Investors

The U.S. National Debt Just Hit The 23 Trillion Dollar Mark As We Continue To Steamroll Toward Financial Oblivion

This week, the U.S. national debt reached the 23 trillion dollar mark for the first time ever.  There was no fanfare, there were no politicians giving speeches about fiscal responsibility, and there has been very little national outrage.  We have simply come to accept that it is “normal” for our national debt to grow at an exponential rate, but the truth is that we are literally committing national suicide.  Given enough time, there is no doubt that this colossal mountain of debt will kill our Republic, and yet fiscal responsibility is not even a major national issue any longer.  Everyone seems to be okay with the fact that we are stealing more than 100 million dollars every single hour of every single day from future generations of Americans and destroying the bright future that they were supposed to have.  What we are doing to our children and our grandchildren is beyond criminal, and yet very few of us seem to care.

At this point things are so bad that even Fed Chair Jerome Powell is warning Congress that the national debt is a major problem…

Federal Reserve Chairman Jerome Powell warned lawmakers Wednesday that the ballooning federal debt could hamper Congress’ ability to support the economy in a downturn, urging them to put the budget “on a sustainable path.”

Powell suggested such fiscal aid could be vital after the Fed has cut its benchmark interest rate three times this year, leaving the central bank less room to lower rates further in case of a recession.

When a major downturn hits the U.S. economy, the federal government is not going to be able to do much because we are already spending money at emergency levels.

Of course Powell shouldn’t exactly be criticizing Congress, because the Fed has already been using up all of their ammunition too.

So when the next recession officially arrives, the amount of intervention that will be possible will be very limited.

Since Barack Obama’s inauguration, we have been adding an average of more than a trillion dollars to the national debt every year.  That is utter insanity, but it has helped the economy in the short-term.

When the federal government borrows money that it does not have and spends it into the economy, that boosts economic activity.  But at the same time it makes our long-term financial problems even worse.

If we were to go back and remove from the economy the 12.4 trillion dollars that the federal government added to our national debt since Obama’s inauguration, we would be in the deepest economic depression in American history right now.

So all of that reckless spending has kept us from economic disaster, but it has set the stage for something even worse when this bubble finally bursts.

In October, the federal government’s budget deficit for the month was $134.5 billion.  That was 34 percent higher than for the same month a year earlier.

I can’t even begin to describe how foolish this is.  The extreme negligence being committed by our politicians in Washington is mind blowing.

And this is just the beginning of our problems.  As our population ages, Social Security, Medicare and other entitlement programs are going to become rapidly more oppressive…

This is only going to get worse. According to Census Bureau projections, by 2030 each 100 working-age Americans will be supporting 35 retirees, and this could rise to 42 by 2060. Another way to think of this is to calculate the number of retirees each worker must support. In 1946, the burden of one retiree was shared between 42 workers. Today, according to the SSA, roughly three workers cover each retiree’s Social Security and Medicare benefits. By 2030, however, there will be only two workers supporting each retiree.

So where are we going to get the money that we need to support those programs?

Of course we aren’t actually going to make it to 2060.  Our entire system will implode long before then.

Consumers have also been on a tremendous debt binge in recent years, and we just learned that total U.S. household debt is about to cross the 14 trillion dollar mark…

Americans increased their borrowing for the 21st straight quarter as more households took out loans to buy homes or refinance existing mortgages, according to a report released today from the Federal Reserve Bank of New York.

Total U.S. household debt rose $92 billion, or 0.7%, to $13.95 trillion in the third quarter, the New York Fed’s quarterly household credit and debt report showed.

We are in the final stages of the biggest debt bubble in the history of the world, and most of us realize that this chapter in our history is going to end very badly.

So why do we just keep making things worse?

Of course it isn’t just the United States that is drowning in debt.  According to the IMF, total global debt has now reached the 188 trillion dollar mark…

The global debt crisis has reached epic and historical proportions.  It’s now $188 trillion, which is more than double the entire economic output of the entire planet.

The global debt load has surged to a new record of around 230% of the world’s output, IMF chief Kristalina Georgieva said according to a report by the Daily Mail.  The entire globe’s economic stability is hanging by a thread, and this news makes that thread appear just a little thinner.

Most people don’t understand that the global financial system has literally been designed to create as much debt as possible.  But once you grasp this, it shouldn’t actually be a surprise that we are now 188 trillion dollars in debt.  The system is simply doing what it was intended to do.  For much more on this, please see my previous article entitled “Global Debt Is Up To $188,000,000,000,000 – This Is Officially The Biggest Debt Bubble The World Has Ever Seen”.

For decades, we have been ignoring the future consequences of running up so much debt, but at some point time is going to run out.

In a recent article, Ron Paul put it this way…

Even though the federal deficit is already over one trillion dollars (and growing), President Trump and Congress have no interest in cutting spending, especially in an election year. Should he win reelection, President Trump is unlikely to reverse course and champion fiscal restraint. Instead, he will likely take his victory as a sign that the people support big federal budgets and huge deficits. None of the leading Democratic candidates are even pretending to care about the deficit. Instead they are proposing increasing spending by trillions on new government programs.

