Pain

World Economy Projected To Shrink For First Time Since 2009 As Coronavirus Plays Havoc With Global Supply Chains

For more than a decade, the global economy has steadily grown quarter after quarter, but it looks like that streak is about to come to a very abrupt ending.  The coronavirus outbreak in China has brought the Chinese economy to a virtual standstill, and as a result critical supply chains are in a state of chaos all over the world.  And since it doesn’t look like the Chinese economy will be able to return to normal for an extended period of time, it appears that a worldwide economic slowdown is imminent.  I warned about this the other day, but now we have even a clearer picture of what is happening.  According to Capital Economics in London, this coronavirus outbreak will cause the global economy to shrink this quarter, and that will be the very first time this has happened since 2009…

The economic casualties from China’s coronavirus epidemic are mounting as Asian and European auto plants run short of parts, free-spending Chinese tourists stay home and American companies brace for unpredictable turbulence.

That’s just the start of a financial hangover that is expected to linger for months even if the flulike illness is soon brought under control, economists and supply chain experts say. The Chinese epidemic’s aftereffects will likely cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis, according to Capital Economics in London.

And if the global economy shrinks for two quarters in a row, that will officially meet the definition of a “global recession”.

So here we are on the verge of the worst economic downturn in more than a decade, and even if this outbreak miraculously ended tomorrow it would still take quite an extended period of time for global supply chains to return to normal.

In particular, the auto industry has been hit extremely hard…

The ripple effects of China’s shutdown are spreading, with the auto industry especially hard hit. Nissan temporarily closed one of its factories in Japan after running short of Chinese components, one week after Hyundai in South Korea did the same. Fiat Chrysler warned that it may shutter one of its European plants. Some U.S. manufacturers could face parts shortages in one to two weeks.

“I worry that it’s going to be a bigger deal than most economists are treating it as right now,” said Mohamed El-Erian, chief economic adviser at Allianz, the German financial services company. “It will take time to restart all these economic engines.”

Of course the global economy was already slowing down before this coronavirus outbreak started, but this has definitely helped to accelerate our problems.

One big red flag is the fact that Caterpillar’s sales are suddenly dropping.  After “33 consecutive months of increases”, Caterpillar’s sales have now fallen for two months in a row.  In fact, January’s enormous 7 percent decline caught many analysts completely off guard…

If Caterpillar is still the global industrial bellwether and leading manufacturing sector indicator it has been for the past century (and absent the Fed somehow printing buildings or excavating mines, it is), then the world is about to enter the worst manufacturing downturn since the financial crisis.

According to CAT’s latest retail sales data, in January the company posted a 7% drop in machine sales, the biggest drop since Jan 2017, and only the second consecutive negative print since December’s -5% drop following 33 consecutive months of increases.

Across the Atlantic, major supply chain headaches have contributed to stunning factory output declines throughout the eurozone.

Just check out these numbers…

Factory output fell by 4.1 percent in the final month of the year compared with the same month a year earlier, according to figures published by Eurostat on Wednesday. Germany was among the states which suffered the most, as production dropped by 7.2 percent. Italy was close behind on a 4.3 percent decrease while France was down 3.2 percent.

Those numbers absolutely scream “recession”, and they aren’t likely to get any better until this coronavirus outbreak is over.

So all eyes will continue to be on China, and right now activity in major Chinese cities is way, way below normal.  The following comes from Zero Hedge…

Specifically, Morgan Stanley suggested that real time measurements of Chinese pollution levels would provide a “quick and dirty” (no pun intended) way of observing if any of China’s major metropolises had returned back to normal. What it found was that among some of the top Chinese cities including Guangzhou, Shanghai and Chengdu, a clear pattern was evident – air pollution was only 20-50% of the historical average. As Morgan Stanley concluded, “This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.”

If the number of cases continues to rise at an exponential rate, there won’t be a “return to normal” any time in the foreseeable future.

So barring some sort of a miracle, we should all settle in for a very long global economic downturn.

But at least one small segment of the global economy is booming at the moment.  Thanks to fears about the coronavirus, demand for private jets has absolutely skyrocketed…

Wealthy travelers and major corporate clients are rejecting commercial airline travel and looking to private jets as a way to isolate themselves from the deadly coronavirus outbreak.

The uptick in interest comes as more airlines cut scheduled flights to and from mainland China and Hong Kong in the wake of the spread of the disease that originated in the Chinese city of Wuhan.

The elite are going to do all that they can to insulate themselves from this virus, and considering how easily it spreads, it is hard to blame them.

As I discussed earlier this week, a prominent medical expert in Hong Kong is warning that 60 to 80 percent of the total world population could ultimately end up catching this virus.  And if that were to happen, it would greatly escalate all of the other problems that we are currently facing.

I am still hoping that such a scenario is not going to happen.

I am still hoping that global authorities can get this horrible virus under control soon, but with each passing day it is becoming more difficult to be optimistic about this outbreak.

