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.

When It Comes To The U.S. Economy, Everyone Wants To Pin The Credit Or The Blame On Donald Trump

No matter what happens with the U.S. economy, most of the credit or the blame is going to go to President Trump.  And now that the U.S. economy appears to be headed for big trouble, the mainstream media is salivating over what this could mean for Trump’s chances of winning in 2020.  Within the past few days, the New York Times, the Washington Post, CNN, MSNBC and Fox News have all run stories about Trump and the economy, and they are all perpetuating the false premise that presidents should be held accountable for how the economy performs.  As I have repeatedly reminded my readers, the truth is that U.S. presidents generally have relatively little control over the direction of the economy.  In our system, it is the central planners at the Federal Reserve that primarily direct our economy, and so most of the credit or the blame for our economic performance should go to them.  And the truth is that even President Trump realizes this.  He understands that the Federal Reserve has control over key economic tools that he does not, and that is one of the reasons why he is so frustrated right now.  The Fed is not running things the way that he would run them, and he realizes that this could severely hurt his chances of winning the next election.

During his first term, President Trump has not actually been able to do much to alter the overall trajectory of the economy.  Some pundits point to the tax cuts that he was able to pass, and certainly reducing corporate tax rates helped things a little bit in the short-term, but the overall impact of the tax bill was relatively negligible.  Ultimately, the moves that the Federal Reserve has been making have been far more important, and at this point Trump seems to be convinced that Fed Chair Jerome Powell and others are intentionally trying to undermine him

He has insisted that his own handpicked Federal Reserve chair, Jerome H. Powell, is intentionally acting against him. He has said other countries, including allies, are working to hurt American economic interests. And he has accused the news media of trying to create a recession.

“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” Mr. Trump tweeted last week. “The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!”

Trade policy is one area where presidents do have more power than anyone else, and this is definitely where President Trump has had the biggest impact on the economy.  After claiming for months that a trade war would be “easy” to win, President Trump is now acknowledging that our trade war with China could potentially result in a recession

“I am doing this whether it’s good or bad for your statement about, ‘Oh, will we fall into a recession for two months?’ The fact is, somebody had to take China on,” Trump said.

“Whether it’s good for our country or bad for our country, short term, it had to be done,” he said, repeating that “whether it’s good or bad, short term, is irrelevant.”

And to be honest, this is the argument that Trump should have been making all along.  A trade conflict with China is most definitely going to be very painful, but it is also very true that something had to be done about China.  They have been taking advantage of us and ripping us off for years, and when previous administrations decided to do nothing about China they were being exceedingly negligent.

However, there is a huge difference between recalibrating our relationship with China and antagonizing them so much that our relationship with the Chinese is completely destroyed.  At this point it appears that we are doing the latter, and that is going to have enormous implications in 2020 and beyond.

And if our trade war with China does push us into a recession, there are many on the left that would greatly rejoice.  The following comes from a Fox News editorial by Steve Hilton

It’s pretty obvious that these establishment Trump-hating hysterics — all of them, of course, living comfortable coastal lives — actually want a recession because they think that’s the best way to get rid of Trump. At least one of them is honest about it.

“I’ve been saying for about two years  — that I hope we have a recession, and people get mad at me,” said Bill Maher, host of HBO’s “Real Time with Bill Maher.”

Unfortunately for Trump, most Americans will squarely blame him if a recession happens even if it wasn’t his fault.  When the U.S. economy was doing relatively well, Trump repeatedly took full credit for it, and that was a huge mistake.  Because if the economy is really struggling in 2020, he probably won’t be able to successfully shift the blame to someone else.  The mainstream media will hammer him over and over again with editorials about “the failure of Trumponomics”, and even though most of those editorials won’t make any sense, they will still have a huge impact on millions of Americans voters.

