This article was originally published by Michael Snyder at The Economic Collapse
Optimism can be a very powerful thing. For a long time Americans believed that things would get better, and that caused them to take action to make things better, and that actually resulted in things moving in a positive direction. But now things have abruptly shifted. In late 2018, an increasing number of Americans believe that an economic downturn is coming, and they are taking actions consistent with that belief. As a result, they are actually helping to produce the result that they fear. And without a doubt, any rational person should be able to see that signs that the U.S. economy is slowing down are all around us. So it isn’t as if those that are preparing for the worst are being irrational. It is just that when large numbers of people all start to move in the same direction, it has a very powerful effect. We witnessed this in the stock market in recent years when people just kept buying stocks even though they were massively overvalued. The collective belief that there was money to be made in the stock market became a self-fulfilling prophecy which pushed stock prices up to absurd heights. But now that process is beginning to reverse as well, and ultimately the unwinding of that bubble will be quite painful.
Over the past couple of years the dominant economic narrative that the mainstream media was pushing was that the U.S. economy was “booming”, and this encouraged businesses to expand and consumers to go out and spend money.
But now the dominant economic narrative has changed, and businesses are starting to take actions that are consistent with the new narrative. In the retail industry, if executives truly believed we would see an economic boom in the years ahead they would be expanding, but instead stores are being closed at a record pace…
Mall and shopping center owners across the U.S. are preparing to be hit by more store closures, following a brutal year that included department store chains like Bon-Ton and Sears going bankrupt, Toys R Us liquidating and even Walmart shutting dozens of its club stores.
Now, a slew of specialty retailers like Gap and L Brands are getting serious about downsizing, which will leave more vacant storefronts within malls until landlords are able to replace tenants.
As a result of these store closings, large numbers of workers will be without jobs, vendors will not be receiving orders and mall owners will be without tenants.
In other words, economic activity will slow down.
Another sector where there has been a major psychological shift is in the real estate industry. Home prices have been falling all over the nation, and this includes markets that were once extremely hot such as San Francisco…
In San Francisco, the number of homes with a price cut in October nearly doubled, to 238 from 124 last October, according to data from Realtor.com.
That’s nothing compared to Santa Clara County, where the number of price cuts rose to 818 last month, more than six times last year’s number. Santa Clara County had been one of the nation’s hottest markets this year, and the Bay Area’s price appreciation leader until September.
“Clearly, there is a market shift,” said Rich Bennett, a Zephyr agent in San Francisco.
If homeowners believed that this dip was just temporary and that home prices would start surging again next year as the U.S. economy thrives, it would be quite foolish of them to slash their prices like this.
In some cases, home prices are being reduced by hundreds of thousands of dollars. Why throw all of that money away if the market is going to bounce back shortly?
Over in the auto industry, there has also been a noticeable psychological shift.
If the U.S. economy was going to be doing extremely well in the years ahead, the major automakers should all be gearing up for record sales.
But instead, General Motors just shut a bunch of factories and laid off 14,000 workers, and Morgan Stanley analyst Adam Jonas is projecting that Ford will soon be laying off large numbers of employees…
“We estimate a large portion of Ford’s restructuring actions will be focused on Ford Europe, a business we currently value at negative $7 billion,” Jonas wrote. “But we also expect a significant restructuring effort in North America, involving significant numbers of both salaried and hourly UAW and CAW workers.”
Ford’s 70,000 salaried employees have been told they face unspecified job losses by the middle of next year as the automaker works through an “organizational redesign” aimed at creating a white-collar workforce “designed for speed,” according to Karen Hampton, a spokeswoman.
“These actions will come largely outside of North America,” Hampton said of Ford’s restructuring. “All of this work is ongoing and publishing a job-reduction figure at this point would be pure speculation.”
Shifting gears, let’s talk about agriculture.
If farmers believed that the trade war was just temporary and that things would soon swing back in their favor, many of them would keep trying to hold on for as long as they possibly could.
But instead, farm bankruptcies are absolutely surging…
A total of 84 farms in the upper Midwest filed for bankruptcy between July 2017 and June 2018, according to the Minneapolis Star Tribune. That’s more than double the number of Chapter 12 filings during the same period in 2013 and 2014 in Wisconsin, Minnesota, North Dakota, South Dakota, and Montana, reported Vox.
Farms that produce corn, soybeans, milk, and beef were all suffering due to low global demand and low prices before the trade war, according to economists, but president Trump’s trade war is making the problem even worse by exacerbating the weaknesses in the American economy. China has retaliated against the tariffs by slapping billions of dollars worth of tariffs on United States agriculture exports in response to Trump’s tariffs on Chinese products. Other countries, including Canada, have also added duties to US agriculture products in response to Trump’s tariffs on all imported steel and aluminum.
Most Americans want to have hope, but when they look at our economic situation all they see is a very bleak future.
And in some parts of the nation, there still hasn’t been any sort of a “recovery” from the last recession. For example, a recent Bloomberg article took a hard look at what conditions are currently like in eastern Kentucky…
Tiffany Hensley’s drive home takes her through some picturesque scenery, and an ugly economy.
“The first thing you see when you get down here is beauty,” says Hensley, midway through her shift at a diner in the rolling hills of eastern Kentucky. “But then you get to looking around. It’s real rough.’’
Of course eastern Kentucky is far from alone. Yes, coastal cities such as San Francisco and New York have prospered in recent years, but rural communities all across America have been deeply suffering.
And now economic conditions are deteriorating once again nationally, and things are about to get a whole lot tougher for everyone.
***
Michael Snyder is a nationally syndicated writer, media personality and political activist. He is publisher of The Most Important News and the author of four books including The Beginning Of The End and Living A Life That Really Matters.
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].
