Will the US Economy Collapse in 2016? Predictions and Preparations

economic collapseBy Eric Blair

Is 2016 the year our financial system fully collapses?

It seems like the alternative media always predicts that an economic collapse is coming. In many ways we’ve been right, but in many ways we’ve been wrong. Sure, mathematically, the debt-based monetary system is headed for disaster, and clearly certain parts of the economy are already experiencing major declines. However, we have to admit that our breathless annual predictions of a major economic collapse have been wrong.

I guess it all depends how you define economic collapse. The oil industry is currently experiencing a collapse. Brick and mortar retail is in collapse. Fast food is also hemorrhaging. And financial institutions are shedding jobs faster than ever. If you’re in one of these fields, you probably feel like the collapse is happening all around you.

Yet the value of the dollar remains relatively stable (for now) and parts of the US economy continue to grow.  For example, Amazon’s revenue grew 23% in the last quarter, Star Wars is setting global records in theaters and with licensed merchandise, organic food is crushing it, and services like Uber and Airbnb are exploding. And of course the businesses of medicine, war, and policing always seem to be booming.

My point is that the economy always has winners and losers. Collapse or no collapse, there will be some industries that are contracting while others are expanding.  Our duty is to identify the pitfalls and opportunities in the current climate to position ourselves to survive and thrive.

Economic Prediction for 2016

I think a dramatic economic collapse is possible but not probable in 2016. At minimum, however, the United States will likely experience a recession in 2016 even using the government’s phony numbers. This will be painful to a great many people and it will dramatically accelerate the timeline for systematic collapse. Yet I believe there are still enough sectors with abundance and consumer demand to delay widespread collapse. Also, the unbelievably low price for oil can subsidize the US consumer economy for years if it continues.

That said, the Overstock CEO is prepping for an economic zombie apocalypse with gold and food for his employees.  If you read this website, Zero Hedge and many others, you probably understand all of the ways the system is doomed. High public debt and taxes; jobs being outsourced and automated; Wall Street swaps, derivatives and high-frequency trading; a Baby Boomer generation retires while their unemployed grandchildren are buried in college debt. Ominous clouds, indeed.

Michael Burry, the real-life market prophet from The Big Short, recently told New York Magazine that a bigger crisis than 2008 is looming because too-big-to-fail banks have only gotten bigger and central banks have lost control of the economy’s risk pricing mechanism – interest rates.

Where do we stand now, economically?
Well, we are right back at it: trying to stimulate growth through easy money. It hasn’t worked, but it’s the only tool the Fed’s got. Meanwhile, the Fed’s policies widen the wealth gap, which feeds political extremism, forcing gridlock in Washington. It seems the world is headed toward negative real interest rates on a global scale. This is toxic. Interest rates are used to price risk, and so in the current environment, the risk-pricing mechanism is broken. That is not healthy for an economy. We are building up terrific stresses in the system, and any fault lines there will certainly harm the outlook.

What makes you most nervous about the future?
Debt. The idea that growth will remedy our debts is so addictive for politicians, but the citizens end up paying the price. The public sector has really stepped up as a consumer of debt. The Federal Reserve’s balance sheet is leveraged 77:1. Like I said, the absurdity, it just befuddles me.

Economic_collapse_guide_cover01“Toxic” Burry calls our situation. Agreed. It’s not a matter of if the economy will experience a major illness, it’s merely a matter of when. The symptoms are already spreading.

But I think we’ve got at least another year before any large-scale breakdown of the economy. This is great news since it gives us plenty of time to adapt and prepare.

Preparations for a Declining Economy

We put together a detailed special report on how we plan to survive and thrive in current economic conditions. It covers tips and tactics to simplify your finances, to get healthier, to diversify your income, to produce and store food and much more. Additionally, we reveal the areas and opportunities that we believe have potential for growth in a bad economy.

We don’t want our readers to be victims of the coming collapse. We want you to survive and thrive. The special report cannot be purchased anywhere but it’s FREE for our email subscribers.

