Economy

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

May 16, 2019 by Michael

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.

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.

I Dare You To Tell Me The Economy Is “Booming” After Reading This List Of 19 Facts About Our Current Economic Performance

May 2, 2019 by Michael

After taking an honest look at the facts, I don’t know how anyone can possibly claim that the U.S. economy is “booming”. I really don’t. We hear this sort of rhetoric from the mainstream media all the time, but it doesn’t make any sense. As I discussed yesterday, nobody should be using the term “booming” to describe the state of the U.S. economy until we have a full year when GDP growth is 3 percent or better, and at this point we haven’t had that since the middle of the Bush administration. And as you will see below, the latest numbers are clearly telling us that the U.S. economy is not even moving in the right direction. Economic conditions are getting worse, and they weren’t that great to begin with. According to the calculations that John Williams has made over at shadowstats.com, the U.S. economy is already in a recession, but of course the Federal Reserve will continue to tell us that everything is just fine for as long as they possibly can. Unfortunately for them, they can’t hide the depressingly bad numbers that are coming in from all over the economy, and those numbers are all telling us the same thing.

The following are 19 facts about our current economic performance that should deeply disturb all of us…

#1 In April, U.S. auto sales were down 6.1 percent. That was the worst decline in 8 years.

#2 The number of mortgage applications has fallen for four weeks in a row.

#3 We just witnessed the largest crash in luxury home sales in about 9 years.

#4 Existing home sales have now fallen for 13 months in a row.

#5 In March, total residential construction spending was down 8.4 percent from a year ago.

#6 U.S. manufacturing output was down 1.1 percent during the first quarter of this year.

#7 Farm incomes are falling at the fastest pace since 2016.

#8 Wisconsin dairy farmers are going bankrupt “in record numbers”.

#9 Apple iPhone sales are falling at a “record pace”.

#10 Facebook’s profits have declined for the first time since 2015.

#11 We just learned that CVS will be closing 46 stores.

#12 Office Depot has announced that they will be closing 50 locations.

#13 Overall, U.S. retailers have announced more than 6,000 store closings so far in 2019, and that means we have already surpassed the total for all of last year.

#14 A shocking new study has discovered that 137 million Americans have experienced “medical financial hardship in the past year”.

#15 Credit card charge-offs at U.S. banks have risen to the highest level in nearly 7 years.

#16 Credit card delinquencies have risen to the highest level in almost 8 years.

#17 More than half a million Americans are homeless right now.

#18 Homelessness in New York City is the worst that it has ever been.

#19 Nearly 102 million Americans do not have a job right now. That number is worse than it was at any point during the last recession.

But at least the stock market has been doing well, right?

Actually, the Dow Jones Industrial Average has been down for two days in a row, and investors are getting kind of antsy.

Hopes of a trade deal with China had been propping up stocks in recent weeks, but it looks like negotiations may have hit “an impasse”…

The latest round of US-China trade talks may have hit an impasse, raising doubts about the chances of an early trade deal between the world’s two leading economies, Chinese official media reported on Thursday.

Unlike the previous negotiations, the 10th round of high-level economic and trade talks, which concluded here on Wednesday, had fewer details about specific discussions and results, state-run Global Times reported.

I warned my readers repeatedly that this would happen. The Chinese are going to negotiate, but they are going to drag their feet for as long as possible in hopes that the U.S. will free Meng Wanzhou.

Of course that isn’t going to happen, and so at some point the Chinese will have to decide if they are willing to move forward with a trade deal anyway.

But if the Chinese drag their feet for too long, Trump administration officials may lose patience and take their ball and go home.

In any event, the truth is that the U.S. economy is really slowing down, and no trade deal is going to magically change that.

And a lot of other pundits are also pointing out that a substantial economic slowdown has now begun. For example, the following comes from Brandon Smith’s latest article…

The bottom line is, the next crash has already begun. It started at the end of 2018, and is only becoming more pervasive with each passing month. This is not “doom and gloom” or “doom porn”, this is simply the facts on the ground. While stock markets are still holding (for now), the rest of the system is breaking down right on schedule. The question now is, when will the mainstream media and the Fed finally acknowledge this is happening? I suspect, as in 2008, they will openly admit to the danger only when it is far too late for people to prepare for it.

