Small business bankruptcies surged 61% in 2023, with 80% of $300B COVID-19 relief loans still outstanding, while total corporate bankruptcies hit a 14-year high, particularly impacting the retail sector.
Credit card debt reached a record $1.4T in 2023, with average APRs soaring to 24.9%, significantly higher than the 5-6% rates in the early 2000s, strangling businesses and consumers alike.
College enrollment has dropped by 2.5M since COVID, while the percentage of 18-26 year olds working in trades increased from 25% to 31%, reflecting a shift in educational and career preferences.
The financial sector’s share of corporate profits rose from 16% in the 1970s-1980s to 41% by the early 2000s, indicating a “quiet coup” where Wall Street elites gained significant control over economic policy.
The Fed’s 2.9% savings rate is the second worst in 75 years, while inflation-adjusted real median household income has declined since 2019, suggesting Americans have been in a de facto recession for 5 years.
The US government has accumulated tens of trillions of dollars in debt over the past 30-40 years, primarily to fund wars and social programs, with annual interest payments now exceeding $1 trillion.
The Federal Reserve’s practice of creating money “out of thin air” to fund government spending has led to significant inflation, benefiting the asset-owning 1% while pushing the bottom 50% further from financial stability.
Central banks worldwide are selling US treasury bonds and buying gold as a neutral asset to protect against a potential dollar crisis and reduce dependence on the US financial system.
The US dollar’s role as the global reserve currency is threatened by its use as a “financial weapon”, prompting other countries to seek alternatives and potentially leading to a monetary reset within the next 10-15 years.
A housing crisis looms with baby boomers unable to sell their large homes, potentially leading to multi-generational living arrangements as younger generations struggle to afford housing.
The US faces a health crisis with 60% of people on psychiatric medications and widespread issues like heart disease and arthritis, contributing to societal and economic challenges.
To prepare for potential economic crises, individuals should focus on developing self-sufficiency skills like electricity, plumbing, and car repair, as well as considering investments in precious metals.
Balancing the US budget would require drastic measures, including cutting entitlements like Social Security and Medicare by 70% and reducing the military budget by 90%, according to John Rubino.
The Fed’s 50-basis-point rate cut in September 2024, the largest since 2008, marks a profound regime change in monetary policy, prioritizing labor market support over inflation control.
This unusual move outside economic emergencies sends a clear message to markets about the Fed’s commitment to protect employment, even with inflation under control.
The Fed’s pre-emptive rate cuts in 2024 may reignite inflation, while the Bank of Japan’s multi-decade reversal of its zero-interest-rate policy could lead to a multi-decade reversal in global monetary trends.
The aggressive rate cuts could potentially impact dollar weakness and revive the yen carry trade, affecting global currency markets.
The fiscal pictures in the U.S. and Europe, along with potential economic and national security policy changes in China, present interlocking macroeconomic and geopolitical challenges for investors.
A potential Trump 2.0 administration could significantly impact markets and the economy, requiring investors to adjust their strategies.
The evolving monetary landscape suggests an increasing role for gold in investment portfolios as a hedge against potential economic uncertainties.
There’s a growing case for commodities in light of the shifting monetary policies and global economic dynamics.
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