Recession

As China Settles In For A Long Trade War, Economic Pressure On Trump Continues To Grow

The trade war between the United States and China is increasingly weighing on the global economy, but unfortunately it does not appear that it will end any time soon.  Many pundits in the U.S. originally believed that the trade war would be short because the economic pain would be too much for the Chinese to handle.  But the truth is that the Chinese are not nearly as motivated by short-term concerns as we are.  They have always been long-term planners, and they are not afraid to set goals that may take multiple generations to achieve.  So they are not going to allow an angry American president that may be voted out of office by the end of next year to greatly alter their long-term economic strategies.

If an acceptable agreement could have been reached with Trump, the Chinese would have jumped at that opportunity.  But right now the two sides are so far apart that they are basically not even on the same playing field, and any additional “negotiations” are not going to change that.  However, the Chinese are likely to try to keep talks with the Trump administration alive in an attempt to prevent the trade war from escalating even more.  In essence, the Chinese are trying to minimize the damage while running out the clock on the Trump presidency.

So for China, this trade war has become an exercise in endurance, and this is something that a Fox Business article recently discussed…

Researchers from Deutsche Bank wrote a note over the weekend, explaining how they believe China appears to have shifted its strategy from a focus on “resolution to one of endurance.”

“We think China is neither aiming to quickly reach a trade deal, nor trying to hit back at the U.S. as hard as it can,” Deutsche Bank China Economist Yi Xiong wrote in a report. “Rather, China seems to have internalized the trade war as a given fact, and is trying to preserve China’s economic resilience under rising tariffs.”

Here in the U.S., we have become quite accustomed to sacrificing our long-term prosperity in order to avoid short-term pain, but the Chinese are simply not going to do that in this case.

Instead, they are going to work extremely hard to do what they can to bolster the Chinese economy internally while they wait for a more “reasonable” U.S. president to get elected.  The following comes from the South China Morning Post…

China will “enhance countercyclical measures in macroeconomic policies … to ensure sufficient liquidity and reasonable growth in credit,” according to a statement by the government’s Financial Stability and Development Commission on Sunday. The wording marked a subtle change from previous policy statements that called only for “appropriate” fine-tuning of monetary policy.

The statement did not mention the trade war with the US, but included specific guidelines on what China should do to manage its economy in the coming months. It urged financial institutions to help sell local government special bonds, with proceeds to be used for government-backed investment projects, while it also told local authorities to “fully tap investment potential”.

Unlike Chinese officials, President Trump has an upcoming election that he must deal with, and the longer this trade war persists the worse his re-election chances are going to become.

As I detailed yesterday, signs of economic trouble are erupting all around us, and the pain from this trade war is only going to become more intense as each new month passes.

So Trump is going to become increasingly desperate to get China to come to an agreement, and that may lead to some very rash decisions.  For example, it is being reported that he “wanted to double tariff rates on Chinese goods” after the Chinese responded to recent U.S. tariffs by imposing some of their own…

President Donald Trump wanted to double tariff rates on Chinese goods last month after Beijing’s latest retaliation in a boiling trade war before settling on a smaller increase, three sources told CNBC.

The president was outraged after he learned Aug. 23 that China had formalized plans to slap duties on $75 billion in U.S. products in response to new tariffs from Washington on Sept. 1. His initial reaction, communicated to aides on a White House trade call held that day, was to suggest doubling existing tariffs, according to three people briefed on the matter.

Unfortunately for Trump, no amount of pressure is going to get the Chinese to budge.

Yes, the Chinese will “talk” to U.S. officials as a delaying tactic, but they have already decided that they will never accept the sort of deal that Trump wants.

Meanwhile, our economic numbers just continue to deteriorate.  On Tuesday, we learned that a key measure of U.S. manufacturing just fell to the lowest level in three years…

A key U.S. factory gauge unexpectedly contracted for the first time since 2016, sending stocks and bond yields lower and boosting expectations for interest-rate cuts as global manufacturing woes deepen.

The Institute for Supply Management’s purchasing managers index fell to 49.1 in August, weaker than all forecasts in a Bloomberg survey of economists, data released Tuesday showed. Figures below 50 indicate the manufacturing economy is generally shrinking. The group’s gauge of new orders dropped to a more than seven-year low, while the production index hit the lowest since late 2015.

In response to that number and more troubling news about the trade war, U.S. stocks were sharply down…

Stocks fell on Tuesday, the first trading day of a historically tough month, after the world’s two largest economies began imposing new tariffs on each other’s goods. Weak manufacturing data also dented investor sentiment.

