World Economy Projected To Shrink For First Time Since 2009 As Coronavirus Plays Havoc With Global Supply Chains

For more than a decade, the global economy has steadily grown quarter after quarter, but it looks like that streak is about to come to a very abrupt ending. The coronavirus outbreak in China has brought the Chinese economy to a virtual standstill, and as a result critical supply chains are in a state of chaos all over the world. And since it doesn’t look like the Chinese economy will be able to return to normal for an extended period of time, it appears that a worldwide economic slowdown is imminent. I warned about this the other day, but now we have even a clearer picture of what is happening. According to Capital Economics in London, this coronavirus outbreak will cause the global economy to shrink this quarter, and that will be the very first time this has happened since 2009

The economic casualties from China’s coronavirus epidemic are mounting as Asian and European auto plants run short of parts, free-spending Chinese tourists stay home and American companies brace for unpredictable turbulence.

That’s just the start of a financial hangover that is expected to linger for months even if the flulike illness is soon brought under control, economists and supply chain experts say. The Chinese epidemic’s aftereffects will likely cause the global economy to shrink this quarter for the first time since the depths of the 2009 financial crisis, according to Capital Economics in London.

And if the global economy shrinks for two quarters in a row, that will officially meet the definition of a “global recession”.

So here we are on the verge of the worst economic downturn in more than a decade, and even if this outbreak miraculously ended tomorrow it would still take quite an extended period of time for global supply chains to return to normal.

In particular, the auto industry has been hit extremely hard

The ripple effects of China’s shutdown are spreading, with the auto industry especially hard hit. Nissan temporarily closed one of its factories in Japan after running short of Chinese components, one week after Hyundai in South Korea did the same. Fiat Chrysler warned that it may shutter one of its European plants. Some U.S. manufacturers could face parts shortages in one to two weeks.

“I worry that it’s going to be a bigger deal than most economists are treating it as right now,” said Mohamed El-Erian, chief economic adviser at Allianz, the German financial services company. “It will take time to restart all these economic engines.”

Of course the global economy was already slowing down before this coronavirus outbreak started, but this has definitely helped to accelerate our problems.

One big red flag is the fact that Caterpillar’s sales are suddenly dropping. After “33 consecutive months of increases”, Caterpillar’s sales have now fallen for two months in a row. In fact, January’s enormous 7 percent decline caught many analysts completely off guard…

If Caterpillar is still the global industrial bellwether and leading manufacturing sector indicator it has been for the past century (and absent the Fed somehow printing buildings or excavating mines, it is), then the world is about to enter the worst manufacturing downturn since the financial crisis.

According to CAT’s latest retail sales data, in January the company posted a 7% drop in machine sales, the biggest drop since Jan 2017, and only the second consecutive negative print since December’s -5% drop following 33 consecutive months of increases.

Across the Atlantic, major supply chain headaches have contributed to stunning factory output declines throughout the eurozone.

Just check out these numbers

Factory output fell by 4.1 percent in the final month of the year compared with the same month a year earlier, according to figures published by Eurostat on Wednesday. Germany was among the states which suffered the most, as production dropped by 7.2 percent. Italy was close behind on a 4.3 percent decrease while France was down 3.2 percent.

Those numbers absolutely scream “recession”, and they aren’t likely to get any better until this coronavirus outbreak is over.

So all eyes will continue to be on China, and right now activity in major Chinese cities is way, way below normal. The following comes from Zero Hedge

Specifically, Morgan Stanley suggested that real time measurements of Chinese pollution levels would provide a “quick and dirty” (no pun intended) way of observing if any of China’s major metropolises had returned back to normal. What it found was that among some of the top Chinese cities including Guangzhou, Shanghai and Chengdu, a clear pattern was evident – air pollution was only 20-50% of the historical average. As Morgan Stanley concluded, “This could imply that human activities such as traffic and industrial production within/close to those cities are running 50-80% below their potential capacity.”

If the number of cases continues to rise at an exponential rate, there won’t be a “return to normal” any time in the foreseeable future.

So barring some sort of a miracle, we should all settle in for a very long global economic downturn.

But at least one small segment of the global economy is booming at the moment. Thanks to fears about the coronavirus, demand for private jets has absolutely skyrocketed

Wealthy travelers and major corporate clients are rejecting commercial airline travel and looking to private jets as a way to isolate themselves from the deadly coronavirus outbreak.

The uptick in interest comes as more airlines cut scheduled flights to and from mainland China and Hong Kong in the wake of the spread of the disease that originated in the Chinese city of Wuhan.

The elite are going to do all that they can to insulate themselves from this virus, and considering how easily it spreads, it is hard to blame them.

As I discussed earlier this week, a prominent medical expert in Hong Kong is warning that 60 to 80 percent of the total world population could ultimately end up catching this virus. And if that were to happen, it would greatly escalate all of the other problems that we are currently facing.

I am still hoping that such a scenario is not going to happen.

I am still hoping that global authorities can get this horrible virus under control soon, but with each passing day it is becoming more difficult to be optimistic about this outbreak.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

An Executive Order Has Initiated ‘Department Of Defense Global Campaign Plan For Pandemic Influenza And Infectious Diseases 3551-13’

It appears that the U.S. military is taking this coronavirus outbreak extremely seriously. An executive order has been issued which has initiated the implementation of “the Department of Defense Global Campaign plan for Pandemic Influenza and Infectious Diseases 3551-13”. We don’t know all of the details of the plan, but we do know that it instructs U.S. military officials “to prepare for widespread outbreaks”. Many in the mainstream media continue to try to convince us that this virus is not much more dangerous than the common flu, but if that is true then why is our military taking such a dramatic step? The following comes from a Military Times article

An executive order issued by the Joint Staff and approved by Defense Secretary Mark Esper this month directed Northern Command and geographic combatant commanders to initiate pandemic plans, which include ordering commanders to prepare for widespread outbreaks and confining service members with a history of travel to China.

The Navy and Marine Corps messages, issued Tuesday and Wednesday, respectively, reference an executive order directing U.S. Northern Command to implement the Department of Defense Global Campaign plan for Pandemic Influenza and Infectious Diseases 3551-13.

For now, we are not being told the specific details of this plan, and when Northern Command was asked about it they issued a very vague statement

“We coordinate with other combatant commands to assess potential impacts in the event of a pandemic and we ensure the U.S. military is poised to respond as required,” said Northern Command in a statement emailed to Military Times. “The military profession fosters a culture of planning, and the fact that we are coordinating planning efforts across the geographical combatant commands is consistent with how we prepare to respond, if directed.”

Thankfully, the virus is not spreading widely inside the United States so far.

But that could change at any time, and on Wednesday a 14th U.S. case was confirmed

A second person evacuated from Wuhan, China, to a U.S. Marine base near San Diego has been diagnosed with the new coronavirus, raising the tally of confirmed cases in the United States to 14, the Centers for Disease Control and Prevention (CDC) reported on Wednesday.

The patient was among 232 individuals who had been placed under quarantine at the Marine Corps Air Station Miramar after being airlifted from the epicenter of the coronavirus outbreak in Wuhan earlier this month, CDC spokeswoman Ana Toro said.

But 14 confirmed cases is just a tiny drop in the bucket compared to more than 59,000 confirmed cases in China.

We should be thankful for the low number of cases in this country, but Dr. Nancy Messonnier is warning that “we are likely to see community spread in the U.S.” at some point…

Top health officials prepped Americans for the prospect of novel coronavirus spreading in communities in the United States during a Wednesday news conference.

“At some point, we we are likely to see community spread in the U.S.,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases.

And if we do start seeing tens of thousands of confirmed cases here, the level of fear is going to rise dramatically and a lot of people are going to go completely nuts.

In fact, we are already starting to see some really strange things.

For example, a couple of “pranksters” in New York thought it would be really funny to spill a bucket of “coronavirus” in the middle of a crowded subway car

David Flores and Morris Cordewell donned hazmats suits for the stunt while holding a container filled with liquid that had biological hazard markings on it.

In the video Cordewell gets up and spills the liquid over the floor as train passengers quickly jump out of harm’s way. However, it turns out their bucket contained Kool-Aid juice.

Who would do something like that?

Yes, they probably thought that it was quite funny, but the truth is that this sort of a stunt could have taken a very tragic turn.

Over in China, we are witnessing things that are even more frightening.

For example, one woman that has apparently caught the virus decided to walk down the street in the middle of the day and touch every car door handle she came across.

In other words, it appears that she was purposely trying to spread the virus to others.

When things get really nuts, most people will behave at least somewhat rationally, but there will always be others that will completely snap.

And without a doubt, there are always crazy people that are trying to bring unusual things into this country. For instance, just check out this recent example from Zero Hedge

That’s exactly what happened two weeks ago: U.S. Customs and Border Patrol, in the midst of the coronavirus outbreak, seized a bag of dead birds that was being carried in the luggage of an airline passenger traveling from China to Washington D.C. on January 27.

The birds were packaged in a bag that had cartoon images on it and was seized at Dulles Airport from a passenger, who was arriving from Beijing, according to the NY Post. The passenger claimed that the birds were “cat food” and that he was planning to bring them to Maryland after his flight.

Our world is getting crazier with each passing day, and it is inevitable that we will see a lot more weird stuff happen in the months ahead.

We are in a battle with a virus that is perfect for spreading fear. It is invisible to the naked eye, it can survive on surfaces for up to 9 days, it has an incubation period of up to 24 days, and it spreads from person to person frighteningly easily.

To a certain extent, there is comfort in being able to see your enemy.

But we cannot detect this virus with our five senses. It could be on the next grocery cart you push, the next door handle you twist or the next hand that you shake.

