Authored by Michael Snyder via The Economic Collapse blog,
Do you remember what happened in 2008? Many people believe that another historic financial disaster is coming and that it will absolutely devastate the U.S. economy. Earlier this week, I wrote about an investor named Michael Burry that has actually bet 1.6 billion dollars that the stock market is going to crash. He made all the right moves in 2008, and he fully intends to be proven right once again in 2023. Of course current conditions definitely resemble 2008 in so many ways. The residential housing market is so dead right now, and commercial real estate prices are plummeting at a very frightening pace. Unfortunately, officials at the Federal Reserve are making it quite clear that they are not done strangling the economy.
This week, mortgage rates jumped above the 7 percent mark to the highest level that we have seen in more than 20 years…
Mortgage rates surpassed 7% this week, hitting the highest level in more than two decades.
The average rate on the popular 30-year fixed mortgage increased to 7.09% this week, up from 6.96% the week prior, according to Freddie Mac’s release on Thursday. That’s the highest point since the first week of April 2002 and marks just the third time rates have exceeded 7% since then. The last times were in October and November of last year, when the rate reached 7.08%.
Needless to say, high mortgage rates have been crippling the housing market in recent months.
At the midpoint of this year, existing home sales were down a whopping 18.9 percent from the same time in 2022…
Total existing-home sales1 – completed transactions that include single-family homes, townhomes, condominiums and co-ops – receded 3.3% from May to a seasonally adjusted annual rate of 4.16 million in June. Year-over-year, sales fell 18.9% (down from 5.13 million in June 2022).
There are certainly lots of people out there that would like to buy homes, but thanks to how high mortgage rates have become they simply cannot afford to do so.
Housing has become extremely unaffordable in this country. According to Redfin, the percentage of teachers that can afford to buy a home close to the school where they work has fallen to just 12 percent…
The number of teachers who can afford a reasonably priced home in their school district nationwide has collapsed to just 12%, down from 17% last summer and 30% in 2019, amid the worst housing affordability crisis in a generation, according to data from Redfin.
Redfin’s analysis of median teacher salaries for 2022 across 50 major cities for over 70,000 PreK-12 public and private schools revealed no teacher in San Jose and San Diego could afford homes within “commuting distances” to their respective school, which means home and work are 20 minutes during typical rush hour conditions.
So much damage has already been done.
But apparently officials at the Federal Reserve believe that even more carnage is necessary, because they are indicating that more rate hikes are on the table…
Most Federal Reserve officials signaled during their July policy-setting meeting that high inflation still poses an ongoing threat that could necessitate additional interest rate hikes this year.
Minutes from the U.S. central bank’s July 25-26 meeting released Wednesday showed that central bank officials observed that inflation remains well above the Fed’s 2% target — and that policymakers need to see “further signs that aggregate demand and aggregate supply were moving into better balance to be confident that inflation pressures were abating.”
No.
Don’t do it.
Even if rates stay at current levels, we are headed for extreme pain.
Raising rates even higher would just be suicidal.
But it looks like they are going to do it anyway, and that could push mortgage rates up to the 8 percent level…
Economists have predicted mortgage rates could go above 8 percent if the economy continues to show signs of strength and the US Federal Reserve decides to raise interest rates again.
Mortgage Rates have not hit such levels since 2000, according to data compiled by Freddie Mac.
Do officials at the Fed actually believe that our system can handle such high rates?
Unless the Fed changes course, the housing market is going to absolutely implode.
And of course the commercial real estate market is already imploding.
The chaos that is already transpiring is putting an enormous amount of strain on our financial institutions, and Fitch is warning that we could soon see sweeping rating downgrades in the banking industry…
A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase
.
The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.
In many ways, I feel like I am watching a repeat of 2008.
Officials at the Fed can clearly see everything that is happening, but they just keep insisting on making things even worse.
So I hope that you have been preparing for turbulent times, because things are going to get crazy.
Sadly, the truth is that most Americans are not prepared for tougher times. In fact, one recent survey discovered that 72 percent of Americans are not financially secure…
For many Americans, payday can’t come soon enough. As of June, 61% of adults are living paycheck to paycheck, according to a LendingClub report. In other words, they rely on those regular paychecks to meet essential living expenses, with little to no money left over.
Almost three-quarters, 72%, of Americans say they aren’t financially secure given their current financial standing, and more than a quarter said they will likely never be financially secure, according to a survey by Bankrate.
Many of those people will lose their jobs during this new economic crisis, and because they don’t have any sort of a financial cushion to fall back on many of them will also end up losing their homes.
Delinquency rates are already starting to move higher, and that should deeply alarm all of us.
But what we have experienced so far is just the tip of the iceberg.
So brace yourselves for what is ahead, because this ride is only going to get bumpier from here.
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“You will own nothing and be happy”
Sound familiar?
Order out of chaos…
The Great Reset…
“C’mon man”
If you haven’t figures it out yet; they want you dead and those remaining will be kept to serve their feudalistic masters.
They will succeed in culling a large percentage of the population of the earth but they will not get the “utopia” they envision by the end of this decade as my timeline will be fulfilled which ends badly for “them”:
Some think it could happen mid trib. if not we will have to all go into battle. But unless people are off grid and have plenty of supplies however most cannot/do not have that much supplies or live off grid..
