Free Republic
Browse · Search
General/Chat
Topics · Post Article

Skip to comments.

The U.S. Economy Has Collapsed: “This Is A Monstrous Negative Revision”
SHTFplan.com ^ | 6.24,2014 | Mac Slavo

Posted on 06/25/2014 1:31:56 PM PDT by Signalman

For months the administration, financial pundits and Wall Street analysts made it a point to inform Americans about the healthy state of our economy. One of the key metrics they’ve used as proof of recovery was the Gross Domestic Product (GDP) which measures the productive output of the U.S. economy as a whole.

Earlier this year the U.S. Bureau of Economic Analysis noted that this measure was showing positive growth. But now, after a second official revision, all of that purported growth used to goad consumers into spending more money on homes, cars and other goods has been revealed to be nothing but conjecture. According to the BEA, not only did economic growth stall during the first quarter of 2014, it completely collapsed, signalling a significant shift in consumption habits amid increasing food and energy prices:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — decreased at an annual rate of 2.9 percent in the first quarter of 2014 according to the “third” estimate released by the Bureau of Economic Analysis.

The government first made consumers believe that the economy grew. Then they revised this down to slight negative growth. The latest revision of -2.9% growth is significant, because even with official inflation at over 2% America’s economic output has declined. It seems that no matter how much money they pump into the system, it isn’t enough to offset the lack of income or job growth.

This is a monstrous negative revision.

A big part of it was non-residential fixed investment. Rather than invest, companies have issued debt and bought back stock. But this does nothing for the economy — it simply blows a bubble in the market. How long before that comes home to roost? Not long now, I suspect.

If you think companies don’t expect a recession inbound, you’re nuts. Inventory draw-downs subtracted 1.7% from the GDP number. Companies don’t build inventories if they don’t think they can sell them — as such this is a forward indicator.

Oh, and current production profits? They’re down while current taxes were up. Obamacare anyone? Worse is that undistributed profits decreased too and this is the second quarter sequentially in which they did. What does a company pay dividends with? Undistributed profits.

So for two quarter the markets has risen like a rocket while the fuel for that rise has been exhausted for the last six months.

This will turn out well, I’m sure.

Officially, we have not yet entered a recession. That requires two quarters of negative growth. However, the current trend indicates that’s exactly what’s going to happen. In the next 30 days the BEA should be releasing the GDP rate for the second quarter of 2014. According to economist John Williams that will more than likely show a negative print and will lead to an official confirmation that the U.S. has entered another recession.

What’s worse, unlike the previous recession that followed the collapse of 2008, there is no way out of this one.

The reason for this is that the consumer is strapped… doesn’t have the liquidity to fuel the growth in consumption.

Income… the median household income, net of inflation, is as low as it was in 1967. The average guy is not staying ahead of inflation.

As a result – personal consumption is more than two thirds of the economy – there’s no way you can have positive sustainable growth in the U.S. economy without the consumer being healthy.

As the renewed downturn gains wider acceptance or wider recognition, that will intensify the selling pressure. When someone starts selling, it’s going to be a race for the door, and I am looking for a dollar selling panic to be the trigger for the onset of hyperinflation.

I don’t see what will save it at this point.

To cries of fear mongering and ‘doom porn’ contrarian economists and analysts warned that these numbers were being fabricated, despite the fact the the underlying fundamentals showed a clear draw-down in consumer confidence, company inventory, home sales and overall spending.

Now all of those warnings are coming to pass.

We have entered the next leg down and given that the governments of the world have pretty much used up all of the arrows in their quivers, there is nothing to stop what’s coming.

And what’s coming is nothing short of a complete collapse of our way of life. Hard to believe? Yes. Implausible? No.

It is so plausible, in fact, that well known radio commentator Mark Levin recently noted that the U.S. government has been actively preparing for and simulating the collapse of our financial system, as well as the widespread violence that will follow.

I’ll tell you what I think they’re simulating.

