Will 2016 Bring the Next Great Depression?
But we aren’t hearing much about this financial carnage on the news yet, are we?
Many people I talk to still think that “nothing is happening,” but don’t you dare say that to Warren Buffett.
He lost $7.8 billion in 2015.
How would you feel if you lost $7.8 billion in a single year?
The truth, of course, is that signs of financial chaos are erupting all around us. Corporate profits are plunging, the bond distress ratio just hit the highest level that we have seen since the last financial crisis, and corporate debt defaults have risen to the highest level that we have seen in about seven years.
If you run a business, you may have noticed fewer people are coming in and it seems as though those who do come in have less money to spend. Economic activity is slowing down, and inventories are piling up. In fact, wholesale inventories have now risen to the highest level that we have seen since the last recession.
Do you notice a theme?
So many things that have not happened in six or seven years are now happening again.
History may not repeat, but it sure does rhyme, and it astounds me that more people cannot see that 2015/2016 is looking eerily similar to a replay of 2008/2009.
Another number that I watch closely is the velocity of money. When an economy is running well, money tends to circulate efficiently through the system. But when an economy gets into trouble, people get scared and start holding on to their money. The velocity of money declined during every single recession since 1960. This is precisely what one would expect. Of course, during the recession that started in 2008, the velocity of money plunged precipitously. But then a funny thing happened when that recession supposedly “ended.” The velocity of money just kept going down, and now it has fallen to an all-time record low.
A big reason for this is the ongoing decline of the middle class. In 2015, we learned that middle-class Americans now make up a minority of the population for the first time ever.
But if you go back to 1971, 61 percent of all Americans lived in middle-class households.
Meanwhile, the share of the income pie that the middle class takes home has also continued to shrink.
In 1970, the middle class brought home approximately 62 percent of all income. Today, that number has fallen to just 43 percent.
As the middle class is systematically destroyed, the number of Americans living in poverty just continues to grow. And those who often suffer the most are the children. It may be hard for you to believe, but the number of homeless children in the U.S. has increased by 60 percent over the past six years.
60 percent!
How in the world can anyone dare to claim that “things are getting better”?
Anyone who says that should be ashamed of themselves.
We are in the midst of a long-term economic collapse that is now accelerating once again.
Anyone who tries to tell you that “things are getting better” and that 2016 is going to be a better year than 2015 is simply not being honest with you.
A new global financial crisis erupted during the last six months of 2015, and this new financial crisis is going to intensify throughout the early months of 2016. Financial institutions will begin falling like dominoes, and this will result in a great credit crunch around the world. Businesses will fail, unemployment will skyrocket and millions will suddenly be faced with economic despair.
By the time it is all said and done, this new financial crisis will be even worse than what we experienced back in 2008, and the suffering that we will see around the world will be off the charts.
So does that mean that I am down about this year?
Not at all. In fact, my wife and I are greatly looking forward to 2016. In the midst of all the chaos and darkness, there will be great opportunities to do good and to make a difference.
What a great shaking comes, people go looking for answers. I think this will be a year when millions of people start to understand that our politicians and the mainstream media are not telling them the truth.
Yes, great challenges are coming. But now is not the time to dig a hole and try to hide from the world. Instead, this will be a time for those that have prepared in advance to love others, help others and show them the truth.
What about you?
Are you ready to be a light during the dark times that are coming?