The Dow Jones Industrial Average closed 285.26 points lower, or 1.1%, at 26,118.02. The S&P 500 lost 0.7% to end the day at 2,906.27 while the Nasdaq Composite pulled back 1.1% to 7,874.16.

We have reached an absolutely critical moment in modern American history.  The largest financial bubble in our entire history is on the verge of bursting, and many believe that we could be on the precipice of an economic downturn even worse than what we experienced in 2008 and 2009.

A trade deal with China would greatly help the short-term outlook, but the Chinese are not willing to give Trump what he desires.  So the only way one will happen is if President Trump completely caves in, but I don’t see that happening.

That means that a tremendous amount of pain is ahead, and the American people are completely unprepared for that.

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.

28 Signs Of Economic Doom As The Pivotal Month Of September Begins

Since the end of the last recession, the outlook for the U.S. economy has never been as dire as it is right now.  Everywhere you look, economic red flags are popping up, and the mainstream media is suddenly full of stories about “the coming recession”.  After several years of relative economic stability, things appear to be changing dramatically for the U.S. economy and the global economy as a whole.  Over and over again, we are seeing things happen that we have not witnessed since the last recession, and many analysts expect our troubles to accelerate as we head into the final months of 2019.

We should certainly hope that things will soon turn around, but at this point that does not appear likely.  The following are 28 signs of economic doom as the pivotal month of September begins…

#1 The U.S. and China just slapped painful new tariffs on one another, thus escalating the trade war to an entirely new level.

#2 JPMorgan Chase is projecting that the trade war will cost “the average U.S. household” $1,000 per year.

#3 Yield curve inversions have preceded every single U.S. recession since the 1950s, and the fact that it has happened again is one of the big reasons why Wall Street is freaking out so much lately.

#4 We just witnessed the largest decline in U.S. consumer sentiment in 7 years.

#5 Mortgage defaults are rising at the fastest pace that we have seen since the last financial crisis.

#6 Sales of luxury homes valued at $1.5 million or higher were down five percent during the second quarter of 2019.

#7 The U.S. manufacturing sector has contracted for the very first time since September 2009.

#8 The Cass Freight Index has been falling for a number of months.  According to CNBC, it fell “5.9% in July, following a 5.3% decline in June and a 6% drop in May.”

#9 Gross private domestic investment in the United States was down 5.5 percent during the second quarter of 2019.

#10 Crude oil processing at U.S. refiners has fallen by the most that we have seen since the last recession.

#11 The price of copper often gives us a clear indication of where the economy is heading, and it is now down 13 percent over the last six months.

#12 When it looks like an economic crisis is coming, investors often flock to precious metals.  So it is very interesting to note that the price of gold is up more than 20 percent since May.

#13 Women’s clothing retailer Forever 21 “is reportedly close to filing for bankruptcy protection”.

#14 We just learned that Sears and Kmart will close “nearly 100 additional stores” by the end of this year.

#15 Domestic shipments of RVs have fallen an astounding 20 percent so far in 2019.

#16 The Labor Department has admitted that the U.S. economy actually has 501,000 less jobs than they previously thought.

#17 S&P 500 earnings per share estimates have been steadily falling all year long.

#18 Morgan Stanley says that the possibility that we will see a global recession “is high and rising”.

#19 Global trade fell 1.4 percent in June from a year earlier, and that was the biggest drop that we have seen since the last recession.

#20 The German economy contracted during the second quarter, and the German central bank “is predicting the third quarter will also post a decline”.

#21 According to CNBC, the S&P 500 “just sent a screaming sell signal” to U.S. investors.

#22 Masanari Takada is warning that we could soon see a “Lehman-like” plunge in the stock market.

#23 Corporate insiders are dumping stocks at a pace that we haven’t seen in more than a decade.

#24 Apple CEO Tim Cook has been dumping millions of dollars worth of Apple stock.

#25 Instead of pumping his company’s funds into the stock market, Warren Buffett has decided to hoard 122 billion dollars in cash.  This appears to be a clear indication that he believes that a crisis is coming.

#26 Investors are selling their shares in emerging markets funds at a pace that we have never seen before.

#27 The Economic Policy Uncertainty Index hit the highest level that we have ever seen in the month of June.

#28 Americans are searching Google for the term “recession” more frequently than we have seen at any time since 2009.