Hopefully things will remain relatively stable for as long as possible, because nobody should want to see a repeat of 2008 (or worse).

Unfortunately, we can’t stop the clock. We are already more than a third of the way through 2019, and we will be into 2020 before we know it.

It has been an unusual year so far, but I have a feeling that it is about to get much, much more interesting.

These New Numbers Are Telling Us That The Global Economic Slowdown Is Far More Advanced Than We Thought

January 14, 2019 by Michael

We continue to get more confirmation that the global economy is slowing down substantially. On Monday, it was China’s turn to surprise analysts, and the numbers that they just released are absolutely stunning. When Chinese imports and exports are both expanding, that is a clear sign that the global economy is running on all cylinders, but when both of them are contracting that is an indication that huge trouble is ahead. And the experts were certainly anticipating substantial increases in both categories in December, but instead there were huge declines. There is no possible way to spin these numbers to make them look good…

Data from China showed imports fell 7.6 percent year-on-year in December while analysts had predicted a 5-percent rise. Exports dropped 4.4 percent, confounding expectations for a 3-percent gain.

China now accounts for more total global trade than the United States does, and the fact that the numbers for the global economy’s number one trade hub are falling this dramatically is a major warning sign.

And of course it isn’t just China that is experiencing trouble. In fact, we just witnessed the worst industrial output numbers in Europe “in nearly three years”…

Adding to the gloom were weak industrial output numbers from the euro zone, which showed the largest fall in nearly three years.

Softening demand has been felt around the world, with sales of goods ranging from iPhones to automobiles slowing, prompting profit warnings from Apple among others.

If we were headed for a major global recession, these are exactly the types of news stories that we would expect to see.

We also continue to get more indications that the U.S. economy is slowing down significantly. For example, sales of new homes in the U.S. were down 19 percent in November and 18 percent in December…

Sales of newly built homes fell 18 percent in December compared with December of 2017, according to data compiled by John Burns Real Estate Consulting, a California-based housing research and analytics firm.

Due to the partial government shutdown, official government figures on home sales for November and December have not been released.

Sales were also down a steep 19 percent annually in November, according to JBRC’s analysts.

Those are horrific numbers, and they are very reminiscent of what we witnessed back in 2008.

And we also just learned that employers are cutting back on hiring new college grads for the first time in eight years…

A new report from the National Association of Colleges and Employers (NACE) shows that for the first time in eight years, managers are pulling back the reins on hiring college grads, with a projected 1.3 percent decrease from last year. Additionally, a survey from Monster.com found that of 350 college students polled, 75 percent don’t have a job lined up yet.

I feel really bad for those that are getting ready to graduate from college, because I know what it is like to graduate in the middle of an economic downturn. At the time, many of my friends took whatever jobs they possibly could, and some of them never really got on the right track after that.

But the economic environment that is ahead will be much worse than any of the minor recessions that the U.S. has experienced in the past, and that means things are going to be extremely tough for our college graduates. And the total amount of student loan debt in this country has roughly tripled over the last decade, and so a lot of these young people are going to enter the real world with crippling amounts of debt but without the good jobs that they were promised would be there upon graduation.

As economic conditions have begun to deteriorate, I have had more people begin to ask me about what they can do to get prepared for what is coming. And I always start off by telling them the exact same thing. Today, 78 percent of Americans are living paycheck to paycheck, but when an economic downturn strikes that is precisely what you do not want to be doing.

Some people that I hear from insist that there is no possible way that they can put together an emergency fund because they are already spending everything that they are bringing in.

And yes, it is true that there are some people out there that are so financially stretched that they literally do not have a single penny to spare even though they are being extremely frugal, but the majority of us definitely have areas where we can cut back.

I realize that “cutting back” does not sound fun. But not being able to pay your mortgage when things get really bad will be a whole lot less fun.

Right now people should be focusing on reducing expenses and trying to make some extra money. Use whatever time we have left before things get really bad to put yourself into a better financial position. If you have at least a little bit of money to fall back on, it will make your life much less stressful in the long run.

