you have credit card balances that are out of control, they can keep you up late into the night.  The worry and the fear can eat away at you like a cancer, and many people play a game of moving balances from one card to another in a desperate attempt to stay afloat.

Fortunately I learned my hard lessons at an early enough age to get things turned around.  Now I warn others about the danger of credit card debt through my writing, and my hope is that the things that I share on my websites are doing some good for others that may be struggling financially.

When you are deep in debt, it is exceedingly difficult to build up any wealth of your own.  This is one of the primary reasons why 69 percent of all Americans have less than $1,000 in savings today.

In essence, more than two-thirds of the country is living paycheck to paycheck, and that is a recipe for disaster when the next major economic downturn in the U.S. strikes.

Overall, household debt in America has now reached a grand total of 12.3 trillion dollars.  When you break that down, it comes to $38,557 for every man, woman and child in the entire nation.

So for a family of five, your share of that total would be $192,785.

And remember, that is just household debt.  That total does not include any form of business debt or any form of government debt.

We truly are a “buy now, pay later” society.  We were the wealthiest and most prosperous nation on the entire planet, and previous generations handed us the keys to the greatest economic machine in world history, but that wasn’t good enough for us.

We always had to have more, more, more – and now we have accumulated more debt than any society in the history of the globe.

It is inevitable that this giant debt bubble is going to burst.  Anyone with an ounce of common sense can see that.

What we experienced in 2008 was just a preview of the hard times that are coming.  The next recession is going to be even worse, and most economists are convinced that it will happen within the next four years no matter who is elected president in November.  The following comes from the Wall Street Journal via the Calculated Risk blog…

Economists in The Wall Street Journal’s latest monthly survey of economists put the odds of the next downturn happening within the next four years at nearly 60%.

Just like the last time around, millions of those that are “living on the edge” financially will fall out of the middle class and into poverty when they lose their jobs.

Hopefully most of you that have been reading my work for an extended period of time have already been getting out of debt and have been building up a financial cushion.

Sadly, most of the country continues to act as if they are living in a pre-2008 world, and the economic wake up call that is coming is going to be incredibly painful for those that thought they could get away with being exceedingly reckless financially.

The post Drowning In Debt: 35 Percent Of All Americans Have Debt That Is At Least 180 Days Past Due appeared first on The Economic Collapse.

But don’t just take my word for how painful this economic “recovery” has been.  The following comes from a Wall Street Journal article that was just posted entitled “Seven Years Later, Recovery Remains the Weakest of the Post-World War II Era“…

Even seven years after the recession ended, the current stretch of economic gains has yielded less growth than much shorter business cycles.

In terms of average annual growth, the pace of this expansion has been by far the weakest of any since 1949. (And for which we have quarterly data.) The economy has grown at a 2.1% annual rate since the U.S. recovery began in mid-2009, according to gross-domestic-product data the Commerce Department released Friday.

The prior expansion, from 2001 through 2007, was the only other business cycle of the past 11 when the economy didn’t grow at least 3% a year, on average.

This entire seven year stretch has come while Barack Obama has been in the White House.  After more than seven and a half years, he is solidly on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least three percent.

And unlike many presidents, he has had two terms in which to try to accomplish that feat.

One of the industries that had been doing fairly well during this recovery was the auto industry, but now in early 2016 they have found themselves struggling too…

Now, the auto sector, which has propped up GDP growth for years, is slowing down. For the first six months, total car and light truck sales, at a seasonally adjusted annual rate (SAAR) of 17.5 million vehicles, are lagging behind last year by 100,000 units. Over the first half, fleet sales to rent-a-car companies and big fleet buyers were up industry wide. But retail sales fell 2%.

All over the corporate world, earnings are down.

In some cases, they are way down.

It is being projected that this will be the fifth quarter in a row when corporate earnings have declined, and even mainstream analysts are now admitting that it is “evident” that we have entered “a global slowdown”…

“Earnings season in the U.S. confirms the overall macro picture that we have. We have a global slowdown. It’s evident in all of the major economies,” said Peter Garnry, head of equity strategy at Saxo Bank, on a Bloomberg podcast.

Of course I have been saying this exact thing for the past 12 months, but a lot of people have tuned me out because the stock market in the United States has been doing so well.

But the stock market is not an accurate barometer for the real economy.  It never has been, and it never will be.