The signs are very clear, but unfortunately we live at a time when “normalcy bias” is rampant in our society.

If you are not familiar with “normalcy bias”, the following is how Wikipedia defines it…

The normalcy bias, or normality bias, is a belief people hold when considering the possibility of a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned. This may result in situations where people fail to adequately prepare themselves for disasters, and on a larger scale, the failure of governments to include the populace in its disaster preparations. About 70% of people reportedly display normalcy bias in disasters.[1]

For most Americans, the crisis of 2008 and 2009 is now a distant memory, and the vast majority of the population seems confident that brighter days are ahead even if we must weather a short-term economic recession first.  As a result, most people are not preparing for a major economic crisis, and that makes us extremely vulnerable.

In 2008 and 2009, the horrible financial crisis and the bitter recession that followed took most Americans completely by surprise.

It will be the same this time around, even though the warning signs are there for all to see.

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.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

About the author: Michael Snyder is a nationally-syndicated writer, media personality and political activist. He is the author of four books including Get Prepared Now, The Beginning Of The End and Living A Life That Really Matters. His articles are originally published on The Economic Collapse Blog, End Of The American Dream and The Most Important News. From there, his articles are republished on dozens of other prominent websites. If you would like to republish his articles, please feel free to do so. The more people that see this information the better, and we need to wake more people up while there is still time.

In The U.S., A Transportation Recession Has Already Officially Arrived

A transportation recession often precedes a recession for the entire economy, and while the debate about when the U.S. economy as a whole will plunge into a recession is quite vigorous right now, the truth is that the debate is over regarding when a transportation recession will begin.  Throughout 2017 and most of 2018, U.S. freight shipment volume was booming, and that was a very strong sign that overall economic activity was rising.  But when economic activity begins to decline, freight shipment volume often goes negative, and that is precisely what is happening right now.  In fact, U.S. freight shipment volume has now declined on a year over year basis for eight months in a row…

Freight shipments within the US by all modes of transportation – truck, rail, air, and barge – fell 5.9% in July 2019, compared to July 2018, the eighth month in a row of year-over-year declines, according to the Cass Freight Index for Shipments, which tracks shipments of consumer and industrial goods but not of bulk commodities such as grains. This decline along with the 6.0% drop in May were the steepest year-over-year declines in freight shipments since the Financial Crisis

When something happens for eight months in a row, that is definitely a trend, and we haven’t seen declines of this magnitude since the last recession.

And other numbers confirm what the Cass Freight Index is telling us.  For example, ACT Research says that the trucking industry is officially in a recession after “two consecutive quarters of negative growth”…

The trucking industry is officially in a recession, according to data tracked by ACT Research.

After months of suggesting a pullback was possible, ACT President Kenny Vieth told FreightWaves on Thursday, July 11 that all metrics his firm tracks meet the technical definition of a recession – two consecutive quarters of negative growth.

“Every freight metric we look at has been negative for at least six months,” he said.

Of course it is possible that the transportation industry could pull out of this recession without the U.S. economy as a whole dipping into one, but I wouldn’t count on it this time.

As I have been documenting for months, just about every economic indicator is telling us that big trouble is ahead.

And more bad news just keeps rolling in on a daily basis.  In fact, we just learned that yet another major retailer is shutting down all of their stores…

Plus-size women’s clothing retailer Avenue Stores, LLC is shutting down all locations.

On Wednesday, the company announced plans to close all 222 stores across 33 states. Everything from clothing to store fixtures will be sold from locations across America, according to a press release.

Usually major retailers don’t do this sort of thing so late in the year.  If at all possible, there is usually an all-out effort to hang on through the highly lucrative Christmas season, and so things must have been really bad for Avenue Stores to pull the plug here in mid-August.

And all of this is happening even though interest rates are still much lower than the long-term average and the federal government is borrowing and spending money like there is no tomorrow.  According to Wolf Richter, our national debt is up by more than a trillion dollars over the last 12 months…

The US Gross National Debt has jumped by $363 billion in the two weeks since President Trump signed the law that suspended the debt ceiling. This surge pushed the total debt to $22.39 trillion. That’s up by $1.01 trillion from 12 months ago. And these are the good times.

This is emergency level spending, and it has been happening while the U.S. economy has still been relatively stable.