In addition, anything that you can do to become more independent of the system is a good thing. On a very basic level, learning to grow a garden can end up saving you a ton of money. I was just at the grocery store earlier today, and food is getting really expensive. When the Federal Reserve says that we are in a “low inflation” environment, I always wonder what world they are living on.

When I got up to the register today, I almost felt like they were going to ask me what organ I wanted to donate in order to pay for my groceries. Unfortunately, the price of food right now is actually quite low compared to what it is going to be in the days ahead.

So I guess I shouldn’t complain too much.

I think that I have just been in a foul mood all day ever since I came across Gillette’s new “toxic masculinity” ad. I will have quite a bit to say about that ad later this evening on EndOfTheAmericanDream.com.

Ladies and gentlemen, 2019 is off to quite a rough start, and things are likely to get a whole lot rougher.

As always, let us hope for the best, but let us also get prepared for the worst.

Two-Thirds Of Americans Think That They Are Middle Class – But Millions Of Them Are Dead Wrong

December 12, 2018 by Michael

The middle class has been steadily shrinking, but most Americans still believe that they are a part of it. Perhaps this is due at least in part to the egalitarian values which have been pounded into our heads for most of our lives. Very few Americans would have the gall to define themselves as “upper class”, and I have never met anyone that would describe themselves as “lower class”. In place of “lower class”, many politicians now like to use the much more politically correct term “working class”, but a more apt description might be “the working poor”. Today, half of all American workers make less than $30,533 a year, and you certainly cannot support a middle class lifestyle for a family with children on that kind of income.

Our incomes have stagnated as the cost of living has soared, and the middle class has experienced steady erosion as a result. But despite all that, 68 percent of all Americans still consider themselves to be “middle class”…

That’s according to new data from Northwestern Mutual’s 2018 Planning & Progress Study, which found that 68 percent of Americans consider themselves middle-class, down 2 percent from last year. However, because of the fuzziness of the definition, far more Americans consider themselves middle-class than technically qualify based on income.

In reality, the middle class now makes up just over 50 percent of the total U.S. population, according to a recent report from Pew Research Center, which used 2016 data. That’s compared to 61 percent in 1971.

So according to that survey, somewhere around 18 percent of all Americans wrongly believe that they belong to the middle class.

There are 325 million people living in the United States today, and so we are potentially talking about 58 million people that think that they are middle class but really aren’t.

Other surveys have come up with similar numbers. For example, one recent survey discovered that 22 percent of non-middle income Americans identified themselves as middle income…

Overall, 22 percent of the non-middle-income Americans surveyed incorrectly classified themselves as middle income. The majority of those people are actually lower-income, with approximately 19 percent of the low-income Americans surveyed defining themselves as middle income. Only approximately 2 percent of upper-income Americans mistakenly defined themselves as middle income.

Of course even if someone can be defined as “middle income” does not necessarily mean that things are going well.

Today, most Americans are living paycheck to paycheck at least part of the time. Living on the edge financially can be a constant source of stress, and it can easily start taking over your entire life. To illustrate this point, I would like to share with you a short excerpt from a recent article by Lauren Wellbank…

Like so many Americans, we struggle to get by each and every month. The compounding interest we rack up by always being a breath away from being broke plays a large role in that. We pay interest on purchases that we can’t afford to pay out of pocket in the moment (like our electric bill when my pay was short last month), and then we pay late fees when we have to take advantage of that grace period. Our monthly payments never go down because we can’t get out in front of any of it.

All of this has a psychological and emotional impact. I’m constantly running our budget through my mind, trying to reassure myself that the numbers will work out this month. I’m never not thinking about money. I dread going to the store or having to buy gas because each purchase moves us closer back down to that zero balance. The anxiety over our finances never goes away.

Have you ever been there?

Perhaps you are there right now. If so, you are definitely not alone. Most American families are deeply struggling, and it is getting worse with each passing year.

Meanwhile, the folks at the very top of the pyramid have been thriving. In fact, one study discovered that the gap between the wealthy and the poor in the United States is the largest that it has been since the 1920s.