That sort of uncertainty is going to drive a lot of people crazy if this virus starts spreading widely inside the United States, and so let us hope that such a scenario does not become a reality.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The Number Of Coronavirus Cases Has Just Exploded, And Many Fear That The Worst Is Yet To Come

Just as the mainstream media was starting to speculate that China could be getting this outbreak under control, a dramatic spike in the numbers has changed everything. All of a sudden people are freaking out again, global financial markets are gyrating all over the place and medical experts all over the world are making bold pronouncements of doom. On Wednesday, Hubei province reported 14,840 new infections and 242 more deaths from this virus. But the biggest reason why there was such a jump in the numbers is because a decision was made to reclassify patients that had been “clinically diagnosed” but up until now had not been counted as “confirmed cases”. The following comes from CNBC

China’s Hubei province reported an additional 242 deaths and 14,840 new cases as of Feb. 12 — a sharp increase from the previous day. The province said it is starting to include “clinically diagnosed” cases in its figures and that 13,332 of the new cases fall under that classification.

The government said that a total of 1,310 people have died in the province and that 48,206 people have been infected in the region.

So this really wasn’t as big of a change as many are making it out to be.

The following is what Hubei province is saying about the decision to reclassify patients

With the deepening of understanding of new coronavirus pneumonia and the accumulation of experience in diagnosis and treatment, in view of the characteristics of the epidemic in Hubei Province, the General Office of the National Health and Health Commission and the Office of the State Administration of Traditional Chinese Medicine issued the “Diagnosis and Treatment Plan for New Coronavirus Infected Pneumonia (Trial (Version) “adds” clinical diagnosis “to the case diagnosis classification in Hubei Province, so that patients can receive standardized treatment according to confirmed cases as early as possible to further improve the success rate of treatment.

According to the plan, Hubei Province has recently conducted investigations on suspected cases and revised the diagnosis results, and newly diagnosed patients were diagnosed according to the new diagnosis classification. In order to be consistent with the classification of case diagnosis issued by other provinces across the country, starting today, Hubei Province will include the number of clinically diagnosed cases into the number of confirmed cases for publication.

Overall, there are now 59,805 confirmed cases inside China, and the death toll has now passed the 1,300 mark.

But those are not the most important numbers.

To me, it is far more important to watch what happens to the number of cases around the rest of the world. Ultimately, that will determine whether this becomes a true global pandemic or not.

A week ago, there were 227 confirmed cases outside of China, and now there are 524. Over the course of about a week we have seen that number more than double, and that is definitely very troubling.

And we continue to get more anecdotal evidence that the situation inside China is far more dire than government officials are admitting.

For example, the Chinese government has been encouraging many businesses that shut down for the virus to reopen so that the economy can start humming again, but it looks like that may have been a huge mistake. In the city of Suzhou, a confirmed case was discovered right after one company reopened their doors, and that resulted in 200 employees immediately being placed under quarantine.

This virus is completely and totally out of control in China right now, and any attempts to “return to normal” too quickly will just make things worse.

Wishful thinking isn’t going to solve anything. It has become exceedingly apparent that this virus can be transmitted from person to person with extreme ease, and the Chinese need to settle in for a very long battle with this virus.

At this point, this virus is spreading very rapidly even among the police and the military

A staff member at the Central Theater General Hospital (Hankou Hospital) in Wuhan confirmed armed police officers were hospitalized.

Among them, 1,500 Chinese soldiers and 1,000 armed police are being quarantined, and China Human Rights and Democracy Information Center, headquartered in Hong Kong, reported on February 10 that 10 CCP soldiers and 15 armed police have been diagnosed with the new virus in Hubei province.

The Chinese People’s Liberation Army General Hospital (Hainan) Hospital in Sanya is preparing to test 3,000 people for new virus pneumonia samples.

300 armed police were isolated to a training site of the Hubei Provincial Corps of the Armed Police.

An epidemic has emerged in the Chinese Navy. After a serviceman of the Navy Submarine Force in Sanya, Hainan, was diagnosed with Covid-19, 300 sailors were isolated, and training programs on nuclear submarines, scheduled to start this month, have been suspended.

As this crisis continues to intensify, experts all over the planet are fearing the worst. Neil Ferguson of Imperial College London says that the death rate among those that have the virus in Wuhan could ultimately go as high as 18 percent, and Hong Kong epidemiologist Gabriel Leung is warning that most of the population of the globe could end up being infected if dramatic action is not taken.

But other medical professionals believe that this outbreak will start to fade once warmer weather arrives. Hopefully they are correct, but Dr. Nancy Messionnier says that it is still way too early to make that sort of an assumption

Dr. Nancy Messionnier of the Centers for Disease Control and Prevention sounds a similar note when it comes to predicting a slowdown of cases with warmer weather. “I think it’s premature to assume that,” she said during a call with reporters on Wednesday. “We haven’t been through even a single year with this pathogen.”

We shall see what happens. But even if this outbreak subsides when the weather is warm, it could still flare back up again in a massive way once next winter arrives.

In fact, many experts believe that we will now be dealing with this coronavirus year after year for the foreseeable future.

Hopefully that is not true, but without a doubt our world is getting a little bit crazier with each passing day.

It seems like one crisis after another just keeps popping up, and there will almost certainly be more great challenges that we must face in the months ahead.

For the moment, this coronavirus outbreak is taking center stage, and the numbers are getting significantly worse every 24 hours.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

The Majority Of Coronavirus Victims Are Men, And The Virus Is Hitting Adults Far Harder Than It Is Hitting Children

This coronavirus outbreak just keeps getting weirder. With each passing day the number of confirmed cases and the number of deaths continue to rise, but not all demographic groups are being affected equally. That seems very odd, but it may also give researchers important clues about how to fight this very deadly virus. On Tuesday, global health officials finally gave this mysterious new coronavirus an official name. From now on they will be calling it “COVID-19”, but I doubt that moniker will really catch on with the general public. In any event, what everybody can agree on is the fact that this disease has the potential to rapidly spread all over the planet, and let us hope that the extreme measures that are being taken to prevent it from getting out of control will be enough.

One of the things that we have just learned about this virus is that it does not seem to affect men and women equally.

According to two different studies, it appears that men are significantly more likely to get infected than women are…

More men than women seem to contract coronavirus, several recent studies of patients at the heart of the outbreak suggest.

Among the Wuhan University hospital patients documented in one study, 54 percent were men. Another earlier study of hospitalized patients was made up of 68 percent men, Business Insider reported.

Scientists do not currently understand exactly why this is happening.

But researchers have pointed out that there was a similar pattern during the SARS outbreak

The 2003 outbreak of SARS struck more women among younger adults (20-54), but was more prevalent among men in older ages (55 and up).

When University of Iowa researchers exposed male and female mice to the virus, the males were more likely to contract SARS.

Could there be something about male physiology that makes us more vulnerable to a coronavirus outbreak?

This is something that scientists should investigate further.

Another thing about COVID-19 that seems quite strange is the fact that children seem to be a lot less vulnerable to the disease. The following comes from CNBC

The new coronavirus that has already killed more people than the 2003 SARS epidemic appears to be sparing one population group: kids.

Of the more than 43,100 people it’s infected since Dec. 31, World Health Organization officials say the majority are over 40 years old and it’s hitting those with underlying health conditions and the elderly particularly hard.

Some researchers are theorizing that a lot of kids are actually getting infected but that their stronger immune systems are preventing severe symptoms from manifesting

The apparent lack of children among confirmed coronavirus cases could also be because they are getting infected but developing more mild symptoms and aren’t being reported to local authorities, according to Marc Lipsitch, a professor of epidemiology at the Harvard School of Public Health. World health officials say they are working to improve surveillance of the disease and expect more mild cases to be reported. It could be a while before we have a clear picture on cases, Lipsitch said.

With any disease, those that have weaker or compromised immune systems are always going to be more vulnerable.

And if this outbreak starts to spiral out of control all over the globe, the number of victims could potentially be absolutely staggering.

In fact, Hong Kong epidemiologist Gabriel Leung is warning that 60 to 80 percent of the entire global population could potentially end up catching this virus if urgent action is not taken…

Prof Gabriel Leung, the chair of public health medicine at Hong Kong University, said the overriding question was to figure out the size and shape of the iceberg. Most experts thought that each person infected would go on to transmit the virus to about 2.5 other people. That gave an “attack rate” of 60-80%.

“Sixty percent of the world’s population is an awfully big number,” Leung told the Guardian in London, en route to an expert meeting at the WHO in Geneva on Tuesday.

The official death rate is still fairly low, but if billions of people end up catching this bug it could result in tens of millions of deaths

With the global population currently at more than 7 billion (7,577,130,400), that means that the virus has the potential to infect more than 4 billion (4,546,278,240) if Professor Leung is correct and its spread continues to accelerate.

And if one percent of those people die, that means there will be more than 45 million deaths.

A death toll of that magnitude would put this crisis on par with the Spanish flu pandemic of 1918.

Once again, I want to stress that there is absolutely no guarantee that such a scenario will actually unfold. The SARS outbreak in 2003 was eventually brought under control, and my hope is that this outbreak will eventually be brought under control as well.

But even if this outbreak ends tomorrow, life is not going to go back to normal. In fact, the truth is that our problems are just getting started.

As far as COVID-19 is concerned, we would be in far better shape if the Chinese had locked down the entire city of Wuhan much earlier. By waiting as long as they did, it allowed five million potential carriers to leave Wuhan for other areas of China…

EXPERTS fear it is too late to stop the deadly spread of coronavirus as FIVE MILLION people left the outbreak epicentre before it was even put on lockdown.

Millions continued to pour out of Wuhan – now dubbed zombieland – long after the first reports about a deadly new virus broke.

Now there are confirmed cases in every single province of China, and we will wait to see if this virus ultimately spreads all over the globe.

Thankfully, world health officials are taking this threat very seriously. On Tuesday, the head of the WHO warned that “a virus is more powerful in creating political, economic and social upheaval than any terrorist attack”

WHO chief Tedros Adhanom Ghebreyesus told reporters in Geneva the vaccine lag meant “we have to do everything today using available weapons” and said the epidemic posed a “very grave threat”.