What a freaking load!…..SRA…..”seasonally adjusted”……,no,ACTUAL NUMBERS not what you want them to be ……
Doom! Doom I tell you. I believe the crash is coming soon (all according to plan) but this article is straight up fear porn,
I don’t doubt that they have the ability to crash the economy whenever they want, but I’ve been reading articles that have predicted an economic collapse for over 20 years. If you listen to these people who’ve written articles like that over the years, we were supposed to have a huge crash and total economic collapse years ago. The destruction of the economy is always right around the corner with these people.
That’s why they hate guys like Trump and RFK because they want to stop them.
Trump is a globalist, a buddy of Rothcild family, so don’t you mean De Santis is who they want to stop. Trump did nothing in office except add to the swamp rats, and push covid bio weapon injections. Besides he is too old to be running for anything.
I am way past retirement, and y2k speakers incl pastors said that it would be a total meltdown in 2000 .now it is 2023, something is not going to their plan (infighting is common, or is it dysfunctionof technology, or something else? ) some you tubers have predicted it 23 years ago, incl Quayle who shut down his website for awhile, Alex Jones and some others. Yet NO one has solution to fix anything or a solution to stand up against the globalists. Duh?
Higher interest rates are just what is needed to bring house prices down. The market is quiet because the prices are unrealistic.
I as a kid/young man remember MUCH higher interest(usury)rates.
My first mortgage around 1985 was 12%. That same year I bought a new 1985 3/4 ton Suburban Silverado 4X4 for $16,000. Seems impossible doesn’t it?
The 1980’s super high interest for houses.
Yuuuuuuup. Sure do. Like 18%! For a home!
Our founding fathers warned about letting Central Banks control our money. Our compromised politicians have always sold us out…nothing has changed in the last 100+ years.
Since W. Wilson administration onward.
ACT of 1871.
“The establishment of a central bank is 90% of communizing a nation.”
Vladimir Lenin
The U.S., Canada, Aust.,New Zee and the E.U. have all been communized.
Hmm, probably will. Whatever.
Interests rates are not coming down and it’s not the Feds fault that the Chinese are done buying T Bills.
The Fed will have to pick up the lost demand by buying more T Bills or raise rates further.
Monetizing debt means long term debt has to account for inflation. The government doesn’t give a shit about the interest rate but the private borrower does. As such, the government will crowd out the private sector. So we’re eventually heading for some type of deflation due to the private sector not being able to compete with the government.
How do destroy the federal reserve and survive the coming economic crisis?
Pay off your debts!!!!!!
Do not go out to eat!
Do not buy a car! Drive your old one into the ground!
Do not buy a house! Do not move to a bigger and better place!
Do not go on vacation!
Use the excess cash flow to build a pile of cash and pay off your debt now.
Without debt the federal reserve cannot exist.
With out debt you can survive and thrive during any crisis. And when it all comes crashing down. You can buy for cents on the dollar.
START NOW!
Good advice accountant.
Come on housing crash.
Give my kids generation a fighting chance.
The fact is this is a cycle that plays out on a regular schedule. The working class, for a while, are allowed to accumulate wealth as reward for their hard work making their masters rich. As the cycle advances, the wealthy play on the greed of the working class and allow the working class to borrow money to live beyond their means. When the working class are so far in debt, and have all their savings invested in the stock market, it is time for the masters to take it all from them. By simply collapsing the economy and crashing the stock markets, hundreds of trillions of dollars will flow from the working class to the wealthy over just a few years.
This time though, they have a new twist to the old game. They will this time offer the people welfare in the form of digital currency. The government will offer the people Universal Basic Income, but it will be in the form of digital currency that will deposited in your digital wallet. Of course receiving this UBI will be contingent upon you voluntarily agreeing to certain conditions and stipulations. Among those will be that from that time forward, all earnings paid to you from employment will be accepted as digital currency in your digital wallet. You will also be required to maintain a minimum social score, and to comply with all government mandates.
These mandates will include registering for selective service, accepting vaccinations, and taking any employment the government finds for you. Any violations of compliance, or failure to maintain the minimum social score will result in penalties assessed upon your digital wallet and or restrictions upon purchases.
Your purchases with your digital wallet will be both tracked and controlled. Limits will be placed on what you are able to purchase and in what quantity. The government will justify this by claiming to regulate the digital footprint of the people and controlling “climate change”.
Of course those people who are wealthy enough to not need the government UBI will not be subject to the controls and limitations that are placed upon the regular people. Welcome to the New World Order. The sad thing is, most people will accept this new system gratefully and will volunteer to join it. They will own nothing, and be happy, because they will not have to take responsibility for their own lives…..
That’s because only a tiny percentage 3 percent of the US adults know what agenda 2030 is, the whole agenda of climate change to control the masses. Majority will do anything incl taking markof the beast chip.
Michael Snyder is not a bad guy but all he really contributes to our thirst for the truth is plagiarizing the original writings of others and adds a few observations of his own and presents the whole as groundbreaking news. Every article also ends with a plea to buy his years old, outdated book. With today’s chaotic events and our quest for truth and knowledge we must spend our time wisely and I suggest bypassing Mr. Snyder’s warmed-over articles is a good beginning.