(The Economic Collapse Blog)—Can you guess who the quote in the article title is from? I will give you a hint. It wasn’t me. I know that it sounds like it could have come from me, but it actually comes from a very big name on Wall Street. Ellen Zentner is Morgan Stanley’s chief U.S. economist, and she is the one that said it. During an interview with CNBC she warned that “the tightening impacts from monetary policy” will have enormous consequences for the U.S. economy in the months ahead…
“We will have a hard landing at some point. I guarantee you that. We’re all wondering: When does that come?” she said. “The point that Dimon makes is that there are these cumulative impacts that build over time, and we are in the camp that we haven’t yet seen all of the tightening impacts from monetary policy,” she added, referring to the impact of Fed rate hikes.
She makes a really great point. The consequences of interest rate hikes are felt over time.
Higher interest rates have certainly started to cause a lot of problems, but if rates are not brought down soon the level of pain that we are experiencing will begin to go up dramatically.
Unfortunately, the Fed is not likely to reduce interest rates any time soon because inflation continues to run hotter than expected…
Inflation increased by the largest amount in almost a year, according to the Fed’s preferred measure – confirming expectations interest rates will not be cut until around June.
The so-called core personal consumption expenditures (PCE) index – which excludes volatile food and energy prices – increased 0.4 percent between December and January.
Marko Kolanovic, the chief market strategist for JPMorgan Chase, believes that the U.S. economy could be headed into “something like 1970s stagflation”…
In an analyst note to clients, the bank’s chief market strategist Marko Kolanovic warned that the economy may turn away from a “Goldilocks” scenario – in which it is not expanding or contracting by too much – and enter a period of stagflation similar to that experienced in the 1970s.
“Going back to the question of market macro regime, we believe that there is a risk of the narrative turning back from Goldilocks towards something like 1970s stagflation, with significant implications for asset allocation,” Kolanovic wrote.
I would argue that we have already been in a period of stagflation.
The economy has certainly been stagnating, and inflation has been unacceptably high.
But now conditions have taken a dramatic turn for the worse in early 2024, and we are seeing some very troubling signs.
For example, I was stunned to learn that a Canadian pension fund has just sold a stake in a Manhattan office tower for just one dollar…
Canadian pension funds have been among the world’s most prolific buyers of real estate, starting a revolution that inspired retirement plans around the globe to emulate them. Now the largest of them is taking steps to limit its exposure to the most-beleaguered property type — office buildings.
Canada Pension Plan Investment Board has done three deals at discounted prices, selling its interests in a pair of Vancouver towers, a business park in Southern California and a redevelopment project in Manhattan, with the New York stake offloaded for the eyebrow-raising price of just $1. The worry is those deals may set an example for other major investors seeking a way out of the turmoil too.
The Canada Pension Plan Investment Board had a 29 percent stake in Manhattan’s 360 Park Avenue South.
The plan was to redevelop that property, but at this point the outlook for office buildings is so bad that the pension fund just wanted out. And so the entire 29 percent stake was sold off for just one dollar.
Do you remember when I warned that we were heading into the worst commercial real estate crash in history? Well, this is what a crash looks like. Meanwhile, large employers all over America continue to conduct mass layoffs.
Today, I was saddened to learn that Electronic Arts is laying off approximately 700 workers…
Another day, another round of mass layoffs in the games industry. Electronic Arts (EA) has announced it will cut around five percent of its employees, putting almost 700 people out of a job. It’s also cancelling games and shutting down at least one development studio.
EA CEO Andrew Wilson announced the layoffs in an email to employees, which was subsequently posted to the company’s blog on Wednesday.
And we just learned more details about the layoffs that Citigroup is conducting…
Citigroup is cutting nearly 300 workers in New York as it continues its massive layoff spree in an effort to rein in expenses, according to filings with the State Labor Department.
About 239 workers in the primary banking subsidiary, 44 from its broker-dealer unit and three from its technology arm are getting cut, according to Worker Adjustment and Retraining Notification (WARN) notices filed this week.
In early January, the company announced that it was cutting 20,000 roles “over the medium-term,” as part of a reorganization effort. The cuts are slated to save the company between $2 billion and 2.5 billion.
We have not seen anything like this since the Great Recession of 2008 and 2009.
On Thursday, Zero Hedge published a list of 50 different mass layoffs that we have seen recently…
1. Everybuddy: 100% of workforce
2. Wisense: 100% of workforce
3. CodeSee: 100% of workforce
4. Twig: 100% of workforce
5. Twitch: 35% of workforce
6. Roomba: 31% of workforce
7. Bumble: 30% of workforce
8. Farfetch: 25% of workforce
9. Away: 25% of workforce
10. Hasbro: 20% of workforce
11. LA Times: 20% of workforce
12. Wint Wealth: 20% of workforce
13. Finder: 17% of workforce
14. Spotify: 17% of workforce
15. Buzzfeed: 16% of workforce
16. Levi’s: 15% of workforce
17. Xerox: 15% of workforce
18. Qualtrics: 14% of workforce
19. Wayfair: 13% of workforce
20. Duolingo: 10% of workforce
21. Rivian: 10% of workforce
22. Washington Post: 10% of workforce
23. Snap: 10% of workforce
24. eBay: 9% of workforce
25. Sony Interactive: 8% of workforce
26. Expedia: 8% of workforce
27. Business Insider: 8% of workforce
28. Instacart: 7% of workforce
29. Paypal: 7% of workforce
30. Okta: 7% of workforce
31. Charles Schwab: 6% of workforce
32. Docusign: 6% of workforce
33. Riskified: 6% of workforce
34. EA: 5% of workforce
35. Motional: 5% of workforce
36. Mozilla: 5% of workforce
37. Vacasa: 5% of workforce
38. CISCO: 5% of workforce
39. UPS: 2% of workforce
40. Nike: 2% of workforce
41. Blackrock: 3% of workforce
42. Paramount: 3% of workforce
43. Citigroup: 20,000 employees
44. ThyssenKrupp: 5,000 employees
45. Best Buy: 3,500 employees
46. Barry Callebaut: 2,500 employees
47. Outback Steakhouse: 1,000
48. Northrop Grumman: 1,000 employees
49. Pixar: 1,300 employees
50. Perrigo: 500 employees
Just look at that list.
That is nuts!
Anyone that thinks that the U.S. economy is heading in the right direction is simply being delusional.
Greg Hunter just interviewed economic analyst David Morgan, and he is warning that we are actually “entering into a global depression the likes of which the world has never seen”…
Economic analyst and financial writer David Morgan has gone against the majority in the past with predictions that seemed unbelievable at the time. One prediction last year is the Fed not cutting interest rates in 2023. The Fed didn’t, and Morgan is still predicting there will be no Fed interest rate cut anytime soon. Now, with a record high stock market, Morgan is predicting “We are entering into a global depression the likes of which the world has never seen.”
Global central banks were able to delay the inevitable by flooding the system with colossal mountains of money.
But that just created a tremendous amount of inflation and now a horrifying economic crisis is coming anyway.
Coffee the Christian way: Promised Grounds
So I would encourage everyone to brace themselves for the “hard landing” that is rapidly approaching, because it is going to be exceedingly painful for the unprepared.
Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
