This article was written by Michael Snyder and originally published at his Economic Collapse blog.
Editor’s Comment: Many people around the world are financially quite poor; but few people will be as bad off as Americans, who have spent most of the post-war years living in a bubble of false security. High on debt, and subsidized by the supremacy of the U.S. petrodollar, hundreds of millions of Americans are in for a rude awakening and a very tough aftermath if/when the system collapses economically.
Living paycheck to paycheck, with many dependent directly on government for handouts, the people in the United States may prove to be the least prepared, and most poorly adjusted to instability and income loss of any people in the world. Where they don’t have plenty, they also don’t have the false illusion of wealth. But here at home, it will surely hurt a lot.
During The Coming Economic Crisis Two-Thirds Of The Country Will Be Out Of Cash Almost Immediately
by Michael Snyder
Did you know that almost 70 percent of the U.S. population is essentially living paycheck to paycheck? As you will see below, a brand new survey has found that 69 percent of all Americans have less than $1,000 in savings. Of course one of the primary reasons for this is that most of us are absolutely drowning in debt. In fact, the total amount of household debt in the United States now exceeds 12 trillion dollars. So many Americans are so busy just trying to pay off their existing debts that they can’t even think about saving anything for the future. If economic conditions remain relatively stable, the fact that so many of us are living on the edge probably won’t kill us. But the moment the economy plunges into another 2008-style crisis (or worse), we could be facing a situation where two-thirds of the country is in imminent danger of running out of cash.
If you are living paycheck to paycheck, you live under the constant threat of your life being totally turned upside down if that paycheck ever goes away. During the last crisis, millions of Americans lost their jobs very rapidly, and because so many of them were living paycheck to paycheck all of a sudden large numbers of people couldn’t pay their mortgages. As a result, multitudes of American families went through the extremely painful process of foreclosure.
Unfortunately, it appears that we have not learned anything from the last go around. According to the brand new survey that I mentioned above, 69 percent of all Americans have less than $1,000 in savings…
Last year, GoBankingRates surveyed more than 5,000 Americans only to uncover that 62% of them had less than $1,000 in savings. Last month GoBankingRates again posed the question to Americans of how much they had in their savings account, only this time it asked 7,052 people. The result? Nearly seven in 10 Americans (69%) had less than $1,000 in their savings account.
Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
Perhaps the most alarming fact from this survey is that 62 percent of all Americans had less than $1,000 in savings last year. So that means that this number has gotten 7 percent worse over the last 12 months.
How did that happen? I thought the mainstream media was telling us that the economy was getting better…
Look, if you don’t have an emergency fund you are in danger of losing everything. This is a point that I have been making over and over again for years, and in an article about this new survey USA Today made this point very strongly as well…
This data is particularly worrisome since the recommendation is for Americans to have six months in expenses saved in case of an emergency, such as a large medical expense, car repair bill, or losing your job. Without this emergency fund to fall back on, millions of Americans could be risking financial disaster.
As the publisher of The Economic Collapse Blog, people are constantly asking me what they should do to get prepared for what is coming.
The number one thing that I always suggest is to build up an emergency fund.
In a chaotic situation it is always hard to anticipate accurately what is going to happen, but without a doubt we are all going to need to continue to pay our bills and to buy things for our families during the next crisis.
Yes, someday the U.S. dollar will become rather worthless, but until that happens you are going to need to continue to put a roof over the heads of your family and to put food on the table.
And you are going to need money to do those things.
Some time ago, the Federal Reserve also found that a large percentage of Americans are living on the edge of financial disaster. They discovered that 47 percent of all Americans could not even come up with $400 to pay for an unexpected emergency room visit without borrowing the money or selling something that they own.
If you can’t even come up with $400 you are really hurting, but that is the status of about half the country these days.
We are continually being told that the economy is strong, but that is simply not the truth.