“To be honest, a virus is more powerful in creating political, economic and social upheaval than any terrorist attack,” Dr Ghebreyesus said.

And he is right.

This virus has the potential to absolutely turn the entire planet upside down.

I am still hoping that does not happen, but I am also encouraging all of my readers to get prepared for the worst.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

This Coronavirus Outbreak Is Really Starting To Take A Very Serious Toll On The Global Economy

Factories all over China have been shut down, global supply chains have been hit by an unprecedented shock, the Baltic Dry Index is absolutely collapsing, the tourism industry is being absolutely devastated, and companies all over the globe are warning that sales will be lower than anticipated this quarter. This coronavirus outbreak is already taking a very serious toll on the global economy, and experts are warning that we could still be in the very early chapters of this crisis. If this outbreak ultimately evolves into a horrifying worldwide pandemic that kills millions of people, what will the global economy look like a few months from now?

For the moment, more than 98 percent of the confirmed cases are still in China, but that could soon change.

And if this virus does start spreading in other countries like it is in China, that could rapidly push us into a deep global recession.

Many are fearing the worst. In fact, Forbes is already labeling this outbreak as “a black swan event”…

A black swan event is a term used on Wall Street that refers to a rare and unpredictable occurrence that is beyond what is expected and has severe consequences. It’s derived from European explorers who had previously thought that all swans were white and only white, as that was all they knew. They were overcome with shock and confusion when Dutch explorer Willem de Vlamingh discovered the existence of black swans in Australia.

The coronavirus is a black swan event, which may have serious consequences for your job, the stock market and global economy.

Needless to say, China is feeling the most economic pain from this outbreak so far. In this sort of an environment, it makes sense that very few Chinese citizens would want to buy homes, and that is precisely what we are currently witnessing

Bloomberg cited a new report via China Merchants Securities (CMSC) that said new apartment sales crashed 90% in the first week of February over the same period last year. Sales of existing homes in 8 cities plunged 91% over the same period.

“The sector is bracing for a worse impact than the 2003 SARS pandemic,” said Bai Yanjun, an analyst at property-consulting firm China Index Holdings Ltd. “In 2003, the home market was on a cyclical rise. Now, it’s already reeling from an adjustment.”

We have never seen an economic catastrophe of this nature since the communists took power in China, and everyone agrees that all of the Chinese economic numbers are going to be absolutely terrible for the foreseeable future.

And since more global trade goes through China than anywhere else in the world, the ripple effects are literally being felt all over the planet.

In fact, the Baltic Dry Index has fallen more than 80 percent since September and is rapidly headed toward an all-time low

The BDI is now in freefall, closing at 466 on Monday, down over 80% since September 2019. Rates for Capesize bulkers (vessels with capacity of around 180,000 deadweight tons) are now at around $3,500-$4,000 per day — less than a third of their mid-teens breakeven rates.

With economic activity all over the world steadily slowing down, there just isn’t a lot of demand right now, and large shipping companies are potentially facing an extended slump.

But things are going to be even worse for the tourism industry. After what we have witnessed in recent days, very few people are going to want to set foot on a cruise ship any time soon. In particular, the case of the Diamond Princess continues to make headlines all over the world, and the number of confirmed cases on board has now risen to 174

After a relatively quiet 36 hours for the ‘Diamond Princess’, Japanese authorities reported 39 more cases, bringing the total to 174 out of 492 people on board tested, while Japan’s defense Minister Taro Kono tweeted that a quarantine officer from the health ministry also tested positive for the virus. As Bloomberg notes, Carnival’s Diamond Princess cruise ship has become the biggest center of infection of any place outside of China. The Diamond Princess was placed under quarantine last week and checks were conducted after a passenger from Hong Kong who had been on the ship tested positive for the virus. The ship has become a case of concern because of the possibility of more infections in the vessel’s confined spaces, and the increased risks to elderly passengers.

To a lesser extent, the airline industry is being affected as well.

Many airlines have already suspended all flights to China, and on Tuesday American Airlines actually extended their flight cancellations until late April

Due to a reduction in demand, American Airlines on Tuesday extended its flight cancellations to and from mainland China and Hong Kong amid the coronavirus outbreak.

According to a company statement, the airline is extending the suspensions between mainland China and Dallas-Fort Worth and Los Angeles through April 24.

Flights from Dallas to Hong Kong are suspended through April 23. Flights between Los Angeles and Hong Kong are suspended through April 23.

So what is going to happen if this virus starts spreading all over the globe like it is currently spreading in China?

At that point, very few people would want to fly anywhere at all.

In fact, most people would want to avoid public places entirely.

If this crisis gets bad enough, we are potentially facing a global economic shutdown unlike anything we have ever seen before.

Let us hope that we never get to that point.

Here in the United States there have only been 13 confirmed cases so far, and most businesses continue to operate normally.

But without a doubt this crisis will have an impact, and the truth is that the U.S. economy was already starting to slow down before this virus appeared on the scene. For example, the number of job openings in the U.S. plummeted dramatically in both November and December

The number of job openings in December dropped by 364,000 from November (seasonally adjusted), after having already plunged by 574,000 in November, according to the Labor Department’s Job Openings and Labor Turnover Survey (JOLTS). This two-month plunge of 938,000 job openings came after a series of ups and downs with downward trend starting after the peak in January 2019.

If this virus gets out of control in this country, it is probably going to be impossible to avoid a very serious economic downturn.

Of course even if this virus were to completely disappear tomorrow, the truth is that we would still be headed for very difficult times.

Life as we have all known it is starting to change, and the chapters ahead are going to be very, very painful.

As for this virus, let us keep hoping that this outbreak will start to subside. Because we already have enough problems, and a horrifying global pandemic would definitely be more than enough to push us over the edge.

About the Author: I am a voice crying out for change in a society that generally seems content to stay asleep. My name is Michael Snyder and I am the publisher of The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I have written four books that are available on Amazon.com including The Beginning Of The End, Get Prepared Now, and Living A Life That Really Matters. (#CommissionsEarned) By purchasing those books you help to support my work. I always freely and happily allow others to republish my articles on their own websites, but due to government regulations I need those that republish my articles to include this “About the Author” section with each article. In order to comply with those government regulations, I need to tell you that the controversial opinions in this article are mine alone and do not necessarily reflect the views of the websites where my work is republished. This article may contain opinions on political matters, but it is not intended to promote the candidacy of any particular political candidate. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions. Those responding to this article by making comments are solely responsible for their viewpoints, and those viewpoints do not necessarily represent the viewpoints of Michael Snyder or the operators of the websites where my work is republished. I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.

Are You Kidding Me? Chinese Exports Plunge 25.4 Percent Compared To Last Year

Exports Declining - Public Domain

We just got more evidence that global trade is absolutely imploding. Chinese exports dropped 25.4 percent during the month of February compared to a year ago, and Chinese imports fell 13.8 percent compared to a year ago. For Chinese exports, that was the worst decline that we have seen since 2009, and Chinese imports have now fallen for 16 months in a row on a year over year basis. The last time we saw numbers like this, we were in the depths of the worst economic downturn since the Great Depression of the 1930s. China accounts for more global trade than any other nation (including the United States), and so this is a major red flag. Anyone that is saying that the global economy is in “good shape” is clearly not paying attention.

If someone would have told me a year ago that Chinese exports would be 25 percent lower next February, I would not have believed it. This is not just a slowdown – this is a historic implosion. The following comes from Zero Hedge

Things are not getting better in China as Exports crashed 25.4% YoY (the 3rd largest drop in history), almost double the 14.5% expectation and Imports tumbled 13.8%, the 16th month of YoY decline – the longest ever. Altogether this sent the trade surplus down to $32.6bn (missing expectations of $51bn) to 11-month lows.

Chinese Exports - Zero Hedge

So much for that whole “devalue yourself to export growth” idea…

I don’t know how anyone can possibly dismiss the importance of these numbers. As you can see, this is not just a one month aberration. Chinese trade numbers have been declining for months, and that decline appears to be accelerating.

Another very interesting piece of news that has come out in recent days regards the massive layoffs that are coming at state industries in China. According to Reuters, five to six million Chinese workers are going to be losing their jobs during this transition…

China aims to lay off 5-6 million state workers over the next two to three years as part of efforts to curb industrial overcapacity and pollution, two reliable sources said, Beijing’s boldest retrenchment program in almost two decades.

China’s leadership, obsessed with maintaining stability and making sure redundancies do not lead to unrest, will spend nearly 150 billion yuan ($23 billion) to cover layoffs in just the coal and steel sectors in the next 2-3 years.

 

For years, the Chinese economic miracle has been fueling global economic growth, but now things are changing dramatically.

Another factor that we should discuss is the fact that the relationship between the United States and China is going downhill very rapidly. This is something that I wrote about yesterday. China has seized control of several very important islands in the South China Sea, and in response the Obama administration has been sailing military vessels past the islands in a threatening manner. Most recently, Obama decided to have an aircraft carrier task force cruise past the islands, and this provoked a very angry response from the Chinese

The four-ship U.S. strike group that patrolled the disputed South China Sea was followed by Chinese warships, a show of force that prompted a hard-line response from China doubling down on its claim to nearly all of the resource-rich sea.

China’s foreign minister said his country’s sovereignty claims are supported by history and made a veiled reference to the 5-day patrol by the Stennis Carrier Strike Group, as well as recent passes by China’s man-made islands by destroyers Lassen and Curtis Wilbur in recent months.

“The South China Sea has been subject to colonial invasion and illegal occupation and now some people are trying to stir up waves, while some others are showing off forces,” Wang Yi said, according to an Associated Press report, a day after the Stennis CSG departed the South China Sea. “However, like the tide that comes and goes, none of these attempts will have any impact. History will prove who is merely the guest and who is the real host.”

