Michael Snyder writes:
Mainstream news outlets are already starting to use the phrase "economic collapse" to describe what is going on in some areas of our world right now.
For many Americans this may seem a bit strange, but the truth is that the worldwide economic slowdown that began during the second half of last year is starting to get a lot worse.
In this article, we are going to examine evidence of this from South America, Europe, Asia and North America. Once we are done, it should be obvious that there is absolutely no reason to be optimistic about the direction of the global economy right now. The warnings of so many prominent experts are now becoming a reality, and what we have witnessed so far are just the early chapters of a crushing economic crisis that will affect every man, woman and child in the entire world.
Let's start with Brazil. It has the seventh largest economy on the entire planet, and it is already enduring its worst recession in 25 years. In fact, at the end of last year, Goldman Sachs said that what was going on down there was actually a "depression."
But now the crisis in Brazil has escalated significantly.
I want to share with you an excerpt from a recent article titled "Brazil: Economic collapse worse than feared." I know, that title sounds like it comes directly from The Economic Collapse Blog, but I didn't write it.
It actually comes from CNN.
Amid political chaos, Brazil's economic collapse is worse than its government once believed.
In the midst of rising calls to impeach President Dilma Rousseff, Brazil's central bank announced Thursday that it now expects the country's economy to shrink 3.5% this year.
That's worse than the central bank's previous estimate for a 1.9% contraction. The darker forecast matches what the International Monetary Fund projected for Brazil — Latin America's largest country — and what many independent economists have suspected.
It is one thing for Michael Snyder to tell you that Brazil is in the midst of "economic collapse," but it is another thing entirely for CNN to say it.
And of course, I have been warning about the crisis down in Brazil for quite some time now. For much more on this, please see my previous article, titled "The Economic Collapse of South America Is Well Underway."
Meanwhile, things are actually much worse in Venezuela than they are in Brazil. Food and basic supplies are in short supply, the inflation rate has hit 720 percent, and crime is completely out of control.
The following is from an article in the Independent called "Venezuela is on the brink of complete economic collapse":
The only question now is whether Venezuela's government or economy will completely collapse first.
The key word there is "completely." Both are well into their death throes. Indeed, Venezuela's ruling party just lost congressional elections that gave the opposition a veto-proof majority, and it's hard to see that getting any better for them any time soon — or ever.
Incumbents, after all, don't tend to do too well when, according to the International Monetary Fund, their economy shrinks 10 percent one year, an additional 6 percent the next, and inflation explodes to 720 percent. It's no wonder, then, that markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt.
Once again, we see a very respected mainstream publication using the phrase "economic collapse" to describe what is happening in South America.
You can find some stunning video of the "economic Armageddon" that is taking place in Venezuela right here. I would encourage you to watch that video, because what is happening down there will eventually be happening here.
Meanwhile, over in Europe, the collapse of the Italian banking system has entered a disturbing new chapter. Italy's finance minister has called a meeting in Rome for Monday that will be focusing on a "last resort" bailout plan for the troubled banks.
Finance minister Pier Carlo Padoan has called a meeting in Rome on Monday with executives from Italy's largest financial institutions to agree final details of a "last resort" bailout plan.As Italy descends into financial chaos, the rest of the continent better be paying attention.
Yet on the eve of that gathering, concerns remain as to whether the plan will be sufficient to ringfence the weakest of Italy's large banks, Monte dei Paschi di Siena, from contagion, according to people involved in the talks.
Italian bank shares have lost almost half their value so far this year amid investor worries over a €360bn pile of non-performing loans — equivalent to about a fifth of GDP. Lenders' profitability has been hit by a crippling three-year recession.
Do you remember how hard it was for the rest of Europe to rescue Greece?
Well, Greece has the 44th largest economy on the planet.
Italy has the eighth.
It would be hard to overstate the seriousness of what is going on over in Europe, and it is not just Italy we are talking about. All over the continent, major banks are in deep trouble, and the chairman of France's second largest retail bank recently told reporters that "I am much more worried than I was in 2009."
And there is very good reason for concern. On Sunday, we learned that a major "bail-in" had just been announced for one of Austria's most prominent banks. The following comes from Zero Hedge:
And then today, following a decision by the Austrian Banking Regulator, the Finanzmarktaufsicht or Financial Market Authority, Austria officially became the first European country to use a new law under the framework imposed by Bank the European Recovery and Resolution Directive to share losses of a failed bank with senior creditors as it slashed the value of debt owed by Heta Asset Resolution AG.The dominoes are starting to fall in Europe, and I would expect even bigger announcements in the weeks and months to come.
