If you think the economy is bad now, I’d hate to tell you but the problems are far from over!
Are you concerned about the state of the U.S. economy? You should be. The current banking crisis is a ticking time bomb that threatens to rock the entire financial system. From soaring inflation to steep interest rates, there are a numerous of warning signs that we can’t afford to ignore.
Here is why you should be preparing for trouble from the current banking crisis:
The Banking Collapse Of 2023 Is LARGER Than The Banking Collapse Of 2008
While the bullshit artists in the media won’t tell you this, the three big banks that collapsed in 2023 had more assets than all 25 banks that collapsed in 2008. And, the crisis is far from over.
When Silicon Valley Bank and Signature Bank went down, we warned our readers that it was only the tip of the iceberg. Now, we’re seeing even more banking failures. First Republic has collapsed, and PacWest, Western Alliance, First Horizon, and many other regional banks are rumored to be on the chopping block. But hey, don’t take our word for it, just check out their crashing stock prices.
It’s a disaster out there for US regional bank stocks this year!
PacWest has plummeted 75%, with Metropolitan Bank following closely behind at 60% in the red. First Horizon is down 57%, Western Alliance down 53%, and Comerica has taken a 46% hit! This isn’t just a bad year for these banks, it’s a nightmare!
Higher Interest Rates Are on the Horizon
The Federal Reserve has done it again! They have raised their key federal funds rate to over 5%, marking a 16-year high. This move is supposedly aimed at curbing inflation, but it seems like the average American is the one who will bear the brunt of it. The Fed’s actions will have severe consequences for consumers, as it will make it harder for them to borrow and spend money.
Things are bad, and now that the Fed has decided to raise interest rates again, they will soon get even worse. Higher interest rates can lead to a decrease in borrowing and spending, which can hurt economic growth. This is especially true in the housing market, where rising rates can make it harder for people to afford homes, potentially leading to a real estate crisis.
During a housing market collapse, foreclosures can skyrocket due to homeowners being unable to make their mortgage payments due to higher interest rates. This can lead to a glut of homes on the market, causing prices to drop. As a result, a vicious cycle of more foreclosures, more homes on the market, and even lower prices can occur. This can have a ripple effect on the economy, leading to job losses, decreased consumer spending, and overall economic downturn.
Small Businesses Will Suffer
The downturn of midsize regional banks will hurt commercial lending to small businesses. Seizing and selling small banks could create a credit crunch, especially in lower-income US regions. With rapidly rising interest rates creating perilous conditions for banks, looming panic in the real estate sector, and fears of a recession on the rise, further instability seems more likely than not.
According to the NFIB Small Business Optimism Index, small businesses are grappling with historic inflation, chronic labor shortages, and a bleak economic outlook.
One of the biggest concerns for small business owners is the expectation of worsening business conditions in the coming months. As many as 45 percent of small business owners believe that the economy will continue to deteriorate, making it difficult for them to operate and stay afloat.
Adding to their woes is the challenge of hiring new employees. In January, 57 percent of small businesses tried or hired new staff, but a shocking 91 percent of small business owners reported few or no qualified applicants for the positions they were trying to fill. This is particularly true in blue-collar industries like construction, transportation, and manufacturing, which have been hit the hardest.
Small businesses are also suffering from the inflation crisis that has been exacerbated by the policies of the current administration. The NFIB Small Business Optimism Index revealed that 42 percent of small businesses had to raise their prices in the month of January to keep up with the rising costs of goods and services. Additionally, 46 percent of small businesses had to raise employee pay to help their staff keep up with the worst inflation crisis in 41 years.
As a result of these challenges, small businesses are struggling to stay afloat. They are facing tremendous pressure to raise prices on their customers, which could lead to a decrease in consumer spending and further harm their business prospects. It’s crucial for policymakers to address these challenges and support small businesses as they work to weather this storm. Without adequate support, many small businesses may be forced to close their doors, leading to devastating consequences for the American economy.
National Debt Is Skyrocketing
The national debt in the United States is skyrocketing and no one seems to care! In just three years, the US has added $8 trillion in debt, bringing the total debt to a whopping $22 trillion since 2008. It’s absolutely insane to think that it took 230 years for the US to accumulate the first $8 trillion in debt, and now it only takes a few years to add the same amount.
But it gets worse. The estimated total US debt within the next 10 years is a staggering $50 trillion with an annual interest expense of over $1 trillion. Can you imagine? Interest payments will soon be the largest expense of the US government. How is this sustainable? How can we allow our government to continue down this path of financial ruin?
Are you Prepared?
The current banking crisis is not to be taken lightly, it is one of the biggest threats we are facing today. Don’t wait for the mainstream media to tell you how bad it is, take action now to protect yourself and your loved ones. It’s time to prepare for the worst and hope for the best.
We advise reading our article on Preparing for an Economic Collapse. We talk about the history of economic collapses, list the steps you need to take, and talk about what will most likely happen when the banking system goes down. You can read the article here.
Be Prepared to Feed Yourself when the Collapse Hits!
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