The Economy

Are They Positioning Themselves For A Pre-Determined Scenario In Which There Will Be A Massive Stock Market Crash?

February 2, 2025 by Michael

Do they know something that we do not? All of a sudden, hedge funds are betting billions of dollars that the stock market is going to crash. If they are wrong, they will lose a ton of money, but if they are correct they will make absolutely enormous profits. So why are they feeling so confident that a stock market collapse is in our future? Without a doubt, the real economy has been moving in the wrong direction for quite some time, but for years there have been relentless efforts to keep the financial markets propped up. Could it be possible that there is a scenario in which the financial markets will simply be allowed to fail at some point?

What we are witnessing at this moment is truly strange. We are being told that hedge funds are “making a multi-billion-dollar gamble” that there will be a “massive market crash”…

Hedge funds are making a multi-billion-dollar gamble against the US economy, betting Donald Trump’s presidency will result in a massive market crash that could devastate 401(k)s, pensions, and household savings across America.

The big hedge funds consistently make money because they are right most of the time.

So the fact that they are anticipating some sort of a crash is extremely alarming.

According to Goldman Sachs, the amount of money being poured into short bets is absolutely staggering…

Data from Goldman Sachs show there has been a surge in “short” bets against US stocks, meaning traders will make money when they fall in value, in a sign of growing concerns about the market.

In January, investors have placed 10 times more bets on US stocks falling than equivalent bets that shares in leading American companies would rise, the investment bank said.

As I noted earlier, if the hedge funds are wrong they stand to lose big.

But if they are right, the are poised to “make hundreds of millions from a stock market collapse”…

And while hedge fund billionaires stand to make hundreds of millions from a stock market collapse, the real victims of this financial gamble could be everyday American investors.

Millions of workers rely on their 401(k)s and pension funds to secure their futures. Yet, as hedge funds place enormous bets on a Wall Street wipeout, these savings accounts could be the next to suffer.

It certainly won’t take much to push the financial markets over the edge.

Those that are propping up simply need to stand aside.

So why would they do such a thing?

Perhaps the goal would be to send a message to President Trump that they don’t like the tariffs that he is imposing…

President Trump on Saturday signed an executive order that imposes 25% tariffs on imports from Canada and Mexico, while adding an additional 10% levy on goods from China. Canada responded hours later with retaliatory tariffs of its own, while Mexico said it was also planning to issue tariffs on the U.S. as well.

China’s commerce secretary said that China would challenge the tariffs through the World Trade Organization, according to Reuters, claiming that the move “seriously violates” WTO rules.

In an ominous post on Twitter, Harvard Professor Jason Furman suggested that Trump would soon be forced to back off because of what will happen to the financial markets…

Less than 2 weeks in and 25% tariffs our close allies + 10% on China.

Plus a (credible) promise that they will go even higher when there is (inevitable) retaliation.

It’s hard to decide if this is worse economic policy or foreign policy.

We’ll see if Trump caves to the market.

Does Furman know something?

It is certainly true that these tariffs will be disruptive.

At this stage, even President Trump is admitting that these tariffs could cause “some pain”…

President Donald Trump warned there could be “some pain” after signing executive orders that imposed stark tariffs on imports from Canada and Mexico and a 10% duty on imports from China, targeting three of America’s key trade partners.

“THIS WILL BE THE GOLDEN AGE OF AMERICA! WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!)” Trump wrote in an all-caps post on Truth Social Sunday morning defending the tariffs. “BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID.”

In response to the tariffs that we have slapped them with, the Canadians have decided to impose high tariffs on many of our goods…

Outgoing Canadian Prime Minister Justin Trudeau said late on Saturday that Canada will respond by placing 25% counter-tariffs on C$155 billion ($107 billion) worth of American-made products, with items including beer, wine, bourbon, fruits, fruit juices, vegetables, clothes, perfume, household appliances, plastic, and lumber subject to tariffs. Hilariously, Canada is going especially hard after alcohol produced in Republican states…

If this trade war goes on for an extended period of time, there will be very serious consequences all over North America.

But Mexico and Canada will feel more pain than we do…

As the first North American trade war begins, some analysts say Mexico and Canada stand to lose more than the United States. The impact on those economies of a three-way tariff conflict could be several times larger than in the United States, which is much less dependent on trade, according to an analysis by S&P Global Ratings.

Mexican manufacturers in the auto and electrical equipment sectors could see significant output declines once tariffs take hold, according to a S&P Global Ratings analysis.

In Canada, the biggest losers are likely to be makers of paper products, rubber and plastics.

If you live in Mexico or Canada, brace yourself, because economic conditions are about to change very rapidly.

Interestingly, all of this economic uncertainty has caused the price of gold to spike, and it has also created “a lucrative arbitrage opportunity” for the big banks…

Fears of imminent tariffs on imports following the election of US President Donald Trump have caused prices for gold futures on Comex to surge over spot prices in London. Spot prices shot to record highs this week, but the additional premium on Comex has created a lucrative arbitrage opportunity for the handful of banks that can quickly fly bullion between key trading hubs.

One of the big banks that is taking advantage of this “lucrative arbitrage opportunity” is JPMorgan…

JPMorgan Chase & Co. will deliver gold bullion valued at more than $4 billion against futures contracts in New York in February, at a time when surging prices and the threat of import tariffs are fueling a worldwide dash to ship metal to the US.

We were warned that economic chaos would be coming, and now it is here.

And the large hedge funds are lining up to profit from it.

It has been said that if you want to know what is really going on, just follow the money.

In this case, it is telling us that enormous turmoil is on the horizon.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

About the Author: Michael Snyder’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com. He has also written eight other books that are available on Amazon.com including “Chaos”, “End Times”, “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. When you purchase any of Michael’s books you help to support the work that he is doing. You can also get his articles by email as soon as he publishes them by subscribing to his Substack newsletter. Michael has published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and he always freely and happily allows others to republish those articles on their own websites. These are such troubled times, and people need hope. John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.” If you have not already done so, we strongly urge you to invite Jesus Christ to be your Lord and Savior today.

