Multiple Bubbles Are Going To Bring America To Its Knees: "The Warning Signs Are There"

Tyler Durden's picture

Authored by Daniel Lang via SHTFplan.com,

If you’ve been paying attention to the ongoing degradation of the American economy since the last financial crisis, you’re probably flabbergasted by the fact that our economy has managed to make it this far without imploding. I know I am. I find myself shocked with every year that passes without incident.

The warning signs are there for anyone willing to see, and they are flashing red. Even cursory research into the numbers underlying our system will tell you that we’re on an unsustainable financial path. It’s simple math. And yet the system has proven far more durable than most people thought.

The only reasonable explanation I can think of, is that the system is being held up by wishful thinking and willful ignorance. If every single person knew how unsustainable our economy is, it would self-destruct within hours. People would pull their money out of the banks, the bonds, and the stock market, and buy whatever real assets they could while their money is still worth something. It would be the first of many dominoes to fall before the entire financial system collapses.

But most people don’t want to think about that possibility. They want the relative peace and prosperity of the current system to continue, so they ignore the facts or try to avoid them as much as possible. They keep their money right where it is and cross their fingers instead. In other words, the only thing propping up the system is undeserved confidence.

Unfortunately, confidence can’t keep an unsustainable system running forever. Nothing can. And our particular system is brimming with economic bubbles that aren’t going to stay inflated for much longer. Most recessions are associated with the bursting of at least one kind of bubble, but there are multiple sectors of our economy that may crash at roughly the same time in the near future. For instance:

  • Eric Rosengren, the president of the Federal Reserve Bank of Boston, recently made a startling tacit admission. We may be in the midst of yet another real estate bubble. Major financial institutions in this country are in possession of over $14 trillion worth of residential real estate loans. That’s well over $40,000 for every man woman and child in America.
  • Low interest rates have fueled a bubble in subprime auto loans, and that bubble appears to be reaching its limits. There are now over 1 million ordinary and subprime auto loans that are delinquent, a number that hasn’t been this high since 2009.
  • There is now well over a trillion dollars worth of student loan debt in this country; much of it owned by low income families. And there’s little hope that these students will ever see a return on their investment. That’s why at least 27% of student loans are in default. While more than one in four students are in default now, that number was one in nine a decade ago. And if current trends continue, there could be $3.3 trillion of student loan debt by the end of the next decade. Clearly, this isn’t going to go on for much longer.
  • And who could forget the stock market? Despite experiencing low GDP growth every year since the last recession, the stock market continues to break new records. Many of the companies on the stock market (especially tech companies), have a market cap that is between 20 and 100 times their sales or earnings numbers. Some are much higher, despite experiencing slow growth, or even no profits at all.

Our economy is awash in cheap money and financial bubbles that threaten to wipe out tens of trillions of dollars worth of savings, investments, and assets. Everyone can close their eyes and hum while they hope that everything is going to be just fine, but it won’t be.

I said before that if everyone knew how unsustainable this economy is, it would all come crashing down. But they’re going to find out one way or another when it comes crashing down anyway. Hope and confidence can only prop up a bubble-ridden economy for so long.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
SmokinMonkey's picture

The whole economy is a giant ponzi scheme waiting to blow up.  

techies-r-us's picture
techies-r-us (not verified) stizazz Mar 31, 2017 10:13 PM

Brace yourselves, sheeple.

Mano-A-Mano's picture
Mano-A-Mano (not verified) techies-r-us Mar 31, 2017 10:15 PM

Yep, Trump's wall will keep you all inside the giant prison to get what's coming.

lexxus's picture
lexxus (not verified) Mano-A-Mano Mar 31, 2017 10:17 PM

If only Trump would get rid of the Fed. It'd be a good step in the right direction.

Mano-A-Mano's picture
Mano-A-Mano (not verified) lexxus Mar 31, 2017 10:21 PM

Dream on.

bob_bichen's picture
bob_bichen (not verified) Mano-A-Mano Mar 31, 2017 10:25 PM

RE: chronic SPAMMER  kavlar, techies-r-us, lexxus, stizazz, mano-a-mano, etc.   (ALL THE SAME PERSON REPLYING TO HIS OWN COMMENTS)

You have NO IDEA how troubled this individual, the Spammer With One Hundred Log-ons, really is.  He has trolled and spammed his website crap on here forever, always with the same macabre conversations with a long series of "imaginary playmates." It really is quite perverse and whoever "he" is, he seems to really get his rocks off voting himself up arrows and replying to his own comments, and also appears to have no life beyond making off-topic comments with his link to the SPAM-, TROJAN-, VIRUS-INFESTED  "biblicisminstitute,wordpress,com"  (sometimes disguised as a short-URL  http://wp.me  )

 

<<Tonight's little commentary on another thread is classic --- one Invisible Friend (Mano-a-Mano) "lives" in Mexico and another Invisible Friend (stizazz) "wants to be his roommate."    Such a fantasy life -- do all of the "Invisible Friends" wear fishnets and makeup as well??  >>

He shares this pathology with "Audio Feeline " "blue fin" AKA "TrollAndDump" (formerly known as XYTHRAS - since banned) whose "dailywesterner,com" is, if anything WORSE than the biblicism fetishist, also SPAM-, TROJAN-, VIRUS-INFESTED.