If stocks accurately reflected the health of the U.S. economy, they would have already crashed really hard a long time ago.  At this moment, stock prices are completely disconnected from economic reality, and this has many of the most respected names on Wall Street scratching their heads.  One of them is Jeffrey Gundlach, the chief executive of DoubleLine Capital.  Just check out what he told Reuters on Friday…

Noting the recent run-up in the benchmark Standard & Poor’s 500 index while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.”

The S&P 500 on Friday touched an all-time high of 2,177.09, while the government reported that U.S. gross domestic product in the second quarter grew at a meager 1.2 percent rate.

“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach said in a telephone interview. “The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”

If you follow Gundlach, you probably already know that he has been dead on accurate with regard to the financial markets over the past couple of years.

So when he says that the stock market “should be down massively” and that it is time to “sell everything”, we should all take him very, very seriously.

All throughout history, a huge decline in corporate earnings has almost always resulted in a huge decline in stock prices.  As Jesse Felder has noted, “we have never seen a decline in earnings of this magnitude without at least a 20% fall in stock prices” during the last 50 years.

To any rational observer, it is quite obvious that stock prices should have already started collapsing quite some time ago.

And to a large extent this has already happened around the planet, but here in the United States stocks continue to defy the laws of economics.

But at this point it isn’t going to do much good to warn people about this.  Those that could see the danger coming have already pulled their money out of stocks, and most of those that want to stick their heads in the sand and pretend that things are somehow going to be different this time are not likely to be persuaded this late in the game.

In the end, we should all be grateful that this absurd financial bubble has lasted for as long as it has, because stability is much more pleasant than instability.  The U.S. economy and the U.S. financial system have enjoyed a prolonged period of stability that has defied all the odds, and let us hope that it lasts for at least a little while longer…

The post Painful To Watch: This Is The Weakest U.S. Economic ‘Recovery’ Since 1949 appeared first on The Economic Collapse.

Earlier today, Sears Chairman Eddie Lampert released a letter to shareholders that was filled with all kinds of bad news.  In this letter, he blamed the horrible results that Sears has been experiencing lately on “tectonic shifts” in consumer spending…

In a letter to shareholders on Thursday, Lampert said the impact of “tectonic shifts” in consumer spending has spread more broadly in the last year to retailers “that had previously proven to be relatively immune to such shifts.”

“Walmart, Nordstrom, Macy’s, Staples, Whole Foods and many others have felt the impact of disruptive changes from online competition and new business models,” Lampert wrote.

And it is very true – Sears is doing horribly, but they are far from alone.  The following are 13 major retailers that are closing down stores…

#1 Sears lost 580 million dollars in the fourth quarter of 2015 alone, and they are scheduled to close at least 50 more “unprofitable stores” by the end of this year.

#2 It is being reported that Sports Authority will file for bankruptcy in March.  Some news reports have indicated that around 200 stores may close, but at this point it is not known how many of their 450 stores will be able to stay open.

#3 For decades, Kohl’s has been growing aggressively, but now it plans to shutter 18 stores in 2016.

#4 Target has just finished closing 13 stores in the United States.

#5 Best Buy closed 30 stores last year, and it says that more store closings are likely in the months to come.

#6 Office Depot plans to close a total of 400 stores by the end of 2016.

The next seven examples come from one of my previous articles…

#7 Wal-Mart is closing 269 stores, including 154 inside the United States.

#8 K-Mart is closing down more than two dozen stores over the next several months.

#9 J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

#10 Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

#11 The Gap is in the process of closing 175 stores in North America.

#12 Aeropostale is in the process of closing 84 stores all across America.

#13 Finish Line has announced that 150 stores will be shutting down over the next few years.

These store closings can be particularly cruel for small towns.  Just consider the impact that Wal-Mart has had on the little town of Oriental, North Carolina…

The Town’n Country grocery in Oriental, North Carolina, a local fixture for 44 years, closed its doors in October after a Wal-Mart store opened for business. Now, three months later — and less than two years after Wal-Mart arrived — the retail giant is pulling up stakes, leaving the community with no grocery store and no pharmacy.

Though mom-and-pop stores have steadily disappeared across the American landscape over the past three decades as the mega chain methodically expanded, there was at least always a Wal-Mart left behind to replace them. Now the Wal-Marts are disappearing, too.

Of course there are many factors involved in this ongoing retail apocalypse.  Competition from online retailers is becoming more intense, and consumer spending patterns are rapidly changing.