It is often said that “pride goeth before destruction”, and President Trump has repeatedly told us that this is the greatest economy ever and that he is responsible for it.  But of course this isn’t even close to the greatest economy ever.  The following comes from another Fox News editorial

The fact is Trump’s best economic growth is 3.5 percent in two quarters out of the 10 quarters he’s been in office, CNBC’s John Harwood reports, adding that same growth figure, 3.5 percent, is Obama’s seventh best quarter, George W. Bush’s eighth best, and Bill Clinton’s 17th best. Yet, Trump claims his economy is the best ever. Far from it.

When things were going relatively well, President Trump should have said that it was a team effort and he should have acknowledged that we still had an enormous amount of work to do.

And all along he should have been educating the American people about the fact that the Federal Reserve has far more power over the performance of the economy than he does.

But now it appears that we are facing a nightmare economic scenario, and everybody is going to blame him for the failure of the economy.

Meanwhile, the Federal Reserve will once again escape accountability for running our economy into the ground, and that is extremely unfortunate.

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.

This Wasn’t Supposed To Happen: U.S. Employment Growth Just Plunged To The Lowest Level In 9 Years

If the U.S. economy was heading into a recession, we would expect to see a slowdown in the employment numbers, and that is precisely what is happening.  According to payroll processing firm ADP, the U.S. economy only added 27,000 new jobs in May, and that is way below the number that is needed just to keep up with population growth.  Of course some in the mainstream media are attempting to put a positive spin on this, but there really is no denying that this is a truly awful number.  In fact, we have not seen a number this bad in more than 9 years

Job creation skidded to a near-halt in May in another sign that the U.S. economic momentum is slowing.

Companies added just 27,000 new positions during the month, according to a report Wednesday from payroll processing firm ADP and Moody’s Analytics that was well below Dow Jones estimates of 173,000.

The reading was the worst since around the time the economic expansion began and the jobs market bottomed in March 2010 with a loss of 113,000.

9 years is a very long time, but this terrible employment number is perfectly consistent with all of the other horrible economic numbers that have been rolling in lately.

Time after time in recent weeks I have been using phrases such as “since the last recession” to describe what we are witnessing.  The U.S. economy has not been in such rough shape in nearly a decade, and things just keep getting worse.

So how did Wall Street respond to the latest employment news?

Actually, stock prices surged, because investors are super excited about the prospect that the Federal Reserve could soon lower interest rates

Stocks added to strong week-to-date performance on Wednesday as investors grew even more confident that the Federal Reserve will lower interest rates this year to reignite an economy wounded by trade battles.

The Dow Jones Industrial Average rose 207.39 points to 25,539.57, while the S&P 500 advanced 0.8% to 2,826.15. The Nasdaq Composite closed 0.6% higher at 7,575.48.

Pushing interest rates all the way to the floor certainly helped the stock market recover after the last recession, but this time around there is a major twist.

The U.S. is currently engaged in a major trade war with China, and the normal tools that the Fed utilizes may not be powerful enough to overcome the negative effects of such a conflict.

And to make things worse, now the U.S. is also starting a trade war with Mexico.  On Wednesday, President Trump made it clear that “not nearly enough” progress had been achieved during negotiations with Mexican officials…

President Donald Trump said “not nearly enough” progress was made in talks with Mexico to mitigate the flow of undocumented migrants and illegal drugs, raising the likelihood that the U.S. will follow through with tariffs next week.

So tariffs will be slapped on Mexican goods starting on Monday, and President Trump seems quite excited about this

“If no agreement is reached, Tariffs at the 5% level will begin on Monday, with monthly increases as per schedule,” Trump tweeted Wednesday. “The higher the Tariffs go, the higher the number of companies that will move back to the USA!”

Of course the Mexicans will almost certainly retaliate, and both countries will start seeing higher prices and significant job losses.

In fact, one study has concluded that the U.S. economy could lose more than 400,000 jobs as a result of these tariffs on Mexico.  The following comes from CNN

If the 5% US tariff on all goods from Mexico takes effect and is maintained, more than 400,000 jobs in the United States could be lost, an analysis released this week found.