Why We Need DOGE – 5 Crazy Examples Of How The Government Has Been Wasting Your Tax Dollars

January 29, 2025January 29, 2025 by Michael

The U.S. government has been wasting money in some of the most bizarre ways imaginable. Some of the examples that I am about to share with you are likely to make you feel sick. Wasting colossal piles of our tax dollars would be bad enough if we were running a balanced budget, but that is certainly not the case. We have been adding trillions of dollars to the national debt each year, and our federal government is now more than 36 trillion dollars in debt. So the truth is that we have had to borrow the money that we have been recklessly wasting. The following are 5 crazy examples of how the government has been wasting your tax dollars…

#1 Joe Biden and his minions spent 15 million dollars to distribute “oral contraceptives and condoms” in Afghanistan…

The Biden administration sent $15 million of taxpayer money in distributing “oral contraceptives and condoms” into Afghanistan, according to a private congressional funding notice reviewed by the Washington Free Beacon.

The award, earmarked by the United States Agency for International Development (USAID) last July, transmitted the funds to Afghanistan.

The money was part of a whopping $100 million package for the Middle Eastern country to support the “basic rights and freedoms” of women and girls who were living under Taliban rule.

#2 Even more money was about to be spent on condoms for the Palestinians. It is being reported that the Biden administration “almost sent $50 million worth of condoms to Gaza”…

Press Secretary Karoline Leavitt also announced on Tuesday that Biden’s administration almost sent $50 million worth of condoms to Gaza, which she called ‘a preposterous waste of taxpayer money!’

‘There was about to be $50 million taxpayer dollars that went out the door to fund condoms in Gaza!’ Leavitt shockingly claimed.

#3 The Biden administration spent $10,000 for an “ice skating drag show” that was focused on climate change…

The 2024 Festivus Waste Report found that the Biden-Harris administration spent over $1 trillion this year, including giving a $10,000 grant to “Beards on Ice” — an ice skating drag show on climate change put on by the Bearded Ladies Cabaret, a self-described “queer cabaret arts organization.”

#4 20 million of our tax dollars were spent on a Sesame Street spin-off in Iraq that was designed to promote “inclusion”…

Additionally, the Agency for International Development (USAID) spent $20 million on a Sesame Street spin-off show in Iraq, titled “Ahlan Simsim,” in an effort to promote “inclusion” and “mutual respect.”

#5 This final example is the most sickening. 1.5 million dollars was spent to study how various species respond to motion sickness. In one of the experiments, holes were actually drilled into the skulls of young kittens. This is evil on a level that I don’t even know how to describe…

About $1.5 million was spent experimenting how different species, such as young female kittens, respond to motion sickness.

According to the report, researchers would strap kittens to a table, where they are spun around in several directions and have holes drilled into their skulls to keep them in place — “and it’s all being done with your money,” Paul writes in the report. “More than one and a half million dollars of it.”

Whoever conducted those experiments on young kittens should be immediately arrested and thrown in prison.

Unfortunately, this kind of “science” is happening in secret labs all over the country, and way too often our tax dollars are funding it.

Are you starting to understand why we desperately need DOGE?

I could give you hundreds of more examples of government waste, but I think that I have made my point.

Elon Musk is convinced that it will be possible to cut a trillion dollars out of the federal budget…

“I think we’ll try for $2 trillion. I think that’s like the best-case outcome,” Musk said during tech trade show CES on Wednesday in Las Vegas, the Post reported. “But I do think that you kind of have to have some overage. I think if we try for $2 trillion, we’ve got a good shot at getting $1 [trillion].”

And it looks like they are off to a great start.

The official DOGE account on Twitter has announced that the federal government is already saving approximately a billion dollars a day based on actions that have been implemented so far…

DOGE is saving the Federal Government approx. $1 billion/day, mostly from stopping the hiring of people into unnecessary positions, deletion of DEI and stopping improper payments to foreign organizations, all consistent with the President’s Executive Orders.

A good start, though this number needs to increase to > $3 billion/day.

Of course a billion dollars a day is just a drop in the bucket.

Much deeper cuts are needed, and representatives from DOGE have been interviewing staffers “from more than a dozen federal agencies”…

Aides for Tesla and Space X CEO Elon Musk and tech entrepreneur Vivek Ramaswamy are starting to interview staffers with the federal government for the newly created Department of Government Efficiency (DOGE), according to a new report.

Representatives for DOGE have had conversations with staffers from more than a dozen federal agencies — including the Treasury Department and the Internal Revenue Service, as well as the Departments of Veterans Affairs, Homeland Security, and Health and Human Services, The Washington Post reported Friday.

Unused office space is one area where enormous cuts could potentially be made.

It is being estimated that up to two-thirds of the office space that the government owns could potentially be sold…

The DOGE people in the Trump administration are considering shedding a big portion of the massive office space that the government owns or leases nationwide, managed by the General Services Administration (GSA), including selling two-thirds of the office space the government owns and terminating three-quarters of the leased office space, according to the WSJ.

Of course selling off so much office space would make our commercial real estate crisis even worse.

But that is a topic for a different article.

For now, we should all be thrilled that a serious effort is finally being made to reduce government waste.

It is inevitable that the left will take legal action against DOGE, but at this moment the Democrats are in a state of shock because the Trump administration is moving so rapidly on so many different fronts…

Democrats are hoping that Trump will make mistakes, and hope to capitalize on them when he does. But for now, they are scrambling to find enough lawyers, and lawsuits, to slow down the fastest start in presidential history.

We have never seen anything like this.

Many battles are ahead, and I don’t know how all of those battles will play out.

