(The Epoch Times)—Who doesn’t know them: the blood-sucking vampires, the eerie undead, immortalized in countless films, and inspired primarily by Bram Stoker’s novel “Dracula” (1897). Just think of iconic movies like the silent film “Nosferatu—A Symphony of Horror” (1922), “Dracula” (1958) with Christopher Lee, Roman Polanski’s parody “The Fearless Vampire Killers” (1967), or “Nosferatu—Phantom of the Night” (1979), starring Klaus Kinski as Count Dracula.

Vampires are demons who rise from their graves at night, seeking to drain the blood of innocent victims. Not only do they steal the life force that sustains them, but they also spread their curse. Many victims, bitten by vampires, are “turned,” becoming undead themselves, thus joining the vampire’s dark domain.

The enemies and hunters of vampires face a formidable challenge: vampires can disguise themselves, transforming into creatures like wolves or bats, and often display immense, superhuman strength. They can only be repelled by traditional defenses—garlic cloves, rosaries, holy water, or the Christian cross. But truly destroying a vampire requires decapitation, driving a wooden stake through its heart, or bright sunlight that turns them to dust.

The vampire is an ancient and widespread myth. The image of a blood-sucking undead creature, or similar concepts, has existed across many cultures. This demon embodies superstition—acting as a projection of primal fears, the inexplicable, and evil as the counterpart to good. The notion of a creature that emerges at night, drains its victims’ blood, and draws them from light into darkness is undoubtedly a profoundly threatening one.

When you reflect a little longer on the horror story of the vampire demon, you will inevitably begin to see parallels (or at least points of contact) with the fiat money system that exists worldwide today.

Under Cover of Darkness

It takes place under the cover of darkness: It is fair to say that the vast majority of people are unaware of how today’s fiat money system is structured, how it operates, or what its effects are. Students in schools and universities are, for the most part, left in the dark about it, and the consequences of the fiat money system, therefore, take most people by surprise—unprepared and relentless. Indeed, how many people know that our current fiat money system is a system in which the state’s central bank holds a coercive monopoly on the creation of fiat central bank money, while commercial banks issue their own fiat commercial bank money based on central bank fiat money.

Who knows that fiat money is literally created out of thin air, representing a form of money creation that has no connection whatsoever to “real savings”? And who explains to people that, from an economic perspective, expanding the fiat money supply is inflationary, leading to uneven higher prices for goods and services compared to a situation where the money supply had not been increased? It is also unknown to many that the issuance of fiat money via the credit market causes a misallocation of capital, initially triggering a boom, only to be followed by a bust; that it drives economies into excessive debt; and that it allows the state to grow ever larger at the expense of the freedoms of citizens and entrepreneurs.

In short, for most people, the damage caused by fiat money is unknown; it creeps upon them under the cover of darkness, like a vampire.

Vulnerable Victims and Life Sucked Away

The victims are often helpless and unaware, with the fruits of their labor effectively being siphoned away. Fiat money has something vampire-like about it, enabling one group (those allowed to create fiat money) to live at the expense of others (those forced to use the monopolized money). The first recipients of newly-created fiat money are the beneficiaries. They can use the new money to purchase goods and services whose prices have not yet risen, making them wealthier.

As the money changes hands, it increases demand, and prices of goods rise accordingly. As a result, the late recipients of the new money can only buy goods at higher prices, leaving them at a disadvantage. The first recipients improve their position at the expense of the late recipients. The most severely affected are those who receive nothing from the newly-created money supply—they are, in effect, the ones “sucked dry.”

The vampire-like redistributive effect of fiat money, which operates in the shadows, particularly benefits commercial banks that create fiat commercial bank money, as well as those in a position to take out new bank loans in fiat money.

First and foremost, it is the state and those who benefit from it who are among the biggest winners of the vampire fiat money system. The state finances a significant portion of its expenditure with newly-created fiat money, using it to pay its representatives, employees, and their pensions, as well as the companies from which it purchases goods and services. The state and its beneficiaries are among the early recipients of the newly-created fiat money, making them the primary beneficiaries at the expense of the many who are not closely connected to the state.

One might argue that a redistribution of income and wealth, brought about by the increase in fiat money, would also occur in a commodity or precious metal money system. This is true in principle, but the increase in, say, a gold money system, would be less pronounced than in a fiat money system. The fact is that the latter was deliberately chosen for its vampire-like nature. It benefits the state, banks, and big business at the expense of the general population, keeping them below their economic potential.

Creating Minions

Like a vampire, fiat money infects its victims, turning them into accomplices of the fiat money system. Fiat money quite literally enslaves its users, making them dependent. For instance, fiat money incentivises firms and private households to incur debt and live beyond their means, made possible through artificially low interest rates. People are also encouraged to invest in assets (such as houses and companies) because the chronic inflationary nature of fiat money ensures a continual rise in asset prices. Once people are lured into exposure to fiat money, their economic and financial well-being becomes dependent on the continuation of the inflationary fiat money system and on it being “rescued” by the state and its central bank during times of crisis—even at the expense of those who do not benefit from the system, or benefit much less.

Politicians, bureaucrats, bank employees, and companies that receive government contracts all develop a vested interest in ensuring that the fiat money system is maintained. In this sense, they become fiat money vampire thralls, feeding off the lifeblood of those engaged in productive work by claiming a share of their income.

Moreover, holders of fiat money are the ones who lose out, as fiat money continually loses its purchasing power. In a fiat money system, the central bank ensures that interest rates are kept artificially low—often negative after accounting for inflation—so that savings in time deposits, savings accounts, and bonds are effectively eroded.

