(The Economic Collapse Blog)—If the economy is fine, why are so many signs of trouble erupting all around us? Those that keep insisting that the U.S. economy is heading in the right direction conveniently ignore the very troubling facts and figures that I regularly share with my readers. When you take an honest look at the cold, hard numbers that the economy keeps producing, there is only one logical conclusion. Our entire system is crumbling, and it appears that conditions will soon get significantly worse.
Just look at what is happening to our banks.
The FDIC’s most recent report tells us that there are 63 “problem banks” in the United States, and collectively our banks now have 517 billion dollars in unrealized losses…
According to the Federal Deposit Insurance Corporation’s first quarter report, the US banking system is sitting on a collective $517 billion in unrealized losses and has 63 “problem banks.”
Those losses have been sparked primarily by a surge in interest rates over the past two years, which have driven down the price of fixed-income securities held by banks.
Unrealized losses held by banks increased by $39 billion in the first quarter relative to the fourth quarter of 2023.
“Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase,” the FDIC said.
I would love to know what banks are on that list.
Wouldn’t you?
But the FDIC will not tell us.
As Daisy Luther has accurately noted, the FDIC won’t release that information because they are afraid of bank runs…
We don’t get to know which banks are in trouble.
It could be my bank. It could be yours. Or maybe it’s not.
Are they big banks? Small ones?
The list is confidential to inhibit the likelihood of bank runs finishing off these institutions.
So we just don’t know.
If Americans had the truth, there would be bank runs all over the country tomorrow morning.
That is a rather comforting thought.
And the condition of our banks just continues to deteriorate because mountains of commercial real estate loans are going bad.
At this point, it has become clear that we have never faced a commercial real estate crisis of this magnitude in our entire history…
The CRE sector faces the triple whammy of falling prices, falling demand, and rising interest rates. The post-pandemic rise of telecommuting and work-at-home programs crushed demand for office space. Vacancy rates in commercial buildings have soared.
This has put significant stress on commercial real estate companies. The biggest bankruptcy in 2023 was the failure of the Pennsylvania Real Estate Investment Trust. The company had loaded up with more than $1 billion in liabilities.
The collapse of the commercial real estate market could easily spill over into the financial sector. That’s because a lot of loans are coming due.
According to the Mortgage Bankers Association, around $1.2 trillion of commercial real estate debt in the United States will mature over the next two years.
A lot of financial institutions will fail during the months and years that are ahead of us. Just hope that your money is not in one of them.
Meanwhile, one recent survey discovered that approximately two-thirds of all small businesses in the United States are teetering on the brink of disaster…
A new survey reveals that over two-thirds of small business owners are terrified of the state of the economy under Joe Biden’s watch, fearing that current conditions and ongoing downward trends will lead to them having to close their businesses.
As reported by the Daily Caller, the poll from the Job Creators Network Foundation (JCNF) shows that 67% of small business owners maintain such fears about the economy as it stands today, marking a 10-point increase from sentiments two years ago. In the same poll, participants’ perceptions of economic conditions for their own businesses fell from 70.2 to 68.1. Perception of national conditions fell even more drastically, from 53.2 to 50.4.
Maybe you don’t care about what is happening to our small businesses.
But you should, because close to half of all workers in the United States are employed by small businesses…
Forbes estimates that at least 46% of all employees in the United States, around 61.6 million people in total, are employed by small businesses.
I think that it is quite an ominous sign that the household survey showed that the U.S. economy lost a whopping 408,000 jobs last month.
Sadly, I think that a lot more months like that are coming.
Retailers are also really struggling right now.
In fact, as Mark B. Spiegel recently discussed, major retailer after major retailer has been reporting disappointing sales numbers…
The U.S. economy seems to finally be cracking. This month a slew of retailers (off the top of my head: Target, Lowe’s, Macy’s, Kohl’s, Best Buy and Foot Locker) reported negative year-over-year sales comps, and that’s before adjusting for the inflation that makes them 3% to 4% more negative in “real” terms. Others (Dollar General and Burlington) reported same-store sales comps in the +2% range, but that too was negative when adjusted for inflation, while Walmart and Nordstrom comps managed to roughly keep pace with inflation, but were unable to exceed it.
At one time, Walmart was an unstoppable retail behemoth. But now even Walmart is closing down stores…
WALMARTS are closing across the country – and retail experts say the cuts are signals of a bleak future for shoppers.
The multi-million dollar corporation has closed nine stores so far this year, which could be a warning sign for other retail giants.
Of course the stores that Walmart is shuttering are just a drop in the bucket compared to what other chains are doing. As I detailed in an article that I posted last week, we are on pace to lose 7,800 stores in 2024.
When the Drudge Report used the term “retail apocalypse” in one of their headlines on Monday morning, that was not an exaggeration at all.
We really are in the early stages of a historic meltdown.
And the outlook for the months ahead is extremely bleak.