When the federal government borrows money that it does not have and spends it into the economy, that tends to boost overall economic activity and raise GDP numbers.  This was Barack Obama’s favorite economic trick, and Donald Trump has followed right in his footsteps.  But of course in the process we are literally destroying the bright future that our children and our grandchildren were supposed to have.  What we are doing to future generations of Americans is beyond criminal, and all of us should be deeply disgusted by what is happening.

But of course the politicians in D.C. are deathly afraid to do anything about our exploding debt, because if we cut spending to sustainable levels that would immediately plunge the U.S. economy into a horrific recession.  And when bad economic times come, voters tend to vote out the people that are already holding office.

For President Trump, keeping the U.S. economy out of a recession is absolutely critical to his chances of winning in 2020, and he knows it.

His opponents know it too, and that is why many of them are openly rooting for a recession.  For instance, just check out what Bill Maher said on his show on Friday…

HBO’s Real Time host Bill Maher made another desperate plea for a recession on Friday, saying that the economic downturn “would be very worth getting rid of Donald Trump.”

“So I’ve been saying for about two years that I hope we have a recession,” Bill Maher said. “And people get mad at me, as Sean Hannity thinks I’m actually causing a recession. I’m just saying we can survive a recession. We’ve had 47 of them. We’ve had one every time there’s a Republican president.”

“So, yes, a recession would be very worth getting rid of Donald Trump and these kind of policies,” Maher said after citing a dubious United Nations report that claims a million species are at risk of extinction.

On the other side, President Trump and his team are going to try to make things seem as rosy as possible between now and election day.

So they will keep telling us that everything is just wonderful, and they will keep insisting that a recession is not coming…

Top White House economic adviser Larry Kudlow said Sunday he does not forecast a recession “at all,” despite warning signs exhibited by the bond market last week.

“First of all, I don’t see a recession at all,” Kudlow told “Fox News Sunday.” “Second of all, the Trump pro-growth program, which I believe has been succeeding – lower tax rates, big rollback of regulations, energy opening, trade reform – we’re gonna stay with that. We believe that’s the heart of the free enterprise. We want an incentive-oriented supply-side economy, providing opportunities for everybody across the board.”

In the end, it really isn’t going to matter who is in the White House.  What is coming to America is going to be extremely painful, and we are about to reap the consequences for decades of incredibly foolish decisions.

How we view reality should never be distorted based on what political party we identify with.  When we willingly choose not to see things objectively, we become very susceptible to deception.

The truth is always going to be the truth, and in our case the truth is not pretty.

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.

Is There A Hidden Political Agenda? The Mainstream Media Is Suddenly Full Of Stories About The Coming Recession

All of a sudden, it seems like the mainstream media just can’t stop talking about “the coming recession”.  If you go to Google News and type in the word “recession”, you will literally get dozens of articles from the last couple of days with “recession” in the headline.  And of course it is true that there are signs of global economic trouble all around us, and I have been documenting them on my website all throughout 2019.  So we don’t want to criticize the mainstream media when they actually decide to tell the truth, because a recession is definitely coming, but could it be possible that there is also a hidden political agenda at work?  The economy is generally regarded to be one of the bright spots for President Trump, and political operatives on the left clearly understand that a major economic downturn now would spell almost certain doom for Trump’s chances of winning the 2020 election.  And when mainstream reporters talk about the possibility of a recession as we approach the next election, many of them almost seem gleeful as they describe how it could hurt Trump politically.  Ultimately, when things start to really get bad it is inevitable that the mainstream media will place the blame directly at the feet of Trump.  It is easy to imagine a narrative along the lines of “Trump’s handling of the economy has plunged the nation into a recession” being relentlessly pounded into the heads of American voters over the next year.  And if the end result is Trump being voted out of office, more than 90 percent of those that work for the big news companies will be just fine with that.

This week, we have seen an absolute explosion in the number of stories about the possibility of an imminent recession.  The following are just a few of the stories I came across while doing research earlier today…

–A global recession may be coming a lot sooner than anyone thought

–Recession watch: 6 financial moves to make when the economy slows down

–Trump 2020 can’t afford a recession

–The recession question we should be asking isn’t ‘when’ but ‘how bad?’

–Recession fears explained in one simple sentence

–Recession ahead? Dow, stocks tank on fears that bond market signals a downturn

–Recession indicator with perfect track record flashing red

–Recession signs are flashing, but Americans are still shopping at Walmart

–Worried about a recession? Don’t panic, but be prepared

Of course many of these stories were sparked by a major event that we just witnessed on Wall Street.  The following comes from Fox Business…

The yield curve is blaring a recession warning.

