(The Economic Collapse Blog)—When U.S. consumers are doing well, the U.S. economy does well. But of course the opposite is also true. When U.S. consumers are not doing well, the U.S. economy really suffers. The government has been trying really hard to put a happy face on things, but the truth is that the standard of living for most U.S. consumers has been going down for a long time. The cost of living has been rising faster than paychecks have, and so most of us have less discretionary income than we once did. And that is really bad news for the U.S. economy, because as the official White House website has pointed out, consumer spending typically accounts for about two-thirds of all economic activity…
Consumption spending makes up two-thirds of the U.S. economy on average, so as the U.S. consumer goes, so goes the U.S. economy.
For once, the White House has told us something that is actually accurate. In the first quarter of 2024, consumer spending accounted for 68 percent of GDP. It has been right around the two-thirds mark for many years, and that makes it one of the most stable numbers in economics.
Unfortunately, consumers are more financially stressed today than they have been in ages. In fact, a survey that was recently conducted by the U.S. Census Bureau discovered that 37 percent of U.S. adults now struggle to pay for their most basic expenses each month…
About 37% of American adults are in households that found it somewhat or very difficult to pay for typical expenses between late June and late July, according to the U.S. Census Bureau’s Household Pulse Survey.
When you are barely able to pay for food, housing and other essentials, there is not going to be extra money to blow at retail stores and restaurants. This is one of the primary reasons why so many retailers and restaurant chains are going bankrupt in 2024.
Of course the economic pain is not spread equally across the entire country. According to that same survey, consumers are particularly struggling in “poor” states such as Mississippi, Alabama and West Virginia…
Mississippi (49.5%), Alabama (45.5%) and West Virginia (43.5%) have the highest percentage of adults who say they’re having trouble affording their basic needs.
I think that there are many good things that could be said about all three states. In fact, I have Alabama ranked 11th for survivability out of all 50 states in my book about the great turmoil that will soon hit our society.
But if you don’t have money, it can be really tough to live in an area of the country where employment prospects are relatively poor. Needless to say, lots of people in big states are really hurting right now too.
The Census survey found that 41.8 percent of Florida residents, 40 percent of New York residents, 39.9 percent of Texas residents and 37.5 percent of California residents are having difficultly paying for their basic expenses at this point.
When close to 40 percent of the population is just barely scraping by, you have a major economic crisis on your hands. No matter how they want to frame things, our leaders are not going to be able to ignore this forever. The lack of consumer spending is hitting the restaurant industry particularly hard…
The year has not even reached its fourth quarter and bankruptcies among restaurant chains, operating companies and large franchisees are already nearly double what they were in 2023.
Jonathan Carson, co-CEO of bankruptcy services and technology firm Stretto, says there have been 17 such Chapter 11 filings in the sector so far in 2024, and there were only nine at this point last year. He expects the trend to continue.
According to Carson, a number of factors have contributed to the nightmare that the restaurant industry is now facing…
“In this situation, a challenging economic environment, post-pandemic recovery issues, rising labor costs, changing consumer habits and inflation have caused more restaurants to struggle in 2024,” Carson told FOX Business in an interview, noting those issues have also impacted other sectors of the economy.
Retailers have also been going bankrupt at a staggering rate.
Just today, I came across another example. Earlier this year, LL Flooring shuttered close to 100 stores, but now the company has decided that it is time to permanently shut down all 442 stores…
LL Flooring – previously known as Lumber Liquidators – is shutting all its stores after going out of business after three decades.
The retailer, one of America’s biggest flooring suppliers, was looking for a buyer after filing for bankruptcy.
Earlier in the summer it had 442 stores, but shut nearly 100 as it looked to cut costs and woo investors. No buyer could be found.
You can’t get blood out of a stone.
If consumers had plenty of discretionary income, they would be out spending it.
But they don’t, and things will only get worse during the months ahead.
Politicians can keep giving more speeches about “how well the economy is doing”, but it won’t change the cold, hard facts on the ground. If someone tries to tell you that the economy is in good shape, just point out that the number of business bankruptcies has been absolutely exploding…
According to statistics released by the Administrative Office of the U.S. Courts, annual bankruptcy filings totaled 486,613 in the year ending June 2024, compared with 418,724 cases in the previous year.
Business filings rose 40.3 percent, from 15,724 to 22,060 in the year ending June 30, 2024. Non-business bankruptcy filings rose 15.3 percent to 464,553, compared with 403,000 in the previous year.
The moment that you point this out, the argument will be over.
There is no way that anyone can monkey with that number.
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Either businesses are filing for bankruptcy or they aren’t.
Right now, companies all over America are really hurting, and as a result many of them are also laying off workers.
In fact, things are so bad that even the tech industry has been conducting mass layoffs…
Tech companies continued to cut jobs at a rapid pace in August 2024. More than 27,000 workers in the industry lost their jobs as over 40 companies, including big names like Intel, IBM, and Cisco, as well as numerous smaller startups, announced layoffs. To date, more than 136,000 tech workers have been laid off by 422 companies in 2024, indicating significant upheaval in the sector.
The momentum of our economy is clearly taking us in a very troubling direction.
Our standard of living has been in decline for years, and now our economic problems are accelerating.
Hopefully you have been making preparations for hard times, because a tremendous amount of pain is ahead.
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.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