But in the end, the truth is that you can’t get blood out of a rock.  The middle class in America is shrinking, and there just isn’t as much discretionary spending going on as there used to be.

And now that we have entered a new economic downturn, many retailers are finding that there are some local communities that can no longer support their stores.  The following comes from CNBC…

Though the shift to online shopping is no doubt playing a role in lighter foot traffic at malls, there’s more to their changing economics than the rise of Amazon. Changing demographics in a town are another reason a shopping center could struggle or fail — for example, if massive layoffs in a particular industry cause people to move away to find employment.

“A lot of people want to try and tie it to the Internet or ‘that’s not cool,’ or teens don’t like it,” Jesse Tron, a spokesman for industry trade group International Council of Shopping Centers, told CNBC last year. “It’s hard to support large-format retail in those suburban areas when people are trying to just pay their mortgage.”

In order to have a thriving middle class, we need good paying middle class jobs.  Unfortunately, our economy has been bleeding those kinds of jobs quite rapidly.  For example, Halliburton just announced that it is eliminating 5,000 more jobs after getting rid of 4,000 workers at the end of last year.

During the Obama years, good paying middle class jobs have been getting replaced by low paying service jobs.  At this point, 51 percent of all American workers make less than $30,000 a year.

And there is no way that you can support a middle class family with children on $30,000 a year.

We have an economy that is in the process of failing.  We can see it in the explosion of subprime auto loans that are going bad, we can see it in the hundreds of retail stores that are shutting down, and we can see it in the tens of thousands of good paying energy jobs that are being lost.

During the Obama years, interest rates have been pushed to the floor, the Federal Reserve has created trillions of dollars out of thin air, and the size of our national debt is getting close to doubling.  Despite all of those desperate measures, our economy continues to crumble.

We stole from the future to try to paper over our failures and it didn’t work.  Now an economic downturn that will ultimately turn out to be even worse than the “Great Recession” of 2008 and 2009 has begun, and our leaders have absolutely no idea how to fix things.

I wish I had better news to report, but I don’t.  Get prepared now, because very rough times are ahead.

The post Economic Recovery? 13 Of The Biggest Retailers In America Are Closing Down Stores appeared first on The Economic Collapse.

Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months.  Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this.  If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia…

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed).

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’s composite measurement.

It is also known as the “Dry Bulk Index”.

Much of the decline of the Baltic Dry Shipping Index is being blamed on China.  The following comes from a Bloomberg report that was posted on Thursday…

The cost of shipping commodities fell to a record, amid signs that Chinese demand growth for iron ore and coal is slowing, hurting the industry’s biggest source of cargoes.

The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.

So many of the exact same patterns that we witnessed back in 2008 are playing out once again in front of our very eyes.  Below, I have shared a chart that was posted by Zero Hedge, and it shows how the Baltic Dry Shipping Index absolutely collapsed in 2008 as we headed into a major financial crisis.  Well, now the Index is collapsing again, and it is already lower than it was at any point back in 2008…

The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.

Just look at the price of U.S. oil.  It just keeps on falling, and as I write this article it is sitting at $40.40.

The price of oil collapsed just before the financial crisis of 2008, and the same pattern is happening again.

And look at what is happening to commodities. The Thomson Reuters/CoreCommodity CRB Commodity Index has plummeted to the lowest level that we have seen since the last recession. It is now down more than 30 percent over the past 12 months, and it continues to fall.

So don’t be fooled by the temporary “stock market recovery” that we have witnessed.  The underlying economic fundamentals continue to decline.  We are entering a global deflationary recession, and the stock market will get the memo at some point just like we saw in 2008.

At this moment, global financial markets are teetering on the brink, and all it is going to take is some kind of major trigger event to send them tumbling over the edge.

And such an event may be coming sooner than you may think.

We live at a time when global terrorism is surging, relationships between nations are deteriorating and our planet is shaking in wild and unpredictable ways.

It wouldn’t take much to push the financial world into full-blown panic mode.  A major regional war in the Middle East, a terror attack that kills thousands, or an earthquake or volcanic eruption that affects a large U.S. city are all potential examples of “black swan events” which could fit the bill.

The global financial system has never been more primed for another 2008-style crisis.  Thanks to the fragility of the system, it could literally happen any day now.

So keep your eyes open – within weeks our world could be completely and totally different.

The post The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low appeared first on The Economic Collapse.

For each of the charts that I am about to share with you, I want you to focus on the last shaded gray bar on each chart which represents the last recession.  As you will see, our economic problems are significantly worse than they were just before the financial crisis of 2008.  That means that we are far less equipped to handle a major economic crisis than we were the last time.

#1 The National Debt

Just prior to the last recession, the U.S. national debt was a bit above 9 trillion dollars.  Since that time, it has nearly doubled.  So does that make us better off or worse off?  The answer, of course, is obvious.  And even though Barack Obama promises that “deficits are under control”, more than a trillion dollars was added to the national debt in fiscal year 2014.  What we are doing to future generations by burdening them with so much debt is beyond criminal.  And so what does Barack Obama want to do now?  He wants to ramp up government spending and increase the debt even faster.  This is something that I covered in my previous article entitled “Barack Obama Says That What America Really Needs Is Lots More Debt“.

#2 Total Debt

Over the past 40 years, the total amount of debt in the United States has skyrocketed to astronomical heights.  We have become a “buy now, pay later” society with devastating consequences.  Back in 1975, our total debt level was sitting at about 2.5 trillion dollars.  Just prior to the last recession, it was sitting at about 50 trillion dollars, and today we are rapidly closing in on 60 trillion dollars.

#3 The Velocity Of Money

When an economy is healthy, money tends to change hands and circulate through the system quite rapidly.  So it makes sense that the velocity of money fell dramatically during the last recession.  But why has it kept going down since then?

#4 The Homeownership Rate

Were you aware that the rate of homeownership in the United States has fallen to a 20 year low?  Traditionally, owning a home has been a sign that you belong to the middle class.  And the last recession was really rough on the middle class, so it makes sense that the rate of homeownership declined during that time frame.  But why has it continued to steadily decline ever since?

#5 The Employment Rate

Barack Obama loves to tell us how the unemployment rate is “going down”.  But as I will explain later in this article, this decline is primarily based on accounting tricks.  Posted below is a chart of the civilian employment-population ratio.  Just prior to the last recession, approximately 63 percent of the working age population of the United States was employed.  During the recession, this ratio fell to below 59 percent and it stayed there for several years.  Just recently it has peeked back above 59 percent, but we are still very, very far from where we used to be, and now the next economic downturn is rapidly approaching.

#6 The Labor Force Participation Rate

So how can Obama get away with saying that the unemployment rate has gone down dramatically?  Well, each month the government takes thousands upon thousands of long-term unemployed workers and decides that they have been unemployed for so long that they no longer qualify as “part of the labor force”.  As a result, the “labor force participation rate” has fallen substantially since the end of the last recession…

#7 The Inactivity Rate For Men In Their Prime Working Years

If things are “getting better”, then why are so many men in their prime working years doing nothing at all?  Just prior to the last recession, the inactivity rate for men in their prime working years was about 9 percent.  Today it is just about 12 percent.

#8 Real Median Household Income

Not only is a smaller percentage of Americans employed today than compared to just prior to the last recession, the quality of our jobs has gone down as well.  This is one of the factors which has resulted in a stunning decline of real median household income.

I have shared these next numbers before, but they bear repeating.  In America today, most Americans do not make enough to support a middle class lifestyle on a single salary.  The following figures come directly from the Social Security Administration…

-39 percent of American workers make less than $20,000 a year.

-52 percent of American workers make less than $30,000 a year.

-63 percent of American workers make less than $40,000 a year.

-72 percent of American workers make less than $50,000 a year.

We all know people that are working part-time jobs because that is all that they can find in this economy.  As the quality of our jobs continues to deteriorate, the numbers above are going to become even more dismal.

#9 Inflation

Even as our incomes have stagnated, the cost of living just continues to rise steadily.  For example, the cost of food and beverages has gone up nearly 50 percent just since the year 2000.

#10 Government Dependence

As the middle class shrinks and the number of Americans that cannot independently take care of themselves soars, dependence on the government is reaching unprecedented heights.  For instance, the federal government is now spending about twice as much on food stamps as it was just prior to the last recession.  How in the world can anyone dare to call this an “economic recovery”?

So you tell me – are things “getting better” or are they getting worse?

To me, it is crystal clear that we are in much worse condition than we were just prior to the last economic crisis.

And now things are setting up in textbook fashion for the next great economic crisis.  Unfortunately, most Americans are totally clueless about what is going on and the vast majority are completely and totally unprepared for what is coming.