The spread between the U.S. 2-year and 10-year yields on Wednesday turned negative for the first time since 2007. Such a development has occurred ahead of each and every U.S. recession of the last 50 years, sometimes leading by as much as 24 months.

Yes, it is possible that the yield curve could be wrong this time, but I wouldn’t bet on it.

And the economic news that is coming in from all over the world just continues to confirm that conditions are deteriorating.  On Thursday, we learned that U.S. manufacturing has slumped back into contraction territory, and earlier this week we got some really troubling news from Germany and China…

Germany – Europe’s largest economy – reported that its gross domestic product, a measure of an economy’s health, went negative in the second quarter.

In China, the country’s industrial output in July hit a 17-year low, Detrick said. Retail sales and investment in real estate and other fixed assets weakened, an indication the world’s second-biggest economy is feeling pressure.

So it isn’t as if the mainstream media is being dishonest with us in this case.  Global economic activity is most definitely slowing down, and many believe that things will get much worse during the second half of this year.

And a global economic slowdown would be terrible news for the Trump campaign, because their entire narrative depends on President Trump making the economy great again.  A substantial percentage of American voters are convinced that since he is a billionaire, Trump must really understand the economy very well.  And according to a CNN poll from earlier this year, the performance of the economy is one of the main reasons for his current level of support…

Right now, the main reason voters approve of Trump’s job performance is the economy. A CNN poll from late May found that 26% of those who approve of Trump’s job performance said it was mainly because of the economy. That was more than double the next most commonly given answer. Additionally, 8% said jobs/unemployment was the main reason for why they approved of Trump. Among those who disapproved, few said anything related to the economy was the main reason why they disapproved of Trump. For example, only 1% said the Trump tax cuts.

But if the U.S. economy plunges into a painful recession, the game completely changes.

For those on the left that would like to see Trump voted out in 2020, the timing of the next recession will be key.  If the next recession doesn’t begin until the second half of 2020, there may not be enough economic pain before November to swing the election in the favor of the Democratic candidate.  So what the left really needs is for a recession to begin during the second half of 2019 or the first half of 2020 so that Americans are really suffering by the time election day rolls around.

I know that is a very sick way to think, but these are the sorts of conversations that these people actually have.  For example, on his own television show Bill Maher publicly stated that a recession would be “worth it” if Trump is voted out in 2020.  As we approach the next election, many on the left will be so desperate to see Trump gone that they will be willing to pay just about any price to see that happen.

And to be honest, the U.S. economy is definitely way overdue for a major downturn, and so it is only prudent to get prepared for rough times ahead.  At this point, even USA Today is providing us with “recession survival tips”…

Do you really need that bundle package from your cable provider, or to pay a gardener to mow your lawn every week? Now might be a good time to figure out what’s an essential expense, and what you can let go.

“Review the family budget to see what could be reduced or cut if there was a sudden drop in monthly income,” says Richard Fleming, a certified financial planner based in Colorado Springs, Colorado. “Be prepared to make those reductions (or) cuts as soon as it becomes necessary.”

That is actually really good advice.

Now is a time to cut costs, get out of debt and build up your emergency fund.

The coming year promises to be quite chaotic, and those that hate President Trump are likely to pull out all the stops in an all-out attempt to get him voted out in 2020.

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.

If The Federal Reserve Cuts Interest Rates Now, It Will Be An Admission That A Recession Is Coming

So there is a lot of buzz that the Federal Reserve is about to cut interest rates – and it might actually happen.  We’ll see.  But if it does happen, it will directly contradict the carefully crafted narrative about the economy that the Federal Reserve has been perpetuating all this time.  Fed Chair Jerome Powell has repeatedly insisted that the U.S. economy is in great shape even when there has been a tremendous amount of evidence indicating otherwise.  And of course President Trump has been repeatedly telling us that this is “the greatest economy in the history of our country”, but now he is loudly calling for the Federal Reserve to cut interest rates as well.  Something doesn’t seem to add up here.  If the U.S. economy really was “booming”, there is no way that the Fed should cut interest rates.  Right now interest rates are already low by historical standards, and theoretically it is during the “boom” times that interest rates should be normalized.  But if the U.S. economy is actually slowing down and heading into a recession, then a rate cut would make perfect sense.  And if that is the reality of what we are facing, then the economic optimists have been proven dead wrong, and people like me that have been warning of an economic slowdown have been proven right.