But at least something is finally being done to crack down on government waste, and that is a reason to smile.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

11 Reasons Why The Federal Reserve Is Bad

January 23, 2025January 23, 2025 by Michael

Most Americans realize that the federal government is drowning in debt and that inflation is out of control. But very few Americans can coherently explain where money comes from or how our financial system actually works. For decades, bankers that we do not elect have controlled America’s currency, have run our economy into the ground, and have driven the U.S. government to the brink of bankruptcy. The Federal Reserve is an institution that was designed to drain wealth from U.S. taxpayers and transfer it to the global elite. Have you ever wondered why a sovereign nation such as the United States has to borrow United States dollars from anyone? Have you ever wondered why a sovereign nation such as the United States does not even issue its own currency? Have you ever wondered why we allow a group of unelected private bankers to run our economy?

Those are some very important questions. Hopefully what you are about to read will open the eyes of many. The truth is that our financial system is centrally-controlled and centrally-managed by a group of banking oligarchs who oversee a constantly expanding debt spiral which could come crashing down at any time. If the American people truly understood how our system works, they would be protesting in the streets right now. The following are 11 reasons why the Federal Reserve is bad…

1 – The Federal Reserve was created as a way to enslave the U.S. government. In fact, the Federal Reserve system literally could not function without U.S. Treasury bonds. Government debt is at the very core of the system, and our federal government is now trapped in a debt spiral from which it can never possibly escape because the system is operating exactly as it was designed. Our national debt has been rising at an exponential rate, and that will continue to be the case until either the current system collapses or we adopt an entirely new system.

2 – The individual Federal Reserve Banks are not “federal” at all. In fact, on the official website of the Federal Reserve Bank of St. Louis, it is openly admitted that Federal Reserve Banks “are not a part of the federal government” and that private banks “hold stock in the Federal Reserve Banks and earn dividends”…

The Federal Reserve Banks are not a part of the federal government, but they exist because of an act of Congress. Their purpose is to serve the public. So is the Fed private or public?

The answer is both. While the Board of Governors is an independent government agency, the Federal Reserve Banks are set up like private corporations. Member banks hold stock in the Federal Reserve Banks and earn dividends.

3 – Why does the Federal Reserve issue our currency? The U.S. Constitution explicitly gives Congress the power to issue our currency…

[The Congress shall have Power . . . ] To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures; . . .

4 – The Federal Reserve creates money out of thin air. I asked Google AI about this, and this is what I was told…

Yes, the Federal Reserve (Fed) creates money out of thin air by increasing the money supply. This process is called “creating money out of thin air” because it involves adding funds to the economy without printing currency.

5 – The Federal Reserve devalues our currency. Since the Federal Reserve was created in 1913, the U.S. dollar has lost more than 96 percent of its purchasing power. The truth is that just a two percent inflation rate will wipe out half of your purchasing power within a single generation. In the chart below, you can clearly see that the beginning of the rapid rise of inflation in the United States coincided with the creation of the Federal Reserve.

6 – The Federal Reserve manipulates the U.S. economy by setting interest rates. By moving rates higher or lower, the Federal Reserve has the power to create economic growth or to destroy it. They have the power to inflate massive economic bubbles and to pop them. Most Americans believe that our presidents “run the economy”, but the truth is that the Federal Reserve has far more control over the economy than the White House does. As you can see below, every recession since World War II has come after a period of rising interest rates.

7 – The Federal Reserve also controls the national money supply. They can pump trillions of dollars into the economy or pull trillions of dollars out of the economy without being accountable to anyone. This can have absolutely disastrous consequences. For example, inflation started getting wildly out of control after the Federal Reserve dramatically increased the size of the money supply during the pandemic.

8 – The Federal Reserve has become far, far too powerful. Our financial markets swing up and down whenever a Fed official makes an important statement, and every man, woman and child in the entire country is directly affected by the decisions that the Federal Reserve Board makes. Ron Paul once told MSNBC that he believes that the Federal Reserve has actually become more powerful than Congress…

“The regulations should be on the Federal Reserve. We should have transparency of the Federal Reserve. They can create trillions of dollars to bail out their friends, and we don’t even have any transparency of this. They’re more powerful than the Congress.”

9 – The Federal Reserve is dominated by Wall Street and the New York banks. The New York representative is the only permanent member of the Federal Open Market Committee, while the other members rotate. The truth is that the Federal Reserve Bank of New York has always been the most important of the regional Fed banks by far, and in turn the Federal Reserve Bank of New York has always been dominated by Wall Street and the major New York banks.

10 – The Federal Reserve has completely eliminated minimum reserve requirements for our banks. Fractional reserve banking has always been a way that the bankers have conned the public, but now they have gotten rid of minimum reserve requirements altogether. This is literally insane.

11 – The Federal Reserve is not accountable to the voters, and Federal Reserve Chair Jerome Powell is flaunting the fact that he cannot even be fired by President Trump…

Federal Reserve Chair Jerome Powell had a clear, direct response when asked during a press conference Thursday if he would step down if asked to do so by President-elect Trump.

“No,” said Powell, whose term as chair ends in 2026.

When asked to elaborate and if he would be legally required to leave, he again said, “No.”

Powell later said it is “not permitted under the law” for the president to fire or demote him or any of the other Fed governors with leadership positions.

Powell’s term will eventually end, but until then he can do whatever he wants.

Shouldn’t we have some way to keep them accountable?

After all, they have an incredible amount of power over us, shouldn’t we have at least a little bit of power over them?

Nobody knows what is really going on inside the Federal Reserve, because we aren’t allowed to see.

Unfortunately, the truth is that they desperately do not want light to be shined on the elaborate “shell game” that they are running.

Have you ever wondered if it was just a coincidence that the personal income tax was implemented just about the same time that the Federal Reserve was created?

Why does the U.S. government have to tax us at all?

Prior to 1913, there was no personal income tax in this country.

If you take a few minutes to stop and think about it, an America where there is no Federal Reserve, no personal income tax and no IRS is not that hard to imagine.

If the U.S. government functioned just fine without all of them at one time, then why couldn’t the U.S. government function just fine without all of them now?

The system that we have now is clearly not working. The Federal Reserve was supposed to guarantee that our system would be perfectly stable, but in reality our system has become much more unstable.

It is time for different thinking. It is time for the U.S. government to take back control of our currency and to take back control of our economy.

For more than a decade, I have been on a crusade to bring the Federal Reserve system to an end, and many others have been pushing for the exact same thing.

Now that we have a new administration in Washington, perhaps they will be open to listening to us.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Our 101 Trillion Dollar Problem: This Is The Number One Tool The Elite Use To Enslave Us

January 20, 2025January 20, 2025 by Michael

Right now, a tremendous awakening is happening as people all over the world become educated about the tools that the elite use to enslave us to their system. The number one tool that they use to enslave us is debt. The financial powers of the world use it to enslave individuals, corporations and governments. For thousands of years humanity has been taught the proverb that “the borrower is the servant of the lender”, and yet today billions of people around the globe have willingly made themselves servants of the money powers. You see, when you borrow money from a financial institution, you not only have to pay that money back, but you also have to pay a significant amount of interest. In fact, often the interest ends up being much more than the principal of the loan. Thus the borrower ends up devoting a great deal of his or her labor to earning money for the lender. Yes, there are times when it is necessary to borrow money. But what we have been doing over the last 30 years goes far beyond “necessary” borrowing. The fact that the U.S. government is now 36 trillion dollars in debt gets a lot of attention, but the truth is that state and local governments, corporations, and U.S. households have piled up enormous mountains of debt as well.

I want to show you a chart from the Federal Reserve that is hard to believe.

In the mid-90s, the total amount of debt in the system was about 20 trillion dollars, but now we have reached the 101 trillion dollar mark…

The word “insanity” does not even begin to describe what we have been doing to ourselves.

It takes a lot of really hard work to add 80 trillion dollars of debt in just 30 years.

Every time we pile up more debt, there is a winner and there is a loser.

Debt strips you of your freedom and slowly drains you of your wealth. It puts the fruits of your labor into the pockets of others.

That is true for individuals, and it is true for a nation as a whole.

Getting others enslaved by debt is how the most powerful financial institutions in the world became so dominant. It is one of the most profitable ways of making money ever invented.

What many people don’t realize is just how much interest they end up paying on some of their debts.

For example, if you go to mortgagecalculator.org, you can calculate the amount of interest that you will pay over the life of your home mortgage. According to that calculator, someone with a $400,000 mortgage at an interest rate of 6.98% over 30 years will end up paying $556,102.18 in interest before the mortgage is finally paid off.

When those 30 years are over, you will have bought a house for yourself and you will also have bought a house for the bankers.

So what should we do?

We need to stop feeding the monster.

They are getting insanely wealthy by financially enslaving all the rest of us.

Unfortunately, many Americans find themselves deep in debt because the cost of living has been rising faster than our paychecks have.

One of the great joys that men in free societies have long enjoyed is the ability to earn an honest wage for an honest day of work. In particular, the amazing capitalist engine that powered the U.S. economy for decade after decade greatly rewarded the incredible hard work and industriousness of the American people. America was known as the land of opportunity, and we built the largest middle class in the history of the world by working incredibly hard.

Unfortunately, things have changed.

Thanks to globalization and extremely rapid advances in technology, the labor of U.S. workers is rapidly losing value. Automation, robotics and AI have made many jobs obsolete. In addition, American workers now must compete against workers from all over the world. Global corporations often find themselves having to choose whether to build a factory in the United States or in the third world. But in the third world workers often earn less than 10 percent of what American workers earn, corporations are often not required to provide any benefits to those workers, and there are often very few oppressive government regulations to contend with.

How can American workers compete against that?

The truth is that labor is now a global commodity. It is exceedingly difficult for a worker in the United States to effectively compete with a desperate, half-starving worker in the third world that will work like mad for two dollars an hour.

But this is what we get for letting our politicians push “free trade” down our throats.

Most American workers had no idea that free trade would mean that they would suddenly be competing for jobs against workers in the Philippines and Malaysia.

But this is the cold, hard reality of globalism.

Of course the top executives at the big global corporations are certainly enjoying this new environment, because their salaries have soared.

In 1950, the ratio of the average executive’s paycheck to the average worker’s paycheck was about 30 to 1.

Now it is 268 to 1.

The rich are getting richer and the poor are getting poorer.

That is what globalism is all about.

The elite make out like bandits as they exploit third world labor pools, while the American middle class finds itself slowly being crushed out of existence.

Our system has been designed to funnel nearly all of the rewards to the very top. Meanwhile, the vast majority of Americans are left wondering why things just don’t ever seem to work out for them.

If you talk to many Americans, they just can’t seem to figure out why they can’t make things work out even though they are working as hard as they can. Millions of Americans have found themselves taking on second or even third jobs in a desperate attempt to provide for their families.

Sadly, things just keep getting worse with each passing year.

As I have discussed in previous articles, demand at food banks is at an all-time high, homelessness in the U.S. is at an all-time high, and homelessness in the U.S. is growing at the fastest pace ever recorded.

But there are elitists out there that are still attempting to claim that the U.S. economy is in great shape.

Of course most of us aren’t buying the propaganda anymore, and that is one of the primary reasons why the election turned out the way that it did.

We need to return to an economy where good workers are valued and where hard work is rewarded.

We need to return to an economy where having a large middle class is an important national goal.

We need to return to an economy where we build American businesses, where we hire American workers, and where we buy American products.

But unless the American people wake up, American workers are going to continue to be devalued.

And if you think that things are bad now, just wait until AI starts taking millions of our jobs.

Are we just going to sit back and let American living standards decline to third world standards, or are we going to do something about it?

Perhaps the greatest victims of the economic nightmare that is unfolding right in front of our eyes are our children.

The overall economic numbers are really bad, but when you examine the impact that this economy is having on children things get really horrifying. Today, 16 percent of U.S. children live in poverty and 14 million U.S. children are on food stamps.

It has been estimated that approximately 50 percent of all U.S. children will be on food stamps at some point before they reach the age of 18.

We were once the most prosperous nation on the entire planet.

How could we let this happen?

Meanwhile, the rich have gotten even richer.

In 2009, there were 8 million millionaires in the United States.

Now there are 22 million.

If everyone was becoming wealthier, that would be great. Unfortunately, the poor have been left with an increasingly smaller slice of the pie to divide among themselves.

At this point, the bottom 50 percent of Americans control just 2.5 percent of the wealth.

I have been ranting about all of this for over a decade, and yet conditions have just continued to deteriorate year after year.

We can’t have an economy that works for the top 10 percent but that sucks the life out of the bottom 90 percent.

Our debt-based financial system needs to be fundamentally reformed, and it is time for us to demand action.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

The Insurance Industry Is Going To Be Absolutely Devastated By The Los Angeles Fires

January 13, 2025January 13, 2025 by Michael

Will the insurance industry be able to survive tens of billions of dollars in losses from the Los Angeles fires? There have been catastrophic fires in California before, but never anything quite like this. So what is going to happen to homeowners if their insurance companies go bankrupt and cannot pay? Even the ones that do not go bankrupt are really going to struggle. I have a feeling that some of them will delay payouts for an extended period of time and will deny as many claims as they possibly can in a desperate attempt to survive. In the end, it is likely that vast numbers of homeowners that were counting on their insurance companies to bail them out will be left holding the bag.

It is being projected that total economic losses from these fires could reach 150 billion dollars, and the insurance industry will be hit with approximately 20 to 25 billion dollars of those losses…

Analysts at Evercore ISI have estimated that insurance industry losses from the Los Angeles wildfires will be in the $20 billion to $25 billion range, and also expect the fires to be treated as one event which could help primary carriers reach their reinsurance coverage.

That is going to be a really tough pill to swallow.

One expert is warning that we are literally “on the edge of a major financial crisis for the insurance industry”…

“I think we’re on the edge of a major financial crisis for the insurance industry,” says Daniel Aldrich, a Northeastern professor, director of the university’s Resilience Studies Program and co-director at the Global Resilience Institute.

I agree with him.

I don’t see how the industry is going to avoid a historic crisis in the aftermath of these fires.

In particular, Politico is telling us that this “could be the final straw that breaks California’s insurance market”…

Wednesday’s firestorm in a wealthy area of Los Angeles could be the final straw that breaks California’s insurance market.

The state’s insurance market has been teetering on the edge of insolvency for years thanks to catastrophic wildfires that have driven many insurers to stop writing new policies and drop existing ones.

Insurance companies are generally well capitalized, but there is only so much they can take.

I think that it is probably inevitable that some insurers will not make it, and that would be extremely bad news for homeowners that are holding policies from those companies…

‘My concern is that the insurance companies won’t be able to handle all the claims and file for bankruptcy and that’s that. It’s scary,’ Los Angeles construction worker Ivan De La Torre, 32, whose uncle and sister both lost their houses in a fire that consumed half of Altadena, a suburb of some 40,000 people north of Los Angeles.

As hundreds of Los Angeles residents return to find homes reduced to ashes due to a devastating wave of wildfires, many are fearful that their insurance policies may not cover the rebuild cost and that future premiums will be astronomical.

Rebuilding costs are going to be insane.

Just think about how much it would cost to rebuild the home that you are living in right now.

If you are a homeowner, could you rebuild your home for what you originally paid for it?

In the vast majority of cases, the answer would be no.

In recent years, home building costs have gone into the stratosphere…

The situation is further complicated by elevated construction costs. Both material prices and labor costs have remained high since the pandemic, which could amplify the final insurance payouts.

Insurers will also face additional living expense claims, typically capped at 30% of a dwelling’s value, and business interruption losses for commercial properties.

Of course many homeowners in the Los Angeles area did not have any insurance at all, and so now they have lost everything. Here is just one example…

The family of Chad Comey, a local musician and community organizer who’s been taking care of his disabled parents for the past several years, lost their home in Pacific Palisades to the fire.

“Chad is one of the best people I know,” wrote friend Tom Rhalter in the fundraiser he organized through GoFundMe for Comey. “Chad’s mom is paralyzed by Neuromyelitis Optica, a rare autoimmune disease, and his dad is blind.

“Chad is the best boss I’ve ever worked for and one of the kindest people I know. The fire took everything: clothes, possessions, and memories,” Rhalter continued. “His parents didn’t have insurance on the home. Chad and his family need immediate financial assistance to help recover from the fire.”

Can you imagine being in that situation?

How would you feel?

State Farm is taking a lot of heat for removing coverage from tens of thousands of homeowners last year…

State Farm said in 2023 that it would stop accepting new homeowners-insurance applications in California and then added last year that it would stop covering 72,000 homes across the state due to the growing frequency and severity of wildfires.

Comedic actor Rob Schneider ranted against State Farm last week, saying they were ‘a pile of crap for cancelling insurance policies’.

Actor James Woods, whose Pacific Palisades home was engulfed by flames and destroyed, also confirmed in a post that ‘one of the major insurance companies canceled all the policies in our neighborhood about four months ago’, an apparent reference to State Farm.

Sadly, approximately 1,600 homeowners in Pacific Palisades had their policies canceled by State Farm about six months ago…

About 1,600 policies in Pacific Palisades were dropped by State Farm in July, California Department of Insurance spokesman Michael Soller said in an Thursday email to CBS MoneyWatch. An analysis of insurance data by CBS San Francisco last year found that State Farm also dropped more than 2,000 policies in two other Los Angeles ZIP codes, which include the Brentwood, Calabasas, Hidden Hills and Monte Nido neighborhoods.

