J. P. Morgan was the founder of JPMorgan Chase & Co., an American multinational financial services company headquartered in New York City. It is the largest bank in the United States and the world’s largest bank by market capitalization as of 2023.

In 1973, Henry Kissinger is purported to have said (though it is disputed): “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls the money can control the world.”

Whether he said it or not, it is true. However, he would have to have been talking about credit.

Since the United States closed the gold window in 1971, the dollar has had less and less gold backing it as the US Federal Reserve banksters have created more and more fiat currency.

According to the US Treasury-Owned Gold dataset, as of November 30, 2023, 261,498,926.24 troy ounces of gold is held in bullion and coins at various vaults including Fort Knox, West Point, Denver, and the New York Fed.  The price of gold was last officially set at $42.2222/troy oz. in 1973. It has not changed, not even by a small amount. I calculated this number from the listed total US dollar value in all vaults divided by the total listed weight. The result actually has seven significant figures of precision (i.e., $42.2222000/troy oz.).

Could this number be because of the occultic Kabbalah practices of the central banking cabal? Symbolically reading the gold price $42.2222 as four twos followed by four more twos, it becomes $2222.2222. The occult loves these repeating numbers, especially factors of eleven. Of course, this is my speculation.

Anyway, from the published data, we can add up all the holdings in the various vaults to get the total value of US Treasury holdings as $11,041,059,957.90. That is billions not trillions.

When was the last time the gold was audited? Who really knows how much gold is still in Fort Knox and the other vaults? Based on official figures, it amounts to little more than 2 percent of the amount needed to back the $20 trillion dollars in the current M2 money supply at the current price of gold:

M2 is the U.S. Federal Reserve’s estimate of the total money supply including all of the cash people have on hand plus all of the money deposited in checking accounts, savings accounts, and other short-term saving vehicles such as certificates of deposit (CDs). Retirement account balances and time deposits above $100,000 are omitted from M2.

See Figure 1 for the accumulation of M2 money supply according to the US Fed’s own data. I plotted this from FRED data. On November 1, 2023, the money supply reached $20.767 trillion. Therefore, if you revalue all the US Treasury gold to this amount, you would get a gold price of $79,415.24/troy oz. That is a factor of thirty-nine times the current price of $2,030/troy oz.

Figure 1: Plot of the M2 money supply since 1959

Credit unbacked by gold is plain theft! There is no other word for it. Flashing electronic numbers on your computer screen are not money. Paper (or plastic) bank notes are not money! Bitcoin is not money! Those are all dollar derivatives. IOUs! They do have a little gold backing; otherwise, you could not buy any gold or silver with them. However, all dollar derivatives are fiat currencies, and they will eventually go to their intrinsic value, which is zero. When that happens, not if but when, they will not buy anything. Since 1959, the US dollar has already lost 98 percent of its value.

It is worth noting that Henry Kissinger was a founding member of the Club of Rome, which had as one of its goals to control the world population and its resources. He was also the guy who got the Arab Emirates and Saudis to only sell oil in US dollars; hence, he oversaw the creation of the petrodollar. The latter has aided in this control.

It follows that, in the current world system, petroleum is also money. However, cracks are starting to form in that system as the BRICS nations (Brazil, Russia, India, China, South Africa, and now Saudi Arabia, among other countries) have created an alternative trading bloc, and the Saudis are taking other currencies for their oil. However, unless the BRICS nations use real money—gold—to exchange goods and services in their trade, they will just be trading another fiat currency for the US dollar. All fiat currencies will go to zero eventually because they always have. When they do, the theft is exposed to all those holding the useless currency.

By that time though, the banksters have gotten what they wanted. They have sucked the wealth (gold, oil, land, and other real commodities) out of the nations using their banking cartels and the military of the US and other Western countries.

In line with Kissinger’s 1973 statement, the same banksters are now coming for your food supply and your energy supply. Man-made global warming is being used as the excuse to shut down agriculture and so-called fossil-fuel electric power generation, which is the backbone of our modern industrial world. The megabillionaire corporate and bank owners already control much of these, but they want it all. As a result, “climate change” is being used now to take everything else they haven’t taken though the debasement of the currency.

Think about that! For six thousand years, gold and silver was money! Since 1971, the globalist bankers have moved the population off honest moneys onto fiat bank notes, then electronic digits, and now they are going “full monty” with central bank digital currencies backed by nothing of any substance.

There is nothing new under the sun. All fiat currencies of whatever kind will collapse! The cycle of life tells us that the wicked will be destroyed eventually as the edifice of their fiat money system collapses and we have a global reset. It might be their planned Great Reset, but even that will only be for a short time because even central bank digital currencies are just another fiat currency.