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 Number Of Coronavirus Cases Has Just Exploded, And Many Fear That The Worst Is Yet To Come

Just as the mainstream media was starting to speculate that China could be getting this outbreak under control, a dramatic spike in the numbers has changed everything.  All of a sudden people are freaking out again, global financial markets are gyrating all over the place and medical experts all over the world are making bold pronouncements of doom.  On Wednesday, Hubei province reported 14,840 new infections and 242 more deaths from this virus.  But the biggest reason why there was such a jump in the numbers is because a decision was made to reclassify patients that had been “clinically diagnosed” but up until now had not been counted as “confirmed cases”.  The following comes from CNBC…

China’s Hubei province reported an additional 242 deaths and 14,840 new cases as of Feb. 12 — a sharp increase from the previous day. The province said it is starting to include “clinically diagnosed” cases in its figures and that 13,332 of the new cases fall under that classification.

The government said that a total of 1,310 people have died in the province and that 48,206 people have been infected in the region.

So this really wasn’t as big of a change as many are making it out to be.

The following is what Hubei province is saying about the decision to reclassify patients…

With the deepening of understanding of new coronavirus pneumonia and the accumulation of experience in diagnosis and treatment, in view of the characteristics of the epidemic in Hubei Province, the General Office of the National Health and Health Commission and the Office of the State Administration of Traditional Chinese Medicine issued the “Diagnosis and Treatment Plan for New Coronavirus Infected Pneumonia (Trial (Version) “adds” clinical diagnosis “to the case diagnosis classification in Hubei Province, so that patients can receive standardized treatment according to confirmed cases as early as possible to further improve the success rate of treatment.

According to the plan, Hubei Province has recently conducted investigations on suspected cases and revised the diagnosis results, and newly diagnosed patients were diagnosed according to the new diagnosis classification. In order to be consistent with the classification of case diagnosis issued by other provinces across the country, starting today, Hubei Province will include the number of clinically diagnosed cases into the number of confirmed cases for publication.

Overall, there are now 59,805 confirmed cases inside China, and the death toll has now passed the 1,300 mark.

But those are not the most important numbers.

To me, it is far more important to watch what happens to the number of cases around the rest of the world.  Ultimately, that will determine whether this becomes a true global pandemic or not.

A week ago, there were 227 confirmed cases outside of China, and now there are 524.  Over the course of about a week we have seen that number more than double, and that is definitely very troubling.

And we continue to get more anecdotal evidence that the situation inside China is far more dire than government officials are admitting.

For example, the Chinese government has been encouraging many businesses that shut down for the virus to reopen so that the economy can start humming again, but it looks like that may have been a huge mistake.  In the city of Suzhou, a confirmed case was discovered right after one company reopened their doors, and that resulted in 200 employees immediately being placed under quarantine.

This virus is completely and totally out of control in China right now, and any attempts to “return to normal” too quickly will just make things worse.

Wishful thinking isn’t going to solve anything.  It has become exceedingly apparent that this virus can be transmitted from person to person with extreme ease, and the Chinese need to settle in for a very long battle with this virus.

At this point, this virus is spreading very rapidly even among the police and the military…

A staff member at the Central Theater General Hospital (Hankou Hospital) in Wuhan confirmed armed police officers were hospitalized.

Among them, 1,500 Chinese soldiers and 1,000 armed police are being quarantined, and China Human Rights and Democracy Information Center, headquartered in Hong Kong, reported on February 10 that 10 CCP soldiers and 15 armed police have been diagnosed with the new virus in Hubei province.

The Chinese People’s Liberation Army General Hospital (Hainan) Hospital in Sanya is preparing to test 3,000 people for new virus pneumonia samples.

300 armed police were isolated to a training site of the Hubei Provincial Corps of the Armed Police.

An epidemic has emerged in the Chinese Navy. After a serviceman of the Navy Submarine Force in Sanya, Hainan, was diagnosed with Covid-19, 300 sailors were isolated, and training programs on nuclear submarines, scheduled to start this month, have been suspended.

As this crisis continues to intensify, experts all over the planet are fearing the worst.  Neil Ferguson of Imperial College London says that the death rate among those that have the virus in Wuhan could ultimately go as high as 18 percent, and Hong Kong epidemiologist Gabriel Leung is warning that most of the population of the globe could end up being infected if dramatic action is not taken.

But other medical professionals believe that this outbreak will start to fade once warmer weather arrives.  Hopefully they are correct, but Dr. Nancy Messionnier says that it is still way too early to make that sort of an assumption…

Dr. Nancy Messionnier of the Centers for Disease Control and Prevention sounds a similar note when it comes to predicting a slowdown of cases with warmer weather. “I think it’s premature to assume that,” she said during a call with reporters on Wednesday. “We haven’t been through even a single year with this pathogen.”

We shall see what happens.  But even if this outbreak subsides when the weather is warm, it could still flare back up again in a massive way once next winter arrives.

In fact, many experts believe that we will now be dealing with this coronavirus year after year for the foreseeable future.

Hopefully that is not true, but without a doubt our world is getting a little bit crazier with each passing day.

It seems like one crisis after another just keeps popping up, and there will almost certainly be more great challenges that we must face in the months ahead.

