(The Economic Collapse Blog)—When you are creeping out on a very high tree limb, everything may seem fine until suddenly the limb snaps and disaster strikes. I think that is a perfect metaphor for what we are facing as a country. Our politicians in Washington have artificially propped up our economy for years by piling up 34 trillion dollars in debt, and the “experts” at the Federal Reserve have artificially propped up the financial markets for years by pumping trillions upon trillions of dollars that they created out of thin air into the system. But now we are so far out on a limb that there is no way back, and there is no safety net below. Ultimately, our fate will be the same as this guy…
Heart-stopping video footage shows the moment a Florida man plummets 60 feet into a creek after a branch he was standing on broke beneath him.
Christopher James Sikes Smalley was enjoying a day at Crystal Springs, a popular swimming spot in Vernon, when a branch he was climbing on snapped.
A clip shows Smalley hanging on to a branch above him with one hand and balancing on top of another.
Suddenly, the branch below Smalley gave way, causing him to fall and hitting other branches before landing in the water.
Fortunately, Smalley was not killed.
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But this was a fall that he will never forget for the rest of his life.
I had to write about this, because it reminded me of what so many people out there are going through right now.
Millions of Americans are currently experiencing their own individual “economic collapses”, and that includes a lifelong Democratic in Pennsylvania named Stacey Ellis that was recently interviewed by the BBC…
She has switched stores, cut out brand-name items like Dove soap and Stroehmann bread, and all but said goodbye to her favourite Chick-fil-A sandwich.
Still, Ms Ellis has sometimes turned to risky payday loans (short-term borrowing with high interest rates) as she grapples with grocery prices that have surged 25% since Mr Biden entered office in January 2021.
“Prior to inflation,” she says, “I didn’t have any debt, I didn’t have any credit cards, never applied for like a payday loan or any of those things. But since inflation, I needed to do all those things….I’ve had to downgrade my life completely.”
Have you had to “downgrade” your life too?
If so, you are far from alone.
For example, a 26-year-old security guard in Brooklyn named Dylan Garcia now only eats two times a day because that is all that he can afford…
Dylan Garcia, a 26-year-old security guard from Brooklyn, says he’s never struggled to buy groceries as much as he has now.
Instead of the fresh food and brand-name items he used to enjoy, he now stocks up on ramen noodles and frozen vegetables – and only eats twice a day because he can’t afford more.
At checkout, he routinely uses “buy now, pay later” schemes, which allow him to pay the bill in installments, but have led to mounting debt.
If you can still eat three meals a day, you should be very thankful for what you still have.
Of course it isn’t just food prices that have been soaring.
Housing has become ridiculously unaffordable, and this week we learned that home prices are now higher than ever…
Findings from Redfin show the median U.S. home sale price soared to $397,954 in June – a nearly 5% increase from a year earlier. That marks the highest level on record and the biggest annual increase since March.
The monthly mortgage payment at that price, when accounting for the 6.86% median interest rate for a 30-year mortgage, is now $2,749. That is roughly $88 shy of April’s record, thanks to a slight drop in mortgage rates.
In a desperate attempt to make ends meet, many Americans have been going very deep into debt.
That worked for a while, but now delinquency rates are spiking.
In fact, the percentage of credit card balances that are considered to be in serious delinquency has risen to the highest level in more than a decade…
The flow of credit card debt moving into delinquency hit 8.9% in the first quarter at an annualized rate, above pre-pandemic levels. In fact, the percentage of credit card balances in serious delinquency – payments are at least 90 days late – climbed to its highest level since 2012.
This is an especially dangerous time to be piling up credit card debt, because credit card interest rates have moved into uncharted territory…
Finally, a vivid reminder that once credit card rates go up they almost never go down, in Q2 the average interest rate on credit card accounts rose again, up to 22.76% from 22.63% in Q1 and 1 basis point below the all time high.
While so far consumers have pretended they can afford to pay this interest upon interest, there will come a day when the brick wall will finally be reached and the US consumer’s Wile E Coyote moment will finally come meet its gravitational implosion.
Most people don’t realize this, but there is no federally mandated limit on credit card interest rates.
So these days many credit card companies are just going hog wild.
Some cards now come with a rate of more than 30 percent on unpaid balances, and that is deeply immoral.
Don’t fall into their trap, because the goal of these predators is to bleed you dry.
Many businesses all over America are also reaching a breaking point here in 2024. For instance, one of the largest flooring suppliers in the entire country is on the verge of bankruptcy…
One of America’s biggest flooring suppliers is considering bankruptcy – the latest retailer to face financial problems.
LL Flooring, with 442 stores across 47 states, has seen its sales falling over the past year as Americans cut back on renovating their homes.
And I was deeply saddened to learn that the company that makes Tonka Trucks and Lincoln Logs has now officially filed for bankruptcy…
A toy company behind favorite brands including Tonka, K’nex, and Care Bears has filed for bankruptcy.
Basic Fun also owns Playhut, Fisher Price Classics, Lite Brite and Lincoln Logs, and makes toys for Walmart, Target and amusement parks.
Tonka – famous for its rugged toy trucks – was founded in 1946 and celebrated its 75th birthday two years ago with Shaquille O’Neal.
Meanwhile, Care Bears were one of the biggest toys of the 1980s after being launched at the start of that decade.
For years, the U.S. economy has been creeping farther and farther into the danger zone.
The limb that we are standing on is really starting to make some very alarming noises, but our leaders don’t seem to care.
Sadly, it is only a matter of time before disaster strikes.
If we had made much different choices, we could have ended up with much different results.
Ultimately, we shall reap what we have sown, and that is not going to be pleasant at all.
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.
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