Next Economic Collapse Already Here; Ready to Threaten Mainstream Society in Obvious Ways
The upcoming U.S. economic collapse is already being felt by many portions of society, even if those iconic “bread lines” of the 1920s aren’t in view. Millions of Americans are experiencing a type of “drip” economic collapse, as I like to call it.
No, the sky isn’t falling, modern conveniences haven’t gone away, and most people’s standards of living are still decent. But the collapse is taking place nonetheless, piece by piece, fraying the outer edges of society. In time, this threatens to affect mainstream America to a more obvious extent.
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How to survive the next economic collapse is almost wholly dependent on recognizing your creeping purchasing power loss, and planning accordingly.
It seems there’s a lot of confusion out there regarding the economic well-being in America. For some, times have never been better. Home prices are skyrocketing; the stock market keeps breaking new records; and small-business optimism is at 20-year highs. Trump has promised to “Make America Great Again,” and many Trump voters still believe that his policies will transform America’s economic prospects. At the end of the day, most people can make ends meet, even if doing so becomes increasingly difficult every year.
But what about the lower echelons of society? In many ways, they are the proverbial canary in the coal mine. A tempest in the teacup which, sooner or later, cannot be contained. The “drip” economic collapse they’re experiencing could become the next economic collapse for the rest of us, without too much changing.
So, what exactly do I mean by “drip” economic collapse? Similar to an IV bag keeping a dying patient from keeling over, government assistance accomplishes the same thing, financially. Electronic Benefit Transfer (EBT) cards, the Supplemental Nutrition Assistance Program (SNAP), disability assistance, and other measures are keeping the public face of this collapse hidden.
Media reports on the thousands of decaying communities littering the landscape have been scant. Even fewer people like to admit their near-destitution, living in their car or scrambling to the next pay-loan center to pay the electricity bill. But the data says it’s happening, and it will only snowball from here.
The decline of restaurant traffic is a perfect illustration of this effect. Why? Because in many American communities, going out for a Friday night family dinner is considered a right of passage. Eating out is a luxury that Americans have traditionally preserved, through good times and bad. But, according to recent data, the budget-conscious consumer may finally be forced to give this luxury up.
According to the National Restaurant Association, same-store sales and customer traffic softened in January 2017. This was the fourth consecutive month of decline and the worst performance in four years. A full 50% of restaurant operators said that same-store sales declined year-over-year, the most in recent history. And the topper? A January 2017 Reuters/Ipsos poll found that one-third of 4,200 respondents said they were eating out less often than they were three months prior, with the majority citing cost as the primary reason. (Source: “Restaurant Sales And Traffic Tumble,” Zero Hedge, March 11, 2017.)
Another sign that an economic collapse is imminent is the massive distress seen in consumer credit card debt. An astonishing 50% of Americans owe at least $25,000 on their credit card, with an average of $37,000. All this comes with personal median incomes hovering around the $30,000 mark. In other words, the ratio of debt to gross domestic product (GDP) of American individuals—excluding mortgage debt, mind you—is approximately 123.33%! That’s higher than Uncle Sam’s overall 107% debt-to-GDP ratio. (Source: “45% Of Americans Spend Up To Half Their Income Repaying Credit Card Debts,” Zero Hedge, May 1, 2017.)
Even worse, the numbers indicate the treacherous levels of capital being siphoned into debt servicing. A full 45% of Americans spend up to half of their incomes servicing their consumer debt. Again, this excludes mortgage payments. What’s left for the average consumer to spend once the debt collector comes to collect? (Source: Ibid.)
Needless to say, these shocking metrics have occurred in a pervasive low-interest-rate environment. Should interest rates rise even modestly, U.S. households are in for a world of pain. It wouldn’t take a full-scale U.S. economic crisis to set the economic collapse 2017 in motion. All it would take is for interest rates to rise another percent or two, if that.
Ways to Survive the Upcoming U.S. Economic Collapse
Fortunately, with a little bit of economic collapse preparation, surviving the drip (or full-blown) economic collapse is entirely possible.
The first thing consumers may want to consider is debt consolidation. This is the act of obtaining a larger loan to pay off the debts of all other outstanding creditors. The key is securing the larger loan at lower interest rates than the debt currently being serviced. For example, acquiring a home equity loan or line of credit at seven or eight percent sure beats the 20% interest payments that credit card companies frequently charge. It’s the same thing for those pesky home appliance payments, which frequently charge the same amount.
By consolidating debt under one umbrella, not only will debt service payments decline, it can simplify your finances. People can also do away with insidious late fees and charges applied when payments are missed.
The second thing that consumers may want to focus on is counteracting the persistent loss of dollar purchasing power.
How do we do this? One method is called substitution. In a nutshell, it’s replacing one good with another similar, but cheaper good. Done correctly, this is a great method to counteract the decline in purchasing power without sacrificing living standards too much (assuming one does not have the ability to earn more money). The dire economic outlook 2017 is making this method more relevant every week.
A great example would be that morning cup of coffee. Instead of purchasing a standard $2.50 “Grande” at Starbucks, why not brew your own? Sure, it doesn’t seem like doing away with your java-to-go will save you much money, but it adds up. It also has side benefits like keeping you away from the long morning drive-through lines.
Now, imagine applying this concept to dozens of different items at the grocery store, week after week. At the end of the year, savings could easily reach a few thousand dollars; enough to make a serious dent in that credit card debt you owe, while improving cash flow.
The concept can be applied to some larger goods as well. Mostly, it involves the fast-depreciating goods that quickly lose value soon after purchase. For example, purchasing a solid second-hand patio set is a great value-buy because, once it is exposed to the elements, the new luster wears off quickly. In a few short weeks, a new set won’t look much different than a used one, which can be purchased at a significant discount.
The same can be said for certain automobiles, television sets, and mundane items like garden tools and bicycles. It’s not feasible (or desirable) to buy everything secondhand but, with the right mixing and matching, it can go a long way to preserving your living standards without sacrificing much quality.
That’s what shopping arbitrage looks like, and more Americans are resorting to this option every day to maintain their standard of living. While these strategies won’t protect you from a full-blown economic crisis, they will protect you from the drip economic crisis that many are enduring. Because, after all, the next economic collapse might be the same one we’re experiencing now: death by a thousand paper cuts, as opposed to blunt force trauma.
However, should the next economic collapse turn cataclysmic, adhering to an economic collapse preparation list could be a life saver. Such a list might include an emergency evacuation plan, an inventory of all perishable goods (with expiry dates) in the pantry, or an inventory of barterable items. The list may be a guidepost for acquiring the goods needed to survive without running water, electricity, or heat for long periods of time. Survivalists can then add these items gradually to their supply, as disposable funds allow.
If the next economic crisis is a dagger, as opposed to the drip variety, you’ll be glad you did.
Lastly, gold has historically been the best and most proven way to preserve purchasing power. Regardless of whether there is a financial crisis 2017, hyperinflation, or just plain old high-trend inflation hits, gold never fails in securing one’s wealth. With the current administration showing no aversion to running up deficits, it makes sense to acquire the yellow metal to the best of one’s ability. Gold has never failed in times of calamity.
How Close Are We to the Coming U.S. Economic Collapse?
As I’ve laid out, economic collapse is already here in many respects. It’s human nature to ascribe life-altering changes to trigger events when, most of the time, profound change happens gradually. Look no further than Japan’s economic misgivings, which parallel America’s to a great degree. The insidious effects of globalization, not to mention a massive property and stock market bubble at the end of the 1980s, has brought on slow terminal economic decline in Japan.
It hasn’t been an overnight disintegration or political revolution triggering Japan’s problems. It’s been national over-indebtedness, unrestrained money printing, and quantitative easing that has gradually eroded the yen’s purchasing power and has put the squeeze on the population’s ability to make ends meet. Sound familiar?
Regardless of whether a dire U.S. economic outlook 2017 ushers in the dagger event that so many are expecting matters not. The next economic collapse is already here, hidden in plain sight. It doesn’t look like a century-ago bread line or popular revolt seen on the nightly news from a third-world country, but the result is the same. It’s simply a slow demise, rather than a quick one.
You can call it a Western-style economic collapse, and it’s only going to accelerate. Prepare accordingly.