If the talking heads on television are correct, we’ll probably see a rate cut.  In fact, apparently there are some people that are even pushing “for a 50 basis point cut”…

Most Fed watchers believe that the central bank will cut its funds rate, now hovering between 2.25% and 2.5%, by a quarter point, also known as 25 basis points. A small group — including President Donald Trump’s latest nominee for Fed governor — are pounding the table for a 50 basis point cut, which would take the rate below 2%. A rate cut of any size would be the first since the 2008 financial crisis.

A 50 basis point cut is something that would normally only be done during an economic emergency.

Have we already reached such a point?

That wouldn’t seem to be the case.  Stock prices are still at record highs, and at least according to the government’s highly manipulated figures, U.S. GDP is still growing…

The nation’s gross domestic product – the value of all goods and services produced in the U.S. – increased at a seasonally adjusted annual rate of 2.1% in the April-June period, following a 3.1% gain in the first quarter, the Commerce Department said Friday. Economists expected a 1.8% increase in output.

The report comes amid mounting worries that the sluggish global economy and President Trump’s trade war with China could lead to a recession by next year.

Yes, there are tons of other indicators that are clearly telling us that an economic slowdown has already begun, and I am not going to repeat everything that I have been saying for the past 6 months in this article.

But even though things are definitely moving in the wrong direction, I would definitely not call what we are currently experiencing “an economic emergency” just yet.

After all, things can’t be too bad if a 16-year-old kid just won 3 million dollars playing video games…

A teenager from Pennsylvania won $3 million and took home the top prize at the 2019 Fortnite World Cup on Sunday. Kyle “Bugha” Giersdorf scored 26 more points than runner-up “psalm” to win the eSports tournament held at Arthur Ashe Stadium in Queens.

“Words can’t even explain it. I’m just so happy,” the 16-year-old said in an interview posted to Twitter by organizers. “Everything I’ve done, the grind, it’s all paid off. It’s just insane.”

Good for that kid.  I wish that I was talented enough to be a world champion at something.

Unfortunately, when things get really bad in this country money is going to start getting really tight, and we simply are not there yet.

So could it be possible that there is another reason for the sudden push to get the Fed to reduce rates?

Well, CNBC’s Steve Liesman seems to think that there could be a political motivation…

“Think about what happens when a person gets up at a rally and starts railing against The Federal Reserve, and starts to create what could lead to Congressional pressure on The Fed, then you could imagine that their could be support for a different system.”

“I think they think there’s a lot of political downside risk to getting this wrong.”

If the Federal Reserve doesn’t cut rates and the U.S. economy really starts going off the rails, they will be President Trump’s number one economic target during the 2020 campaign.

And it has already gotten to the point where Trump is regularly attacking them on social media.  For example, he posted the following just a little while ago…

The Fed “raised” way too early and way too much. Their quantitative tightening was another big mistake. While our Country is doing very well, the potential wealth creation that was missed, especially when measured against our debt, is staggering.

If a wave of anti-Fed sentiment helps get Trump re-elected, that could potentially be a nightmare scenario for the folks over at the Federal Reserve.  With a full second term and a Republican majority in Congress, President Trump could decide to dramatically reform or completely get rid of the Federal Reserve system altogether.  Of course those that follow my work regularly know that I would be thrilled by this, because I have been advocating for the elimination of the Federal Reserve system for many years.

The sort of political scenario that I just outlined probably won’t happen, but even if there is a small chance that it could happen the people running the Federal Reserve have got to account for that possibility.

So cutting rates would be a way to “play it safe” by appeasing President Trump and his supporters.  If President Trump senses that the Fed is on his team, then he probably won’t be inclined to make a big move against them.

In any event, a small rate cut is definitely not going to do much to alter our overall economic trajectory.

Because the truth is that an economic slowdown has already begun, and many experts are anticipating that it will greatly accelerate during the second half of this year.

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.

An “Earnings Recession” Is Here – Big Companies All Over America Are Reporting Disastrous Financial Results

If the U.S. economy really was “booming”, then corporate earnings would be rising.  But that isn’t happening.  In fact, we haven’t seen corporate earnings fall like this since the last recession.  They fell during the first quarter of this year, and based on the results we have so far, it appears that corporate earnings will be down substantially once again in the second quarter.  When corporate earnings drop for two quarters in a row, that is officially considered to be an “earnings recession”, and that normally occurs just before the overall economy plunges into recession territory.  As things get tighter for our corporate giants, we should expect a lot more layoffs in the months ahead, and the unemployment rate should rise quite briskly.  In other words, it looks like our economic problems are about to accelerate substantially.

