14 Very Alarming Numbers That Reveal Current State Of Economy

The economic numbers just continue to get worse and worse, and at this point, it has become exceedingly clear that an economic slowdown is happening.  In fact, even the chair of the Federal Reserve is using the term “slowdown” to describe what is taking place.  But of course, many are still hoping that the U.S. economy can pull out of this slump and avoid the sort of crippling recession that we experienced in 2008.  Unfortunately, that may be really tough because the entire global economy is slowing down right now.  Our world is more interconnected than ever before, and what happens on one side of the planet is invariably going to affect the other side of the planet.  Some parts of the globe are already mired in deep economic problems, and the U.S. appears to be following down the same path.

If you still think that the economy is in “good shape”, please read over the following list very carefully.

The following are 14 very alarming numbers that reveal the true state of the economy…

#1 Continuing jobless claims are rising at the fastest pace in 10 years.

#2 U.S. businesses are adding jobs at the slowest pace in 18 months.

#3 General Motors, Ford, Nissan and Fiat Chrysler all reported sales declines of at least 5 percent on a year over year basis in March.

#4 Tesla vehicle deliveries were down a whopping 31 percent during the first quarter of 2019.

#5 U.S. consumer confidence fell more than 7 points in March.

#6 Manhattan real estate sales have now fallen for six straight quarters.  That is the longest losing streak in 30 years.

#7 London real estate sales just dropped by the most we have seen in 10 years.

#8 The owner of Kay, Zales and Jared jewelers just announced that they will be closing 150 stores.

#9 Retail layoffs are 92 percent higher than they were at this time last year.

#10 U.S. freight shipment volume has fallen for three months in a row.

#11 The inventory to sales ratio in the United States has risen sharply for five months in a row.

#12 At this point, almost half of all renters in America spend more than 30 percent of their incomes on rent.

#13 The real median net income for Minnesota farmers was only $26,055 in 2018, and that was before many of them were absolutely devastated by the recent flooding.

#14 Overall, U.S. economic numbers are off to their worst start for a year since 2008.

We didn’t see economic numbers like this last year.

But now things have clearly changed.  It is starting to feel more like 2008 with each passing day, and this is a point that Mac Slavo made in his most recent article

The signs of yet another economic recession are everywhere. In fact, it seems hard to find any positive economic news anymore, even though a mere few months ago, it was difficult to find a report signaling the United States might be headed for some turmoil.

These days, many people get offended at the thought that the U.S. economy is heading for trouble.  But the truth is that we have been heading for trouble for a very long time.

Our economy is built on a foundation of sand.  More specifically, we have borrowed our way into “prosperity”.

The other day, I wrote an article about our $22,000,000,000,000 national debt.  It is the biggest single debt in the history of the world, and we continue to add to it at a rate that is absolutely insane.  In fact, our 234 billion dollar deficit in February broke the all-time record for a single month.  If we continue to do this, there is no way that our story ends well.

But that 22 trillion dollar debt is only a fraction of our overall debt.

When you add up all forms of debt in the United States, it comes to a grand total of more than 72 trillion dollars.  And that doesn’t even include a single dollar of our unfunded liabilities on the federal, state and local level.

When Ronald Reagan took office, the total amount of debt in the U.S. was less than 5 trillion dollars.

When historians look back on this time in history, they will not be surprised that our society ultimately collapsed.  What will surprise them is that it took so long for it to do so.

Sometimes I get criticized for urging people to get prepared.  But those that really deserve the criticism are those that are assuring everyone that everything is going to be just fine.  If we got the smartest minds in the entire country together and treated this like a major national emergency, perhaps we could find a way to engineer some sort of a soft landing when this debt bubble bursts.

But as it stands, there is no plan and our long-term problems get worse with each passing day.  Our economy is headed for a crash of epic proportions, and it isn’t going to matter who is in power in Washington when it happens.

And at the rate that our economy is currently slowing down, America may become an economic horror show a lot sooner than many people had anticipated.

Article posted with permission from Michael Snyder

Signs Of Another Recession Are Literally Everywhere

The signs of yet another economic recession are everywhere.  In fact, it seems hard to find any positive economic news anymore, even though a mere few months ago, it was difficult to find a report signaling the United States might be headed for some turmoil.

The Federal Reserve finally turned more dovish recently, alluding to market fears.  Stating they wouldn’t be raising interest rates again, which makes borrowing money more expensive, was just one of the signs that we may need to prepare ourselves for another downturn. With the current state of the average American’s finances, any hiccup in the economy could be bad news for those living paycheck to paycheck (or 78% of Americans.)

Some economic analysts are now saying that very soon, the central bankers at the Fed will begin actively easing by reinvesting the Fed’s maturing mortgage bonds into Treasury securities. It’s not exactly “Quantitative Easing I, II, and III,” but it will have some of the same effects, according to GoldSeek.com. Two factors appear to be the catalyst to the Fed’s “thinking” on this dovish turn.

The first is the increasing recognition of the same slowing global growth that made other central banks turn dovish in recent months. The second is the Fed’s realization that its previous course risked inverting the yield curve, which was violently turning against its fourth-quarter expectations and possibly toward recession. Raising rates at that point would not have looked good for central banks in the history books, hence the backtracking. But eventually, their history will be ruined either way – this is just a “kick the can down the road” temporary solution.

Central Banks Prepare For A Slow Down In The Economy; But The Fed Can’t Fix This Crisis

GoldSeek.com believes, as we do, that a recession is approaching but it’s not quite here just yet.  The latest data is not encouraging, however, and it won’t be long before we start to see canyons, instead if some minor cracks in this economy. The most glaring concern for economic analysts is that the global economy clearly hasn’t recovered from the last recession like it did in previous cycles. Money printing and QE has failed to work this time regardless of the fancy stock market “recovery” numbers. Rising prices and wage stagnation have led to a wealth gap that has seen the more ignorant masses calling for socialism and complete government control over the economy.

Those solutions have failed every single time they’ve been tried, but people have lost all hope that they can make it in this already authoritarian environment created by the elite politicians and central bankers.  What the disillusioned masses fail to realize is that they are held back by themselves, and the beliefs in the rules put in place to intentionally keep them down and brainwash them into believing they are nothing without government dominance and control.  But it’s time to take back power from the government and central bankers, not add to it.

You can begin by preparing for the inevitable, even if it’s early. In fact, the earlier the better! Preparing yourself for a recession is simple, but it is also incredibly difficult at the same time.  You will need to become as financially free as you possibly can before it hits you square in your wallet.

How Prepare For An Economic Downturn: Go Debt-Free In 2019

To do that, you’ll need to live on less and pay off debts.  Throw every spare cent at your debt, and watch your payments dwindle. When you don’t owe anyone any money, you are free to do with your income what you choose, and buying some extra food and bottled water is never a bad idea. Seriously, who knows what could happen? A severe storm could even warrant using that stored food and water, in you’ll be glad you took on a preparedness mindset when the economic SHTF.

Article posted with permission from Mac Slavo

$222 Trillion: True Size Of US National Debt, Including Unfunded Liabilities

The United States is on a path to financial ruin, and everyone can see what is happening, but nobody can seem to come up with a way to stop it.  According to the U.S. Treasury, the federal government is currently 22 trillion dollars in debt, and that represents the single largest debt in the history of the planet.  Over the past decade, we have been adding to that debt at a rate of about 1.1 trillion dollars a year, and we will add more than a trillion dollars to that total once again this year.  But when you add in our unfunded liabilities, our long-term financial outlook as a nation looks downright apocalyptic.  According to Boston University economics professor Laurence Kotlikoff, the U.S. is currently facing 200 trillion dollars in unfunded liabilities, and when you add that number to our 22 trillion dollar debt, you get a grand total of 222 trillion dollars.

Of course, we are never going to pay back all of this debt.

The truth is that we are just going to keep accumulating more debt until the system completely and utterly collapses.

And even though the federal government is the biggest offender, there are also others to blame for the mess that we find ourselves in.  State and local governments are more than 3 trillion dollars in debt, corporate debt has more than doubled since the last financial crisis, and U.S. consumers are more than 13 trillion dollars in debt.

When you add it all together, the total amount of debt in our society is well above 300 percent of GDP, and it keeps rising with each passing year.

But for the moment, let’s just focus on the giant mountain of debt that the federal government has piled up.  The U.S. budget deficit for last month was 234 billion dollars, and that was an all-time record for a single month.  Our exploding debt is an existential threat to our nation, and we are literally destroying the bright future that our children and our grandchildren were supposed to have.

And it isn’t just a 22 trillion dollar debt that we are leaving them with.  We have also made tens of trillions of dollars worth of future promises that we expect future generations to keep.  These are called “unfunded liabilities” because we do not currently have the money to fulfill those obligations.

According to official government projections, the Social Security Administration is facing a 13 trillion dollar unfunded liability over the next 75 years, and Medicare is facing a 37 trillion dollar unfunded liability over the same time frame.

Adding those two numbers together, we get a grand total of 50 trillion dollars.

Where in the world would we ever be able to get so much money when we are already drowning in debt?

Unfortunately, as is so often the case with government projections, those unfunded liability numbers are actually wildly optimistic.

Boston University economics professor Laurence Kotlikoff has been studying our unfunded liability crisis for many years, and according to him the real number is 200 trillion dollars

Consumers will largely bear the brunt of the country’s financial ruin, according to Kotlikoff, which is why it is crucial to give them the power to make better financial decisions.

While the United States’ official debt is $20 trillion, the fiscal gap is really 10 times larger — $200 trillion. That comes from adding in off-the-book liabilities, including debt that’s in the Federal Reserve’s hands, Kotlikoff said.

If Kotlikoff is correct, that means that the true size of the financial obligation that we are imposing upon future generations is 222 trillion dollars, and that number just keeps rising month after month.

Many pundits speak of a day when America will be bankrupt in the future, but according to Kotlikoff we are bankrupt “right now”

But Kotlikoff’s dire prognosis for the United States is enough to wake anyone out of even the deepest summer slumber.

“The evidence is in front of our eyes that we’re bankrupt,” Kotlikoff said. “It’s not bankrupt in the future. It’s bankrupt right now.”

Unfortunately, there doesn’t appear to be an easy way out.  Any politician that would be foolish enough to even threaten to reduce Social Security and Medicare benefits would be immediately voted out of office.  America’s population is rapidly aging, and about half of America’s seniors don’t have anything saved for retirement

The bad news is that almost half of Americans approaching retirement have nothing saved in a 401(k) or other individual account. The good news is that the new estimate, from the U.S. Government Accountability Office, is slightly better than a few years earlier.

Of those 55 and older, 48 percent had nothing put away in a 401(k)-style defined contribution plan or an individual retirement account, according to a GAO estimate for 2016 that was released Tuesday.

America’s seniors are counting on us to keep the promises that we have made to them.

Sadly, it doesn’t appear that we are going to be able to do that for too much longer.

In the end, we are going to have to make some very tough choices.  One Democrat actually started a petition to sell the state of Montana to Canada for a trillion dollars, and so far it has over 18,000 signatures.  Of course, we aren’t ever going to sell off pieces of our country, but we are going to have to find some way to come up with an enormous mountain of money.

When I ran for Congress last year, I made doing something about the national debt one of my top issues.  Unfortunately, concern about the national debt is not a priority for either political party right now, and that is a huge mistake.

You can spend more money than you are bringing in for quite a while, but eventually, a day of reckoning arrives.  Anyone that has ever gone into too much credit card debt knows exactly what I am talking about.  We have been on the biggest debt binge in the history of the world, and it has allowed us to enjoy a standard of living that is far beyond what we actually deserve, but the price that we will pay for such utter foolishness will be extremely painful indeed.

Article posted with permission from Michael Snyder

Debt Compounds With Socialist Policies: 40% Of NY and CA Want To MOVE OUT

Americans have gotten themselves into a predicament.  With debt levels at all-time highs, 40% of those living in California and New York want to flee their states for tax havens and less socialist policies.

YouTube channel, Money GPS has been putting together videos laying out the major problems with obtaining debt.  Most Americans start right out of high school with student loans, and supplement their lifestyle with credit cards, shackling them to debt repayment for a good portion of their lives.  But the debt problem continues to compound and rather than pay off their debts and reach financial freedom, Americans take out more loans. In fact, according to Money GPS, it’s so bad today that many people in New York and California suggest they literally can’t afford to live there anymore and are considering moving.

The debt crisis will collapse the nation. –Money GPS

And once you add the high cost of socialist policies onto the backs of the already majorly indebted, far too many Americans are flung into poverty by not being able to keep what they have earned. Now, 40% of Californians and New Yorkers want to flee their high-tax socialist utopias for some freedom and to experience less theft (taxation), and those numbers are exponentially on the rise. According to CNBC, known for putting a leftist/socialist spin on the news, Californians’ main fear was the cost of living.  But that is literally and entirely the government’s fault for instituting policies that require massive amounts of theft to cement.

In a poll which aimed to “pinpoint what’s causing the worst financial fears and stress among Americans,  California residents said their top financial stressor was the general cost of living.  Housing costs, made high by regulations, are forcing many residents to rethink where they’ve chosen to live.

New York residents, when polled, reported the same kind of problems.  Those who work for the government continue to line their pockets with money taken from the middle class.  This is causing the middle class to all but evaporate. According to the New York Post, the poll determined that more than a third of all city residents say they can’t afford to live anywhere in the state, let alone the “Big Apple” or New York City. Residents also believe economic hardship will send them packing in five years or less, according to a dismal new poll.

41 percent of New York resident fear they’ll be “forced” to pull up stakes and seek greener pastures where the economic climate is more welcoming. “They are making this city a city for the wealthy [government elitists], and they are really choking out the middle class,’’ said Ari Buitron, a 49-year-old paralegal and born-and-bred New Yorker from Forest Hills, Queens. New Yorkers are being lured down south thanks to the state’s immense tax burden and new federal tax policies that punish high-tax states, according to Miami property magnate Gil Dezer. “Because of the city tax and the non-deductibility of your real estate taxes, we’re seeing a lot more people with piqued interest,” he told The Post.

Article posted with permission from Mac Slavo.

Markets Aren’t Buying What The Fed Is Selling – Here’s Why

The markets are not buying what the Federal Reserve is attempting to sell in terms of their claims about the strength of the United States’ economy. In fact, more fears about the global economy have surfaced after the Fed’s recent shift in gears.

A surprisingly dovish turn by the Federal Reserve and intense new worries have rattled Wall Street, sparking more recession fears and concerns about a global economic slowdown. But it’s nothing that a week or two of good news can’t cure, right? As long as you listen to the Fed, who is promising to take care of all of us in the event of an economic meltdown.

According to Market Watch, some good news may fix the skittish feeling about the economy, but that good news is also not likely going to surface this week.  Especially considering there’s speculation that the reports trickling in about the U.S.’s economic state could still be effects of the partial government shutdown.

Everyday Americans base their understanding of the economy on how well they can see things around them going. Certain economic indicators, such as home sales and new construction, can be symptoms of the steep drop in mortgage rates since last October. The housing market has been hanging on by a thread, however, which doesn’t go very far with alleviating worries about the economy.

