I really don’t know anyone that would argue that the U.S. economy is in great shape right now. Inflation is out of control, large companies are conducting mass layoffs all over the nation, the housing bubble is starting to implode, and more homeless encampments are constantly popping up in our major cities as poverty spreads like wildfire. But this isn’t the main event. I am calling this “the storm before the storm”, because the truth is that this new economic crisis is still only in the very early chapters. Unfortunately, much more suffering is on the way, and our country is not going to be able to handle it.
Perhaps you don’t agree with me. And that is okay. Nobody agrees with me 100 percent about everything.
But hopefully we can all agree that things are clearly trending in the wrong direction. According to Challenger, Gray & Christmas, the number of job cuts that employers announced in May 2023 was 287 percent higher than the number of job cuts that employers announced in May 2022…
U.S.-based employers announced 80,089 cuts in May, a 20% increase from the 66,995 cuts announced one month prior. It is 287% higher than the 20,712 cuts announced in the same month in 2022, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
It would be one thing if the month of May was some sort of a statistical anomaly, but it wasn’t.
In fact, for the first five months of 2023 the number of job cuts is up a whopping 315 percent compared to the same five months last year.
Take a few moments to reflect on that number.
Other than during the lockdowns of 2020, we haven’t seen anything like this since 2009.
And those that are at the top of the economic food chain are leading the way.
For example, we just learned that Goldman Sachs is planning to conduct a third round of mass layoffs…
Goldman Sachs plans to make another round of job cuts — its third in less than a year — as dealmaking profits continue to tank, sources told The Post on Tuesday.
The David Solomon-led investment bank will cull an additional 250 workers on the heels of 3,200 being fired in January in what staff had dubbed “David’s Demolition Day,” an insider said.
Economic activity is really slowing down all over the nation, and this is beginning to show up in corporate earnings reports.
On Thursday, Macy’s announced that same-store sales actually fell 8.7 percent during the most recent quarter…
In an earnings report on Thursday, Macy’s said same-store sales sank 8.7 percent last quarter, forcing the New York-based department store to cut prices on clothes and other discretionary items.
Macy’s results concluded the retail industry’s earnings season, which showed how stubbornly high inflation, particularly in food, is forcing shoppers to further cut back on discretionary items like clothing to afford their soaring grocery bills.
Dollar General announced very disappointing results as well, and that resulted in a wild sell off of Dollar General stock…
Meanwhile, Dollar General, which caters to low-income shoppers and is the fastest-growing US retail chain by store locations, also cut its annual sales and profit outlook on Thursday, sending the company’s stock down 19.55 percent for the day.
A 20 percent decline in one day is a big deal.
So why is Dollar General performing below expectations?
Well, the CEO says that their core customers are very financially stressed right now. In fact, he says that many of them are “having to rely more on food banks”…
“Unfortunately, our customers are saying they’re having to rely more on food banks, savings, credit cards,” CEO Jeff Owen said on a call with analysts Thursday.
The company says its “core customer” makes less than $40,000 a year. Owen also said he believes customers were caught off-guard by reduced tax refunds and reduced SNAP benefits, “which exacerbated the inflationary pressures they were already experiencing.”
Dollar General’s results echo those of rival Dollar Tree, which also came in below investors’ expectations last week and cut its profit outlook for the year.
In an article that I posted a few days ago, I discussed the extraordinary demand that we are starting to see at food banks around the country.
There is so much suffering out there right now, and it is only going to intensify as more Americans lose their jobs in the months ahead.
If the Federal Reserve had not raised interest rates so aggressively, that would have greatly helped matters.
But instead they have chosen to bring the hammer down on the U.S. economy, and now the average rate on a 30-year fixed mortgage is almost up to 7 percent…
The rate on the 30-year fixed mortgage rose to 6.79% this week from 6.57% a week ago. One year ago, it averaged 5.09%.
“Mortgage rates jumped this week, as a buoyant economy has prompted the market to price-in the likelihood of another Federal Reserve rate hike,” said Sam Khater, Freddie Mac’s chief economist. “Although there has been a steady flow of purchase demand around rates in the low to mid six percent range, that demand is likely to weaken as rates approach seven percent.”
As the housing bubble steadily implodes, those that work in the industry are going to have such a hard time.
Of course the truth is that difficult times are ahead for all of us.
It has become clear that nobody in Washington is going to be coming riding to the rescue.
The debt-fueled years when “easy money” was flowing like wine have come to an end, and now a whole lot of pain is on the horizon.
Sadly, most Americans still do not understand that a great economic storm is rapidly approaching, and that is extremely unfortunate.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Article cross-posted from The Economic Collapse Blog.
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.