For the moment, this coronavirus outbreak is taking center stage, and the numbers are getting significantly worse every 24 hours.

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.

This Coronavirus Outbreak Is Really Starting To Take A Very Serious Toll On The Global Economy

Factories all over China have been shut down, global supply chains have been hit by an unprecedented shock, the Baltic Dry Index is absolutely collapsing, the tourism industry is being absolutely devastated, and companies all over the globe are warning that sales will be lower than anticipated this quarter.  This coronavirus outbreak is already taking a very serious toll on the global economy, and experts are warning that we could still be in the very early chapters of this crisis.  If this outbreak ultimately evolves into a horrifying worldwide pandemic that kills millions of people, what will the global economy look like a few months from now?

For the moment, more than 98 percent of the confirmed cases are still in China, but that could soon change.

And if this virus does start spreading in other countries like it is in China, that could rapidly push us into a deep global recession.

Many are fearing the worst.  In fact, Forbes is already labeling this outbreak as “a black swan event”…

A black swan event is a term used on Wall Street that refers to a rare and unpredictable occurrence that is beyond what is expected and has severe consequences. It’s derived from European explorers who had previously thought that all swans were white and only white, as that was all they knew. They were overcome with shock and confusion when Dutch explorer Willem de Vlamingh discovered the existence of black swans in Australia.

The coronavirus is a black swan event, which may have serious consequences for your job, the stock market and global economy.

Needless to say, China is feeling the most economic pain from this outbreak so far.  In this sort of an environment, it makes sense that very few Chinese citizens would want to buy homes, and that is precisely what we are currently witnessing…

Bloomberg cited a new report via China Merchants Securities (CMSC) that said new apartment sales crashed 90% in the first week of February over the same period last year. Sales of existing homes in 8 cities plunged 91% over the same period.

“The sector is bracing for a worse impact than the 2003 SARS pandemic,” said Bai Yanjun, an analyst at property-consulting firm China Index Holdings Ltd. “In 2003, the home market was on a cyclical rise. Now, it’s already reeling from an adjustment.”

We have never seen an economic catastrophe of this nature since the communists took power in China, and everyone agrees that all of the Chinese economic numbers are going to be absolutely terrible for the foreseeable future.

And since more global trade goes through China than anywhere else in the world, the ripple effects are literally being felt all over the planet.

In fact, the Baltic Dry Index has fallen more than 80 percent since September and is rapidly headed toward an all-time low…

The BDI is now in freefall, closing at 466 on Monday, down over 80% since September 2019. Rates for Capesize bulkers (vessels with capacity of around 180,000 deadweight tons) are now at around $3,500-$4,000 per day — less than a third of their mid-teens breakeven rates.

With economic activity all over the world steadily slowing down, there just isn’t a lot of demand right now, and large shipping companies are potentially facing an extended slump.

But things are going to be even worse for the tourism industry.  After what we have witnessed in recent days, very few people are going to want to set foot on a cruise ship any time soon.  In particular, the case of the Diamond Princess continues to make headlines all over the world, and the number of confirmed cases on board has now risen to 174…

After a relatively quiet 36 hours for the ‘Diamond Princess’, Japanese authorities reported 39 more cases, bringing the total to 174 out of 492 people on board tested, while Japan’s defense Minister Taro Kono tweeted that a quarantine officer from the health ministry also tested positive for the virus. As Bloomberg notes, Carnival’s Diamond Princess cruise ship has become the biggest center of infection of any place outside of China. The Diamond Princess was placed under quarantine last week and checks were conducted after a passenger from Hong Kong who had been on the ship tested positive for the virus. The ship has become a case of concern because of the possibility of more infections in the vessel’s confined spaces, and the increased risks to elderly passengers.

To a lesser extent, the airline industry is being affected as well.

Many airlines have already suspended all flights to China, and on Tuesday American Airlines actually extended their flight cancellations until late April…

Due to a reduction in demand, American Airlines on Tuesday extended its flight cancellations to and from mainland China and Hong Kong amid the coronavirus outbreak.

According to a company statement, the airline is extending the suspensions between mainland China and Dallas-Fort Worth and Los Angeles through April 24.

Flights from Dallas to Hong Kong are suspended through April 23. Flights between Los Angeles and Hong Kong are suspended through April 23.

So what is going to happen if this virus starts spreading all over the globe like it is currently spreading in China?

At that point, very few people would want to fly anywhere at all.

In fact, most people would want to avoid public places entirely.

If this crisis gets bad enough, we are potentially facing a global economic shutdown unlike anything we have ever seen before.

Let us hope that we never get to that point.

Here in the United States there have only been 13 confirmed cases so far, and most businesses continue to operate normally.

But without a doubt this crisis will have an impact, and the truth is that the U.S. economy was already starting to slow down before this virus appeared on the scene.  For example, the number of job openings in the U.S. plummeted dramatically in both November and December…

The number of job openings in December dropped by 364,000 from November (seasonally adjusted), after having already plunged by 574,000 in November, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS). This two-month plunge of 938,000 job openings came after a series of ups and downs with downward trend starting after the peak in January 2019.