The power of the purse now resides in the hands of lunatic, America hating liberals hell bent on destroying our president. You don’t have to look very far to remember the economy under Obama. So yeah, we are liquidating stock investments as fast as possible. And putting the bulk into property purchases, rather than bank accounts.
Its fading fast peeps.
” …but instead stores are being closed at a record pace…”
Snyder has done a good job of cataloguing America’s economic decline under W & Obola, but there is more to the retail apocalypse than a general economic downturn which is beginning (finally).
The real story is that technology is changing the way America shops and AMAZON & ALIBABA are that change. Walmart & Home Depot are close behind. Sears, and some others, not so much. Couch potatoes have decided that they want everything delivered; including their pizza & beer, with a quarter pounder, side of fries and some tacos.
They only reason to get up off their collective asses now is for more ice cream and toppings. Oh, and to open the door for the delivery person. 🙂
durangokidd, yes more time to sit on the couch and get fatter and dumber here in USA today!
What Snyder does not point out or fully realize is simply that everything is a created illusion, not just economic matters. Anything to do with politics and social matters is just as illusory as economics because it is all interconnected, like peanut butter and jelly ! But none of it is actually a real necessity, just an illusion created to control the masses.
This is precisely why we supposedly have 60+ genders now ? And of course none of it is real. The only people who could possibly accept any of the insanity are the brain dead zombies created in our fraudulent school systems in the last 30 years and more specifically in the last 10 years under BHO and crew.
Here is how they do it all very easily and few people fully understand any of it in depth ? How many actually realize your smart phone is in fact just another control mechanism that hard wires you directly into the matrix ?
http://www.downtoearththinking.com/the-matrix-is-very-real-in-usa-today–.html
I think were seeing the very beginning of the end times. A total financial collapse is staring us right in the face. Its been coming for a long, long time. 2000 and then 2008 were the harbingers of what’s to come. I predict the 2nd great depression is at the doorstep…..followed by World War. And yes, these are the times predicted in the book of Revelation.!!!
JJ,
I hope a depression occurs. All our prices are way out of whack from costs of production or providing services.
I don’t think we will sink into a “hot” world war. Russia, North America, and China are virtually invasion proof military wise, due to Nukes. I am however very concerned about what will happen if more Nutcase Moslems get Nukes.
Of course eastern Kentucky is far from alone. Yes, coastal cities such as San Francisco and New York have prospered in recent years, but rural communities all across America have been deeply suffering.
Genius there’s your answer as to why they volunteer.
Be of good cheer tho …the day draweth nigh when the Hillbilly Vietcong get their paybacks.
Bill, I’ve been hearing about economic collapse for 2 decades but we just might be closer to it than ever before.
The Deplorable Renegade, Here in USA we had a total collapse in 2007-08 and it was simply covered up with the $20 trillion and more that most people are not even aware of. It is all part of the many illusions I speak of often and it is already past tense. We are in fact just living in a make believe world you might say. we simply have not seen the outcome of it all quite yet because of that $20 trillion. But we will !
That does not include the $20 trillion the pentagon hides and is totally unaccounted for or the massive unfunded liabilities beyond that and off the books. The pentagon simply hides what they want to hide via their allies in congress on the necessary committees and of course the corrupted spook agencies who are all are part of the cabal we see before us now.
McCain was one of those people and there are numerous others both red and blue feeding at that trough ! All part of the deep state apparatus that controls us and every dollar manufactured.
The truth is USA defaulted, in 2007-08 and it was of course covered up like everything else is covered up. That does not mean it will remain covered up just as the DOJ/FBI crimes are being exposed.
Are Americans slow thinkers or what ? and even slower to take actions. Now the French of all people have schooled us on taking action. Pathetic !
Who can afford a car payment? I can barely cover my monthly rent and utilities!
Ruteger, I’ve always paid cash for vehicles from private owners. I don’t even make enough money to qualify for financing. So be it. It’s one extra bill I gladly do without. Find the best thing you can for sale by an individual, pay the whole cash price right there on the spot, and be done with it. In the long run you’re a lot better off, especially when you need money for any repairs. The money you would’ve spent for notes can instead be saved for that “rainy day” if/when the vehicle breaks down.
DR: Yes, that’s good advice. Who wants that monkey on their back every month. Staying debt-free is about the best money advice I can give anyone (along with a good credit score which is icing on the cake for lower interest loans, apartment hunting and job hunting).
Yeah none of this is Trumps fault, he is just the latest to follow orders and do as he was told like all of the other con job presidents who have worked against constitutional freedoms in these United States. D or R party no difference on vital important matters concerning the public.
The Fed holds no responsibility?
I would go even further and say:
The Psychological Bubble That Has Been Propping Up The U.S. – as the self-described “Indispensable Country” – Is Starting To Implode.
YOU will be left standing in the smoldering ruins – scratching what’s left of your miserable ass mouthing “Uugh? Who coulda knowed? Who coulda figgered?” – long after the ‘Usual Suspects’ have departed – with the loot – for greener pastures.
THAT concludes today’s sermon.
“The Psychological Bubble That Has Been Propping Up The U.S. Economy”
The prices were fixed by fiat, not by the power of positive thinking.
Reality… there is a war going on between Nationalists and Globalists..World wide Nationalists are in ascension..
Globalists have long held sway over Macro Economics.. with major institutions like the US Federal Reserve raising and crashing economies while they systematically loot the Nation State and impoverish the people..
Now there is nothing wrong with a little prudence.. You can make money in options on entities like Fakebook as their Pump and Dump Scheme takes a dive.. rises and dives again.
At the same time only fools bet on Economic Collapse. Just as only fools fail to prepare for Economic Collapse.
Keep being productive.. make the best decisions you can and keep in mind.
Fortune Favors the Bold..
Vic