(The Economic Collapse Blog)—The U.S. government is $40,068,807,991,924.84 in debt, and all of a sudden the rest of the world has become a lot more hesitant to lend us money. Bond prices are crashing and rates are spiking. For years, I warned that our politicians were borrowing and spending way too much money. But those politicians just kept voting for budgets with bigger and bigger deficits.
Now we find ourselves in the middle of a financial nightmare with no way out. The same thing could be said about Japan and most nations in Europe. Globally, bond prices have been steadily plummeting as bond yields have skyrocketed. Unfortunately for all of us, financial institutions all over the planet are holding gigantic mountains of government bonds that have collapsed in value. The unrealized losses that they are potentially facing will be off the charts. Meanwhile, rapidly rising interest rates could set off an unprecedented derivatives implosion. At this point, the total notional amount outstanding for global over-the-counter interest rate derivatives is well over 600 trillion dollars.
As long as investors still had faith in the game, everything was going to be fine.
But now investors are losing faith in the U.S. government, the Japanese government and governments all over Europe, because they have been borrowing money at insanely reckless levels.
So now we have a massive crisis on our hands, and last week things really started to get out of hand.
In fact, last week was definitely “a week of pain” for financially irresponsible governments throughout the world…
This has been a week of pain for anyone who borrows money.
All over the world, lenders are demanding higher interest rates. The global bond market is extracting higher yields from every borrower, starting with the biggest borrowers of all: national governments. But not every government is paying equally.
Trustworthy borrowers with solid finances and honest leadership pay less. Distrusted borrowers with disordered finances and corrupt leaders pay more. In times past, the United States would have headed that first list.
In a previous article, I explained that historically when the yield on 10 year U.S. Treasuries hits 5.25 percent things start to get really crazy.
Well, late last week the yield on 10 year U.S. Treasuries was hovering around 5.2 percent…
In trading yesterday, the yield on a U.S. 10-year Treasury bond hovered near 5.2 percent. Germany pays less than the United States. France pays less than the United States. Canada pays less than the United States. Even Greece pays less than the United States. Estonia—a country under constant threat of a Russian invasion and the annihilation of its sovereignty—pays much less than the United States: only 3.6 percent.
We were only going to be able to play this game for so long.
I don’t know why this was so difficult for so many of the “experts” to understand.
At one point on Friday, the yield on 10 year U.S. Treasuries reached 5.23 percent, which was the highest that we have seen since just before the last global financial crisis…
Investors were rattled this week as the benchmark 10-year Treasury yield soared to its highest level since 2007, but sticky inflation is just one of the factors behind this latest surge.
The key 10-year Treasury yield, which influences mortgages, leapt to 5.23% on Friday for its highest level since 2007. It was the latest leg higher for the benchmark yield, which earlier this month was trading just below 4.8%. Bond yields and prices move inversely to one another.
This is what a bond market collapse looks like, and we are still only in the early stages.
On X, one popular account warned that most people have “no idea what is about to happen”…
The era of easy money is over, and that is really bad news for all of us.
John Roque has pointed out that there have been 16 times throughout history when bond yields have spiked like this. Every single time, it has resulted in some sort of a financial crisis…
“Something always breaks,” proclaimed a recent note from John Roque, head of technical analysis at 22V Research.
Roque pointed out on a chart of the 10-year Treasury yield going back the last five decades 16 instances where it experienced a rapid advance like it is now. During each and every move, some sort of financial calamity resulted. While the scale of the crises varied in their market impact (from the jarring-but-short-lived Silicon Valley Bank failure of 2023 to the 1987 stock market crash), the jump in yields almost always led to some sort of disruption to financial markets that weighed on risk assets.
“As sure as day follows night, when the 10-year Treasury yield rises, something gets knocked out,” Roque remarked to CNBC. “It just pays to be cautious.”
Personally, I am very concerned about what all of this is going to mean for the stock market.
Stock prices are currently at a level that we have only witnessed “three times over the last 156 years”…
Currently, we’re witnessing the stock market do something that’s only been accomplished three times over the last 156 years. When this signal appears, it has consistently foreshadowed significant declines to come for Wall Street.
What goes up must come down.
Every time the CAPE Ratio has been this high, a bear market has followed…
Economists introduced the CAPE Ratio in the late 1980s and have backtested it as far back as January 1871. Over this roughly 156-year stretch, the average multiple is 17.42. As of the closing bell on Sept. 21, the S&P 500’s CAPE Ratio clocked in at 41.60.
Including the present, there have only been three times, spanning 156 years, in which the S&P 500’s Shiller P/E Ratio has topped 40 — and the previous two occurrences were followed by notable bear markets
The bottom line is that we are perfectly primed for a stock market crash, and signs of trouble are already apparent.
The performance of just a handful of tech stocks has been masking some very alarming developments that have been happening under the surface. At this point, 52 percent of all stocks in the S&P 500 are already trading beneath their 200 day moving averages…
The S&P 500’s latest trip back to near-record territory has been powered by a surprisingly small number of stocks.
As of Tuesday’s close, the S&P 500 was only 0.44% shy of a record closing high, and yet 52% of individual member stocks were trading below their long-term 200-day moving averages. This is a reflection of the fact that a handful of stocks, chiefly hyperscalers like Meta and semiconductor stocks like Micron Technology, have been doing much of the heavy lifting lately.
That is a major red flag.
In fact, there are major red flags all around us.
And now we are entering the pivotal month of October when some of the largest stock market crashes throughout history have occurred.
Historically, bonds normally start crashing before stocks do.
That exact same pattern is playing out right in front of our eyes in the fall of 2026.
If it was just the U.S. that was in trouble, that would be bad enough.
But what we are looking at is a truly global debt crisis.
This moment has been coming for a very long time, and the entire world is going to be stunned by what happens next.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