We truly are living in a “new Gilded Age”, and the biggest winners have been those in the “top 0.1 percent”. The following comes from Matthew Stewart…

It is in fact the top 0.1 percent who have been the big winners in the growing concentration of wealth over the past half century. According to the UC Berkeley economists Emmanuel Saez and Gabriel Zucman, the 160,000 or so households in that group held 22 percent of America’s wealth in 2012, up from 10 percent in 1963. If you’re looking for the kind of money that can buy elections, you’ll find it inside the top 0.1 percent alone.

It has been said that money cannot buy happiness, and that is true.

But without a doubt the numbers show that there are some tremendous disadvantages to being poor. Here is more from Stewart…

Obesity, diabetes, heart disease, kidney disease, and liver disease are all two to three times more common in individuals who have a family income of less than $35,000 than in those who have a family income greater than $100,000. Among low-educated, middle-aged whites, the death rate in the United States—alone in the developed world—increased in the first decade and a half of the 21st century. Driving the trend is the rapid growth in what the Princeton economists Anne Case and Angus Deaton call “deaths of despair”—suicides and alcohol- and drug-related deaths.

Unfortunately, economic conditions are starting to deteriorate once again, and it is those at the bottom of the totem poll that are going to feel the pain first.

The period of relative stability that we had been enjoying is rapidly ending, and just about everyone can see that hard times are ahead of us.

A new survey of corporate CFOs was just released that contains some eye-popping numbers. It turns out that 49 percent of them believe that a recession will start by the end of next year, and a whopping 82 percent of them believe that a recession will have started by the end of 2020…

Considering that major corporations have been busy shedding workers, it follows that corporate finance leaders see a U.S. recession ahead. Evidence of a slowing economy has been popping up, including recent large-scale cuts in head count by U.S. corporations such as General Motors and Verizon.

Eighty-two percent of chief financial officers polled believe a recession will have started by the end 2020, and nearly 49 percent think the downturn will arrive sometime next year, according to the Duke University/CFO Global Business Outlook, released Wednesday.

This is yet another example of the major psychological shift that is taking place in our nation. The overwhelming consensus is that economic activity is going to slow down, and it won’t be people with millions of dollars in their bank accounts that will be suffering.

No, once again it will mostly be people that are barely getting by that will be losing their jobs and their homes, and nobody is going to come riding to their rescue.

About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

“The Outlook For The Global Economy Has Deteriorated”: Oil, Copper And Lumber Are All Telling Us The Next Economic Downturn Is Here

November 18, 2018 by Michael

Oil, copper and lumber are all telling us the exact same thing, and it isn’t good news for the global economy. When economic activity is booming, demand for commodities such as oil, copper and lumber goes up and that generally causes prices to rise. But when economic activity is slowing down, demand for such commodities falls and that generally causes prices to decline. In recent weeks, we have witnessed a decline in commodity prices unlike anything that we have witnessed in years, and many are concerned that this is a very clear indication that hard times are ahead for the global economy.

Let’s talk about oil first. The price of oil peaked in early October, but since that time it has fallen more than 25 percent, and the IEA is warning of “relatively weak” demand out of Asia and Europe…

The International Energy Agency said on Wednesday that while US demand for oil has been “very robust,” demand in Europe and developed Asian countries “continues to be relatively weak.” The IEA also warned of a “slowdown” in demand in developing nations such as India, Brazil and Argentina caused by high oil prices, weak currencies and deteriorating economic activity.

“The outlook for the global economy has deteriorated,” the IEA wrote.

Meanwhile, the price of copper has been declining for quite some time now. The price of copper also fell substantially just before the last recession, and many analysts are pointing out that “Dr. Copper” is now waving a red flag once again…

The message of weakening demand on the oil front was reinforced by the falling price of copper. The base metal is often referred to as “Dr. Copper” on its presumed ability to forecast the peaks and troughs of business cycles since it is used in different areas of the economy such as homes, factories and electricity generation. Copper has served as a leading indicator of both recessions and economic booms.

The price of lumber is a “third witness” that indicates that big trouble is looming.