Or could it be possible that I am wrong?  Whether you agree or disagree with me, please feel free to add to the discussion by posting a comment below…

The post 10 Charts Which Show We Are Much Worse Off Than Just Before The Last Economic Crisis appeared first on The Economic Collapse.

#1 After accounting for inflation, median household income in the United States is 8 percent lower than it was when the last recession started in 2007.

#2 The number of part-time workers in America has increased by 54 percent since the last recession began in December 2007.  Meanwhile, the number of full-time jobs has dropped by more than a million over that same time period.

#3 More than 7 million Americans that are currently working part-time jobs would actually like to have full-time jobs.

#4 The jobs gained during this “recovery” pay an average of 23 percent less than the jobs that were lost during the last recession.

#5 The number of unemployed workers that have completely given up looking for work is twice as high now as it was when the last recession began in December 2007.

#6 When the last recession began, about 17 percent of all unemployed workers had been out of work for six months or longer.  Today, that number sits at just above 34 percent.

#7 Due to a lack of decent jobs, half of all college graduates are still relying on their parents financially when they are two years out of school.

#8 According to a new method of calculating poverty devised by the U.S. Census Bureau, the state of California currently has a poverty rate of 23.4 percent.

#9 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#10 In 2007, the average household in the top 5 percent had 16.5 times as much wealth as the average household overall.  But now the average household in the top 5 percent has 24 times as much wealth as the average household overall.

#11 In an absolutely stunning development, the rate of small business ownership in the United States has plunged to an all-time low.

#12 Subprime loans now make up 31 percent of all auto loans in America.  Didn’t that end up really badly when the housing industry tried the same thing?

#13 The average cost of producing a barrel of shale oil in the United States is approximately 85 dollars.  Now that the price of oil is starting to slip under that number, the “shale boom” in America could turn into a bust very rapidly.

#14 On a purchasing power basis, China now actually has a larger economy than the United States does.

#15 It is hard to believe, but there are 49 million people that are dealing with food insecurity in America today.

#16 There are six banks in the United States that pretty much everyone agrees fit into the “too big to fail” category.  Five of them have more than 40 trillion dollars of exposure to derivatives.

#17 The 113 top earning employees at the Federal Reserve headquarters in Washington D.C. make an average of $246,506 a year.  It turns out that ruining the U.S. economy is a very lucrative profession.

#18 We are told that the federal deficit is under control, but the truth is that the U.S. national debt increased by more than a trillion dollars during fiscal year 2014.

#19 An astounding 40 million dollars has been spent just on vacations for Barack Obama and his family.  Perhaps he figures that if we are going down as a nation anyway, he might as well enjoy the ride.

If our economy truly was “recovering”, there would be lots of good paying middle class jobs available.

But that is not the case at all.

I know so many people in their prime working years that spend day after day searching for a job.  Most of them never seem to get anywhere.  It isn’t because they don’t have anything to offer.  It is just that the labor market is absolutely saturated with qualified job seekers.

For example, USA Today recently shared the story of 42-year-old Alex Gomez…

“I’ve had to seriously downgrade my living situation,” said Alex Gomez, a 42-year-old with a master’s degree in entrepreneurship. Gomez lost his last full-time job in 2009 and has been looking for work since a short-term contract position ended in 2012.

Gomez’s home was foreclosed on, so the Tampa resident lives with three roommates in a college neighborhood. He drained his 401(k) trying to save his house, and he has around $150,000 in student loans. His mother is tapping her 401(k) to pay his rent. Gomez subsists on that and about $200 a month in food stamps.

“I have been applying and looking for pretty much anything at this stage,” he said. Although he’s looking for work in engineering or data management, “I applied to a supermarket as a deli clerk because I used to be a deli clerk as a teenager,” he said. He was told he was overqualified and turned down.

Does Alex Gomez have gifts and abilities to share with our society?

Of course he does.

So why can’t he find a job?

It is because we have a broken economy.

We are in the midst of a long-term economic decline and the system simply does not work properly anymore.

And thanks to decades of very foolish decisions, this is only the start of our problems.

Things are only going to get worse from here.

The post 19 Very Surprising Facts About The Messed Up State Of The U.S. Economy appeared first on The Economic Collapse.

The U.S. Census Bureau has just released some brand new numbers, and they are quite sobering.  For example, after accounting for inflation median household income in the United States has declined a total of 8 percent from where it was back in 2007.