State Farm has very entertaining commercials, but this is going to be a blow to their reputation that will be very difficult to recover from.

Unfortunately, this crisis is far from over.

High winds have returned to the region, and that is going to make things very challenging for those that are fighting these fires…

Ominous winds were expected to regain strength Monday, howling through fire-blackened trees, picking up plumes of ash and smoke and further tangling efforts to tamp down the explosion of fires across Los Angeles County that have killed at least 24 people and destroyed thousands of homes and businesses.

From a big picture point of view, this disaster is yet another devastating blow in a long series of devastating blows to the U.S. economy.

How many blows can we possibly take?

Unfortunately, I have a feeling that it won’t be too long before we find out.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

What Is The Economic Value Of Greenland And Why Does Trump Want It So Badly?

January 7, 2025 by Michael

All of a sudden, everyone is talking about Greenland. Normally, Greenland is a place that is largely ignored by the rest of the world, but apparently Donald Trump is very serious about acquiring it. But what would that look like? If Greenland is made the 51st state, it would have as many U.S. Senators as the state of California. That could have very serious implications for the balance of power in Congress. And how would Greenland vote in U.S. presidential elections? Has anyone even considered that? Of course Greenland could become just another U.S. territory, but why would the citizens of Greenland want to become the next Puerto Rico? That certainly doesn’t sound very appealing. And why is Trump making such a big deal out of this anyway? Approximately 56,000 people live in Greenland, and 80 percent of it is covered in ice. So why does Trump want it so badly?

Of course the truth is that it all comes down to natural resources.

In particular, Greenland has lots and lots of oil.

According to Wikipedia, Greenland “has some of the world’s largest remaining oil resources”…

Some geologists believe Greenland has some of the world’s largest remaining oil resources:^[30] in 2001, the U.S. Geological Survey found that the waters off north-eastern Greenland (north and south of the Arctic Circle) could contain up to 110 billion barrels (17×10⁹ m³) of oil,^[31] and in 2010 the British petrochemical company Cairns Oil reported “the first firm indications” of commercially viable oil deposits.^[32]

The U.S. consumes an average of approximately 20 million barrels of petroleum per day.

So 110 billion barrels is a serious amount of oil.

And it also turns out that the Chinese are very interested in the rare-earth elements that are buried under the dirt in Greenland. In fact, one particular area of Greenland is “home to one of the world’s largest undeveloped deposits of rare-earth elements outside of China”…

Kvanefjeld is home to one of the world’s largest undeveloped deposits of rare-earth elements outside of China. Seventeen elements, including scandium and yttrium, are buried deep underground there. They are used in everything from cell phones and wind turbines to electric cars. Mining advocates say tapping into them would be a major financial boon for Greenland.

Greenland Minerals Limited (GML), the Australian company developing the mine, said that the country would receive $240 million (€201 million) in taxes and royalties annually over the mine’s planned 37-year lifespan. GML’s biggest stakeholder is Shenghe Resources Holding, a Chinese rare-earths processing company.

It has been estimated that there are more than 38 million tons of rare earth deposits in Greenland.

So who will end up benefitting from those deposits?

Will it be the U.S. or will it be China?

On top of everything else, an extremely important U.S. military base is already located in Greenland…

Thule Air Base, already a vital U.S. military installation, provides early warning radar and monitors potential missile threats. Housing approximately 600 personnel, it plays a critical role in the U.S. missile defense network, covering threats across the northern hemisphere. Its strategic location enables unparalleled monitoring capabilities, reinforcing America’s defensive posture in the Arctic. Expanding this presence would fortify America’s Arctic strategy against rivals such as Russia and China, ensuring unparalleled leverage in the rapidly evolving Arctic theater.

If we lost that base, it would be an enormous strategic blow to the United States.

After considering all of the variables, Trump has decided that it is time for us to control Greenland.

In fact, he is threatening Denmark with very painful tariffs if they try to stand in the way…

US President-elect Donald Trump has threatened “very-high” tariffs on Denmark if it resists his effort to take control of Greenland, an autonomous Danish territory.

And on Tuesday, Trump actually refused to rule out the use of military force to take control of Greenland…

President-elect Donald Trump on Tuesday wouldn’t rule out exercising military or economic coercion to further his goal of bringing both Greenland and the Panama Canal under U.S. control, as his son, Donald Trump Jr., is in Greenland amid Trump’s push to acquire the autonomous territory of Denmark.

“I can’t assure you, you’re talking about Panama and Greenland,” Trump told reporters during a press conference at his Mar-a-Lago estate in Florida. “No, I can’t assure you on either of those two. But I can say this — we need them for economic security.”

Obviously, a military invasion of Greenland is something that should be completely off the table.

The rest of the world would be absolutely horrified if we invaded Greenland and made it part of the United States by force.

If Greenland is going to come under U.S. control, it must be done by diplomatic means. Perhaps Donald Trump Jr.’s visit to the island is the beginning of that process…

Donald Trump Jr., son of President-elect Donald Trump, arrived in Greenland Tuesday with conservative activist Charlie Kirk amid a push to purchase the Danish territory.

“Don Jr. and my Reps landing in Greenland,” the president-elect posted on Truth Social.

“The reception has been great. They, and the Free World, need safety, security, strength, and PEACE!

“This is a deal that must happen. MAGA. MAKE GREENLAND GREAT AGAIN!”

In the end, it will be up to the people of Greenland to decide their future.

It is a land that has been dominated by Denmark for a very long time, but now it could soon be holding a referendum on independence…

Greenland, the world’s largest island, was a Danish colony until 1953, when it became an integral part of the Kingdom of Denmark. In 1979, it achieved home rule, and in 2009, self-governance, granting it control over domestic affairs while Copenhagen retained authority over defence and foreign policy. Crucially, the 2009 agreement provides Greenland with the right to declare independence through a referendum.

