Global Crisis

Millions of Americans were gearing up for some huge event to happen in September, but the world didn’t end and now many of them have given up entirely on prepping. Of course the truth is that some absolutely earth-shattering events did take place last month, but because September did not play out exactly as some were anticipating, a lot of people feel very let down. My contacts in the emergency food industry tell me that sales have dropped off dramatically, and yesterday I was told by someone that I trust that the same is true for those that sell precious metals. But this should not be happening. What we witnessed in August and September was just the warm up act, and all of the numbers are absolutely screaming at us that we are right on track for a major global crisis. In this article I am going to focus on economic and financial issues, but there are so many other things going on around the planet right now that threaten to throw our world into turmoil. Anyone that thinks that it is safe to “relax” now is simply not paying attention. The following are 20 reasons why all the people that quit prepping after September are dead wrong…

#1 U.S. exports are down 11 percent for the year so far. The only other times they have fallen this dramatically since the turn of the century were during the last two recessions.

#2 Since March, the amount of stuff being shipped by truck, rail and air inside the United States has been falling every single month on a year over year basis. This is a clear indication that economic activity is really slowing down.

#3 Wholesale sales in the U.S. have fallen to the lowest level since the last recession.

#4 The inventory to sales ratio has risen to the highest level since the last recession. This means that there is a whole lot of unsold inventory that is just sitting around out there and not selling.

#5 Industrial production declined for five months in a row during the first half of 2015. That is something that has never happened outside of a recession.

#6 Wal-Mart is projecting that its earnings may fall by as much as 12 percent during the next fiscal year.

#7 Don’t expect U.S. consumers to rush in and save the day. According to brand new numbers from the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

#8 And remember, there are 102.6 million working age Americans that do not even have a job of any kind.

#9 According to Challenger Gray, layoffs at major firms have risen to the highest level that we have witnessed since 2009.

#10 The number of job openings in the United States declined by 5.3 percent during the month of August. That was a huge plunge for just one month.

#11 According to British banking giant HSBC, the world is already in a “dollar recession“. Global trade has fallen 8.4 percent so far this year, and global GDP expressed in U.S. dollars is down 3.4 percent.

#12 In September, Chinese exports were down 3.7 percent compared to one year ago, and Chinese imports were down a staggering 20.4 percent compared to a year ago.

#13 During the month of August, we witnessed the 8th largest single day stock market crash in U.S. history on a point basis and the 10th largest single day stock market crash in U.S. history on a point basis. It was the first time ever that the Dow Jones Industrial Average declined by more than 500 points on two consecutive trading days.

#14 On August 24th, we also witnessed the greatest intraday stock market point swing of all time. From the high point of the day to the low point of the day, the Dow Jones Industrial Average plummeted 1,089 points before recovering.

#15 At one point in September, approximately 11 trillion dollars of stock market wealth had been wiped out around the globe.

#16 At one point in September, Chinese stocks were down about 40 percent from the peak of the market.

#17 At one point in September, German stocks were down about 25 percent from the peak of the market.

#18 Since the last financial crisis, the global economy has added another 50 trillion dollars to our colossal pile of debt. That means we are far more vulnerable to a crisis than we were the last time around.

#19 The list of global financial giants that are rumored to be in very serious trouble includes Deutsche Bank (the biggest bank in Germany), UBS (the biggest bank in Switzerland) and three of the largest commodity trading firms on the entire planet: Glencore, Trafigura and the Noble Group. The total collapse of any one of them would easily be another “Lehman Brothers moment” for the global financial system.

#20 Stocks are still in a massive bubble. In fact, stocks in the U.S. are going to have to fall more than 30 percent from the current levels just to get back to what is considered “normal” or “average”. The following is an extended excerpt from one of my previous articles…

*****

In recent years, stocks have soared to unbelievably unrealistic levels. One of the most popular methods of measuring the true value of stocks is something called the cyclically-adjusted price to earnings ratio. It was developed by economist Robert Shiller of Yale University, and it attempts to accurately show how much we are paying for stocks in relation to how much those corporations are actually earning. When this number is very high, stocks are overvalued, and when this number is very low stocks are undervalued.

Earlier this year, CAPE hit a peak of about 27, and by the beginning of August it was still sitting up around 26. The only times CAPE has been higher have been just before other stock market bubbles have burst…

It would take a total drop of about 40 percent from the peak of the market just to get back to average. So far the Dow has fallen about 10 percent or so, so it is going to take another 30 percent crash just to get to a point where stock prices are considered “normal” once again.

*****

In this day and age, we are so impatient and our attention spans are pitifully small. We live in a world of instant coffee, video on demand, and 48 hour news cycles. Very few of us are willing to take a long term view of things because we have all become accustomed to “living in the now” and focusing on what is in front of us this very instant.

Yes, the headlines are not screaming about a “stock market crash” or an “economic depression” on this particular day in October.

But that doesn’t mean that we are out of the woods by any stretch of the imagination.

The biggest bank in the western world (HSBC) says that a global recession has now begun, and the pain that we have experienced so far is just the tip of the iceberg.

So please don’t think that it is time to relax.

The month of September was not “the end” of anything.