Even though Fed Chairman Jerome Powell described the U.S. economy as being “in a good place,” the decline in inflation can’t be disentangled from a slower growth in the U.S. and abroad. The Fed itself cut its U.S. growth forecast to 2.1% from 2.3%, compared to 2.9% in 2018. –Market Watch

Gloomy Economic Outlook: The Fed Cuts The Growth Prospect For The U.S.

Central banks are also preparing for the upcoming economic slowdown. The Trump administration’s war on free trade has also stomped on the economic growth potential.  The tariffs have affected most Americans at this point, and have hit that 78% who live paycheck to paycheck hard in the form of higher costs for goods and services.

Article posted with permission from Mac Slavo

Fed Chair Just Described What’s Happening To US Economy As A “Slowdown”

Now even the Federal Reserve is publicly admitting that the U.S. economy is slowing down.  And that is quite remarkable because usually, the Federal Reserve is extremely hesitant to say that an economic slowdown is taking place.  As I pointed out the other day, in 2008 former Fed Chair Ben Bernanke kept insisting that a recession was not coming, but we found out later that a recession had already begun when he was making those statements.  Normally the Federal Reserve tries very hard to paint a rosy picture of our economic future, and one of the big reasons for that is because they want us to believe that they are doing a good job and that they have everything under control.  So it was quite stunning to hear Fed Chair Jerome Powell use the term “slowdown” to describe what is coming for the U.S. economy on Wednesday…

Citing a more modest outlook for the economy, the Federal Reserve on Wednesday held interest rates steady and signaled it did not plan to raise rates at all this year and would bump them up just once in 2020, providing a road map for a sustained period of easy-money policy.

“The U.S. economy is in a good place,” Fed Chairman Jerome Powell said at a news conference, adding policymakers foresee “a modest slowdown, with overall conditions remaining favorable. We see no need to rush to judgment (by lifting or cutting rates).”

Admittedly, he did only say that it would be a “modest slowdown”, and so to most people that won’t sound that bad.

But this is the very first time that Powell has talked like this, and the truth is that the Atlanta Fed’s GDPNow model is currently forecasting that U.S. growth in the first quarter will be less than half a percent.  Fed officials are hoping that growth will be better in the second quarter, but there is also a very strong possibility that the economy will continue to decelerate.

Because the economy is entering a “slowdown”, the Federal Reserve announced on Wednesday that it does not anticipate any more interest rate hikes for the rest of the year.

Normally Wall Street would experience a huge surge of euphoria upon hearing such news, but stocks were actually down on Wednesday

The Dow Jones Industrial Average and S&P 500 closed lower on Wednesday after the Federal Reserve’s latest monetary-policy announcement dragged Treasury yields lower, pushing bank shares down.

Goldman Sachs led the 30-stock Dow to end the day down 141.71 points at 25,745.67. The S&P 500 closed 0.3 percent lower at 2,824.23. The Nasdaq Composite eked out a gain, closing 0.1 percent higher at 7,728.97.

This certainly could not have been the reaction that the Federal Reserve was hoping for.

Could it be possible that bad news for the U.S. economy is no longer good news for Wall Street?

Without a doubt, we are witnessing a huge wave of pessimism in the business community right now.  Yesterday, I noted that Federal Express is talking as if a global recession had already started, and other corporate leaders are making similar statements.

For example, just consider what the CEO of banking giant UBS just said

The head of UBS was among the latest to blame the world’s backdrop for weaker-than-expected results. CEO Ermotti told a conference in London on Wednesday that it “one of the worst first-quarter environments in recent history,” Reuters reported. The Swiss bank slashed another $300 million from 2019 costs after revenue at its investment bank plunged. Investment banking conditions are among the toughest seen in years, especially outside the U.S., he said.

And the CFO of BMW told investors on Wednesday that BMW’s earnings may be exposed to “additional risks” from the global economy in the months ahead…

“Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy,” CFO Nicolas Peter said in BMW’s quarterly earnings report Wednesday.

Last, but certainly not least, the co-CEO of Samsung just said that his company is anticipating “slowing growth in major economies” for the remainder of 2019…

“We are expecting many difficulties this year such as slowing growth in major economies and risks over global trade conflicts,” Samsung Co-Chief Executive Kinam Kim said.

Here in the United States, whoever is in the White House at the time usually gets most of the credit or most of the blame for how the economy is performing.

But the truth is that President Trump did not create the financial bubble that caused the boom on Wall Street.

The Federal Reserve did.

And President Trump is not going to be responsible when that bubble bursts either.

The Federal Reserve has far, far more control over the performance of the U.S. economy than either the president or Congress does.  And since the Federal Reserve was initially created in 1913, there have been 18 distinct recessions and/or depressions, and now we are heading into the 19th one.

If we want to finally get off this economic roller coaster ride permanently, we need to abolish the Federal Reserve.  But this isn’t even part of the national political discussion at this point.

However, that could soon change.  In the aftermath of the financial crisis of 2008, we witnessed a huge backlash against the Federal Reserve system.  Eventually, that backlash subsided, but now that we are entering a new crisis, perhaps it is time to start dusting off all of those old “End the Fed” signs.

Article posted with permission from Michael Snyder

Student Loan Debt Is Impacting Entire Economy

Student loan debt has reached record level highs and its impacts are being felt throughout the entire economy. This crisis will be hard on those deeply indebted, but it is also a drag on the nation’s economy as a whole.

For an entire generation of Americans, who were told they would amount to nothing without a fancy piece of paper that would cost them tens of thousands of dollars (or more in some cases) student debt is nothing new. According to NBC News, many so-called Millennials, the desire to attend the best possible school. Couple that with the demands for graduate degrees and skyrocketing college costs, student loans may be fundamentally altering the economy.

A recent analysis from the staff at the Federal Reserve found that the average student loan debt held by those in the 24- to 32-year-old age group doubled from $5,000 to $10,000 between 2005 and 2014. In that same report, the Fed also found that home ownership fellnine percentage points in that same time period for those in that age group.

Student Loan Debt Is A Crisis That’s Also Impacting The Housing Market

Student loan debt has already affected the housing market, and because of the amount, most are required to pay back, more and more debt continues to pile up for those already maxed out. And it almost always begins with student loans.

On average, Millennials, ages 18 to 34, carry about $36,000 in debt, according to a 2018 study by Northwestern Mutual Life. That looks very similar to the numbers for Generation X, who carry $39,000 in debt on average, and Baby Boomers who hold about $36,000 in debt, according to the study. NBC News

However, once you break that down, you can see the strain that student loan debt has put on Millennials.

The largest source of debt for Gen Xers and Baby Boomers is their mortgages, which clock in at 32 percent and 25 percent respectively for those age groups. The biggest source of debt for Millennials? Personal education loans at 21 percent. NBC News

Rather than saving and putting a down payment on a house, Millennials have chosen to borrow money for education.  That easy money they borrowed is to blame for the skyrocketing costs of college as well. According to the financial guru, Dave Ramsey, far too many people struggling to pay on their student loans while their future hangs in the balance. It’s a familiar problem that’s only getting worse. America’s total student loan debt is now nearly $1.5 trillionOn average, students take 10-20 years to pay back their student loans.

Article posted with permission from Mac Slavo

Numbers Confirm Global & US Economies Are Weakest They Have Been Since Last Recession

Even mainstream economists are admitting that economic activity is slowing down.  And at this point, that fact would be very difficult to deny because the numbers are very clear.  We haven’t faced anything like this in a decade, and many are deeply concerned about what is coming next.  Will it be just another recession, or will it be an even greater crisis than we faced in 2008?  According to Bloomberg Economics, the global economy experienced a “sharp loss of speed” over the course of 2008 and global economic conditions are now “the weakest since the global financial crisis”…

The global economy’s sharp loss of speed through 2018 has left the pace of expansion the weakest since the global financial crisis a decade ago, according to Bloomberg Economics.

Its new GDP tracker puts world growth at 2.1 percent on a quarter-on-quarter annualized basis, down from about 4 percent in the middle of last year. While there’s a chance that the economy may find a foothold and arrest the slowdown, “the risk is that downward momentum will be self-sustaining,” say economists Dan Hanson and Tom Orlik.

This is definitely the worst condition that the global economy has been in since I started The Economic Collapse Blog, and I am personally very alarmed about where things are heading.  The tremendous economic optimism of early 2018 has given way to a tremendous wave of pessimism, and the speed at which the economic environment is changing has stunned a lot of the experts.

In fact, Bloomberg economists Dan Hanson and Tom Orlik openly admit that they are “surprised” by how quickly the global economy has shifted…

“The cyclical upswing that took hold of the global economy in mid-2017 was never going to last. Even so, the extent of the slowdown since late last year has surprised many economists, including us.

Of course, the U.S. has not been immune from the changes.  The U.S. economy is rapidly slowing down as well, and this is something that I have been heavily documenting on my website.

And now we have just received more confirmation that the economy is decelerating.  The Atlanta Fed has just updated their GDPNow model yet again, and with this new revision, they are now projecting that the U.S. economy will grow at a rate of just 0.2 percent during the first quarter of 2019…

Moments ago we got another confirmation of this, when following the latest retail sales report which saw a dramatic cut to December retail sales even as January surprised modestly to the upside, the Atlanta Fed slashed its Q1 GDP nowcast, and after rebounding modestly from 0.3% to 0.5% a week ago, it has once again slumped, and is now at the lowest recorded level, and just 0.2% away from economic contraction.

This is how the AtlantaFed justified its latest Q1 GDP cut, which as of March 11 was just 0.2 percent, down from 0.5 percent on March 8: “After this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent.”

In other words, we are just a razor-thin margin away from entering an economic contraction.

Last week, we learned that U.S. job cut announcements were up 117 percent in February when compared to last year.  All of the economic momentum is in a negative direction right now, and it is going to be exceedingly difficult to avert a recession at this point.

And of course, a lot of analysts believe that what is coming will be a whole lot worse than just a recession.  The greatest debt bubble in the entire history of our planet is in the process of bursting, and the consequences are going to be absolutely horrific.  I really like how financial expert Egon von Greyerz recently made this point

People must understand that the world has never faced risk of this magnitude. We are now in the final seconds of the global mega bubble, the likes of which the world has never seen before. What will happen next will be worse than the fall of the Roman Empire, much worse than the South Sea and Mississippi Bubbles, and will create a disaster that will dwarf the Great Depression of the 1930s.

The problem is simple to define and is all based around debts and liabilities. At the beginning of this century, global debt was $80 trillion. When the Great Financial Crisis started in 2006, global debt had gone up by 56% to $125 trillion. Today it is $250 trillion.

There is no way that a 250 trillion dollar bubble is going to burst in an orderly fashion.  Essentially, we are looking at the sort of apocalyptic financial scenario that I have been warning about for a long time, and most people have no idea that it is coming.

And if people only listened to the financial authorities, it would be easy to get the impression that everything is going to be just fine.

For example, Fed Chair Jay Powell just told 60 Minutes that the outlook for the U.S. economy “is a favorable one”.  The following comes from Fox Business

Jay Powell, the head of the Federal Reserve, says he does not see a recession hitting the U.S. economy anytime soon.

“The outlook for our economy, in my view, is a favorable one,” Powell said Sunday in an interview with CBS’s Scott Pelley for “60 Minutes.”

If you are tempted to believe Powell, let me remind you of what former Fed Chair Ben Bernanke told Congress in early 2008

“The U.S. economy remains extraordinarily resilient,” the U.S. central bank chief said in answering questions after testifying before the House of Representatives Budget Committee.

Bernanke added that growth will be worse this year. “We currently see the economy as continuing to grow, but growing at a relatively slow pace, particularly in the first half of this year,” he said.

Of course, we all remember what happened next.  The U.S. economy plunged into the worst economic downturn since the Great Depression of the 1930s, and we are still dealing with the aftermath of that crisis to this day.

Nobody is going to ring a bell when the next recession starts.  It is just going to happen, and just like last time, most Americans are going to be blindsided by it.

Article posted with permission from Michael Snyder

Millennials Have $1 Trillion In Debt – Most Don’t Own Homes

Millennials are the most deeply indebted generation that has ever walked the face of the earth.  Most don’t even own a home, yet they suffer under the weight of $1 trillion debt load.

According to an op-ed by Market Watch, this is not a good thing and doesn’t bode well for the millennial generation or the overall economy.  The debt will be a problem, and millennials will pay so much for student loans that consumption and investment will be crowded out.  While the $1 trillion number is large and not unnoticeable, the issue is what makes up all of this millennial debt. It’s mostly student loans, and a staggeringly high amount of these loans are in delinquency.

Society has done the millennial generation a great disservice by insisting they go into debt tens or even hundreds of thousands of dollars to get jobs that can be done with no college degree.  The op-ed published in Market Watch states:

On a societal level, imagine what happens if the economy takes a wrong turn and these student loans — which are already 10% delinquent — go to 40% delinquent?

Revolution.

Not to get all “Book of Revelation” on you, but debt has historically led to war and inflation and autocracy.

Once you know that, you develop a healthy respect for debt and the destruction it can cause. -Market Watch

If you are in debt, in most cases it’s your fault. But in the case of millennials, they made decisions to take out student loans when they were too young to make these decisions. What’s so sad and telling is that parents of these debt riddled millennials have never taught their kids about money and never suggested working and saving as a means to pay for a college education.  They’ve never said they should not buy for something they cannot afford pay for.  Yet so many take out a loan before they have even earned a dollar of income. And the parents, in many cases, have set a poor example by being in so much credit card debt and taking out massive car loans.

It has become the American way, to buy things and hope you can afford the payment. And student loan debt, because it’s so easy to get, has crowded out other kinds of debt.  It’s also “government debt” and not going be wiped away when filing for bankruptcy.  Student loans will follow you around until they are paid off – in full.  And that’s something that should also be looked into.  The problem is millennials have been promised easy money, and it is easier than working for that money.

Even if a recession doesn’t happen, the absolute best-case scenario is that people will just limp along with the crushing weight debt, crowding out consumption and investment. People live in poverty, retire in poverty, and die in poverty. And it can be attributed to the massive amounts of debt they’ve taken on.

There’s a difference between poor and broke. It would be nice if millennials now taught their children the power of debt, and how it can enslave a person. Hopefully, the next generation won’t make as many mistakes.

Read Market Watch’s op-ed here.

Article posted with permission from Mac Slavo

12 Statistics That Prove That The U.S. Is Facing A Consumer Debt Apocalypse

In the entire history of the United States, consumers have never been in so much debt.  And that would not be a crisis as long as the vast majority of us were regularly making our debt payments, but as you will see below delinquency levels are starting to rise to extremely alarming levels.  In fact, some of the numbers that are coming in are even worse than we witnessed at any point during the last recession.  If things are this bad already, what are they going to look like once the economy really gets bad?  Because even though it appears that we are heading into a new recession, according to the Federal Reserve it has not officially begun yet.  That means that much worse is yet to come.  Just like last time, millions of Americans will likely lose their jobs, and without an income, most of those that suddenly find themselves unemployed will not be able to pay their bills.  The stage is set for the largest tsunami of consumer debt defaults that this country has ever seen, and that will absolutely devastate major financial institutions all across America.