If this virus gets out of control in this country, it is probably going to be impossible to avoid a very serious economic downturn.

Of course even if this virus were to completely disappear tomorrow, the truth is that we would still be headed for very difficult times.

Life as we have all known it is starting to change, and the chapters ahead are going to be very, very painful.

As for this virus, let us keep hoping that this outbreak will start to subside.  Because we already have enough problems, and a horrifying global pandemic would definitely be more than enough to push us over the edge.

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.

Will The Coronavirus Outbreak Cause A Massive Stock Market Crash?

Could it be possible that this coronavirus outbreak will be the trigger that finally bursts the biggest stock market bubble in U.S. history?  As I have discussed previously, stock prices in the United States were the most overvalued that they have ever been during the month of January, and our stock market has never been more perfectly primed for a huge meltdown.  But stock prices are all about what investors believe will happen in the future, and if they remain convinced that the future is bright then perhaps this stock market bubble could persist for a while longer.  Unfortunately for Wall Street, this coronavirus outbreak is starting to create a wave of fear in the financial community.  In fact, concern about the coronavirus pushed the Dow Jones Industrial Average down more than 600 points on Friday, and that represented the worst day for the Dow since last August…

Stocks fell sharply on Friday, wiping out the Dow Jones Industrial Average’s gain for January, as investors grew increasingly worried about the potential economic impact of China’s fast-spreading coronavirus.

The Dow dropped 603.41 points, or 2.1%, to 28,256.03 in the 30-stock average’s worst day since August. The S&P 500 had its worst day since October, falling 1.8% to 3,225.52. The Nasdaq Composite dropped 1.6% to 9,150.94.

Up until now, investors were very confident that the Fed and the Trump administration could keep the party rolling, but now that is changing.  Just consider what Ilya Feygin just told CNBC…

“The theme coming into this year was the Fed and Trump are going to bail us out of any problems, but the virus is something neither one can do anything about. That’s a reason to become more fearful.”

A reason “to become more fearful”?

That certainly doesn’t sound good for stocks.

And this coronavirus outbreak has also been pushing down the price of oil…

Oil prices have also suffered from the virus outbreak, because China is a big consumer of the commodity.

US oil prices are on track for their worst month since May last year, when the US-China trade war and high inventory levels weighed on prices.

Ultimately, the economic impact of this crisis will be determined by how bad this outbreak eventually becomes, and that is very uncertain at this point.

But without a doubt the coronavirus is already having a substantial impact on the Chinese economy.  The following comes from CNN…

The economic impact of the virus is still impossible to determine, but one state media outlet and some economists have said that China’s growth rate could drop two percentage points this quarter because of the outbreak, which has brought large parts of the country to a standstill. A decline on that scale could mean $62 billion in lost growth.

Goldman Sachs is warning that this outbreak will also cause the U.S. economy to slow down this quarter, but the bank is still convinced that next quarter will be better…

The fast-spreading coronavirus could slow first quarter growth of the United States economy, according to a new report from Goldman Sachs.

Analysts at the firm forecast a 0.4 percentage point decline on US annualized growth through March. But it’s not all doom and gloom: Goldman Sachs (GS) also predicts that growth will rebound in the second quarter by roughly the same amount.

Of course the analysts over at Goldman Sachs are assuming that this coronavirus outbreak is not going to turn into a horrifying global pandemic.

But what if they are wrong?

During the last two weeks of January the number of confirmed cases got 236 times larger, and if this outbreak continues to grow at an exponential rate it is going to be absolutely catastrophic for the entire global economy.

Quite a few experts are now recognizing this reality, and that includes Tuomas Malinen…

Global recession, a European banking crisis and a crash in the U.S. capital markets will produce a global economic collapse which will almost certainly overwhelm any attempts—massive and coordinated as they may be—to turn the tide by over-stretched central banks and over-indebted governments.

This is, why the coronavirus outbreak should be treated for what it is: a potential harbinger of human and economic calamity.

Whether such a scenario materializes in the weeks ahead all depends on how widely this virus spreads.

Personally, I am hoping that this outbreak fizzles out as rapidly as possible.  This virus has an incubation period of up to 14 days, and wondering who might have the virus is going to drive a lot of people completely nuts.

Unfortunately, it looks like things are only going to get worse.  According to a study that was just released, we could soon have “independent self-sustaining outbreaks in major cities globally”.  The following comes from Natural News…

A new, urgent study just published in The Lancet warns that “independent self-sustaining outbreaks in major cities globally” may be “inevitable” due to the “substantial exportation” of symptomless carriers of coronavirus. That same study also calculates that 75,815 individuals are infected right now in mainland China, where the official government numbers are currently under 10,000.

Titled, “Nowcasting and forecasting the potential domestic and international spread of the 2019-nCoV outbreak originating in Wuhan, China: a modelling study,” the study is authored by Professor Gabriel M. Leung, MD and Kathy Leung, PhD.

Coming into this year, so many of us felt such a sense of urgency, but I don’t know anyone that thought we would potentially be facing a horrific global pandemic by the end of January.