Aversion to Light

The vampire and the fiat money system cannot withstand the bright light of day; both will crumble to dust when exposed to sunlight. If people truly understood the negative effects of fiat money and the damage it causes to the world, they would likely reject it—along with the production and employment structures it creates. This is likely why so little is taught about fiat money in schools and universities. Its darker aspects are concealed, with the statist education system as particeps criminis ensuring the bright light of knowledge does not shine on the fiat money system.

Remember that central bank councils are typically referred to as “the guardians of the currency,” and it is said that they “fight” inflation. Nothing could be further from the truth—much like a vampire who welcomes his guests and engages in witty conversation without revealing his true nature. Just as sunlight kills a vampire, sound economic knowledge would destroy the fiat money system, especially when coupled with a simple, well-understood ethic like “do unto others as you would have them do unto you.”

Until that day comes, investors should be aware of the serious economic and ethical flaws of fiat money. The uncomfortable truth is that long-term prosperity and peace cannot be sustained under a fiat money system. Therefore, it is in everyone’s best interest for the bright light of truth to expose and thus end the fiat money system. But how can this be achieved?

By proactively and honestly informing people about the evils of fiat money; by advising them to reduce their dependence on it, both in their lives and their savings; and by promoting a free market for money, while encouraging technological innovations in the monetary sphere that lie beyond the state’s control. Together, these efforts will act like a ray of sunlight striking the vampire-like fiat money system—ultimately causing it to crumble to dust.

#1 The number of Americans filing first time claims for unemployment benefits just hit the highest level in over a year…

The number of people filing for unemployment for the first time was at its highest levels in more than a year, partly due to storm damage and labor stoppages.

Initial jobless claims for the week ending Oct. 5 came in at 258,000, up 33,000 from last week’s level of 225,000, and the highest since it hit the same level in August 2023, data from the Labor Department shows.

#2 According to Primerica’s latest Financial Security Monitor report, the percentage of middle-income households that “rate their personal financial situation negatively” has hit the highest level that they have ever recorded…

Primerica’s latest Financial Security Monitor report for the third quarter found 55% of middle-income households now rate their personal financial situation negatively, a 6-point jump from the previous survey.

“For the first time in a year, a majority of middle-income households are feeling negative about their personal finances,” said Glenn Williams, CEO of Primerica. “In fact, this latest report represents the highest negative rating we’ve seen since we began fielding the survey exactly four years ago.”

#3 I am old enough to remember a time in this country when you were set for life if you had a million dollars.  Unfortunately, thanks to our endless cost of living crisis it now costs 4.4 million dollars to live “the American Dream” over the course of a lifetime…

You can live the American Dream, but it will cost you.

The lifetime tab for such aspirations as owning a home, driving new cars, raising kids and taking annual vacations comes to a cool $4.4 million, according to Investopedia, the financial media site.

That’s more than the average American earns in a lifetime.

#4 The company that produces more french fries than anyone else in North America is cutting production and laying off workers due to a dramatic slowdown in consumer demand…

Lamb Weston, the largest producer of french fries in North America and a major supplier to fast-food chains, restaurants and grocery stores, is closing a production plant in Washington state. The company announced last week that it would lay off nearly 400 employees, or 4% of its workforce, and temporarily cut production lines in response to slowing customer demand.

#5 At one time Boeing was flying high, but now it has decided to lay off approximately 10 percent of its entire workforce…

The CEO of Boeing told employees late Friday that the company plans to cut 10% of its total staff “over the coming months.”

“Our business is in a difficult position, and it is hard to overstate the challenges we face together,” said Kelly Ortberg, who started at CEO of the troubled aircraft maker two months ago and has been dealing with a strike by 33,000 hourly workers for half his time on the job.

#6 The banking industry continues to deeply struggle.  So far this year, banks in the United States have permanently shut down over 700 local branches…

US banks closed more than 700 branches in the first nine months of the year, forcing thousands to travel further to access vital services.

Bank of America closed the most locations of any bank, shuttering 132 between January and September.

U.S. Bank followed swiftly behind, having closed 101 of their own branches.

#7 After 75 years, True Value has been forced to file for bankruptcy and will be “selling substantially all of its operations to a rival”…

True Value, a 75-year old hardware store brand, has filed for bankruptcy and is selling substantially all of its operations to a rival, the company announced Monday.

In a press release, True Value said it will continue day-to-day operations of selling hardware and other homeware tools to its 4,500 independently operated locations during the Chapter 11 process, which includes a $153 million stalking horse bid from rival company Do it Best.

#8 Did you ever think that you would live to see a day when hundreds of 7-Eleven stores would be closing?  Sadly, that time has now arrived…

Several hundred “underperforming” 7-Eleven locations across North America are closing, the convenience store announced.

Seven & I Holdings, the chain’s Japan-based parent company, revealed in an earnings report Thursday that 444 locations of 7-Eleven are shutting down because of a variety of issues, including slowing sales, declining traffic, inflationary pressures and a decrease in cigarette purchases.

#9 Home Depot apparently believes that rough times are ahead, because they are dumping millions of square feet of warehouse space…

Home Depot is hastily exiting warehouse space, to the tune of 3.2 million square feet in a month, according to Bisnow.

Since late August, Home Depot has put up nearly 4 million square feet of warehouse space for sublease, including a 1.3M SF Phoenix warehouse and a 1.1M SF distribution center in the Inland Empire, according to CoStar Analytics.