If Greenland votes for independence, it seems unlikely that they would be interested in giving that up just to become another U.S. territory.

Greenland Prime Minister Múte Bourup Egede insists that his country “will never be for sale”…

“Greenland is ours,” Egede also said. “We are not for sale and will never be for sale. We must not lose our long struggle for freedom.”

Egede was indeed responding to an assertion from Trump that the United States must acquire Greenland “for purposes of National Security and Freedom throughout the World.”

So I think that this is a deal that would be exceedingly difficult for Trump to make.

Of course this isn’t the first time that the United States has been interested in acquiring Greenland…

This is not the first time the US has shown interest in acquiring the island. Under President Andrew Johnson in 1867, the US State Department noted Greenland’s resources and location as ideal for acquisition but made no formal efforts.

Nearly a century later, President Harry S Truman offered Denmark $100 million for Greenland in 1946 after recognising its strategic value post-World War II. Truman also considered trading parts of Alaska for Greenland, though the deal never materialised.

Without a doubt, I think that Greenland would like to have very strong ties to the United States.

But I wouldn’t count on Greenland becoming part of the U.S. any time soon.

Needless to say, Trump will have so many other issues to focus on once he becomes president that the status of Greenland will probably quickly become an afterthought.

2025 is going to be such an important year for our nation and for the entire world, and the decisions that Trump makes during the months ahead will have enormous implications for all of us.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

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Thanks To Years Of Inflation, The Price Of Breakfast In America Is Now Obscene

January 5, 2025January 5, 2025 by Michael

They have officially ruined breakfast. Once upon a time, breakfast was the least expensive meal of the day, but now everything has changed. Eggs, butter and coffee have all become extremely expensive, and there is no relief in sight in 2025. When I went to the grocery store on Friday, I spent about 45 dollars for just nine tubs of butter. I could hardly believe my eyes, but after doing some digging I discovered that five dollars for a pound of butter is very close to the national average at this stage.

Of course in some areas it is even more expensive. During an exchange on MSNBC’s Morning Joe program, Joe Scarborough was astounded to learn that the price of butter has reached 7 dollars in some stores in his area…

“It’s $7… I’m just saying it’s 7,” Brzezinski interrupted.

“Butter is $7… What, is it framed in gold?” Scarborough replied incredulously, with a look of shock on his face.

“It’s seven bucks…. it depends where you go,” Brzezinski stated somberly.

Europe is facing a similar crisis.

In fact, the price of butter in Europe jumped by an average of 19 percent during the 12 month period ending in October…

Across the 27-member states of the European Union, the price of butter rose 19% on average from October 2023 to October 2024.

That included a rise of 49% in Slovakia, and 40% in Germany and the Czech Republic, according to EU figures with reports indicating the cost has continued to rise.

But they keep telling us that inflation is under control.

Yeah, right.

Egg prices have been rising even more rapidly.

In some areas of California, a carton of 12 eggs will now cost you 9 dollars…

Egg prices in California have reached unprecedented levels, with some areas reporting costs as high as $9 per dozen. This surge is largely attributed to the ongoing impact of Highly Pathogenic Avian Influenza (HPAI), commonly known as bird flu, which has significantly disrupted egg supply across the United States.

The price escalation in California is particularly notable. While the national average for a dozen Grade A large eggs hovers around $3.20, in California, the average price for a carton of white cage-free eggs has hit $5.11. However, in certain regions, consumers are seeing prices nearly double that amount.

I vividly remember when you could buy a carton of 12 eggs for less than a dollar.

Sadly, those days are long gone and they aren’t coming back.

It is being reported that egg prices have risen 160 percent since 2019, and they are expected to go substantially higher in 2025 because of the bird flu.

If you love coffee, you should be aware that coffee prices are also being projected to continue to rise at an exponential rate in 2025.

Can you imagine paying 8 dollars for a single cup of coffee? Well, those that live in Australia could be doing exactly that by the end of this calendar year…

Coffee lovers could soon not be able to justify buying their caffeine fix daily with experts warning single cup could cost from $8-$12 by the end of 2025.

A confluence of factors has pushed Arabica bean prices into the stratosphere.

If you can believe it, the price of a pound of Arabica beans jumped more than 80 percent in 2024…

The warning comes as the price of Arabica beans, the world’s most popular variety, continues to rise.

Buying a pound of the bean variety topped US $3.44 on December 10, having risen more than 80 per cent in 2024.

Chocolate prices are entering unprecedented territory as well.

In 2024, cocoa futures actually tripled in price…

Prices for chocolate’s main ingredient have almost tripled since the start of 2024 as faltering production in West Africa — the world’s biggest growing region — led to massive supply shortages, the publication wrote, citing exchange data.

In early January, cocoa futures traded at around $4,000 per tonne. In mid-December they peaked at $12,700 per tonne, according to data from Trading Economics.

As this price shift starts filtering down to the consumer level, a lot of us won’t be able to afford to eat as much chocolate as we once did.

In fact, we have already reached a point where chocolate is being referred to as a “luxury” item.

If you love beef, I have more bad news for you.

According to Zero Hedge, cattle futures just hit another new all-time record high…

Cattle futures in Chicago surged to fresh record highs on Friday, driven by severe winter weather forecasts for the Central Plains and Midwest, two key regions home to the nation’s cattle belt. Analysts warn that the harsh conditions could reduce herd sizes and impact carcass weights, further tightening the nation’s cattle supply.

“While cattle can tolerate cold weather, extreme cold forces them to expend more energy, directly impacting feed conversion rates and ultimately reducing carcass weights,” Daily Livestock Report wrote in a note on Friday, warning that cattle weights fell 3% during last year’s cold blast across the Lower 48.

