They actually did it. The Federal Reserve just raised interest rates by another 25 basis points right in the middle of a major banking crisis. I honestly do not understand what Fed officials are thinking. They had already blown a 620 billion dollar black hole in the balance sheets of U.S. banks by raising rates so aggressively, and that resulted in the second and third largest bank failures in U.S. history earlier this month. Apparently they are not yet satisfied with the carnage that they have caused, and so they have decided to make things even worse. What we are witnessing is either extreme incompetence of epic proportions, or they are trying to crash the economy on purpose. I am sitting here trying to think of a third alternative, but so far I am coming up blank.
Fed officials can see exactly what their reckless rate hikes are doing to the system, but they are pressing forward anyway. Wednesday’s rate hike was “the ninth consecutive rate increase”…
The Federal Reserve on Wednesday raised its benchmark interest rate by a quarter of a point, forging ahead with its fight against stubborn inflation despite a spate of bank failures and a growing crisis within the financial sector.
The unanimous decision puts the key benchmark federal funds rate at a range of 4.75% to 5%, the highest since 2007, from near zero just one year ago. It marks the ninth consecutive rate increase aimed at combating high inflation.
The fact that it was a “unanimous decision” should greatly alarm all of us.
Isn’t there a single voice of reason left at the Fed?
The last time the Fed raised rates like this was just before the financial crisis of 2008.
And we all remember what that did to our banking system.
But the Fed insists that this time is different. In fact, we were just told that our banking system “is sound and resilient”…
“The U.S. banking system is sound and resilient,” the Fed said. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.”
Of course banks don’t tighten the flow of credit when things are good.
They tighten the flow of credit when they get into trouble.
And it appears that another major U.S. bank is now exhibiting signs of distress…
Shares of regional bank PacWest Bancorp dropped Wednesday after the company disclosed it had shed more than $6 billion in deposits during the recent squeeze on midsized banks, though PacWest said it did not plan to raise more capital.
The bank said in a press release Wednesday that it had $27.1 billion in deposits as of March 20, which is down from $33.9 billion at the end of December and from $33.2 billion on March 9. The change appears to have largely come from venture banking deposits, which accounted for a third of PacWest’s deposits at the end of December and now stand at just 24%.
There are more than 4,000 banks in the United States today, and hundreds of them could end up failing before this crisis is over.
That would mean fewer mortgages for potential homeowners.
That would also mean fewer auto loans, credit cards and debit cards.
Unfortunately, the flow of credit is the lifeblood of our economy, and so we need our banks to be healthy.
But if the Federal Reserve continues to go down this road, bank after bank will be absolutely crushed.
Needless to say, the Fed’s insane policies are also bursting the housing bubble. At this point, U.S. home prices are down 12.3 percent just since last June…
The national median existing-home price fell 0.2% in February from a year earlier to $363,000, the first year-over-year decline since February 2012, the National Association of Realtors said Tuesday. Median prices are down 12.3% from their record $413,800 in June.
U.S. homeowners have already lost trillions of dollars of home equity, and now the Fed has just poured more fuel on the fire.
It is madness.
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It is literally insane for the Federal Reserve to aggressively hike rates as we are plunging into a major economic downturn, but that is precisely what they are doing.
Look, if the long-term economic outlook was positive do you think that Walmart would be closing even more stores?…
Walmart has announced plans to close stores in Hawaii and Minnesota, which join a handful of other stores closing in several states this year.
The retail giant said the decision was made after a review process that determined the impacted stores failed to meet financial expectations, the company told USA TODAY.
Ten stores in Florida, Hawaii, Illinois, Minnesota, New Mexico, Oregon, Washington D.C., and Wisconsin will close by the end of the year, along with two experimental “pickup” locations in Illinois and Arkansas.
Walmart exists to make money.
If there was a chance that those stores could be turned around, Walmart would not be permanently shutting them down.
Sadly, other major retailers are also closing locations all over the nation.
They can see what is coming.
Higher interest rates are already crushing economic activity from coast to coast, and they are battening down the hatches.
The “experts” at the Fed are assuring all of us that they know exactly what they are doing, but the truth is that they have lost control.
As you read this article, wealthy individuals and large companies are pulling uninsured money out of small and mid-size banks all over America.
Many of those small and mid-size banks will soon be in very serious jeopardy, and that will significantly reduce the flow of credit into our economy.
Is this what they want?
Do they really want to see the U.S. economy implode?
Our leaders continue to make mind-numbingly bad decisions, and we are on a course that leads to national suicide.
When will the American people finally wake up?
Sadly, most Americans are still blindly trusting the “experts”, and the “experts” have us on a highway to extreme misery.
***It is finally here! Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.***
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About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com. In addition to my new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned) When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends. Time is short, and I need help getting these warnings into the hands of as many people as possible.
I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe. I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article. The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.
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Article cross-posted from The Economic Collapse Blog.
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.
Seems to me they focus on the laws of supply and demand, but ignore the laws of mass production. The cost of producing that Model T, and the price the consumer had to pay for it, is directly dependent on the ability to manufacture higher quantities efficiently and in a short amount of time. Slow the demand to one or two Model T’s a day, and all the sudden that nice efficient production process is worthless, and the Model T is essentially as expensive as a custom-built car. The cost of production is going up, while artificially constricted demand is driving prices down, and it is then not very long before that Model T plant has to shut the doors.
Now on the supply side you’ve got multiple market forces all driving up costs, while on the demand side there are conflicting forces some trying to drive prices down and others trying to drive prices up. Well, that might possibly stabilize prices on the demand side, but all the while you’re driving supply side costs through the roof.
And whether or not artificially slowing demand could actually work is a crap shoot to begin with, because those same forces are driving down supply. Now you’ve got a race to the bottom between supply and demand, and a guessing game of which will outpace the other. At that point, you might as well be running to the highest point on the deck of the Titanic. You’re just putting off the inevitable.
Another factor is which side, supply or demand, at a given level of production, is the loan. It’s not quite as simple as supply side vs demand side. On the supply side, throughout the supply chain root system, we have both supply and demand at every level. When they go out and try to sell these interest rate manipulations, the focus is always on end consumer loans. Yet if you’re also making capital less available to the production side of things, your efforts are conflicting.
But I’m not an economist or anything. I’m sure they’re all far more knowledgeable than us commoners , and know what they’re doing – you know, since all they’ve been doing has worked so great thus far (🙄)
Then when it doesn’t work they send out the goon squad to blame the results of all their manipulation on free-market capitalism, when the mess they created wasn’t driven by free-market forces at all. Perfect smoke screen. It was the fault of them there eeeviil producers.