About the Author

John Gideon Hartnett is an Australian physicist, cosmologist, and Christian with a biblical creationist worldview. He has a PhD with distinction in physics from the University of Western Australia (UWA). During his research career he worked at UWA and the University of Adelaide and published more than two hundred papers in scientific leading journals, in book chapters, and in conference proceedings. He was a foundering director of an Australian startup now commercializing his research on ultrastable cryogenic “clocks.” He has lectured around the world in churches and at conferences and written extensively on biblical creation, mostly in terms of astrophysics and cosmology. He blogs at johnhartnett.org.

Price increases on essential goods like food, housing, and fuel are hitting hard for Average Americans. But in its policy to avoid economic reality as much as possible, the Fed’s CPI numbers don’t account for factors such as consumers buying cheap alternatives instead of the name brands that they used to easily afford.

Acting as de facto PR agencies for Federal Reserve monetary policy, some media outlets are claiming that Americans are making headway on their debts, it’s just that higher inflation is obscuring all their great progress. As described by WalletHub editor Christie Mathern:

“When you adjust for inflation to compare this number to past years, our current credit card debt total is actually 15% lower than the highest number in 2008.”

According to that analysis, crippling price increases are causing consumers to take on more loans, but the debt only seems too high because each dollar is worth so much less now than it was 15 years ago. Unfortunately, the economy is now so irreparably distorted that these perceptions of economic pseudo-reality have become the norm. Increasingly severe mental gymnastics are required to continue justifying the position that consumer debt has reached anything but utterly unsustainable levels.

Meanwhile, trillions printed during Covid are still in the economy, meaning inflation will only get worse as Powell waves his magic wand to cut rates in the hopes of “stimulating growth.” If you believe that more debt automatically equals more growth, then Powell might be right. But the real result will be higher prices at the store, more consumer debt, and more previous debts left unpaid. According to a Bankrate survey, over 50 million Americans are carrying credit card balances for an entire year and then some, and other numbers show that around half of consumers are carrying balances from month-to-month.

“Total credit card balances hit a high of $1.08 trillion in the third quarter of 2023, according to the Federal Reserve Bank of New York — a figure that is up $48 billion over the quarter and $154 billion over the year. Interest on this debt is also increasing, with the Federal Reserve reporting the average APR for revolving credit at 22.77 percent as of the third quarter.”

One has to wonder if maybe consumer defaults are the goal. Perhaps “economic growth,” in the Fed’s eyes, really means crashing it all so that more assets like real estate can be owned by parasitic megabanks. However, the simpler explanation is that backed into a corner with so few weapons in their arsenal to meaningfully stabilize prices or get debt under control, there isn’t much else that the Fed can do other than more of the same.

Delinquencies are already at their highest point in about a decade, and the notion that these debt-addicted spenders are going to borrow less rather than more appears quite unlikely in 2024. Lower interest rates will be too tempting when cash-strapped consumers are already struggling more than ever just to afford rice and beans:

As Peter Schiff tweeted on January 11th, there’s unfortunately no end in sight for consumers who are already borrowing just to finance basic needs.

Anyone who thinks the #Fed will succeed in returning #inflation to 2% doesn't understand inflation, including #Powell or other FOMC members. Today's hotter than expected Dec. #CPI doesn't mean that the Fed has to fight harder to win the inflation war, but that it's already lost!

— Peter Schiff (@PeterSchiff) January 11, 2024

As he said on last week’s The First TV with Jesse Kelly:

“Americans continue to borrow to buy things that they don’t earn enough money to afford, and all that means (is) more upward pressure on prices — the Fed has done too little, too late…we’re running a trillion dollars in debt every quarter.”

But if the job numbers pick up, maybe consumers can afford more expensive survival needs and finally start paying down those debts…right? Not so fast. 2023 was a big year for layoffs, especially in an overly-frothy tech industry suffering further disruption by AI. And ResumeBuilder.com’s recent survey found that almost half of companies are anticipating more job cuts in 2024.

Making matters worse, over 1 out of 4 debtors (especially Millennials and Gen Z) are already saying YOLO and “Doom Spending” their way into an even deeper hole. That’s more than 25% of American consumers throwing in the towel, borrowing like there’s no tomorrow, and all but guaranteeing default at one point or another.

The only question left is when we’ll reach the debt event horizon that sucks the economy into a black hole of runaway inflation and cascading defaults. If the Fed is good at one thing, it’s kicking the can down the road — but at some point, that road leads to a cliff, and from there, there’s nowhere left to go but into the void.