That means that middle class families have significantly less purchasing power than they did just prior to the last major financial crisis.

And one research firm is projecting that it is going to take until 2019 for median household income to return to the level that we witnessed in 2007…

For everybody wondering why the economic recovery feels like a recession, here’s the answer: We’re still at least five years away from regaining everything lost during the 2007-2009 downturn.

Forecasting firm IHS Global Insight predicts that real median household income — perhaps the best proxy for middle-class living standards — won’t reach the prior peak from 2007 until 2019. Since the numbers are adjusted for inflation, that means the typical family will wait 12 years until their purchasing power is as strong as it was before the recession. That would be the longest period of stagnation, by far, since the Great Depression of the 1930s.

Of course that projection assumes that the economy will continue to “recover”, which is a very questionable assumption at best.

Meanwhile, total household wealth has been declining for middle class families as well.

According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

That is a pretty substantial drop.  But you never hear our politicians (especially the Democrats) bring up numbers like that because they want us to feel good about things.

So why is all of this happening?

The biggest reason why the middle class is struggling so much is the lack of good jobs.

As the chart posted below demonstrates, the percentage of the working age population that is actually employed is still way, way below where it was prior to the last recession…

The “employment recovery” (the tiny little bump at the end of the chart) has been so miniscule that it is hardly even worth mentioning.

At the moment, we still have 1.4 million fewer full-time jobs than we did in 2008 even though more than 100,000 people are added to the U.S. population each month.

And a lot of the workers that have lost jobs since the start of the last recession have never been able to find a new one.

According to a brand new survey conducted by Rutgers University, more than 20 percent of all workers that have been laid off in the past five years still have not found a new job.

Meanwhile, the control freak bureaucrats that run this country continue to kill off small businesses.

In recent years we have seen large numbers of small businesses fail, and at this point the rate of small business ownership in the United States is at an all-time low.

As a result of everything that you have just read, the middle class is shrinking and dependence on the government is soaring.

Today, there are 49 million Americans that are dealing with food insecurity, and Americans received more than 2 trillion dollars in benefits from the federal government last year alone.

For many more statistics just like this, please see my previous article entitled “30 stats to show to anyone that does not believe the middle class is being destroyed“.

Without a doubt, things are not that good for the middle class in America these days.

Unfortunately, the next great wave of financial trouble is rapidly approaching, and once it strikes things are going to get substantially worse for the middle class.

Yes, the stock market set record high after record high this summer.  But what we have observed is classic bubble behavior.  So many of the exact same patterns that occurred just prior to previous stock market crashes are happening once again.

And it is interesting to note that September 22nd has marked important market peaks at various times throughout history…

For traders, September 22 is one of those days with a notorious history. UBS’s Art Cashin notes that September 22 marked various market highs in 1873, 1929, 1980, and even as recent as 2008.

Could the coming months be the beginning of the next major stock market decline?

Small-cap stocks are already starting to show signs of real weakness.  In fact, the Russell 2000 just hit a “death cross” for the first time in more than 2 years…

The Russell 2000 has been diverging from the broader market over the last several weeks, and now technicians point out it has flashed a bearish signal. For the first time in more than two years, the small-cap index has hit a so-called death cross.

A death cross occurs when a nearer-term 50-day moving average falls below a longer-term, 200-day moving average. Technicians argue that a death cross can be a bearish sign.

None of us knows what the market is going to do tomorrow, but a lot of the “smart money” is getting out of the market right now while the getting is good.

So where is the “smart money” putting their assets?

In a previous article, I discussed how sales of gold bars to wealthy clients is way up so far this year.

And CNBC has just reported that the ultra-wealthy “are holding mountains of cash” right now…

Billionaires are holding mountains of cash, offering the latest sign that the ultra-wealthy are nervous about putting more money into today’s markets.

According to the new Billionaire Census from Wealth-X and UBS, the world’s billionaires are holding an average of $600 million in cash each—greater than the gross domestic product of Dominica.

Why are they doing this?

Are they concerned about the potential of a market crash?

And if we do see another market crash like we witnessed back in 2008, what is that going to mean for the rest of us?

2008 certainly did not destroy our economy.

But it did cause an immense amount of damage that we have never recovered from.

Now the next wave is approaching, and most people don’t even see it coming.

The post This Is About As Good As Things Are Going To Get For The Middle Class – And It’s Not That Good appeared first on The Economic Collapse.

