(The Economic Collapse Blog)—If the economy is fine, why are so many signs of trouble erupting all around us? Those that keep insisting that the U.S. economy is heading in the right direction conveniently ignore the very troubling facts and figures that I regularly share with my readers. When you take an honest look at the cold, hard numbers that the economy keeps producing, there is only one logical conclusion. Our entire system is crumbling, and it appears that conditions will soon get significantly worse.
Just look at what is happening to our banks.
The FDIC’s most recent report tells us that there are 63 “problem banks” in the United States, and collectively our banks now have 517 billion dollars in unrealized losses…
According to the Federal Deposit Insurance Corporation’s first quarter report, the US banking system is sitting on a collective $517 billion in unrealized losses and has 63 “problem banks.”
Those losses have been sparked primarily by a surge in interest rates over the past two years, which have driven down the price of fixed-income securities held by banks.
Unrealized losses held by banks increased by $39 billion in the first quarter relative to the fourth quarter of 2023.
“Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase,” the FDIC said.
I would love to know what banks are on that list.
Wouldn’t you?
But the FDIC will not tell us.
As Daisy Luther has accurately noted, the FDIC won’t release that information because they are afraid of bank runs…
We don’t get to know which banks are in trouble.
It could be my bank. It could be yours. Or maybe it’s not.
Are they big banks? Small ones?
The list is confidential to inhibit the likelihood of bank runs finishing off these institutions.
So we just don’t know.
If Americans had the truth, there would be bank runs all over the country tomorrow morning.
That is a rather comforting thought.
And the condition of our banks just continues to deteriorate because mountains of commercial real estate loans are going bad.
At this point, it has become clear that we have never faced a commercial real estate crisis of this magnitude in our entire history…
The CRE sector faces the triple whammy of falling prices, falling demand, and rising interest rates. The post-pandemic rise of telecommuting and work-at-home programs crushed demand for office space. Vacancy rates in commercial buildings have soared.
This has put significant stress on commercial real estate companies. The biggest bankruptcy in 2023 was the failure of the Pennsylvania Real Estate Investment Trust. The company had loaded up with more than $1 billion in liabilities.
The collapse of the commercial real estate market could easily spill over into the financial sector. That’s because a lot of loans are coming due.
According to the Mortgage Bankers Association, around $1.2 trillion of commercial real estate debt in the United States will mature over the next two years.
A lot of financial institutions will fail during the months and years that are ahead of us. Just hope that your money is not in one of them.
Meanwhile, one recent survey discovered that approximately two-thirds of all small businesses in the United States are teetering on the brink of disaster…
A new survey reveals that over two-thirds of small business owners are terrified of the state of the economy under Joe Biden’s watch, fearing that current conditions and ongoing downward trends will lead to them having to close their businesses.
As reported by the Daily Caller, the poll from the Job Creators Network Foundation (JCNF) shows that 67% of small business owners maintain such fears about the economy as it stands today, marking a 10-point increase from sentiments two years ago. In the same poll, participants’ perceptions of economic conditions for their own businesses fell from 70.2 to 68.1. Perception of national conditions fell even more drastically, from 53.2 to 50.4.
Maybe you don’t care about what is happening to our small businesses.
But you should, because close to half of all workers in the United States are employed by small businesses…
Forbes estimates that at least 46% of all employees in the United States, around 61.6 million people in total, are employed by small businesses.
I think that it is quite an ominous sign that the household survey showed that the U.S. economy lost a whopping 408,000 jobs last month.
Sadly, I think that a lot more months like that are coming.
Retailers are also really struggling right now.
In fact, as Mark B. Spiegel recently discussed, major retailer after major retailer has been reporting disappointing sales numbers…
The U.S. economy seems to finally be cracking. This month a slew of retailers (off the top of my head: Target, Lowe’s, Macy’s, Kohl’s, Best Buy and Foot Locker) reported negative year-over-year sales comps, and that’s before adjusting for the inflation that makes them 3% to 4% more negative in “real” terms. Others (Dollar General and Burlington) reported same-store sales comps in the +2% range, but that too was negative when adjusted for inflation, while Walmart and Nordstrom comps managed to roughly keep pace with inflation, but were unable to exceed it.
At one time, Walmart was an unstoppable retail behemoth. But now even Walmart is closing down stores…
WALMARTS are closing across the country – and retail experts say the cuts are signals of a bleak future for shoppers.
The multi-million dollar corporation has closed nine stores so far this year, which could be a warning sign for other retail giants.
Of course the stores that Walmart is shuttering are just a drop in the bucket compared to what other chains are doing. As I detailed in an article that I posted last week, we are on pace to lose 7,800 stores in 2024.
When the Drudge Report used the term “retail apocalypse” in one of their headlines on Monday morning, that was not an exaggeration at all.
We really are in the early stages of a historic meltdown.
And the outlook for the months ahead is extremely bleak.
In fact, Harry Dent just told Fox News that we should brace ourselves for “a bigger crash than we got in 2008 to ’09”…
Speaking in an updated interview with Fox News Digital, Dent cautioned that the “everything” bubble has still yet to burst, and it may be a bigger crash than the Great Recession.
“In 1925 to ‘29, it was a natural bubble. There was no stimulus behind that, artificial stimulus per se. So this is new. This has never happened,” Dent said on Tuesday. “What do you do if you want to cure a hangover? You drink more. And that’s what they’ve been doing.”
“Flooding the economy with extra money forever might actually enhance the overall economy long-term. But we’ll only see when we see this bubble burst,” he added. “And again, this bubble has been going 14 years. Instead of most bubbles [going] five to six, it’s been stretched higher, longer. So you’d have to expect a bigger crash than we got in 2008 to ’09.”
Our leaders were able to keep the game going for years by pumping trillions upon trillions of dollars into the system.
But they didn’t fix anything.
Instead, they just delayed the inevitable.
Our entire system really is crumbling all around us, and as it crumbles we are going to see chaos on a scale that most people don’t even want to imagine.
Already, major cities from coast to coast are being terrorized by theft, violence, drugs, homelessness, gangs and anarchy.
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If things are this bad already, what is America going to look like once our leaders completely lose control of the economy?
Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.