The tariffs on Mexico, set to go in effect on Monday, would cost Texas alone more than 117,000 jobs, according to the analysis by The Perryman Group, an economic consulting firm. Texas is Mexico’s largest export market, making the two economies closely intertwined.

And the truth is that those numbers could actually be on the low side.

According to Marc Thiessen, a trade war with Mexico would literally put millions of U.S. jobs at risk…

Indeed, Mexican tariffs could be even more devastating for Americans than those imposed on China. Deutsche Bank estimates the tariffs could raise the average price of automobiles sold in the United States by $1,300. Indeed, U.S. and Mexican auto-supply chains are so deeply integrated that many parts cross the border multiple times before they end up in a finished vehicle — which means they would be hit by tariffs multiple times, compounding costs. Ten million U.S. workers’ jobs depend on this supply chain; tariffs would put those jobs at risk, including those of the “forgotten Americans” in the industrial Midwest whose jobs Trump vowed to protect.

We shall see what happens, but the outlook for the U.S. economy for the rest of this year is not good at all, and beyond that things look exceedingly grim.

Hopefully I am wrong, but it certainly appears that a major economic downturn is developing just in time for the 2020 presidential election.

There is one more thing that I would like to mention before I wrap up this article.  This week, a Russian news source reported that Russia and China “will sign an agreement” regarding the use of their own national currencies in bilateral trade with one another…

Russia and China will sign an agreement on possible payments in national currencies. A decree of the Russian government on signing of a relevant agreement with the Chinese side was released on the official portal of legal information on Wednesday.

According to the draft decree approved through that government document, “settlements and payments for goods, service and direct investments between economic entities of the Russian Federation and the People’s Republic of China are made in accordance with the international practice and the legislation of the sides’ states with the use of foreign currency, the Russian currency (rubles) and the Chinese currency (yuan).”

In other words, they are dumping the dollar in favor of their own national currencies when trading with each other.  This is a direct threat to the international dominance of the U.S. dollar, and other countries have been discussing similar moves.

For decades, the U.S. dollar has essentially been a global currency.  More dollars are actually used outside of the United States than within this country, and most Americans don’t realize that.

This has given us some enormous advantages in the global marketplace, and it could be just a matter of time before those advantages begin to disappear.

Things that used to take months or years to happen are now happening in a matter of days.  The pace of change is really picking up, and right now the momentum of events is heading in a direction that is definitely not favorable to the United States.

Get Prepared NowAbout 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.

Economic Chaos Erupts! – Global Manufacturing Plunges, The Trade War Expands And The Nasdaq Enters Correction Territory

The global economic slowdown is really starting to accelerate.  Just within the past few days, we have gotten more really awful global manufacturing numbers, the trade war has expanded to more nations, and the Nasdaq has officially entered correction territory.  We have not witnessed this sort of global economic environment since the Great Recession, and if the economic chaos continues to escalate it won’t take too much to spark a brand new financial crisis.  Of course the global financial system is far more vulnerable than it was back in 2008, and so if we stay on the path that we are currently on we could be facing a nightmare scenario very rapidly.

Let’s talk about the manufacturing numbers first.  The numbers coming out of Germany are already at a crisis level, and manufacturing is also now contracting in Japan, South Korea and China as well.

Overall, global manufacturing as a whole has now fallen into contraction territory for the first time in seven years

Global manufacturing was the weakest since 2012 last month, a victim of mounting trade tensions and further reason to worry that the world economy is weakening.

With softness in Germany, Japan, the U.K. — as well as the lowest U.S. result in a decade — IHS Markit’s global Purchasing Managers Index fell to 49.8 in May, below the 50 level that divides expansion from contraction.

The reports underscore the growing threat posed by the escalating U.S.-China trade war, and they coincided with a fresh warning from Wall Street about recession risks.

The reason why so many people are freaking out about these numbers is because this is exactly what we would expect to see if we were entering a global recession.