In fact, it turns out that the period from 2005 to 2015 was the worst period for per capita real GDP growth in modern American history. The following comes from Zero Hedge…
- Growth was unusually strong in the 1960s and early 1970s. In every year from 1966 through 1973, per-capita income was up between 30 percent and 40 percent from a decade earlier. Thus, it’s not surprising that many Americans recall this as a great period for the nation’s economy.
- In every year from 1984 to 2007 — a period that economists call the Great Moderation, because of the way both growth and interest rates stabilized — per-person income was up between 20 percent and 30 percent from a decade earlier. That’s ample reason for Americans to view this as a good period for the economy.
- Cumulative per-person growth from 2005 to 2015 was lower than in any prior decade in the sample. That certainly helps explain why many Americans are unhappy with the nation’s recent economic performance.
And as I repeat over and over, Barack Obama is on track to be the one and only president in all of American history to never have a single year when the economy grew by at least 3 percent, and he has had eight years to try to accomplish that feat.
Why doesn’t Donald Trump ever bring up that amazing fact? I would think that he could get a lot of mileage out of that number.
At this point, nobody can deny that the middle class is shrinking. 61 percent of all Americans lived in middle class households in 1971, but now the middle class makes up a minority of the population for the very first time in our history.
Back in 1970, the middle class brought home approximately 62 percent of all income, but today that figure has plummeted to just 43 percent.
Those that are still doing well often dismiss those that are struggling by barking out such phrases as “get a job”, but the truth is that getting a good job is not so easy these days.
The most recent statistics show that there are 7.9 million Americans that are considered to be officially unemployed. When you add that number to the 94.1 million working age Americans that are considered to be “not in the labor force”, you get a grand total of 102 million working age Americans that do not have a job right now.
And just because you do have a job does not mean that everything is okay. As I have discussed previously, 51 percent of all U.S. workers make less than $30,000 a year according to the Social Security Administration.
Everywhere you look things seem to be getting worse and not better. Not too long ago I documented the explosion of tent cities all over the country as poverty continues to rise, and I discussed how one study found that some young women in our impoverished inner cities are so desperate that they are actually trading sex for food.
Sadly, it isn’t just a few hard cases that we are talking about. Even in areas of the country that are supposed to be “doing well” we are seeing record-setting poverty numbers. For example, it was recently reported that the number of New Yorkers sleeping in homeless shelters just set a brand new all-time high, and the number of New York families permanently living in homeless shelters is up 60 percent over the past five years.
If things are this bad during an “economic recovery”, what are they going to look like once the economy really starts imploding?
And considering the fact that almost 70 percent of the population has virtually no savings, could our nation handle an extended economic downturn that may be even worse than what we experienced in 2008 and 2009?
As a nation we truly are living on the edge, and it isn’t going to take very much at all to push us into oblivion.
This article was written by Michael Snyder and originally published at his Economic Collapse blog.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.
Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what is coming and what you can do to prepare, read his latest book [amazon text=Get Prepared Now!: Why A Great Crisis Is Coming & How You Can Survive It&asin=150522599X].
BBB – Bullion, Bullets, Bourbon! Check!
I have been encouraging this community for years to save ten dollar bills in number ten cans because cash will be king in the next Deflationary Depression coming to a neighborhood near you soon.
One needs only to look at the massive piles of cash being accumulated and hoarded by the Insider’s Insider; Warren Buffet, or the largest public companies in the world, like Apple, for that matter.
Those who have screamed “hyperinflation” and/or the converse, a dollar crash because the dollar will be “worthless” are complete and utter fucking morons.
Jim Willie most of all. 🙂
I agree the dollar will get stronger before the final collapse as I am an Armstrong fan also. The thing is, I will reference Martin and you restate everything he says but you never give credit where credit is due. These ideas you come up with, check the archives, are Armstrongs theories. Although I agree, please give Armstrong his due credit.
It only means that great minds think alike. I don’t link to Armstrong’s site and do not make my observations based upon his work; but I do like to read his articles when they pop up.
I have a substantial financial education of my own and 40 years of significant management experience in the financial/investment industry. I have pretty much seen it all, and from a insider’s perspective.