Joseph Zidle, a strategist with the Blackstone investment firm, has called the government — or “sovereign” — debt bubble the “mother of all bubbles.” When the sovereign debt bubble inevitably busts, it will cause a meltdown bigger than the 2008 crash.

As usual, Ron Paul is right on the mark.

And actually “a meltdown bigger than the 2008 crash” would be a best case scenario.

Ultimately, it is extremely doubtful that we are going to be able to survive what is going to happen to us once this bubble completely bursts.

The Republic that previous generations of Americans sacrificed so much to build is being systematically destroyed, and it is our own greed that is doing it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. 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.

Guess Who Is Preparing For A Major Stock Market Crash?

Pessimism is spreading like wildfire on Wall Street, and this is particularly true among one very important group of investors.  And considering how much money they have, it may be wise to listen to what they are telling us.  According to a very alarming survey that was recently conducted by UBS Wealth Management, most wealthy investors now believe that there will be a “significant” stock market decline before the end of next year.  The following comes from Yahoo Finance…

Wealthy people around the globe are hunkering down for a potentially turbulent 2020, according to UBS Global Wealth Management.

A majority of rich investors expect a significant drop in markets before the end of next year, and 25% of their average assets are currently in cash, according to a survey of more than 3,400 global respondents. The U.S.-China trade conflict is their top geopolitical concern, while the upcoming American presidential election is seen as another significant threat to portfolios.

Of course this could ultimately become something of a self-fulfilling prophecy if enough wealthy investors pull their money out of stocks and start increasing their cash reserves instead.  Nobody wants to be the last one out of the barn, and it isn’t going to take too much of a spark to set off a full-blown panic.  Perhaps the most troubling number from the entire survey is the fact that almost 80 percent of the wealthy investors that UBS surveyed believe that “volatility is likely to increase”…

Nearly four-fifths of respondents say volatility is likely to increase, and 55% think there will be a significant market sell-off before the end of 2020, according to the report which was conducted between August and October and polled those with at least $1 million in investable assets. Sixty percent are considering increasing their cash levels further, while 62% plan to increase diversification across asset classes.

During volatile times for the market, stocks tend to go down.

And during extremely volatile times, stocks tend to go down very rapidly.

Could it be possible that many of these wealthy investors have gotten wind of some things that the general public doesn’t know about yet?

Of course the truth is that anyone with half a brain can see that stock valuations are ridiculously bloated right now and that a crash is inevitable at some point.

And as I noted yesterday, corporate insiders are currently selling off stocks at the fastest pace in about two decades.

But why is there suddenly so much concern about 2020?

A different survey of business executives that was recently conducted found that 62 percent of them believe that “a recession will happen within the next 18 months”…

A majority of respondents – 62% – believe a recession will happen within the next 18 months. Private companies are particularly worried that a recession lurks in the near term, with 39% anticipating a recession in the next 12 months. This compares with 33% of public company respondents who felt the same way. About one-quarter – 23% – of respondents do not expect a recession within the next two years.

62 percent is a very solid majority, and without a doubt we are starting to see businesses pull back on investment in a major way.

In fact, according to Axios business investment in the United States has now dropped for six months in a row…

  • Business investment has fallen for six months straight and declined by 3% in the third quarter, the largest drop since 2015.
  • The retrenchment by businesses helped turn Wednesday’s U.S. workforce productivity report — a key economic metric that compares goods-and-services output to the number of labor hours worked — negative for the first time in four years.

I know that I bombard my readers with numbers like this on an almost daily basis, but I cannot stress enough how ominous the economic outlook is at this point.

And it isn’t just the U.S. that we need to be concerned about.  Two other surveys that measure the business outlook for the entire globe just fell to their lowest levels in a decade…

The IHS Markit global business outlook—which surveys 12,000 companies three times a year—fell to the worst level since 2009, when data was first collected.

The Ifo world economic outlook, which surveys 1,230 people in 117 countries, fell in the fourth quarter to the worst level since the second quarter of 2009.

Markit’s poll found optimism for activity, employment and profits in the year ahead were all at the lowest level since the financial crisis. Markit also reported a decline in planned investment spending, with inflation expectations at a three-year low.

It is really happening.

The global economy really is heading into a major downturn.

And once this crisis really gets rolling, it is going to be exceedingly painful.

All across America, big companies are already starting to go under at a pace that is absolutely frightening.  For instance, on Tuesday one of the biggest dairy companies in the entire country filed for bankruptcy…

Dairy giant Dean Foods filed for Chapter 11 bankruptcy protection as declining milk sales take a toll on the industry.

Dean Foods – whose more than 50 brands include Dean’s, Land O’ Lakes and Country Fresh – said it intends to continue operating.

The company said it “is engaged in advanced discussions” for a sale to Dairy Farmers of America, a national milk cooperative representing farmers, producers and brands such as Borden cheese and Kemps Dairy.

I have quite a few relatives in Minnesota, and I have always had a soft spot for Land O’Lakes butter.  So it definitely saddened me to hear that this was happening.

