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.

12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

Lost in all of the headlines about Iran and impeachment is the fact that the U.S. economic slowdown which began during the latter stages of last year appears to be accelerating.  The final numbers which will tell us if we are officially in a recession at this moment won’t be released until months from now, but for millions upon millions of Americans it definitely feels like one has already started.  Yes, the stock market has been soaring, but at this point the stock market has become completely divorced from economic reality.  And as you will see later in this article, stock prices are now the most overvalued that they have ever been in all of American history.

But before we get to that, let’s talk about what is happening in the real economy.

The following are 12 signs that the economy is seriously slowing down as 2020 begins…

#1 The U.S. Manufacturing Purchasing Managers Index has been in contraction for 5 months in a row, and it is now at the lowest level we have seen since June 2009.

#2 Last month, manufacturing employment fell at the fastest pace we have seen since August 2009.

#3 Last month, new manufacturing orders fell at the fastest pace we have seen since April 2009.

#4 Chicago PMI has been contracting for 4 months in a row.

#5 European manufacturing PMI declined again in December.

#6 Borden Dairy, one of the largest dairy companies in the entire world, declared bankruptcy just a few days ago.

#7 Earlier this month, the Baltic Dry Index had its worst day in 6 years.

#8 Overall, the decline in the Baltic Dry Index this month is the largest that we have seen since 2008.

#9 The auto recession just continues to get even worse.  Thanks to the substantial slowdown we witnessed during the second half of 2019, the total number of cars and trucks sold in the United States during all of 2019 was actually below the level that we witnessed back in 2000 when our population was significantly smaller.

#10 Used heavy duty truck prices have fallen “as much as 50%“.

#11 Macy’s just announced that they will be closing 28 stores.

#12 To start the year, AT&T is laying off thousands of workers, and according to Robert Reich those being laid off “will have to train their foreign replacements“.

Of course many of the “experts” continue to assure us that everything will be just fine.

In fact, one panel of “experts” recently came to the conclusion that there is “almost no chance of a recession this year”.

That would be absolutely wonderful news if it was true.

Sadly, the numbers that I just shared with you tell a completely different story.  They tell the story of an economy that is most definitely heading for a recession.

And according to John Williams of shadowstats.com, if the government was using honest numbers they would show that we are actually in a recession right now.

But what about the stock market?

Shouldn’t the fact that stock prices have been soaring be seen as an optimistic sign?

Well, there have been a few other stock bubbles of this nature throughout our history, and all of them have ended very badly.

In 1929, stock prices were at an all-time record high and it seemed like the economic good times would never end.

But then the stock market crashed and we plummeted into the Great Depression of the 1930s.

In 2000, the dotcom bubble pushed stock prices to absolutely absurd heights, but then stock prices quickly collapsed when the bubble burst and the U.S. economy fell into a very painful recession.

During the years leading up to 2008, stock prices once again rose to dizzying levels and it seemed like the party would last indefinitely.

But then the financial crisis struck, and the Great Recession of 2008 and 2009 was the most excruciating economic downturn our nation has experienced since the 1930s.

Unfortunately, we are even more primed for a stock market crash now than we were in any of the previous examples that I just shared.

So how do I know this?

Well, for one thing P/E ratios have become ridiculously inflated.  The following comes from Marketwatch

Indeed stocks are overvalued according to the popular measure of price-to-earnings (P/E) — which compares the price of one share of stock to one year of per-share earnings relative to recent history. The S&P 500 index SPX, -0.29% is trading at 18.6 times forward earnings, according to FactSet data, above the average ratio of 16.7 during the past five years and 14.9 over the past ten.

In addition, price-to-sales ratios for the S&P 500 are now at the highest level in all of U.S. history

The above chart, from Ned Davis Research, shows that price relative to sales for the S&P 500 is at a record high, “well in excess of what they were in 2000 or 2007 at those peaks,” wrote Ned Davis in a Wednesday note to clients.

Other measures, like the median price to earnings ratio — which exclude the skewed effects of very profitable and very unprofitable companies — shows the S&P 500 overvalued by nearly 30% versus the typical valuation level seen since 1964.

In other words, in the entire history of the United States stock prices have never been more overvalued than they are at this moment.

And every other time we have seen stock price ratios get this high, an absolutely horrifying stock market crash has followed.

The optimists are insisting that things will somehow turn out differently this time.

They assure us that everything is under control and that very bright days are ahead.

You can believe them if you want, but every indicator is pointing in the opposite direction.

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.

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.

What In The World Is The Federal Reserve Thinking???