Last month, lumber dropped more than 10 percent, and that was the biggest monthly drop that we have seen in more than 7 years…

In October, prices for softwood lumber in the U.S. dropped 10.3% – the largest decline since May 2011, according to the Producer Price Index (PPI) release by the Bureau of Labor Statistics. The producer price index for softwood lumber has fallen 21.2% since setting the cycle and all-time high in June.

If oil, copper and lumber are all telling us the same thing simultaneously, don’t you think that we should be listening?

At this point, even Bloomberg is admitting that the global economy is heading toward “a generalized slowdown”…

These developments suggest the synchronized growth that the global economy has enjoyed in recent years is likely to be replaced by a generalized slowdown. Just take a look at the data out of Japan and Germany this week, which showed the world’s third- and fourth-largest economies contracted in the third quarter.

How many signs is it going to take before people start understanding what is happening?

Wells Fargo just notified about 1,000 employees that they will be laid off. Job losses are starting to mount, and it is likely that we will start to see these sorts of news stories on an almost daily basis now.

And as the shaking on Wall Street accelerates, we are going to see more financial firms get into trouble. In fact, we just witnessed the total collapse of OptionSellers.com. The following comes from a notice that they sent to investors informing them that they lost all their money and that the firm is being liquidated…

I am writing to give you an update on the situation here with your account.

We have spent the week unwinding our short natural gas call position as expediently as possible.

Today which was to be the final day of liquidation, the market flared as prices appear to have been caught in a “short squeeze.”

The speed at which it took place is truly beyond anything I have seen in my career. It overran our risk control systems and left us at the mercy of the market.

In short, it was a rogue wave and it overwhelmed us.

Unfortunately, this has resulted in a catastrophic loss.

Our clearing firm, FC Stone now requires us to liquidate all positions. We hoped to have this done today. If not, it will be completed tomorrow.

Your account could potentially be facing a debit balance as of tomorrow. OptionSellers.com will be processing fee credits over the course of the coming days to help alleviate debit balances. What these will be will be determined after all positions are cleared.

This has in effect, crippled the firm. At this point, our brokers at FC Stone have been assisting us in liquidation.

Our offices will remain open and we will all still be here to answer your questions and process account closings. We will do everything in our power to ease what discomfort we can.

I am truly sorry this has happened.

I will be updating you again via memo in 24 hours.

Regards,

OptionSellers.com

Those investors are among the first to be completely wiped out, but they certainly won’t be the last.

The ironic thing is that Americans are less concerned about another crisis than they have been at any point since 2008 at a time when they should be more focused on getting prepared than ever.

You know that it is really late in the game when even Jim Cramer of CNBC is saying that the U.S. economy is really slowing down. A few of my readers wrote me after that article because they didn’t like the fact that I had quoted Jim Cramer. But I don’t think that they really got my point. I was not endorsing Jim Cramer as some sort of financial guru. Rather, I was pointing out that even mainstream media celebrities that were previously cheerleaders for the economy are now recognizing the reality of what we are facing.

Global economic activity is slowing down, and things are shifting very rapidly now. The weather is already getting very cold, the mood of the nation is very dark, and it would only take a very small push to send us completely tumbling over the edge.

Middle Class Destroyed: 50 Percent Of All American Workers Make Less Than $30,533 A Year

October 21, 2018 by Michael

The middle class in America has been declining for decades, and we continue to get even more evidence of the catastrophic damage that has already been done. According to the Social Security Administration, the median yearly wage in the United States is just $30,533 at this point. That means 50 percent of all American workers make at least that much per year, but that also means that 50 percent of all American workers make that much or less per year. When you divide $30,533 by 12, you get a median monthly wage of just over $2,500. But of course nobody can provide a middle class standard of living for a family of four for just $2,500 a month, and we will discuss this further below. So in most households at least two people are working, and in many cases multiple jobs are being taken on by a single individual in a desperate attempt to make ends meet. The American people are working harder than ever, and yet the middle class just continues to erode.

The deeper we dig into the numbers provided by the Social Security Administration, the more depressing they become. Here are just a few examples from their official website…

-34 percent of all American workers made less than $20,000 last year.

-48 percent of all American workers made less than $30,000 last year.

-59 percent of all American workers made less than $40,000 last year.