If you check the archives, you will discover I discussed the elements of the business cycle and explained what would happen prior to financial SHTF …. YEARS AGO …. when everyone was screaming hyperinflation. 🙂
The only cash that’s for real is coin (copper IS valuable). Paper money is and will be shown to be totally worthless–unless you can find a use for it as a mere piece of paper…. Every cent of U.S. copper coinage (the circulating coin of today) is really worth about ten “dollars” of today’s perceived value of the paper “money”. No doubt, therefore, the Government will attempt to outlaw its possession or its use as money to force people to be subject to the economic collapse that Government will claim is the necessity for the tyrannical policies of theirs that they’ll also claim is the “solution” to the problem.
That’s when we Smart Preppers Break out the Silver 1 Oz Rounds and Life Goes on.
~WWTI… Lots of Broke ass people in my area. I have started convincing my neighbors to barter, skills or what ever. Some really like the idea and its got them thinking. You better get your neighbors on board, so they can help watch your back as well.
My neighbors are great. One just gave me a $25 gift card for supermarket. I just gave them a few rides around when their truck was broke down for a couple of weeks with a warped head repair. They were so appreciative.. What a rental car would have costed them they said? And the guy kept buying me 18 packs of beer. I was grateful but said they did not need to give me anything, I would have done it anyway just to help them. Good peeps out there. Build these relationships now. SHTF will get Fugly. Get the Barter System going and neighborhood yard sales and trade your stuff.
Every area needs a Free Shit Box. Where people can donate their stuff for free and take anything eels out of the pile they want or need. I’ve seen these before and people use it as a book exchange library. People also do this with Magazines.
Article: 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.
**Sounds like Americans are Smart People. Why would I leave any Cash in the bank for them to steal in a Bail in Bank Holiday? Good Job Americans, Got Physical Gold and Silver to preserve your wealth?? Safer under your mattress than in any bank or lending institution. It gives you 24/7 access to your money, without any ATM Fees accrued.
~WWTI… I think the Banks Trustfulness is right at the bottom with the trust factor of the Main Stream Media.
YUP, my preps served me well when my work went to shit. Didn’t miss a beat as I lived in my retreat and had food and everything I needed. In fact it was a nice break lol. Used my unemployment for skoolin’ and got a different job. When things got better I went back to my old job and replaced what I used and a lot more. PREPPING….IT’S NOT JUST FOR SHTF ANYMORE LOL.
Lucky you, I called all my close neighbors for a ride to the store when my vehicle was down and none would help. I had food but no fresh produce. Finally a friend across town came to take me. I paid him with a batch of homemade cookies since he wouldn’t take money. He loved the cookies, and also took me out to dinner. Good to find out now who you can count on or trust.
Do not expect them to go quietly. Expect them to take what they need to survive.
Or get what the need to DIE!
I only use cash for all my preps. No credit card or car payment or any of that BS to drain me every month. My prepping is my No. 1 priority to me and I don’t let anything take away from that. My vehicles come from private owners for cash only. I don’t need that extra bill and never have to worry about the repo man. Just go out here and buy a an overpriced vehicle you think you can afford but really can’t. Just go rack up purchases of stupid items on that credit card you don’t really need. It’s no freakin’ wonder people run out of money so fast. All I really care about in life is my prepping and surviving whatever curveballs life throws at me.
I hear all of that. Am completely out of debt to boot, with the house paid off. A lot of my money goes to food or other preps. Time is short.
I agree, prepping is also my # one priority. Like I told my girlfriend, any that she feels that another man with a bigger dick, or bigger bank account is better for her, she is free to leave, because most of those local millionare types like to live in well, and don’t buy preps.. I get the final laugh at the end of the EMP Event. I don’t spend any money unless I have to, its just economics. When I was homeless, it was a lack of food and water that hit first, not the ego.
Hey Ya! Keep the fires burning bright and high, keeps the wolves from coming into camp.
PO’d but it may attract the parasites…. Better use a wood stove lol.