If you think that I am exaggerating even a little bit, please read over the following list very carefully.  The following are 12 statistics that prove that the U.S. is facing a consumer debt apocalypse…

#1 Total consumer debt in the United States just surpassed the 4 trillion dollar mark.  That has never happened before in all of U.S. history.

#2 When you throw in mortgages and all other kinds of individual debt, U.S. consumers are now 13.5 trillion dollars in debt.

#3 A whopping 480 million credit cards are in circulation in this country.  That number has shot up by nearly 13 percent since 2015.

#4 U.S. consumers are carrying 870 billion dollars worth of balances on their credit cards right now.

#5 56 percent of Americans that currently have credit card balances have been carrying them for more than a year.

#6 The number of “seriously delinquent”credit card accounts in the U.S. has shot up to 37 million.

#7 Americans now owe a total of 1.3 trillion dollars on their auto loans.

#8 At this moment, more than 7 million Americans are delinquent on their auto loan payments.  The figure has already surpassed what we witnessed during the peak of the last recession by about a million.

#9 The total amount of student loan debt in the United States has reached the 1.5 trillion dollar mark.  Over the last 10 years, that number has more than doubled.

#10 Right now, more than 166 billion dollars in student loan debt is considered to be “seriously delinquent”.

#11 Millennials are now more than a trillion dollars in debt.  No generation of Americans has ever been deeper in debt at this stage in life.

#12 One recent survey found that 78 percent of Americans “are living paycheck to paycheck”.  Suffocating debt levels are a big reason why that figure is so incredibly high.

Since so many Americans are living paycheck to paycheck, that means that there is very little room for error.  During the last recession, large numbers of Americans immediately began getting behind on their bills once they were laid off, and we saw mortgage defaults rise to unprecedented levels.  Sadly, we haven’t learned from our past mistakes, and millions upon millions of Americans will find themselves drowning in an ocean of red ink once again during this next recession.

But even if you are not living paycheck to paycheck, carrying credit card balances is a very unwise thing to do.

Most Americans don’t realize that if you only make the minimum payment on a credit card every month, you can end up paying more in interest than you did for the original purchases.  The following comes from USA Today

If a credit-card borrower only made the minimum payments on $5,000 of debt, for example, they’d be in debt for more than 18 years and would end up paying $6,372 in interest based on national average interest rates, according to Ted Rossman, industry analyst for CreditCards.com.

If you keep playing this game, I promise you that you will never get rich.  Instead, the only people that will be getting wealthy will be the people that are receiving your debt payments.

Credit card debt is one of my pet peeves.  One of the best financial moves that anyone can make is to get out of credit card debt and never look back.

And that is particularly important at this juncture because the economy is really starting to slow down.  Compared to last year, U.S. job cut announcements were up 117 percent in February.

We haven’t seen anything like that since the last financial crisis.

At this point, even mainstream economists are openly admitting what is coming.  Mark Zandi, the chief economist at Moody’s Analytics, sounded downright gloomy in his most recent article…

The economy is throttling back. Way back. That’s the message in the near stall out of job growth last month. Job creation probably isn’t as bad as February’s disappointing numbers suggest — unusually poor weather played a role in limiting job growth to just 20,000 — but it is weaker than just a few months ago. Businesses are nervous, and sentiment is at risk of breaking if anything goes wrong.

And plenty could go wrong. A recession could materialize swiftly if businesses lose faith, and there is a good chance they will.

And when the next recession strikes, things are going to get very, very rough for U.S. consumers.

A consumer debt apocalypse is coming, and it is going to be incredibly painful.

Article posted with permission from Michael Snyder

Economy Teeters On Brink Of A Recession – US Debt Levels Absolutely Exploding

We now have official confirmation that the U.S. economy has dramatically slowed down.  In recent days I have shared a whole bunch of numbers with my readers that clearly demonstrate that a new economic downturn has begun.  And even though stock prices have been rising, the numbers for the “real economy” have been depressingly bad lately.  But what we didn’t have was official confirmation from the Federal Reserve that the economy is really slowing down, but now we do.  According to the Atlanta Fed’s GDPNow model, the economy is growing “at a 0.3 percent annualized rate in the first quarter”

The U.S. economy is growing at a 0.3 percent annualized rate in the first quarter, based on data on domestic construction spending in December released on Monday, the Atlanta Federal Reserve’s GDPNow forecast model showed.

For years, the goal has been to get U.S. growth above the key 3 percent threshold, but what this forecast is telling us is that economic growth is currently at one-tenth of that level.

That is just barely above recession territory.

So when I say that we are teetering on the brink of a recession, I am not exaggerating.

We also just got some really bad news about construction spending

Construction spending fell 0.6% in December from November, based on a seasonally adjusted annual rate, released today by the Commerce Department. Compared to December a year earlier, total construction spending inched up only 0.8% (not seasonally adjusted), the lowest growth rate since Oct 2011, coming out of the great recession.

Now we can add that to the list of all the other numbers that are telling us that very rough times are ahead.

Meanwhile, debt levels in the U.S. just continue to explode.

According to the latest report, Americans now have 480 million credit cards.  That is about 100 million more than during the last recession.

In other words, there are about 1.5 credit cards for every man, woman and child in the entire country.

The total amount of credit card debt in the United States has now reached a whopping $870,000,000,000.  That number has never been higher in the history of our nation.

And when you total up all forms of individual debt, U.S. consumers are now 13.5 trillion dollars in the hole.

Corporate debt levels are exploding as well, and this is something that Dallas Fed President Robert Kaplan warned about on Tuesday

U.S. nonfinancial corporate debt consists mostly of bonds and loans. This category of debt, as a percentage of gross domestic product, is now higher than in the prior peak reached at the end of 2008, Kaplan said.

A number of studies have concluded this level of credit could “potentially amplify the severity of a recession,” he noted.

The lowest level of investment-grade debt, BBB bonds, has grown from $800 million to $2.7 trillion by year-end 2018. High-yield debt has grown from $700 million to $1.1 trillion over the same period. This trend has been accompanied by more relaxed bond and loan covenants, he added.

Overall, corporate debt has more than doubled since the last financial crisis, and that is just one of the reasons why our financial system is far more vulnerable today than it was just before the last financial crisis.

This week we also learned that the federal budget deficit is exploding as well.  The following comes from Business Insider

According to a report from the Treasury Department released Tuesday, the budget deficit — that is the difference between what the federal government takes in and what it spends — hit $310 billion in the first four months of fiscal year 2019.

Fiscal years for the federal government run October through September, so the data reflects the shortfall from October 2018 through January 2019. Based on the data, the deficit increased by 77% compared to the same period the prior year.

A 77 percent increase in one year?

I don’t even have the words to describe how foolish this is.

We are on pace to add way over a trillion dollars to the national debt this year, and one of the big things fueling this horrific debt binge is our rapidly expanding interest payments

Finally, and perhaps most concerning, is that for the first four months of this fiscal year, interest payments on the U.S. national debt hit $192 billion, $17 billion, or 10% more than in the same four-month period last year and the most interest ever paid in the first third of the fiscal year. As Reuters’ Jeoff Hall points out, annualizing the $192BN interest expense means that the interest on U.S. public debt is on track to reach a record $575 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to 2.7% of estimated GDP, the highest percentage since 2011.

But according to the proponents of modern monetary theory (MMT), we can spend as much money as we want because “deficits almost never matter”

Because MMT holds that government spending isn’t funded by taxes, the Green New Deal doesn’t include any measures to finance the very large, open-ended fiscal commitments it would undertake. According to MMT economists, the only possible danger from the resultant government debt would be inflation, which can usually be controlled with tools other than raising taxes. In other words, deficits almost never matter. So confident are they of their theory’s universal applicability that MMT proponents often respond to their critics with scorn.

If you can believe it, there are actually members of Congress that believe this stuff.  Of course, the truth is that our national debt is an existential threat to the continued existence of our nation, and this is a point that I have made repeatedly.

The U.S. economy was in far better shape just prior to the financial crisis of 2008 than it is now, and today we are drowning in far more debt than we were at that time.

The stage is set for the most terrifying economic horror show in American history, and the clock is ticking away with each passing day.

Article posted with permission from Michael Snyder

Retail Apocalypse Continues: Dollar Tree Closing Up To 390 Stores

The retail apocalypse is now in full swing.  As consumers drift toward the ease of online shopping, brick and mortar stores begin to close up. Dollar Tree is the latest in a wave of companies announcing that they will be closing several hundred stores in the following months.

Dollar Tree reported a $2.3 billion loss, which has propelled the company to announce store closures and renovations.  Dollar Tree plans to close 390 Family Dollar stores this year while renovating 1,000 other locations. “We are confident we are taking the appropriate steps to reposition our Family Dollar brand for increasing profitability as business initiatives gain traction in the back half of fiscal 2019,” CEO Gary Philbin said in announcing the results according to CNBC.

On an unadjusted basis, the company had a loss of $2.31 billion, or a loss of $9.66 a share, compared with a profit of $1.04 billion, or $4.37 a share, during the same quarter last year, which included an extra week.

This news comes as the clothing retailer Charlotte Russe announced they will close all of their stores and immediately begin to liquidate their inventory.  “We are partnering with the buyer and remain in talks to sell the (intellectual property), are optimistic about the future of the brand, and remain in ongoing negotiations with a buyer who has expressed interest in a continued brick and mortar presence to continue to serve our loyal customers in the future,” the fashion retailer said in a statement to USA TODAY.

In a court hearing in Wilmington, Delaware, on Wednesday, Judge Laurie Selber Silverstein approved the sale of Charlotte Russe’s assets to SB360 Capital Partners LLC, a liquidation company. According to court documents, store liquidation sales “shall commence no later than March 7” and end “no later than April 30.”

Charlotte Russe Holdings had been teetering on the edge of bankruptcy for some time, having announced a deal to renegotiate certain debts more than a year ago.

The San Diego-based mall chain filed for Chapter 11 bankruptcy protection in early February and outlined plans to close 94 stores. The chain also put itself up for sale and said if it didn’t find a buyer it would liquidate. –USA Today

A furious wave of retail store closures is underway.  Many companies have too much debt and can no longer remain competitive with companies such as Amazon.  The bankruptcy marks the latest in a series of similar cases among mall retailers that have been unable to identify any realistic sustainable path amid declining foot traffic and intense digital competition.

Article posted with permission from Mac Slavo

US Job Cut Announcements Rise 117 Percent To Highest Level In More Than 3 Years

We have not seen anything like this since the last recession.  Layoff announcements are coming fast and furious now, and the speed at which workers are being laid off is shocking a lot of people.  In this day and age, big companies have absolutely no loyalty to their workers.  The moment it becomes financially advantageous for them to start laying off employees, most of them will do it in a heartbeat.  I personally know someone that was an extremely hard worker and that put in extra time and effort for his company for many, many years, but he was just laid off because that is what the number crunchers determined was the right move.  It is a cold, cruel world, and as we witnessed back in 2008, job losses can occur at a pace that is absolutely breathtaking when a recession strikes.

Over the past couple of weeks, I have been documenting the numbers that indicate that a major economic slowdown has begun, and we may have gotten the biggest one so far on Thursday.

According to Challenger, Gray & Christmas, the number of job cut announcements in February was up 117 percent compared to the same period last year.  The following comes from Fox Business

While many experts and investors are eagerly awaiting data on status of the labor market Opens a New Window. to be released by the government on Friday, a new report shows U.S. employers cut more jobs Opens a New Window. last month than they have in the past 3.5 years.

Even though it is the shortest month of the year, U.S. employers announced plans to cut 76,835 jobs last month, according to a report from Challenger, Gray & Christmas. That’s a 117 percent year-over-year increase, and a 45 percent increase over January’s numbers.

You have to go all the way back to 2015 to find a month that was as bad as February.

Are you starting to see that the momentum for the economy has clearly shifted?

The economic news just keeps getting worse and worse as we roll through 2019, and the retail sector is being hit harder than just about anyone else.

In fact, retailers announced more job cuts in February than any other sector did

The retail sector had the most planned job cuts, with 41,201 so far this year – the highest January-February total since 2009. The industrial goods sector – including some manufacturers – followed with nearly 32,000 cuts announced during the same time period.

The primary reasons employers cited for eliminating positions were restructuring and bankruptcy.

This is being called a “retail apocalypse”, and we are on pace to absolutely shatter the all-time record for store closings in a single year.

At this point, retailers have already announced the closure of more than 5,300 stores.  The following list of retailers that have announced that they are shutting down at least 10 locations comes from Business Insider

Payless ShoeSource: 2,500 stores
Gymboree: 805 stores
Family Dollar: 390 stores
Shopko: 251 stores
Chico’s: 250 stores
Gap: 230 stores
Performance Bicycle: 102 stores
Charlotte Russe: 520 stores
Sears: 70 stores
Destination Maternity: 42-67 stores
Victoria’s Secret: 53 stores
Kmart: 50 stores
Abercrombie & Fitch: 40 stores
Christopher & Banks: 30-40 stores
JCPenney: 27 stores
Beauty Brands: 25 stores
Henri Bendel: 23 stores
Lowe’s: 20 stores

And that list doesn’t even include the fact that Amazon is closing all 87 of its pop-up stores.

I have repeatedly warned that we will be facing a future of boarded up windows, empty retail stores and abandoned malls, and it is happening right in front of our eyes.

Of course, it isn’t just the retail industry that is rapidly laying off workers.  Here are just a few of the highlights from the workforce reduction announcements that we have seen in recent days…

-Tesla continues to struggle, and they have already laid off 8 percent of their entire workforce.

-Microsoft is cutting approximately 200 jobs in their commercial sales business.

-JP Morgan is steadily shutting down bank branches in lower income neighborhoods.

-We Work has announced that they have let 300 employees go.

-Devon Energy is eliminating about 200 workers.

-Whole Foods is cutting back worker hours.

-Encana has announced that it is laying off 274 workers in the Houston area.

-In North Carolina, Duke Energy has eliminated 1,900 positions.

-Ocwen Financial is planning to lay off approximately 2,000 workers over the course of 2019.

And in my article yesterday, I noted that General Motors is shutting down four major production plants this year.

It’s really happening.

The bubble of debt-fueled false prosperity that we have been enjoying is disappearing, and the road ahead is going to be really rough.

On Thursday we also learned that U.S. household wealth has been plummeting.  In fact, the fourth quarter of 2018 was the worst quarter for household balance sheets since the last financial crisis

Americans’ net worth fell at the highest level since the financial crisis in the fourth quarter of 2018 as sliding stock market prices ate into the household balance sheet.

Net worth dropped to $104.3 trillion as the year came to an end, a decrease of $3.73 trillion from the third quarter, according to figures released Thursday by the Federal Reserve. The fall amounted to a drop of 3.4 percent.

An increasing number of families are feeling financially squeezed these days, and many of them are accumulating large amounts of debt as they attempt to keep things going.

But for a lot of Americans that are currently drowning in debt, the end of the road has already been reached.