Most Americans are not even paying attention to this dispute, but in China there is talk of war. The Chinese are absolutely not going to back down, and it does not look like Obama is going to either. Needless to say, a souring of the relationship between the largest economy on the planet and the second largest economy on the planet would not be a good thing for the global economy.

And of course China is far from the only country that is having economic problems. Yesterday, I discussed how Italy’s banking system is on the verge of completely collapse. A few days before that I discussed the economic depression that has gripped much of South America. A new global economic crisis has already begun, and just because the United States is feeling less pain than the rest of the world so far does not mean that everything is going to be okay.

There are huge red flags in Europe, Asia and South America right now. In addition, our neighbor to the north (Canada) is experiencing a very significant slowdown. The irrational optimists can continue to believe that the U.S. economy will somehow escape relatively unscathed if they would like, but that is not going to be what happens.

Just like virtually everyone else on the planet, we are heading into hard times too, and this is going to become a dominant theme in the presidential campaign as we move forward into the months ahead.

(Originally published on The Economic Collapse Blog)

21 New Numbers That Show That The Global Economy Is Absolutely Imploding

Earth At Night - Public Domain

After a series of stunning declines through the month of January and the first half of February, global financial markets seem to have found a patch of relative stability at least for the moment. But that does not mean that the crisis is over. On the contrary, all of the hard economic numbers that are coming in from around the world tell us that the global economy is coming apart at the seams. This is especially true when you look at global trade numbers. The amount of stuff that is being bought, sold and shipped around the planet is falling precipitously. So don’t be fooled if stocks go up one day or down the next. The truth is that we are in the early chapters of a brand new economic meltdown, and I believe that all of the signs indicate that it will continue to get worse in the months ahead. The following are 21 new numbers that show that the global economy is absolutely imploding…

#1 Chinese exports fell by 11.2 percent year over year in January.

#2 Chinese imports were even worse in January. On a year over year basis, they declined a whopping 18.8 percent.

#3 It may be hard to believe, but Chinese imports have now plunged for 15 months in a row.

#4 In India, exports were down 13.6 percent on a year over year basis in January.

#5 In Japan, exports declined 8 percent in December on a year over year basis, while imports plummeted 18 percent.

#6 For the sixth time in six years, Japanese GDP growth has gone negative.

#7 In the United States, exports were down 7 percent on a year over year basis in December.

#8 U.S. factory orders have fallen for 14 months in a row.

#9 The Restaurant Performance Index in the United States has dropped to the lowest level that we have seen since 2008.

#10 This month the Baltic Dry Index fell below 300 for the first time ever.

#11 It is now cheaper to rent a 1,100 foot merchant vessel than it is to rent a Ferrari.

#12 Orders for Class 8 trucks in the United States dropped by 48 percent on a year over year basis in January.

#13 Due to a lack of demand for trucks, Daimler just laid off 1,250 U.S. workers.

#14 Even though Saudi Arabia and Russia have agreed to freeze oil production at current levels, the price of U.S. oil has still fallen below 30 dollars a barrel.

#15 It is being reported that 35 percent of all oil and gas companies around the world are at risk of falling into bankruptcy.

#16 According to CNN, 67 oil and gas companies in the United States filed for bankruptcy during 2015.

#17 The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

#18 All over America, retail stores are shutting down at a stunning pace. The following list of store closures comes from one of my previous articles

-Wal-Mart is closing 269 stores, including 154 inside the United States.

-K-Mart is closing down more than two dozen stores over the next several months.

-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

-The Gap is in the process of closing 175 stores in North America.

-Aeropostale is in the process of closing 84 stores all across America.

-Finish Line has announced that 150 stores will be shutting down over the next few years.

-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

#19 The price of gold is enjoying its best quarterly performance in 30 years.

#20 Global stocks have fallen into bear market territory, which means that about one-fifth of all global stock market wealth has already been wiped out.

#21 Unfortunately for global central banks, they have pretty much run out of ammunition. Since March 2008, central banks have cut interest rates 637 times and they have purchased a staggering 12.3 trillion dollars worth of assets. There is not much more that they can do, and now the next great crisis is upon us.

Without any outside influences, the global economy and the global financial system will continue to rapidly fall apart.

But if we do have a major “black swan event” take place, that could cause the bottom to fall out at any moment.

In particular, I am deeply concerned about the possibility that World War III could be sparked in the Middle East. In an article that I published earlier today entitled “Turkey Is Asking The United States To Take Part In A Ground Invasion Of Syria“, I included a quote from Turkish Foreign Minister Mevlut Cavusoglu that reveals just how eager Turkey and Saudi Arabia are for war to begin…

Some countries like us, Saudi Arabia and some other Western European countries have said that a ground operation is necessary,” Turkish Foreign Minister Mevlut Cavusoglu told Reuters in an interview.

However, this kind of action could not be left to regional powers alone. “To expect this only from Saudi Arabia, Turkey and Qatar is neither right nor realistic. If such an operation is to take place, it has to be carried out jointly, like the (coalition) air strikes,” he said.

The Turks and the Saudis very much want the United States to take a leading role in any ground invasion of Syria, but the Obama administration is not likely to do that.

So we shall see if the Turks and the Saudis are willing to go ahead without us. Let us hope that they do not decide to invade Syria, because that could start the biggest war in the Middle East that any of us have ever seen.

Unfortunately, Turkey is already attacking.

Turkey has been shelling Kurdish and Syrian military positions in northern Syria for four days in a row even though the Obama administration has been urging them to stop.

The first month and a half of 2016 has already been quite chaotic, and the stage is set for global events to greatly accelerate during the months ahead.

Sadly, the mainstream media in the United States is largely ignoring the preparations for a ground invasion of Syria, and they keep telling us that the global economy is going to be just fine, so most ordinary Americans are going to be absolutely blindsided by what is about to happen.

(Originally published on The Economic Collapse Blog)

Chinese Exports Plunge 11.2 Percent As Economic Activity Continues To Collapse All Over The Planet

Cargo Ship - Public Domain

If the global economy is in fine shape, then why does all of the hard data tell us that global trade is absolutely collapsing? The Baltic Dry Index has fallen below 300 for the first time ever, and export numbers are way down for almost every major exporting nation on the entire planet. As you will see below, this includes China. The Chinese account for more global trade than anyone else, and so the fact that their imports and their exports are both collapsing precipitously is a huge red flag. When less stuff is being bought and sold and shipped around the world, that tells us that the “real economy” is contracting. Tremendous efforts are being made to try to prop up financial markets all over the globe right now, but in the end those efforts are going to prove to be rather futile. The global economy is clearly plunging into recession, and at this point it is becoming exceedingly difficult for even the most optimistic economic analysts to deny this reality.

When the trade numbers for China for the month of January were released, they were an extreme disappointment. The following comes from CNBC

China‘s exports fell 11.2 percent on-year in January, while imports declined 18.8 percent, clocking far bigger slides than expected by analysts.

Analysts polled by Reuters had expected a 1.9 percent drop in January exports, and a 0.8 percent drop in imports, after China’s exports fell 1.4 percent in December from a year earlier and imports slid 7.6 percent .

We never see numbers like this outside of a recession.

Never.

Chinese imports have now fallen for 15 months in a row, and the second largest economy on the entire planet appears to be in the process of imploding. As I mentioned above, China has become the most important hub for global trade. Nobody accounts for more total trade than they do, and so these new numbers can only be described as catastrophic.

Other numbers are telling the same story. Global trade has fallen so dramatically that it is now cheaper to rent a 1,100 foot merchant vessel that than it is to rent a Ferrari…

Rates for Capesize-class ships plummeted 92 percent since August to $1,563 a day amid slowing growth in China. That’s less than a third of the daily rate of 3,950 pounds ($5,597) to rent a Ferrari F40, the price of which has also fallen slightly in the past few years, according to Nick Hardwick, founder of supercarexperiences.com. The Baltic Exchange’s rates reflect the cost of hiring the vessel but not fuel costs. Ships burn about 35 metric tons a day, implying a cost of about $4,000 at present prices, data compiled by Bloomberg show.

Can you believe that?

This is just another sign of how crazy things have become.

Another indication of the slowdown in China is what is happening to the Hong Kong housing market. Just check out these numbers

Two weeks ago, in our latest report on the Hong Kong housing market, we observed that according to the local Centaline Property Agency total Hong Kong property transactions in January were on track to register the worst month since 1991, when it started compiling monthly figures. In other words, the biggest drop in recorded history.

Centaline estimated that only 3,000 transactions will have registered with developers slowing down new launches, while only 394 units were sold in the first 27 days of January, 80.3 per cent lower than the 2,127 deals lodged in December. Meanwhile, sales of used homes fell by a fifth to 1,276 deals in January.

We could talk about many more examples like this all over the world.

Most people like to watch the ups and downs of the financial markets, but it is the hard economic numbers that tell us the real story.

We are in the midst of a stunning global economic downturn, and the global financial system is starting to take notice. Global stocks have fallen into bear market territory, the price of oil has fallen by three-fourths over the past 18 months, junk bonds have been crashing hard just like they did in 2008, and at one point last week close to 17 trillion dollars of global stock market wealth had been wiped out since mid-2015.

In a desperate attempt to revive economic activity, many global central banks have started to implement negative interest rates. Unfortunately, these negative interest rates are having some very nasty unintended consequences

One of the unintended consequences of global central banks’ race to the bottom (which seemingly has no bottom) is that negative interest rates act as a tax on the banking system.

By penalising commercial lenders for parking their reserves at the central bank, it erodes the profit margin they make on charging already low interest rates while raising the cost of capital.

So far, “banks seem unable or unwilling to pass negative deposit rates to their retail customers, leaving them with few options to offset costs”, note analysts at JP Morgan.