I agree prepping food and water are the most important purchases for an investment, my only question to you is can you please make up your mind on the SHTF event. Today is an EMP, yesterday was Russian nuclear attack, last year was Nirambu. Will your scientist friend make up his mind please.
HCKS, good to see you back and I agree. I’ve been dumped by a few women who went after those “greener pastures”. And they all found out the HARD way that the grass AIN’T ALWAYS GREEN ON THE OTHER SIDE. LOL! I had the last laugh on every one of them. I also only spend money when absolutely necessary. No useless items for Braveheart. Not drowning in any kind of debt either. Egos never fill the belly.
So you refused to pay to get their teeth fixed? Or for antibiotics for their std’s? That’s just mean.
that’s just funny…
I hate to break it to you – though, thanks for caring – but most of us have already put away as much as we could of practical value. The old B-B-B mantra. Maybe some metal, maybe some other items. But money? As is cash? I’ve done that – over and over and over these last 8 years. Found many times already were hard enough I had to dip it to catch up – pay up – pony up due to life as we’ve come to know it. Or to help out kids, the grandkids… just make to the next month. Sure, put away all you can. But… the purpose of life is to live it. Sin miedo.
@Hicks-good to see you back at SHTF.
If Hillary Gets in The White House. Bend Over Place Your Head Firmly between your Legg’s and Kiss Your Ass Good Bye.
A lot of Americans keep only a minimal amount of money in the bank. They do have cash around the house; they don’t trust banks. The number of these people have increased. The interest paid on traditional savings accounts are so low that they don’t cover inflation. You actually lose real purchasing power over time. People do put money in retirement accounts but in the event of economic or financial collapse, these accounts will be what the Federal government draws on first when they need money.
In other words, at most, 19% of the people surveyed MIGHT have enough cash to survive an economic crisis. Big thing to remember about an economic crisis: cash is going to be king because banks are going to crash and burn in huge numbers. When that happens, any money people have in them essentially has gone up in smoke. The resulting shortage of physical cash means that asset prices will drop like Bill Clinton’s pants. Having physical cash reserves puts the game changer in your corner. Instead of trying to survive, you’ll be able to thrive.
I’ll go off on a little 2008 tangent for a bit. Geography showed stark differences in how people tried to survive. On the West Coast, particularly California, people ditched the mortgage and walked away from the house, leaving all the fixings inside. On the East Coast, stories of people not paying utilities and huddling around candles/fireplaces for heat just to “save the house” were fairly common.
What’s the smartest option, regardless of geography? Ditch the mortgage, period. If you can anticipate not being able to pay the mortgage and/or losing your job, first order of business should be walking away from that mortgage and putting that wad of mortgage money, every month, in a safe at a self-storage that you rent under a nom de guerre. In fact, a self-storage SHOULD be your base of operation should the economy turn really crappy; if you can use units at multiple locations to expand your base of operation, all the better. It’s a place to store supplies, gear, and barter items. It can also serve as an emergency shelter, depending on facility policy. And, most important, it doesn’t cost a lot of money.
Next move beyond that should be a mail drop at a UPS store location. For around $100 per year, you have a real street address that you can put on a driver’s license, which is important if you plan on finding work.
In the context of having already built a reserve of cash, and being able to draw some sort of income during a really crappy economy, these are two simple measures that will allow you to thrive, not just survive, at a cost that amounts to peanuts every month.
I’m sure you guys are familiar with the joke about the bear chasing the two campers. One stops to put on his running shoes and the other asks why he is taking valuable time to do that. The shoed camper responds that he only has to be the fastest one of the two to evade the bear-
In essence, that is what effective prepping is. When the bear comes after you, you don’t want to be vulnerable to the first, second or third wave of attack. As the zero hedge motto states, eventually- you WILL become targeted but you will have increased your survival chances immensely.
To me, there are several real stages of preparation.