In an article that I posted yesterday, I noted that an all-time record 7 million Americans are behind on their vehicle payments, 37 million credit card accounts are considered to be “seriously delinquent”, and 166 billion dollars worth of student loans are now in the “seriously delinquent” category.

This is a consumer debt crisis that already surpasses the numbers that we witnessed during the last recession.

Nobody is quite sure what is going to happen next.  This is very much a developing story, and I will share new numbers with you as I get them in.

We haven’t experienced anything quite like this since 2008, and most Americans are completely unprepared for a new economic downturn.

Article posted with permission from Michael Snyder

Deadbeat Nation: 37 Million Credit Card Accounts In The US Are “Seriously Delinquent” Right Now

Is the consumer debt bubble finally starting to burst?  If the latest numbers on delinquent credit card accounts are any indication, that appears to be precisely what is happening.  As I noted the other day, Americans currently have 480 million credit cards, and they are carrying 870 billion dollars worth of balances on those cards.  That is one giant pile of debt, but there won’t be a problem as long as the vast majority of Americans regularly make their credit card payments.  Unfortunately, the number of credit card accounts that are delinquent has been steadily rising, and now we are being told that the number of “seriously delinquent” accounts has shot up to 37 million

At the end of 2018, Americans struggled to make payments on the country’s $870 billion worth of credit card debt.

About 37 million credit card accounts were marked as seriously delinquent in the fourth quarter, meaning they were 90 or more days past due, an increase of two million from the same period a year earlier.

Remember, those accounts are not just behind.  We are talking about accounts that are at least 90 days past due.

It appears that the credit card industry has a burgeoning crisis on their hands.

Meanwhile, the number of Americans that are behind on their auto loan payments has reached an unprecedented level as well.

At this moment, more than 7 million Americans are delinquent on their auto loan payments.  That is a brand new all-time record, and it smashes the highest level that we witnessed during the last recession by about a million.

If things are this bad already, how high will these numbers go once we get really deep into the next recession?

The student loan debt bubble is starting to burst as well.  According to the most recent numbers, over 166 billion dollars in student loan debt is considered to be “seriously delinquent”.  That number has never been higher in all of U.S. history.

Right now, millions of Americans are deeply struggling with student loan debt, and an increasing number of them have decided to give up on making payments completely.

In an effort to combat this, the industry is encouraging a massive crackdown, and what we are currently witnessing in Florida may soon be coming to the rest of the nation.  The following comes from Zero Hedge

Some 1,000 healthcare workers have lost their licenses to practice in Florida due to their inability to pay off their student debt, a new report claims. The “crackdown”, as described, could potentially put hundreds of people out of work, and comes as a result of student loan companies lobbying states to enact laws that punish those who default on their loans by taking away their professional licenses. However, so far Florida is the only state actually enforcing the law.

Adam Walser, an investigative reporter for ABC, found that the state Board of Health had suspended more than 900 healthcare licenses, including those belonging to registered nurses, nurses assistants and pharmacists, over the last two years. There are additionally 12 other states that still have the power to take away healthcare licenses for unpaid student loans. However, officials in those states said that they haven’t suspended any licenses over the last two years.

In the middle part of the country, farm debt is a major story right now.

Farm debt delinquencies have hit the highest level that we have seen in 9 years, and the global trade war has pushed many family farms to the brink of bankruptcy.

Unfortunately, I don’t think that things are going to get any better for them any time soon.

But I bet that you aren’t hearing much about any of this on the news, are you?

Instead, we are being inundated by mindless stories that really don’t matter.  For example, there is supposedly a huge “controversy” about whether Kylie Jenner is really a “self-made” billionaire or not.

Who cares?

Our country is literally coming apart all around us, and we are supposed to obsess about Kylie Jenner?

On Wednesday, we learned that Dollar Tree Inc. will be closing up to 390 Family Dollar stores in 2019.  When you add that to the other store closings that have already been announced this year, it brings the grand total to nearly 5,000.

Can the mainstream media please talk about our ongoing “retail apocalypse” a little bit more?  That is far more important to the daily lives of most Americans than Kylie Jenner.

The U.S. economy is in really rough shape at this moment, and even the president of the New York Fed is now admitting that our economy will slow down “considerably” this year…

The US economy should slow “considerably” in 2019 as the boost from last year’s economic stimulus fades, the president of the New York Federal Reserve Bank said Wednesday.

Amid economic uncertainty, the Federal Reserve could “wait” before raising interest rates again, John Williams said in remarks to the Economic Club of New York.

For many Americans, the economic horror show of 2008 and 2009 is nothing but a fading memory at this point.  But the truth is that what is coming is going to be even worse than that.  Our financial system is far more vulnerable that it was in 2008, and our debt levels are far, far higher.

This unsustainable bubble of debt-fueled prosperity that we have been enjoying in recent years has lasted for far longer than it should have, and it is just a matter of time before things dramatically deteriorate.

And if the recent debt delinquency numbers that I just shared with you are any indication, we are a lot closer to economic doomsday than most people would dare to imagine.

Article posted with permission from Michael Snyder

Financial Crisis: The Trade War Cost Americans $1.4 Billion PER MONTH Last Year

Tariffs are taxes, and like any regulation or tax, the increased cost will get passed onto the consumer.  Although this is common sense, many still don’t believe that the trade war had an impact on their financial situation.  However, just last year, Americans (not the Chinese) spent $1.4 billion per month on trade war taxes.

The Trump Administration’s trade policies and increased tariffs cost American consumers $1.4 billion a month last year. Not many media outlets were there to tell anyone the honest truth that it’s the American public that will pay the tariffs, not the Chinese government.

Financial Experts Warn: Americans WILL Pay The Cost Of A Trade War

Regardless of President Donald Trump’s declaration that he is winning the trade war, American farmers and consumers appear to be the casualties. Two separate papers published over the weekend found that the cost of Trump’s duties (tariffs, so theft) to the U.S. economy was in the billions and being borne largely by American consumers.  Chinese companies aren’t paying the tariffs.  They simply raise their prices and American consumers or businesses shoulder the burden, and it didn’t take businesses long to pass on the cost to the consumer. The papers also declared that some of the world’s leading trade economists have said Trump’s tariffs would be the most consequential trade experiment seen since the1930 Smoot-Hawley tariffs blamed for worsening the Great Depression.

“This is kind of the worst-case scenario in terms of consumers,’’ David Weinstein, who analyzed the data, said in an interview. “It’s pretty unclear that this trade war is a net win for the economy at this point.’’ According to Time, in a separate paper published on Sunday four economists including Pinelopi Goldberg, the World Bank’s chief economist and a former editor-in-chief of the prestigious American Economic Review, put the annual losses from the higher cost of imports alone for the U.S. economy at $68.8 billion, or almost 0.4 percent of gross domestic product.

Goldberg’s study also found that consumers and U.S. companies were paying most of the costs of the tariffs. Additionally, after factoring in the retaliation by other countries, the main victims of Trump’s trade wars had been farmers and blue-collar workers in areas that supported Trump in the 2016 election.

After accounting for the impact of higher tax (theft) revenue and the higher prices set by domestic producers, the study found the aggregate annual loss for the U.S. economy fell to $6.4 billion, or 0.03 percent of GDP. So increasing taxes doesn’t boost the economy? Who knew, other than everyone with two brain cells to rub together.

Article posted with permission from Mac Slavo

18 Really Big Numbers Show US Economy Quickly Starting To Fall Apart

Virtually every piece of hard economic data is telling us that the U.S. economy is slowing down dramatically.  Many of the pundits have been warning that we could officially enter recession territory later this year or next year, but these numbers seem to indicate that it could happen a whole lot sooner than that.  But the stock market has been surging over the last two months, and at this point, stocks are off to their best start to a year since 1987, and as long as stock prices are rising a lot of people are simply not going to pay much attention to the economic alarm bells that are ringing.  But everyone should be paying attention because things are really starting to get bad out there.  The following are 18 really big numbers that show that the U.S. economy is starting to fall apart very rapidly…

#1 Farm loan delinquencies just hit the highest level that we have seen in 9 years.

#2 We just learned that U.S. exports declined by 4 billion dollars during the month of December.

#3 J.C. Penney just announced that they will be closing another 24 stores.

#4 Victoria’s Secret has just announced plans to close 53 stores.

#5 On Thursday, Gap announced that it will be closing 230 stores over the next two years.

#6 Payless ShoeSource has declared bankruptcy and is closing all 2,100 stores.

#7 Tesla is also closing all of their physical sales locations and will now only sell vehicles online.

#8 PepsiCo has started laying off workers and has committed to “millions of dollars in severance pay”.

#9 The Baltic Dry Index has dropped to the lowest level in more than two years.

#10 This is the worst slump for core U.S. factory orders in three years.

#11 We just witnessed the largest decline in the Philly Fed Business Index in more than 7 years.

#12 In January, sales of existing homes fell 8.9 percent from a year earlier.  That was the third month in a row that we have seen a decline of at least 8 percent.  This is an absolutely catastrophic trend for the real estate industry.

#13 U.S. housing starts were down 11.2 percent in December compared to the previous month.

#14 Compared to a year earlier, home sales in southern California were down 17 percent in January.

#15 In December, home sales in Sacramento County fell a whopping 22.5 percent compared to a year earlier.

#16 Pending home sales in the United States have now fallen on a year over year basis for 13 months in a row.

#17 More than 166 billion dollars in student loan debt is now “seriously delinquent”.  That is an all-time record.

#18 More than 7 million Americans are behind on their auto loan payments.  That is also a new all-time record, and it is far higher than anything that we witnessed during the last recession.

It appears that “the recovery” has finally come to an end.  After seeing all of those numbers, there is no way that anyone can possibly claim that economic conditions are “getting better”.

And even though the official government numbers are highly manipulated, we never even had one “boom year” throughout the entire “recovery”.

The final numbers for 2018 are now in, and last year was the 13th year in a row when U.S. GDP growth was below 3 percent.

The last time we had a “boom year” when economic growth was above 3 percent was all the way back in 2005.  That was in the middle of the Bush administration.

We have never seen a bad streak like this before in modern American history.  The following comes from CNS News

But prior to the current 13-year period when real GDP has failed to grow by 3.0 percent in any year, there has been no stretch (in the years since 1930) when the United States went as long as five straight years with real GDP failing to grow by at least 3 percent.

Even though the Federal Reserve pumped trillions of dollars into the financial system over the last decade, and even though we added nearly 12 trillion dollars to the national debt, the best that the authorities have been able to do is to stabilize the system for a while.  Now it is starting to sputter once again, and many believe that the next crisis will be far worse than the last one.

By contrast, the Great Depression of the 1930s featured some really bad years, but following those bad years, the U.S. experienced a tremendous economic boom

By contrast, after the stock market crash in 1929, the United States saw four years of negative annual GDP—1930 (-8.5), 1931 (-6.4), 1932 (-12.9) and 1933 (-1.2). But then in the nine full years from 1934 through 1942, real GDP grew by an average of 9.75 percent.

We should have had some boom years too, but we didn’t, and now things are going to get bad again.

The Democrats are going to blame the Republicans and the Republicans are going to blame the Democrats, but all of that arguing isn’t going to solve anything.

What is coming next has been a central focus of my work for a very long time.  The last recession was very painful, but it did not fundamentally alter life in America.

This next crisis will.

The “Everything Bubble” is bursting, the “Perfect Storm” is coming, and all of our lives will never be the same again.

But that doesn’t mean that there isn’t hope.  In fact, once things really start getting crazy hope is going to be one of the major themes in my work because people are really going to need it.

There will be great challenges, and life will be very different, but that doesn’t mean that life is over.

America is about to experience the consequences of decades of exceedingly foolish decisions, and the pain will be extreme.  But difficult times also offer an opportunity for dramatic change, and that is something that we will need to embrace.

Article posted with permission from Michael Snyder

The Looming US Government & Private “Debt Trap” Threat

The signals from financial markets today indicate that we could be on the verge of a new credit crisis.  The looming debt trap threat has ensnared millions of Americans, and they firmly believe that their government (which is $22 trillion in debt) will somehow protect them and save them from themselves.

There will come a time when no one will loan the government any more money. When that time comes, if you are dependent on the government for either welfare or a salary, you’ll be in a world of panic. But it won’t be much easier for those who are dependent on themselves either.  At that point in time, the government will attempt to steal more money from producers to try to make up for their horrible spending habits.  The economy will plunge into ruins taking society and the American standard of living with it.

Debt has become a looming crisis, and in America, it’s a trap.  People borrow more money than they will ever be able to repay and more and more creditors are willing to loan high-risk borrowers more money. According to Seeking Alpha, the debt based system we’ve been forced to live under is a ticking time bomb, and no one can see the clock.

Our best-case outcome of controlled price inflation is essentially that forecast by the Congressional Budget Office. Working from the CBO’s own figures, by 2023 we can estimate accumulated debt including intragovernmental holdings will be $26.3 trillion, including our estimated interest cost totaling $1.3 trillion.

The CBO assumes GDP will increase by 48% by 2028 to $29.803 trillion, whereas our cyclical case is for debt to rise to $51.4 trillion. While both these figures should be taken as purely indicative, clearly, US government debt will increase at a faster pace than the growth in GDP and will strangle economic activity.

If the purchasing power of the dollar declines more rapidly than implied by the CBO’s assumed 2% price inflation target, interest payable on Federal debt will in turn be sharply higher than expected, compounding the debt problem. The federal government will face a potentially terminal debt trap from which there can be no escape.

Seeking Alpha

As Americans struggle with record levels of debt in an economy they are all too often told is just fine and doing great, they face increased prices from trade war taxes and the costs of regulations.  It is a trap that is difficult to get out of.  Infamous financial guru Dave Ramsey has said: “you can wander into debt. You cannot wander out.”

Unfortunately, not one politician in Washington is focused on the national debt, unless it’s on how to raise it even more.  The best way to prepare for this horrific apocalyptic economy is to store some essentials, such as food and water, and have things that can be bartered. Also, consider getting yourself out of debt. Do what you can to pay off or pay down what you owe and stop borrowing money. A financial crisis is looming and it will impact those who are not prepared more than those who are.

“If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not.” -Tess Pennigton, The Prepper’s Blueprint

Article posted with permission from Mac Slavo

A Recession Indicator Having A Perfect Record For 70 Years Is About To Be Triggered

The unemployment rate has been a perfect forecaster of a recession in the past 70 years, and it appears to be edging closer to triggering that signal.  “It’s never been wrong. It’s something to watch,” said Joseph Lavorgna, chief economist for the Americas at Natixis.

As the unemployment rate hovers around 4% (the number reported in the mainstream media) a more accurate unemployment number is 8.1%.  This takes into account those who have given up on finding work and those who are underemployed (workers who are part-time but want full-time employment),  This more accurate unemployment number is called the U-6, while we often hear the U-3 reported on the news. But even former Federal Reserve chair Janet Yellen says the U-6 is a much more accurate indicator of where things are with regards to the economy.

According to Lavorgna, since 1948, the economy has always entered or been in a recession when the unemployment rate increased 50 basis points (or 0.50 percentage point) from its trailing cyclical low. Lavorgna added that a recession has occurred in all 11 instances regardless of the level of unemployment, according to CNBC. He pointed to the example of a recession in 1953 when the unemployment rate rose to just 3.1 percent, and in 1981 when the cyclical low in the unemployment rate was high at 7.2 percent.