The worse this outbreak becomes, the more pain the global economy is going to feel.

And there is no way that this stock market bubble is going to survive a severe global economic downturn.

The only way anyone ever makes money in the stock market is if they get out in time.  And unfortunately the ridiculously elevated prices that we have been witnessing may not last too much longer if this outbreak continues to spiral out of control.

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 Mainstream Media Admits We Are In “An Auto Recession” – And It Just Continues To Get Worse

Quite a few of the most important sectors of the global economy are already “in a recession”, and yet somehow we are still supposed to believe that the economic outlook for the rest of 2020 is a positive one.  I am not buying it, and I know that a lot of other people aren’t buying it either.  The global economic slowdown that began last year is really picking up pace here in early 2020, and global financial markets are perfectly primed for a meltdown of epic proportions.  Unfortunately, most people simply do not understand how badly the global economy has been deteriorating.  For example, global auto sales have now fallen for two years in a row, and even CNN is admitting that the global auto industry has been in a “recession” for some time…

The global auto industry plunged deeper into recession in 2019, with sales dropping more than 4% as carmakers struggled to find buyers in China and India. The pain is likely to continue this year.

The number of vehicles sold across major global markets dipped to 90.3 million last year, according to analysts at LMC Automotive. That’s down from 94.4 million in 2018, and well below the record 95.2 million cars sold in 2017.

Here in the United States, people keep trying to tell us that the economy is in good shape, but last year auto sales fell here too…

Nonseasonally adjusted passenger car sales in the U.S. for 2019 declined 10.9% to 4.7 million units, versus 5.3 million units in 2018, according to an S&P Global Market Intelligence analysis.

Sales of trucks, minivans and SUVs for the year totaled 12.2 million units, up 2.8% from the 2018 figure of 11.9 million units.

The overall nonseasonally adjusted U.S. vehicle sales for the period fell 1.4% to 17.0 million units, versus 17.2 million units a year ago.

Very few analysts are expecting these trends to turn around in 2020.

And considering how important the auto industry is to the global economy as a whole, that has very serious implications for all of us…

Recession comes with big ramifications for the global economy. According to the International Monetary Fund, the car industry accounts for 5.7% of economic output and 8% of goods exports. It is the second largest consumer of steel and aluminum.

Meanwhile, we are experiencing a very deep transportation recession in the United States as well.  The following comes from Wolf Richter…

Shipment volume in the US by truck, rail, air, and barge plunged 7.9% in December 2019 compared to a year earlier, according to the Cass Freight Index for Shipments. It was the 13th month in a row of year-over-year declines, and the steepest year-over-year decline since November 2009, during the Financial Crisis

How in the world can the U.S. economy possibly be in “good shape” with absolutely horrific numbers like that?

When the amount of goods being shipped around the country by truck, rail and air is steadily falling, that is a crystal clear indication that economic conditions are slowing down.

And one of the biggest reasons why a transportation recession is upon us is because it looks like we are in a “manufacturing recession” too.

In fact, the manufacturing numbers for December were simply abysmal…

US manufacturing took a turn from lousy to worse in December, according to the Manufacturing ISM Report On Business, released today, with employment, new orders and new export orders, production, backlog of orders, and inventories all contracting.

The overall Purchasing Managers Index (PMI) dropped 0.9 percentage points from November to 47.2% in December 2019, the fifth month in a row of contraction, and the fastest contraction since June 2009.

Overall, 2019 was the worst year for U.S. industrial production since 2015.

Across the Atlantic, things are even worse in Europe.  The following comes from Zero Hedge…

The manufacturing downturn across Europe deepened in the last month of 2019 according to the latest survey data released on Thursday.

IHS Markit Eurozone Manufacturing PMI lost momentum last month, printing at 46.3, down from 46.9 in November, if modestly above the 45.9 expected. The PMI averaged 46.4 in 4Q, a seven-year low.

When will global authorities finally admit that we have a real problem on our hands?

How much worse do the numbers have to get?

This month, the Baltic Dry Index has been plunging dramatically.  For those that don’t know, the Baltic Dry Index is a key indicator of where global trade is heading, and on Monday it plummeted to a nine-month low…

The Baltic Exchange’s main sea freight index hit a nine-month low on Monday, dragged down by falling rates of capesize and panamax segments as world trade continues to slump.

The Baltic Dry Index, which tracks rates for capesize, panamax and supramax vessels that ferry dry bulk commodities across the world, dropped 25 points, or 3.3%, to 729 (according to Refinitiv data), the lowest level since April 2019

This is not what a healthy global economy looks like.

Of course many of those in positions of authority will continue to insist that everything is just fine for as long as possible.

In fact, back in 2008 Federal Reserve Chairman Ben Bernanke kept telling us that a recession wasn’t going to happen even after the worst economic downturn since the Great Depression had already started.

Just like back then, all of the hard economic numbers that we have are all saying the same thing.

Both the U.S. economy and the global economy as a whole have been slowing down for quite a while, and it looks like big trouble is ahead of us.

That means that now is not the time to be spending lots of money, making big financial commitments or going into debt.