The collapse of our financial system, the collapse of our society and the potential for widespread violence, looting, killing in the streets, because that’s what happens when an economy collapses.

I’m not talking about a recession. I’m talking about a collapse, when people are desperate, when they can’t get food or clothing, when they have no way of going from place to place, when they can’t protect themselves.

There aren’t enough police officers on the face of the earth to adequately handle a situation like that.

This is happening right here and now. The streets may not devolve into madness tomorrow or next month, but piece by piece the foundations of America’s economic health and social structure are crumbling. The time to finalize preparations for what’s coming is now.

It’s going to go from bad to worse.


TOPICS: Business/Economy
KEYWORDS: collapse; economy; gdp; markets; preppers; recession; shtf
Navigation: use the links below to view more comments.
first 1-5051-55 next last

1 posted on 06/25/2014 1:31:56 PM PDT by Signalman
[ Post Reply | Private Reply | View Replies]

To: Signalman

The only thing “Propping” up the Ecomony right now is the “Propaganda Bubble”....


2 posted on 06/25/2014 1:36:14 PM PDT by GraceG (No, My Initials are not A.B.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

Milton Friedman was right. You can only keep up the illusion of prosperity for only a short time with all that borrowing, printing and squandering of capital with government spending. Also if your regulatory agencies initiate an anti capitalist, anti carbon energy crusade with endless rules regulations and taxes, the private sector slows down considerably. Obama and Bernacke have done more to harm America than any two individuals ever to serve in high office.


3 posted on 06/25/2014 1:38:03 PM PDT by allendale
[ Post Reply | Private Reply | To 1 | View Replies]

To: GraceG

It’s been fiat for probably my entire lifetime. I don’t know if we are near the abyss or not, but we are not the first country to tank and will certainly not be the last. Nothing but are greed and liberalism to blame.


4 posted on 06/25/2014 1:39:24 PM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: appalachian_dweller; OldPossum; DuncanWaring; VirginiaMom; CodeToad; goosie; kalee; ...

Preppers’ PING!!

Time to step it up if you can.


5 posted on 06/25/2014 1:39:29 PM PDT by Kartographer ("We mutually pledge to each other our lives, our fortunes and our sacred honor.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

If one encounters
an Elite
Looking to buy your food
Just lock and load
And blow them away
For Good!


6 posted on 06/25/2014 1:43:55 PM PDT by x1stcav ("The past is a foreign country: they do things differently there.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: x1stcav

Oh, and take their money of course.


7 posted on 06/25/2014 1:44:31 PM PDT by x1stcav ("The past is a foreign country: they do things differently there.")
[ Post Reply | Private Reply | To 6 | View Replies]

To: Signalman

In my view the real SHTF is when the markets start to puke up all the fake money. So far that’s not happening yet, because “everybody” desperately wants to keep the merry-go-round running. It will, but timing is everything.


8 posted on 06/25/2014 1:47:21 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

Has Obama blamed it on Global Warming yet or will that be next week ?


9 posted on 06/25/2014 1:54:19 PM PDT by molson209 (Blank)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

The corrupt MSM goes first.


10 posted on 06/25/2014 1:54:36 PM PDT by Obadiah (None are more hopelessly enslaved than those who falsely believe they are free.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: allendale
Obama and Bernacke have done more to harm America than any two individuals ever to serve in high office.

The Republicans will take over Congress in November and be promptly blamed for the recession.

11 posted on 06/25/2014 1:54:55 PM PDT by Jeff Chandler (Conservatism is the political disposition of grown-ups.)
[ Post Reply | Private Reply | To 3 | View Replies]

To: Jeff Chandler

“The Republicans will take over Congress in November and be promptly blamed for the recession. “

And there will be a resurgence in tent cities, and high fuel prices will be an issue again.