Not only households are having a harder time making ends meet, but getting out of debt is becoming increasingly difficult. No wonder more Americans are going bankrupt. Compared to a year ago, the number of personal bankrupcies is 18% higher.

Everyone seems to be dealing with financial setbacks. That’s why we are relying more on credit cards to get by than ever before. And people are not resorting to credit just to make big-ticket purchases, as they used to do in the past. They are having to use their credit cards for basic necessities such as rent, energy, and groceries.

The New York Federal Reserve revealed that the typical household now carries $10,170 credit card debt. In the past quarter alone, nationwide credit card debt swelled by $43 billion – the second-largest increase on record. On the other hand, in September, 60% of respondents to the New York Fed’s Survey of Consumer Expectations said that their ability to get loans is lower than it was a year ago. That’s because the credit crisis banks have been warning about has already begun.

In recent months, credit card companies have been reporting extensive losses due to the rise in credit card debt delinquencies and defaults. Borrowers are facing mounting challenges to pay their balances in full each month. In all, americans owe more than $1 trillion on credit cards, a record high. Goldman Sachs said on Friday that credit card issuers’ financial losses caused by delinquencies and defaults rose by 3.64% in the past three months.

The bank’s analysts see them rising another 1.3 percentage points to 4.93% in October.”Losses have been climbing quickly since early 2022, jumping at speeds not seen since the 2008 financial crisis,” Goldman emphasized.

With more banks announcing tighter lending standards, many consumers will become more financially insecure, especially those who rely on overdrafts to cover short-term financial needs and unexpected expenses and maintain their purchasing power. This situation has put already-struggling banks on edge.

Fears of a full-blown credit crunch and the resulting negative impact on households, businesses, and the U.S. economy are at an all-time high. During a credit crunch, loans become tougher to get. Banks that offer them might do so with more onerous terms like abnormally high-interest rates or other restrictions — making such financing more costly.

At this point, banks are doing whatever they can to stay afloat, because this time around, there will be no rescuing or bailing out from the Federal Reserve. According to Bloomberg, we may face potentially dire consequences due to the administration’s continued inability to manage its finances. That matters because it shows that the government does not have the means to lift the country out of a crisis like it did in 2008. So if more people become delinquent on their debt and more financial institutions fail, there will be no safety net protecting our economy from collapsing.

The chart, which was withdrawn after widespread protest, sought to identify the characteristics needed to build not only an economy but civilization itself with a racist culture. Thus, the kind of lifestyle and values that might culminate in someone having high credit scores and saving up for a significant down payment for a house were something not to be emulated or praised, but rather to be called out and declared shameful.

Although the chart no longer is found on the Smithsonian website, the mentality that created it lives on in the policies of the Biden administration. To show its commitment to equity—equal outcomes—the Federal Housing Finance Agency (FHFA) implemented a new policy on May 1, 2023, that punishes homebuyers with high credit scores who can put down at least 15–20 percent on a mortgage by making them pay higher interest rates and extra fees. Declares a Wall Street Journal editorial:

According to calculations by Evercore ISI, buyers with strong credit scores between 720 and 739 who make 15%–20% down payments will see their rates increase by 0.750%. Borrowers who put down 20%–25% will see rates increase by 0.500%.

The winners are borrowers with weak credit scores—that is, riskier borrowers. Under current FHFA policy, a borrower with a weak credit score below 620, who is borrowing more than 95% of the value of their home, pays 3.750%. Under Ms. Thompson’s new plan, those borrowers will see their fees decrease by 1.750%.

Not surprisingly, commentators like James Bovard have rightly attacked this policy as one that imposes perverse incentives, turning the rewards for creditworthiness upside down. Bovard writes:

Starting May 1, The Post exposed last week, a Biden administration decree will require adjusting mortgage calculations to penalize homebuyers with a FICO credit score of 680 and above—almost two-thirds of the population.

This levy will be used to reduce costs for people with low credit scores—i.e., risky borrowers more likely to default on mortgages.

However, this is not merely another version of the Law of Unintended Consequences, in which well-meaning government officials implement a policy without looking at the so-called bigger picture.

The consequences here are intended. The Biden administration officials know full well the implications of this new policy and is sending the message that the notion of creditworthiness itself is implicitly racist.

As Newsweek points out, the racial gaps in home ownership and credit scores are significant:

Only about 25 percent of homebuyers with Federal Housing Administration loans are people of color, according to the White House. Black and Hispanic people, on average, have fewer savings to use as a down payment on a home and tend to have lower credit scores, according to David Stevens, former CEO of the Mortgage Bankers Association (MBA) and a former FHA commissioner during the Obama administration. The current policy is being rolled out by the FHFA.