In order to build wealth, middle class Americans either need to have their own businesses or they need good jobs.  Sadly, the percentage of Americans that own a business continues to decline steadily.  In the report that I mentioned above, the Federal Reserve says that the proportion of U.S. families that have an ownership interest in a small business fell from 13.3 percent in 2010 to a brand new all-time low of 11.7 percent in 2013.

This is one of the factors that is increasing the gap between the extremely wealthy and the rest of us in this country.  And of course another of the major factors is the steady decline in good paying jobs.

The U.S. Competitiveness Project at Harvard Business School is chaired by professors Michael E. Porter and Jan W. Rivkin.  It just released a new report entitled “An Economy Doing Half Its Job”, and it addressed the fact that the middle class is deeply struggling even though many large U.S. corporations have been thriving.  The following is an excerpt from an article in the Boston Globe about this report…

In a statement, Porter added: “Shortsighted executives may be satisfied with an American economy where firms operating here are winning without lifting US living standards. But leaders with longer perspectives understand that companies can’t thrive for long while their workers and their communities struggle.”

Unfortunately, this is not likely to change any time soon.  In fact, that same report discovered that Harvard Business School alumni foresee “falling pay and fewer openings for full-time jobs” for American workers in the years ahead…

U.S. workers face a dim future, with stagnant or falling pay and fewer openings for full-time jobs.

That’s the picture that emerges from a survey of Harvard Business School alumni.

More than 40 percent of the respondents foresee lower pay and benefits for workers. Roughly half favor outsourcing work over hiring staffers. A growing share prefer part-time employees. Nearly half would rather invest in new technology than hire or retain workers.

The Obama administration continues to tell us that the unemployment rate is “going down” and that the economy is recovering, but that does not match the reality of what most Americans are experiencing on a day to day basis.

As David Stockman recently so aptly put it, outside of health and education the U.S. economy has not produced a single job since mid-2000 even though our population has grown greatly since that time…

In a few deft seconds, a “no jobs” nobody who apparently doesn’t actually have one himself,  essentially explained the contents of the chart below to his silenced CNBC hosts. Over the course of 170 “jobs Fridays” since mid-2000, the latter have apparently never noticed the single most stunning fact embedded in the monthly BLS report. Namely, that outside of health and education there has not been one net new job created in the American economy since July 2000! Yes, not a single new job—as in none, nein, nichts, nada, zip!

In addition, most of the new jobs that are being “added to the economy” each month are part-time jobs.  Right now, we still have 1.4 million fewer full-time jobs than we did in 2008 even though more than 100,000 people are added to the population each month.

What this means is that the middle class is shrinking.

We are witnessing an increasing concentration of wealth among the ultra-wealthy, and most of the rest of us are getting poorer.  As a recent CNN article detailed, the Federal Reserve has also discovered that the gap between the rich and the poor in America is larger than the Fed has ever recorded before…

In its Study of Consumer Finances, released every three years, the Fed found that the wealthiest 3% of American households controlled 54.4% of the nation’s wealth in 2013, a slight increase from its last survey in 2010. It’s also substantially higher from the 44.8% they held in 1989, showing how quickly the income divide has been growing over the past decade or so.

At the same time, the share of wealth held by the bottom 90% fell to 24.7% in 2013. That’s compared to 33.2% in 1989.

How close does the share of wealth for the bottom 90 percent have to go before we admit that we have a major problem on our hands?

Is there anyone out there that would be okay with it hitting zero percent?

One of the big reasons why the wealthy have been doing so well is because the stock market has been soaring.  The money printing policies of the Federal Reserve have sent stock prices to unprecedented heights.  This has overwhelmingly benefited the extremely wealthy…

According to recent data from the Federal Reserve, America has the lowest level of stock ownership in 18 years. Yet stock ownership for the wealthy is at a new high—and that has accounted for most of their good fortune compared to the rest of America.

In fact, the Fed says that the wealthiest top 10 percent of all Americans now own 81 percent of all stocks…

Stock ownership is even more concentrated when it comes to share of total stock holdings. In 2010, the latest period available, the top 10 percent of Americans by net worth held 81 percent of all directly held or indirectly held stocks, according to Edward N. Wolff, an economics professor at New York University who specializes in inequality and Federal Reserve data.

Wolff said that share—which has not been released yet for 2013—has probably gone even higher than 81 percent since 2010.