12 posted on 06/25/2014 2:00:18 PM PDT by DonaldC (A nation cannot stand in the absence of religious principle.)
[ Post Reply | Private Reply | To 11 | View Replies]

To: Signalman

With the media running Baghdad Bob interference? Yeah, buy some silver


13 posted on 06/25/2014 2:02:10 PM PDT by Viennacon (Rebuke the Repuke!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: nascarnation

+1. The Dow 17,000 mark isn’t far off, either.


14 posted on 06/25/2014 2:08:38 PM PDT by carriage_hill ( Incoming fire always has the right of way.)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Signalman

At least we are in the [food] growing season.


15 posted on 06/25/2014 2:13:32 PM PDT by Blueflag (Res ipsa loquitur: non vehere est inermus)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GraceG

bump


16 posted on 06/25/2014 2:13:54 PM PDT by GeronL (Vote for Conservatives not for Republicans)
[ Post Reply | Private Reply | To 2 | View Replies]

To: nascarnation

In Zimbabwe the stock market soared while the people were collecting wheebarrows full of paper money to buy a loaf of stale bread. Inflation also inflates stock prices I guess


17 posted on 06/25/2014 2:15:11 PM PDT by GeronL (Vote for Conservatives not for Republicans)
[ Post Reply | Private Reply | To 8 | View Replies]

To: GeronL

I agree.
This is treacherous territory.
But fortunes are made in treacherous times.
I want to be a junior version of John Paulson 2008.


18 posted on 06/25/2014 2:16:51 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
[ Post Reply | Private Reply | To 17 | View Replies]

To: GraceG
the only thing propping up the economy right now is the "propaganda bubble"

That and the near-zero interest rates on savings. When one sells stock, they have to pay capital gains, so they don't have the full amount for themselves. And what they do have brings in no interest on savings. Besides that, they lose out on dividends. People feel trapped and have decided to "sell" when the prices start declining.

Only.....SURPRISE....the big boys will know ahead of time when to burst the bubble and they'll take their profits. For the rest of us, prices will drop like a rock before we can even get a bid in.

The thing is, the ptb want it that way. Otherwise, CDs and other safe savings would be paying 1% now, 2% soon after. That's the only way to gradually deflate the bubble.

19 posted on 06/25/2014 2:20:31 PM PDT by grania
[ Post Reply | Private Reply | To 2 | View Replies]

To: Signalman

Just received word from my accountants that new IRS Form 720 needs to be filled out.
Form 720 is a quarterly Federal Excise Tax...it is part of Obamacare (I believe). I have 3 employees so the cost to me is $2.00 per employee). $ 6.00 total. I figure by the time this is filled out and process the end results will be a loss of money to the gubment. How much will it cost them to keep audit me and process 6 bucks?


20 posted on 06/25/2014 2:20:56 PM PDT by IC Ken
[ Post Reply | Private Reply | To 1 | View Replies]

To: IC Ken

http://www.franczek.com/frontcenter-1195.html


21 posted on 06/25/2014 2:23:18 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
[ Post Reply | Private Reply | To 20 | View Replies]

To: nascarnation

We are likely going into a depression, the lies from the MSM are just to be expected.

The economy shrinks by 2.9% and they yell “recovery”, if you take inflation into account this means Americans are probably 5% poorer than last year.


22 posted on 06/25/2014 2:23:52 PM PDT by GeronL (Vote for Conservatives not for Republicans)
[ Post Reply | Private Reply | To 18 | View Replies]

To: GeronL

It will be ugly.
But it would be less ugly if we got rich during the process.


23 posted on 06/25/2014 2:27:09 PM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
[ Post Reply | Private Reply | To 22 | View Replies]

To: Signalman

I am convinced that the downward revision for the first quarter to negative 2.9 percent from negative 1.2 percent is to “prevent” a new Obama recessions. A recession is defined as two quarters of negative growth in the GDP. If the “real” numbers for the second quarter is negative 1.6 percent from the unrevised number, the second quarter will show a positive 0.1 percent growth in GDP.