The unemployment rate which was reported February 1, rose to 4 percent in January from 3.9 percent. It is currently 30 basis points above the low of 3.7 percent reported in November.  Based on simple math, the unemployment rate is close to triggering a recession indicator. But Lavorgna says the chances are still only 1 in 3 that that happens.  “The current rise is notable and would be troubling if it continues,” notes Lavorgna. “The recent increase in the rate has been due to rising labor force participation, which is a sign of economic strength, not weakness.” According to CNBC, the reason the unemployment rate has risen is actually a good thing.  The long-term unemployed are returning to the workforce and looking for a job. “Generally job growth is positive just before a recession,” said LaVorgna.

This isn’t the only indication that a recession is creeping up on the United States.  Other signs are there if you choose to look past the glassy-eyed talking heads in the media. Retail sales were so bad in December of 2018, that many say it had to be “suspect data” and not the simple fact that the economy isn’t as strong as many would have you believe.  If the data was not suspect, then a recession is on the way. And with retail stores closing at an alarming rate, it isn’t surprising to hear retail sales have dropped.

Article posted with permission from Mac Slavo

Report: ‘No Light At The End Of The Tunnel’ As A Wave Of Retail Stores Close

Another economic red flag has appeared and its the closure of retail stores.  According to a new report detailing the precarious situation of the current economy, there is “no light at the end of the tunnel” as the closure of brick and mortar stores will continue.

Coresight Research released an outlook of 2019 store closures Wednesday, saying, there’s “no light at the end of the tunnel,” according to several reports, including one from Yahoo News.  According to the global market research firm’s report, a mere six weeks into 2019, United States retailers have announced 2,187 closings of physical stores.  That’s up 23 percent compared to last year. Those closings include 749 Gymboree stores251 Shopko store,  and 94 Charlotte Russe locations.

This may not seem like such a big deal especially if you don’t often shop, but it’s a red flag for the overall economy.  Either customers/consumers now have less money and aren’t willing to borrow (use credit cards) to spend at stores anymore, or they are already maxed out and cannot spend.  Another issue could be the overbearing regulations and burdensome theft (taxation) levied on business. It could be a combination of all of those as well, making the cost of keeping a brick and mortar store open no longer worth it.

But reports and the media blame the growth of online sales, rising interest rates, and declining sales.  Bankruptcies also are continuing at a rapid pace “with the number of filings in the first six weeks of 2019 already at one-third of last year’s total,” the report states. That means companies have taken on more debt than they can handle, and much like individuals, when that happens, it is likely the beginning of some very rough times ahead.  And debt is a major concern right now for most economists.  Consumer debtstudent loan debtauto debt, and the national debt has all reached historic records – and that isn’t a positive sign for the economy.

Payless ShoeSource is reported to be considering its second bankruptcy and if Charlotte Russe doesn’t find a buyer by February 17, the chain plans to completely liquidate, according to a court filing. “The continuation of a high level of retail bankruptcies, with the annualized number of filings year-to-date in 2019 already outpacing the number in 2018,” Coresight said in the new report.

The economy is very unstable right now, and all the signs of a coming recession on there.  Will it happen in 6 months? One year? Two years? No one knows exactly, but the everything bubble the global economy is experiencing now will at some point, deflate.

Article posted with permission from Mac Slavo

National Debt Passes $22 Trillion: A Crisis In The Making

The national debt should be a huge concern for every single American, as the government is essentially stealing from people not yet born to pay for things now.  As debt increases, so does volatility and interest rates; and at some point, the government will have to admit they cannot pay that money back.

“Reaching this unfortunate milestone so rapidly is the latest sign that our fiscal situation is not only unsustainable but accelerating,” said Michael A. Peterson, chief executive officer of the Peter G. Peterson Foundation, a nonpartisan organization working to address the country’s long-term fiscal challenges.  According to Yahoo, the problem is that our taxes are too low, not the government’s frivolous spending.

According to Yahoo, a big national debt can also make it harder for the government to increase spending to combat the next recession or devote more money to retraining workers and helping the poor, among other programs.  It seems that the media is more concerned about making sure money is funneled through incompetent bureaucrats than anything else.  If government programs designed to help the poor with stolen funds (taxes) were effective, there wouldn’t be a skyrocketing homeless epidemic infecting socialist cities in California.

The problem is that government programs are never effective and aren’t voluntary.  They simply take money from some, and after paying incompetent “public servants” a pittance is returned to “help the poor.”

Peterson attributed the growing national debt to “a structural mismatch between spending and revenues.” And while that’s the truth, the media continues to hide the fact that firstly, taxation is theft simply because it’s compulsory, and not voluntary. Peterson then says that the biggest drivers of the deficit are the aging population, high healthcare costs, and growing interest payments, combined with a tax code that fails to generate sufficient revenue, he said.

However, what the mainstream media fails to tell anyone is that the federal government generated plenty of revenue (stolen funds). The ruling class collected a record amount of taxes in 2018. They stole $1,683,537,000,000 in individual income taxes in fiscal 2018 (October 2017 through September 2018), according to the Monthly Treasury Statement released today.  That doesn’t include taxation and theft of any other kind. In fiscal 2018, total tax collections equaled $3,328,745,000,000, according to the Treasury statement.  So what we have here, folks is a spending problem.  The ruling class steals your money, spends it on lavish salaries and homes for themselves, then goes into debt to not fix the problems they promised to when you voted. And yet we have a nation of statists that bow to this immoral culture as if it’s the only religion.

Perhaps if the mainstream media would dare to actually publish how much money is stolen from Americans to pay for the lavish lifestyles of the wealthy rulers who dictate their lives, we would have a lot more people demanding their freedom from the totalitarians they voted for.

Article posted with permission from Mac Slavo

US National Debt To Pass $22 Trillion

The U.S. national debt is wildly out of control, and nobody in Washington seems to care.  According to the U.S. Treasury, the federal government is currently $21,933,491,166,604.77 in debt.  In just a few days, that figure will cross the 22 trillion dollar mark.  Over the last 10 years, we have added more than 11 trillion dollars to the national debt, and that means that it has been growing at a pace of more than a trillion dollars a year.  To call this a major national crisis would be a massive understatement, and yet there is absolutely no urgency in Washington address this absolutely critical issue.  We are literally destroying the financial future of this nation, but most Americans don’t seem to understand the gravity of the situation that we are facing.

The Congressional Budget Office projects that the national debt and interest on that debt will both explode at an exponential rate in future years if we stay on the path that we are currently on.  According to the CBO, the federal government spent 371 billion dollars on net interest during the most recent fiscal year…

In fiscal 2018, the government spent $371 billion on net interest, while the Defense Department budget was $599 billion. Social Security benefits cost $977 billion, Medicare $585 billion and Medicaid $389 billion, according to the CBO estimates.

But the CBO said interest outlays’ rate of growth in fiscal 2018 was faster than that for the three mandatory federal programs: Social Security (up $43 billion, or 5 percent); Medicaid (up $14 billion, or 4 percent); and Medicare (up $16 billion, or 3 percent). In comparison, net interest on the public debt increased by $62 billion, or 20 percent.

The 371 billion dollars that we spent on interest could have been spent on roads, schools, airports, strengthening our military or helping the homeless.

Instead, it was poured down a black hole.

As interest rates rise, it is being projected that we will soon be spending more on interest on the national debt than we do on national defense.  And not too long after that, interest on the national debt will cost us more than the entire Social Security program each year.

The bigger our debt gets, the more interest we have to pay, and the CBO is projecting that we will add another 12 trillion dollars to the debt during the 2020s…

Washington has been drowning in red ink for years and it’s only going to get a lot worse over the next decade, a fresh government estimate shows.

The U.S. is likely to add $12 trillion in public debt from 2020 to 2029 through a combination of higher government spending and slower economic growth, according to the Congressional Budget Office.

Of course CBO estimates are almost always way too optimistic, and so reality will probably be a lot worse than that.

But if government debt is so bad, why do we just keep on accumulating more of it?

Well, the truth is that government debt always makes the short-term look better.  When the government borrows money and spends it into the economy, it increases GDP.  In essence, we are sacrificing our long-term prosperity in order for some short-term gain.

If we went back and removed the 11 trillion dollars that the federal government borrowed and spent over the last decade, we would be in the worst economic depression in American history right now.  But by stealing from the future, the federal government has been able to stabilize things.

Unfortunately, the future always arrives eventually, and our future is looking extremely bleak at the moment.

If we want to turn things around, we should not be afraid to learn from what other countries have done.  Switzerland and Sweden have both found a lot of success in managing their budgets by adopting very strict fiscal frameworks

What magic formula keeps the Swiss and Swedish fiscal houses in order?

In both cases, they adopted a comprehensive fiscal framework anchored by sensible fiscal targets and enforced by spending and tax limits. It allows them to live with prevailing economic cycles by pegging federal spending and debt to GDP — spending more when the economy is down, and less when growth is strong — and establishing a process for living within those goals.

But that would require discipline, and that is something that is severely lacking in our nation’s capital right now.

In fact, on the left it has become very trendy to say that the U.S. can never face a debt crisis because we can always “print more money”.  Here is one example

All lending to the U.S. government is done in dollars, and the Treasury controls the supply of that currency. It is literally impossible for America to face a pure debt crisis because it can always print enough money to pay its bills.

Again, that creates its own problems. Doing so would risk significant inflation which would almost certainly harm the country’s credit rating, making future borrowing more expensive. However, America structurally can’t reach a point where it doesn’t have the money to pay its debts; only a point where it prioritizes different concerns.

There is so much wrong with those two paragraphs that I don’t even know where to begin.

First of all, the U.S. Treasury does not control the supply of our currency.  The Federal Reserve does, and under normal circumstances more “Federal Reserve notes” do not come into existence unless a corresponding amount of U.S. debt is also issued.

In other words, the process of creating more money also creates more debt.  Most Americans simply do not understand that the Federal Reserve system was designed to be a perpetual debt machine, and it is the primary reason why we are now nearly 22 trillion dollars in debt.  During my run for Congress, abolishing the Federal Reserve was one of the key issues that I ran on, and we need to continue to educate the American people about these issues.

Because the truth is that the national debt is an existential threat to the future of this nation, and we are systematically destroying the very bright future that our children and our grandchildren were supposed to have.

Article posted with permission from Michael Snyder

63 Of America’s Largest 75 Cities Are Completely Broke

The debt crisis in the United States of America has reached apocalyptic proportions.  A new and horrifying report out details the reason why 63 of America’s largest cities are completely broke: debt and overspending.

According to a recent analysis of the 75 most populous cities in the United States, 63 of them can’t pay their bills and the total amount of unfunded debt among them is nearly $330 billion. Most of the debt is due to unfunded retiree benefits such as pension and health care costs.  That means those depending on that money, likely won’t see a dime of it. 

“This year, pension debt accounts for $189.1 billion, and other post-employment benefits (OPEB) – mainly retiree health care liabilities – totaled $139.2 billion,” the third annual “Financial State of the Cities” report produced by the Chicago-based research organization, Truth in Accounting (TIA), states. TIA is a nonprofit, politically unaffiliated organization composed of business, community, and academic leaders interested in improving government financial reporting.

Many state and local governments are not in good shape, despite the economic and financial market recovery since 2009,” Bill Bergman, director of research at TIA, told Watchdog.org.

The top five cities in the worst financial shape are New York City, Chicago, Philadelphia, Honolulu, and San Francisco. These cities, in addition to Dallas, Oakland, and Portland, all received “F” grades. In New York City, for example, only $4.7 billion has been set aside to fund $100.6 billion of promised retiree health care benefits. In Philadelphia, every taxpayer would have to pay $27,900 to cover the city’s debt. In San Francisco, it would cost $22,600 per taxpayer.

By the end of Fiscal Year 2017, 63 cities did not have enough money to pay all of their bills, the report states, meaning debts outweigh revenue. In order to appear to balance budgets, TIA notes, elected officials “have not included the true costs of the government in their budget calculations and have pushed costs onto future taxpayers.” –Hartford City News Times

To say that more simply: your children have been sold into debt slavery and owned by the governments; both local and federal. The government is officially punishing the unborn for their inability to handle money. What a time to be alive…

One major problem area TIA identifies is that city leaders are lying. (What a shock! A lying politician…) These political masters have acquired massive debts despite the balanced budget requirements imposed on them by scamming the public and enslaving them.

“Unfortunately, some elected officials have used portions of the money that is owed to pension funds to keep taxes low and pay for politically popular programs,” TIA states. “This is like charging earned benefits to a credit card without having the money to pay off the debt. Instead of funding promised benefits now, they have been charged to future taxpayers. Shifting the payment of employee benefits to future taxpayers allows the budget to appear balanced, while municipal debt is increasing.”

It’s only a matter of time until this system built on debt and theft comes crashing to the ground. How prepared are you?

Article posted with permission from Mac Slavo

CBO Report: Debt Is On An Unsustainable Course

The latest economic outlook from the Congressional Budget Office is dire.  It’s basically saying that if the federal government continues borrowing and spending at the current rate, an apocalyptic economic crisis is coming.

According to the CBO’s own report,  if spending continues at the projected pace the national debt and the federal deficit would reach alarming levels, causing a fiscal crisis in the United States.  The federal deficit is expected to reach $897 billion in the fiscal year 2019, alarming many economists.

Fiscally irresponsible spending bills coupled with the great recession boosted the debt dramatically over the past decade. And at the end of the 2018 fiscal year, the amount of public debt reached 78 percent of gross domestic product (GDP). The CBO estimates that debt held by the public will rise steadily over the next decade, reaching 92.7 percent of GDP by 2029 and 150 percent of GDP in 30 years. –The Epoch Times

This is rather dangerous news for the economy. “Even at its highest point ever, just after World War II, the debt was far less than that—106 percent of GDP,” Keith Hall, the director of the CBO said in his testimony at a congressional hearing on January 29. But the government won’t do anything about it.  In fact, they want to spend and tax even more.

The CBO is warning that the high and ever-rising national debt will have significant negative consequences for the economy. “We anticipate a very strong, tough budget coming out to hold down spending,” Larry Kudlow, White House chief economic adviser, told reporters on January 28. “The President has talked about this—at least 5 percent reduction in the nondefense accounts across the board.” Kudlow believes the White House’s future proposal will lower spending and cut the deficit. “Economic growth is absolutely essential to reducing the deficit share of GDP, which is the burden on the economy,” he added.

As private debt and public debt both rise to alarmingly high levels, the economy hangs in the balance.  It certainly won’t take much for this gigantic everything bubble we’ve found ourselves in to burst.

Read the CBO’s entire “Economic Outlook” report by clicking here. 