Get Instant Access Here.

Eric Blair writes for ActivistPost.com. This article may be freely shared with author attribution and source link.

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14 Comments on "Will the US Economy Collapse in 2016? Predictions and Preparations"

  1. locutus_of_borg | January 1, 2016 at 1:43 pm | Reply

    I need to know the EXACT day the US economy and the dollar will collapse.

    • It is collapsing TODAY, even as we speak.

      • Would it make sense to move to canada from usa? If usa collapsed then would canada be a safe place to go? Where would people move? Where would we store money? If collapse in USA happened then how would people pay tp get pm a plane and leave? Would citizens be able to get their money from bank or would it be impossible? Would cash be useless? Would it be use less in canada?

        • I live in a developing country, not involved that much with world politics, and here, as in every other part of the world, we are beginning to feel the inexorable squeeze — waning employment, soaring food prices, medications too expensive to buy, a rapidly deteriorating medical and health system, and on and on.

          So my conclusion is that there is nowhere to run. Best stay where you are and prepare the best you can.

  2. AffinityNetNews | January 2, 2016 at 10:14 am | Reply

    “Never underestimate the stupidity of the American people.” – P.T. Barnum

    Even in this late hour, there are still oceans of hopelessly ignorant, and clueless fools who proclaim through some warped and deranged thinking and MSM indoctrination that: “Since a massive financial collapse hasn’t happened yet, it will never happen.” I get hate mail all the time from these pathetic and brainless infants living in complete denial of reality.

    It’s like saying because, it’s not summer yet that, it will never be summer! Unbelievable.

    These are the same off-spring of the fools that said the market will never crash in 1929.

    It’s truly staggering how ignorant, clueless and cowardly some of these sheep are. What’s even more alarming is they are out on the roads driving !

    And ‘when’ not ‘if’, it happens … they’ll be the ones screaming and screeching from the rooftops … “Why didn’t someone tell me this was coming” !!!

    • Peetey mikes | April 8, 2016 at 4:21 am | Reply

      …and Sadly,the government can’t operate because they don’t receive taxes,so either they send their officials go hunting people down to collect taxes for them to barely survive, while the well-informed and well-prepared citizens citizens has to defend his resources from those Leftist cry babies that were warned all along for years,eventually they become the looting mass that the “responsible citizen” ends up cleaning them up because the government will be fighting to remain afloat and won’t be able to attend or come to anyone’s rescue ,while everyone else is trying to survive and defend their families and whatever resources they have..Sad indeed,but those sheeps never listened or cared about the warning signs or calling.Leaving the VIGILANT PATRIOT CITIZEN ELIMINATING ALL THE SOCIAL THREAT from the masses of looters.But don’t get me wrong,also the government will be doing cleansing trying to “restore order” and we know that’s how nasty a desperate government could go into those lengths…..THERE WAS NEVER A FREE LUNCH IN THIS WORLD.I DON’T KNOW WHY LEFTIST AND OBLIVIOUS PEOPLE COULD EVER UNDERSTAND THIS..

    • Ryno Lascavio | April 23, 2016 at 2:37 pm | Reply

      Its not just ignorance, its WILLFUL ignorance. Many people know the truth, but pride and hatred of “the other side” that might have the correct answer keeps them from doing or supporting the right thing.

  3. Vishwas Patil | March 6, 2016 at 2:14 am | Reply

    Fantasies See theearnings of Apple, Microsoft, Boeing, defence industry et el. Robust demand too. Why will USD fail? Currency is just a medium for trading with confidence attached. For US, 20 Trillion debt is just a local currency loan unlike for other countries. Long term Euro future uncertain in view of the impending refugee crises and slowing down economy. So, Euro will never be a substitute. Yuan or Yen far more unlikely for the obvious reasons. Till America attracts world brain from all over the world, it will remain a powerhouse.