-68 percent of all American workers made less than $50,000 last year.

At this moment, the federal poverty level for a family of five is $29,420, and yet about half the workers in the entire country don’t even make that much on a yearly basis.

So can someone please explain to me again why people are saying that the economy is “doing well”?

Many will point to how well the stock market has been doing, but the stock market has not been an accurate barometer for the overall economy in a very, very long time.

And the stock market has already fallen nearly 1,500 points since the beginning of the month. The bull market appears to be over and the bears are licking their chops.

No matter who has been in the White House, and no matter which political party has controlled Congress, the U.S. middle class has been systematically eviscerated year after year. Many that used to be thriving may still even call themselves “middle class”, but that doesn’t make it true.

You would think that someone making “the median income” in a country as wealthy as the United States would be doing quite well. But the truth is that $2,500 a month won’t get you very far these days.

First of all, your family is going to need somewhere to live. Especially on the east and west coasts, it is really hard to find something habitable for under $1,000 a month in 2018. If you live in the middle of the country or in a rural area, housing prices are significantly cheaper. But for the vast majority of us, let’s assume a minimum of $1,000 a month for housing costs.

Secondly, you will also need to pay your utility bills and other home-related expenses. These costs include power, water, phone, television, Internet, etc. I will be extremely conservative and estimate that this total will be about $300 a month.

Thirdly, each income earner will need a vehicle in order to get to work. In this example we will assume one income earner and a car payment of just $200 a month.

So now we are already up to $1,500 a month. The money is running out fast.

Next, insurance bills will have to be paid. Health insurance premiums have gotten ridiculously expensive in recent years, and many family plans are now well over $1,000 a month. But for this example let’s assume a health insurance payment of just $450 a month and a car insurance payment of just $50 a month.

Of course your family will have to eat, and I don’t know anyone that can feed a family of four for just $500 a month, but let’s go with that number.

So now we have already spent the entire $2,500, and we don’t have a single penny left over for anything else.

But wait, we didn’t even account for taxes yet. When you deduct taxes, our fictional family of four is well into the red every month and will need plenty of government assistance.

This is life in America today, and it isn’t pretty.

In his most recent article, Charles Hugh Smith estimated that an income of at least $106,000 is required to maintain a middle class lifestyle in America today. That estimate may be a bit high, but not by too much.

Yes, there is a very limited sliver of the population that has been doing well in recent years, but most of the country continues to barely scrape by from month to month. Out in California, Silicon Valley has generated quite a few millionaires, but the state also has the highest poverty in the entire nation. For every Silicon Valley millionaire, there are thousands upon thousands of poor people living in towns such as Huron, California…

Nearly 40 percent of Huron residents — and almost half of all children — live below the poverty line, according to the U.S. Census Bureau. That’s more than double the statewide rate of 19 percent reported last month, which is the highest in the U.S. The national average is 12.3 percent.

“We’re in the Appalachians of the West,” Mayor Rey Leon said. “I don’t think enough urgency is being taken to resolve a problem that has existed for way too long.”

Multiple families and boarders pack rundown homes, only about a quarter of residents have high school diplomas and most lack adequate health care in an area plagued with diabetes and high asthma rates in one the nation’s most polluted air basins.

One recent study found that the gap between the wealthy and the poor is the largest that it has been since the 1920s, and America’s once thriving middle class is evaporating right in front of our eyes.

We could have made much different choices as a society, but we didn’t, and now we are going to have a great price to pay for our foolishness…

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The Stock Market Just Crashed In Italy, And Argentina Has Panic-Raised Interest Rates To 65 Percent

September 28, 2018 by Michael

In the 9th largest economy in the world, the financial markets are crashing, and in the 21st largest economy in the world the central bank just raised interest rates to 65 percent to support a currency that is completely imploding. While the mainstream media in the United States continues to be obsessed with all things Kavanaugh, an international financial crisis threatens to spiral out of control. Stock prices are falling and currencies are collapsing all over the planet, but because the U.S. has been largely unaffected so far the mainstream media is mostly choosing to ignore what is happening. But the truth is that this is serious. The financial crisis in Italy threatens to literally tear the EU apart, and South America has become an economic horror show. The situation in Brazil continues to get worse, the central bank of Argentina has just raised interest rates to 65 percent, and in Venezuela starving people are literally eating cats and dogs in order to survive. How bad do things have to get before people will start paying attention?