Since the last financial crisis, the Federal Reserve has been very good to the elite.

But most of the rest of us have had a really hard time.

Until more Americans start getting good jobs and building small businesses, things are not going to turn around for the middle class.

But the policies being pursued by our politicians continue to kill good jobs and continue to kill small businesses, so I wouldn’t expect significant changes any time soon.

The post Small Business Ownership In America Is At An All-Time Low appeared first on The Economic Collapse.

1. Americans are so broke that about a third of them have debt collectors on their heels.  One recent study discovered that more than one out of every three adults in the United States has an unpaid debt that is “in collections“.  That is a total of 77 million people.  In other words, the debt collection business in America is absolutely booming.

2. Americans are so broke that Congress is now actually considering allowing post offices to provide payday loans and check cashing services.

3. Americans are so broke that they are keeping their vehicles longer than ever.  The average age of vehicles on America’s roads recently set a new all-time high of 11.4 years.

4. Americans are so broke that car dealers are having to go to extreme lengths to get new customers.  Last year, one out of every four auto loans in the United States was made to someone with subprime credit.

5. Americans are so broke that 52 percent of them cannot even afford the homes that they are living in right now.

6. Americans are so broke that they are falling farther behind on their student loans than ever.  The total amount of student loan debt in the U.S. has now reached a whopping 1.2 trillion dollars, and approximately seven million Americans are in default on their student loans at this point.

7. Young Americans are so broke that half of all college graduates are still relying on their parents financially when they are two years out of school.

8. Young Americans are so broke that only 36 percent of American adults under the age of 35 currently own a home.  That is the lowest level that has ever been recorded.

9. Americans are so broke that many of them can’t even afford to shop at Wal-Mart and dollar stores anymore…

Discount stores are slowly dying.

Yesterday, Dollar Tree announced it would buy Family Dollar, a chain that is in the process of closing hundreds of stores and firing workers.

Other discount stores have been struggling as well, writes Heidi Moore at The Guardian. Fashion discounter Loehmann’s filed for bankruptcy, while Wal-Mart’s sales have declined for the past five quarters.

“There’s just not enough money deployed by American families to keep all the discount chains in business,” Moore writes.

10. Americans are so broke that they are running up record levels of debt.  Overall, U.S. households are 11.68 trillion dollars in debt right now.

11. Americans are so broke that the wealth of the “typical American household” has fallen by 36 percent over the past decade.

12. Americans are so broke that one out of every four part-time workers in America is living below the poverty line.

13. Americans are so broke that more than 37 million Americans are now being served by food pantries and soup kitchens.

14. Americans are so broke that there are 49 million Americans that are dealing with food insecurity.

15. Americans are so broke that the number of people on food stamps has increased by about 14 million while Obama has been in the White House.  Ten years ago, the number of women in the U.S. that had jobs outnumbered the number of women in the U.S. on food stamps by more than a 2 to 1 margin.  But now the number of women in the U.S. on food stamps actually exceeds the number of women that have jobs.

16. Americans are so broke that the U.S. government has had to spend an astounding 3.7 trillion dollars on welfare programs over the past five years.

17. Americans are so broke that more than 20 percent of all children in the U.S. are living in poverty.

18. Americans are so broke that we have a record number of kids sleeping in the streets.  In fact, we have more than a million public school children that are homeless at this point.

19. Americans are so broke that 76 percent of all Americans are living paycheck to paycheck.

20. Americans are so broke that 26 percent of Americans have absolutely no emergency savings whatsoever.

21. Americans are so broke that approximately two-thirds of all Americans do not have enough money saved up to cover six months of expenses if an emergency arose.

If things are this bad now, during the so-called “economic recovery”, how bad will things get during the next major economic downturn?

Unfortunately, most Americans have been lulled into a false sense of security.  The financial crisis of 2008 seems like ancient history to most of them now, and most people appear to believe that our leaders have “fixed” whatever was wrong the last time.

Of course that is not the case at all.  In fact, our long-term problems have just continued to grow since then.

The truth is that what we are experiencing right now is about as good as things are going to get for the U.S. economy.  When the next crisis arrives, all of the numbers in the list above are going to rapidly get a lot worse.

So enjoy the rest of this “bubble” while you still can.  It certainly will not last for too much longer.

The post 21 Ways To End The Phrase ‘Americans Are So Broke…’ appeared first on The Economic Collapse.