The truth is that we have really reached the limit of what monetary policy can do.

Since March 2008, interest rates have been cut 637 times around the world and central banks have purchased 12.3 trillion dollars worth of assets.

Despite all of that unprecedented intervention, we are now plunging into a brand new global crisis.

The central bankers are just making things up as they go along, and they are flailing all over the place as they desperately try to find a way to fix things. I like how Jim Rogers put it during a recent interview with CNN

Famed investor Jim Rogers is warning that financial Armageddon is just around the corner, and it’s being fueled by moronic central bankers.

We’re all going to pay a horrible price for the incompetence of these central bankers,” he said Monday in a TV interview with CNNMoney’s Nina dos Santos. “We got a bunch of academics and bureaucrats who don’t have a clue what they’re doing.”

We have reached the terminal phase of the greatest financial bubble in history, and now the endgame is upon us.

Yes, governments and central banks will keep trying to “fix things”, but it is becoming exceedingly clear that they are rapidly losing control.

And there are other factors, such as the potential start of World War 3 in the Middle East, that could turn this new crisis into a complete and utter nightmare in no time at all.

So let us pray for the best, but let us also get prepared for the worst…

22 Signs That The Global Economic Turmoil We Have Seen So Far In 2016 Is Just The Beginning

Skyline Globe Clock Gears - Public Domain

As bad as the month of January was for the global economy, the truth is that the rest of 2016 promises to be much worse. Layoffs are increasing at a pace that we haven’t seen since the last recession, major retailers are shutting down hundreds of locations, corporate profit margins are plunging, global trade is slowing down dramatically, and several major European banks are in the process of completely imploding. I am about to share some numbers with you that are truly eye-popping. Each one by itself would be reason for concern, but when you put all of the pieces together it creates a picture that is hard to deny. The global economy is in crisis, and this is going to have very serious implications for the financial markets moving forward. U.S. stocks just had their worst January in seven years, and if I am right much worse is still yet to come this year. The following are 22 signs that the global economic turmoil that we have seen so far in 2016 is just the beginning…

1. The number of job cuts in the United States skyrocketed 218 percent during the month of January according to Challenger, Gray & Christmas.

2. The Baltic Dry Index just hit yet another brand new all-time record low. As I write this article, it is sitting at 303.

3. U.S. factory orders have now dropped for 14 months in a row.

4. In the U.S., the Restaurant Performance Index just fell to the lowest level that we have seen since 2008.

5. In January, orders for class 8 trucks (the big trucks that you see shipping stuff around the country on our highways) declined a whopping 48 percent from a year ago.

6. Rail traffic is also slowing down substantially. In Colorado, there are hundreds of train engines that are just sitting on the tracks with nothing to do.

7. Corporate profit margins peaked during the third quarter of 2014 and have been declining steadily since then. This usually happens when we are heading into a recession.

8. A series of extremely disappointing corporate quarterly reports is sending stock after stock plummeting. Here is a summary from Zero Hedge of a few examples that we have just witnessed…

  • SHARES OF LIONS GATE ENTERTAINMENT FALL 5 PCT IN EXTENDED TRADE AFTER QUARTERLY RESULTS – RTRS
  • TABLEAU SOFTWARE SHARES TUMBLE 40 PCT IN AFTER HOURS TRADING – RTRS
  • YRC WORLDWIDE SHARES DOWN 16.4 PCT AFTER THE BALL FOLLOWING RESULTS – RTRS
  • SPLUNK INC SHARES DOWN 7.6 PCT IN AFTER HOURS TRADING – RTRS
  • LINKEDIN SHARES EXTEND DECLINE, DOWN 24 PCT AFTER RESULTS, GUIDANCE – RTRS
  • HANESBRANDS SHARES FURTHER ADD TO LOSSES IN EXTENDED TRADE, LAST DOWN 14.9 PCT – RTRS
  • OUTERWALL SHARES FALL 11 PCT IN EXTENDED TRADING AFTER QUARTERLY RESULTS – RTRS
  • GENWORTH SHARES DOWN 16.5 PCT AFTER THE BELL FOLLOWING RESULTS, RESTRUCTURING PLAN

9. Junk bonds continue to crash on Wall Street. On Monday, JNK was down to 32.60 and HYG was down to 77.99.

10. On Thursday, a major British news source publicly named five large European banks that are considered to be in very serious danger…

Deutsche Bank, Credit Suisse, Santander, Barclays and RBS are among the stocks that are falling sharply sending shockwaves through the financial world, according to former hedge fund manager and ex Goldman Sachs employee Raoul Pal.

11. Deutsche Bank is the biggest bank in Germany and it has more exposure to derivatives than any other bank in the world. Unfortunately, Deutsche Bank credit default swaps are now telling us that there is deep turmoil at the bank and that a complete implosion may be imminent.

12. Last week, we learned that Deutsche Bank had lost a staggering 6.8 billion euros in 2015. If you will recall, I warned about massive problems at Deutsche Bank all the way back in September. The most important bank in Germany is exceedingly troubled, and it could end up being for the EU what Lehman Brothers was for the United States.

13. Credit Suisse just announced that it will be eliminating 4,000 jobs.

14. Royal Dutch Shell has announced that it is going to be eliminating 10,000 jobs.

15. Caterpillar has announced that it will be closing 5 plants and getting rid of 670 workers.

16. Yahoo has announced that it is going to be getting rid of 15 percent of its total workforce.

17. Johnson & Johnson has announced that it is slashing its workforce by 3,000 jobs.

18. Sprint just laid off 8 percent of its workforce and GoPro is letting go 7 percent of its workers.

19. All over America, retail stores are shutting down at a staggering pace. The following list comes from one of my previous articles

-Wal-Mart is closing 269 stores, including 154 inside the United States.

-K-Mart is closing down more than two dozen stores over the next several months.

-J.C. Penney will be permanently shutting down 47 more stores after closing a total of 40 stores in 2015.

-Macy’s has decided that it needs to shutter 36 stores and lay off approximately 2,500 employees.

-The Gap is in the process of closing 175 stores in North America.

-Aeropostale is in the process of closing 84 stores all across America.

-Finish Line has announced that 150 stores will be shutting down over the next few years.

-Sears has shut down about 600 stores over the past year or so, but sales at the stores that remain open continue to fall precipitously.

20. According to the New York Times, the Chinese economy is facing a mountain of bad loans that “could exceed $5 trillion“.

21. Japan has implemented a negative interest rate program in a desperate attempt to try to get banks to make more loans.

22. The global economy desperately needs the price of oil to go back up, but Morgan Stanley says that we will not see $80 oil again until 2018.

It is not difficult to see where the numbers are trending.

Last week, I told my wife that I thought that Marco Rubio was going to do better than expected in Iowa.

How did I come to that conclusion?

It was simply based on how his poll numbers were trending.

And when you look at where global economic numbers are trending, they tell us that 2016 is going to be a year that is going to get progressively worse as it goes along.

So many of the exact same things that we saw happen in 2008 are happening again right now, and you would have to be blind not to see it.

Hopefully I am wrong about what is coming in our immediate future, because millions upon millions of Americans are not prepared for what is ahead, and most of them are going to get absolutely blindsided by the coming crisis.

(Originally published on The Economic Collapse Blog)

Economic Activity Is Slowing Down Much Faster Than The Experts Anticipated

Locomotive - Public Domain

We have not seen global economic activity fall off this rapidly since the great recession of 2008. Manufacturing activity is imploding all over the planet, global trade is slowing down at a pace that is extremely alarming, and the Baltic Dry Index just hit another brand new all-time record low. If the “real economy” consists of people making, selling and shipping stuff, then it is in incredibly bad shape. Here in the United States, the dismal economic numbers continue to stun all of the experts. For example, on Monday we learned that the Texas general business activity index just hit a six year low

Economic activity in Texas keeps getting worse.

The general business activity index out Monday from the Dallas Federal Reserve for January was -34.6, a six-year low and much worse than economists had expected.

The forecast for the monthly index was -14, following a December reading of -21.6 (revised from -20.1) that was also worse than expected.

One could perhaps argue that this is to be expected in Texas because of the collapse in the price of oil.

But what about the very unusual things that we are seeing in other areas of the country? In Erwin, Tennessee, a rail terminal that had been continuously operating for 135 years was just permanently shut down, and hundreds of workers now find themselves without a job

The last coal train to leave Erwin rolled slowly out of town just after at 3 p.m. Thursday, less than eight hours after CSX Transportation employees heard the news that rocked all of Unicoi County.

“Its a hard pill to swallow,” county Mayor Greg Lynch said. “Of course, we heard rumors that something was coming down. But never in my wildest dreams did I imagine they would just shut down and leave town.”

CSX delivered the news of its decision to immediately close Erwin’s 175-acre rail yard and abruptly end the employment of the facility’s 300 workers in a series of meetings with employees conducted at the start of their morning shifts.

It has been said that if you want to know what is really happening with the U.S. economy, just watch the railroads.

And right now, rail traffic all over the nation is falling to depressingly low levels.

One of Steve Quayle’s readers says that rail traffic in Colorado has slowed down so much that hundreds of engines are just sitting there on the tracks

With regard to the train freight article this morning, we have in Grand Junction, CO., literally hundreds of engines sidelined on the tracks. They are three deep on some tracks and easily number over 250. I have never seen this many engines on the tracks before and I feel this is just another indicator of the slowdown in shipping.

In case you are tempted to think that this is just anecdotal evidence, I want you to consider what is happening to the largest railroad company in the United States.

According to Wolf Richter, operating revenues for Union Pacific were down 15 percent last year…

Union Pacific, the largest US railroad, reported awful fourth-quarter earnings Thursday evening. Operating revenues plummeted 15% year over year, and net income dropped 22%.

It was broad-based: The only category where revenues rose was automotive (+1%). Otherwise, revenues fell: Chemicals (-7%), Agricultural Products (-12%), Intermodal containers (-14%), Industrial Products (-23%), and Coal (-31%). Shipment of crude plunged 42%.