24 posted on 06/25/2014 2:37:16 PM PDT by MIchaelTArchangel (Have a wonderful day!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jeff Chandler

“The Republicans will take over Congress in November and be promptly blamed for the recession.”

The dems will blame repubs and the repubs will blame the dems .

Hillary will blame both and claim a “Third Way” is needed.

She will run third party “Third Way” and as we saw with yesterdays vote, the black drones will vote anyway they are told to vote.


25 posted on 06/25/2014 2:45:57 PM PDT by IMR 4350
[ Post Reply | Private Reply | To 11 | View Replies]

To: nascarnation
“SHTF is when the markets start to puke up all the fake money”

My guess is that the spewing commences mid-2016.

26 posted on 06/25/2014 2:50:28 PM PDT by RS_Rider (I hate Illinois Nazis)
[ Post Reply | Private Reply | To 8 | View Replies]

To: Signalman

Ping for later


27 posted on 06/25/2014 2:56:23 PM PDT by servantboy777
[ Post Reply | Private Reply | To 1 | View Replies]

Comment #28 Removed by Moderator

To: Signalman
Having published a book on preparedness for just such an event ("When There is No FEMA - Survival for Normal People in (Very) Abnormal Times"), I've done the best I can to hedge my bets. Keeping my fingers crossed that it proves to be an adequate hedge.

More recently I have just relocated my household to our permanent bug-out location. These days all our eggs are coming straight from the chicken!

29 posted on 06/25/2014 3:05:30 PM PDT by The Duke ("Forgiveness is between them and God, it's my job to arrange the meeting.")
[ Post Reply | Private Reply | To 1 | View Replies]

To: Obadiah
"The corrupt MSM goes first."

So true.
Chop off their heads!
Then next, the politicians.

30 posted on 06/25/2014 3:34:02 PM PDT by StormEye
[ Post Reply | Private Reply | To 10 | View Replies]

To: GraceG

Exactly! CNBC and the WSJ!


31 posted on 06/25/2014 3:41:11 PM PDT by fortheDeclaration (Pr 14:34 Righteousness exalteth a nation:but sin is a reproach to any people)
[ Post Reply | Private Reply | To 2 | View Replies]

To: grania

[ the only thing propping up the economy right now is the “propaganda bubble”

That and the near-zero interest rates on savings. ]

And when that savings one Bursts all we will have is the propaganda to prop it up....


32 posted on 06/25/2014 3:46:14 PM PDT by GraceG (No, My Initials are not A.B.)
[ Post Reply | Private Reply | To 19 | View Replies]

To: RS_Rider
My guess is that the spewing commences mid-2016.

You are more of an optimist than I, sir.

33 posted on 06/25/2014 4:22:39 PM PDT by grobdriver (Where is Wilson Blair when you need him?)
[ Post Reply | Private Reply | To 26 | View Replies]

To: Obadiah

Of course. Traitors should hang.


34 posted on 06/25/2014 4:45:04 PM PDT by Lee'sGhost ("Just look at the flowers, Lizzie. Just look at the flowers.")
[ Post Reply | Private Reply | To 10 | View Replies]

To: Signalman

It’s a race to the bottom; a depressive economy with slowing money velocity vs quantitative easing. There is a lot of debt out there, consumer, financial, corporate, and government. The demographic trends in the developed countries don’t look good; there won’t be enough young people to support pensioners, and provide the big consumer demand needed to support the economy.


35 posted on 06/25/2014 5:05:18 PM PDT by grumpygresh (Democrats delenda est. New US economy: Fascism on top, Socialism on the bottom.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: GraceG

We never left the 2008 recession. Now we are going to devolve into a depression. It will happen over time but escalating as it moves forward and made worse by the destructive commie in the Whitehouse.

If you are not prepared use the short time left to get stocked up.


36 posted on 06/25/2014 5:09:10 PM PDT by Georgia Girl 2 (The only purpose o f a pistol is to fight your way back to the rifle you should never have dropped.)
[ Post Reply | Private Reply | To 2 | View Replies]

To: Signalman
when they can’t protect themselves.