This week, some of the largest companies in the entire country reported results for the second quarter, and we witnessed disappointment after disappointment.

Let’s start with Boeing…

The 737 Max is already more than four months into an unprecedented global grounding, which authorities ordered after two fatal crashes. The manufacturer provided hints of the strain on its resources, starting with a US$1.01 billion burn of free cash flow in the second quarter — a US$5 billion swing from last year’s gain during the same period.

Of course Boeing made a bad plane, and so their disastrous results could certainly be blamed on that.

But what about Netflix?  Once one of the darlings of Wall Street, Netflix has been absolutely monkeyhammered in recent days…

Netflix’s disappointing quarter reported last Wednesday has caused the streaming darling of Wall Street to shed more than $24 billion in value in six days as the stock has sunk 15 percent.

Shares of Netflix have now fallen each of the last nine trading days, as the stock began its downfall even before it released its quarterly financial report, which indicated it lost subscribers in the U.S. for the first time since launching its streaming service nearly a decade ago.

Yes, Netflix could be considered a special case because they are facing a lot of new competition.  Last December I wrote an entire article predicting that this would happen, and this is just the beginning of the company’s problems.

On the other hand, the future was supposed to be exceedingly bright for Tesla, but the firm is hemorrhaging money like crazy and over the past 24 hours the stock price has crashed hard…

Even after delivering a record number of cars in its second quarter, Tesla (TSLA) is still bleeding money. Tesla said Wednesday that it lost $408 million during the three months ending in June, far worse than Wall Street had expected. Shares of Tesla fell more than 10% in after hours trading following the earnings report.

The loss was slightly less painful than the previous quarter, in which Tesla lost $702 million.

But Elon Musk has a gift for getting investors to hand over giant piles of money, and so Tesla is going to survive for now.

Meanwhile, the rest of the auto industry is really struggling as well.  In fact, Ford just reported very disappointing results and reduced the forecast for the remainder of 2019 significantly…

Ford shares plunged Wednesday after the automaker reported second-quarter earnings that were short of expectations and issued a disappointing forecast for the year.

Ford, which has slashed thousands of jobs this year, is also investing $11 billion by 2022 in electric and hybrid vehicles to try to keep pace in a changing industry.

Are you starting to see a pattern?

Even Paypal is falling short of expectations.  The following comes from CNBC…

Shares of PayPal fell as much as 6% in after-hours trading after the payments giant missed Wall Street’s estimates for second-quarter revenue and lowered its full-year guidance.

Everything that I have just shared with you makes complete and total sense if the U.S. economy is in the process of plunging into a new recession.

And other economic numbers continue to tell us the exact same thing.  For example, we just got the worst U.S. manufacturing PMI number in 118 months.  That is absolutely terrible news, but Europe’s manufacturing sector is doing even worse.

Manufacturing activity is slowing down all over the globe, and a big reason for that is because global trade is shrinking at the fastest pace that we have seen since the last financial crisis.

Meanwhile, we just learned that existing home sales in the United States have now fallen on a year over year basis for sixteen months in a row.

After something happens 16 times in a row, you would think that the experts would be able to spot a “trend” by now, but so many of them continue to be optimistic about the real estate industry.

In addition, store closing announcements just continue to roll in at a stunning rate.  This week, we learned that GNC is planning to close up to 900 stores by the end of 2020.

We were already on pace to absolutely shatter the all-time record for store closings in a single year even before that announcement, and the phrase “retail apocalypse” almost doesn’t seem strong enough to describe what we are witnessing any longer.

Just as I have warned, America’s landscape is being littered by boarded up stores and abandoned malls, and this is particularly true in our poorest areas.

Unprecedented money printing by the Federal Reserve and an unprecedented debt binge by the federal government may have bought us a very brief reprieve, but none of the fundamental economic problems that were identified during the last recession were ever fixed.

Now a new crisis has arrived, and we are just in the very early chapters of it.

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.

As Wall Street Celebrates Rising Stock Prices, Companies Are Literally Shutting Down All Over America

How long can the stock market possibly stay completely disconnected from economic reality?  On Monday, the Dow Jones Industrial Average rose just 27 points, but that was good enough to push it to yet another new all-time record high.  Investors have been absolutely thrilled by the extremely impressive bull run that we have witnessed so far in 2019, but there is no way that this is sustainable.  Wall Street may be celebrating for the moment, but meanwhile all of the hard economic numbers are telling us that we have now entered a new economic slowdown.  Just like in 2008, it appears to be inevitable that the party on Wall Street is about to hit a brick wall, but nobody should be surprised when it happens.  Everywhere around us there are signs of economic trouble, and right now companies are literally shutting down all over America.