But a lot more major casualties are coming.

Of course the economic optimists will continue to insist that we are just experiencing a few bumps on a path that leads to a wonderful new era of American prosperity.  They will continue to tell us of a great “financial harvest” that is about to happen even when things are falling apart all around us.

You can believe them if you want, but most wealthy investors and most business owners believe that hard times are dead ahead.

I have never seen so much pessimism about a coming year as I am seeing about 2020 right now.

There is a growing national consensus that it is going to be a very chaotic year, and I would recommend using what little time you have left to get prepared for it.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. 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.

We Haven’t Seen A Manufacturing Slowdown Like This Since The Last Financial Crisis

This isn’t what was supposed to happen.  According to the economic optimists, there was going to be a great “manufacturing renaissance” as America entered a wonderful new golden age of boundless prosperity.  But of course that is not what has happened.  Manufacturing activity has been declining for the past three months, and all across the country we are seeing economic conditions rapidly deteriorate.  Over and over, we are seeing economic numbers that are worse than anything we have seen since the last recession, but the economic optimists keep assuring us that these are just temporary blips on the way to America’s glorious economic renewal.  Well, they can keep believing in a mirage of future prosperity if they want, but the hard numbers keep telling us another story.  For example, the Chicago Purchasing Managers Index has now fallen to a level that was “last sustained during the financial crisis”…

Manufacturing activity across the country has contracted for three months, according to closely watched ISM data. In the Midwest, the slowdown has been more severe. The Chicago Purchasing Managers Index shows backlogs dropping to a level touched briefly four years ago but last sustained during the financial crisis.

In the middle of the country, it already feels like a manufacturing recession for many business owners.  Manufacturing facilities are being closed down, machines are being idled and thousands of workers are being let go.  The following comes from a CNBC article about our current manufacturing slowdown…

At Ameri-Source Metals’ machine shop outside Pittsburgh, stacks of graphite stubs have begun to pile up in a quiet corner.

Founder Ajay Goel said the customer who typically buys the stubs – a multinational chemicals company – now only needs one-fourth of the amount he used to produce. As a result, the machines have been idled and the workers who serviced them, laid off.

That sure doesn’t sound like a “booming economy” to me.

So far this year, thousands upon thousands of manufacturing workers have been laid off in the Upper Midwest.  By now, we were supposed to be adding large numbers of these good paying jobs, but instead we are losing them at a frightening pace.

In fact, it is being reported that more than 8,000 manufacturing jobs have been lost in the key state of Pennsylvania alone…

From January to September, the states bordering the Great Lakes have lost more than 25,000 manufacturing jobs: Pennsylvania lost 8,100; Ohio lost 6,000; Michigan lost 6,500; and Wisconsin lost 4,700.

Of course it isn’t just the manufacturing industry where employment is cooling off.  At this point, the number of job openings in the U.S. has fallen to an 18 month low, and it is expected to fall ever further in the months ahead.

Things have already gotten so bad that the mainstream media is running articles about how ordinary Americans can prepare for the coming recession.  For instance, the following comes from a CNN article entitled “What can you do now to financially prepare for a layoff later?”…

Sometimes, there are warning signs that you are in danger of being laid off — a buyout of your company, a merger or a strategic change in direction. Other times, the cuts come without warning. But while being laid off is not in your control, being financially prepared for such an event is.

“Companies evolve, change and fail and employees, and even business owners, need to be prepared for the unexpected,” said Mike Silane, a chartered financial analyst with 21 West Wealth Management.

And remember, all of this is happening even though the federal government is running trillion dollar deficits and the Federal Reserve is using up all the ammunition that they should be saving for the depths of the next recession.

In essence, the authorities are already implementing emergency measures in a desperate attempt to support the faltering U.S. economy, but it isn’t working.

This week, we learned that orders for Class-8 trucks in the month of October were down 51 percent from a year ago.

Can anyone explain to me how that is consistent with the “booming economy” narrative that the economic optimists are endlessly pushing?

Unfortunately, the truth is that we can see signs of a major slowdown all around us.  U.S. business hiring has fallen to a 7 year low, the Cass Freight Index has declined for 10 months in a row, and manufacturing is now the smallest share of the United States economy that it has been in 72 years.

But despite all of the evidence that is staring them right in the face, the economic optimists continue to insist that everything is probably going to be okay.  In fact, Goldman Sachs CEO David Solomon is telling us that “the chance of a U.S. recession between now and the election is small”…

“I’ve said that I still think the chance of a U.S. recession between now and the election is small — in the distributions of outcomes, it’s a smaller outcome — I said roughly 25%,” Solomon told Bloomberg Television in Berlin on Tuesday. “Nine months ago I probably would have told you it was very small, kind of 15%,” he said. “So I do think the uncertainty has increased a little bit some of the risk,” but economic data and earnings momentum have held up well and American consumers are “still very healthy,” he said.

Of course the truth is that American consumers are actually not “very healthy” at this moment.  Consumer confidence has fallen for 3 months in a row, and 44 percent of all Americans currently do not make enough money to cover their monthly expenses.