1) strategic relocation or a tested bug out plan
2) managed food and water storage
3) defensive tools and skills
4) medical knowledge and supplies
5) hard assets, barterable at any stage of shtf
Like the bear analogy, it takes time to get this together in the right ratios. I truly think that most people who have heeded their internal voice already are a step ahead in the process.
I know what living pay check to pay check is like, I and my wife did it for yrs. Car payments, house payments, kid payments (when they were born ) etc etc.Then we had a strike in 1987 at the packing plant were I worked, a sympathy strike, 3 days at the most. Ya right. I was out of work for 2 yrs. I was a good union man, when they said poop, I squatted and started grunting, a lot of good it did me, but that is a whole another story to that part. I/we did learn the hard way not live pay check to pay check. Now our house is paid for, don’t owe for any vehicle, don’t owe on any credit card and have few bucks in the bank. and now everyone else can go fly a kite or whatever. It took a lot of will power, but we got it done.
Brother, can you spare a dime?
Don’t have money in a savings account?? Anyone with half a brain wouldn’t keep money in a savings account when you get no interest and run the risk of the bank bailing out and taking your money. Not having money in a savings account means nothing except people aren’t as dumb as some thought.
Its good to have some cash, gold and silver, but don’t forget to invest in some copper and lead. Many people never hear the storm coming until its too late. I have fed and watered people after hurricanes that next hurricane season were in the same state of helpless. As a survivalist stay off of this kind of peoples radar or you will find yourself with far too many mouths to feed if a collapse comes. I am old and have seen many bad things in my life. I have never lost the light of hope even on the darkest days and boy we are sure going to have a lot of darkness to over come if Hillary Clinton wins the election in the future. I fear for America says the old swamp rat.
“The authorities that exist have been established by God.” Ro 13:1
This country will not be blessed if we continue in our present state. There will be a revival back to the Lord or we will perish.
Free Choice for us all.
I don’t have any savings . . . in the bank.
It’s still flooded around here, and some areas are expecting more as the water runs down stream. The schools will be closed for a third day.
The good news is that I won’t have to mow the back yard for a couple more weeks.
Here is a light book i found that may help in a few small areas of your finance: twistingcapital.wordpress.com
But its no silver bullet.
What I learned from my Grandparents
Pops 1905-1985, moved off the family farm to New York City in 1927, after serving 4 years 0 days in the US Navy and went to work for Edison Electric. Lived in an apartment, never bought anything on credit. Worked for the same Company until he retired in 1969, moved back to a large city in their home state about 40 mile from the farm. Bought a 3 bedroom 1 bath 1100 ft house for cash. No state income tax and low property tax. Grandma 1909-2000 lived in the house til 1994 when she moved to a retire home.
The family kept her house up and the government took her estate when she died to pay her nursing home costs of 6 years. Her estate was her $40,000 home.
Seems Grandma had already given her children their inheritance back in 1992, $100,000 in US savings bonds she kept in a shoebox on the top shelf in the closet.
She cooked all her meals at home, cleaned her own house, washed the dishes, Grandpa dried, never drove a car. They were the happiest couple I knew as a kid. They both enjoyed good health until their walk on earth was over.
“Perhaps the most alarming fact from this survey is that 62 percent of all Americans had less than $1,000 in savings last year. So that means that this number has gotten 7 percent worse over the last 12 months”
Perhaps the most alarming fact is that basic arithmetic is now not required for Juris Doctor level education lol
62% to 69% is an 11% increase, not 7% (you were off by a factor of almost 36%)
But this just shows it is MUCH worse than had even caused your concern!
As long as the lights stay on, All Is Well with my Soul. As we have seen with the Negro, unless you are in the military, damage is minimal.
17 trillion dollars in debt plus tax loopholes for the rich equals one hell of an upcoming financial disaster.
Yea but… If i recived a financial survey i would be broke, no savings, no provitions… Just like every one else on SHTF website. Who actually tells anyone how much is tucked away lol. Just like a firearm survey would say “only 1% of preppers have firearms, the other 99% lost them in a boating accident along with there gold and silver”.