#10 At this point, things are so bad that even Disney is laying off workers…

According to sources cited by Deadline, Disney is pushing ahead with new layoffs as part of a broader “cost-saving initiative.” About 300 employees across Disney’s corporate divisions will be impacted this week.

The layoffs of 300 employees began on Tuesday and will continue until the end of the week. They are all US-based employees who work across the company’s corporate operations, including legal, HR, finance, and communications.

If you have recently lost your job, I feel very badly for you, because the employment market has gotten a lot more “complicated” than it was in the old days.

Once upon a time, being good at what you do was enough.

But now other considerations are often more important than pure merit…

A top Oregon state official has been put on administrative leave after a pink-haired, DEI-obsessed subordinate complained he was making hiring decisions based on qualifications instead of personal identity considerations, according to a report.

Mike Shaw, who until recently served as the Oregon Department of Forestry’s second-in-command, was put on blast by Megan Donecker, the department’s former DEI strategy officer, for looking “beyond gender and identity in hiring, seeking only candidates most qualified for the job,” OregonLive reported.

He was formally placed on administrative leave Aug. 6 after Donecker filed a formal complaint, according to the Daily Mail.

Isn’t that nuts?

Our society is getting crazier with each passing day, and I am deeply concerned about where all of this is heading.

Sadly, the tough economic times that we are experiencing now are not even worth comparing to the pain that is coming if we don’t turn things around.

Our system is literally crumbling right in front of our eyes, and unless something dramatic happens economic conditions in this country will soon become extremely harsh.

Michael’s new book entitled “Why” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

The speaker of the video, Ryan McMaken, argues that the recent rise in prices is due to monetary inflation, which is the increase in the money supply. He criticizes the claim that greed is the cause of inflation, citing the fact that prices have been rising steadily for over a decade, even before the pandemic.

McMaken points out that the money supply has increased by 185% since 2009 and by 32% since early 2020. He argues that this increase in the money supply is the direct cause of rising prices.

He also criticizes the claim that there is not much inflation, citing the fact that food prices have increased by 26% in the past four years. He argues that the real cause of rising prices is the government’s policy of money printing.

McMaken concludes by calling on elected officials to stop printing money and to address the real cause of inflation.

Summary generated by Gemini.

The speaker of the video, Ryan McMaken, argues that the recent rise in prices is due to monetary inflation, which is the increase in the money supply. He criticizes the claim that greed is the cause of inflation, citing the fact that prices have been rising steadily for over a decade, even before the pandemic.

McMaken points out that the money supply has increased by 185% since 2009 and by 32% since early 2020. He argues that this increase in the money supply is the direct cause of rising prices.

He also criticizes the claim that there is not much inflation, citing the fact that food prices have increased by 26% in the past four years. He argues that the real cause of rising prices is the government’s policy of money printing.

McMaken concludes by calling on elected officials to stop printing money and to address the real cause of inflation.

Summary generated by Gemini.

Investors are turning to utilities and real estate stocks, but these sectors need more than low rates; they need a buoyant economy and strong consumer demand, so interest rate decisions may be insufficient.

If we look at the long-term trend, the market remains in a cyclical bullish mode, but we need to understand why and be aware of the rise in volatility.

Markets have been rising, discounting an ever-increasing money supply and future currency debasement. However, the next wave of central bank easing may not come until 2025.

Fundamentals may have been weak and earnings not as robust as required by demanding valuations, but investors understand that the fiscal challenges posed by rising government expenditure and public debt will ultimately mean ultra-loose monetary policies, which make sovereign bonds more expensive, erode currency purchasing power and, by comparison, make equities and risky assets more attractive.

Investors may continue to accept higher valuations for equities and risky assets because they fear monetary and fiscal insanity more than they are concerned about a recession.

It is not that markets like fiscal imprudence. Extreme monetary policies erode the currency’s purchasing power, and equities and risky assets become protection for real inflation. Murray Rothbard calculated the true money supply (TMS), which is the most realistic indicator of inflation. As Professor Joseph Salerno explains, “three items which are not included in any Fed measure of the money supply (Ml, M2, M3) or even of overall “liquidity” (L) find a place in the TMS.”. These are the demand and other deposits held by the U.S. government, foreign official institutions, and foreign commercial banks at “U.S. commercial and Fed banks.”.

When we look at True Money Supply, we can understand what market participants really look at for a bullish market trend, even if they may not be calculating it in the Rothbard way. The available money for market transactions. The quantity of money that is put to work to generate a return that offsets inflation. “Liquidity,” as most market participants call it.

Mike Shedlock, a great macroeconomic analyst and investor, discusses these important differences when analyzing money growth because they basically give us an idea of the buying or selling pressure in a market. The True Money Supply (TMS) includes the currency component of M1, total checkable and savings deposits, as well as U.S. government deposits, note balances, and demand deposits from foreign banks and public institutions. Any market trader understands this when they are talking of “cash on the sides,” “high liquidity,” and “bullish sentiment.”. All these money measures, when rising, indicate stronger demand for risky assets looking for a return. Alternatively, Professor Frank Shostak’s definition of total money supply includes cash plus demand deposits with commercial banks and institutions plus government deposits with banks and the central bank.

Why are these measures more important than the traditional M2 and M3 money aggregates? Because they show us the level of buying pressure in the market.