He told Newsweek that this can be attributed to factors like distrust in the banking system or being a first-generation American. He added that low credit scores can be a significant barrier to homeownership.

But in order for the FHFA to close the gap by bringing down LLPAs [loan-level price adjustments] for those borrowers, the agency will compensate for the reduction in borrowing fees by raising the LLPAs of borrowers with higher credit scores, who tend to be white.

The average credit score in white communities was 727 in 2021, compared with 667 in Hispanic communities and 627 in Black communities, according to data analyzed by FinMasters, a personal finance blog.

Not surprisingly, the Biden administration blames the homeownership gap on racism, so its proclivity is to punish the people who saved their income and engaged in forward-looking behavior, something the Smithsonian condemned as a product of “whiteness.” However, as Bovard points out, black homeownership rates relative to white rates are lower today than they were more than fifty years ago: “Federal Housing Finance Agency Director Sandra Thompson testified to Congress last year that the racial homeownership gap ‘is higher today than when the Fair Housing Act [of 1968] was passed.’”

That is hardly insignificant. In 1968, the United States was just beginning to shed Jim Crow laws, and prospective black homeowners had far fewer financing opportunities than they do today. Furthermore, homebuyers were expected to put at least 20 percent down, with only some exceptions, so one might consider lending policies at that time to have been far less friendly to black borrowers than they are today.

Furthermore, the Bill Clinton, George W. Bush, and Barack Obama administrations had policies explicitly aimed at increasing homeownership among blacks and other minority groups. Bush claimed his administration had put a record number of black Americans in their own homes by helping to provide down payments and lowering interest rates, among other policies.

Andrew Cuomo, the Clinton administration’s housing and urban development secretary, declared that the homeowning gap between blacks and whites was due to discrimination and ordered mortgage lenders to lower lending barriers for black households. Cuomo wrote:

The American Dream of homeownership is not reserved for whites. We will not tolerate a continued homeownership gap as wide as the Grand Canyon that divides Americans into two societies, separate and unequal. Eliminating housing and lending discrimination is vital to making the opportunity for homeownership a reality for all Americans.

Of course, the Bush administration’s all-out push to increase black and Hispanic homeownership rates had its own unhappy ending: the 2008 financial meltdown. All the Bush administration’s efforts to increase minority home ownership blew up as home prices plunged and many homeowners defaulted on their mortgages and lost their homes. Writes Bovard: “Thanks to the housing crash, the median net worth for Hispanic households declined by 66 percent between 2005 and 2009 and the median net worth of black households declined by 53 percent.”

Moreover, in a 2004 article in Barron’s, Bovard warned that the Bush housing policies were going to have an unhappy ending:

One of the proudest elements of President Bush’s “compassionate conservative” agenda has been government financial support to home buyers for down payments. Bush is determined to end the bias against people who want to buy a home but don’t have any money. But he is exposing taxpayers to tens of billions of dollars of possible losses, luring thousands of moderate-income families into bankruptcy, and risking the destruction of entire neighborhoods.

Bovard’s words were prophetic. But at least Bush didn’t blame borrowers with high credit scores and large down payments for the racial housing gaps.

The Biden administration, on the other hand, has expanded the definition of “intersectionality” to include the claim that whites (along with non-whites who have high credit scores) are to blame for minorities’ low credit scores and shakier finances. The Biden administration’s policies continue what Bovard called “wrecking ball benevolence.” Former federal Judge Janice Rogers Brown concurred, writing: “Whether the road was paved with good intentions or greased by greed and indifference, affordable housing turned out to be the path to perdition for the U.S. mortgage market.”

Economically, none of this makes sense, but one must understand that the Biden administration is not looking to promote working markets in housing. Instead, it is claiming that the only cause of the gap in homeownership between blacks and whites is white racism and that the government must engage in extraordinary means to eliminate this gap, even if this requires turning economic logic upside down.

One does not have to be a seer or have a doctorate in economics to know that this latest iteration of federal housing policy will end in failure just like all the other housing initiatives for minorities. But don’t blame the Law of Unintended Consequences. This new policy is deliberate, and when it fails (as it surely will), look for Biden or whoever else is in the White House to call for even more drastic measures.

About the Author

William L. Anderson is Senior Editor at the Mises Institute and professor emeritus of economics at Frostburg State University in Frostburg, Maryland.

Article cross-posted from Mises.

However, as many analysts point out, this is not necessarily the main factor that dictates the risk of a credit crunch. Deposit flight is certainly an important risk. Many regional banks will have to cut lending to families and businesses as deposits shrink, but in the United States bank loans are less than 19 percent of corporate credit according to the IMF, while in the euro area it is more than 80 percent. What will generate a credit crunch is the destruction of capital in the asset base of most lenders.