On Friday, Italian stocks had their worst day in more than two years, and it was the big financial stocks that were on the cutting edge of the carnage…

Shares in Italian banks .FTIT8300, whose big sovereign bond portfolios makes them sensitive to political risk, bore the brunt of selling pressure, sinking 7.3 percent as government bonds sold off and the focus turned to rating agencies.

Along with the main Italian stock index .FTMIB, the banks had their worst day since the June 2016 Brexit vote triggered a selloff across markets.

Italian bonds got hit extremely hard too. The following comes from Business Insider…

Bond markets are also suffering. The yield on the benchmark 10-year Italian bond jumped in Friday morning trading. Yields move inversely to price, with a higher yield reflecting an increased premium to hold the bond. The 10-year yield hit 3.22% in early morning trade, an increase of more than 10%.

So what sparked the sudden selloff?

Well, the new Italian government and the EU are at odds with one another, and the European elite were greatly displeased when Italy approved a new budget that was far larger than anticipated…

On Thursday night, six months after the government’s ascent to power, Italy’s populist coalition government of the Five Star Movement and the Northern League finally agreed on the key tenets of its first budget.

The coalition said in a statement they had agreed to set Italy’s budget deficit at 2.4% of GDP, an increase on the current level and far above the 1.6% that technocratic finance minister Giovanni Tria had lobbied for.

It is easy to criticize Italy, but what we are doing here in the United States is just as bad if not worse.

A new 854 billion dollar spending bill just got pushed through in D.C., and it is going to continue to explode the size of our national debt. We are going down the exact same path that all of these other nations have gone down, and in the process we are literally committing national suicide.

Just look at what is happening in Argentina. Years of wild spending have resulted in an economy that is deep in recession. The Argentine peso has lost approximately 50 percent of its value so far in 2018, and in a desperate attempt to stop the bleeding the central bank of Argentina just panic-raised interest rates to 65 percent.

When interest rates are at 65 percent, you don’t really have an economy anymore.

What you have is an endless nightmare.

In an emergency move, the International Monetary Fund has agreed to increase the size of Argentina’s bailout to 57 billion dollars…

The International Monetary Fund and Argentina announced Wednesday an arrangement to increase resources available to the South American country by $19 billion.

The agreement, pending IMF Executive Board approval, would bring the total amount available under the program to $57.4 billion by the end of 2021, up from $50 billion.

That won’t be nearly enough to turn the situation around in Argentina, and the IMF probably knows that.

For a long time many of us have been warning of a coming global financial crisis, and now that day has arrived.

For a long time many of us have been telling you to keep a close eye on Italy, and now a day of reckoning for that very troubled nation is here.

And big problems are coming for the U.S. too. Signs of imminent economic trouble just keep popping up, and it isn’t going to take much to push us into a new financial crisis that will be much worse than what we witnessed in 2008.

Oil Prices Have Been Rising And $4 A Gallon Gasoline Would Put Enormous Stress On The U.S. Economy

September 3, 2018September 3, 2018 by Michael

Thanks to increasing demand and upcoming U.S. sanctions against Iran, oil prices have been rising and some analysts are forecasting that they will surge even higher in the months ahead. Unfortunately, that would be very bad news for the U.S. economy at a time when concerns about a major economic downturn have already been percolating. In recent years, extremely low gasoline prices have been one of the factors that have contributed to a period of relative economic stability in the United States. Because our country is so spread out, we import such a high percentage of our goods, and we are so dependent on foreign oil, our economy is particularly vulnerable to gasoline price shocks. Anyone that lived in the U.S. during the early 1970s can attest to that. If the average price of gasoline rises to $4 a gallon by the end of 2018 that will be really bad news, and if the average price of gasoline were to hit $5 a gallon that would be catastrophic for the economy.

Very early on Tuesday, the price of U.S. oil surged past $70 a barrel in anticipation of the approaching hurricane along the Gulf Coast. The following comes from Fox Business…

U.S. oil prices rose on Tuesday, breaking past $70 per barrel, after two Gulf of Mexico oil platforms were evacuated in preparation for a hurricane.

U.S. West Texas Intermediate (WTI) crude futures were at $70.05 per barrel at 0353 GMT, up 25 cents, or 0.4 percent from their last settlement.

If we stay at about $70 a gallon, that isn’t going to be much of a problem.

But some analysts are now speaking of “an impending supply crunch”, and that is a very troubling sign. For example, just check out what Stephen Brennock is saying…

“Exports from OPEC’s third-biggest producer are falling faster than expected and worse is to come ahead of a looming second wave of U.S. sanctions,” said Stephen Brennock, analyst at London brokerage PVM Oil Associates. “Fears of an impending supply crunch are gaining traction.”

So how high could prices ultimately go?

Well, energy expert John Kilduff is now projecting that we could see the price of gasoline at $4 a gallon by winter…

Energy expert John Kilduff counts Iran sanctions as the top reason West Texas Intermediate (WTI) could climb as much as 30 percent by winter, and that could spell $4 a gallon unleaded gasoline at the pumps.

“The global market is tight and it’s getting tighter, and the big strangle around the market right now is what’s in the process of happening with Iran and the Iran sanctions,” the Again Capital founding partner said on CNBC’s “Futures Now.”

About two months from now, U.S. sanctions will formally be imposed on Iran, and that is going to significantly restrict the supply of oil available in the marketplace.

So refiners that had relied on Iranian oil are “scrambling” to find new suppliers, and this could ultimately drive oil prices much higher…

Iran’s oil exports are plummeting, as refiners scramble to find alternatives ahead of a re imposition of U.S. sanctions in early November. That in turn has helped drain a glut of unsold oil.

“To the extent we’re seeing the Iran barrels lost to the market, you’re looking at a WTI price and Brent in the $85 to $95 range, potentially,” Kilduff said.

Other sources are also predicting that oil prices will rise.

Barclays is warning that “prices could reach $80 and higher in the short term”, and BNP Paribas is now anticipating that Brent crude will average $79 a barrel in 2019.

In addition to the upcoming Iranian sanctions, rising global demand for oil is also a major factor that is pushing up prices.

For example, many Americans don’t even realize that China has surpassed us and has now become the biggest crude oil importer on the entire planet…

China became the world’s largest crude oil importer in 2017, surpassing the US and importing 8.4 million barrels per day.

The US only imported 7.9 million barrels per day in 2017, according to the US Energy Information Administration.

So what is the bottom line for U.S. consumers?

The bottom line is that gasoline prices are likely to jump substantially, and that is going to affect prices for almost everything else that you buy.

Excluding tech products, virtually everything else that Americans purchase has to be transported, and so the price of gasoline must be factored into the cost.

So if gasoline prices shoot up quite a bit, that means that almost everything is going to cost more.

And this would be happening at a time when inflation is already on the rise…

According to data from the Bureau of Labor Statistics, the Consumer Price Index for All Urban Consumers, less food and energy, hit 2.4% in July 2018. That’s its highest reading since September 2008.

Of course 2.4 percent doesn’t really sound that scary, and that is how the government likes it.

But if the rate of inflation was still calculated the way it was back in 1990, the current inflation rate would be above 6 percent.

And if the rate of inflation was still calculated the way it was back in 1980, the current inflation rate would be above 10 percent.

Inflation is a hidden tax on all of us, and it is one of the big reasons why the middle class is being eroded so rapidly.

Please do not underestimate the impact of the price of oil. It shot above $100 a barrel in 2008, and it was one of the factors that precipitated the financial crisis later that year.

Now we are rapidly approaching another crisis point, and there are so many wildcards that could potentially cause major problems.

One of those wildcards that I haven’t even talked about in this article would be a major war in the Middle East. One of these days it will happen, and the price of oil will instantly soar to well above $100 a barrel.

We live at a time of rising global instability, and we should all learn to start expecting the unexpected.

This article originally appeared on The Economic Collapse Blog. About the author: Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.

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