Many Keynesian economists see deposits and savings accounts as idle money and invented the ludicrous “excessive savings” concept. There is no such thing as excessive savings or idle money. The reason they see those savings as negative is because their political view of economics perceives that any money not spent by the government is not productive. Far from it. Those savings and deposits are invested in the capital markets and are the key to originating lending, investment, and growth in the real economy. Keynesians tend to think of the “social use of money,” which means more printing of currency through deficit spending, because they mostly perceive that the government is the only one making a real social use of currency issued. However, inflationism is not a social policy but a tool for serfdom that creates hostage clients of citizens by destroying the purchasing power of their wages and deposit savings. It is a transfer of wealth from the middle class to the government.

Once we understand that what matters for market participants is the elusive “liquidity” and “sentiment” perception and that bullish sentiment and liquidity come from a rising true money supply, while bearish signals arise from a decline in this measure of liquidity, then we can understand that the allegedly hawkish messages of central banks disguise a much looser policy than headlines suggest. Furthermore, using any of the different measures of true money supply previously mentioned, we can understand why market participants try to defend their clients from the current and future loss of purchasing power of the currency by taking more risk and accepting higher valuations for growth assets.

Most market participants are aware that higher liquidity injections will mask the current fiscal imbalances. Unsustainable deficit spending is money printing, which creates strong long-term pressure on the purchasing power of fiat currencies. Thus, market corrections are always an opportunity to buy stocks and risky assets that will always rise in value in fiat currency terms because the unit of measure, money, loses purchasing power.

Once it is established that fiscal insanity will make currencies fall in value and, consequently, markets denominated in that currency rise, investors need to understand the timing and where to invest.

The difficulty this time is that now we have persistent inflation and central bank losses in their bond portfolio. Thus, timing is essential. The lag effect of a market correction and its subsequent bounce may be longer. It will happen, but we need to guess when.

After the Fed decided to hold rates steady at its two-day meeting, equities slumped, even though Powell seemed to signal that rate cuts could be coming as soon as September. Markets discounted a slump in liquidity, therefore lowering buying pressure. Hence, multiple compressions. Rate cuts do not signal a healthy economy but a slowing one, so equities slump despite the promise of a rate cut because investors continue to see lower buying pressure.

Even with the bounce after Black Monday, most indices remain significantly below the level when markets started to weaken on July 22. The lag effect of the true money supply started to show its effect on March 13. The Nasdaq and the S&P 500 were leading markets that had begun to slow down and pointed to lower highs and deeper lows.

What can we learn ahead of the next bullish wave of money growth? First, pay attention to the components mentioned above and their trends. Second, analyze when the Fed may start a true easing path, being realistic. The trend now signals liquidity drying up. There may not be a recession, but monetary buying pressure is slowing down markedly. The tap is not closed, but the flow is slow.

The Fed may cut rates in September, but that is only realizing that the economy is weaker than headlines suggest. A rate cut of 25 or 50 basis points is unlikely to generate an immediate burst in credit demand or rising deposits. Hence, the truly bullish signal would come when the Fed returns to purchasing mortgage-backed securities and treasuries. However, that may not happen until elections have passed and there is clarity about the next chairman of the Fed. We may be talking about March 2025.

Before that money growth bounces abruptly and leads to the next multiple expansion phase, we must remember the lessons of this correction. So-called defensive indices do not protect investors. Japan and Europe remain bad options in a liquidity drought. Cryptocurrencies do not show defensive qualities and their correlation to US tech stocks remains elevated. Gold is a better defense against a market correction than most risky assets, and commodities do not perform well in a slowing economy with diminishing liquidity.

Most investors will look at the recent slump with prudence, knowing they need to leave some dry powder (less liquidity, less buying pressure) to take advantage of opportunities.

In this era of monetary insanity, ignoring the macroeconomic, geopolitical, and earnings’ realities may lead to excessive risk-taking and significant losses in a correction. We must consider the fundamentals when looking at buying opportunities and pay attention to when liquidity will flow back to capture the currency debasement trend that leads to the next bull market. It’s not easy. Risks accumulate slowly but manifest quickly, and we tend to blame one catalyst instead of the complacency built after years of fiscal and monetary excess.

The next wave of monetary excess will be more aggressive than the past one, that is guaranteed. That means markets will soar again. However, timing is key… and it may take a few painful months to arrive.

The cost of living has become extremely painful, and millions of Americans are stressed out of their minds because their finances are such a mess.  Over the past several years we have witnessed an economic shift of epic proportions.  The ultra-wealthy have gotten a lot wealthier, the ranks of the poor have exploded, and the middle class has been absolutely eviscerated.  In this current economic environment, only a very small segment of the population is living comfortably.

The following comes from CBS News…

Americans have a specific annual income in mind for what it would take to feel financially secure, according to a new survey from Bankrate. The magic number? $186,000 per year.

Currently, only 6% of U.S. adults make that amount or more, Bankrate said. The median family income falls between $51,500 and $86,000, according to the latest federal data. Achieving financial security means being able to pay your bills while having enough left over to make some discretionary purchases and put money away for the future, the personal finance site said.

When I was growing up, I thought that anyone that earned more than $100,000 a year was wealthy.

But now it takes an income about five times that size in order to be considered “wealthy”…

Americans have an even higher yardstick for feeling rich. The survey found they believe they would need to earn $520,000 a year to qualify as wealthy — up from their $483,000 response during the same survey last year.

Much of the population is trying as hard as they can, but they will never make the kind of money that they would like to make.

Meanwhile, the cost of living just keeps going higher and higher and higher.

As a result, the percentage of Americans that admit that they are experiencing financial stress just continues to go up…

Many inflation-weary consumers continue to experience financial stress, with a new Federal Reserve Bank of Philadelphia survey finding that 35% of Americans are worried about making ends meet, up from 29% a year earlier.

That gap between what the typical American earns and what they aspire to earn means “Americans have their eyes set on this high income, and they think they need to make more money even if they know it’s unrealistic they’ll never make that amount,” Sarah Foster, an analyst at Bankrate, told CBS MoneyWatch.

At this point, even many that are considered to be in “upper-income groups” feel forced to take on extra jobs just to make ends meet…

Americans in upper-income groups are concerned about their ability to pay bills, with more than 15 percent of this demographic taking up additional jobs over the past year, according to a survey by the Federal Reserve Bank of Philadelphia.

As of April 2024, 32.5 percent of respondents earning over $150,000 annually were worried about making ends meet over the next six months, up from 21.7 percent in April of last year, the June survey showed.

This percentage is higher than for those in the income groups of $100,000 to $149,999, $70,000 to $99,999, and $40,000 to $69,999. Only individuals who earned less than $40,000, the lowest income group, were more worried than the $150,000-plus group.

I have never seen numbers like this before.

People are feeling so much anxiety about their finances, and that helps to explain why economic issues are playing such a prominent role in this election cycle.

Some Americans are trying to make ends meet by cutting back anywhere that they can.

For example, the following comes from an NPR article about how Americans are cutting back on charitable giving…

Robert Lang, a longtime cabinetmaker in Cincinnati, used to feel good about giving money to less-fortunate people. These days, however, he’s being forced to be less generous.

“I’m no great humanitarian,” says Lang. “But I feel really good if I can give a homeless guy 20 bucks. And we can’t do that anymore.”

The reason? Rising prices, which have forced Lang to dial back his giving as the 69-year-old tries to make ends meet with Social Security benefits and a part-time job with a furniture-making journal.

When times get tough, people become less generous.

I wish that wasn’t true, but that is just the way that it is.

So what will happen when economic conditions become extremely harsh?

BCA Research chief global strategist Peter Berezin is warning that another recession is coming and that stock prices could soon fall by 30 percent…

There may be trouble looming on the horizon for the U.S. stock market, according to BCA Research.

In a note to clients last week, BCA Research chief global strategist Peter Berezin warned that, contrary to popular belief, the economy will fall into a recession either this year or in early 2025.

Should that happen, the S&P 500 could tumble to 3,750, which marks a 30% drop from current levels.

Will he be proven correct?

I don’t know.

But I do know that it feels like a recession has already arrived to many Americans.

Every day, we get even more bad economic news.  For instance, Fox Business just published an article about how major drug store chains are in the process of closing down locations from coast to coast…

Just this week, Walgreens announced that it would close a “significant” number of under performing stores across the U.S. due to ongoing challenges with profitability and declining margins.

Earlier this month, Rite Aid announced that 27 locations in Michigan and Ohio have been added to the growing number of stores it plans to close while it restructures under Chapter 11 bankruptcy.

In large cities all over the nation, thousands upon thousands of commercial properties are now sitting empty.

Of course this is just the start.

As the globe is rocked by one chaotic crisis after another, things will get a whole lot worse.

A “perfect storm” is now upon us, and most people have absolutely no idea how harsh conditions around us will soon become.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Just this week we have received quite a bit of very troubling news, and the outlook for the months ahead is very bleak.  The following are 11 signs that the U.S. economy is in far worse shape than most people think…

#1 Just like in 2008, delinquencies are on the rise.  In fact, credit card delinquencies have now reached the highest level that we have seen in more than 10 years…

Meanwhile, more consumers aren’t making loan payments on time. Credit card delinquencies have hit their highest level in over a decade, and auto delinquencies are also spiking. This could prove to be yet another tripwire for the stock market, as consumer spending accounts for about 70% of U.S. economic activity.

#2 The commercial real estate crisis just continues to escalate.  An article that originally appeared in the New York Times claims that major Wall Street banks have “begun offloading their portfolios of commercial real estate loans hoping to cut their losses”…

Some Wall Street banks, worried that landlords of vacant and struggling office buildings won’t be able to pay off their mortgages, have begun offloading their portfolios of commercial real estate loans hoping to cut their losses.

It’s an early but telling sign of the broader distress brewing in the commercial real estate market, which is hurting from the twin punches of high interest rates, which make it harder to refinance loans, and low occupancy rates for office buildings — an outcome of the pandemic.

#3 When banks get into trouble, they start shutting down branches.  So far this year, U.S. banks have closed more than 400 branches all over the country…

US banks closed 51 branches across the country in the first three weeks of June.

The figures suggest banks are committed to increasingly offering their services online and axing costly bricks-and-mortar locations.

More than 400 bank branches have closed so far in 2024.

#4 Big companies are laying off workers from coast to coast.  For example, approximately 500 Texas truckers just lost their jobs when a large logistics company abruptly shut their doors for good…

A truck and logistics company has abruptly shut – affecting 2,000 workers – just three years after being bought by private equity.

Out of the blue, staff at US Logistics Solutions were given news on Thursday that they were out of a job and would also not get their paychecks on Friday.

Around 500 were truck drivers, and the rest a mixture of warehouse, dock and office workers at the Humble, Texas- based company.

#5 The Dallas Fed Services Index has now been in negative territory for 25 months in a row…

This is the 25th straight month of contraction (sub-zero) for the Dallas Fed Services index and judging by the respondents’ comments, there is a clear place to point the finger of blame

#6 The “restaurant apocalypse” just continues to intensify.  This week, we learned that Hooters has suddenly decided to permanently shut down close to 40 “underperforming” locations…

The Atlanta-based sports bar chain, Hooters, abruptly shuttered dozens of “underperforming” restaurants across the U.S., as it joins a growing list of eateries facing the harsh realities of inflation and changing consumer habits, according to reports.

Nation’s Restaurant News (NRN) reported that word began to spread on Sunday evening that Hooters locations in places like Bryan, Texas; Lakeland, Florida; and Louisville, Kentucky were closing abruptly, with nearly 40 restaurants in the U.S. shutting their doors.

#7 Retail chains continue to go belly up at a staggering rate.  Today, it was being reported that two large retailers in the Northeast have made a decision to file for bankruptcy…

Two sister chains that sell sporting goods have filed for bankruptcy as retailers continue to struggle.

Bob’s Stores, which sells athletic and casual clothing, and outdoor gear retailer Eastern Mountain Sports together have 50 stores across the northeast of America.

#8 We just learned that consumer confidence in the U.S. dropped lower this month…

US consumer confidence teetered slightly in June as Americans grew a little warier about the future, new data released Tuesday showed.

The Conference Board’s latest consumer confidence index dipped to 100.4 in June from a downwardly revised level of 101.3 in May.

#9 The initial consumer confidence reading has been revised down in 7 of the last 8 months.

#10 Housing in the U.S. is now more unaffordable than it has ever been before…

The housing cost burden has hit a record, according to a new report from Harvard’s Joint Center for Housing Studies.

Home prices are now 47% higher than they were in early 2020, with the median sale price now five times the median household income, according to the study.

#11 As I discussed yesterday, the homeless population in the city of Chicago tripled from January 2023 to January 2024…

The number of Chicagoans living in city shelters or on city streets tripled between January 2023 and January 2024, according to the annual survey used by federal officials to track homelessness, city officials announced Friday.

Those at the bottom of the economic food chain are being hit the hardest by the harsh economic conditions that we have been experiencing.

Homelessness, poverty, hunger and theft are all on the rise, and many of those that serve struggling communities say that they are being absolutely overwhelmed because they simply do not have sufficient resources to meet all of the needs.

Sadly, I am entirely convinced that this is just the beginning.  I believe that conditions will eventually become much harsher as the economy continues to deteriorate during the months ahead.

But Joe Biden and his minions insist that everything is just great. In fact, they would like you to believe that the economy is “booming” right now.

You can believe that if you want, but the cold, hard numbers that we keep getting directly contradict the endless stream of propaganda that we are constantly being fed.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Justice Clarence Thomas wrote the court’s 9–0 decision in Connelly v. Internal Revenue Service. The case concerns two brothers’ closely-held corporation. After one of the brothers died, tax authorities and the estate did not agree on the value of the stock.

Closely-held corporations commonly enter into agreements that require the redemption of a shareholder’s stock after the shareholder dies to preserve the closely held nature of the business. Under such routine estate-planning devices, corporations that enter into such agreements purchase life insurance on the shareholder to make sure the transaction is funded.

The Supreme Court held that life insurance proceeds that will be used to redeem a decedent’s shares must be included when calculating the value of those shares for purposes of the federal estate tax.

The appeal of Thomas Connelly, executor of the estate of the late Michael Connelly, was rejected by the U.S. Court of Appeals for the 8th Circuit in June 2023.

The IRS said the estate owed close to $1 million after it found that St. Louis-based Crown C Corporation, a building materials business, failed to report life insurance proceeds after Michael Connelly died in 2013.

Michael Connelly, who was president and CEO of the corporation when he died, owned 77.18 percent of the company’s shares, while Thomas Connelly owned 22.82 percent.

The executor filed an estate tax return reporting the value of his late brother’s shares as $3 million, but the IRS conducted an audit in which an accounting firm valued the shares at more than $3.8 million at the time of the brother’s death.

The IRS determined that the life insurance proceeds needed to be included in the valuation of the corporation, which meant the company had a value of $6.8 million at the date of death. The IRS found that the estate owed an additional $890,000. The estate paid the amount and then sued the tax agency in federal court in Missouri.

The Supreme Court examined whether a life insurance policy obtained to finance the company’s repurchase of the late co-owner’s shares should be factored into the valuation of the stock.

The estate argued the stock should not be taxed because the proceeds were to be used to repurchase the outstanding shares. The IRS countered that the shares were subject to tax based on the fair market value as measured by what they could be sold for when the co-owner died.

The case concerns an important question of federal tax law on which the federal courts of appeal disagree, according to the surviving brother’s petition.

Under the Internal Revenue Code, when an individual dies that person’s estate is subject to federal estate tax calculated based on the fair market value of the estate’s holdings at the time of the death.

“In many cases, fair market value can be determined through a straightforward analysis of public markets. But when a particular type of asset is not freely traded, fair market value must be determined on the basis of assessment and evaluation,” the petition states.

“Under applicable Treasury regulations, life-insurance proceeds payable to a corporation may be relevant to determining the value of a decedent’s stock in the corporation in some circumstances but not others.”

“The question presented is whether the proceeds of a life-insurance policy taken out by a closely held corporation on a shareholder in order to facilitate the redemption of the shareholder’s stock should be considered a corporate asset when calculating the value of the shareholder’s shares for purposes of the federal estate tax.”

In his new opinion, Justice Thomas recounted that the Connelly brothers entered into an agreement to make sure the company would stay in the family if either brother passed away. In that pact, the corporation could be forced to purchase the deceased brother’s shares.