  4. Ryno Lascavio | April 23, 2016 at 2:35 pm | Reply

    The problem isnt the system, its politicians. Politicians (especially Democrats) cannot function without promising free stuff to those who vote for them. That free stuff not only ACTUALLY costs money, but it disincentivizes more and more citizens to actually work. Not only that, but every 4 years the same politicians have to up the ante as people who get free stuff always want more.

    • Ryno – you’re right insofar as your blame politicians for ruining the system of your society. The Clinton’s deregulated wall street, where the Bush Administration caused the biggest jobs crises for the country in modern history, and whose economic and financial policies allowed a recession to happen. Where you are wrong is your reference to ‘free stuff’ as being a burden on the society; that telling people it’s free ‘disincentives’ them. Your error lies in the lacking of common knowledge where the ‘free things’ you are referring to are not ‘free’, they are nominated as public goods by society, and are collectively funded by society through tax. The nations that practice democratic socialism all have the highest standards of living, the most intelligent citizenry, the highest levels of civil happiness, and are FAR MORE DEMOCRATIC than the US (which is evidently an oligarchy). When your wages are the same as they were 40 years ago, despite inflation and the increased costs of living (again, republicans and democrats to blame), and when the 0.1% own as much as the middle class, I think perhaps more blame lays with the ‘system’ the politicians helped create, and not public goods.

  5. I guess when you’re not starving to death, you can sit back and think about things and “get a job ya bum” I’m eating about 500 calories or less a day, myself. It’s all I can get here in Mississippi.

  6. Yep – always hedge your bets by saying ‘possible’ and ‘maybe’. This way he’s ‘right’ no matter what happens.

    However – I’m betting against even the “likely experience a recession in 2016” (note – he didn’t say it *would* happen, so he’s not ‘wrong’ if it doesn’t). I’m going to say it is not going to happen. Not that it’s impossible, but so unlikely as to be not worth considering.

    Still – let’s take a look at something:

    “It seems like the alternative media always predicts that an economic collapse is coming. In many ways we’ve been right, but in many ways we’ve been wrong.”

    I see the same tired prediction literally every year. And every year, it fails to occur. Even the great recession of ’09 – as bad as that was – was not a collapse of the system (not even the great depression of the 30’s). I also see the same reasons given – government debt, faked government numbers, etc.

    If you keep predicting the same thing, and it keeps failing to occur, perhaps you should look at your analysis and change it. “In many ways we’ve been right.” In what ways, specifically?

    • Morteza Motahhari | August 1, 2016 at 4:36 am | Reply

      How is it possible we grow in wealth and get rich day after day while we are limited in resources.We have only one planet to extract wealth from and that is not limitless.This is capitalism big BUG so the collapse of US economy as the mother of capitalism is inevitable.

  7. Albert L Biele | August 30, 2016 at 5:03 am | Reply

    Ryno Lascavio is correct in his analogy that “Public goods” is not “Free Stuff,” but rather paid for by tax payers. More accurate analyses would be to compare common household debt verses income. When a household interest on debt exceeds annual income, that household can no longer pay their debt/interest on revenue collected, but rather, forced to borrow the difference from an outside source, seriously increasing the ratio of debt verses income, until the debt becomes unsustainable. A prudent household resolution would be to cut back on expenses, or increase their income. Of course, the debt accumulated by our government is somewhat more complex; the cost of interest and government services far exceeds taxes collected. The difference between a household and the government is, a households debt is controlled by the actual owner, whereas, government debt is controlled by elected officials i.e., it’s not their money. Until we shrink the federal government, and turn authority back to the states, federal debt will continue to increase. In reality, I believe that we are faced with a scenario of “to-little, to-late. There is no magic wand that will fix the damage caused by our elected officials. The political system has become totally corrupt, being raped by self-aggrandizing bureaucrats, who seem to enrich their bank accounts by 10’s of millions of dollars on a public servants salary. My professional overview; this economy will explode before the end of this year.

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