Meanwhile, global financial markets are looking increasingly shaky.  On Monday, the Nasdaq fell another 120 points and it has now officially entered correction territory

Stocks ended mostly lower Monday, June’s first day of trading, amid reports that the U.S. government is planning to target a host of big tech companies with antitrust and business practice probes. Shares of Alphabet, Amazon, Facebook and Apple all weighed on the market during Monday’s session.

The Nasdaq dropped 1.6% to enter correction territory, closing more than 10% below its record high set in late April.

The term “correction territory” might not mean a lot to many of you, so let me put what is happening in terms you may understand.

On Monday alone, America’s most prominent tech stocks lost approximately 150 billion dollars in value.  It looks like the Trump administration is getting ready to go to war with the big tech companies, and that is really, really bad news for tech investors.  The following comes from Breitbart

The Masters of the Universe got hit hard by investors on Monday. Like $150 billion hard.

Shares of the top tech giants fell sharply on Monday after reports that U.S. antitrust regulators had divided up oversight of the sector, with the Department of Justice assuming responsibility for Alphabet and Apple and the Federal Trade Commission taking on Facebook and Amazon. This triggered fears that the government could mount challenges to the business models of the companies.

Shares of Alphabet dived 6.1 percent on Monday after the Wall Street Journal reported that the Justice Department is in the early stage of preparing an antitrust probe of the company. Reuters reported that the Department of Justice is also looking into Apple’s business for possible antitrust violations.

Speaking of war, our trade conflict with China continues to escalate.  The mainstream media hasn’t been talking much about it, but apparently the Chinese have decided to put purchases of U.S. soybeans “on hold” until a trade agreement is reached…

China, the world’s largest soybean buyer, has put purchases of American supplies on hold after the trade war between Washington and Beijing escalated, according to people familiar with the matter.

State-grain buyers haven’t received any further orders to continue with the so-called goodwill buying and don’t expect that to happen given the lack of agreement in trade negotiations, said the people, who asked not to be named because the information is private.

U.S. soybean farmers have been sitting on unprecedented amounts of soybeans in hopes that an end to the trade war would raise prices.

But instead, demand for U.S. soybeans is going to go through the floor, and this could potentially force thousands of soybean farmers into bankruptcy.

And in addition to our trade war with China, the Trump administration has apparently decided that now is a good time to start a trade war with Mexico

From produce to cars, a wide variety of Mexican goods could become more expensive if Trump follows through on his threat to hit Mexican imports with tariffs that soon could climb to 25%. Trump wants to pressure Mexico into doing more to halt the flow of Central American migrants to the U.S. via the Mexican border.

The tariffs, set to begin June 10, would gradually climb to 25% on Oct. 1 if Mexico doesn’t take steps “to dramatically reduce or eliminate” the number of migrants, Trump said Thursday. Such a strategy would hurt American shoppers, the economy and stocks, experts say, just as U.S. growth is slowing and the threat of more tariffs on Chinese imports looms larger.

At least in this case the U.S. and Mexico are still talking, and so perhaps some kind of resolution can be reached.

On top of everything else, the Trump administration has also just decided to add India to the trade war as well

Mr. Trump on Friday said India would be removed from the U.S.’s privileged-trading program called the Generalized System of Preferences on Wednesday. Under the decadeslong program meant for some developing economies, the U.S. had allowed India to avoid tariffs on certain exports to the U.S. in the interest of promoting tighter trade ties and development.

India, the U.S.’s ninth-largest trading partner, is a top beneficiary of the GSP program. Mr. Trump’s move will add tariffs of as much as 7% on Indian exports of goods like chemicals, auto parts and tableware to the U.S., which in 2018 accounted for more than 11%, or $6.3 billion, of India’s total exports of goods valued at $54.4 billion, according to the Congressional Research Service, a research agency for the U.S. Congress.

A global trade war is going to be incredibly painful for everyone, and this is all happening at a time when the global economy was already starting to slow down substantially.