So Union Pacific did what American companies do best: it laid off 3,900 people last year.

And of course we can see evidence of the emerging economic slowdown all around us pretty much wherever we look. Sprint just laid off 8 percent of its workforce, GoPro is letting go 7 percent of its workers, and Wal-Mart just announced the closure of 269 stores.

But instead of dealing with reality, there are a lot of irrational optimists that insist that things will start bouncing back any day now. For instance, CNBC is reporting that Goldman Sachs is forecasting that the S&P 500 will end up finishing the year back at 2,100…

Goldman, though, is sticking with its forecast that the S&P 500 will rebound and finish the year at 2,100, a rise of about 11 percent from current levels but basically no net gain for the full year.

It is easy to say something like that, but the actions of the big banks speak louder than words.

Most people don’t realize this, but several of the “too big to fail” banks laid off thousands of workers in 2015

Bank of America and Citigroup reduced headcount the most, eliminating about 20,000 staffers between them, according to fourth-quarter earnings reports from each bank. The respective moves amount to 4.6 percent and 4 percent fewer workers at the banks. JPMorgan Chase reported in its earnings that it employs 6,700 fewer workers than a year ago.

And guess what?

The “too big to fail” banks did the exact same thing just before the great stock market crash of 2008.

When are people going to finally start understanding that we have a major league crisis on our hands?

Since June 2015, approximately 15 trillion dollars of global stock market wealth has been wiped out. After a brief respite at the end of last week, it appears that the global financial crisis is getting ready to accelerate once again.

On Monday, the price of oil dipped back under 30 dollars, the Dow was down another 208 points, and the Nikkei is currently down another 389 points in early trading.

Somewhere close to one-fifth of all global stock market wealth has already been wiped out.

We only have about four-fifths left.

But in the end, I can talk about these numbers until I am blue in the face and some people will still not get prepared.

Some people have so much faith in Barack Obama, the Federal Reserve and the mainstream media that they would literally follow them off a cliff.

By now, most of the people that believe that they should prepare for the coming crisis have already gotten prepared, and most of those that want to believe that everything is going to work out just fine somehow are never going to get prepared anyway.

What is going to happen is going to happen, and tens of millions of people are going to end up bitterly regretting not listening to the warnings when they still had the chance.

(Originally published on The Economic Collapse Blog)

Lowest Ever: The Baltic Dry Index Plunges To 394 As Global Trade Grinds To A Standstill

Container Ship - Public Domain

For the first time ever, the Baltic Dry Index has fallen under 400. As I write this article, it is sitting at 394. To be honest, I never even imagined that it could go this low. Back in early August, the Baltic Dry Index was sitting at 1,222, and since then it has been on a steady decline. Of course the Baltic Dry Index crashed hard just before the great stock market crash of 2008 too, but at this point it is already lower than it was during that entire crisis. This is just more evidence that global trade is grinding to a halt and that 2016 is going to be a “cataclysmic year” for the global economy.

If you are not familiar with the Baltic Dry Index, here is a helpful definition from Wikipedia

The Baltic Dry Index (BDI) is an economic indicator issued daily by the London-based Baltic Exchange. Not restricted to Baltic Sea countries, the index provides “an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a timecharter basis, the index covers Handysize, Supramax, Panamax, and Capesize dry bulk carriers carrying a range of commodities including coal, iron ore and grain.”

The BDI is one of the key indicators that experts look at when they are trying to determine where the global economy is heading. And right now, it is telling us that we are heading into a major worldwide economic downturn.

Some people try to dismiss the recent drop in the Baltic Dry Index by claiming that shipping rates are down because there is simply too much capacity out there these days. And I don’t dispute that. Without a doubt, too many vessels were built during the “boom years”, and now shipbuilders are paying the price. For example, Chinese shipyards reported a 59 percent decline in orders during the first 11 months of 2015…

Total orders at Chinese shipyards tumbled 59 percent in the first 11 months of 2015, according to data released Dec. 15 by the China Association of the National Shipbuilding Industry. Builders have sought government support as excess vessel capacity drives down shipping rates and prompts customers to cancel contracts. Zhoushan Wuzhou Ship Repairing & Building Co. last month became the first state-owned shipbuilder to go bankrupt in a decade.

But that doesn’t explain everything. The truth is that exports are way down all over the world. China, the United States, South Korea and many other major exporting nations have all been reporting extremely dismal export numbers. Global trade is contracting quite rapidly, and I don’t see how anyone could possibly dispute that.

The global economy is a mess, but many people are not paying any attention to the economic fundamentals because they are too busy looking at the stock market.

The stock market does not tell us how the economy is doing. If the stock market is up today that does not mean that the economy is doing well, and if the stock market is down tomorrow that does not mean that it is doing poorly.

Yes, the health of the financial markets can greatly affect the overall economy. We saw this back in 2008. When there is a tremendous amount of panic, that can cause a credit crunch and make it very difficult for money to flow through our system. The end result is a rapid slowdown of economic activity, and it is something that we will be experiencing again very soon.

But don’t let the day to day fluctuations of the stock market fool you. Just because the Dow was up 227 points today does not mean that the crisis is over. It is important to remember that stocks are not going to go down every single day. On Thursday, the Dow didn’t even regain two-thirds of what it lost on Wednesday. Even in bear markets there are up days, and some of the biggest up days in stock market history were right in the middle of the crash of 2008.

It is critical that we take a long-term view of things and not let our vision be clouded by every tick up and down in the financial markets. Initial jobless claims just hit their highest level in about six months, and companies like Macy’s and GoPro are laying off thousands of workers. Things are already bad, and they are rapidly getting worse.

And let us not forget the great amount of financial carnage that has already happened so far this year. According to CNBC, approximately 3.2 trillion dollars of stock market wealth was wiped out globally during the first 13 days of 2016…

Almost $3.2 trillion has been wiped off the value of stocks around the world since the start of 2016, according to calculations by a top market analyst.

It has also been the worst-ever start to a year for U.S. equities, said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, as both the S&P 500 and the blue-chip Dow Jones industrial average have posted their steepest losses for the first eight days trading of a year.

Over the past six months, there have now been two 10 percent “corrections” for U.S. stocks. The only other times we have seen multiple corrections like this were in 1929, 2000 and 2008. If those years seem familiar to you, that is because they should. In all three years, we witnessed historic stock market crashes.

The stunning collapse of the Baltic Dry Index is just more evidence that we have entered a global deflationary crisis. Goods aren’t moving, unemployment is rising all over the planet, and commodity prices have fallen to levels that we have not seen in over a decade.

Around the globe, there have been dramatic stock market crashes to begin the year, and we should expect to see much more market turmoil during the weeks and months to come.

If the markets have calmed down a bit for the moment, we should be very thankful for that, because we could all use some additional time to prepare for what is coming.

The debt-fueled standard of living that so many of us are enjoying today is just an illusion. And many of us won’t even understand what we have been taking for granted until it is taken away from us.

A great shaking is coming to the global economy, and the pain is going to be unimaginable. So let us enjoy every single day of relative “normalcy” while we still can, because there aren’t too many of them left.

(Originally published on The Economic Collapse Blog)

The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low

Globe Matrix - Public Domain

I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already. Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low. Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine. In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates. Of course the truth is that there is no “economic recovery” on the horizon. In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis. This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.

Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months. Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this. If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia

A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed).

The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’s composite measurement.

It is also known as the “Dry Bulk Index”.

Much of the decline of the Baltic Dry Shipping Index is being blamed on China. The following comes from a Bloomberg report that was posted on Thursday…

The cost of shipping commodities fell to a record, amid signs that Chinese demand growth for iron ore and coal is slowing, hurting the industry’s biggest source of cargoes.

The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.

So many of the exact same patterns that we witnessed back in 2008 are playing out once again in front of our very eyes. Below, I have shared a chart that was posted by Zero Hedge, and it shows how the Baltic Dry Shipping Index absolutely collapsed in 2008 as we headed into a major financial crisis. Well, now the Index is collapsing again, and it is already lower than it was at any point back in 2008…

Baltic Dry Index - Zero Hedge

The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.

Just look at the price of U.S. oil. It just keeps on falling, and as I write this article it is sitting at $40.40.

The price of oil collapsed just before the financial crisis of 2008, and the same pattern is happening again.

And look at what is happening to commodities. The Thomson Reuters/CoreCommodity CRB Commodity Index has plummeted to the lowest level that we have seen since the last recession. It is now down more than 30 percent over the past 12 months, and it continues to fall.

So don’t be fooled by the temporary “stock market recovery” that we have witnessed. The underlying economic fundamentals continue to decline. We are entering a global deflationary recession, and the stock market will get the memo at some point just like we saw in 2008.

At this moment, global financial markets are teetering on the brink, and all it is going to take is some kind of major trigger event to send them tumbling over the edge.

And such an event may be coming sooner than you may think.

We live at a time when global terrorism is surging, relationships between nations are deteriorating and our planet is shaking in wild and unpredictable ways.

It wouldn’t take much to push the financial world into full-blown panic mode. A major regional war in the Middle East, a terror attack that kills thousands, or an earthquake or volcanic eruption that affects a large U.S. city are all potential examples of “black swan events” which could fit the bill.

The global financial system has never been more primed for another 2008-style crisis. Thanks to the fragility of the system, it could literally happen any day now.

So keep your eyes open – within weeks our world could be completely and totally different.