Article posted with permission from Mac Slavo

Trump Administration Warns: Economy May Not Grow During First Quarter

This government shutdown is really starting to take a toll on the U.S. economy.  On Wednesday, the chair of the White House Council of Economic Advisers made an absolutely stunning admission.  We all knew that the global economy was slowing down, and we all knew that U.S. economic activity was beginning to sputter, but up until this week, the Trump administration had always insisted that we are not heading for a recession.  Well, all of that changed on Wednesday when Kevin Hassett publicly admitted that we could end up with zero GDP growth during the first quarter of 2019

A top economic adviser to President Donald Trump told CNN on Wednesday that the US economy may show no growth in the first quarter if the federal government shutdown lasts much longer.

White House Council of Economic Advisers Chairman Kevin Hassett said in an interview with CNN’s Poppy Harlow that he was not overly worried about the long-term effects of a government shutdown. But after Harlow asked him if the United States could wind up with zero GDP growth this quarter, he conceded that it was possible. “We could, yes,” he said.

With much of the government currently closed, and with no end to the shutdown in sight, it is inevitable that the economic numbers for the first quarter are not going to look as good as they could have been.

But if this shutdown lasts for the entire quarter, that could easily push us into an economic contraction, and that would send shockwaves all over the planet.

And at this point, there is definitely a possibility that this shutdown could go on for a couple more months.  Neither side intends to give in, and things are starting to get very personal.  On Wednesday, Nancy Pelosi made it exceedingly clear that she will not allow President Trump to deliver the State of the Union address at the U.S. Capitol until the shutdown ends under any circumstances…

House Speaker Nancy Pelosi dug in Wednesday on her call to delay the State of the Union address even after President Trump vowed to proceed with the speech next week, sending a curt letter making clear she will not allow the event to take place during the government shutdown.

Reacting to Pelosi’s letter, Trump told reporters at the White House “we’ll do something in the alternative,” suggesting a speech of some kind will still happen next week.

This truly is unprecedented.

Donald Trump is the very first president in all of U.S. history to be “disinvited” from delivering the State of the Union address.

And the hundreds of thousands of federal workers that are not receiving paychecks right now are really starting to get restless.  A lot of them have been living paycheck to paycheck, and so missing a couple of paychecks is a really, really big deal to those people.  As Marketwatch recently noted, some of them are actually “turning to food banks to feed their families”…

Within just a few weeks into the government shutdown, people are struggling to cope. We hear stories about people turning to food banks to feed their families. We hear stories about people who are in dire straits because they can’t get loans. We hear stories about people who can’t pay their mortgages. That’s not even one month into the shutdown.

If something this minor can cause such widespread pain and suffering, what would we see if a real crisis actually hit this nation?

Of course, the truth is that most Americans are simply not prepared to handle much of anything, and this is a point that Mac Slavo made quite well in one of his most recent articles

Almost 60% of Americans have less than $1000 in savings for a rainy day fund or an immediate emergency. It’s been ten years since the Great Recession left many Americans jobless with no money, and it appears most have learned nothing. The government shutdown serves as a painful warning and preview for what will happen once unemployment rises from 50-year lows.  Americans are far too dependent on others, including the government, for their survival.

For now, many that are struggling financially due to this shutdown are trying to bridge the gap by going into more debt.

And if the shutdown doesn’t last too much longer, that might work for a lot of people.

But it is very dangerous to go into too much debt, and a large portion of the country has already crossed that line.  For example, one recent survey discovered that approximately a third of all Americans are “afraid they’ll max out their credit card when making a large purchase”

Despite the dangers of high-interest loans, more consumers are testing the limits of plastic.

To that point, more than 1 in 3 people —or 86 million Americans — said they’re afraid they’ll max out their credit card when making a large purchase, according to a new WalletHub credit cards survey. (Most of those polled considered a large purchase as anything over $100.)

The only easy way out of this government shutdown would be for one of the two sides to completely fold, and that would be politically disastrous for whoever decides to do that.

The battle lines have been drawn, and this political game of chicken is going to go on until somebody blinks.

And if nobody blinks for a couple more months, the economic consequences of this government shutdown are likely to be quite severe.

Article posted with permission from Michael Snyder

Brutal Reality: Government Shutdown Is Proving Americans Are NOT Prepared For A Recession

The brutal reality is that most Americans are not prepared for the next economic downturn or recession. The government shutdown is highlighting just how much Americans rely on others as opposed to themselves, and how little they have saved for an emergency.

According to the newest op-ed article by Market Watch, the government shutdown is perfectly proving that Americans are not prepared for a financial disaster of any kind, let alone an economic recession. Many have long assumed that the government (which as we all know is almost $22 trillion in debt) will be using their money (stolen funds aka, taxation) to bail out those who get themselves into trouble. But the shutdown is proving just how little the government actually does and just how financially illiterate many Americans have allowed themselves to become.

The Shutdown Is Providing Evidence Of Private Businesses Making Government Obsolete

Almost 60% of Americans have less than $1000 in savings for a rainy day fund or an immediate emergency. It’s been ten years since the Great Recession left many Americans jobless with no money, and it appears most have learned nothing. The government shutdown serves as a painful warning and preview for what will happen once unemployment rises from 50-year lows.  Americans are far too dependent on others, including the government, for their survival.

Within just a few weeks into the government shutdown, people are struggling to cope. We hear stories about people turning to food banks to feed their families. We hear stories about people who are in dire straits because they can’t get loans. We hear stories about people who can’t pay their mortgages. That’s not even one month into the shutdown. –Market Watch

Most Americans live paycheck to paycheck, including those who work for the government.  Many won’t live below their means in order to save and it certainly seems that most citizens have picked up the government’s spending habits. They have also stopped saving for themselves. According to a recent GoBankingRates survey, only 21% of Americans have more than $10,000 in savings, with nearly 60% having less than $1,000 in savings. Almost 32% of Americans have nothing saved up at all.

And something most don’t want to hear is that every economic cycle will end and hit a low again despite the rosy attestations of those who wish to keep confidence high. There is nothing in history that suggests that extremely low unemployment can be maintained for an extended period of time. Indeed, it is precisely at the end of an economic cycle that low unemployment rates tend to reverse rather suddenly.

There is one way to prepare for a recession and it’s to end dependence on debt and save some money for an emergency. Without the shackles of credit card debt, student loan debt, and car payments, Americans could not only save more, but their money would go much further as no one has already claimed it in the form of debt repayment.

How Prepare For An Economic Downturn: Go Debt-Free In 2019

Article posted with permission from Mac Slavo

IMF Issues A Worldwide Warning: “The Risk Of A Sharper Decline In Global Growth Has Certainly Increased”

IMF Managing Director Christine Lagarde made headlines all over the globe this week when she declared that “the risk of a sharper decline in global growth has certainly increased”.  As you will see below, signs of economic trouble are popping up all over the planet, and pretty much just about everyone is now acknowledging that the global economy is slowing down.  But does that mean that we are headed for a global recession in 2019?  Well, things certainly do not look good right now, but there is still time to turn things around.  But in order to turn things in a more positive direction, something has got to be done to stop the downward momentum that seems to be accelerating in the early portion of this year.

On Monday, the IMF slashed their forecast for global economic growth for the second time in three months

The International Monetary Fund (IMF) revised down its estimates for global growth on Monday, warning that the expansion seen in recent years is losing momentum.

The Fund now projects a 3.5 percent growth rate worldwide for 2019 and 3.6 percent for 2020. These are 0.2 and 0.1 percentage points below its last forecasts in October — making it the second downturn revision in three months.

But at least they are still projecting global economic growth this year, and many would argue that “a 3.5 percent growth rate” is wildly optimistic.

At this point, it seems like just about everywhere you look economic confidence is declining.  For example, one recent survey found that the percentage of global CEOs that believe that the world economy will slow down over the next year has jumped dramatically

Rising populism, policy uncertainty and trade conflicts have led to a sharp drop in confidence among global CEOs.

The share of chief executives who think the global economy will slow over the next year has jumped to nearly 30% from 5% in 2018, according to a survey of 1,300 top business leaders by audit giant PwC.

At least publicly, corporate CEOs usually want to put a positive spin on the future, and so it is absolutely astounding that this number has risen so much in a single year.

But there is no denying what is happening around the world right now.  Over in Asia, China just announced that 2018 was the worst year for economic growth that country had seen in 28 years.

In addition, Chinese corporate bond defaults soared to an all-time record high in 2018, and it looks like 2019 could easily be even worse.

On the other side of the globe, Europe’s largest economy actually contracted during the third quarter

In Europe, its largest economic powerhouse Germany has been dented after it was announced the German economy had contracted in the third quarter.

This left Berlin skirting on the fringe of recession territory with economists fearing the most powerful economy in Europe was on the brink of financial chaos.

Europe faces great uncertainty during the months ahead.  There is a very real possibility that we could have a “no deal Brexit”, Italy is teetering on the brink of complete and total financial ruin, and the entire European banking system could begin to collapse at any time.

Meanwhile, we continue to get more indications that the U.S. economy is slowing down as well.

For example, on Monday we got news that JCPenney is “on the precipice of bankruptcy”

JCPenney already finds itself in a precarious position in the first month of 2019: stocks are dwindling, sales are falling, and its desolate boardroom is still waiting for a number of senior vacancies to be filled.

Analysts fear the multitude of problems the department store is now facing points towards a ‘broken business’ balancing on the precipice of bankruptcy.

And just like its once fierce competitor Sears, all 846 of its stores could face closure, potentially affecting thousands of workers and risking another heavy blow to an already beaten-and-bruised retail sector.

Just like Sears, JCPenney is headed for zero, but it will take some time for the process to fully play out.

And the same thing is true for the nation as a whole.  As James Howard Kunstler observed in his most recent article, our financial system “is on a slow boat to oblivion”…

As in this age of Hollywood sequels and prequels, America prefers to recycle old ideas rather than entertain new ones, so you can see exactly how the 2020 presidential election is shaping up to be a replay of the Great Depression, with Roosevelt-to-rescue! — only this time it’ll be with somebody in the role of Eleanor Roosevelt as chief executive. Donald Trump, of course, being the designated bag-holder for all the financial blunders of the past decade, gets to be Herbert Hoover. As was the case in the original, economic depression will segue into war, with maybe not such a happy ending for us as World War Two was.

There should be no doubt that the money part of the story is on a slow boat to oblivion. The world has been running on loans to such a grotesque degree that it’s managed the impressive feat of bankrupting the future. The collateral for all that debt was the conviction that there were ample amounts of future “growth” up ahead to service that debt. That conviction is now evaporating as car sales plummet, and real estate goes south, and nations twang each other over trade, and global supply lines wither. Globalism is unwinding — and not for the first time, either.

Of course, most ordinary Americans are not getting prepared for what is ahead because they do not believe that anything is going to happen.

Despite an abundance of evidence to the contrary, most people believe that the system is stable and that our political leaders can easily fix any problems that may arise.

Unfortunately, the truth is not that simple.  Our problems have been building for decades, and at this point, there is no way that this story is going to end well.

Article posted with permission from Michael Snyder

US Loses BIG In Trade War: Imports Rose, Exports Slashed

The trade deficit, which was made a big deal by president Donald Trump and ignited a trade war with China, has worsened.  The United States has so far lost big in the core driver of the trade war (the trade deficit) that was a top complaint of Trump’s and the U.S. may have already lost this trade war.

Exports of goods from the U.S. were slashed 26.3% and imports rose 38.5% worsening the trade deficit – which the tariffs were supposed to correct. The Trump Administration’s trade warfare with China began in earnest last March following steel and aluminum tariffs that primarily hit other countries. The U.S. and Chinese tariffs on each other’s goods then escalated repeatedly through September 18 with threats of much more the same by March 1 of this year.

There are no winners when an economic war such this is declared, and so far, the U.S. appears to be on the losing side. Americans are already living paycheck to paycheck with the increased cost of goods forcing the use of credit cards to make ends meet or they will see a massive decrease their standard of living. 

 According to the Cato Institute, Reuters, using Chinese data, estimated the U.S. trade deficit with China rose 17% last year. In fact, a report by the Daily Mail claims that China’s trade surplus to the U.S. is at an all-time record-breaking high of $323 billion. In light of the tariffs, Beijing has encouraged Chinese businesses to buy more goods made in their country while avoiding goods from the U.S.  And it’s appearing to pay off.  America has all but lost this economically disastrous trade war.

Unfortunately, the trade is likely still far from over. “The record US trade deficit with China will sit uncomfortably with the Trump administration,” Nick Marro of the Economist Intelligence Unit said in a report. “That may cast a shadow over the next round of trade talks.”

Trump and his Chinese counterpart, Xi Jinping, agreed on December 1, 2018, to postpone additional tariff hikes by 90 days while they negotiated more terms of this war. But penalties of up to 25 percent already imposed on billions of dollars of each other’s goods remain in place, raising the cost for American and Chinese buyers of soybeans, medical equipment, and other goods.

December’s trade contraction is “likely to continue into 2019 due to falling foreign demand, including demand for Chinese-made electronic products,” Iris Pang of ING said in a report.

Article posted with permission from Mac Slavo

New Numbers Indicate Global Economic Slowdown Far More Advanced Than Assumed

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So I guess I shouldn’t complain too much.

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

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

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

Article posted with permission from Michael Snyder

$3.5 Trillion A Year: America’s Health Care System Has Become One Of The World’s Largest Money Making Scams

If the U.S. health care system was a country, it would have the fifth largest GDP on the entire planet.  At this point, only the United States, China, Japan and Germany have a GDP that is larger than the 3.5 trillion dollar U.S. health care market.  If that sounds obscene to you, that is because it is obscene.  We should want people to be attracted to the health care industry because they truly want to help people that are suffering, but instead, the primary reason why people are drawn to the health care industry these days is because of the giant mountains of money that are being made.  Like so many other things in our society, the health care industry is all about the pursuit of the almighty dollar, and that is just wrong.

In order to keep this giant money machine rolling, the health care industry has to do an enormous amount of marketing.  If you can believe it, a study that was just published found that at least 30 billion dollars a year is spent on such marketing.

Hoping to earn its share of the $3.5 trillion health care market, the medical industry is pouring more money than ever into advertising its products — from high-priced prescriptions to do-it-yourself genetic tests and unapproved stem cell treatments.

Spending on health care marketing nearly doubled from 1997 to 2016, soaring to at least $30 billion a year, according to a study published Tuesday in JAMA.

This marketing takes many different forms, but perhaps the most obnoxious are the television ads that are endlessly hawking various pharmaceutical drugs.  If you watch much television, you certainly can’t miss them.  They always show vibrant, smiling, healthy people participating in various outdoor activities on bright, sunny days, and the inference is that if you want to be like those people you should take their drugs.  And the phrase “ask your doctor” is usually near the end of every ad…

The biggest increase in medical marketing over the past 20 years was in “direct-to-consumer” advertising, including the TV commercials that exhort viewers to “ask your doctor” about a particular drug. Spending on such ads jumped from $2.1 billion in 1997 to nearly $10 billion in 2016, according to the study.

As a result of all those ads, millions of Americans rush out to their doctors to ask about drugs that they do not need for diseases that they do not have.

And on January 1st, dozens of pharmaceutical manufacturers hit Americans with another annual round of massive price increases.