Here in the United States, a lot of businesses are really starting to notice a big decline in economic activity.  Here is just one example that was published on Zero Hedge earlier today…

Down here, in Texas, I am seeing a big drop in economic activity over the last 6 months. Our healthcare businesses’ volume over this period is at 629, down from 770, year-on-year, almost a 20% decline, and the worst six month decline in our 15 year history. We have been pulling out all of the stops for business development, cutting overhead, and running all the QC traps to determine if it is something within our business, within our local market, within our industry, or having to do with the economy in general.

In this period, we have seen seven competitors go out of business in our city. We have recently confirmed similar experiences with colleagues in Kentucky, Colorado, and elsewhere in Texas. One of them asked me, “If this is not temporary, what would the strategy be?” My response was, “Hunker in the bunker and wait for everyone else to die.”

This is what we have all been preparing for, and things are going to get progressively tougher in the months ahead.

Unfortunately, most Americans are completely and totally clueless about what is ahead.  Today, 59 percent of all Americans are living paycheck to paycheck, and the truth is that the vast majority of us are entirely unprepared to go through another recession.

And of course many believe that what we are facing is going to be much worse than just a “recession”.  A perfect storm is rapidly coming together, and the chaos that we have seen so far is nothing compared to what is rapidly approaching.

Get Prepared NowAbout 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.

All Of The Economic Momentum Is Moving In Just One Direction Now

Earlier today, I was greeted by this jarring headline when I visited the Drudge Report: “BONDS FLASH RECESSION WARNING”.  These days, it seems like the “R word” is being thrown around constantly, but at this time last year everyone was celebrating how well the economy was doing.  Unfortunately, we have witnessed a dramatic shift in recent months, and we just got some more really bad economic numbers.  Thanks to those bad numbers and an increasing amount of anxiety about the trade war, the Dow Jones Industrial Average fell another 237 points on Monday.  That means that we are on pace to potentially see the Dow fall for a sixth week in a row, and that is something that hasn’t happened since the last recession.

But right now investors are far more spooked about what is going on in the bond market.  According to Mish Shedlock, we haven’t seen this many yield curve inversions “since the start of the Great Recession”…

On Friday, US Treasury yields plunged at the mid to long end of the curve providing the most inversions since the start of the Great Recession. This is the biggest recession warning since 2007.

In so many ways, what we are witnessing at this moment is very reminiscent of the conditions that prevailed just prior to the last financial crisis.

Back then, the economic numbers were definitely starting to slide, but most Americans didn’t think that we were heading toward big trouble.  But those that understood what was happening were sounding the alarm, and the same thing is happening today.  For example, the following comes from a CNBC article entitled “Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning”

“Recent data points suggest US earnings and economic risk is greater than most investors may think,” wrote Michael Wilson, the firm’s chief U.S. equity strategist.

Specifically, the stock strategist highlighted a recent survey from financial data firm IHS Markit that showed manufacturing activity fell to a nine-year low in May. That report also revealed a “notable slowdown” in the U.S. services sector, a key area for an American economy characterized by huge job gains in health care and business services.

In addition to disappointing manufacturing numbers, we also just learned that orders for capital goods were down significantly during the month of April…

The Commerce Department said on Friday orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, dropped 0.9% last month as demand weakened almost across the board. Data for March was revised down to show these so-called core capital goods orders rising 0.3% instead of increasing 1.0% as previously reported.

Also, we just found out that U.S. home price gains have now fallen for 12 months in a row.

When you add those numbers to all of the other depressing economic numbers that have been rolling in lately, a very clear picture emerges.

The U.S. economy is heading in the wrong direction, and things are steadily getting worse.

A resolution to our trade war with China would be a huge economic boost in the short-term, but that is not likely to happen for the foreseeable future.  In fact, on Monday President Trump stated that he is “not ready” to make a deal with China

Bank shares fell broadly amid the lower interest rates. Goldman Sachs dropped 1.8% while Citigroup and J.P. Morgan Chase fell 0.9% and 1.1%, respectively. Morgan Stanley and Wells Fargo also slipped.