(Originally published on The Economic Collapse Blog)

Global Economic Activity Is Slowing Down At A Pace Not Seen Since The Last Major Recession

Globe Interconnected - Public Domain

If you have been watching for the next major global economic downturn, you can now stop waiting, because it has officially arrived. Never before in history has global trade collapsed this dramatically outside of a major worldwide recession. And this makes perfect sense – when global economic activity is increasing there is more demand for goods and services around the world, and when global economic activity is decreasing there is less demand for goods and services around the world. So far this year, global trade is down about 8.4 percent, and over the past 30 days the Baltic Dry Index has been absolutely plummeting. A month ago it was sitting at a reading of 809, but now it has fallen all the way to 628. However, it is when you look at the trade numbers for specific countries that the numbers become particularly startling.

Just within the last few days, new trade numbers have come out of China. China accounts for approximately one-fifth of all global factory exports, and for many years Chinese export growth has helped fuel the overall global economy.

But now Chinese exports are falling. In October, Chinese exports were down 6.9 percent compared to a year ago. That follows a decline of 3.7 percent in September.

The numbers for Chinese imports are even worse. Chinese imports in October were down 18.8 percent compared to a year ago after falling 20.4 percent in September. China’s growing middle class was supposed to help lead a global economic recovery, but that simply is not happening.

The following chart from Zero Hedge shows just how dramatic these latest numbers are compared to what we are accustomed to witnessing. As you can see, the only time Chinese trade numbers have been this bad for this long was during the major global recession of 2008 and 2009…

Chinese Imports Chinese Exports

Other numbers confirm the magnitude of the economic slowdown in China. I have mentioned the ongoing plunge of the China Containerized Freight Index previously, but now it has just hit a brand new record low

The weakness in China’s economy and its exports to the rest of the world are showing up in the weekly China Containerized Freight Index (CCFI): On Friday, it dropped to the worst level ever.

The index, operated by the Shanghai Shipping Exchange, tracks how much it costs, based on contractual and spot-market rates, to ship containers from China to 14 major destinations around the world. Unlike a lot of official data from China, the index is an unvarnished reflection of a relentless reality.

It has been cascading lower since February and has since dropped 31%. At 742 currently, it’s down 26% from its inception in 1998 when it was set at 1,000.

Here are some more deeply disturbing global trade numbers that come from my previous article entitled “18 Numbers That Scream That A Crippling Global Recession Has Arrived“…

Demand for Chinese steel is down 8.9 percent compared to a year ago.

China’s rail freight volume is down 10.1 percent compared to last year.

In October, South Korean exports were down 15.8 percent from a year ago.

According to the Dutch government index, a year ago global trade in primary commodities was sitting at a reading of 150 but now it has fallen all the way down to 114. What this means is that less commodities are being traded around the world, and that is a very clear sign that global economic activity is really slowing down.

Additionally, German export orders were down about 18 percent in September, and U.S. exports are down about 10 percent for the year so far.

Clearly something very big is happening, and it is affecting the entire planet. The CEO of the largest shipping company in the world believes that the explanation for what is taking place is fairly simple

In fact, according to Maersk CEO, Nils Smedegaard Andersen, the reason why companies that are reliant on global trade, such as his, are flailing is simple: global growth is substantially worse than the official numbers and forecasts. To wit: “The world’s economy is growing at a slower pace than the International Monetary Fund and other large forecasters are predicting.

Quoted by Bloomberg, Andersen says that “we believe that global growth is slowing down,” he said in a phone interview. “Trade is currently significantly weaker than it normally would be under the growth forecasts we see.

Global financial markets can run, but they can’t hide from these horrifying trade numbers forever.

One of the big things that is contributing to this new global economic slowdown is the unwinding of the U.S. dollar carry trade. A recent piece from Phoenix Capital Research explained the U.S. dollar carry trade pretty well…

When the Fed cut interest rates to zero in 2008, it flooded the system with US Dollars. The US Dollar is the reserve currency of the world. NO matter what country you’re in (with few exceptions) you can borrow in US Dollars.

And if you can borrow in US Dollars at 0.25%… and put that money into anything yielding more… you could make a killing.

A hedge fund in Hong Kong could borrow $100 million, pay just $250,000 in interest and plow that money into Brazilian Reals which yielded 11%… locking in a $9.75 million return.

This was the strictly financial side of things. On the economics side, Governments both sovereign and local borrowed in US Dollars around the globe to fund various infrastructure and municipal projects.

Simply put, the US Government was practically giving money away and the world took notice, borrowing Dollars at a record pace. Today, the global carry trade (meaning money borrowed in US Dollars and invested in other assets) stands at over $9 TRILLION (larger than the economy of France and Brazil combined).

But now the U.S. dollar carry trade is starting to unwind because the U.S. dollar has been doing very well lately. As the U.S. dollar has surged against other global currencies in 2015, this has put a tremendous amount of stress on emerging markets around the world. All of a sudden oil, other commodities and stock markets in nations such as Brazil began to crash. Meanwhile, those that had taken out loans denominated in U.S. dollars were finding that it was taking far more of their own local currencies to service and repay those loans. This financial crunch in emerging markets is going to take years to fully play out, and it is going to take a tremendous toll on global markets.

Of course we have seen this happen before. A surging dollar helped cause the Latin American debt crisis of the 1980s, the Asian financial crisis of the 1990s and the major global recession of 2008 and 2009.

If you thought that the financial shaking that happened in late August was bad, the truth is that it was nothing compared to what is now heading our way.

So buckle your seat belts boys and girls, because we are definitely in for a bumpy ride.

(Originally published on The Economic Collapse Blog)

Global Trade Is Collapsing As The Worldwide Economic Recession Deepens

Dominoes Falling - Public Domain

When the global economy is doing well, the amount of stuff that is imported and exported around the world goes up, and when the global economy is in recession, the amount of stuff that is imported and exported around the world goes down. It is just basic economics. Governments around the world have become very adept at manipulating other measures of economic activity such as GDP, but the trade numbers are more difficult to fudge. Today, China accounts for more global trade than anyone else on the entire planet, and we have just learned that Chinese exports and Chinese imports are both collapsing right now. But this is just part of a larger trend. As I discussed the other day, British banking giant HSBC has reported that total global trade is down 8.4 percent so far in 2015, and global GDP expressed in U.S. dollars is down 3.4 percent. The only other times global trade has plummeted this much has been during other global recessions, and it appears that this new downturn is only just beginning.

For many years, China has been leading the revolution in global trade. But now we are witnessing something that is almost unprecedented. Chinese exports are falling, and Chinese imports are absolutely imploding

Growth of exports from China has been dropping relentlessly, for years. Now this “growth” has actually turned negative. In September, exports were down 3.7% from a year earlier, the “inevitable fallout from China’s unsustainable and poorly executed credit splurge,” as Thomson Reuters’ Alpha Now puts it. Most of these exports are manufactured goods that are shipped by container to the rest of the world.

And imports into China – a mix of bulk and containerized freight – have been plunging: down 20.4% in September from a year earlier, after at a 13.8% drop in August.

This week it was announced that Chinese GDP growth had fallen to the lowest level since the last recession, and that makes sense. Global economic activity is really slowing down, and this is deeply affecting China.

So what about the United States?

Well, based on the amount of stuff that is being shipped around in our country it appears that our economy is really slowing down too. The following comes from Wolf Richter, and I shared some of it in a previous article, but I think that it bears repeating…

September is in the early phase of the make-or-break holiday shipping season. Shipments usually increase from August to September. They did this year too. The number of shipments in September inched up 1.7% from August, according to the Cass Freight Index.

But the index was down 1.5% from an already lousy September last year, when shipments had fallen from the prior month, instead of rising. And so, in terms of the number of shipments, it was the worst September since 2010.

It has been crummy all year: With the exception of January and February, the shipping volume has been lower year-over-year every month!

The index is broad. It tracks data from shippers, no matter what carrier they choose, whether truck, rail, or air, and includes carriers like FedEx and UPS.

What major retailers such as Wal-Mart are reporting also confirms that we are in a major economic slowdown. Wal-Mart recently announced that its earnings would fall by as much as 12 percent during the next fiscal year, and that caused Wal-Mart stock to drop by the most in 27 years.

And of course this is going to have a huge ripple effect. There are thousands of other companies that do business with Wal-Mart, and Reuters is reporting that they are starting to get squeezed…

Suppliers of everything from groceries to sports equipment are already being squeezed for price cuts and cost sharing by Wal-Mart Stores. Now they are bracing for the pressure to ratchet up even more after a shock earnings warning from the retailer last week.

The discount store behemoth has always had a reputation for demanding lower prices from vendors but Reuters has learned from interviews with suppliers and consultants, as well as reviewing some contracts, that even by its standards Wal-Mart has been turning up the heat on them this year.

“The ground is shaking here,” said Cameron Smith, head of Cameron Smith & Associates, a major recruiting firm for suppliers located close to Wal-Mart’s headquarters in Bentonville, Arkansas. “Suppliers are going to have to help Wal-Mart get back on track.”

Similar things are going on at some of the other biggest companies in America as well.

For instance, things have gotten so bad for McDonald’s that one franchise owner recently stated that the restaurant chain is “facing its final days”

“McDonald’s announced in April that it would be closing 700 ‘underperforming’ locations, but because of the company’s sheer size — it has 14,300 locations in the United States alone — this was not necessarily a reduction in the size of the company, especially because it continues to open locations around the world. It still has more than double the locations of Burger King, its closest competitor.”

However, for the franchisees, the picture looks much worse than simply 700 stores closing down.

“We are in the throes of a deep depression, and nothing is changing,” a franchise owner wrote in response to a financial survey by Nomura Group. “Probably 30% of operators are insolvent.” One owner went as far as to speculate that McDonald’s is literally “facing its final days.”

Why would things be so bad at Wal-Mart and McDonald’s if the economy was “recovering”?

Come on now – let’s use some common sense here.

All of the numbers are screaming at us that we have entered a major economic downturn and that it is accelerating.