The highlights from the announcement:
Today, the Austrian Financial Market Authority (FMA) in its function as the resolution authority pursuant to the Bank Recovery and Resolution Act (BaSAG – Bundesgesetz über die Sanierung und Abwicklung von Banken) has issued the key features for the further steps for the resolution of HETA ASSET RESOLUTION AG. The most significant measures are:
According to the current resolution plan for HETA, the wind-down process should be concluded by 2020, although the repayment of all claims as well as the legally binding conclusion of all currently outstanding legal disputes will realistically only be concluded by the end of 2023. Only at that point will it be possible to finally distribute the assets and to liquidate the company.
- a 100% bail-in for all subordinated liabilities,
- a 53.98% bail-in, resulting in a 46.02% quota, for all eligible preferential liabilities,
- the cancellation of all interest payments from 01.03.2015, when HETA was placed into resolution pursuant to BaSAG,
- as well as a harmonisation of the maturities of all eligible liabilities to 31.12.2023.
Over in Asia, economic chaos is beginning to prevail as well.
In China, the stock market is already down more than 40 percent from the peak, Chinese exports were down 25.4 percent on a year over year basis in February, and Chinese economic numbers overall have not been this poor since the depths of the last global recession.
At the same time, the Japanese economy is really struggling right now. As I wrote about the other day, Japanese GDP has shrunk for two out of the last three quarters, we just saw Japanese industrial production experience the biggest one month decline that we have witnessed since the tsunami of 2011, and business sentiment has fallen to a three-year low. The Nikkei has dropped by about 5,000 points from where it was last summer, and some analysts believe that Japanese markets "are being destroyed" due to massive intervention by the Bank of Japan.
Here in the United States, we haven't been hit quite as hard as the rest of the world just yet, but there are lots of very disturbing warning signs all around us.
At the end of last week, we learned that it is being projected that U.S. GDP will have grown by just 0.1 or 0.2 percent during the first quarter of 2016. And on Monday corporate earnings reporting season begins, and it is expected to be a very, very bad one. The following comes from Business Insider:
We are about to get confirmation that earnings growth for America's biggest companies was negative in the first quarter, compared to the same period a year ago.If these projections turn out to be accurate, it will be the fourth quarter in a row of earnings declines. This is something that we never see outside of a recession.
When aluminum giant Alcoa releases its results on Monday, it will mark the unofficial start of the heaviest reporting season for S&P 500 companies.
The final scoreboard is expected to show a 9.1% earnings drop for the quarter, according to FactSet senior earnings analyst John Butters.
And for a whole bunch more numbers which indicate that the U.S. economy is in very serious trouble, please see my previous article titled "19 Facts That Prove Things in America Are Worse Than They Were 6 Months Ago."
Of course I am just another voice in the crowd when it comes to predicting that the U.S. economy is headed for rough times. For example, just check out what Societe Generale economist Albert Edwards is saying.
A tidal wave is coming to the US economy, according to Albert Edwards, and when it crashes it's going to throw the economy into recession. ...He continued:
The profit recession facing American corporations is going to lead to a collapse in corporate credit.
"Despite risk assets enjoying a few weeks in the sun our fail-safe recession indicator has stopped flashing amber and turned to red."
Whole economy profits never normally fall this deeply without a recession unfolding. And with the US corporate sector up to its eyes in debt, the one asset class to be avoided — even more so than the ridiculously overvalued equity market — is US corporate debt. The economy will surely be swept away by a tidal wave of corporate default.As you can see, it isn't just one nation or one region of the world that we need to be concerned about.
Economic chaos is erupting literally all over the planet, and global leaders are starting to panic.
Unfortunately, they have had seven years to try to fix things since the last global recession, and they didn't get the job done. Anyone who believes that by some miracle they will be able to pull us out of the fire this time and that everything will somehow be OK is simply engaged in wishful thinking.
Michael T. Snyder is the publisher of The Economic Collapse Blog and author of The Beginning of the End.
Signs are emerging. The Ecstatic of Tours told us that: "Before the war breaks out again, food will be scarce and expensive*. There will be little work for the workers, and fathers will hear their children crying for food. There will be earthquakes and signs in the sun. Toward the end, darkness will cover the earth. When everyone believes that peace is assured, when everyone least expects it, the great happening will begin. Revolution will break out in Italy almost at the same time as in France. For some time the Church will be without a Pope."
Our Lady told Fr. Stephano Gobbi on November 15, 1990, at Malvern Pennsylvania: "I announce to you that the hour of the great trial is on the point of arriving. The great trial has arrived for your country. How many times, as a concerned and sorrowing mother, have I endeavored to urge my children to follow the path of conversion and of return to the Lord. I have not been listened to. You have continued to walk along the way of rejection of God, and of His law of love. Sins of impurity have become ever more widespread, and immorality has spread like a sea which has submerged all things. Homosexuality, a sin of impurity which is against nature, has been justified; recourse to the means of preventing life have become commonplace, while abortions - these killings of innocent children, that cry for vengeance before the face of God - have spread and are performed in every part of your homeland.The moment of divine justice and of great mercy has now arrived.