You don’t use up all of your ammunition before the battle even begins.  The U.S. economy has not even officially entered recession territory yet, although many experts are definitely anticipating one in 2020.  When that recession arrives, the Federal Reserve is going to want as much ammunition to fight it as possible.  So I was horrified to learn that the Federal Reserve announced on Wednesday that interest rates are being slashed once again.  We have now had three interest rate cuts in 2019 as the Federal Reserve desperately attempts to revive the stalling U.S. economy.  But what are they going to do during the next recession when they have already pushed interest rates all the way to the floor and they can’t push them any lower?  In addition, in recent days the Federal Reserve has decided to absolutely flood the financial system with new money in a desperate attempt to stabilize the repo market.  In essence, the Federal Reserve has launched a massive new round of quantitative easing even before a major crisis has erupted on Wall Street.  I can understand trying to be proactive, but in reality quantitative easing is an extreme emergency measure that should only be used in the most desperate of situations.  If the Fed is creating this much new money now, what are they going to do once things really get bad?  Are we destined to become the next Venezuela?

For a long time, the Federal Reserve has insisted that the U.S. economy is in good shape.  If that is true, there is no way in the world that the Fed should be cutting interest rates.  But that is exactly what happened on Wednesday

In a vote widely anticipated by financial markets, the central bank’s Federal Open Market Committee lowered its benchmark funds rate by 25 basis points to a range of 1.5% to 1.75%. The rate sets what banks charge each other for overnight lending but is also tied to most forms of revolving consumer debt.

It was the third cut this year as part of what Fed Chairman Jerome Powell has characterized as a “midcycle adjustment” in a maturing economic expansion.

With rates now so close to zero, there isn’t going to be much that the Fed can do in that regard once the next recession strikes.

According to Fed Chair Jerome Powell, this latest rate cut was done for “insurance” purposes

Powell said lowering the rate again was ‘insurance’, or protection needed because ‘weakness in global growth and trade developments have weighed on the economy and posed ongoing risks’.

If the U.S. economy doesn’t plunge into a deep recession next year, Powell and the other bureaucrats at the Fed will probably be applauded for these moves.

But if we do experience a significant economic downturn, they will be caught with their pants down.

Yes, the U.S. economy is definitely slowing down, but this week we learned that it still grew at an annual rate of 1.9 percent last quarter.

1.9 percent is not good at all, and if honest numbers were being used it would show that our economy is actually contracting.  But at least things are relatively stable for the moment, and as long as things are relatively stable the Federal Reserve should not be resorting to emergency measures.

Of course Wall Street was absolutely thrilled that the Fed cut rates again, and news of the rate cut pushed the S&P 500 to yet another all-time record high

Stocks advanced Wednesday after the Federal Reserve cut interest rates for the third time this year, propelling the Standard & Poor’s 500 to a fresh record.

The S&P 500 index added 9.88 points, or 0.3%, to close at 3046.77. The Dow Jones industrial average climbed 115.27 points, or 0.4%, to end at 27,186.69. The Nasdaq added 27.12 points, or 0.3%, at 8,303.98.

And without a doubt, this rate cut is good for consumers.  Rates on mortgages, auto loans and credit cards will go down, and that will save average Americans a lot of money

These Fed interest rate cuts are starting to add up, lowering costs for many Americans who use credit cards or take out loans while squeezing savers.

The Federal Reserve lowered its benchmark interest rate Wednesday by a quarter percentage point for the third time in the past three months. The move is likely to further trim borrowing costs on credit cards, home equity lines, adjustable-rate mortgages and auto loans.

But this is yet another example of the short-term thinking that is plaguing our society.

When the next recession arrives, the Fed will be able to cut rates a handful of times, and then that will be the end of it.

The Fed should have also held off on buying more bonds until we really needed it as well.  Even though a new financial crisis has not even started yet, the Fed has been creating money like crazy and their balance sheet has ballooned “by about $100 billion over the past month”

The Fed has been buying bonds again, but officials insist it is an effort to stabilize the funds rate within the target range rather than a resurrection of QE. Still, the central bank balance sheet has expanded by about $100 billion over the past month and is back above the $4 trillion mark, $3.6 trillion of which is in Treasurys and mortage-backed securities.

So if the Fed is being this crazy now, what are they going to do when a real financial crisis erupts?

Perhaps they should just get it over with and create trillions of dollars right now and turn us into the Weimar Republic already.

Because that is where all of this craziness is eventually going to take us.  Our dollar is eventually going to be absolutely worthless and we will become the next Venezuela.

I have always been highly critical of the Federal Reserve, but at least in other eras those running the Fed were at least mildly competent.

But now it appears that incompetence is running wild over at the Federal Reserve, and we will all pay a great price for their mistakes in the not too distant future.

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.

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