The Economic Collapse

Sometimes I think that we truly are living in Bizarro World.  We just witnessed one of the most horrible financial disasters in years, and economic activity is dramatically slowing down all around us, but Wall Street is celebrating.  In fact, the Dow Jones Industrial Average rose more than 1,200 points on Thursday.  Despite everything else that is going wrong, investors were absolutely giddy because the inflation number that was just released was slightly lower than what most experts were anticipating.  A lot of people seem to think that this could mean that the Federal Reserve will soon stop hiking interest rates, but that isn’t going to happen.  Jerome Powell continues to insist that rates will keep going higher until the official inflation rate is back down to about 2 percent, and we are a long, long way from there. (Read More...)

Another domino has fallen.  We are being told that the failure of FTX “would be kind of like a Lehman Brothers event”, and at this hour FTX is on the verge of collapse.  There was a chance that FTX could survive when Binance announced a shocking rescue plan, but after looking at the books Binance has reportedly backed out of the deal.  As a result, investors that have poured billions into FTX are likely to lose everything.  And many believe that FTX’s heavily promoted token, FTT, is going to zero.  If you have been waiting for a financial disaster to happen, this certainly qualifies.  A lot of people that were “crypto millionaires” not too long ago are going to be totally wiped out. (Read More...)

This holiday season is certainly going to be far less jolly for millions of Americans.  Yesterday, I detailed 11 signs that economic activity in the U.S. is rapidly declining.  Well, today we have gotten even more bad news.  Thanks to deteriorating economic conditions, Americans plan to buy a lot less stuff this holiday season.  In fact, one survey that was just released has discovered that approximately half the country plans to “buy fewer things” this year… (Read More...)

Have you noticed it too?  There has been a dramatic shift in the economy in recent days.  It has been sudden and it has been severe.  All over the country, sales are falling like a rock, inventories are piling up to alarming levels, and large companies are beginning to conduct mass layoffs.  Perhaps it was inevitable that such a downturn would arrive, but the Federal Reserve has made things far worse by rapidly hiking interest rates.  Every other time the Fed has engaged in such a rate hiking binge it has resulted in a recession, and there is no way that we are going to escape unscathed this time around.  The following are 11 signs that economic activity is plunging off a cliff… (Read More...)

The level of anger that we are witnessing all over the United States right now is extremely alarming.  Millions of voters on both the left and the right are filled with rage, and I have never seen this country more bitterly divided than it is at this moment.  Interestingly, survey after survey has found that the economy is the number one issue that voters are concerned about.  Our once great economic machine is coming apart at the seams, and the cost of living has become extremely oppressive.  But to be honest, for now the economy is still relatively stable.  So how angry will Americans be once the wheels start coming off and economic conditions really start deteriorating very rapidly? (Read More...)

This is starting to look like 2008 all over again.  For years, the tech industry was the strongest part of the U.S. economy by a wide margin.  The largest tech firms were raking in billions upon billions of dollars in revenue and their stock prices soared to unprecedented levels.  But now the tech industry has suddenly fallen on difficult times.  Many large tech companies are laying off huge numbers of workers, and we are being warned that even more layoffs are ahead.  If the most prosperous sector of our economy is experiencing this much trouble already, what is the outlook for the rest of the economy as we head into 2023? (Read More...)

If you live in a major urban area, you may have noticed that “tent cities” are starting to pop up all around you.  The worst inflation crisis in decades has combined with the worst drug crisis that we have ever seen to create an unprecedented homelessness crisis.  Every night, even more Americans join the rapidly growing “unsanctioned encampments” that are taking up more and more real estate in our largest cities.  If things are this bad now, how many of our fellow citizens will be sleeping in the streets when economic conditions are much worse a year or two from today?  We are supposed to be the greatest nation on the planet, but with each passing day even more tent cities are established.  Our system is failing, and the widespread economic suffering that we are witnessing right now is truly difficult to comprehend. (Read More...)

The last time interest rates were this high, the U.S. economy plunged into “the Great Recession” and millions of Americans lost their jobs.  But the Federal Reserve is not going to stop here.  In fact, Fed Chair Jerome Powell is telling us that more rate increases are on the way and that officials at the Fed are determined to “stay the course until the job is done”.  If “the job” is to destroy the U.S. economy, they have already made a tremendous amount of progress toward that goal.  The housing market is completely and utterly imploding, and economic activity is steadily slowing down all around us.  But even though Powell can see the damage that is happening, he insists that the Fed will keep raising rates until the official rate of inflation returns to 2 percent. (Read More...)