Demand for beef remains very robust, but the size of the U.S. national cattle herd just keeps shrinking.

At this point, it is the smallest that it has been since 1961.

So beef prices will just keep escalating in 2025.

You could try switching to chicken or turkey, but they are both becoming more expensive thanks to the bird flu.

The bottom line is that we are transitioning into an entirely new environment.

We were quite accustomed to living in a society that produced enormous quantities of extremely inexpensive food.

But now global food supplies are steadily getting tighter, and global food prices are steadily marching upwards.

Hunger is on the rise all over the world, and demand at food banks in the United States is higher than ever before.

Years in advance, I explained to my readers in excruciating detail where global food production trends would be taking us.

Sadly, it will not be possible for our leaders to reverse those trends.

Horrifying global food shortages are in our future, and I would suggest that you prepare accordingly.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

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Worst Homelessness Crisis Ever! Those On The Low End Of The Economic Spectrum Are Being Absolutely Pulverized By This Economy

December 29, 2024December 29, 2024 by Michael

All over America, our core urban areas are teeming with tent cities, hordes of homeless drug addicts, and vast throngs of newly arrived migrants that don’t have anywhere to go. When I wrote about this topic one year ago, homelessness in the U.S. was at an all-time record high, and it was increasing at the fastest pace ever recorded. It was going to be hard to top that, but somehow we did. Fast forward to today, and homelessness in the U.S. has reached another all-time record high, and it is increasing at an even faster pace. We are literally in the midst of the worst homelessness crisis that our federal government has ever measured, and there is no end in sight.

When the rest of us discuss the economic pain that we are experiencing, many on the high end of the economic spectrum wonder what all the fuss is about because things still seem pretty good to them.

But for many of those on the low end of the economic spectrum, it feels like a full-blown economic collapse has already begun.

On Friday, the U.S. Department of Housing and Urban Development revealed that the homeless population in the U.S. jumped 18 percent in just one year…

Homelessness in the United States soared to the highest level on record, according to government data released Friday.

More than 770,000 people experienced homelessness in 2024, an 18% increase from 2023, the US Department of Housing and Urban Development reported. It was the largest annual increase since HUD began collecting the data in 2007 (excluding the jump from 2021 to 2022, when the agency didn’t conduct a full count due to the Covid-19 pandemic).

If homelessness is at the highest level ever and it is rising at the fastest rate ever, your economy is not okay.

Let’s just be real for a moment.

I am so sick and tired of the Biden administration and the mainstream media telling us that everything is just fine.

More than three-quarters of a million Americans are homeless, and that is just the ones that they are able to find and count.

The true number is certainly far higher.

We are being told that the spike in homelessness is happening because we don’t have enough affordable housing and because we are not able to absorb all of the migrants that have been pouring over our borders.

In fact, in 13 communities that have been heavily impacted by migration, “family homelessness more than doubled”…

Migration had a particularly notable impact on family homelessness, which rose 39% from 2023 to 2024, according to the report. In the 13 communities that reported being affected by migration, family homelessness more than doubled.

When we think of the homeless, we tend to think of older men with addiction problems.

But the truth is that approximately 150,000 children are living in the streets at this point…

Massively concerning is that 150,000 children experienced homelessness, a 33% jump in 2024 when compared to the prior year.

What is wrong with us?

Why can’t we get this crisis under control?

Our politicians like to give speeches about affordable housing, but housing just continues to become more unaffordable…

Rents have continued climbing since briefly dipping lower during the pandemic, as well. As of 2023, nearly half of renters spend more than 30% of their income on housing, qualifying them as cost-burdened, according to the US Census Bureau.

Every day, more precious people on the low end of the economic spectrum are being evicted from their homes.

Every day, the homeless population in this country just gets even bigger.

And now we have entered a time when finding a decent job is going to be quite a bit more difficult…

US private sector full-time jobs have DROPPED by nearly 2 MILLION over the past year.

Such a drop has never happened outside of recessions.

The only gain in full-time jobs has been in the government sector.

We aren’t buying the propaganda any longer.

They keep trying to convince us that everything is just fine, but that clearly isn’t the truth.

When Don Lemon tried to convince a random man that he was interviewing that the economy “is actually better under Biden”, the man responded with a “hearty laugh”…

“Four years ago it was a lot better. I made a lot more money than I do now,” the man said.

Incredibly, rather than try to understand the man’s perspective, Lemon argued with him.

“I know you feel that way, but that’s not actually what the record shows,” Lemon said. “The economy is actually better under Biden.”

That prompted a hearty laugh from the interviewee.

We can see the tent cities that are popping up like mushrooms all over our major cities.

We can see the hordes of people that are sleeping in their vehicles in retail parking lots at night.

And we can see that prices at the grocery store are far, far higher than they used to be.

According to a national survey that was just released, approximately 70 percent of U.S. adults believe that the U.S. economy is in poor condition right now…

About 7 in 10 U.S. adults rate the country’s economic state as very or somewhat poor, up slightly from about 6 in 10 in October. Self-identified Democrats are primarily driving the recent negativity. About 6 in 10 Democrats described the U.S. economy as “good” in October. With Republicans on the verge of controlling the executive and legislative branches, only about half of Democrats say that now.

That same survey also discovered that about a third of all U.S. adults are either “extremely” or “very” concerned about being able to “afford groceries over the next few months”…

The new AP-NORC poll shows about one-third of Americans say they are “extremely” or “very” concerned about their ability to afford groceries over the next few months. About 3 in 10 are highly worried about being able to afford holiday gifts, gas or electricity.

There are tens of millions of Americans that are barely holding on from month to month.

Next month, more of them will lose their grip.

We really are in the midst of a slow-motion economic collapse, and poverty and hunger really are growing all around us.

But for now, those on the high end of the economic spectrum are still living the high life, but it is just a matter of time before they experience severe economic pain too.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.