The drop in bank shares and rates come after President Donald Trump said on Monday the U.S. was “not ready” to make a deal with China, before adding he expected one in the future. Trump also said tariffs on Chinese imports could go up “substantially.”

And the Chinese are clearly digging in as well.  The chief editor of the Global Times, Hu Xijin, has a very close relationship with top Chinese officials, and he just warned that China “is seriously considering restricting rare earth exports” to the United States…

While the official at China’s national planning body did not directly answer whether Beijing would restrict rare earth exports to the United States, Global Times Editor-in-chief Hu Xijin wrote on Twitter: ‘Based on what I know, China is seriously considering restricting rare earth exports to the U.S. China may also take other countermeasures in the future.’

Although the tabloid Global Times is not one of China’s official media, it is widely read and is published by the ruling Communist Party’s People’s Party newspaper.

Just a few days ago I published an entire article about the impact that such a move would have on the U.S. economy, and I won’t reproduce all of that information here.

But the bottom line is this – the U.S. economy would be in a massive amount of trouble if that happened.

A deteriorating relationship with China is part of the scenario that we have been anticipating, and events are definitely starting to accelerate now.

For most Americans, however, there is no reason to be concerned.  Most of us simply trust that our leaders in Washington have things under control and that everything will work out just fine somehow.

But if we do plunge into another deep economic crisis, many Americans will be in enormous trouble right away.  According to one recent survey, 45 percent of us rate our financial situations as either “fair” or “poor”

Nearly 30% of respondents rate their financial situation as “only fair” and 15% say it’s “poor.” Meanwhile, 25% worry “all” or “most” of the time that their household income won’t be enough to cover their expenses.

Their biggest concerns: Saving enough for retirement and unplanned medical costs, with 54% and 51%, respectively, saying they’re “very” or “moderately” worried about each prospect.

In addition, another recent survey discovered that 59 percent of all Americans are currently living paycheck to paycheck.

Just like last time around, most Americans are living on the edge financially.

And just like last time around, millions of Americans will be completely blind-sided by an economic train wreck that they didn’t see coming.

Get Prepared NowAbout 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.

Even Before The Recession Has Officially Begun, Some Large U.S. Firms Are Laying Off Thousands Of Workers

If the U.S. economy is “booming” and very bright days are ahead, then why are many large U.S. corporations laying off thousands of workers?  Layoffs are starting to come fast and furious now, and this is happening even though the coming recession has not even officially started yet.  Of course many are convinced that we are actually in a recession at this moment.  In fact, according to John Williams of shadowstats.com if the government was actually using honest numbers they would show that we have been in a recession for quite some time.  But the narrative that the mainstream media keeps feeding us is that the U.S. economy is “doing well” and that the outlook for the future is positive.  Well, if that is true then why are big companies laying off so many workers right now?

Let’s start by talking about Ford Motor Company.  On Monday, they announced that they will be laying off approximately 7,000 workers

Ford Motor said Monday that it is laying off about 7,000 managers and other salaried employees, about 10% of its white-collar workforce across the globe, as part of a restructuring plan designed to save the No. 2 automaker $600 million annually.

The cuts, some of which were previously announced by the company, will be completed by August, Ford CEO Jim Hackett said in an email to employees Monday.

If the U.S. economy was about to take off like a rocket, this move doesn’t make any sense at all.

But if we are headed into a recession, this move makes perfect sense.

Another large firm that is laying off thousands of workers is Nestle

Nestle SA’s U.S. unit will dismiss about 4,000 workers as it stops delivering frozen pizza and ice cream directly to stores and transitions to a warehouse model that’s becoming an industry standard for Big Food companies looking to trim costs.

And we also recently learned that 3M is planning to get rid of about 2,000 workers

3M plans to cut 2,000 globally as part of a restructuring due to a slower-than-expected 2019.

The maker of Post-it notes, industrial coatings and ceramics said Thursday that the move is expected to save about $225 million to $250 million a year. The St. Paul Minnesota-based company anticipates a pretax charge of about $150 million, or 20 cents per share, this year.

