If virtually everyone is expecting a recession, and most people start acting accordingly, do you think that will make an economic downturn less likely or more likely?
Needless to say, the answer to that question is obvious. Right now, banks all over the country are getting really tight with their money, large corporations are laying off workers at a frightening pace, and consumers are cutting back on their spending. In other words, it really is starting to look a lot like a recession out there, and economic conditions are only going to get even more harsh in the months ahead.
I know that this is not good news. Things are already far from great, and one recent survey found that 70 percent of all Americans are “feeling financially stressed”…
Inflation, economic instability and a lack of savings have an increasing number of Americans feeling financially stressed.
Some 70% of Americans admit to being stressed about their personal finances these days and a majority — 52% — of U.S. adults said their financial stress has increased since before the Covid-19 pandemic began in March 2020, according to a new CNBC Your Money Financial Confidence Survey conducted in partnership with Momentive.
Unfortunately, the truth is that the financial stress is just beginning for many families, because a significant economic downturn is on the way.
At this point what is approaching is so obvious that the Federal Reserve is even publicly admitting that a recession will start “later this year”…
Federal Reserve economists believe that recent banking turmoil will trigger a mild recession later this year, a potentially ominous sign for President Joe Biden as he heads into an election campaign.
Their projection was for “a mild recession starting later this year, with a recovery over the subsequent two years,” according to the minutes, released Wednesday. That would spark a jump in unemployment. They estimated the economy would fully recover by 2025.
I honestly cannot remember the last time that the Federal Reserve actually predicted that a recession would be coming.
Normally, the Fed is wildly optimistic with their projections because they want us to have faith that their policies are working.
But now even they have thrown in the towel.
Bank of America is also sounding the alarm. Analysts at the bank recently shared 12 charts “that show that the economy is about to enter a full-blown recession”, and I was particularly interested in what they had to say about tightening credit conditions…
“US banks have been tightening lending standards to small companies past few quarters. Credit crunch to intensify and highly correlated with small business demand for workers. Should May SLOOS report show drop in loan availability to -10 or below = unambiguous credit crunch,” BofA said.
A major credit crunch is here, and that is going to send major shockwaves throughout the entire economy.
The last time we witnessed anything like this was in 2008, and we all remember what happened back then.
If you still believe that our leaders will magically find some way out of this economic mess, you are definitely in the minority at this point. According to a survey that KPMG conducted not too long ago, 91 percent of corporate CEOs in the U.S. “are convinced we are heading toward a recession in the next 12 months”…
Just when it seemed there was a light at the end of the tunnel with pandemic-related disruptions subsiding, the vast majority of U.S. CEOs (91%) are convinced we are heading toward a recession in the next 12 months. Moreover, only about a third of U.S. CEOs (34%) believe this recession will be mild and short.
91 percent. Just think about that.
And many CEOs have already started laying off workers in anticipation of what is coming.
In fact, we just learned that Best Buy will be giving the axe to workers “in hundreds of stores”…
Best Buy is cutting workers in hundreds of stores across the US as the electronics retailer looks to cut costs and shift focus towards e-commerce.
Last week workers who specialize in selling complex products in stores, sometimes called ‘consultants’, were told they would lose their job, according to the Wall Street Journal.
The layoff will affect jobs across the more than 900 stores Best Buy operates in the US. Those laid off were invited to reapply for open positions within the company or receive severance.
Sadly, the entire retail industry is in huge trouble at this point.
The “retail apocalypse” that we went through a few years ago will be nothing compared to what we will soon experience. According to analysts at UBS, we could eventually see more than 50,000 retail stores in this country permanently close their doors…
Tens of thousands of store closures are looming across the U.S., according to analysts.
More than 50,000 retail locations could permanently shut their doors over the next five years, according to UBS analysts.
This is one nail in the coffin for commercial real estate.
A second nail in the coffin for commercial real estate is the fact that so many restaurants are in trouble all over the nation.
For example, dozens of Burger King locations will soon be shut down as the entire chain grapples with disappointing sales…
Last month, Meridian Restaurants Unlimited, which has 118 Burger King locations across the US, filed for bankruptcy having racked up $14 million in debt.
It is set to close 27 locations in Minnesota, Utah, Montana, Kansas, Nebraska and North Dakota.
It came as another franchisee, EYM King, announced it was closing 26 restaurants in Michigan and 90-unit operator Toms King was sold out of bankruptcy for $33 million.
A third nail in the coffin for commercial real estate is the record high office vacancy rates that we are seeing all over America. In San Francisco, the vacancy rate is almost up to 30 percent…
A sobering report from Coldwell Banker (available to pro subs in the usual place) reveals that San Francisco’s office vacancy rate hit a record high of 29.4%, as net absorption (total new square footage leased minus the total square footage of vacated space) registered -1.56 million sq. ft.
To that end, software giant Salesforce has put the last of its San Francisco office space up for sublease as part of its January plan to lay off approximately 7,000 employees and reduce office space, SF Gate reports.
A lot of people thought that I was overstating things when I said that we are heading into the greatest commercial real estate crash in U.S. history. But I wasn’t.
And many others are now issuing similar warnings. The following comes from Fox Business…
The commercial real estate market may be headed for a crash that rivals the 2008 financial crisis this year.
Office and retail property valuations could plummet as much as 40% from peak to trough this year as higher interest rates make it harder for investors to refinance trillions in looming debt, according to Lisa Shalett, chief investment officer for Morgan Stanley Wealth Management.
The recession of 2023 won’t just be the end of a typical business cycle.
The truth is that what we are witnessing is the culmination of many long-term economic trends that I have been watching for a long time.
Our leaders have been making disastrous decisions for decades, and now we are going to reap what they have sown.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Article cross-posted from The Economic Collapse Blog.
Bypass Big Tech Censors
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.