There aren’t enough police officers on the face of the earth to adequately handle a situation like that.

I'm sure this will come as a surprise to the author but protecting citizens is not the function of police officers. They investigate and solve crimes already committed.

37 posted on 06/25/2014 5:51:53 PM PDT by OldPossum ("It's" is the contraction of "it" and "is"; think about ITS implications.)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

This thread and all the comments are so depressing!

Prepared, but for what is coming and for how long???


38 posted on 06/25/2014 6:01:32 PM PDT by 3D-JOY
[ Post Reply | Private Reply | To 1 | View Replies]

To: Signalman

Good grief. SMDH.


39 posted on 06/25/2014 6:02:08 PM PDT by Wyatt's Torch
[ Post Reply | Private Reply | To 1 | View Replies]

To: Jeff Chandler

-— The Republicans will take over Congress in November and be promptly blamed for the recession. -—

You can bank on that. The homeless may also return. It’s surprising that there haven’t been any homeless people in this depression...


40 posted on 06/25/2014 6:17:15 PM PDT by St_Thomas_Aquinas ( Isaiah 22:22, Matthew 16:19, Revelation 3:7)
[ Post Reply | Private Reply | To 11 | View Replies]

To: St_Thomas_Aquinas

We don’t hear much about the homeless. The two I have seen recently were both White men.


41 posted on 06/25/2014 6:21:45 PM PDT by combat_boots (The Lion of Judah cometh. Hallelujah. Gloria Patri, Filio et Spiritui Sancto!)
[ Post Reply | Private Reply | To 40 | View Replies]

To: Kartographer

Tried but can’t step up unless I drive to another town for grocery shopping. At the store yesterday they didn’t have the beef fajitas (good sale, boneless and already seasoned) or the whole chickens that were on sale. The bullion advertised wasn’t ever ordered and neither were about 6 other advertised specials that I specifically went for. Had to have the manager substitute another item for a sale item and then only was able to get one instead of stocking up. I had to have someone get the soft drinks (a rarely bought item) from the back. Had to have another employee get bread from the back, too. I bought every single serve beef pot pie they had - 6 (treats for hubby). Another employee admitted they never order what the store supports. Seriously, what store doesn’t have chicken? I know what to expect so never put anything on the groery list that is anything above the basic items but still never come home with more than 1/4-1/3rd of what I went for. But that’s what I’m up against.

Waiting at the checkout, I noticed there was only of those little bottles of energy drink. Just one. The only surprise there was that the shelf wasn’t empty like so many others in the store are. Oh, but they can have over 10 feet of one type of store brand pancake mix.

While at the store, there were two guys with a baby (sigh) who were talking about the illegal kids here and didn’t understand why we brought them over (at least they figured that part of the story out) when they couldn’t vote. I butted in to say it’s because their parents will be here soon to be reunited and they’ll be voting. The guys agreed that we’ll soon have 600 thousand adult illegals soon (that number is too low, dude). I replied if we really wanted the kids deported we’d have dropped them off at their embassies and washed our hands of them.

The icing on the cake was on the drive home and seeing a handmade sign posted on the corner that read, “Deport Obama”.


42 posted on 06/25/2014 6:55:29 PM PDT by bgill
[ Post Reply | Private Reply | To 5 | View Replies]

To: x1stcav

Is that a haiku? :-)


43 posted on 06/25/2014 6:59:48 PM PDT by ottbmare (the OTTB mare, now a proud Marine Mom)
[ Post Reply | Private Reply | To 6 | View Replies]

To: GeronL

Gas prices jumped this week.

There was a guy with a workman vest on standing in my driveway today so asked what he was doing. He is with a company that contracts with utilities to go around and log with gps where every pole is located and what lines and connections are on each in case of repairs. He also had to get into the yard to check the meter. Yes, we were previously notified they’d be doing this. That’s all well and good, but one would think the utility company would already know where their poles were and everything about your meter. As for the gps, that’s just an expensive wasteful hoo-ha because when the power/cable/phone goes out, you give them your name/account number/address not your gps location. Makes you wonder.