For example, just take a look at what is happening to the trucking industry.  I recently warned about the trucking “bloodbath” that was unfolding, and over the past week it has greatly accelerated.

On the 12th of July, we learned that trucking giant LME had abruptly shut down.  The following comes from Zero Hedge…

Less-than-truckload carrier LME has reportedly “suddenly and abruptly” shut down its operations, according to FreightWaves.

The company is a regional carrier based in Minnesota that operated throughout the Midwest. The company had terminals in 30 locations across the U.S. and through interline agreements services all of North America. It also worked with major companies like 3M, John Deere and Toro.

The company reportedly included “over 600 men and women” and has been listed as having 382 power units and 1,228 trailers, with 424 truck drivers.

Then today we learned that Timmerman Starlite Trucking suddenly shut down without any notice…

40 year old California trucking outlet Timmerman Starlite Trucking, Inc. is the latest victim in the “trucking apocalypse” and announced that it would be shutting down effective immediately, according to FreightWaves.

30 employees are expected to lose their jobs as a result. The company is based in a mid sized city about 100 miles east of San Francisco and had a fleet of 30 trucks, 150 trailers and 28 drivers.

The company’s owner cited “a tough freight market and environmental regulations” as reasons for the shut down. The company announced the shutdown on its Facebook page.

Of course those two trucking companies are definitely not the only victims of this “bloodbath”.  According to Business Insider, ALA Trucking, Williams Trucking, Falcon Transport and New England Motor Freight have also completely ceased operations in 2019.

If the U.S. economy really was “booming”, this would not be happening.

Meanwhile, major retailers continue to fall like dominoes.  Charming Charlie is headed for bankruptcy and will be closing all of their stores…

Fashion accessory retailer Charming Charlie will close all its stores after going bankrupt for the second time in less than two years. More than 3,000 full- and part-time employees could lose their jobs.

Charming Charlie Holdings Inc. filed for Chapter 11 protection in Delaware with plans for going-out-of-business sales at about 261 stores, according to court documents. The chain expects the liquidation to take about two months.

In addition, we just learned that Fred’s will be shuttering another 129 stores as it desperately attempts to stay alive…

Troubled discount merchandiser Fred’s has announced another round of store closures.

The chain will shutter 129 stores, leaving it with about 80 locations, USA Today reported. Going-out-of business sales have already begun.

Not too long ago, I went to a going out of business sale at a local store that was closing down, and it was definitely depressing.  At one time the shelves had been packed full of products, but by the time I got there people were clawing through the small handfuls of deeply discounted merchandise that still remained.

Sadly, such scenes are being repeated over and over again all around the country.  In fact, things are already so bad that even Manhattan retailing legend Barneys is likely headed for bankruptcy…

Barneys may be on the cusp of filing for bankruptcy protection as the luxury Manhattan retailer contends with high rents and shoppers going online, according to two media reports.

Reuters, citing unnamed sources, reported Saturday that Barneys has tapped law firm Kirkland & Ellis LLP and is weighing a potential bankruptcy filing among other options that could occur in the coming weeks.

The all-time record for store closings in a single year was set in 2017 when 8,139 stores shut down.

According to a brand new report that was just released, we are on pace to absolutely shatter that old record.

In fact, Coresight says that the number of store closings in the U.S. could hit 12,000 by the end of this year…

The “going-out-of-business” sales and liquidation of other brands is expected to continue. Coresight estimates closures could reach 12,000 by the end of the year, the report said.

In The Beginning Of The End, I painted a picture of a future in which America’s communities would be littered by boarded up stores that had been abandoned by major retailers.

Now it is happening right in front of our eyes.

Everything that is taking place in the “real economy” makes perfect sense, and unfortunately our economic problems are likely to accelerate significantly in the months ahead.

What doesn’t make sense is what we are witnessing on Wall Street.

There is no way that stock prices should be rising like this, but financial bubbles don’t typically follow rational patterns.

Instead, they usually just keep going until something comes along to end them.

And considering everything that is going on in the world right now, that “something” could definitely arrive sooner rather than later.

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.

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