But everyone will just keep taking those drugs because that is what the doctors are telling them to do.  But what most people never find out is that the pharmaceutical industry goes to great lengths to get those doctors to do what they want.  According to NBC News, the big drug companies are constantly “showering them with free food, drinks and speaking fees, as well as paying for them to travel to conferences”.

It is a legal form of bribery, and it works.

When you go to most doctors, they will only have two solutions to whatever problem you have – drugs or surgery.

And since nobody really likes to get cut open, and since drugs are usually the far less expensive choice, they are usually the preferred option.

Of course, if doctors get off the path and start trying to get cute by proposing alternative solutions, they can get in big trouble really fast

Today’s medical doctors are not allowed to give nutritional advice, or the American Medical Association will come shut them down, and even if they were, they don’t know the right things to say, because they weren’t educated that way in medical college. So instead, M.D.s just sling experimental, addictive drugs at symptoms of deeper rooted sicknesses, along with immune-system-destroying antibiotics and carcinogenic vaccines.

That’s why any medicine that wrecks your health is easy to come by, just like junk food in vending machines. The money isn’t made off the “vending” products, the money is made off the sick fools who are repeat offenders and keep going back to the well for more poison – it’s called chronic sick care or symptom management. Fact: Prescription drugs are the fourth leading cause of death in America, even when “taken as directed.”

Switching gears, let’s talk about hospitals for a moment.

When you go to the hospital, it is often during a great time of need.  If you are gravely ill or if an accident has happened and you think you might die, you aren’t thinking about how much your medical care is going to cost.  At that moment you just want help, and that is a perfect opportunity for predators to take advantage of you.

Just consider the example of 24-year-old Nina Dang.  She broke her arm while riding her bicycle in San Francisco, and so she went to the emergency room.

The hospital that Facebook CEO Mark Zuckerberg donated so much money to definitely fixed her arm, but later they broke her bank account when they hit her with a $24,000 bill

A bystander saw her fall and called an ambulance. She was semi-lucid for that ride, awake but unable to answer basic questions about where she lived. Paramedics took her to the emergency room at Zuckerberg San Francisco General Hospital, where doctors X-rayed her arm and took a CT scan of her brain and spine. She left with her arm in a splint, on pain medication, and with a recommendation to follow up with an orthopedist.

A few months later, Dang got a bill for $24,074.50. Premera Blue Cross, her health insurer, would only cover $3,830.79 of that — an amount that it thought was fair for the services provided. That left Dang with $20,243.71 to pay, which the hospital threatened to send to collections in mid-December.

Most Americans assume that if they have “good health insurance” that they are covered if something major happens.

But as Dang found out, you can still be hit with crippling hospital bills even if you have insurance.

Today, medical debt is the number one reason why Americans declare bankruptcy.  Because of the way our system is set up, most families are just one major illness away from financial ruin.

And this kind of thing is not just happening in California.  The median charge for a visit to the emergency room nationally is well over a thousand dollars, and you can be billed up to 30 dollars for a single pill of aspirin during a hospital stay.

Our health care system is deeply broken, and it has been designed to squeeze as much money out of all of us as it possibly can.

Unfortunately, we are stuck with this system for now.  The health care industry is certainly not going to reform itself, and the gridlock in Washington is going to make a political solution impossible for the foreseeable future.

Article posted with permission from Michael Snyder

This Is Exactly The Kind Of Behavior That You Would Expect During A Stock Market Implosion…

If a doctor tells you that his patient’s condition is swinging up and down wildly, is that a good sign or a bad sign?  Of course, the answer to that question is quite obvious.  And if a doctor tells you that his patient’s condition is “stable”, is that a good sign or a bad sign?  Just like in the medical world, instability is not something that is a desirable thing on Wall Street, and right now we are witnessing extreme volatility on an almost daily basis.  On Thursday, the Dow was already down several hundred points when I went out to do some grocery shopping with my wife, and at the low point of the day, it had fallen 611 points.  But then a “miracle happened” and the Dow ended the day with an increase of 260 points.  As I detailed yesterday, this is precisely the sort of behavior that you would expect during a chaotic bear market.

As Fox Business has noted, bear market rallies are typically “sharp, quick and usually short”.  I figured that the momentum from Wednesday would carry over into the early portion of Thursday, so I was surprised when the Dow was down by so much as we neared the middle of the day.  But then around 2 PM we witnessed an extraordinary market surge

The Dow Jones Industrial Average posted a 865-point swing in less than two hours. The blue-chip index had been down in mid-afternoon more than 500 points to cut the previous session’s gains in half, before bargain hunters and short covering turned a big decline into a modest gain.

An 865 point swing in less than two hours is not “normal”.

In fact, it is about as far from “normal” as you can get.

Let’s talk about short covering for a moment.  During huge market downturns, speculators often try to make a lot of money very rapidly by shorting stocks.  But if momentum suddenly shifts, those short sellers can be caught with their pants down and the consequences can be quite dramatic.  The following comes from Marketwatch

Indeed, market veterans warn that massive, one-day rallies are often more characteristic of downturns, occurring as selloffs lead to significantly oversold technical conditions that leave markets ripe for short covering only to give way to renewed selling once the frenzy of forced buying is exhausted. Investors who short a stock are essentially betting that its price will fall by first borrowing the shares, but those traders can be forced to buy shares back if prices suddenly swing higher, which, in turn, can amplify price swings.

In addition, it appears that on Thursday there was more of the “forced pension rebalancing” that Zero Hedge has been talking about

It certainly has the smell of a massive pension reallocation as the moment stocks started to surge, bonds were dumped

No stock market crash in U.S. history has ever gone in a straight line.  There are always huge ups and downs during every market crash, and this market crash is no exception.

Ultimately, there is no way that you can possibly interpret the behavior of the market in recent days as “healthy”

Here’s the problem: as we discussed last night, since 1990, every comparable reversal – with a few exceptions – came during the 2008-2009 bear market.  According to Bloomberg data, in eight previous bear markets the S&P 500 experienced rallies of greater than 2.5% more than 120 times as the benchmark plunged from peak to trough. From the collapse of Lehman to the financial crisis bottom in March 2009, the S&P 500 rallied more than 4 percent on 13 different occasions.

This is not the kind of price action you see in normal bull markets,” said Robert Baird equity sales trader Michael Antonelli. “This is just a face ripping short cover rally. I am 100 percent not saying we are in a situation like 2008 now, but look at October 10, 2008 to October 13, 2008: the market rose nearly 12 percent in one day. October 27 to October 28, 2008, it rose 11 percent.”

Meanwhile, it appears that one of America’s most iconic retailers is about to go down in flames.

For years I have been warning that Sears was eventually “going to zero”, and if a last ditch rescue attempt does not materialize by the end of the day on Friday, Sears will be liquidated

The employer of more than 68,000 filed for bankruptcy in October. Its last shot at survival is a $4.6 billion proposal put forward by its chairman, Eddie Lampert, to buy the company out of bankruptcy through his hedge fund, ESL Investments. ESL is the only party offering to buy Sears as a whole, people familiar with the situation tell CNBC. Without that bid or another like it, liquidators will break the company up into pieces.

But as Lampert stares down a deadline of Dec. 28 to submit his offer, he is quickly running out of time. As of Thursday afternoon, Lampert had neither submitted his bid, nor rounded up financing, the people familiar said.

The inevitable demise of Sears could be seen from a mile away, and the same thing can be said about the country as a whole.

Our debt-fueled standard of living has been propped up by the biggest debt binge in the history of the world, and Wall Street has been transformed into the largest casino on the entire planet.

The entire U.S. economic system has become one huge Ponzi scheme, and all Ponzi schemes ultimately collapse.

Right now, we are in the early stages of a game that is going to take some time to fully play out.  The pessimism that has gripped Wall Street is starting to spread throughout the general population, and many experts were stunned to learn that consumer confidence just declined for a second month in a row

The confidence Americans feel in the economy fell for the second month in a row and touched the lowest level since last summer, perhaps a sign that worries about the 9 1/2-year U.S. expansion have spread from Wall Street to Main Street.

The consumer confidence index dropped to 128.1 this month from a revised 136.4 in November, the Conference Board said Thursday. Economists polled by MarketWatch had forecast a 133.3 reading.

If you have been a regular visitor to my websites, then nothing that will happen over the next few months should be a surprise to you.

The inevitable consequences for decades of exceedingly foolish decisions are starting to roll in, and the bursting of “The Bubble To End All Bubbles” is going to be beyond excruciating.

Article posted with permission from Michael Snyder

Stock Market Crash? Investors Brace For Market Open After Christmas Eve Meltdown

Monday was the worst Christmas Eve stock trading day in the history of the stock market. Now investors are bracing themselves for what could be a market crash just before the New Year.

According to Market Watch, in a shortened Christmas Eve session Mondaythe Dow Jones Industrial Average slid 653.17 points, or 2.9%, to 21,792.20, marking its lowest close since Sept. 7, 2017, while the S&P 500 index fell 2.71% to 2,351.10, its lowest since April 21, 2017. The Nasdaq Composite Index tumbled 2.21% to 6,192.92, its lowest close since July 10, 2017.

Last week was also the worst week of trading since the recession as the Nasdaq officially entered bear-market territory on Friday, and is now off 23.6% from its record close set August 29 of this year. The S&P 500 is down 19.8% from its September 20 record close, and the Dow has slid 18.8% from its October 3 record close.

Market Watch further reported that Monday’s dramatic session came after Treasury Secretary Steven Mnuchin tweeted that he had spoken with the CEOs of the country’s six biggest banks to assess the health of the banking system, raising concerns that the administration knows something the market doesn’t.

Many investors seem to think this “everything bubble” is slowly deflating now, however, a violent pop could shock the markets too. “I’m watching the U.S. economy implode from the beach,” Peter Schiff told MarketWatch during a recent phone interview from a beach in Puerto Rico. “We’re in a lot of trouble,” he said.

Citing a source close to the White House, CNN reported that Mnuchin could be in “serious jeopardy” from an increasingly frustrated President Donald Trump, who has been publicly supportive of his top cabinet member. Mnuchin supported the appointment of Jerome Powell as chairman of the Federal Reserve, whose monetary policy decisions have come under repeated criticism by not only Trump but those who are attempting to pay their debts back. Even though CNN reported Mnuchin was in “jeopardy”, the conflicting news outlet also stated that a White House source told CNN that Mnuchin’s job was not on the line.

“They’re raising rates too fast because they think the economy is so good. But I think they will get it pretty soon. I really do,” said Trump in his Christmas message on Tuesday, of the Federal Reserve, the United States’ central bank. Some blamed accelerated losses on Monday on a tweet by Trump, who blamed the Fed for the stock drop – and in this instance, Trump is correct.  The Federal Reserve is responsible for every single recession and depression in American history. Along with help from the government, band-aids get put on wounded economies that require tourniquets.

But then Trump immediately claims the trade war is “necessary” while knowing the American consumer is paying the cost for it. With rising cost of goods and services thanks to the trade war, and the rising cost of servicing debts, Americans are being backed into a corner.

Article posted with permission from Mac Slavo

The Worst Christmas Eve For The Stock Market EVER – The Dow Has Now Fallen More Than 5000 Points From The Peak

This is definitely not the gift that investors wanted for Christmas.  On Monday, the Dow Jones Industrial Average plunged 653 points as panic swept through Wall Street like wildfire.  That represented a 2.9 percent daily decline, and that made it the worst Christmas Eve for the Dow ever recorded.  Incredibly, the previous record had lasted for exactly 100 years.  Normally the day before Christmas is a very, very quiet day on Wall Street, but right now there are no “normal” days for the financial markets.  If you go back to early October, the Dow Jones Industrial Average hit an all-time record high of 26,951.81, and on Monday the Dow closed at just 21,792.20.  That means that the Dow has now plummeted more than 5,000 points in less than three months, and that is a major milestone.

The S&P 500 also crossed a major milestone on Monday when it entered bear market territory

The term on Wall Street is synonymous with serious, long-lasting declines in stock markets. In numeric terms, a bear market is a 20 percent or more drop from a recent peak.

The S&P 500 hit that milestone on Monday, dropping 20 percent from its 52-week high. Markets have stumbled through what is usually one of their best months of the year, with indexes on track for their worst December performances since the Great Depression in 1931.

What this means is that the longest bull market in all of U.S. history is officially dead.

And there is still about a week left in the month.  If things continue to unravel, this could ultimately turn out to be the worst December that the stock market has ever experienced.

Now that a bear market has begun, it is likely to stick around for a while.  Just consider these numbers

Since World War II, bear markets on average have fallen 30.4 percent and have lasted 13 months, according to analysis at Goldman Sachs and CNBC. When that milestone has been hit, it took stocks an average of 21.9 months to recover.

Of course all of the “experts” consulted by the mainstream media are going to assume that there will eventually be a recovery.

But could it be possible that this is the beginning of the “big crash” from which we will never recover?

Without a doubt, the elements for a perfect storm have been coming together for a long time.  We are witnessing great political shaking, our relationships with both Russia and China are rapidly deteriorating, a trade war has begun, social decay is spreading through our society like cancer, and the crust of our planet is becoming increasingly unstable.  Now we can add economic and financial instability to the mix, and a scenario is emerging that is eerily similar to what I have been warning about for a very long time.

Even before the markets crashed on Monday, U.S. Treasury Secretary Steven Mnuchin had scheduled an emergency call with the “Plunge Protection Team”.  The following comes from Reuters

The Treasury said Mnuchin will convene a call on Monday with the president’s Working Group on Financial Markets, which includes Washington’s main stewards of the U.S. financial system and is sometimes referred to as the “Plunge Protection Team.”

The group, which was also convened in 2009 during the latter stage of the financial crisis, includes officials from the Federal Reserve as well as the Securities and Exchange Commission.

But instead of calming the markets, many were concerned that this would actually accelerate the panic on Wall Street

“Panic feeds panic, and this looks like panic in the administration,” said Diane Swonk, chief economist at Grant Thornton. “Suggesting you might know something that no one else is worried about creates more unease.”

And without a doubt, what we witnessed on Monday was sheer panic.

Consumer lending has already been tightening up over the past couple of months, and the chaos on Wall Street is almost certainly going to cause financial institutions to become even tighter with their money.

As credit conditions tighten, economic activity will slow down, and that will make the coming recession even more inevitable.

There is one more key data point that I would like to share with you all today.  Since 1960, there have only been 13 years when the stock market has declined for the year.  As Joe Zidle has noted, most of the time those declines occur “before or during a recession”…

“I think there’s a massive gap between sentiment and fundamentals” for the market, Blackstone investment strategist Joe Zidle said on CNBC’s “Squawk Box.”

“If the market closes down for the year, which looks likely … it will only be the 13th time that we’ve seen a full year decline since 1960,” Zidle said. Of those 13 full year declines in the past 58 years, seven occurred before or during a recession.

Now that the Dow Jones Industrial Average has fallen more than 5000 points, I think that we can safely say that this is a stock market crash.

But how bad will this stock market crash ultimately turn out to be?

If the Federal Reserve had rushed in with emergency measures at the first signs of trouble, they probably could have stabilized things.  But the longer they wait, the harder it is going to be to stop the process that has been set in motion.

The Bubble of All Bubbles is starting to burst, and unless we see dramatic central bank intervention soon it is likely that an unprecedented financial nightmare is ahead.

I hope that you are able to rest and relax with family and friends this time of the year because it looks like what is ahead in 2019 is going to be extremely painful.

Article posted with permission from Michael Snyder

This Was The Worst Week For The Stock Market Since The Financial Crisis Of 2008

Just when you thought that things couldn’t get any worse, they did.  During normal times, a Friday before Christmas is an extremely boring trading session, but these are not normal times.  On Friday, the Dow Jones Industrial Average was down another 414 points, and that brought the total drop for the week to 1,655 points.  The marketplace has been completely gripped by panic, and CNN’s Fear & Greed index has just registered the highest “fear rating” that we have ever seen.  I keep saying that we have not witnessed anything like this since the last financial crisis, and the numbers clearly back that assessment up.  In fact, this was the largest weekly percentage drop for the Dow since October 2008

The Dow just suffered its deepest weekly plunge since 2008and the Nasdaq is officially in a bear market.

The miserable performance reflects deepening fears on Wall Street of an economic slowdown and overly-aggressive Federal Reserve.

Apprehension about a looming government shutdown and anxiety over higher interest rates were two of the major factors that pushed stocks down on Friday.

Normally trading volume is very, very light in the days leading up to Christmas, so what we just witnessed was extremely unusual.  Trading volume on Friday was “really heavy” with “more than 12 billion shares” changing hands…

In a bad sign on Friday, volume was really heavy. More than 12 billion shares changed hands on U.S. exchanges on Friday, the biggest volume in at least two years.

When I have warned about a “rush for the exits” in the past, this is the kind of thing that I am talking about.

Many investors were panic-selling on Friday because they wanted to be out of the market before things closed down for the holidays, and stock prices just kept getting hammered lower and lower.

For the week, the carnage was absolutely colossal.  The following is how CNBC summarized what happened…

  • The Dow lost 6.8 percent and 1,655 points on the week. It was its worst percentage drop since October 2008.
  • The Nasdaq lost 8.3 percent on the week and is now 22 percent below its record reached in August, a bear market.
  • The S&P 500 lost 7 percent for the week and is now down 17.8 percent from its record.
  • The Dow and S&P 500, which are both in corrections, are on track for their worst December performance since the Great Depression in 1931, down more than 12 percent each this month.
  • Both the Dow and the S&P 500 are now in the red for 2018 by at least 9 percent.

It should also be noted that the number of stocks hitting 52-week lows right now is at historically high levels.  The following comes from Zero Hedge

Since 1984, there were only eight days when a bigger proportion of shares did so, according to Sundial Capital Research. Two of them were in 1987 — during the famous Black Monday crash, when the Dow Jones Industrial Average lost 23 percent in one day, and then again during the following session. The rest were in the aftermath of the collapse of Lehman Brothers in October and November 2008.

And it isn’t just stocks that are getting hammered.  In fact, at this point 93 percent of all asset classes are down for the year.

As so many have already said, 2018 is a year when literally nothing is working.

A similar thing is happening over in Europe, where stocks are on pace for their worst year since 2008.  We are watching a truly global meltdown take place, and trillions upon trillions of dollars of paper wealth is being washed away.

Of course, not everybody has lost money.  Those that sold before this stock market crash started made out like bandits, and it is very interesting to note that over the past couple of months “the smart money” has been getting out of stocks at a pace that we have never seen before.

So what happens next?

For now, there will be a pause.  The stock market will be closed for the weekend, then it will open for half a day on Monday, and then it will be closed for Christmas on Tuesday.

Hopefully this “cooling off period” will help things to be much calmer by the time the markets open on Wednesday.

But even if things do calm down during the holidays, the truth is that this crisis is far from over.

The largest financial bubble in U.S. history is starting to burst, and a great deal of pain is ahead.

Article posted with permission from Michael Snyder

Is The Federal Reserve Actually TRYING To Cause A Stock Market Crash?

The Federal Reserve has decided not to come to the rescue this time.  All of the economic numbers tell us that the economy is slowing down, and on Wednesday Fed Chair Jerome Powell even admitted that economic conditions are “softening”, but the Federal Reserve raised interest rates anyway.  As one top economist put it, raising rates as we head into an economic downturn is “economic malpractice”.  They know that higher rates will slow down the economy even more, but it isn’t as if the Fed was divided on this move.  In fact, it was a unanimous vote to raise rates.  They clearly have an agenda, and that agenda is definitely not about helping the American people.

Early on Wednesday, Wall Street seemed to believe that the Federal Reserve would do the right thing, and the Dow was up nearly 400 points.  But then the announcement came, and the market began sinking dramatically.

The Dow Jones Industrial Average lost 720 points in just two hours, and the Dow ended the day down a total of 351 points.  This is the lowest that the Dow has been all year, 60 percent of the stocks listed on the S&P 500 are in bear market territory, and at this point, approximately four trillion dollars of stock market wealth has been wiped out.

We haven’t seen anything like this since the last financial crisis.  This is officially the worst quarter for the stock market since the fourth quarter of 2008, and it is the worst December that Wall Street has experienced since 1931.

It is insanity to raise interest rates when stocks are already crashing, but the Federal Reserve did it anyway.

They knew what kind of reaction this would cause on Wall Street and in other global markets, but that didn’t stop them.  The financial world is in utter turmoil, and this move by the Fed has definitely added fuel to the fire.

Could it be possible that they actually want a stock market crash?

Some are suggesting that the reason why the vote was unanimous was because they wanted to send a “strong signal” to President Trump.  He has been extremely critical of the Federal Reserve in recent weeks, and this could be a way for the Fed to show Trump who is really in charge.

They are calling this “the Trump economy”, but that is simply not true.  And when Barack Obama was in the White House, it wasn’t “the Obama economy” either.  Ultimately, it is the Federal Reserve that is running the economy, and they fiercely guard their independence and their authority.

President Trump knows that the only way that he is going to win in 2020 is if the economy is doing well, and he also understands that higher interest rates will slow the economy down.

So essentially the Federal Reserve has a tremendous amount of political power in their hands.

During the Obama era, the Fed pushed interest rates all the way to the floor and kept them there for many years.

But now the Federal Reserve has raised interest rates seven times since Donald Trump took office, and four of those rate hikes have been under current Fed Chair Jerome Powell.

Needless to say, it certainly doesn’t take a lot of imagination to figure out how Donald Trump is feeling about Powell at this moment.

Meanwhile, we continue to get more indications that the U.S. economy is heading for difficult times.  Just consider the following news about FedEx

FedEx shares are plunging after what Morgan Stanley called a “jarring” cut to its annual forecasts, suggesting global growth is slowing far more than most expect – in fact, the bank hinted at the possibility of a “severe recession” unfolding – and prompting expectations of an “uber-dovish hike” by the Fed.

The global logistics bellwether slashed its outlook just three months after raising the view, reflecting an unexpected and abrupt change in the company’s view of the global economy amid rising trade tensions between the U.S. and China. Not only were the cuts were deeper than the Street expected according to Morgan Stanley analyst Ravi Shanker, but everyone is pointing to the following comment from the press release: “Global trade has slowed in recent months and leading indicators point to ongoing deceleration in global trade near-term.”

To see the term “severe recession” used in such a context is more than just a little bit alarming.

The last time the U.S. economy went through a recession, millions of Americans lost their jobs and we saw a wave of mortgage defaults unlike anything we had ever seen before in modern American history.

Are we about to go through something similar?

Earlier today, a CNN article also used the term “recession”, and it discussed the fact that investors now want big corporations to focus on paying down their debts instead of buying back shares of stock…

Fears of an economic slowdown — or even recession — have turned a spotlight on the debt that businesses piled up during the past decade, when borrowing costs were historically low.

For the first time since the Great Recession, investors want companies to prioritize paying down debt rather than investing in the future or share buybacks and dividends, according to a Bank of America Merrill Lynch survey of global fund managers.

But stock buybacks are one of the only things that has been propping up the stock market.  The only way for the bubble to continue is for corporations to go into dizzying amounts of debt in order to fund massive stock buybacks, because the Federal Reserve clearly does not intend to support the markets right now.

At least for the short-term, the Federal Reserve could have calmed the markets and encouraged economic activity by leaving interest rates alone.

In the end, they decided not to do that, and that makes one wonder what they are really trying to achieve.

Article posted with permission from Michael Snyder

Top Economist: “If The Fed Raises Interest Rates Tomorrow They Should All Be Fired For Economic Malpractice”

The Federal Reserve is responsible for creating the stock market boom that we have witnessed in recent years.  Are they now also setting the stage for a stock market bust?  After hitting an all-time high earlier this year, the Dow has plunged more than 3,000 points from the peak of the market, and it would appear that it would be extremely irresponsible for the Fed to raise interest rates in such a chaotic environment.  In addition, evidence continues to mount that the U.S. economy is slowing down, and everyone knows that raising interest rates tends to depress economic activity.  So it would seem that it would not be logical for the Federal Reserve to raise interest rates at this time.  In fact, economist Stephen Moore told Fox Business that if the Fed raises interest rates “they should all be fired for economic malpractice”

“The Fed has been way too tight. They made a major blunder three months ago with raising the rates. It’s caused a deflation in commodity prices. And I will say this, David, if the Fed raises interest rates tomorrow they should all be fired for economic malpractice.”

If the Federal Reserve raises interest rates and indicates that more rate hikes are coming in 2019, it is quite likely that the markets will throw another huge temper tantrum.

But as Jim Cramer has noted, if the Federal Reserve make the right choice and leaves rates where they currently are, we could potentially see a significant market rally…

“Today was a dress rehearsal for the kind of rally we can get if the Fed does the right thing tomorrow and repudiates the idea that we need a series of rate hikes in 2019, not just one more tomorrow,” Cramer said Tuesday. “If we get the Fed on board, expect more positive action like we had this morning before the market gave up much of its gains.”

Unfortunately, there is a factor that is complicating things.

In recent weeks, President Trump has been extremely critical of the Federal Reserve and Fed Chair Jerome Powell.  If the Fed decides to leave interest rates where they are, that could be interpreted as them giving Trump exactly what he wants, and it is likely that they do not want to be viewed as siding with Trump.

This is yet another reason why we need to end the Fed.  The Fed has become just another player in the game of politics, and the truth is that the Federal Reserve is a deeply un-American institution.  Our founders intended for us to have a free market capitalist system, but instead, we have an unelected panel of central planners setting our interest rates and running our economy.

Since the Federal Reserve was created in 1913, there have been 18 major economic downturns, and now we are heading into another one.  Central banking manipulation endlessly causes boom and bust cycles, and hopefully, this time around the American people will finally decide that enough is enough.

As losses on Wall Street mount, hedge funds are starting to go down like dominoes, and that is going to cause huge problems for some of our largest financial institutions.  For example, we just found out that Citigroup could potentially lose 180 million dollars due to bad loans that it made to a prominent Asian hedge fund

It’s not just hedge funds that are blowing up left and right: so are the banks that are lending them money.

Citigroup is facing losses of up to $180 million on loans made to an unnamed Asian hedge fund which saw major losses on its FX trades Bloomberg reports citing a person briefed on the matter. The hedge fund and Citi “are in discussions on the positions and how they should be valued” which is usually a bad sign as when it comes to FX the mark to market is, at least, instantaneous. Bloomberg adds that the situation is fluid and the eventual losses may end up being smaller depending on how the trades are unwound.

We haven’t seen anything like this in 10 years, and if the Fed raises interest rates this new financial crisis could begin to escalate quite rapidly.

At this point, even former Fed chair Alan Greenspan is urging investors to “run for cover”

The former Federal Reserve chairman who famously warned more than two decades ago about “irrational exuberance” in the stock market doesn’t see equity prices going any higher than they are now.

“It would be very surprising to see it sort of stabilize here, and then take off,” Greenspan said in an interview with CNN anchor Julia Chatterley.

He added that markets could still go up further — but warned investors that the correction would be painful: “At the end of that run, run for cover.”

The markets were calmer on Tuesday because everyone was kind of waiting to see what the Fed would do on Wednesday.

The decision should be obvious, but unfortunately, things are never that simple.

We live in very uncertain times, and the shaking of our financial system has begun.

Article posted with permission from Michael Snyder

Ron Paul: The Market Correction Could Make Things ‘Worse Than 1929’

Former presidential candidate, Dr. Ron Paul says that the current market conditions are ripe for a correction of 50% and Wall Street is vulnerable to depression-like conditions in the next year. “It could be worse than 1929,” Dr. Paul said recently in an interview.

Paul said Thursday on CNBC‘s “Futures Now that “Once this volatility shows that we’re not going to resume the bull market, then people are going to rush for the exits.”  Paul added that “it could be worse than 1929.”  He was referencing the fateful day in October of 1929 when the stock market crashed, and the United States was flung into the Great Depression that lasted ten years. During that year, a worldwide depression was ignited because of the U.S.’s market crash.  The stock market began hemorrhaging and after falling almost 90 percent, sent the U.S. economy crashing a burning.

And of course, no one believes it could happen again. But Dr. Paul is continuously warning against the media’s constant optimism. As well-known Libertarian, Paul has been warning Wall Street that a massive market plunge is inevitable for years. He’s currently projecting a 50 percent decline from current levels as his base case, citing the ongoing U.S.-China trade war as a growing risk factor. “I’m not optimistic that all of the sudden, you’re going to eliminate the tariff problem. I think that’s here to stay,” he said. “Tariffs are taxes.”  And these tariffs are a direct tax on the American economy and consumer.

Paul places the blame for the inevitable future crash on the Federal Reserve’s “easy money policies” also known as quantitative easing.  He contended the Federal Reserve’s quantitative easing has caused the “biggest bubble in the history of mankind.” And this time, it’s an everything bubble.

‘The Everything Bubble’: Why The Coming Collapse Will Be Even Worse Than The Last

Soon, investors will be forced to reconcile a massive expansion of debt and falling productivity and growth with a host of potentially disruptive crises: The advent of government-sponsored cyber-warfare, followed by the collapse of the global dollar-based monetary system. Whereas the last crisis trigger massive devaluations in the real estate and stock markets, the next crash will be the result of a triple bubble in stocks, real estate and bonds as investors bail out of traditional assets in favor of the safety of gold, silver and – perhaps – cryptocurrencies like bitcoin. –Tyler Durden,  ZeroHedge.com

Unlike the Great Depression, however, Paul said the next historic downturn doesn’t have to last a decade. “If you allow the liquidation, it doesn’t last long,” De. Paul said, according to CNBC.

Paul also stated that Washington lawmakers, aka. the political elitists, do not have an ability to effectively fix the debt problem, nor will they be able to fix the next Great Depression, which along with the Federal Reserve, is mostly their fault.  and he’s been highly critical of the 2017 Trump tax cuts for creating a dire debt situation. “It’s so important to understand the original cause of the problem, and that is the Federal Reserve running up debt and letting politicians spend money,” he added. Anyone with even the smallest amount of sense can figure that out though.  So why won’t mainstream media blame the government and the Federal Reserve? We believe you know the answer to that question…

Article posted with permission from Mac Slavo