The stats that foreshadow the looming financial collapse
Although I’m not an expert in finance, nor do I live in the first world, still I do have access to data and information just like any other person with internet. And according to my findings, most of which are American, (due to their dominance of the world economy and therefore a barometer of the global financial condition) the world is in for another recession in the coming 12-24 months. America will certainly lead the way, along with China, Canada, Australia and many emerging economies. No one will be spared. Get ready for the 2020 meltdown.
To begin with the American economy is slowing dramatically. Contrary to that their stock market has been surging, with its best start to a year since 1987, so people aren’t paying attention to the alarm bells going off in the rest of the financial sector. Let’s look at some of the recent stats I found. Here is a list for America:
1 Farm loan delinquencies are at their highest default in 9 years, which is serious nationwide. It particularly affects grain farmers, the source of basic foodstuffs for the masses and for cattle. Farmers simply cannot repay their loans.
2 US exports declined by $4 billion in December 2018, with a $5 billion surge in imports. As a result the trade deficit in goods has jumped 12% amid current tariff battles. December saw a $79 billion goods deficit.
3 JCPenney franchise is closing another 24 stores in a downturn in sales. Altogether 27 stores are scheduled to close in 2019.
4 Victoria’s Secret franchise is closing 53 stores. Sales fell 7% as they lost 2 million customers in the past 2 years.
5 Gap franchise is closing 230 stores in the next 2 years across America, 130 this year alone.
6 Payless ShoeSource franchise just declared bankruptcy, closing all 2100 stores.
7 Tesla is closing all of its physical sales locations, only selling online in an effort to cut costs, implying a significant reduction in staff. They say there is no other way to achieve the savings needed for their electric car to succeed.
8 Pepsico is laying off many of its workers, resulting in costs of millions of dollars in severance pay, as they are relentlessly automating and closing factories. The fourth industrial revolution will not be fun for the blue collar working class and the arrival of AI, unless some totally new economic paradigm like UBI (universal basic income) replaces the old system.
9 The Baltic Dry Index dropped to its lowest level in 2 years. This is a measurement of the cargo ships transporting freight around the world.
10 This year is the worst slump for core US factory orders in 3 years, since 2016. Ironically an 8% drop in defense spending triggered it, which is rather tragic in that it reveals the most glaring flaw in our humanity in modern history, namely that war is good for business. In the past, kings had to pay upfront with gold for their wars and soon ran out, but with fiat printing you just add it to the debt. That’s why it is said that all wars are bankers’ wars. Such is the nature of our immoral capitalist system, based on the “military-industrial complex” that President Eisenhower warned the American people against in 1961. Ironically again, it was the so-called perceived threat of Russia which baffled him when he saw it in his advisers, a perceived threat more present than ever yet again today in 2019, like a ghost from the past back to send the people running to their military advisers for protection.
11 America just witnessed the largest decline in the Philly Fed Business index in more than 7 years. It’s a measure of regional manufacturing growth.
12 January 2019 sales of homes fell 8.5% from a year ago, the 3rd month in a row of an 8% decline, the biggest drop since may 2011.
13 US housing stats were down 11.2% in December 2018, compared to the previous month. There was a surge in November, though it was followed by a collapse in December, totally against expectations.
14 Home sales in Southern California are down 17% in Jan 2019; the year-on-year increase was the smallest since 2012.
15 Home sales in Sacramento County fell 22% yoy, with a slowdown in labor as well as real estate.
16 Pending home sales in the US have fallen yoy for 13 months in a row, down 2.2% yoy. Borrowing costs are down so buyers may be coming back, particularly since there was a forced pause of the Fed’s interest rate hike. Interest rates are basically being forced to remain at their all time lows indefinitely, which is unprecedented historically and leaves them out of ammunition to counter any further economic crises. They are basically stuck at near zero or rock bottom, with no more room to go lower.
17 $166 billion student loan debt is delinquent or defaulting, an all time record. The total student debt was $1.45 trillion at the end of 2018.
18 Around 7 million Americans are 90 days behind on auto loan payments, another all time record, higher than the last recession of 2008.
We can see by these stats that economic conditions are not getting better, and some people are calling for an imminent stock market crash. Last year was the 13th year in a row when US GDP growth was below 3%. The last “boom” year with growth above 3% was in 2005. This has never been seen before in modern US history, at least not since 1930. At the same time America has dded $12 trillion to the national debt.
Curiously the 1930 Great Depression was followed by a boom. After 1929 there was 5 years of negative GDP, and then the economy grew. Theoretically America should have had a boom in the years since 2008, but it never happened. Although that last recession was bad, it did not drastically alter life in the USA. But now the “everything bubble” is coming. The consequence of decades of foolish decision making is approaching. The worst is yet to come. Will 2020 be the year of the next Great Recession, or the next Great Depression? And how are you positioned to handle the impending storm?
Published here first on UCommunity
Thanks to YouTube channel Epic Economist for references.