Those that are wise will be positioning themselves to survive the coming economic storm, but unfortunately most people are paying no heed to the warning signs.

Just like last time around, most people have tremendous faith in the system, and so they will be absolutely blindsided by the crisis that is coming.

In the end, multitudes will be expecting the government to bail them out somehow, but considering the fact that we are already 23 trillion dollars in debt that simply is not going to be possible.

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.

Global Collapse Incoming? The Total Breakdown Of Relations With China Could Throw Our Planet Into Utter Turmoil

We just witnessed one of the most monumental events of the entire decade, and yet most Americans still don’t understand what has happened.  In recent months, the global economy and stock markets around the world have been buoyed by the hope that the U.S. and China would soon sign a new trade agreement.  Unfortunately, there is no way that is going to happen now.  On Tuesday, the Senate unanimously passed the “Hong Kong Human Rights and Democracy Act of 2019”, and the House of Representatives passed the same bill by a 417 to 1 vote on Wednesday.  Needless to say, the Chinese are beyond angry that Congress has done this.  In part one of this article, I showed that China is warning the U.S. to “rein in the horse at the edge of the precipice” and that there will be “revenge” if this bill is allowed to become law.  And it looks like this bill will actually become law, because Bloomberg is reporting that President Trump is fully expected to sign it…

President Donald Trump is expected to sign legislation passed by Congress supporting Hong Kong protesters, setting up a confrontation with China that could imperil a long-awaited trade deal between the world’s two largest economies.

Before I go any further, there is something that I want to address.  Earlier today, one of my readers emailed me and accused me of siding with China because I am warning about what will happen if trade negotiations fail.  Of course that is not true at all.  I have been writing about the horrific human rights abuses in China for many years, and they are one of the most tyrannical regimes on the entire planet today.  But our two economies have become deeply intertwined over the past two decades, and there are going to be very serious consequences now that we are rapidly becoming bitter enemies.  Anyone that doesn’t see this is simply not being rational.

As I have detailed repeatedly in recent months, the global economy has already entered a very serious slowdown.  One of the only things that could reverse our economic momentum in the short-term would be a comprehensive trade agreement between the United States and China.  But now that our relationship with China has been destroyed, there isn’t going to be a deal.

Some mainstream news sources are reporting that all of this rancor about Hong Kong could delay a trade deal, but that is just more wishful thinking.

Over in China, they are being much more realistic.  In fact, the editor of the Global Times, Hu Xijin, just said that the Chinese are “prepared for the worst-case scenario“…

Few Chinese believe that China and the US can reach a deal soon. Given current poor China policy of the US, people tend to believe the significance of a trade deal, if reached, will be limited. China wants a deal but is prepared for the worst-case scenario, a prolonged trade war.

And he followed that up with another tweet that openly taunted U.S. farmers…

So a friendly reminder to American farmers: Don’t rush to buy more land or get bigger tractors. Wait until a China-US trade deal is truly signed and still valid six months after. It’s safer by then.

As the two largest economies on the entire planet decouple from one another, it is going to cause global economic activity as a whole to dramatically slow down.  Corporate revenues will fall, credit markets will start to tighten, and fear will increasingly creep into global financial markets.

I have repeatedly warned that conditions are ideal for our first major crisis since 2008, and this conflict with China could be more than enough to push us over the edge.

And already we are getting more bad economic news day after day.  For example, we just learned that U.S. rail traffic this month is way down compared to last year…

Nowhere is the slowdown in the U.S. economy more obvious than in places like Class 8 Heavy Duty Truck orders and rail traffic. We already wrote about how Class 8 orders continued to fall in October and new data the American Association of Railroads (AAR) now shows that last week’s rail traffic and intermodal container usage both plunged.

The AAR reported total carloads for the week ended Nov. 9 came in at 248,905, down 5.1% compared with the same week in 2018. U.S. weekly intermodal volume was 266,364 containers and trailers, down 6.7% compared to 2018, according to Railway Age.

Unless a miracle happens with China, the economic numbers are going to continue to get worse.

Sadly, a miracle seems exceedingly unlikely now.  As I pointed out in part one, the only way that our relationship with China can be fixed is if Congress repeals the bill that it just passed, and there is no way that is going to happen.

And we better hope that our trade war with China doesn’t escalate into a real war at some point.

According to a report that was released earlier this year, we are very ill-prepared to fight any sort of a conventional war with China in the Western Pacific…

The University of Sydney’s United States Studies Centre’s new report Averting Crisis, said: ‘China’s growing arsenal of accurate long-range missiles poses a major threat to almost all American, allied and partner bases, airstrips, ports and military installations in the Western Pacific.

‘As these facilities could be rendered useless by precision strikes in the opening hours of a conflict, the PLA missile threat challenges America’s ability to freely operate its forces from forward locations throughout the region.’

In addition, U.S. military officials are deeply concerned by how rapidly China has been upgrading their strategic nuclear arsenal.  For example, they now possess a “submarine-launched missile capable of obliterating San Francisco”…

China has tested a new submarine-launched missile capable of obliterating San Francisco, an insider has revealed, in a massive boost to the country’s ‘deterrent’.