Rather, it was just the beginning…

Have you been paying attention to what has been happening in Argentina, Venezuela, Brazil, Ukraine, Turkey and China? If you are like most Americans, you have not been. Most Americans don’t seem to really care too much about what is happening in the rest of the world, but they should. In major cities all over the globe right now, there is looting, violence, shortages of basic supplies, and runs on the banks. We are not at a “global crisis” stage yet, but things are getting worse with each passing day. For a while, I have felt that 2014 would turn out to be a major “turning point” for the global economy, and so far that is exactly what it is turning out to be. The following are 20 early warning signs that we are rapidly approaching a global economic meltdown…

#1 The looting, violence and economic chaos that is happening in Argentina right now is a perfect example of what can happen when you print too much money…

For Dominga Kanaza, it wasn’t just the soaring inflation or the weeklong blackouts or even the looting that frayed her nerves.

It was all of them combined.

At one point last month, the 37-year-old shop owner refused to open the metal shutters protecting her corner grocery in downtown Buenos Aires more than a few inches — just enough to sell soda to passersby on a sweltering summer day.

#2 The value of the Argentine Peso is absolutely collapsing.

#3 Widespread shortages, looting and accelerating inflation are also causing huge problems in Venezuela…

Economic mismanagement in Venezuela has reached such a level that it risks inciting a violent popular reaction. Venezuela is experiencing declining export revenues, accelerating inflation and widespread shortages of basic consumer goods. At the same time, the Maduro administration has foreclosed peaceful options for Venezuelans to bring about a change in its current policies.

President Maduro, who came to power in a highly-contested election last April, has reacted to the economic crisis with interventionist and increasingly authoritarian measures. His recent orders to slash prices of goods sold in private businesses resulted in episodes of looting, which suggests a latent potential for violence. He has put the armed forces on the street to enforce his economic decrees, exposing them to popular discontent.

#4 In a stunning decision, the Venezuelan government has just announced that it has devalued the Bolivar by more than 40 percent.

#5 Brazilian stocks declined sharply on Thursday. There is a tremendous amount of concern that the economic meltdown that is happening in Argentina is going to spill over into Brazil.

#6 Ukraine is rapidly coming apart at the seams…

A tense ceasefire was announced in Kiev on the fifth day of violence, with radical protesters and riot police holding their position. Opposition leaders are negotiating with the government, but doubts remain that they will be able to stop the rioters.

#7 It appears that a bank run has begun in China…

As China’s CNR reports, depositors in some of Yancheng City’s largest farmers’ co-operative mutual fund societies (“banks”) have been unable to withdraw “hundreds of millions” in deposits in the last few weeks. “Everyone wants to borrow and no one wants to save,” warned one ‘salesperson’, “and loan repayments are difficult to recover.” There is “no money” and the doors are locked.

#8 Art Cashin of UBS is warning that credit markets in China “may be broken“. For much more on this, please see my recent article entitled “The $23 Trillion Credit Bubble In China Is Starting To Collapse – Global Financial Crisis Next?”

#9 News that China’s manufacturing sector is contracting shook up financial markets on Thursday…

Wall Street was rattled by a key reading on China’s manufacturing which dropped below the key 50 level in January, according to HSBC. A reading below 50 on the HSBC flash manufacturing PMI suggests economic contraction.

#10 Japanese stocks experienced their biggest drop in 7 months on Thursday.

#11 The value of the Turkish Lira is absolutely collapsing.

#12 The unemployment rate in France has risen for 9 quarters in a row and recently soared to a new 16 year high.

#13 In Italy, the unemployment rate has soared to a brand new all-time record high of 12.7 percent.

#14 The unemployment rate in Spain is sitting at an all-time record high of 26.7 percent.

#15 This year, the Baltic Dry Index experienced the largest two week post-holiday decline that we have ever seen.

#16 Chipmaker Intel recently announced that it plans to eliminate 5,000 jobs over the coming year.

#17 CNBC is reporting that U.S. retailers just experienced “the worst holiday season since 2008“.

#18 A recent CNBC article stated that U.S. consumers should expect a “tsunami” of store closings in the retail industry…

Get ready for the next era in retail—one that will be characterized by far fewer shops and smaller stores.

On Tuesday, Sears said that it will shutter its flagship store in downtown Chicago in April. It’s the latest of about 300 store closures in the U.S. that Sears has made since 2010. The news follows announcements earlier this month of multiple store closings from major department stores J.C. Penney and Macy’s.

Further signs of cuts in the industry came Wednesday, when Target said that it will eliminate 475 jobs worldwide, including some at its Minnesota headquarters, and not fill 700 empty positions.

#19 The U.S. Congress is facing another deadline to raise the debt ceiling in February.

#20 The Dow fell by more than 170 points on Thursday. It is becoming increasingly likely that “the peak of the market” is now in the rear view mirror.

And I have not even mentioned the extreme drought that has caused the U.S. cattle herd to drop to a 61 year low or the nuclear radiation from Fukushima that is washing up on the west coast.

In light of everything above, is there anyone out there that still wants to claim that “everything is going to be okay” for the global economy?

Sadly, most Americans are not even aware of most of these things.

All over the country today, the number one news headline is about Justin Bieber. The mainstream media is absolutely obsessed with celebrity scandals, and so is a very large percentage of the U.S. population.

A great economic storm is rapidly approaching, and most people don’t even seem to notice the storm clouds that are gathering on the horizon.

In the end, perhaps we will get what we deserve as a nation.

20 Reasons Why All The People That Quit Prepping After September Are Dead Wrong

20 Early Warning Signs That We Are Approaching A Global Economic Meltdown