That is one of the reasons why consumers are piling up staggering amounts of debt, and that consumer debt bubble is starting to burst.

Unfortunately, the economic optimists will continue to push their false narrative up until the very end, and lots of people will believe them.

You can believe them too if you want, but it won’t change what is about to happen.

The crisis that so many have been anticipating is starting to play out, and our problems are likely to greatly accelerate in the months ahead.

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. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. 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.

The Deutsche Bank Death Watch Has Taken A Very Interesting Turn

The biggest bank in Europe is in the process of imploding, and there are persistent rumors that the final collapse could happen sooner rather than later.  Those that follow my work on a regular basis already know that this is a story that I have been following for years.  Deutsche Bank is rapidly bleeding cash, they have been laying off thousands of workers, and the vultures have been circling as company executives desperately try to implement a turnaround plan.  Unfortunately for Deutsche Bank, it may already be too late.  And if Deutsche Bank goes down, it will be even more catastrophic for the global financial system than the collapse of Lehman Brothers was in 2008.  Germany is the glue that is holding the EU together, and so if the bank that is right at the heart of Germany’s financial system collapses, the dominoes will likely start falling very rapidly.

There has been a tremendous amount of speculation about Deutsche Bank over the past several days, and so let’s start with what we know.

We know that Deutsche Bank has been losing money at a pace that is absolutely staggering…

Deutsche Bank reported a net loss that missed market expectations on Wednesday as a major restructuring plan continues to weigh on the German lender.

It reported a net loss of 832 million euros ($924 million) for the third quarter of 2019. Analysts were expecting a loss of 778 million euros, according to data from Refinitiv. It had reported a net profit of 229 million euros in the third quarter of 2018, but a loss of 3.15 billion euros in the second quarter of this year.

If you add the losses for the second and third quarter of 2019 together, you get a grand total of nearly 4 billion euros.

How in the world is it possible to lose that much money in just 6 months?

If all they had their employees doing was flushing dollar bills down the toilet for 6 months, it still shouldn’t be possible to lose that kind of money.

When investors learned of Deutsche Bank’s third quarter results last week, shares of the bank went down about 8 percent in a single day.

Overall, the stock price has lost over a quarter of its value over the past year.

Unless you enjoy financial pain, I have no idea why anyone would want to be holding Deutsche Bank stock at this point.  As I have previously warned, it is eventually going to zero, and the only question remaining is how quickly it will get there.

We also know that Deutsche Bank has been laying off thousands of workers all over the world…

On July 8, 2019, thousands of Deutsche Bank employees across the globe arrived at their offices, unaware that they would be leaving again, jobless, just a few hours later. In Tokyo, entire teams of equity traders were dismissed on the spot, while some London staff were reportedly told they had until 11am to leave the bank’s Great Winchester Street offices before their access cards stopped working.

The job cuts, which totalled 18,000, or around 20 percent of Deutsche Bank’s workforce, were the flagship element of a restructuring plan designed to save the ailing German lender.

The day before those layoffs happened, most of those employees would have probably told you that Deutsche Bank is in good shape and has a very bright future ahead.

Just like we witnessed with Lehman Brothers, there is always an effort to maintain the charade until the very last minute.

But the truth is that anyone with half a brain can see that Deutsche Bank is dying.  There have been so many bad decisions, so many aggressive bets have gone bad, and there has been one scandal after another…

In April 2015, the bank paid a combined $2.5bn in fines to US and UK regulators for its role in the LIBOR-fixing scandal. Just six months later, it was forced to pay an additional $258m to regulators in New York after it was caught trading with Myanmar, Libya, Sudan, Iran and Syria, all of which were subject to US sanctions at the time. These two fines, combined with challenging market conditions, led the bank to post a €6.7bn ($7.39bn) net loss for 2015. Two years later, it paid a further $425m to the New York regulator to settle claims that it had laundered $10bn in Russian funds.

At this point, it is just a zombie bank that is stumbling along until someone finally puts it out of its misery.

Money is so tight at Deutsche Bank that they have even cancelled the Christmas reception for retired employees…

Times change. Once upon a time (2001, in fact), Deutsche Bank was able to book stars like Robbie Williams for its staff Christmas party, with a Spice Girl turning up too just because it was such a great party. Now, according to the FT, Christian Sewing has even cancelled the daytime coffee-and-cake Christmas reception for retired employees.

Of course saving a few bucks on coffee and cake is not going to make a difference for a bank with tens of trillions of dollars of exposure to derivatives.

Deutsche Bank is the largest domino in Europe’s very shaky financial system.  When it fully collapses, it will set off a chain reaction that nobody is going to be able to stop.  David Wilkerson once warned that the financial collapse of Europe would begin in Germany, and Jim Rogers has warned that the implosion of Deutsche Bank would cause the entire EU to “disintegrate”…

Then the EU would disintegrate, because Germany would no longer be able to support it, would not want to support it. A lot of other people would start bailing out; many banks in Europe have problems. And if Deutsche Bank has to fail – that is the end of it. In 1931, when one of the largest banks in Europe failed, it led to the Great Depression and eventually the WWII. Be worried!

Sadly, most Americans can’t even spell “Deutsche Bank”, and they certainly don’t know that it is the most important bank in all of Europe.

But those that understand the times we are living in are watching Deutsche Bank very carefully, because if it implodes global financial chaos will certainly follow.

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. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. 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.

More Bad Economic Numbers Put A Huge Dent In The Case Of The Economic Optimists

For a long time, people have been trying to tell me that the U.S. economy is headed for a new golden era.  They insist that the U.S. will be more powerful and more respected than ever before, and that we will see unprecedented prosperity in this nation.  But despite extremely wild spending by the U.S. government and exceedingly irresponsible intervention by the Federal Reserve, the U.S. economy has not even had a “good” year in ages.  As I have pointed out numerous times, we have not had a year when U.S. GDP grew by at least 3 percent since the middle of the Bush administration, and that makes this the longest stretch of low growth in all of U.S. history by a very wide margin.  Many believe that brighter days may still be ahead, but all of the economic numbers that we have been getting in recent months make it abundantly clear that a new economic slowdown has begun.  I shared 14 of those numbers earlier this week, and I will share some brand new ones with you today.

Let’s start by taking a look at how U.S. consumers are faring.  U.S. consumer confidence has now fallen for 3 months in a row, and this week we learned that the Bloomberg Consumer Comfort Index has just fallen at the fastest pace in more than 8 years…

U.S. consumer comfort suffered its biggest weekly decline in more than eight years on a pullback in Americans’ assessments of the economy, personal finances and the buying climate, possibly signaling more moderate household spending approaching the holiday-shopping season.

The Bloomberg Consumer Comfort Index fell 2.4 points, the most since March 2011, to 61 in the week ended Oct. 27.

How in the world can anyone possibly claim that we have a “booming economy” after reading that?

We also just got another depressingly bad manufacturing number.  Experts were expecting a reading of 48.3 for the Chicago Purchasing Management Index, but instead it came in at just 43.2…

The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.

Any reading below 50 indicates deteriorating conditions.

We were promised a “manufacturing renaissance”, but instead manufacturing is now the smallest share of the U.S. economy that it has been in 72 years.

That is terrible.

Manufacturing traditionally provides good paying jobs, and as I pointed out the other day, U.S. business hiring has now declined to the lowest level in 7 years.

But at least we have plenty of government jobs, eh?

In the private sector, things are getting really tough, and we are starting to see lots of big companies lay off workers.

For example, Molson Coors just announced that they will be laying off up to 500 workers as they desperately search for a way to survive in this difficult economic environment…

To further drive efficiency and enable growth, Molson Coors is consolidating and reorganizing office locations. The Denver office will be closed and Chicago will be designated as the North American operational headquarters. Functional support roles currently housed in several offices around the country will now be based in Milwaukee, Wisconsin.

As a result, we expect to reduce employment levels by approximately 400 to 500 employees as part of this restructuring, primarily in our existing United States, Canada and International reporting segments, as well as Corporate.

You know that things are getting tough when even beer companies start laying people off.

Of course the “retail apocalypse” continues to escalate, and we just learned that Forever 21 will be closing most of their stores and laying off most of their employees…

More than 100 Forever 21 stores are slated to close as part of the fashion retailer’s Chapter 11 bankruptcy protection case, according to court documents filed this week.

The family-owned company, which has about 32,800 employees, said it would close “most” of its stores in Asia and Europe and up to 178 stores in the U.S. when it filed for protection Sept. 29.

A similar scenario is playing out for Dressbarn.  According to USA Today, all of their 544 stores “will close no later than Dec. 26″…

Liquidation sales at the remaining Dressbarn stores will start Friday, the struggling retailer announced Wednesday.

While the 544 stores will close no later than Dec. 26, the women’s clothing website is expected to relaunch in 2020 with a new owner, the company said in a news release.

It has been hoped that a limited trade agreement with China might bolster the economy at least temporarily, but now we are learning that Chinese officials expect “phase one” of the deal to “soon fall apart”.  According to CNN, the Chinese are pessimistic that our two countries will ever be able to “reach a full trade deal”…

Chinese officials have expressed doubts about whether the world’s two largest economies can reach a full trade deal, Bloomberg reported. That is casting a long shadow over the “phase one” agreement that the countries reached earlier in October.

This is consistent with my warnings from previous articles.  The Chinese wanted the Trump administration to stop the implementation of any more tariffs, and they were able to achieve that with “phase one”.  But in order to move forward with “phase two”, the Chinese are going to insist on the removal of all tariffs…

According to BBG’s sources, this is the bare minimum that Beijing would accept to move ahead with Phase 1: a commitment from the Americans to removing tariffs in Phase 2, and agreeing to cancel the next round of tariffs, set to take effect in December.

This is something that the Trump administration will never agree to, and so that puts us back where we originally started.

The Chinese will continue to “negotiate”, but only for stalling purposes.

There is only about a year left until the 2020 elections, and the Chinese are hoping to run out the clock on the Trump administration with as little disruption to their own economy as possible.

Unfortunately for the Chinese, Trump could possibly win another term, and if either Elizabeth Warren or Bernie Sanders win they could potentially be even tougher on trade with China.

In any event, we should not expect a comprehensive trade deal with China any time soon, and that is really bad news for the economic optimists.

Of course the truth is that everything that I have just shared is bad news for all of us.  The U.S. economy is seriously deteriorating, and things are only going to get worse in the months ahead.

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 can only allow this to happen if this “About the Author” section is included 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  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.

The Boom Turns Into A Bust – Here are 14 Signs That The U.S. Economy Is Steadily Weakening

There should no longer be any doubt that the U.S. economy is slowing down, but most Americans still don’t realize what is happening because the major news networks are completely focused on the endless impeachment drama that is currently playing out in Washington.  And without a doubt that is important, because it threatens to literally rip our entire nation in two.  But meanwhile, economic activity has taken a very ominous turn.  Hiring is slowing, consumer confidence is plunging, defaults on auto loans are rapidly escalating, the “transportation recession” continues to get deeper and it appears that the housing bubble is popping.  Everywhere we turn, there are signs of economic trouble, and many are deeply concerned about what this will mean for us as we head into a pivotal election year in 2020.

Not since the last recession have we seen numbers this bad.  The “mini-boom” that we witnessed for several years has now turned into a “bust”, and very tough times are ahead.

The following are 14 signs that the U.S. economy is steadily weakening…

#1 U.S. business hiring has fallen to a 7 year low.

#2 Consumer confidence in the United States has now declined for 3 months in a row.

#3 Defaults on “subprime” auto loans are happening at the fastest pace that we have seen since 2008.

#4 The percentage of “subprime” auto loans that are at least 60 days delinquent is now higher than it was at any point during the last recession.

#5 Vacancies at U.S. shopping malls have hit the highest level since the last recession.

#6 Destination Maternity has announced that they will be closing 183 stores as the worst year for store closings in U.S. history just continues to get worse.

#7 The Cass Freight Index has now fallen for 10 months in a row.

#8 U.S. rail carload volumes have plunged to the lowest level in 3 years.

#9 In September, orders for class 8 heavy duty trucks were down 71 percent.

#10 Tesla’s U.S. sales were down a whopping 39 percent during the third quarter of 2019.

#11 The bad news just keeps rolling in for the real estate industry.  Last month, existing home sales in the United States declined by another 2.2 percent.

#12 New home prices have fallen to the lowest level in almost 3 years.

#13 According to one recent report, 44 percent of all Americans don’t make enough money to cover their monthly expenses.

#14 A recent survey found that more than two-thirds of all U.S. households “are preparing for a possible recession”.

All over the country, economic activity is slowing down, and this is hitting many small businesses particularly hard.

In Wisconsin, one aluminum firm “has seen bookings plunge by 40 percent” and was forced to lay off workers as a result…

Sachin Shivaram, the chief executive of Wisconsin Aluminum Foundry, started to worry this summer when orders for his brake housings and conveyor belt motors first grew scarce. Within weeks, what began as mild concern snowballed into a business drought that has seen bookings plunge by 40 percent.

In August, Shivaram, 38, reluctantly laid off two dozen workers, hoping to recall them when the outlook improved. It hasn’t.

“Things are not good. We didn’t anticipate this level of deterioration,” he said. “Orders are down across the board.”

Of course there are hundreds of other examples just like this one.

As times get tougher, many U.S. consumers are increasingly turning to debt to help make ends meet.

For those at the low end of the economic food chain, getting approved for credit cards and other conventional forms of debt can be quite difficult.  This has opened up a door for online financial predators, and they are making a killing by making loans to people that really can’t afford them.

In fact, it is being reported that online lending has become a $50 billion industry, and sometimes these “loans” carry annual interest rates of more than 100 percent…

It’s called the online installment loan, a form of debt with much longer maturities but often the same sort of crippling, triple-digit interest rates. If the payday loan’s target audience is the nation’s poor, then the installment loan is geared to all those working-class Americans who have seen their wages stagnate and unpaid bills pile up in the years since the Great Recession.

In just a span of five years, online installment loans have gone from being a relatively niche offering to a red-hot industry. Non-prime borrowers now collectively owe about $50 billion on installment products, according to credit reporting firm TransUnion. In the process, they’re helping transform the way that a large swathe of the country accesses debt. And they have done so without attracting the kind of public and regulatory backlash that hounded the payday loan.

Just like the “payday loan” industry flourished during the last recession, now predatory lending is flourishing during this present era.

Unfortunately, as “the everything bubble” bursts, times are going to be very tough for all of us during the years ahead.

I think that Michael Pento of Pento Portfolio Strategies summed things up very well when he made the following statement during a recent interview…

‘When this thing implodes, we are all screwed. On a global scale, we have never before created such a magnificent bubble. These central bankers are clueless, and they have proven that beyond a doubt. All they can do is to try to keep the bubble going.’

We should give the central bankers credit for keeping the bubble going for as long as it has.  It should have never lasted this long, but thanks to unprecedented intervention they have been able to keep it alive.

But no financial bubble lasts forever, and now things have started to shift in a major way.

2020 is rapidly approaching, and the time of “the perfect storm” is now upon us.

I encourage you to do what you need to do to weather the coming economic storm, because it is not going to be pleasant.

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 can only allow this to happen if this “About the Author” section is included 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  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.

They Are Telling Us That The Next Recession “Won’t Be As Bad As 2008”. They Are Wrong.

Are we really supposed to believe them?  As the next recession rapidly approaches, the mainstream media is assuring us that there isn’t really that much to be concerned about.  In fact, as you will see below, CNN is assuring us that “the next one won’t be as bad as 2008”.  But how do they know?  After all, we didn’t have a president that was in danger of being impeached in 2008.  As this impeachment process moves forward, the mood of this nation is going to become increasingly sour.  Over in Europe, they are dealing with endless Brexit drama, and over in China the Hong Kong protests have created instability unlike anything we have seen in the modern history of that country.  Meanwhile, the Middle East has become an endless source of “wars and rumors of wars”.  At some point missiles will start flying back and forth and a major war will erupt over there, and that will immediately throw the entire global economy into chaos.  On top of everything else, our planet is shaking like a leaf, global weather patterns are becoming increasingly unstable and crops are failing all over the world.  The truth is that the environment that the global economy operates within is far more unstable today than it was back in 2008, and it wouldn’t take much at all to push us into a complete and utter economic nightmare.

But if you listen to the mainstream media, you would be tempted to assume that everything is going to be just fine.

In fact, CNN just published an article entitled “Not all recessions are a crisis, and the next one won’t be as bad as 2008”…

Recession fears are on the rise in the United States. Memories of the last downturn are exacerbating these worries: The last time America faced a recession was in 2008, as the financial crisis was unfolding. Millions of people lost their jobs, GDP growth plummeted and businesses shut down.

But not all recessions are like that. Sometimes the economy can grow all the way through a recession. In fact, some economists believe the world is in a recession now and most people don’t even realize it.

Wouldn’t it be great if we could go all the way through the next recession without even realizing it?

I would love that.

Perhaps they should invent a way for us to eat Brussels sprouts without realizing it as well.

According to CNN, it is likely that we are headed for a “growth recession” rather than a recession in which we would have “millions of lost jobs like the last recession”…

For the United States, a global growth recession will probably mean sluggish growth, rather than millions of lost jobs like the last recession 10 years ago did. A growth recession would be nothing like 2008, when America entered a so-called technical recession: at least two consecutive quarters of a shrinking economy. The US economy is far away from that.

They can be optimistic if they want, but the thing about sticking your head in the sand is that your rear end is still exposed.

Look, I am not opposed to wishful thinking, but at some point you have to deal with reality.  Personally, I would like to be able to dunk a basketball like Michael Jordan does, but it just isn’t going to happen.

And our reality is telling us that we are far more vulnerable economically today than we were back in 2008.  Even though we have never had a full year of 3 percent economic growth since the last recession, the Dow Jones Industrial Average is nearly twice as high as it was at the peak of the bubble that burst during the last financial crisis.

In other words, stock prices are absurdly overinflated, and at some point there is going to be a dramatic implosion.

Much of the growth in stock prices has been driven by companies that are supposedly worth billions of dollars but that don’t actually make any profits.

WeWork is an example of the type of company that I am talking about.  It is constantly hemorrhaging money, but back in January it was supposedly worth 47 billion dollars.

Of course that number was always completely and utterly ridiculous, and after all the trouble that the company has had in recent months the valuation of the company has changed dramatically.

In fact, at this point it is being reported that WeWork is only worth about 8 billion dollars…

As WeWork runs out of money, SoftBank Group is orchestrating the company’s “rescue financing plan” that could value it below $8 billion, Bloomberg reports.

Why it matters: $8 billion is a slim fraction of the $47 billion valuation WeWork gleaned in January from SoftBank. The rescue plan also comes after the office-sharing business slammed the brakes on its IPO, causing company bonds to tumble.

So how does a company lose 39 billion dollars in value in less than a year?

Well, it was never actually worth 47 billion dollars in the first place, and the truth is that WeWork is eventually going to zero.

But similar things could be said about company after company.  Wall Street has become a theater for the absurd, and eventually this whole freak show is going to implode in spectacular fashion.

And so what happens if a historic stock market crash is one of the triggers that plunges us into an extended economic depression like we experienced in the 1930s?

Our society is not equipped to handle something like that.  We are soft, lazy, self-obsessed and completely dependent on the system.  If we had to suddenly become a lot more self-sufficient, most of us would fall flat on our faces.

Earlier today, I came across a Time Magazine article which explained that 71 percent of all 17-to-24-year-olds in the United States do not even meet the most basic qualifications for military service…

Approximately 71% of the 34 million 17-to-24-year-olds in the U.S. would not qualify for military service because of reasons related to health, physical appearance and educational background, according to the Pentagon.

The ineligible typically includes those who are obese, those who lack a high school diploma or a GED, convicted felons, those taking prescription drugs for ADHD and those with certain tattoos and ear gauges, the Wall Street Journal reports, though some requirements can be waived.