You will know the hour of weakness and of poverty; the hour of suffering and defeat; the purifying hour of the great chastisement. The great trial has arrived for your Church. How great is your responsibility, O Pastors of the Holy Church of God! You continue along the path of division from the Pope and of the rejection of his Magisterium; indeed, in a hidden way, there is in preparation a true schism which could soon become open and proclaimed...And then, there will remain only a small faithful remnant, over which I will keep watch in the garden of my Immaculate Heart.
The great trial has arrived for all humanity. The chastisement, predicted by me at Fatima and contained in that part of the secret which has not yet been revealed, is about to take place. The great moment of divine justice and of mercy has come upon the world."
We are being prepared for the Reign of Antichrist. The Rev. P. Huchede, in his work entitled "History of Antichrist," explains the religious preparation, both intellectual and moral, for the Reign of Antichrist which will arrive after economic collapse:
"But how shall he deprive the world of Christianity and have himself adored as God? Alas, it is only too true that the minds and hearts of men are admirably disposed for revolution and consequently ready to accept and bear the cruel yoke of such a tyrant. Revolution as the word itself implies means a subversion, but a subversion of all that is true, good, beautiful, and grand in the universe. It is the subversion of religion, representing its dogmas as myths and its moral teachings as tyranical. It is the subversion of authority. Licentiousness under the name of liberty becomes the order of the day; each one is invested with the right to govern himself. It is the subversion of reason: and do we not find leading minds in some of the most enlightened nations denying the principle of contradiction and maintaining the absolute identity of all beings? Revolution is therefore essentially destructive, and it becomes cosmopolitan by the action of secret societies scattered throughout the world. Is it not true to say that the 'mystery of iniquity' is prepared in secret revolutionary dens? But it does not suffice to destroy; it is absolutely necessary to build up again. The world cannot subsist long in a vacuum. It must have a religion; it must have a philosophy; it must have an authority. Revolution will furnish all these. Instead of the reasonable and supernatural religion of Jesus Christ, Revolution will preach Pantheism. The God-humanity will impart the theurgic spirit and thus lead men to adore the demon as the author of universal emancipation...What frightful immorality must follow in the train of this shameless prostitution of religion! Never has the threefold concupiscence made greater ravage among mankind. And this is the religion sought and hoped for as the cherished boon of the aspirations of our modern free thinkers. To our Christian philosophy, the honor of humanity's revolution will substitute a babel of extravagant and absurd ideas. Instead of a mild and efficient authority consecrated alike by Church and state, despotism* and anarchy will rise up and contend for the shreds of religious liberty and human policy...if the state of perversion continue for a while longer, he [Antichrist] will find the world prepared to receive and serve him." (Rev. P. Huchede, History of Antichrist, pp. 13-14, Tan Books).
Is there really any doubt that we are now on the verge of a One World Government which will be eventually led by the Son of Perdition? Men are ready to worship and adore the demon. Those whose names are not written in the Book of Life, that is, who are not consecrated to the Immaculata. But first we must have economic collapse.
At his Blog, Mark Mallett writes, "world bodies such, as the International Monetary Fund, who are increasingly warning that America’s foundations are beginning to crumble under its enormous debt. I have written before that Revolution is coming. But it will only come when the social order has been sufficiently destabilized, and then, the opportunity for a new political order is possible. That destabilization is coming hard and fast, it seems, as unemployment and poverty in the U.S. rises and the possibility for social chaos, such as we see breaking out in other third world countries, becomes less remote. Far from a speculation, several popes have been warning for decades that such a revolution has been the intention all along of secret societies working parallel to governments...With the collapse of the United States, the door will be open for a new super-power—or super-world government—to assert a mode of governance that does not place the intrinsic freedom and dignity of the human person at its center, but instead profitability, efficiency, ecology, the environment, and technology as its primary goal."
The hearts of men are growing ever colder. As multi-millionaires and billionaires accumulate more and more wealth, many cities have witnessed tent cities spring up. Some estimate the number of unemployed at over 30 million. Many have given up and many more are well on their way to doing so. It is an evil time. A time prophesied some 1,600 years ago by Saint Nilus: "After the year 1900, toward the middle of the 20th century, the people of that time will become unrecognizable. When the time for the Advent of the Antichrist approaches, people's minds will grow cloudy from carnal passions, and dishonor and lawlessness will grow stronger. Then the world will become unrecognizable. People's appearances will change, and it will be impossible to distinguish men from women due to their shamelessness in dress and style of hair. These people will be cruel and will be like wild animals because of the temptations of the Antichrist. There will be no respect for parents and elders, love will disappear, and Christian pastors, bishops, and priests will become vain men, completely failing to distinguish the right-hand way from the left. At that time the morals and traditions of Christians and of the Church will change. People will abandon modesty, and dissipation will reign. Falsehood and greed will attain great proportions, and woe to those who pile up treasures. Lust, adultery, homosexuality, secret deeds and murder will rule in society."