Other ZHers  may wish to take one minute to send an email to abuse@zerohedge.com requesting that all of the "imaginary friends" (in the list below; copy and paste)   be permanently banned for spamming.

As you do that, use your imagination to try to conceive of what type of whackadoo would spend their life in pajamas, fake eyelashes and high heels, eating stale chips and drinking cheap soda from the dollar store, popping zits, and spamming zerohedge. 

Many of the following have been banned but, like crabs and cockroaches, they just seem to come back.  The "short list of imaginary playmates" includes:

Audio Feeline
blue fin
TrollAndDump
XYTHRAS

Son of Loki
kavlar
 
mano-a-mano

letsit
lexxus
tazs

techies-r-us

stizazz

lock-stock

beauticelli  
mofio

santafe
Aristotle of Greece

Gargoyle

bleu

oops

lance-a-lot
Loftie

toro
Yippee Kiyay

lonnng
Nekoti

SumTing Wong

King Tut
Adullam

espirit

rp2016

Holy hand grenade of Antioch,

etc. etc. etc.

espirit's picture

You fucking guys are a hoot. If you have ZH authorization to continue, we will know this site has been compromised.

Keep it up, and you can't follow us fools.

 

VbDFrioPzxAwSeDortVxERd

 

P.S. - Look at bob_bichen last two hundred posts.

TeraByte's picture

I already had a gut feeling in several occasions commentaries were quickly opened by some idiot/ idiots, who seemed to enjoy of commenting and responding to themselves. This has succeeded often to sabotage a real debate on issues and go to hay wires from the onset. This might has been the intent too.

fbazzrea's picture

judging from their time stamps, it must require two minutes minimally for them to sign out/in and post their one-liner. wash/rinse/repeat.

The central planners's picture

He will certainly not do that but he will get rid of the evil mexicans that picks tomatoes for a buck.

Lynn Trainor's picture

No, just the rapists, gang bangers, thieves and killers.  

ebworthen's picture

No problems.

No such thing as money or debt anymore, except for us Serfs.

When that blows sky high like Obummercare and trust in the FED and U.S. Fiat, it is all over.

Where is that resever currency chart when you need it?  Doesn't matter, look here:

http://www.usdebtclock.org/

TBT or not TBT's picture

RFID chip or no rations, plus get you tackled, chipped, and named "Not Sure".    

Lynn Trainor's picture

I'm waiting also for Trump to address civil forfeiture.

BobEore's picture

Not a wholly unlikely scenario.

On the other hand... the only thing likely to 'bring America to it's knees' will be the continued insistence of it's citizens to fall for the red/blue b.s. designed to create conditions suitable to destructive civil war.

The alternative to which is to focus upon the main enemy. Terror states which fund their activities via infiltration of western governments, theft of their industrial and military secrets, corruption of their judicial and political classes, aggressive lobbying by special interest groups, and the use of complicit media organs to influence pubic opinion while degrading critical thinking skills...

have decided it's time for America to be thrown under the bus... you will either comply with their agenda.... or roust them from their embedded nests of influence.

TBT or not TBT's picture

Back when McCarthy was pointing out real infiltration, the seeding of commies for "their long march through the institutions" was well underway.    Now our commies are either homegrown in schools and popular media, or practically born that way into government dependency traps.   Of course we also have the 1965 immigration wreckage of people's imported massively from authoritarian cultures of all stripes.  

logicalman's picture

Red/Blue is the distraction in US.

Similar distractions in most "democratic" countries, just with different colours.

Some places, the distraction is stuff like bombs, shells & starvation.

For EVERYONE who isn't in power, the enemy is the same - those who wish to parasitize them, The Money Addicts.

Something's off when one human can own billions of dollars when another one has to live on a dollar a day (if you can call that living).

Salzburg1756's picture

The greatest injustice is what we did to the Germans.

trgfunds's picture

Payrolls keep flowing, this thing keeps going. What a lot of people don't realize is that in 2008 we were a week away from direct deposit/paychecks not appearing. Not just for the section 8 free shit army. ALL OF YOU. THAT is the thing they never told you. They gave it all kinds of fancy names and all kinds of explanation, but they should have just called it the paycheck crisis. But then, that would have gotten everyone's attention focused on the money system wouldn't it... 

Roger Rabbit's picture

Can you explain this further or provide a link?

ATM's picture

Never underestimate the power of printing money. It is the great magical smokescreen of governments. Not one man in a million can figure it out.

new game's picture

soooooooooo, is this another great buying opportunity for the patient cashed up mofo? real estate again? cars again?

cash for clunkers and third party real estate liquidations? or is this the real deal of the fed and treasurie loosing there grip. lol to that thought. they have the cash and we are the junkies. never forget that relationship.

and, never forget the ability of the fed being able to print and hand out money to targeted needs to keep the bailing wire wrapped tight enuf to hold-er together...

something tells me this will be the wealth transfer of a lifetyme...

be prepared.

for me it is land, remote with a view of surrounding approaches....

HRH Feant's picture
HRH Feant (not verified) Mar 31, 2017 9:57 PM

When? Soon.

Raffie's picture

Mr Bubble of D00M!!!!!

10mm's picture

Who the fuck cares. Let it blow.

Cabreado's picture

I suppose if you had kids, you'd prefer something "sustainable."

(I have none)

LetThemEatRand's picture

I remember watching Jim Rogers several years ago chastising an attractive reporter about how she should tell her viewers to leave the market and buy farmland, and his book.

Rogers was probably right about the fundamentals, but we don't live in the real world anymore.  We live in the financial matrix.  The Shit Hits the Fan Plan has been telling us the world will end for close to a decade now.  He'll be right eventually.

Billy the Poet's picture

Sounds like you need another shocking installment of King World News.

LetThemEatRand's picture

What do you think, Billy?  Have we been fooled again or is the jury still out for you on Trump?

Cabreado's picture

Ah, you're another latent Dear Leader guy, eh?

espirit's picture

...and the winner is that will make it 'all righteous is' ... ???

Not addressed to you Calbreado.

 

FukThemVwAsHyyUmOxveJoiLmNNhan

Billy the Poet's picture

Here's some of my comments from the day I decided to vote for Trump:

 

Blow this fucker up. The elites will not stop until they kill us all. Do I trust Trump? Of course not but let's get this party started....I've got no expectations one way or the other....If nothing else I would enjoy the wailing and gnashing of teeth over at DKos if Hillary loses...It's like they've drawn a line in the sand and despite the fact that I don't give a damn about the line or the sand their constant taunting makes me want to cross it just to get the shit show started.

 

Did I get things mostly right or did I get fooled?

LetThemEatRand's picture

Fighting other internet sites with your vote?  Yes, fooled.  The deep state is stronger than ever, and the MSM/liberal sites are making more money than ever.   The gnashing of teeth is all about $$.  

I thought you voted for Trump to end Obamacare.

Billy the Poet's picture

Yes, fooled.

So when I said that Trump can't be trusted I was fooled and he can be trusted in your opinion?

 

The deep state is stronger than ever

By what criteria?  Seems to me that far more people are now aware that the Deep State exists than ever have before.

 

I thought you voted for Trump to end Obamacare.

I was angered by the increase in my insurance premium and voted against Obama's heir apparent because of it. That's entirely different from believing that Trump would fix things.

LetThemEatRand's picture

"So when I said that Trump can't be trusted I was fooled and he can be trusted in your opinion?"

Jesus fucking Christ.  Is there anyone here I can discuss anything with that doesn't try to tell me that if I'm rubber they are a glue?

I have posted over and over that I was fooled by Trump, and that I don't trust him any longer.  Fuck you.

Billy the Poet's picture

Your intellectual dishonesty never fails. Was I right in saying that Trump was not trustworthy but that his election would stir the pot or was I not?

LetThemEatRand's picture

You were right in saying that Trump was not trustworthy and this election would stir the pot.

You also said other shit that you've conveniently forgotten, but I'm intellectually dishonest.  

Billy the Poet's picture

You're intellectually lazy or you would have posted quotes to back up your claim.

LetThemEatRand's picture

That's rich that you don't deny my comment, but accuse me of being "intellectually" lazy for not proving it with your own words.  Are you a fucking politician?  

For what it's worth, intellectual laziness is not the same as laziness.  

Billy the Poet's picture

Your comment has no facts within it which I can either confirm or deny.  Post the things I've supposedly said or admit your error.

 

northern vigor's picture

Farmland has gone up 300% here in the last seven years. Rogers was right. 

Global Douche's picture

Not only that, but Rogers also told one reporter of the average age of the American farmer, now being 56. After all, who wants to deal with government who often overregulates the living shit out of what they do and has tried everything to otherwise control prices? No wonder it's such a big hassle! Worse yet, without really careful incorporating - the Family Farm can incur a massive Death Tax, which Congress hasn't the huevos to tackle. Jim added the age for the Japanese farmer is even older on average, although I'm getting more afraid I'll require a geiger counter before handling most things from their country. 

CunnyFunt's picture

If America is brought to its knees, I'd hate to see the rest of the world. Bubbles know no borders.

Curiously_Crazy's picture

I dunno... the world is holding trillions of $US paper. When it really starts falling those dollars will no doubt start coming home to roost. The Chinese are already buying real assets like farmland and mines for paper - so you'll have rapidly rising prices with a rapidly lower purchasing power locally. The worst of both worlds.

bonderøven-farm ass's picture

I don't see any investments made by China on foreign soil being secure. If (when) the USD implodes countries will turn inward....seize foreign-owned assets within their borders and nationalize them.

China is fucked.....then again, aren't we all in varying degrees?

sinbad2's picture

Remember most big American companies only turn a profit because of their operations in China. GM for example only turns a profit because of sales to China. If countries seize Chinese assets, I'm sure the Chinese would reciprocate. The US alone has $218 billion invested in China.

China has been investing in commodities, they are stockpiling massive amounts of copper and other metals.