Submitted by Michael Snyder via The Economic Collapse blog
,
Are you ready for what is coming in
August? All over America, economic, political and
social tensions are building, and the next 30 days could turn out
to be pivotal. In July, we saw things start to turn. As
you will read about below, a major six year trendline for the
S&P 500 was finally broken this month, Chinese stocks crashed,
commodities crashed, and debt problems started erupting all over
the planet.
I fully expect that this next month (August) will be a
month of transition as we enter an extremely chaotic time in the
fall and winter.
Things are unfolding
in textbook
fashionfor another major global financial crisis in the months
ahead, and yet most people refuse to see what is happening.
In their blind optimism, they want to believe that things
will somehow be different this time. Well, the coming
months will definitely reveal who was right and who was
wrong. The following are 11 red flag events that just
happened as we enter the pivotal month of August 2015…
#1Puerto Rico is going to default on a 58 million
dollar debt payment
that is due on
Saturday. Even though this has
serious
implicationsfor the U.S. financial system, Barack Obama has
said that there will be no bailout for “America’s Greece”.
#2As James Bailey has pointed out, the most
important trendline for the S&P 500
has finally been
brokenafter holding up for six years. This is a critical
technical signal that will likely motivate a significant number of
investors to sell off their holdings in the weeks ahead.
#3The IMF is indicating that it will not take part
in the new Greek debt deal. As a result, the whole thing
may completely
fall apart…
Leaked minutes of the fund’s latest board meeting, which took
place on Wednesday, showed staff “
cannot reach agreement at this stage” on whether
to take part in the new €86bn (£60bn) bailout for Greece. The
document said there were doubts over the capacity of the Athens
Government to implement economic reforms, as well as the over the
sustainability of the country’s sovereign debt pile, which is now
projected to hit 200 percent of GDP.
The German Chancellor, Angela Merkel, only sanctioned a new
Greek deal earlier this month
on the condition that the IMF takes part.
#4Italy is going down the exact same path as
Greece, but Italy is going to be a much larger problem for Europe
because it has a far, far larger economy. This week, we
learned that youth unemployment in Italy has reached a 38-year high
of
44 percent, and Italy’s debt
to GDP ratio has now hit
135 percent.
#5The Canadian economy has officially entered
a new recession.
This is something that was not supposed to happen.
#6The price of oil plummeted
close to 20
percentduring the month of July. It was the worst month
for the price of oil that we have seen
since October 2008,
which just happened to be during the height of the last financial
crisis.
#7Commodities just had their worst month
in almost four
years. As I have written about previously, we witnessed
a collapse
in commodity pricesjust before the stock market crash of 2008
too.
#8Thanks to Barack Obama, the U.S. coal industry
is imploding, and some of the largest coal producers in the entire
country have just announced that they are
declaring
bankruptcy…
On Thursday, Bloomberg reported that the biggest American
producer of coking coal, Alpha Natural Resources,
could file for
bankruptcyas soon as Monday.
Competitor
Walter Energy filed for bankruptcy earlier this month, and
several others have done the same this year.
#9For the month of July, the Shanghai Composite
Index was down
13.4 percent.
Despite unprecedented government intervention to prop up the
market, it was the worst month for Chinese stocks since October
2009.
#10A major red flag that a recession in the United
States is fast approaching is the fact that Exxon Mobile just
announced their worst earnings for a single quarter
since 2009. Compared
to the same time period one year ago, Exxon Mobile’s earnings were
down 51 percent.
#11Chevron is another oil giant that has seen
earnings plunge. In the second quarter of this year,
Chevron’s earnings were down an eye-popping
90 percentfrom a year
ago.
And in this list I didn’t even mention the economic chaos that
is happening down in South America. For full coverage of
that, please see my previous article entitled “
The South American Financial Crisis Of
2015“.
To a certain extent, I can understand why most Americans are not
alarmed about the months ahead. The relative stability of the
past several years has lulled most of us into a false sense of
security, and the mainstream media is assuring everyone that
everything is going to be just fine and that brighter days are
ahead. At this point, many believe that it is patently absurd
to suggest that we could see an
economic collapse
in 2015. But of course even though the signs were
glaringly apparent, very few of us anticipated the financial crisis
of 2008 either.
A few weeks ago, I authored a piece entitled “
The Last Days Of ‘Normal Life’ In America“, and I stand by
every single word of that article. I truly believe that the
era of debt-fueled prosperity that we have been enjoying for so
long is coming to an end, and our standard of living will never
again get back to this level.
Just yesterday, I had the chance to go over and stock up on some
emergency supplies at a dollar store. It always astounds me
what you can still buy for a dollar. The combined cost of raw
materials, manufacturing, packaging, shipping and retailing most of
these items shouldn’t be less than a dollar, but thanks to having
the reserve currency of the world we are still able to go to these
big box stores and fill up our carts with lots and lots of
extremely inexpensive merchandise.
Unfortunately, this massively inflated standard of living is
going to come crashing to a halt. This next financial crisis
is going to destroy the system that is currently producing such
comfortable lifestyles for the vast majority of us, and that will
be an extremely painful experience.
So enjoy this summer for as long as it lasts. Even though
August threatens to be pivotal, it is going to be nothing compared
to what will follow.
Fall and winter are coming.
Prepare while there is still time to do so.