Only 1% of young people are both “eligible and inclined to have conversation with” the military about possible service, according to the Defense Department.

This is just one example of how badly our society has declined.

There are thousands more, and I write about them all the time.

So we better hope that things don’t get really, really bad in this country, because it would be a colossal mess unlike anything the world has ever seen before.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  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 in written form on their own websites, but only if this “About the Author” section is included.  In order to comply with 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  You can follow me on social media on Facebook and Twitter.  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 this website.

69 Percent Of U.S. Households “Are Preparing For A Possible Recession”

Do you believe that a recession is coming?  If so, you certainly have a lot of company.  It turns out that more than two-thirds of all U.S. households “are preparing for a possible recession” right now.  There is a growing national consensus that that U.S. economy is heading for big trouble, and this is causing a lot of people to cut back on spending.  In fact, we just witnessed the first drop in retail sales in seven months.  If this slowdown in retail spending extends into the holiday season, that could potentially be absolutely disastrous for the entire retail industry.  We are already in the midst of the worst “retail apocalypse” in U.S. history, and we are learning of more store closings with each passing day.  But of course it isn’t just the retail industry that is in very serious trouble, and I have some brand new numbers from a couple of other sectors that I will share with you below.

But first let’s talk about this new survey that just came out that says that 69 percent of all U.S. households “are preparing for a possible recession”…

More than two-thirds of U.S. households say they are preparing for a possible recession.

Some 69% of participants in a recent poll said they were taking steps to shore up their finances ahead of a possible downturn, including 44% who said they were spending less money. Some 10%, including 13% of college graduates, are looking for a better or more stable job.

Considering what I do, it makes perfect sense to me that more than two-thirds of the country would be preparing for a recession.

But it would be very interesting to see this number broken down by political affiliation.  In general, Democrats tend to be far more pessimistic about the economy than Republicans are right now, and that is just because Donald Trump is in the White House.

I would suspect that the percentage of Trump supporters that are “preparing for a possible recession” would be well under 50 percent, but that is just a guess on my part.

In any event, the truth is that 100 percent of Americans should be preparing for a recession, because the warning signs are all around us.

And on Wednesday another economic red flag emerged.  For months, the economic optimists have been touting “the strength of the consumer” as one of the bright spots for the economy, but last month retail sales dropped for the first time in seven months…

U.S. retail sales fell for the first time in seven months in September, raising fears that a slowdown in the American manufacturing sector could be starting to bleed into the consumer side of the economy.

The Commerce Department said Wednesday that retail sales dropped 0.3% last month as households slashed spending on building materials, online purchases and especially automobiles.

That is certainly not the end of the world, but it does indicate that consumers are starting to scale back their spending.

Of course that is the last thing that retailers want to see happen.  We are already on pace to absolutely shatter the all-time record for store closings in a single year, and we just learned that Sears and Kmart will soon be closing more stores…

Sears and Kmart store closings are expected to continue into early 2020.

While more than 100 Sears and Kmart stores will shutter in the coming months, additional closures will stretch into January.

Company officials did not release an official list of the locations that will close. But news outlets across the nation, as well as documents filed with state governments, show some of the closings will happen in January 2020.

Sears has essentially been in the process of liquidating for a very long time, and we can only hope that eventually this incredibly painful liquidation will mercifully come to an end.

For many other retailers, this holiday season will be a “make or break moment”, and we should probably expect another huge wave of store closing announcements early in 2020.

And as I noted above, it isn’t just the retail industry that is really struggling.  We are already in a “transportation recession”, and we just learned that the Cass Freight Index has now declined for ten months in a row.  The following comes from Wolf Richter…

Freight shipments by all modes of transportation – truck, rail, air, and barge – within the US fell 3.4% in September 2019, compared to September last year, according to the Cass Freight Index for Shipments. For the index – which tracks shipment volume of consumer and industrial goods but not of bulk commodities – it was the 10th month in a row of relentless year-over-year declines

Another sector that is facing very tough times is the auto industry, and according to Reuters over 7 million Americans are seriously delinquent on their auto loans…

More than 7 million Americans are already 90 or more days behind on their car loans, according to the New York Federal Reserve, and serious delinquency rates among borrowers with the lowest credit scores have by far seen the fastest acceleration.

If all these numbers remind you of the last recession, that would make perfect sense, because we haven’t seen anything like this in more than a decade.

And all of this is happening even though the federal government is adding a trillion dollars to the national debt each year and the Federal Reserve has begun flooding the financial system with fresh cash.

In terms of “economic stimulus”, our leaders are already pushing the accelerator all the way to the floor, and it is simply not working.

This truly is the beginning of the end (#ad) for the U.S. economy, and most Americans can now see that very tough times are ahead.

But what most Americans don’t understand is that what we will be facing won’t be anything like 2008.

Instead, it will be much, much worse.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep.  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 in written form on their own websites as long as this “About the Author” section is included.  In order to comply with 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.  This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate.  You can follow me on social media on Facebook and Twitter.  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 this website.

 

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