CNBC is reporting that the number of job openings in the U.S. is falling and that the number of layoffs is rising

Job openings fell 5.3 percent in August, while a 2.6 percent rise in layoffs and discharges offset a 0.3 percent gain in hires. Finally, the amount of quits — or what Convergex calls its “take this job and shove it” indicator because it shows the percentage of workers who left positions voluntarily — fell to 56.6 percent from 57.1 percent, indicating less confidence in mobility.

And as I discussed the other day, Challenger Gray is reporting that we are seeing layoffs at major firms at a level that we have not witnessed since 2009.

We already have 102.6 million working age Americans that do not have a job right now. As this emerging worldwide recession deepens, a lot more Americans are going to lose their jobs. That is going to cause the poverty and suffering in this country to spike even more, if you can imagine that.

Just consider what authorities discovered on the streets of Philadelphia just this week

Support is flooding in for a homeless Philadelphia family whose two-year-old son was found wandering alone in a park in the middle of the night.

Angelique Roland, 27, and Michael Jones, 24, were sleeping with their children behind cardboard boxes underneath the Fairmount Park Welcome Center in Love Park when the toddler slipped away.

The boy was found just before midnight and handed over to a nearby Southeastern Pennsylvania Transportation Authority police officer, who took him to the Children’s Hospital of Philadelphia.

He was wearing a green, long sleeve shirt, black running pants and had a diaper on, but did not have shoes or socks.

Could you imagine sleeping on the streets and not even being able to provide your two-year-old child with shoes and socks?

These numbers that I write about every day are not a game. They affect all of us on a very personal level.

Just like in 2008 and 2009, millions of Americans that are living a very comfortable middle class lifestyle today will soon lose their jobs and will end up out in the streets.

In fact, there will be people that will read this article that this will happen to.

So no, none of us should be excited that the global economy is collapsing. There is already so much pain all around us, and what is to come is beyond what most of us would even dare to imagine.

(Originally published on The Economic Collapse Blog)

Not Just The Largest Economy – Here Are 26 Other Ways China Has Surpassed America

China - Public Domain

In terms of purchasing power, China now has the largest economy on the entire planet, but that is not the only area where China has surpassed the United States. China also accounts for more total global trade than the U.S. does, China consumes more energy than the U.S. does, and China now manufactures more goods than the U.S. does. In other words, the era of American economic dominance is rapidly ending. Global economic power is making a dramatic shift to the east, and that is going to have huge implications for our future. We already owe the Chinese well over a trillion dollars, and as our economic infrastructure crumbles we are feverishly borrowing even more money in a desperate attempt to prop up our falling standard of living. We can’t seem to match the work ethic, inventiveness and determination of China and other Asian nations and it is showing. If we continue down this path, what will the future look like for future generations of Americans?

In terms of raw GDP, the U.S. is still number one, at least for now. But according to the IMF, China is now the number one economy on the entire planet in terms of purchasing power…

The simple logic is that prices aren’t the same in each country: A shirt will cost you less in Shanghai than San Francisco, so it’s not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have. The Economist’s Big Mac Index is a great example of these disparities.

So the IMF measures both GDP in market exchange terms, and in terms of purchasing power. On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy.

When I first learned about this, I was quite stunned.

I knew that China’s economy had been roaring, but like most Americans I just assumed that the U.S. would continue to remain head and shoulders above everyone else.

Unfortunately, things are changing at a pace that is much faster than most people ever thought possible. The following are 26 other ways that China has surpassed America…

#1 When you add up all imports and exports, China now accounts for more total global trade than the United States does.

#2 There is now more total corporate debt in China than there is in the United States.

#3 During 2013, we sold about 121 billion dollars worth of stuff to the Chinese, but they sold about 440 billion dollars worth of stuff to us. That was the largest trade deficit that one nation has had with another nation in the history of the world.

#4 China is now the leading manufacturer of goods in the entire world.

#5 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.

#6 The United States had been the leading consumer of energy in the world for about 100 years, but during the summer of 2010 China took over the number one spot.

#7 China now has the largest new car market in the entire world.

#8 China has more foreign currency reserves than anyone else on the planet.

#9 China is the number one gold producer in the world.

#10 China is also the number one gold importer in the world.

#11 15 years ago, China was 14th in the world in published scientific research articles. But now, China is expected to pass the United States and become number one very shortly.

#12 China is also expected to soon become the global leader in patent filings.

#13 China awards more doctoral degrees in engineering each year than the United States does.

#14 China has the world’s fastest train and the world’s most extensive high-speed rail network.

#15 China uses more cement than the rest of the world combined.

#16 Today, China produces nearly twice as much beer as the United States does.

#17 85 percent of all artificial Christmas trees are made in China.

#18 There are more pigs in China than in the next 43 pork producing nations combined.

#19 China is now the number one producer of wind and solar power on the entire globe.

#20 China produces more than twice as much cotton as the United States does.

#21 China produces more than three times as much coal as the United States does.

#22 China now produces 11 times as much steel as the United States does.

#23 China controls over 90 percent of the total global supply of rare earth elements.

#24 An investigation by the U.S. Senate Committee on Armed Services found more than one million counterfeit Chinese parts in the Department of Defense supply chain.

#25 According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment. According to an article in U.S. News & World Report, the number one U.S. export to China is “scrap and trash”.

#26 Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

The Chinese are using some of their new wealth to buy up land, properties and businesses here in the United States. In fact, just the other day we learned that a group from China is buying New York City’s Waldorf Astoria hotel.

For much, much more on this trend, please see some of my previous articles…

-“The Chinese Are Acquiring Large Chunks Of Land In Communities All Over America

-“45 Signs That China Is Colonizing America

-“Meet Your New Boss: Buying Large Employers Will Enable China To Dominate 1000s Of U.S. Communities

And most Americans don’t realize this, but Chinese-made cars will soon be sold in the United States.

The following is from a recent WND article

Chinese-made cars will be making their way to the U.S. next year, and guess which company is going to start exporting them to our shores?

A Chinese company, of course.

Chinese-owned Volvo’s parent company, Zhejiang Geely Holding Group, will begin exporting its S60L from China to the United States as early as next year, according to a Reuters report which quoted a senior Volvo executive.

Volvo is trying to take advantage of two new Chinese factories that will make up an export hub to send vehicles to the U.S. and Russia.

Everywhere you look, China is dominating and America is in decline.

If this was a sporting event for little kids, the “mercy rule” would have been invoked by now.

Unfortunately, there is no “mercy rule” on the global economic stage.

The United States is going to have to get things together if it wants to have any hope of competing with the Chinese in the future.

The Chinese are kicking our tails and they know it.

One survey found found that 75 percent of those living in China believe that their country is on the right track.

On the other hand, Americans are not nearly as optimistic.

According to one average of recent surveys, only 28 percent of Americans believe that the United States is on the right track.

I think that those numbers say a lot. We have been in decline for quite some time, but we can never seem to get the ship righted.

Hopefully our leaders can start coming up with some solutions soon, because we are running out of time.

(Originally posted at End of the American Dream)

The Emerging Division Between East And West Threatens To Plunge The Globe Into Chaos

Division Between East And West - Public Domain

In general, over the last several decades the world has experienced an unprecedented era of peace and prosperity. The opening up of relations with China and the “end of the Cold War” resulted in an extended period of cooperation between east and west that was truly unique in the annals of history. But now things are shifting. The civil war in Ukraine and the crash of MH17 have created an enormous amount of tension between the United States and Russia, and many analysts believe that relations between the two superpowers are now even worse than they were during the end of the Cold War era. In addition, the indictment of five PLA officers for cyber espionage and sharp disagreements over China’s territorial claims in the South China Sea (among other issues) have caused U.S. relations with China to dip to their lowest point since at least 1989. So could the emerging division between the east and the west ultimately plunge us into a period of global chaos? And what would that mean for the world economy?

For as long as most Americans can remember, the U.S. dollar and the U.S. financial system have been overwhelmingly dominant. But now the powers of the east appear to be determined to break this monopoly. Four of the BRICS nations (China, Russia, India and Brazil) are on the list of the top ten biggest economies on the planet, and they are starting to make moves to become much less dependent on the U.S.-centered financial system of the western world. For example, just last week the BRICS nations established two new institutions which are intended to be alternatives to the World Bank and the IMF…

So in their summit, from July 14 to 16, the five BRICS announced two major initiatives aimed squarely at increasing their power in global finance. They announced the launch of the New Development Bank, headquartered in Shanghai, that will offer financing for development projects in the emerging world. The bank will act as an alternative to the Washington, D.C.—based World Bank. The BRICS also formed what they’re calling a Contingent Reserve Arrangement, a series of currency agreements which can be utilized to help them smooth over financial imbalances with the rest of the world. That’s something the IMF does now.

Clearly, the idea is to create institutions and processes to supplement — and perhaps eventually supplant — the functions of those managed by U.S. and Europe. And they would be resources that they could control on their own, without the annoying conditions that the World Bank and the IMF always slap on their loans and assistance.

This comes at a time when both China and Russia are seeking to emphasize their own currencies and move away from using the U.S. dollar so much.

Even in the western media, it is being admitted that China’s yuan is “a growing force in global finance“, and according to CNBC the use of Chinese currency in international trade is growing very rapidly…

Of the German companies profiled, 23 percent are using the renminbi to settle trades, up from 9 percent last year, while usage in Hong Kong rose to 58 percent from 50 percent and to 17 percent from 9 percent in the U.S.

Usage of the renminbi among French companies – a new addition to this year’s list – was high at 26 percent.

And of course Russia has been actively pursuing a “de-dollarization strategy” for months now. Each new round of economic sanctions pushes Russia even further in the direction of independence from the U.S. dollar, and Gazprom has been working hard to get large customers to switch from paying for natural gas in dollars to paying for natural gas in euros and other currencies. For much more on this, please see my previous article entitled “Russia Is Doing It – Russia Is Actually Abandoning The Dollar“.

(Read the rest of the story here…)

 

Do NOT follow this link or you will be banned from the site!