To finance this possible share redemption, the corporation took out life insurance on each brother. After Michael Connelly died, there was a dispute over how to value his shares for calculating the estate tax.

“The central question is whether the corporation’s obligation to redeem Michael’s shares was a liability that decreased the value of those shares. We conclude that it was not and therefore affirm” the decision of the 8th Circuit, Justice Thomas wrote.

The justice explained that when Michael Connelly died, the corporation was worth almost $4 million and the family valued his shares at about $3 million. But the tax agency took the view that the corporation’s value was closer to $7 million because of the $3 million in insurance proceeds. This made the decedent’s shares worth a little over $5 million.

“Because a fair-market value redemption has no effect on any shareholder’s economic interest, no willing buyer would have treated [the] obligation to redeem … as a factor that reduced the value of those shares,” Justice Thomas wrote.

Crown C Corporation’s “contractual obligation to redeem Michael’s shares did not diminish the value of those shares.

“[R]edemption obligations are not necessarily liabilities that reduce a corporation’s value for purposes of the federal estate tax[,]” the justice wrote for the court.

Those in the top one percent of the top one percent are pretty much able to do whatever they want, and the rest of us are pretty much powerless to stop them.  Unfortunately, the gap between the ultra-wealthy elite and the rest of us just continues to get even larger.

Last year, the total wealth of the world’s millionaires reached a staggering 86.8 trillion dollars…

The world has never had so many rich people and their investments in soaring stock markets have made them wealthier than ever recorded, according to a study published on Wednesday.

The number of “high net worth individuals” (HNWI) — defined as people with liquid assets of at least $1 million — rose by 5.1 percent last year to 22.8 million, according to consulting firm Capgemini.

Their total wealth reached $86.8 trillion in 2023, a 4.7 percent increase from the previous year, according to the annual World Wealth Report.

Meanwhile, 5 billion people have gotten poorer since the start of the pandemic…

Since 2020, the richest five men in the world have doubled their fortunes. During the same period, almost 5 billion people globally have become poorer.

How much power do the hundreds of millions of people around the world that are living on less than two dollars a day have compared to the billionaires in the western world that are constantly making headlines?

The truth is that they run the world and the rest of us are just living in it.

Here in the United States, the colossal gap between CEO pay and worker pay got even larger last year…

Bosses have always made more money than workers. But the gap between CEOs and employees is growing.

The median CEO in the S&P 500 was paid 196 times as much as the median employee in 2023, according to an analysis by Equilar and The Associated Press.

That’s up from a ratio of 185 in 2022.

It would be a good thing if the rich were getting richer as long as everyone else was getting richer as well.

But instead, poverty is literally exploding all around us.

In 2020, there were approximately 140 homeless camps in Oakland, California.

Since that time, the city has closed 537 homeless camps, but there are still approximately 1,500 remaining all over the city…

Oakland officials passed a policy in 2020 to regulate homeless encampments when there were about 140 camps. The policy was created to prohibit encampments in specific areas of the city, including proximity to businesses, schools, playgrounds, traffic lanes, bike paths, housing and playgrounds.

Any encampments in those prohibited areas were supposed to be vacated, with the city offering shelter before evacuating the camp.

Since then, the city has closed 537 homeless camps with approximately 1,500 remaining, according to a city report.

I feel so bad for the law-abiding citizens that still live in Oakland. Conditions have become so precarious that one construction company actually “refused to finish its pothole paving job because it got ‘too dangerous’ for its workers”…

Frustrated Oakland residents are in the hole after a construction crew quit and refused to finish its pothole paving job because it got ‘too dangerous’ for its workers – as other businesses flee the Bay Area over the same concerns.

Residents in the Sobrante Park area in East Oakland said they weren’t even notified after the third-party general contractor decided to abandon the project before repaving the streets, leaving large potholes and dangerous loose gravel all over the neighborhood since mid-May.

If you still have a nice home and plenty of money, good for you. But you should understand that you are solidly in the minority at this point.

Of course our politicians care far more about the economic health of the elite than anyone else, because it is the elite that fund their campaigns. So even though just about all the rest of us have seen our standard of living go way down, in recent years there has been an all-out effort to prop up the stock market because that is where the elite have much of their wealth.

Today, the wealthiest 10 percent of all Americans own 93 percent of all the stocks. And the poorest 50 percent of all Americans own just 1 percent of all the stocks.

The stock market wealth that the entire bottom half of the country controls is basically just a rounding error compared to the enormous holdings of the elite. Unfortunately for the elite, it appears that trouble may be brewing for the financial markets…

The US stock market is shrinking, and investors are pulling their money out at a near-record pace as storm clouds gather over the US economy.

That means the titans of Wall Street may have to contend with choppy water as they cruise toward their Nantucket getaways this year.

In fact, Bank of America says that their customers have been pulling large amounts of money out of stocks for five consecutive weeks…

Bank of America analysts said on Tuesday that their clients have now been large net sellers of US stocks for five weeks in a row. Just last week, they sold off $5.7 billion more in stocks than they purchased, the highest outflow since last July.

Bank of America recorded the second largest sell-off of tech stocks in their history last week. And while one week does not a trend make, it does stand in stark contrast with the Magnificent Seven fervor that ensnared Wall Street mere months ago.

Whether it happens sooner or later, it is inevitable that America’s financial idols will come crashing down at some point.

But for most of the country, it feels like the economy has already crashed.

Our cost of living crisis has become exceedingly painful, our entire society is drowning in debt, and poverty and homelessness are exploding all around us.

Just about the only people that are still doing really well are those that are at the very top of the food chain.

When you hear that “the economy is booming”, those are the people they are talking about.

But just like all the rest of us, the elite will not be able to escape the period of tremendous global chaos that is ahead of us.

Like I said, money can buy you just about anything, but it cannot purchase a free pass from the day of reckoning that is rapidly approaching.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

As a society, we are on the greatest debt binge in the history of the world, and it just gets worse every single year.  Previous generations handed us an economy that provided us with an incredibly high standard of living, but we always had to have more.  So we have been borrowing and spending with no end in sight, and now our day of reckoning is fast approaching.

According to the New York Fed, U.S. household debt surged to another record high during the first quarter of this year…

In the first three months of 2024, total household debt surged to a fresh record of $17.69 trillion, an increase of $184 billion, or 1.1% from the previous quarter. The increase mostly stemmed from a jump in mortgage balances, which rose $190 billion from the previous quarter to $12.44 trillion at the end of March.

If we could handle all that debt, there wouldn’t be much cause for alarm. Unfortunately, delinquency rates are rising.

In fact, the proportion of credit card balances in serious delinquency has risen to the highest level since 2012…

A growing number of Americans are falling behind on their monthly credit card payments as they continue to battle high inflation and interest rates, according to New York Federal Reserve data published Tuesday.

Credit card delinquencies, which have already surpassed their pre-pandemic levels, continued to rise in the three-month period from January to March.

The flow of credit card debt moving into delinquency hit 8.9% in the first quarter at an annualized rate, compared with an 8.5% rate the previous quarter and 5.87% at the end of 2023. In fact, the percentage of credit card balances in serious delinquency climbed to its highest level since 2012.

In 2012, we were just coming out of the Great Recession.

Now a new economic crisis has begun, and millions of U.S. households are teetering on the brink of financial disaster.

If you use credit cards, it is so important to pay them off in full every month. Unfortunately, approximately 44 percent of all cardholders do not do that…

Overall credit card balances totaled $1.115 trillion in the first quarter of the year, $129 billion more than last year. For card users who pay their balance in full every month, that’s not a problem. But according to Bankrate, roughly 44% of borrowers carry credit card debt over from month to month.

It has always been financial suicide to carry credit card balances from month to month, and that is especially true today because interest rates are so ridiculously high…

The rise in credit card usage and debt is particularly concerning because interest rates are astronomically high. The average credit card annual percentage rate, or APR, hit a new record of 20.72% last week, according to a Bankrate database that dates to 1985. The previous record was 19% in July 1991.

If people are carrying debt to compensate for steeper prices, they could end up paying more for items in the long run. For instance, if you owe $5,000 in debt, which Americans do on average, current APR levels would mean it would take about 279 months and $8,124 in interest to pay off the debt making the minimum payments.

I always encourage my readers to pay off high interest debt as soon as possible.

If you have credit card debt, eliminating it should be your number one financial goal. Sadly, the New York Fed’s new report tells us that an increasing number of Americans are getting behind on their credit cards and their auto loans…

The Fed’s report showed 6.9% of credit card debt transitioned to serious delinquency last quarter, up from 4.6% a year ago. And for credit card holders aged 18–29, 9.9% of balances were in serious delinquency.

Auto loan delinquencies are also higher as the average monthly car payment jumped to $738 in 2023. Close to 2.8% of auto loans are now 90 or more days delinquent — that equates to more than 3 million cars. Auto loans are the second-largest debt category following mortgage debt, with $1.62 trillion outstanding.

Tens of millions of U.S. households have severely overextended themselves financially.

When you get to a point where you are so far in debt that you can barely make the minimum payments, it can feel like you are “trapped” with no way out…

High interest rates are pushing low- and moderate-income Americans who have fallen behind on credit card payments and auto loans to the brink, according to a new report.

“It’s crazy,” 43-year-old Army veteran Ora Dorsey told The New York Times. “It does make it hard to get out of debt. It seems like you’re only paying the interest.”

“We don’t have the credit to be able to buy a house, and we have a bunch of debt, either student loans or credit card debt,” 31-year-old Chris Nunn, who drives for the DoorDash delivery app, told the Times. “So we’re trapped.”

Dorsey told the outlet she has been trying to cut down debts accrued following various health issues for years. She is working three jobs to cut down her substantial debt.

Today, Americans are more pessimistic about the economy than they have been in a very long time.

It can be absolutely soul crushing to work as hard as you possibly can and still not have enough money for all the bills.

If you are feeling a tremendous amount of stress about your finances, you are certainly not alone.

According to one recent survey, approximately half of the entire population is struggling with mental health issues due to financial stress…

About half of U.S. adults are struggling with their mental health because of their financial situation.

Forty-seven percent of adults say concerns about money have, at least occasionally, caused anxiety, stress, worrisome thoughts, loss of sleep, depression or other effects, according to Bankrate’s latest Money and Mental Health Survey.

About 65% of them say their biggest concern is inflation and rising prices, and nearly 60% say their stress derives from paying for everyday expenses such as groceries and utilities. About 56% say they are worried about having enough emergency savings, and 47% are most concerned about being in debt, according to the survey.

After seeing numbers like that, how in the world can anyone possibly claim that the U.S. economy is in good shape?

The level of economic pain that we are already witnessing is absolutely staggering, and conditions are only going to get worse during the chaotic months and years that are ahead of us.

But even though our leaders continue to make incredibly reckless decision after incredibly reckless decision, many people out there continue to be convinced that everything is going to work out just fine somehow.

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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.