The Chinese navy tested its state-of-the-art JL-3 missile in Bohai Bay in the Yellow Sea last month, sources said.

The nuclear-capable missile has a 5,600 mile range, significantly longer than its predecessor the JL-2, which could strike targets 4,350 miles away.

We certainly aren’t at that point yet, but without a doubt the Chinese now consider us to be their primary global enemy.

For the moment, it is just a “cold war” that we are facing, and the Chinese are quite adept at playing global chess.  They have lots of ways that they can hurt us, and most Americans don’t realize this.

But in the end nobody is going to “win” this conflict, and the entire planet is going to suffer.

Collectively, the economies of the United States and China account for approximately 40 percent of the GDP of the entire world.

As we cause chaos for one another, everyone else is going to experience tremendous pain as well.

The stage is set for a global nightmare, and at this point it doesn’t appear that there is a way that we will be able to escape 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.

Goodbye Middle Class: 50 Percent Of American Workers Make Less Than 33,000 Dollars A Year

The truth is that most American families are deeply struggling, but you hardly ever hear this from the mainstream media.  Yes, about 10 percent of all American workers are making $100,000 or more a year, but most of those high paying jobs are concentrated in the major cities along the east and west coasts.  For much of the rest of the country, these are very challenging times as the cost of living soars but their paychecks do not.  According to the Social Security Administration, the median income in the United States last year was just $32,838.05.  In other words, 50 percent of American workers made more than $32,838.05 and 50 percent of American workers made less than $32,838.05 in 2018.  Let’s be generous and round that number up to $33,000, and when you break it down on a monthly basis it comes to just $2,750 a month.  Of course nobody can support a middle class lifestyle for a family of four on $2,750 a month before taxes, and so in most families more than one person is working these days.  In fact, in many families today more than one person is working multiple jobs in a desperate attempt to make ends meet, and it still is often not quite enough.

If you want to look at the Social Security wage statistics for yourself, you can find them right here.  As you will see, I am not making these numbers up.

These days many would have us feel bad if we are not making at least $100,000 a year, but according to the report only about 10 percent of all American workers make that much money.

Instead, most Americans are in what I would call “the barely getting by” category.  Here are some key facts that I pulled out of the report…

-33 percent of all American workers made less than $20,000 last year.

-46 percent of all American workers made less than $30,000 last year.

-58 percent of all American workers made less than $40,000 last year.

-67 percent of all American workers made less than $50,000 last year.

That means that approximately two-thirds of all American workers are making $4,000 or less a month before taxes.

Ouch.

But these numbers help us to understand why survey after survey has shown that most Americans are living paycheck to paycheck.  After paying the bills, there just isn’t much money left for most of us.

And for an increasing number of Americans, even paying the bills has become exceedingly difficult.  In fact, a brand new report from UBS says that 44 percent of all U.S. consumers “don’t make enough money to cover their expenses”…

Low-income consumers are struggling to make ends meet despite the “greatest economy ever,” and if a recession strikes or the employment cycle continues to decelerate — this could mean the average American with insurmountable debts will likely fall behind on their debt servicing payments, according to a UBS report, first reported by Bloomberg.

UBS analyst Matthew Mish wrote in a recent report that 44% of consumers don’t make enough money to cover their expenses.

That means that about half the country is flat broke and struggling just to survive financially.

Of course those at the top of the economic food chain often don’t have a lot of sympathy for those that are hurting.  Many of them have the attitude that those that are struggling should just go out and get one of the “good jobs” that the mainstream media is endlessly touting.

But most jobs in the United States are not “good jobs”.

Today, the poverty level for a household of four in the United States is $25,750.  More than 40 percent of the workers in this country make less than that each year.

Starting a business is always an option, but that takes money, and thanks to government regulations it is harder than ever to run a small business successfully.

Just look at what is happening to our dairy farmers.  There are few occupations that are more quintessentially “American” than being a dairy farmer, and since most people drink milk and eat cheese, you would think that it would be a pretty safe profession.

But instead, dairy farms are shutting down at a pace that is absolutely chilling all over the nation.  For example, just check out what has been going on in Wisconsin…

Wisconsin lost another 42 dairy farms in July, and since January 1, has lost 491 farms, reports the Wisconsin Department of Agriculture, Trade and Consumer Protection.

At this rate, the Dairy State could lose 735 dairy farms this year, which would be a decline of 9%. In 2018, the state lost 691 farms, a rate of decline of 7.9%.

Over the last decade the state has lost more than 5,000 farms, or 40% of its licensed dairy farms. To state the obvious, the current rate of exits is more than double that of the last decade.

So why is this happening?

Government.

In profession after profession, government control freaks have made it nearly impossible to make a living, and this has pushed the percentage of Americans that are self-employed to historic lows.

If you are struggling right now, I want you to know that you are not alone.  There are tens of millions of other Americans that are really hurting in this economy, and the bad news is that economic conditions will soon get a lot worse.

But you can make it through whatever is ahead.  You just have to keep believing.

A lot of people accuse me of spreading “doom and gloom”, but that is not true at all.  There is hope in understand what is happening, and there is hope in getting prepared for the hard times that are ahead.  When you take steps to prepare, you are telling yourself and everyone around you that you believe that you can make it through the storm that is coming.

Or you could just have blind faith in the system, even though it is exceedingly obvious that the system is crumbling all around us.  Those that are blindly trusting the system to take care of them are building their dreams on a foundation of sand, and when the waves come crashing in those dreams are going to get washed away very quickly.

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 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.

North America’s Bird Population Is Collapsing – Nearly 3 Billion Birds Have Been Wiped Out Since 1970

All around us, our world is literally in a state of collapse, but most people don’t seem to care.  I spend much of my time writing about the inevitable collapse of our economic and financial systems, but they are only one part of the story.  These days, millions upon millions of us are spending countless hours in this “virtual world” that we have created, and that is preventing many of us from understanding what is really going on in “the real world”.  Where I live, I can literally keep the doors wide open for hours without worrying about bugs coming in, because insect populations are disappearing at a pace that is frightening.  They are calling it “the insect apocalypse”, and some scientists are warning that they could all be gone in 100 years.  And this dramatic decline in the insect population is one of the main reasons why North America’s bird population is collapsing.  In the old days, I remember the singing of birds often greeting me in the morning, but these days I am never awakened by birds.  That might make sense if I lived right in the middle of a major city, but I don’t.  I live in a very rural location, and I do see birds out here, but not nearly as many as I would expect.

Sadly, the scientific evidence is confirming what many of us had feared.  According to a scientific study that was just released, North America’s bird population has fallen by “nearly 3 billion birds since 1970″…

If you’ve noticed fewer birds in your backyard than you used to, you’re not mistaken.

North America has lost nearly 3 billion birds since 1970, a study said Thursday, which also found significant population declines among hundreds of bird species, including those once considered plentiful.

On second thought, I don’t know if the term “collapse” is strong enough to describe what we are facing.

In 1970, there were about 10 billion birds in North America.

Now, there are about 7 billion.

When are we finally going to admit that we have a major crisis on our hands?

Hopefully it will be before the count gets to zero.

Overall, we are talking about a total decline of approximately 30 percent…

“We saw this tremendous net loss across the entire bird community,” says Ken Rosenberg, an applied conservation scientist at the Cornell Lab of Ornithology in Ithaca, N.Y. “By our estimates, it’s a 30% loss in the total number of breeding birds.”

Could humanity survive without birds?

Probably, but this is yet another sign that the planetary food chain is in the process of totally breaking down.  Despite all of our advanced technology, we are not going to survive without an environment that supports life, and at this moment that environment is being destroyed at a staggering pace.

According to the lead author of the study, the evidence they compiled “showed pervasive losses among common birds across all habitats, including backyard birds”…

“Multiple, independent lines of evidence show a massive reduction in the abundance of birds,” said study lead author Ken Rosenberg, a senior scientist at the Cornell Lab of Ornithology and American Bird Conservancy, in a statement. “We expected to see continuing declines of threatened species. But for the first time, the results also showed pervasive losses among common birds across all habitats, including backyard birds.”

I like having birds in my backyard.  In fact, I wish that I had a whole lot more.

Two of the largest factors being blamed for this stunning decline are “toxic pesticides” and “insect decline”.  We have already talked about the “insect apocalypse” which is raging all around us, but I should say a few words about pesticides.  Yes, they may help to protect our crops and our lawns, but in the process we are literally poisoning everything.

And that includes ourselves.  According to the Centers for Disease Control and Prevention, “there are traces of 29 different pesticides in the average American’s body”, and many believe that this is one of the reasons why cancer rates have skyrocketed in recent decades.

These days it seems like just about everyone knows at least one person with cancer.  If you are one of those rare people that doesn’t know a single person with cancer, please leave a comment below, because I would love to hear your story.  It has been estimated that one out of every three women and one out of every two men will get cancer in their lifetimes, but considering the rate that we are currently polluting our environment those estimates may be too conservative.

Without a doubt, several of the big pesticide companies are some of the most evil corporations on the entire planet, and yet most Americans don’t really seem to care about the death and destruction that they have unleashed all around us.

As with so many other things, this is yet another example that shows that we have no future on the path that we are currently on, and the clock is ticking.

Don’t you want a world in which the birds sing to you in the morning?  Pete Marra, one of the scientists involved in the study, told the press that a number of bird species “that were very common when I was a kid” are among those being hit the hardest…

“We can all talk through the stories about there being fewer and fewer birds, but it’s not until you really put the numbers on it that you can really grasp the magnitude of these results,” Marra said. “We’re now seeing common species that have declined, things like red-winged blackbirds and grackles and meadowlarks — species that I grew up with, that were very common when I was a kid. That is the most surprising and most disturbing part.”

Everywhere around us, we can see decay, decline or collapse.  This stunning drop in the bird population is just one more example.

But just like with so many other issues, most people don’t really care, and most people certainly don’t want to change.

So in the end we will reap what we have sown, and it will not be pleasant.

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

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