44 posted on 06/25/2014 7:09:18 PM PDT by bgill
[ Post Reply | Private Reply | To 17 | View Replies]

To: Lee'sGhost

There’s a moneymaker - manufacturing rope.


45 posted on 06/25/2014 8:06:35 PM PDT by NTHockey (Rules of engagement #1: Take no prisoners. And to the NSA trolls, FU)
[ Post Reply | Private Reply | To 34 | View Replies]

To: DonaldC
thx Donald....a voice of reason....this country lasted 200 yrs and now we're done....many, many countries fail yet survive....

I think we'll survive, but we won't be happy....will think lovingly of days gone by, when HOPE ruled the day...that your children were absolutely going to do better than you and your grankids even better....

I guess I just miss the hope....

46 posted on 06/25/2014 9:37:48 PM PDT by cherry
[ Post Reply | Private Reply | To 4 | View Replies]

To: ottbmare

‘Is that a haiku? :-)’

This sort of thing sometimes happens when I’m drunk-posting.

As I look at it I don’t think it’s so much haiku as a take off on Kipling’s ‘British Soldier’ poem.

But, I could be very wrong.


47 posted on 06/26/2014 3:54:24 AM PDT by x1stcav ("The past is a foreign country: they do things differently there.")
[ Post Reply | Private Reply | To 43 | View Replies]

To: GeronL
That is true only in terms of the Zimbabwe dollar. Sure the market went up x%. Prices of anything an average Zimbabwean would want to purchase went up x% x 20.

Dow 30K with a loaf of bread at $15 and a gallon of gas at $25 will not matter too much.

48 posted on 06/26/2014 5:33:00 AM PDT by zek157
[ Post Reply | Private Reply | To 17 | View Replies]

To: zek157
Several years ago we had a housing bubble because people with no investment in their property found themselves upside down and rent was cheaper than paying their high payments and then housing prices fell.

Soon people again won't have money to pay their mortgages even though they have worked decades to pay for it they will lose their homes. Who will end up with all those homes? All those financial institutions that Quantitative easing went to. People will be paying rent to the leaches that Obama gave all our money to.

The liars in the press will not likely survive. People starving and homeless don't have a lot to lose and take revenge.

I highly recommend to all my friends, get out of debt and the first debt to get rid of is your mortgage. There are a variety of ways to get the mortgage paid down quickly. Don't treat your self to any luxury, use all available cash to apply to the principal of you mortgage. When you do this a higher percentage of every payment goes to the principal helping you to get rid of the debt even faster.
Don't wait until the end of the year, everytime you can squeeze the minimum amount your mortgage company will take give it to them. and get your interest payments reduced. Most companies will accept $1000.00. That sounds like a lot but isn't what it used to be and the mortgage companies haven't raised it yet.

Once the home prices fall you won't be able to sell your home for what you owe on it. You may have relatives who will want to come and live with you if you have a secure place to live. That may not be all bad, having someone there all the time would be a good thing. They might even be able to pay some rent. If you have a basement it can be lived in even if it isn't finished.

I hate to see all this coming but don't see anyway around it.

49 posted on 06/26/2014 8:04:10 AM PDT by JAKraig (Surely my religion is at least as good as yours)
[ Post Reply | Private Reply | To 48 | View Replies]

To: JAKraig

Well if you’re correct, we can both be the next John Paulson and laugh at everybody else!


50 posted on 06/26/2014 8:06:06 AM PDT by nascarnation (Toxic Baraq Syndrome: hopefully infecting a Dem candidate near you)
[ Post Reply | Private Reply | To 49 | View Replies]


Navigation: use the links below to view more comments.
first 1-5051-55 next last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
General/Chat
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson