Michael T. Snyder

Business Debt Delinquencies Are Now Higher Than When Lehman Brothers Collapsed In 2008

May 22, 2016May 22, 2016 by Michael

You are about to see more very clear evidence that a new economic crisis has already begun. During economic recoveries, business debt delinquencies generally fall, and during times of economic recession business debt delinquencies generally rise. In fact, you will see below that business debt delinquencies shot up dramatically just prior to the last two recessions, and the exact same thing is happening again right now. In 2008, business debt delinquencies increased at a very frightening pace just before Lehman Brothers collapsed, and this was a very clear sign that big trouble was ahead. Unfortunately for us, in 2016 business debt delinquencies have already shot up above the level they were sitting at just before the collapse of Lehman Brothers, and every time debt delinquencies have ever gotten this high the U.S. economy has always fallen into recession.

In article after article, I have shown that key indicators for the U.S. economy started falling in either late 2014 or at some point during 2015. Well, business debt delinquencies are another example of this phenomenon. According to Wolf Richter, business debt delinquencies have shot up an astounding 137 percent since the fourth quarter of 2014…

Delinquencies of commercial and industrial loans at all banks, after hitting a low point in Q4 2014 of $11.7 billion, have begun to balloon (they’re delinquent when they’re 30 days or more past due). Initially, this was due to the oil & gas fiasco, but increasingly it’s due to trouble in many other sectors, including retail.

Between Q4 2014 and Q1 2016, delinquencies spiked 137% to $27.8 billion.

And we never see this kind of rise unless the U.S. economy is heading into a recession. Here is more from Wolf Richter…

Note how, in this chart by the Board of Governors of the Fed, delinquencies of C&I loans start rising before recessions (shaded areas). I added the red marks to point out where we stand in relationship to the Lehman moment:

Business loan delinquencies are a leading indicator of big economic trouble.

To me, this couldn’t be any clearer.

Just like the U.S. government and just like U.S. consumers, U.S. businesses are absolutely drowning in debt.

In fact, a report that was just released found that debt at U.S. companies has been growing at a pace that is 50 times faster than the rate that cash has been growing.

Just imagine what it would mean for your family if your debt was growing 50 times faster than your bank account. Needless to say, this is an extremely troubling development…

Well, American companies may just have a mountain’s worth of problems, according to a new report from Andrew Chang and David Tesher of S&P Global Ratings.

“At the same time, the imbalance between cash and debt outstanding we reported on last year has gotten even worse: Debt outstanding increased 50x that of cash in 2015,” wrote Chang and Tesher.

“Total debt rose by roughly $850 billion to $6.6 trillion last year, dwarfing the 1% cash growth ($17 billion).”

And the really bad news is that banks all across the country are starting to tighten credit to businesses.

In other words, they are beginning to become much more reluctant to loan money to businesses because debts are going bad at such an alarming rate.

When the flow of credit to the business community starts to slow down, it is inevitable that the overall economy slows down as well. It is just basic economics. So the deterioration of the U.S. economy that we have witnessed so far is just the beginning of a process that is going to take quite a while to play out.

And let us not forget that most of the rest of the world is already is much worse shape than we are. Most global financial markets are officially in bear market territory right now, and some nations are already experiencing full-blown economic depression.

Now that the early chapters of the “next crisis” are here, most American families find themselves ill-equipped to deal with another major downturn. In fact, USA Today is reporting that approximately two-thirds of the country is currently living paycheck to paycheck…

Two-thirds of Americans would have difficulty coming up with the money to cover a $1,000 emergency, according to an exclusive poll, a signal that despite years after the Great Recession, Americans’ finances remain precarious as ever.

These difficulties span all incomes, according to the poll conducted by The Associated Press-NORC Center for Public Affairs Research. Three-quarters of people in households making less than $50,000 a year and two-thirds of those making between $50,000 and $100,000 would have difficulty coming up with $1,000 to cover an unexpected bill.

What are these people going to do when they lose their jobs or their businesses go under?

If you have any doubt that the U.S. economy is already in recession mode, just look at this chart over and over.

For months, I have been warning that the same patterns that immediately preceded previous recessions were happening once again, and this rise in debt delinquencies is another striking example of this phenomenon.

This stuff isn’t complicated. Anyone that is willing to be honest with themselves should be able to see it. As a society, we have been making very, very bad decisions for a very, very long period of time, and what we are watching unfold right now are the inevitable consequences of those decisions.

*About the author: Michael Snyder is the founder and publisher of The Economic Collapse Blog. Michael’s controversial new book about Bible prophecy entitled “The Rapture Verdict” is available in paperback and for the Kindle on Amazon.com.*

11 Signs That The U.S. Economy Is Rapidly Deteriorating Even As The Stock Market Soars

May 10, 2016May 10, 2016 by Michael

We have seen this story before, and it never ends well. From mid-March until early May 2008, a vigorous stock market rally convinced many investors that the market turmoil of late 2007 and early 2008 was over and that happy days were ahead for the U.S. economy. But of course we all know what happened. It turned out that the market downturns of late 2007 and early 2008 were just “foreshocks” of a much greater crash in late 2008. The market surge in the spring of 2008 was just a mirage, and it masked rapidly declining economic fundamentals. Well, the exact same thing is happening right now. The Dow rose another 222 points on Tuesday, but meanwhile virtually every number that we are getting is just screaming that the overall U.S. economy is steadily falling apart. So don’t be fooled by a rising stock market. Just like in the spring of 2008, all of the signs are pointing to an avalanche of bad economic news in the months ahead. The following are 11 signs that the U.S. economy is rapidly deteriorating…

#1 Total business sales have been declining for nearly two years, and they are now about 15 percent lower than they were in late 2014.

#2 The inventory to sales ratio is now back to near where it was during the depths of the last recession. This means that there is lots and lots of unsold stuff just sitting around out there, and that is a sign of a very unhealthy economy.

#3 Corporate earnings have declined for four consecutive quarters. This never happens outside of a recession.

#4 Profits for companies listed on the S&P 500 were down 7.1 percent during the first quarter of 2016 when compared to the same time period a year ago.

#5 In April, commercial bankruptcies were up 32 percent on a year over year basis, and Chapter 11 filings were up 67 percent on a year over year basis. This is exactly the kind of spike that we witnessed during the initial stages of the last major financial crisis as well.

#6 U.S. rail traffic was 11 percent lower last month than it was during the same month in 2015. Right now there are 292 Union Pacific engines sitting idle in the middle of the Arizona desert because there is literally nothing for them to do.

#7 The U.S. economy has lost an astounding 191,000 mining jobs since September 2014. For areas of the country that are heavily dependent on mining, this has been absolutely devastating.

#8 According to Challenger, Gray & Christmas, U.S. firms announced 35 percent more job cuts during April than they did in March. This indicates that our employment problems are accelerating.

#9 So far this year, job cut announcements are running 24 percent above the exact same period in 2015.

#10 U.S. GDP grew at just a 0.5 percent annual rate during the first quarter of 2016. This was the third time in a row that the GDP number has declined compared to the previous quarter, and let us not forget that the formula for calculating GDP was changed last year specifically to make the first quarter of each year look better. Without that “adjustment”, it is quite possible that we would have had a negative number for the first quarter.

#11 Barack Obama is poised to become the first president in U.S. history to never have a single year during his time in office when the economy grew by more than 3 percent.

But you never hear Obama talk about that statistic, do you?

And the mainstream media loves to point the blame at just about anyone else. In fact, the Washington Post just came out with an article that is claiming that the big problem with the economy is the fact that U.S. consumers are saving too much money…

The surge in saving is the real drag on the economy. It has many causes. “People got a cruel lesson about [the dangers] of debt,” says economist Matthew Shapiro of the University of Michigan. Households also save more to replace the losses suffered on homes and stocks. But much saving is precautionary: Having once assumed that a financial crisis of the 2008-2009 variety could never happen, people now save to protect themselves against the unknown. Research by economist Mark Zandi of Moody’s Analytics finds higher saving at all income levels.

So even though half the country is flat broke, I guess we are all supposed to do our patriotic duty by going out and running up huge balances on our credit cards.

What a joke.

Of course the U.S. economy is actually doing significantly better at the moment than almost everywhere else on the planet. Many areas of South America have already plunged into an economic depression, major banks all over Europe are in the process of completely melting down, Japanese GDP has gone negative again despite all of their emergency measures, and Chinese stocks are down more than 40 percent since the peak of the market.

This is a global economic slowdown, and just like in 2008 it is only a matter of time before the financial markets catch up with reality. I really like how Andrew Lapthorne put it recently…

On the more bearish slant is Andrew Lapthorne, head of quantitative strategy at Societe Generale. To him this profit downturn is a sign that stocks are far too overvalued and the economy is weaker than you think.

“MSCI World EPS is now declining at the fastest pace since 2009, losing 4% in the last couple of months alone (this despite stronger oil prices),” wrote Lapthorne in a note. For the S&P 500 specifically, the year on year drop in profit drop was the most since third quarter of 2009.

“Global earnings are now 14% off the peak set in August 2014 and back to where they stood five years ago. Equity prices on the other hand are 25% higher. Gravity beckons!”

I couldn’t have said it better myself.

Look, this is not a game.

So far in 2016, three members of my own extended family have lost their jobs. Businesses are going under at a pace that we haven’t seen since 2008, and this means that more mass layoffs are on the way.

We can certainly be happy that U.S. stocks are doing okay for the moment. May it stay that way for as long as possible. But anyone that believes that this state of affairs can last indefinitely is just being delusional.

Gravity beckons, and the crash that is to come is going to be a great sight to behold.

All Of A Sudden, Fish Are Dying By The MILLIONS All Over The Planet

May 8, 2016May 8, 2016 by Michael

Why are millions upon millions of dead sea creatures suddenly washing up on beaches all over the world? It is certainly not unusual for fish and other inhabitants of our oceans to die. This happens all the time. But over the past month we have seen a series of extremely alarming mass death incidents all over the planet. As you will see below, many of these mass death incidents have involved more than 30 tons of fish. In places such as Chile and Vietnam, it has already gotten to the level where it has started to become a major national crisis. People see their coastlines absolutely buried in dead sea creatures, and they are starting to freak out.

For example, just check out what is going on in Chile right now. The following comes from a Smithsonian Magazine article entitled “Why Are Chilean Beaches Covered With Dead Animals?“…

Compared to other countries, Chile is almost all coast, and that geographical fluke means that the country is known for its beautiful beaches. But that reputation may be on the wane thanks to a new sight on Chilean shores: dead animals. Lots of them. Heaps of them, in fact. As Giovanna Fleitas reports for the Agence France-Presse, the South American country’s beaches are covered with piles of dead sea creatures—and scientists are trying to figure out why.

Tales of dead animals washing up on shore are relatively common; after all, the ocean has a weird way of depositing its dead on shore. But Chile’s problem is getting slightly out of hand. As Fleitas writes, recent months have not been kind to the Chilean coast, which has played host to washed-up carcasses of over 300 whales, 8,000 tons of sardines, and nearly 12 percent of the country’s annual salmon catch, to name a few.

Authorities in Chile are scrambling to come up with a reason for why this is happening, but nobody appears to be quite sure what is causing this tsunami of death.

In Vietnam, things are even worse. At this point, so many dead fish and clams have been washing up along the coast that soldiers have been deployed to bury them…

Millions of fish have washed up dead along a 125-kilometre stretch of the Vietnamese coast in one of the communist country’s worst environmental disasters.

Soldiers have been deployed to bury tonnes of fish, clams and the occasional whale that began dying in early April along the north-central coast, including some popular tourist beaches.

Vietnamese officials facing growing anger over the disaster have not announced the official cause of the deaths, which have affected the livelihoods of tens of thousands of families.

Elsewhere in Asia, there have been similar incidents. For example, CNN is reporting that one lake in southern China is currently dealing with 35 tons of dead fish…

At least 35 tons of dead fish appeared in a lake in southern China, leaving residents stunned.

The piles of fish washed up in a lake in Hainan province on Wednesday, Chinese state media reported.

Residents expressed concerns on pollution, but local authorities said the fish died as a result of salinity change.

On the other side of the world, similar incidents have also happened in major lakes. Here is one example from Bolivia…

Thousands of dead fish have washed up onto the shores of a lake in Bolivia.

Just before they died, some of the fish had just hatched from their eggs in lake Alalay, in the central Bolivian city of Cochabamba.

No one yet knows the number of dead fish, but they have stockpiled five cubic metres (177 cubic feet) so far, so it’s possible there is over a tonne of dead fish in the lake.

And here is an example from Brazil…

More than 200 tons of dead fish were removed from the Furnas Lake on Sunday (1st) in Alfenas (MG). According to the Military Police of the Environment, both fish raised in ponds, networks and those who are released, all of the tilapia species in the lake were affected. The damage to the psicultores is estimated at around R $ 900 thousand.

I could go on and on all day with examples such as these.

Just within the last month, 40 tons of fish died in India, 65 tons of fish died in Cambodia, 70 tons of fish died in Colombia, and millions of fish “suddenly died” in Indonesia.

So why is this happening?

I don’t know.

Could it be possible that these mass deaths are somehow related to the alarming earth changes that we see happening all around us?

Without a doubt, we have seen a dramatic rise in seismic activity during the early portions of 2016. There has been a series of very destructive earthquakes around the world in recent months, and once dormant volcanoes are coming to life all over the globe with distressing regularity.

Of course humanity has done much to destroy the planet as well, and we continue to deal with the aftermath of the Fukushima nuclear disaster. I do think that it is very interesting to note that most of these mass fish deaths have happened in nations that border the Pacific Ocean.

I am certainly not claiming to have an answer for why so many fish are dying. All I know is that millions upon millions of dead fish are washing up on shores all over the globe, and people are really starting to freak out about this.

We live in a world that is becoming increasingly unstable, and major disasters seem to be getting more frequent and more intense. Just look at what is happening up in Alberta right now.

I believe that we are entering the “perfect storm” that myself and so many others have been warning about for so long.

Or could it be possible that I am just being overly dramatic?

Please feel free to tell us what you think by posting a comment below…

Economic Collapse Is Erupting All Over The Planet As Global Leaders Begin To Panic

April 10, 2016 by Michael

Mainstream news outlets are already starting to use the phrase “economic collapse” to describe what is going on in some areas of our world right now. For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse. In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.

Let’s start with Brazil. It has the 7th largest economy on the entire planet, and it is already enduring its worst recession in 25 years. In fact, at the end of last year Goldman Sachs said that what was going on down there was actually a “depression“.

But now the crisis in Brazil has escalated significantly.

I want to share with you an excerpt from a recent article entitled “Brazil: Economic collapse worse than feared“. I know, that title sounds like it comes directly from The Economic Collapse Blog, but I didn’t write it.

It actually comes from CNN…

Amid political chaos, Brazil’s economic collapse is worse than its government once believed.

In the midst of rising calls to impeach President Dilma Rousseff, Brazil’s central bank announced Thursday that it now expects the country’s economy to shrink 3.5% this year.

That’s worse than the central bank’s previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America’s largest country — and what many independent economists have suspected.

It is one thing for Michael Snyder to tell you that Brazil is in the midst of “economic collapse”, but it is another thing entirely for CNN to say it.

And of course I have been warning about the crisis down in Brazil for quite some time now. For much more on this, please see my previous article entitled “The Economic Collapse Of South America Is Well Underway“.

Meanwhile, things are actually much worse in Venezuela than they are in Brazil. Food and basic supplies are in short supply, the inflation rate has hit 720 percent, and crime is completely out of control.

The following is from an article in the Independent entitled “Venezuela is on the brink of complete economic collapse“…

The only question now is whether Venezuela’s government or economy will completely collapse first.

The key word there is “completely.” Both are well into their death throes. Indeed, Venezuela’s ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it’s hard to see that getting any better for them any time soon — or ever.

Incumbents, after all, don’t tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It’s no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.

Once again we see a very respected mainstream publication using the phrase “economic collapse” to describe what is happening in South America.

You can find some stunning video of the “economic Armageddon” that is taking place in Venezuela right here. I would encourage you to watch that video, because what is happening down there will eventually be happening here.

Meanwhile, over in Europe the collapse of the Italian banking system has entered a disturbing new chapter. Italy’s finance minister has called a meeting in Rome for Monday that will be focusing on a “last resort” bailout plan for the troubled banks…

Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy’s largest financial institutions to agree final details of a “last resort” bailout plan.

Yet on the eve of that gathering, concerns remain as to whether the plan will be sufficient to ringfence the weakest of Italy’s large banks, Monte dei Paschi di Siena, from contagion, according to people involved in the talks.

Italian bank shares have lost almost half their value so far this year amid investor worries over a €360bn pile of non-performing loans — equivalent to about a fifth of GDP. Lenders’ profitability has been hit by a crippling three-year recession.

As Italy descends into financial chaos, the rest of the continent better be paying attention.

Do you remember how hard it was for the rest of Europe to rescue Greece?

Well, Greece has the 44th largest economy on the planet.

Italy has the 8th.

It would be hard to overstate the seriousness of what is going on over in Europe, and it is not just Italy we are talking about. All over the continent major banks are in deep trouble, and the chairman of France’s second largest retail bank recently told reporters that “I am much more worried than I was in 2009“.

And there is very good reason for concern. On Sunday, we learned that a major “bail-in” had just been announced for one of Austria’s most prominent banks. The following comes from Zero Hedge…

And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.

The highlights from the announcement:

Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:

a 100% bail-in for all subordinated liabilities,

a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,

the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,

as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.

According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.

The dominoes are starting to fall in Europe, and I would expect even bigger announcements in the weeks and months to come.

Over in Asia, economic chaos is beginning to prevail as well.

In China, the stock market is already down more than 40 percent from the peak, Chinese exports were down 25.4 percent on a year over year basis in February, and Chinese economic numbers overall have not been this poor since the depths of the last global recession.

At the same time, the Japanese economy is really struggling right now. As I wrote about the other day, Japanese GDP has shrunk for two out of the last three quarters, we just saw Japanese industrial production experience the biggest one month decline that we have witnessed since the tsunami of 2011, and business sentiment has fallen to a three year low. The Nikkei has dropped by about 5,000 points from where it was last summer, and some analysts believe that Japanese markets “are being destroyed” due to massive intervention by the Bank of Japan.

Here in the United States, we haven’t been hit quite as hard as the rest of the world just yet, but there are lots of very disturbing warning signs all around us.

At the end of last week, we learned that it is being projected that U.S. GDP will have grown by just 0.1 or 0.2 percent during the first quarter of 2016. And on Monday corporate earnings reporting season begins, and it is expected to be a very, very bad one. The following comes from Business Insider…

We are about to get confirmation that earnings growth for America’s biggest companies was negative in the first quarter, compared to the same period a year ago.

When aluminum giant Alcoa releases its results on Monday, it will mark the unofficial start of the heaviest reporting season for S&P 500 companies.

The final scoreboard is expected to show a 9.1% earnings drop for the quarter, according to FactSet senior earnings analyst John Butters.

If these projections turn out to be accurate, it will be the fourth quarter in a row of earnings declines. This is something that we never see outside of a recession.

And for a whole bunch more numbers which indicate that the U.S. economy is in very serious trouble, please see my previous article entitled “19 Facts That Prove Things In America Are Worse Than They Were Six Months Ago“.

Of course I am just another voice in the crowd when it comes to predicting that the U.S. economy is headed for rough times. For example, just check out what Societe Generale economist Albert Edwards is saying…

A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it’s going to throw the economy into recession.

…the profit recession facing American corporations is going to lead to a collapse in corporate credit.

“Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red”

…

He continued:

Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.

As you can see, it isn’t just one nation or one region of the world that we need to be concerned about.

Economic chaos is erupting literally all over the planet, and global leaders are starting to panic.

Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn’t get the job done. Anyone that believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be okay is simply engaged in wishful thinking.

23 Percent Of Americans In Their Prime Working Years Are Unemployed

March 28, 2016March 27, 2016 by Michael

Did you know that when you take the number of working age Americans that are officially unemployed (8.2 million) and add that number to the number of working age Americans that are considered to be “not in the labor force” (94.3 million), that gives us a grand total of 102.5 million working age Americans that do not have a job right now? I have written about this before, but today I want to focus just on Americans that are in their prime working years. When you look at only Americans that are from age 25 to age 54, 23.2 percent of them are unemployed right now. The following analysis and chart come from the Weekly Standard…

Here’s a chart showing those in that age group currently employed (95.6 million) and those who aren’t (28.9 million):

“There are 124.5 million Americans in their prime working years (ages 25–54). Nearly one-quarter of this group—28.9 million people, or 23.2 percent of the total—is not currently employed. They either became so discouraged that they left the labor force entirely, or they are in the labor force but unemployed. This group of non-employed individuals is more than 3.5 million larger than before the recession began in 2007,” writes the Republican side of the Senate Budget Committee.

Clearly, we have never recovered from the impact of the last recession.

But let’s try to put these numbers in context.

Below, I would like to share two charts with you. They show what has happened to the inactivity rates for men and for women in their prime working years in the United States in recent years.

In order to be considered “inactive”, you can’t have a job and you can’t be looking for a job. So this subset of people is smaller than the group that we were talking about above. The 23.2 percent of Americans in their prime working years that are unemployed right now includes those that are looking for a job and those that are not looking for a job.

These next two charts do not include anyone that has a job or that is currently looking for a job. These charts only cover “inactive” people in their prime working years that are not considered to be in the labor force.

As you can see in this first chart, the inactivity rate for men in their prime working years exploded higher during the last recession and then continued to go up even after the recession supposedly ended. At this point, it is hovering near all-time record highs. Does this look like an “economic recovery” to you?…

For women, we see a similar thing. In this next chart, you can see that the inactivity rate for women in their prime working years rose during the last recession and then just kept on rising. At this point, it remains far higher than it was during the last recession…

What are we to make of all this?

For both men and women in their prime working years, the inactivity rate is significantly higher than it was during the last recession.

All of these people neither have a job nor are they looking for one.

So what in the world is going on here?

Are they independently wealthy?

Have these people found rich spouses to marry so they don’t have to work?

No, the truth is that the middle class in America is steadily eroding and poverty is absolutely exploding. Credit card debt has soared to a new record high, and 48 percent of all U.S. adults under the age of 30 believe that “the American Dream is dead”.

The issue isn’t that people don’t want to work.

The issue is that people cannot find enough work.

And even if you have a job, that does not mean that you are on easy street. According to the Social Security Administration, 51 percent of all American workers make less than $30,000 a year.

Tens of millions of Americans are now among the ranks of “the working poor”. So many families are watching their expenses soar while their paychecks go down or stagnate. If you are in this situation right now, then you probably know how exceedingly stressful it can be.

Just look at what is happening to the cost of health insurance. The following comes from Fox News…

Health insurance premiums have increased faster than wages and inflation in recent years, rising an average of 28 percent from 2009 to 2014 despite the enactment of Obamacare, according to a report from Freedom Partners.

And I am not exactly sure where they got those numbers. Personally, I know that my health insurance rates have gone up far faster than that.

Two years ago, my health insurance company wanted to double the health insurance premiums for my family even though we never get sick. So I switched to another insurance company that offered a policy that was only about 30 percent higher than my last one. But then when it came time to renew, that insurance company wanted to raise my rate by another 50 percent.

Thanks to Obamacare, American families are being absolutely crippled by the cost of health care. And of course we are seeing the rising cost of living so many other places as well. Our paychecks are being squeezed harder and harder, and this is absolutely killing the middle class. In fact, the middle class in America is now a minority for the first time ever.

And now for the real bad news – this is about as good as things are ever going to get in this country. As you can see from what I have shared above, we never really had any sort of meaningful “economic recovery”, and now we have entered the early phases of the next major downturn.

So where do we go from here? Unfortunately, our debt-fueled prosperity has provided us with a massively inflated standard of living that is not even close to sustainable. As this bubble bursts, the economic pain is going to be absolutely unprecedented.

But it won’t be just economic pain that we are facing. In my new book, I detail the things that I believe that are coming to this country, and I explain why the entire planet will soon be facing incredibly challenging times. It is going to be one of the most controversial Christian books of 2016, because it directly challenges many of the things that are being taught in mainstream churches today. My book is an ominous message of warning and an inspiring message of hope, and I truly believe that it is the most important thing that I have ever written.

No matter how you may see the future, the key is that we all learn to love one another. The years ahead are going to be extremely challenging, and those that want to chase everyone else away and survive as lone wolves are going to have a very rough time. We all need each other, and those that have friends, family and communities around them are going to be in a much better position to weather the coming storms.

So let us hope for the best, but let us also prepare for the worst…

Do Not Despise Small Beginnings – An Incredible True Story That You May Find Hard To Believe

February 18, 2016February 18, 2016 by Michael

It has been said that a journey of a thousand miles begins with a single step. Well, I would like to share a little bit of my journey with you, and hopefully this will inspire someone out there. We live in a day and age when you don’t have to be a celebrity to make a difference. I know this is true because ten years ago I was about as anonymous as you could possibly get. I was newly married and working as a lawyer in the heart of Washington D.C. not too far from the White House. That may sound glamorous to you, but it definitely was not. Approximately one out of every 12 residents of D.C. is a lawyer according to some estimates, and so they are a dime a dozen. And my work was about as meaningless as you could get. If there was a lawyer version of a toilet scrubber, that would have been me. Nobody knew who I was, and nobody cared who I was. I was having no real measurable impact on the world around me, but I wanted to. I just didn’t know how.

In 2008, I started to look into something called blogging. I learned that there were more than a million blogs already on the Internet by that time, and so I had no idea why anyone would possibly want to read anything that I had to say, but I decided to try it. I began with a few free Blogger blogs, and my readership in those days could have been measured with a magnifying glass.

But I stuck with it.

And that is one of the keys to success in any area of life. So many people give up if they don’t have immediate success. And that is so sad, because all “overnight success stories” had to start somewhere.

So do not despise small beginnings – they can ultimately lead to something great.

Eventually my readership began to grow, and the real turning point for me came when I left the legal world at the end of 2009 and started The Economic Collapse Blog. Of course that had very humble beginnings as well. The first month the site was live I only had about 4,800 pageviews. But that was a whole lot more than I had before.

Very early on I decided that I was going to try to put out the highest quality articles that I could possibly write, and people really responded to that. They knew that they weren’t getting straight answers about the economy from the mainstream media, and they were seeking out alternative sources of information. We have seen the “alternative media” absolutely explode in recent years, and I am proud to be part of that revolution.

In early 2010, my wife and I decided to take a leap and move across the country to a little town outside of Seattle, Washington. We didn’t really have much money, so it was kind of a crazy thing to do. But we felt called to do it, so by faith we packed up our lives and moved all the way across the continent. We figured that I could make a little money writing and she could make a little money painting furniture and we could figure out a way to survive somehow.

We spent a little over a year out near Seattle, and during that time The Economic Collapse Blog started to grow by leaps and bounds. We also had other websites such as End Of The American Dream and The Most Important News that were really starting to grow as well, and so we felt secure enough to seek out a more permanent home. That was always the plan anyway, because we wanted to get away from the large population centers.

God eventually led us to a wonderful home in the mountains in a very isolated part of the northwest United States. And my wife and I both agree that this is the best place that either of us have ever lived. We absolutely love the peace and quiet, and the view that we have across the valley is priceless. I could have very easily sat up on that mountain living a very quiet life for the rest of my days and been very happy.

But God had other things in mind for us. When we moved up there, we believed that God was instructing us to prepare for what He wanted us to do. So we studied, and we prayed and we kept working on our websites. And then we studied, and we prayed and we worked some more. We never knew what kinds of doors God was going to open up for us. By faith we just tried to do what we believed that He was instructing us to do.

And of course many of you already know about the amazing doors that God has been opening up for us over the past few years. He is doing things that I never even would have imagined asking Him to do.

The reason why I am sharing all of this is to say that if someone like me can be used to make a difference, so can you.

If a completely anonymous Washington D.C. lawyer can move to the mountains in the middle of nowhere and be used to touch millions of lives all over the planet, that just shows that all things are possible with God.

Of course not everyone has a talent for writing. But we all have some way to make a difference. Individually, each one of us in limited, but collectively we can make a massive difference in this world if we are willing to work together.

When I was growing up, I wanted to be a rock star someday, but to this day I still don’t have any musical talent. However, there are people out there with amazing gifts in that area, and I often find myself in awe of their talents.

Other people can make a different in other areas. What some people are about to do with YouTube videos absolutely amazes me. Others write gripping novels or host amazing radio shows. And yet others organize street protests or get heavily involved in local politics.

We all have different gifts and abilities, and we all have ways that we can make a difference.

Part of my message is to warn people about the incredibly hard times that are coming, but part of my message is also to give hope to people so that they can come through those hard times.

You may choose to curse the darkness when it comes, but I plan on lighting a candle.

No matter how bad things get, I will not bend, I will not break and I will not fear. It is when times are the darkest that the greatest heroes are needed, and we need people that are going to be willing to face the great challenges that are coming with tremendous strength and courage.

Even in the midst of all of the chaos and all of the darkness, my wife and I believe that the greatest chapters of our lives are still ahead of us.

And we invite you to work with us to make a difference. God took the broken pieces of my life and turned them into a beautiful thing, and He can do the same thing for you.

No matter how hard things may seem right now, please do not give up.

It’s not over.

In fact, your future is only just beginning, and all things are possible…

If The Economy Is Fine, Why Are So Many Hedge Funds, Energy Companies And Large Retailers Imploding?

November 18, 2015November 18, 2015 by Michael

If the U.S. economy really is in “great shape”, then why do all of the numbers keep telling us that we are in a recession? The manufacturing numbers say that we are in a recession, the trade numbers say that we are in a recession, and as you will see below the retail numbers say that we are in a recession. But just like in 2008, the Federal Reserve and our top politicians will continue to deny that a major economic downturn is happening for as long as they possibly can. In this article, I want to look at more signs that a dramatic shift is happening in our economy right now.

First of all, let’s consider what is happening to hedge funds. For many years, hedge funds had been doing extremely well, but now they are closing up shop at a pace that we haven’t seen since the last financial crisis. The following is an excerpt from a Business Insider article entitled “Hedge funds keep on imploding” that was posted on Wednesday…

BlackRock is winding down its Global Ascent Fund, a global macro hedge fund that once contained $4.6 billion in assets, according to Bloomberg’s Sabrina Willmer.

“We believe that redeeming the Global Ascent Fund was the right thing to do for our clients, given the headwinds that macro funds have faced,” a BlackRock spokeswoman told Business Insider.

The winding down of the Ascent fund is the second high-profile hedge fund closing in 24 hours. The Wall Street Journal reported Tuesday that Achievement Asset Management, a Chicago-based hedge fund, was closing.

And those are just two examples. Quite a few other prominent hedge funds have shut down recently, and many are wondering if this is just the beginning of a major “bloodbath” on Wall Street.

Another troubling sign is the implosion of so many energy companies. Just like in 2008, a major crash in the price of oil is hitting the energy sector really hard. Just check out these stock price declines…

-Cabot Oil & Gas down 37.27 percent over the past 12 months

-Southwestern Energy down 68.11 percent over the past 12 months

-Chesapeake Energy down 73.98 percent over the past 12 months

A number of smaller energy companies have already gone out of business, and several of the big players are teetering on the brink. If the price of oil does not rebound significantly very soon, it is just a matter of time before the dominoes begin to fall.

We are also seeing tremendous turmoil in the retail industry. The following comes from Investment Research Dynamics…

The retail sales report for October was much worse than expected. Not only that, but the Government’s original estimates for retail sales in August and September were revised lower. A colleague of mine said he was chatting with his brother, who is a tax advisor, this past weekend who said he doesn’t understand how the Government can say the economy is growing (Hillary Clinton recently gave the economy an “A”) because his clients are lowering their estimated tax payments. Businesses lower their estimated tax payments when their business activity slows down.

The holiday season is always the best time of the year for retailers, but in 2015 there is a lot of talk of gloom and doom. Most large retailers will not start announcing mass store closings until January or February, but without a doubt many analysts are anticipating that once we get past the Christmas shopping season we will see stores shut down at a pace that we haven’t seen since at least 2009. Here is more from the article that I just quoted above…

Retail sales this holiday season are setting up to be a disaster. Already most retailers are advertising “pre-Black Friday” sales events. Remember when holiday shopping didn’t begin, period, until the day after Thanksgiving? Now retailers are going to cannibalize each other with massive discounting before Thanksgiving. Anybody notice over the weekend that BMW is now offering $6500 price rebates? The collapsing economy is affecting everyone, across all income demographics.

Last week we saw the stocks of Macy’s, Nordstrom and Advance Auto Parts do cliff-dives after they announced their earnings. I mentioned to a colleague that the Nordstrom’s report should be the most troubling for analysts. Nordstrom in their investor conference call said that they began seeing an “unexplainable slowdown in sales in August in transactions across all formats, across all catagories and across all geographies that has yet to recover.”

I think that a chart would be helpful to give you an idea of how bad things have already gotten. Jim Quinn shared this in an article that he just posted, and it shows the change in retail sales once you remove the numbers for the auto industry. As you can see, the numbers have never been this dreadful outside of a recession…

But stocks went up 247 points on Wednesday so everything must be great, right?

Wrong.

The stock market has never been a good barometer for the overall economy, and this is especially true these days.

In 2008, stocks didn’t crash until well after the U.S. economy as a whole started crashing, and the same thing is apparently happening this time around as well.

One of the things that is keeping stocks afloat for the moment is stock buybacks. In recent years, big corporations have spent hundreds of billions of dollars buying back their own stocks. The following comes from Wolf Richter…

IBM has blown $125 billion on buybacks since 2005, more than the $111 billion it invested in capital expenditures and R&D. It’s staggering under its debt, while revenues have been declining for 14 quarters in a row. It cut its workforce by 55,000 people since 2012. And its stock is down 38% since March 2013.

Big-pharma icon Pfizer plowed $139 billion into buybacks and dividends in the past decade, compared to $82 billion in R&D and $18 billion in capital spending. 3M spent $48 billion on buybacks and dividends, and $30 billion on R&D and capital expenditures. They’re all doing it.

Later in that same article, Richter explains that almost 60 percent of all publicly traded non-financial corporations have engaged in stock buybacks over the past five years…

Nearly 60% of the 3,297 publicly traded non-financial US companies Reuters analyzed have engaged in share buybacks since 2010. Last year, the money spent on buybacks and dividends exceeded net income for the first time in a non-recession period.

Big corporations like to do this for a couple of reasons. Number one, it pushes the price of the stock higher, and current investors appreciate that. Number two, corporate executives are usually in favor of conducting stock buybacks because it increases the value of their stock options and their own stock holdings.

But now corporate profits are falling and it is becoming tougher for big corporations to borrow money. So look for stock buybacks to start to decline significantly.

Even though it is taking a bit longer than many would have anticipated, the truth is that we are right on track for a massive financial collapse.

All of the indicators that I watch are flashing red, and even though things are moving slowly, they are definitely moving in the same direction that we saw in 2008.

But just like in 2008, there will be people that mock the warnings up until the day when it becomes completely and utterly apparent that the mockers were dead wrong.

Russia’s New ‘Nuclear Torpedo’ Can Create Giant Tsunamis And Wipe Out Entire Coastal Cities

November 16, 2015November 16, 2015 by Michael

While the eyes of the world are on ISIS, Russia is creating weapons unlike anything the world has ever seen before. Plans for a giant self-propelled nuclear torpedo that can create a giant tsunami more than 1,000 feet tall were recently “leaked by mistake” by the Russian media. Apparently the warheads on these torpedos are designed to create so much radiation “that everything living will be killed” – including those that try to survive the attack by hiding in underground shelters. These “robotic mini-submarines” would have a range of up to 10,000 kilometers and would be able to evade all existing U.S. detection systems. To say that such a weapon would be a “game changer” would be a massive understatement.

I know that you are not just going to take my word for any of this. So like I do in all of my articles, I am going to carefully document what I am saying.

The reason why we know about the plans for this new nuclear torpedo is because they were displayed on Russian state television for a few moments during a recent broadcast. According to Russian officials, this was an “accident”. The following comes from a report in the Independent…

Secret plans for a new Russian nuclear torpedo system have been shown on state-controlled television in what the Kremlin said was an accident.

A close-up of a confidential document detailing “Ocean Multipurpose System: Status-6” was broadcast for several seconds by Channel One Russia and NTV during coverage of a meeting between Vladimir Putin and military officials.

Could it be possible that this “accident” happened on purpose?

Could it be possible that it was intended as a warning for the Obama administration?

You never know.

But without a doubt, this is the kind of weapon that would keep military planners up at night. According to RT, this new nuclear torpedo is designed to create “extensive zones of radioactive contamination” that would ensure that no “military, economic, business or other activity” would occur in that area for a very long time…

The presentation slide titled “Ocean Multipurpose System: Status-6” showed some drawings of a new nuclear submarine weapons system. It is apparently designed to bypass NATO radars and any existing missile defense systems, while also causing heavy damage to “important economic facilities” along the enemy’s coastal regions.

The footnote to the slide stated that Status-6 is intended to cause “assured unacceptable damage” to an adversary force. Its detonation “in the area of the enemy coast” would result in “extensive zones of radioactive contamination” that would ensure that the region would not be used for “military, economic, business or other activity” for a “long time.”

In addition, Konstantin Sivkov of the Russian Geopolitical Academy told the BBC that this kind of weapon could be used to create a tsunami more than 1,000 feet high…

“A warhead of up to 100 megatons could produce a tsunami up to 500m (1,650ft) high, wiping out all living things 1,500km (930 miles) deep inside US territory“

As I have written about previously, a whopping 39 percent of all Americans live in counties that directly border a shoreline. The detonation of just a handful of these weapons could wipe out the entire east coast and kill off a very substantial percentage of the U.S. population.

On top of all that, the BBC is reporting that a state-run Russian publication is suggesting that these new torpedos are being fitted with extremely radioactive cobalt warheads…

According to state-run Rossiiskaya Gazeta, the destructive power attributed to the new torpedo’s warhead would fit the description of a cobalt bomb.

That would be a type of thermonuclear warhead with a layer of cobalt-59, which on detonation would be transmuted into highly radioactive cobalt-60 with a half-life longer than five years.

Such a weapon would guarantee “that everything living will be killed”, the paper said – there would not even be any survivors in bunkers.

A cobalt bomb has never been tested because of the devastating radiation it would unleash.

Worst of all, we would have no advance warning that these torpedos were coming. They can be launched from anywhere, they reportedly have a range of up to 10,000 kilometers, and they are designed to “avoid all acoustic tracking devices and other traps”…

On the diagram the giant torpedo’s range is given as “up to 10,000km” (6,200 miles) and depth of trajectory is “up to 1,000m” (3,300ft).

It was developed by Rubin, a submarine design bureau in St Petersburg.

It would, apparently, be launched by nuclear-powered submarines of the 09852 “Belgorod” and 09851 “Khabarovsk” series.

Rossiiskaya Gazeta called the torpedo a “robotic mini-submarine”, travelling at 100 knots (185km/h; 115mph), which would “avoid all acoustic tracking devices and other traps”.

We already know that Russia has been building “black hole submarines” that NATO officials admit are undetectable.

So Russia already has the capability to approach our coastlines without us even knowing about it.

But these new nuclear torpedos take the game to an entirely new level.

And of course this is not the only new weapons system that Russia has been developing in anticipation of World War III. Earlier this year, I discussed several more in an article entitled “The Next-Generation Weapons That Russia Will Use Against The United States In World War III“.

Sadly, the Obama administration seems almost totally oblivious to this threat. Our strategic nuclear forces are so outdated that floppy disks and rotary phones are still being used, and Barack Obama is fond of saying that “the Cold War’s been over for 20 years“.

Unfortunately for us, the Russians do not see things the same way. Anti-American sentiment inside Russia is at an all-time high, and every time the U.S. interferes in Syria or Ukraine the Russians get even angrier.

Just like we do, there are “talking heads” on Russian television that tell people what to think. And many of these “talking heads” on Russian television are openly talking about how war with the United States is inevitable. These days, the Russians consider themselves to be the great force for good in the world, and they consider America to be the great force for evil in the world. In fact, one of their most popular talking heads named Alexander Dugin has publicly called the U.S. the “kingdom of the Antichrist”.

And even though the Russian economy has dipped into recession, the Russians continue to feverishly prepare for war. This year alone, Russian military spending is up 33 percent.

Yes, ISIS is a far greater threat than most Americans would even dare to imagine as I discussed yesterday. In the times to come, I fully expect to see terror attacks inside this country unlike anything we have ever seen before.

But I am completely convinced that the greater long-term strategic threat is Russia.

The Russians are feverishly preparing for World War III while Barack Obama acts like it could never possibly happen.

Hopefully Obama is right, because if he is wrong the consequences for this nation will be absolutely unthinkable.

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