Did you catch that part about these layoffs being due to “a slower-than-expected 2019”?

Unfortunately, things are slow for a lot of companies out there these days.

Another company that is dumping a large number of workers is MGM Resorts

MGM Resorts International MGM, -2.09% plans to cut about 1,000 positions by the end of the current quarter amid a cost-cutting and operational overhaul that calls for fewer managers across its properties.

That figure includes some 254 positions that the company moved to eliminate last week.

In addition, Dressbarn just announced that all of their stores will be closing

Dressbarn is closing all of its stores.

The women’s retailer announced Monday “plans to commence a wind-down of its retail operations, including the eventual closure of its approximately 650 stores.”

I am not sure how many employees they have per store, but even if it is just a handful we are talking about the loss of thousands of jobs.

The U.S. economy has been slowing down for months, and now the complete breakdown of trade talks with China threatens to plunge us into a prolonged trade war.  As I noted in another article, a couple of different studies have concluded that an extended trade war could literally cost our economy millions of lost jobs.

And once the job losses start rolling, they can really get out of hand very quickly.  We saw this in 2008, and it is just a matter of time until we see it happen again.

On Sunday, a reader sent me an article about a factory closing that was happening in her neck of the woods in Pennsylvania.  One worker that was laid off said that the closure of the facility “was the final kick in the gut”

Robert and Brooks Gronlund, owners of Wood-Mode Inc., wrote a text to workers Friday, saying they “are extremely appreciative” of the employees’ contributions and commitments. The company owners then confirmed all of them were terminated, as were their benefits.

“It was the final kick in the gut,” Michele Sanders, a 22-year employee of the company, said Saturday.

The privately-owned company in Kreamer, which produced custom wood cabinets, shut its doors Monday, leaving nearly 1,000 people without jobs. The abrupt closure of the plant stunned workers and community leaders.

So now almost 1,000 people do not have a way to support themselves and their families.

We are talking about hard working people with real hopes and real dreams.

Kreamer is a very small town.  According to Wikipedia, only 773 people live within the city limits, and so obviously there are not a lot of employment opportunities in the town.

And if those workers are anything like the rest of the U.S. population, most of them were probably living paycheck to paycheck.

I keep encouraging my readers to build an emergency fund, because you never know when you will be next on the employment chopping block.  I personally know a number of people that have just lost their jobs, and it can be an absolutely devastating experience.

Unfortunately, it looks like what we have witnessed so far is just the beginning.  All of the numbers tell us that economic activity is slowing down, and so we should all get ready to potentially face a rapidly deteriorating economic environment during the second half of 2019.

Get Prepared NowAbout 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.

Here Are 15 Numbers That Show How The Global Economy Is Performing, And All Of Them Are Bad

Global economic activity has already been slowing down dramatically, and the U.S. trade war with China is just going to make things worse.  In so many ways, what we are witnessing in 2019 is quite reminiscent of what we witnessed as the last recession was beginning.  Global exports are absolutely plummeting, auto sales are way down all over the globe, debt delinquencies are way up, and retailers are closing stores at a record pace.  Even if the U.S. and China were getting along, things would be rough for the global economy in the months ahead, but a full-blown trade war between the two largest economies on the entire planet has the potential to be absolutely disastrous.  We are truly in uncharted waters, and many believe that events are going to start accelerating very rapidly now.

Even though I write about this stuff on a daily basis, I have been surprised by how poor the global economic numbers have been lately.

And remember, earlier this month the global media were convinced that the U.S. and China were about to finalize a trade deal.  Now that negotiations have completely broken down, we should expect that these numbers will soon get even worse.

The following are 15 numbers that show how the global economy is currently performing…

#1 Global exports are absolutely crashing and have now fallen to the lowest level since 2009.

#2 U.S. auto dealers are dealing with a backlog of 4.2 million unsold vehicles.

#3 Auto sales in Europe have fallen for seven months in a row.

#4 Chinese auto sales fell a whopping 16.6 percent in the month of April.