The slump in mark-to-market valuations of all asset classes from loans to investments is what will ultimately drive an inevitable credit contraction.

Credit standards have tightened significantly already, and the credit impulse of the economy, both in the US and euro area, has deteriorated rapidly, according to the respective Bloomberg indices. Both are below the March 2021 low.

We must remember that credit standards’ tightening was already a reality before the Silicon Valley Bank demise. But the reality check of capital destruction in the financial system’s asset base is far from done.

Start-ups will most likely see the most severe crunch in financing as the tech bubble burst adds to the asset base capital destruction in private equity and venture capital firms, who have delayed all they could the required write-downs and face a sobering reality check. Our internal estimate of capital destruction in the asset base of banks and private equity firms is between a 15 to 25 percent wipeout, which is consistent with the average decline in market value over the October 2021–March 2023 period.

Real estate investments all over the US and Europe require a significant reevaluation now that real estate has underperformed the market for eighteen months, according to Morgan Stanley. The optimistic valuations of real estate and corporate investments in banks’ balance sheets will require a significant analysis and subsequent write-off that leads to much tighter credit standards and stringent investment conditions.

Capital destruction tends to be forgotten in a world used to constant central bank easing, but it is likely to be the main source of strangling of credit to families and businesses as banks and private equity firms deal with the loss of value and weakening earnings and cash flow of investments made at elevated valuations and unreasonable prices.

The main challenge this time is that capital destruction is happening in almost every part of the lenders’ asset base, from the allegedly low-risk part, sovereign bond portfolios, to the aggressively priced investments in volatile businesses and bull-market valuations of corporate and venture capital investments. The profitable asset part of banks will likely require important provisions for nonperforming loans, a subject that was raised by the Federal Reserve and the ECB months before the banking crisis. Furthermore, as governments will blame the recent collapses on lack of regulation again, it is extremely likely that new rules will be imposed demanding banks to book large provisions recognizing losses on the loan book ahead of time.

Even if we assume a modest impact on banks’ balance sheets, the combination of higher rates, declining optimism about the economy and the slump in equity, private investments and bond valuations is going to inevitably lead to a massive crunch in access to credit and financing. It is more than banks.

The crunch will come from private direct middle market loans, a decline in high-yield bond demand, while institutional leveraged loans may fall as access to leverage is more expensive and challenging and investment grade bonds may likely continue to see strong demand but at higher costs. The question is not when there will be a credit crunch, but how large and for how long. Considering the size of the famous “bubble of everything “and its slow implosion, it may last for a couple of years even with a central bank pivot, because by now a reverse in monetary policy may only zombify the financial system.

Article cross-posted from Mises.

U.S. Treasury Secretary Janet Yellen recently told the media that she expects banks to be more cautious in the aftermath of the collapse of Silicon Valley Bank and Signature Bank. She said: “We already saw some tightening of lending standards in the banking system prior to that episode, and there may be some more to come.”

Meanwhile, Federal Reserve Chair Jerome Powell said at a news conference that the turmoil in the banking sector is “likely to result in tighter credit conditions for households and businesses, which would in turn affect economic outcomes.”

The chief economist of Citibank, Nathan Sheets, has also warned that the nation could be headed for a credit crunch as well as a recession in the next few months in the wake of the bank collapses and the Fed’s monetary tightening.

As for when he expects this to happen, Sheets noted: “That’s something that will unfold in [the] coming months and quarters, and could indeed make that recession that we’re expecting somewhat longer than it would be otherwise and somewhat deeper.”

In a credit crunch, banks are significantly less likely to lend money, making it more difficult for people to make the types of large purchases that tend to require loans, such as homes and vehicles. Less credit would also be available for businesses.

This slowdown in economic activity could see mass layoffs on top of those we have already seen in recent months as well as business failures and consumers defaulting on debts. If the credit crunch continues, financial institutions may become even stricter in their lending standards, spurring a downward spiral some believe will be one of the biggest problems facing our nation in the next six months.

In this type of environment, those who seek to apply for a loan or extend their credit could well encounter tighter lending requirements. This is bad news at a time when standards are already tightening, with several banks recently tightening qualifications for credit cards, home equity lines of credit and car loans by raising the minimum accepted credit score and interest rates and reducing credit limits.

There are many signs of a major economic downturn throughout the country, with Disney laying off thousands of workers, Bed, Bath and Beyond closing its doors entirely, and Walmart closing multiple stores throughout the country.

How can Americans prepare for a potential credit crunch?

Although there is not much we can do to stop what is most likely coming, people who are anticipating a need to borrow money in the near future should start taking steps to make sure their credit is as good as possible. This may mean reducing your credit utilization rate, reviewing your credit report and disputing errors on it, and being sure to pay debt payments like credit card bills on time every month. Meanwhile, businesses that have loans that are approaching the end of their term should roll it over or refinance it as soon as possible rather than waiting.

Experts are also advising Americans to make sure they have cash on hand to cover emergency situations, such as a period of joblessness or a full economic collapse. Of course, that is easier said than done at a time when inflation remains high and many people are struggling to cover the rising costs of everyday goods and groceries.

Sources for this article include:

• SHTFPlan.com
• CNBC.com
• NATURAL NEWS

Banks decided to substantially tighten their lending standards and that really deepened the economic downturn.  So our leaders should be doing what they can to support the stability of the system, but in so many cases they end up doing just the opposite.

For example, on Wednesday U.S. Treasury Secretary Janet Yellen publicly admitted that blanket coverage of all uninsured deposits in U.S. banks is not even under consideration…

In response to a direct question about whether the Treasury would circumvent Congress to insure all deposits, Yellen replied, “I have not considered or discussed anything having to do with blanket insurance or guarantees of all deposits.”

When she made this statement, she poured even more lighter fluid on small and mid-size banks all over the country.

Wealthy individuals and large companies have already been pulling billions of dollars out of such banks, and a lot more money will inevitably be pulled out in the days ahead.

Now that these banks are bleeding deposits at an unprecedented rate, what do you think their approach to lending will be?

Needless to say, they are going to be extremely averse to taking risks at this point.

And that means that lending standards are going to be getting a lot tighter.

In response to a tweet in which Joe Biden touted the accomplishments of his administration, Elon Musk warned that “the banks are melting”.

Umm … the banks are melting

— Elon Musk (@elonmusk) March 23, 2023

Musk is quite correct.

Our banks are definitely in the process of melting, and hundreds of them could soon be in very serious jeopardy.

And just to make sure that hordes of banks will soon be teetering on the brink of disaster, the Federal Reserve hiked interest rates once again this week.

As CNN’s Richard Quest has pointed out, our banks “are stuffed to the gills with these government bonds”, and every time rates go up those bonds become even less valuable…

Quest said, “Now, if inflation was your goal and your number one target, then you’d have gone 50 [basis points]. But, obviously, the overriding concern today is the banking sector. And remember, Zain, the problem with the banking sector is that all the banks are stuffed to the gills with these government bonds. Raise the interest rate, and the bond becomes less valuable. So, even today’s action at 0.25% makes things that little bit worse for the banks.”

Later, he added, “More banks are going to go out of business. More state and regional banks in the United States will need to be resolved — to use the technical phrase — they’ll be taken over, they’ll be wound up, they’ll be taken into ownership, all sorts of things.”

So is there evidence that all of this banking turmoil is starting to directly affect the behavior of U.S. consumers?

Well, it appears that credit card transactions are already starting to tumble quite dramatically…

As Citi’s Paul Lejuez writes in the latest “Citi’s Credit Card Insights” report (available to professional subs), the bank’s credit card data for the 16 sub-sectors it tracks show that total spending in March wk 3 (ended 3/18/23) decreased 10.3%, a big deceleration vs March wk 2 (-6.8%), and driven by a high-single digit decline in transactions. Ex-Food, spending decreased even more, tumbling by 13.0% vs -8.1% in March wk 2.

As Lejuez notes, “This was the first week of data following the disruption within the financial sector, and we were curious if it might have had an impact on the consumer. It sure did” and as Citi goes on to note, the third week of March, and the first week after America’s regional banks imploded, “was the biggest decline in total retail spending we have seen since the pandemic began (April 2020).”

As economic activity slows down, companies all over the nation will be forced to slash payrolls.

We have already been witnessing a tsunami of layoffs in recent months, and it appears that this tsunami is gathering even more momentum.

For example, Walmart has just announced that it will be giving the axe to hundreds of e-commerce fulfillment workers…

Hundreds of workers at five U.S. Walmart facilities that fulfill e-commerce orders are being asked to find jobs within 90 days at other company locations, a spokesperson confirmed to Reuters.

About 200 workers at Pedricktown, New Jersey, and hundreds of others at Fort Worth, Texas; Chino, California; Davenport, Florida; and Bethlehem, Pennsylvania were let go due to a reduction or elimination in evening and weekend shifts, the spokesperson said.

And Accenture just announced that it will be laying off a whopping 19,000 workers worldwide in the months ahead…

Professional services company Accenture plans to cut 19,000 jobs worldwide over the next 18 months in order to trim costs amid the tumultuous economic environment.

Most of the cuts will impact those working in the company’s non-billable corporate roles, Accenture said in a Thursday filing with the Securities and Exchange Commission (SEC).

Even Disney is being forced to slim down.  In fact, we are being told that the coming wave of Disney layoffs in April will be a “bloodbath”…

With Disney’s April 3 shareholder meeting — a virtual affair this year — less than two weeks away, some clarity is emerging about the company’s plans to reduce staff and cut costs.

Insiders tell Deadline that multiple rounds of cuts are being prepared. The first one is being targeted for late March, likely next week, we hear. (March 30 or March 31 have been floated as possible dates, but that has not been confirmed.) According to sources, there will be a big wave in late April, described as “the big one” or a “bloodbath,” when a large portion of the cuts are expected to come.

Needless to say, this isn’t normal.

We haven’t seen anything like this since 2008, and every month this crisis just seems to escalate even more.

You know that things are bad when one of the largest employment websites in the entire world starts conducting mass layoffs…

Job search platform Indeed announced on Wednesday that it plans to lay off 2,200 employees, or roughly 15% of its staff.

Indeed CEO Chris Hyams said in a letter shared with employees that the cuts come from nearly every team at Indeed and Indeed Flex, noting that the decisions were carefully made with human resources, the legal department, and Diversity, Equity, Inclusion and Belonging teams.

As economic activity slows down, it is inevitable that many more Americans will suddenly lose their jobs.

Just hope that it doesn’t happen to you.

We have been anticipating that a major economic meltdown was coming, and now it is here.

Unfortunately, most Americans still assume that our leaders know exactly what they are doing, but the truth is that way too often they are taking actions that are making our problems even worse.

***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com.  In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is definitely a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.

The credit reporting agency TransUnion is warning that credit card delinquency rates, which have hovered close to the levels seen before the pandemic in recent times, are likely to experience a considerable increase in the new year. Their 2023 Consumer Credit Forecast predicts a 2.6 percent increase by the end of 2023, a noteworthy rise over the 2.1 percent for the end of this year.

They also expect an increase from 4.1 to 4.3 percent in unsecured personal loan delinquency rates, a figure that refers to consumers who are 60 days or more past due on accounts. However, they do predict a moderate drop in serious auto loan delinquency rates from 1.95 percent to 1.9 percent.

TransUnion’s vice president and head of U.S. research and consulting, Michele Raneri, said: “Rapidly increasing interest rates and stubbornly high inflation combined with recession fears represent the latest in a series of significant challenges consumers have faced in recent years. It’s not surprising then to see pronounced increases in delinquency rates for credit card and personal loans, two of the more popular credit products.”

Americans opened up a record-setting 87.5 million new credit cards in 2022, along with 22.1 million personal loans. Credit card originations will likely drop slightly next year, but the number of new cards being opened is anticipated to stay much higher than we’ve seen at any point during the last ten years, due in no small part to the end of the pandemic stimulus funding that helped some families and businesses get through pandemic-related layoffs and lockdowns.

Raneri noted that some people got used to having some extra money on hand thanks to the stimulus payments and will struggle to get used to its sudden absence.

She said: “The higher delinquency rates will be due to some tightening of the employment market, but I also believe there was a lot of money put into the system and into consumers’ hands during the pandemic, and as that runs out and is depleted—and then with inflation where everything is costing more—it all starts to show up in delinquencies.”

Fed announces another interest rate increase

Meanwhile, the Federal Reserve has voted to raise its benchmark federal fund rate 50 basis points, with a target range of 4.25 to 4.5 percent. This is the highest level on record since the end of 2007, and more rises are expected in the near future. In fact, some economists believe that rates will be raised above 5 percent in 2023, which would only make it even more difficult for Americans who are already struggling to pay off their credit card debt.

A recent survey by U.S. News and World Report found that more than eight out of every 10 Americans with credit card debt are experiencing some degree of anxiety about it. Around 31 percent have racked up $6,000 or more in credit card debt, while 15.1 percent have credit card debt that exceeds $10,000. Twenty-seven percent of people said they are experiencing a medium amount of stress over their credit card debt, while 21.5 percent said they feel “a lot” of stress about the situation.

More than half of respondents said they have seen a rise in credit card debt this year, and most cite rising costs and inadequate income as the reason behind their growing credit card debt. Unfortunately, high inflation is expected to persist well into the new year and beyond.

Sources for this article include:

• TheEpochTimes.com
• Money.USNews.com
• NATURAL NEWS

When you are barely scraping by from month to month, it can be really tempting to turn to credit cards for relief.

And that is precisely what has been taking place.

This week, we learned that credit card debt surged at the fastest pace in 20 years during the second quarter of this year…

The Federal Reserve Bank of New York reported that credit card debt held by U.S. households surged by 13% on an annualized basis in the second quarter, representing the sharpest climb in over 20 years. A recent study by Wells Fargo found that Americans also rely on credit card rewards to offset everyday expenses.

“When it comes to credit card spending over the past couple of years, we have seen categories shift on where people are spending their money and right now our top categories are grocery and gas,” said Krista Phillips, Wells Fargo executive vice president and head of branded cards and markets.

It is a really bad idea to pile up credit card debt just as the U.S. economy is entering a major downturn.

But most people are not interested in such warnings.

High interest “buy now pay later” loans are even worse, but their popularity is absolutely exploding right now…

But when credit cards are maxed out, some consumers go to BNPL loans as a way to bridge the gap, according to a Harvard study from earlier this year showing that the industry is booming with a particular draw to consumers earning less than $50,000 annually and those with sub-prime credit scores.

According to the New York Times, “buy now pay later” transactions are triple what they were just two years ago, and food purchases are an area of “significant growth” for the industry…

The New York Times reported that $45.9 billion in BNPL transactions were made in the U.S. last year, which is a three-fold increase from 2020. While food only accounted for 6% of those purchases in 2021, stats provided by the companies indicate significant growth in that arena.

When economic conditions turn really sour, those that have gotten deep into this type of debt will be really sorry.

But I can understand why they are doing it.

All of us have to feed our families, and a single cart of food can now cost as much as a really cheap used vehicle did in the old days.

Earlier today, I came across an article on Zero Hedge that really caught my attention…

However, in actuality, inflation and the budgetary issues it is causing in U.S. households, is resulting in “infighting” amongst families, according to the Wall Street Journal.

35 year old Leibel Sternbach, a financial adviser, told the Journal: “If I buy more of my milk before the one in the fridge is empty, there’s going to be hell to pay.” He said his wife double checks the fridge after every shopping trip and tells him of all the things he didn’t need to buy.

The couple spends about $350 per week in groceries – a bill that is up from $220 a year prior. They are cutting back on items like pre-cut vegetables and oven ready meals to try and cut additional costs from their bill.

Millions of other Americans are having similar discussions in their own households.

In the old days, I can remember paying 25 dollars for everything that I needed at the grocery store for an entire week.

And that even included an entire cake.

These days, an entire shopping cart full of food will run you hundreds of dollars.

For years, economic pundits such as Peter Schiff and myself have been warning that nightmarish inflation would be coming.

Now it is here, and Schiff insists that what the Federal Reserve is doing to fight inflation is “not going to work”…

“I don’t know why everybody continues to be surprised when the inflation numbers come out worse than expected. They assume that what the Fed is doing is going to work. It’s not going to work. The people who think it is don’t understand the nature of the problem.”

Schiff believes that in order to defeat inflation we are going to need to see interest rates hiked until they are “higher than the CPI”…

The numbers indicate that Fed can’t win this inflation fight. Part of the solution is positive real interest rates. If you look at all of the Fed tightening cycles since 1973, the central bank has never stopped tightening before the Fed funds rate was higher than the CPI.

If the Fed really did hike interest rates to 8 or 9 percent, that would plunge us into an extremely bitter economic depression.

But that wouldn’t totally solve the inflation crisis either.

There are two fundamental factors that make this crisis different from any other crisis we have faced.

First of all, there is simply way too much money floating around.  Our politicians borrowed and spent trillions of dollars that we did not have over the past few years, and the Federal Reserve pumped trillions of dollars that it created out of thin air into the financial system.

Hiking interest rates cannot erase all of that money. Secondly, rising prices are not just being caused by changes in demand.

We have a major global supply problem now, and I believe that it will only get worse in the years ahead.

So the Fed can try to crush demand as much as it wants, but that won’t alter our supply issues.

That will be particularly true for categories that have relatively inelastic demand such as food.

No matter how high interest rates go, people will still need to buy food for their families.

But as global food shortages grow more severe in 2023 and beyond, the total supply of food available is just going to get tighter and tighter.

As a result, I believe that food prices will continue to go up no matter how high the Federal Reserve hikes interest rates.

And every month that prices rise faster than our paychecks do, our standard of living goes down.

This has been happening for quite some time now, and our leaders in Washington should take full responsibility for this.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com.  In addition to my new book I have written five other books that are available on Amazon.com including  “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.

Article cross-posted from End of the American Dream.