In fact, Harry Dent just told Fox News that we should brace ourselves for “a bigger crash than we got in 2008 to ’09”…
Speaking in an updated interview with Fox News Digital, Dent cautioned that the “everything” bubble has still yet to burst, and it may be a bigger crash than the Great Recession.
“In 1925 to ‘29, it was a natural bubble. There was no stimulus behind that, artificial stimulus per se. So this is new. This has never happened,” Dent said on Tuesday. “What do you do if you want to cure a hangover? You drink more. And that’s what they’ve been doing.”
“Flooding the economy with extra money forever might actually enhance the overall economy long-term. But we’ll only see when we see this bubble burst,” he added. “And again, this bubble has been going 14 years. Instead of most bubbles [going] five to six, it’s been stretched higher, longer. So you’d have to expect a bigger crash than we got in 2008 to ’09.”
Our leaders were able to keep the game going for years by pumping trillions upon trillions of dollars into the system.
But they didn’t fix anything.
Instead, they just delayed the inevitable.
Our entire system really is crumbling all around us, and as it crumbles we are going to see chaos on a scale that most people don’t even want to imagine.
Already, major cities from coast to coast are being terrorized by theft, violence, drugs, homelessness, gangs and anarchy.
If things are this bad already, what is America going to look like once our leaders completely lose control of the economy?
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.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
This is where the US Government has led us. If it makes you feel any better, they treat the world the same way they treat us. That’s why BRICS and the rest of the world is getting rid of us.
This calls for the 25th amendment, section 4
Thank you for allowing us to comment on your site JDR. Many, if not most alternative press sites do not want to hear what we think, which is sad because they don’t want to hear how angry we are, which is considerable.
As for this article by Michael Snyder. I believe it is even worse than he is describing. The FDIC has only about 80 billion or so against that multiple hundred billion or even trillion-dollar mess. When Biden killed our Energy Sector, it set America on the road to a total meltdown as the FED also devalued the dollar to the point that this inflation has doubled the price of food as compared to five years ago.
Even though credit unions are also exposed to the derivatives market, they are still safer than banks. We are advising everyone to take their monies out of the banks and put them in as strong a credit union as you can find. Credit Unions like Navy Federal are large enough to weather the storm which is only expose at five billion in derivatives as compared to banks which are expose in the trillions of dollars.
In the 2008 crash, the cause was when the FED raised rates at the same time that gas, went for the first time, to $5.00 a gallon. That is when the housing market crashed. Now it is even worse. Who do you think is purchasing all those homes people are moving out of because they cannot afford the monthly payments? COMMERCIAL REAL ESTATE COMPANIES that’s who, and they are going to be the first to fail !
I know this is the truth. I see it all around me in my town. In my supermarket restaurant owners get there at the opening and scoop up all sale items by the shopping carts. I complained about no sale items and was told that I had better get there first thing in the morning, or forget about it. Our “booming” Biden economy. Empty store fronts and places closing all over. To think imbecile Biden supporters voted for this and will again. I think 2024 is make or break. We can’t survive much more. Pray for Peace. Trump 2024! America First! ULTRAMAGA!
This isn’t just about Joe. Joe doesn’t run anything. We have a presidency by committee including Bernie who is in charge of the domestic economy, Barry and Susan in charge of
Islamic relations, Hillary running the state department, Chuck in charge of legislative affairs to name a few. With computerized voting machines and mail in ballots, this crowd doesn’t need the peasants.
Marxist Globalist Progressive Liberals OWN this fiasco. To stop it. We must arrest the billionaires that are funding the destruction. Soros, Gates, Schwab, and many others are pushing for a tyrannical system of government. No thanks. After their arrests, we must rid ourselves of the DEEP STATE BUREAUCRATS who are facilitating the destruction.
Yes, it is BY DESIGN crumbling —- banks routinely hire people who flunked grade school arithmetic, incapable of performing simple banking operations —- but hasn’t that long been the case at the Federal Reserve?!?!
When Peter G. Peterson’s handpicked boy, Timothy Geithner, was chairman of the Wall Street control element, the FRBNY (NY Federal Reserve), Geithner fired economic advisor Prof. Shiller (“Irrational Exhuberance”) for suggesting they add the function of “falling housing prices” to their MORTGAGE MODELS and hired the Peterson Institute’s Katherine Mann to replace him –– she was famous for claiming that for every American job offshored, two or more new jobs would MAGICALLY appear in America!
SOROS, BILL GATES, HANSJÖRG WYSS, PRITZKERS, JON STRYKER, WARREN AND PETER BUFFET, AND too many others are destroying North America and Western Civilization — — — no “Palmer Raids” to save the nation this time around ……….
No worries, the leader of the Freak World shall save us:
(At the 5:37 time point)
https://youtu.be/fFb6fxN4AlU?si=qqVqnL8xSMi7L31o
At least the flags popping up are ‘Red Flags’. Just think how bad it would be if those were ‘Blue Flags’!