#5 Overall, Chinese auto sales have now fallen for 11 months in a row.  That is a new all-time record.

#6 U.S. auto loan delinquencies have reached the highest level since the last recession.

#7 U.S. credit card delinquencies have hit the highest level in eight years.

#8 In April, U.S. manufacturing activity unexpectedly declined 0.5 percent.

#9 Thanks to the trade war, the price of soybeans just dropped to the lowest level since 2008.

#10 Party City just announced that it will be closing 45 stores.

#11 Fred’s just announced that they will be closing 104 more stores.

#12 In April, U.S. retail sales declined for the second time in three months.

#13 According to the Atlanta Fed’s latest forecast, U.S. GDP growth is expected to fall to just 1.2 percent in the second quarter of 2019.

#14 According to a new study just released by the Urban Institute, 40 percent of all Americans “sometimes struggle to afford housing, utilities, food or health care”.

#15 Overall, 59 percent of all Americans are currently living paycheck to paycheck according to a survey that was just conducted by Charles Schwab.

Leaders from both the U.S. and China are trying to act tough and say the right things, but everyone knows that this trade war is going to hurt both countries.

Economic numbers from both nations have been troubling lately, and one expert that was just interviewed by CNBC says that “it could get a lot worse”

Consumer and industrial activity in both the U.S. and China slowed in April, even before the world’s two biggest economies entered the latest phase of an escalating trade war that could take a bite out of global growth.

“The real message today is that both the economic data from the U.S. and China have disappointed. They’re like two boys in the sandbox that are spitting on each other, and it could get a lot worse,” said Marc Chandler, global market strategist at Bannockburn Global Forex.

In the short-term, it would greatly help if the U.S. and China could find a way to agree to a trade deal.

Unfortunately, the events of the past 48 hours have made that a lot less likely.

As I discussed yesterday, President Trump essentially took a sledgehammer to Chinese telecommunications giant Huawei.  When the Commerce Department put Huawei on the “Entity List”, it essentially banned the company from buying much needed parts and components from U.S. firms.  Some have described this as “the nuclear option”, and I think that description is quite accurate.  In the end, this move is going to be absolutely devastating for Huawei.

Of course the Chinese are absolutely furious about this.  Huawei is viewed with great national pride in China, and this move is considered to be a direct insult to Chinese national honor.  Most Americans are not paying too much attention to the details of the trade war, but in China this is a really big deal and people are extremely angry.  In fact, there has apparently been a run on “Donald Trump toilet brushes” in China in recent days because the Chinese are so angry.

Following my recent article about Huawei, a number of readers complained that I was being too soft on China.  Of course that is not true at all.  Long before Donald Trump ran for president, I was writing about how China was lying, cheating, stealing our technology and robbing us blind.  I was literally begging for our politicians to stand up and do something, and I was thrilled when Trump started talking tough about China because I knew that he really understood these issues.

But I also want everyone to understand that trying to decouple from the Chinese economy would be extremely painful even in the most optimistic scenario.  Our two economies have become extremely integrated, and we have become very dependent on China in many different ways.  They buy our soybeans, they provide us with rare earth elements, and they own more than a trillion dollars of our debt.  Looking at it from the Chinese perspective, they have countless ways that they can hurt us, and the angrier we make them the more likely it will be that they will lash out at us.

When negotiating with China, you need to be tough but you also need a lot of finesse.  Taking a baseball bat and slamming it into their kneecaps is not going to work.

If we destroy our relationship with China, that is going to result in us going down a very dark path.  Yes, China is an evil empire that has no respect for human rights at all.  There is no freedom of speech in China, over the past year they have been shutting down lots of churches and burning lots of Bibles, and they have been systematically throwing members of other religious minorities into concentration camps.

So I don’t have any sympathy for the communist Chinese government at all.  I just want all of you to understand that they are a very dangerous adversary, and a protracted trade war could be truly disastrous for the entire global economy.

Get Prepared NowAbout 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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