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This roller-coaster is almost to the top of the lift hill and this ride is about to get interesting. Guys like Michael Pento, Alasdair Macleod, Peter Schiff, John Williams, Bill Holter, Gregory Mannarino, Rob Kirby, James Rickards, Bo Polny, Dr. William Black, Former Assistant Treasury Secretary Dr. Paul Craig Roberts, Dr. Jerome Huyler, Gerald Celente, Andy Hoffman, Bix Weir, James Turk, etc., etc., etc… all suggest that things are not looking so good and that we should all be preparing for what seems to be the inevitable. Should be we believe them?

Unfortunately, many would say “Of course not!” After all, unemployment is at 2.1%! Oh, you didn’t know? Note my sarcasm as I mention that according to the U.S. Bureau of Labor Statistics, April’s unemployment is sitting steady at 2.1%. Isn’t that great? So, how can that be bad news and why are more people not celebrating this, let alone talking about it?

Well, many would say that we don’t celebrate this because it’s an inaccurate number. The question we need to ask is why? After all, the U.S. Bureau of Labor Statistics says it’s 2.1%, so shouldn’t we believe it?

The reason it’s inaccurate and the reason no one celebrates this number is because it’s the “U-1” and it doesn’t count everyone it should. So then let’s talk about this 5% unemployment rate that the U.S. Bureau of Labor Statistics has tried to sell everyone. Do you think this number is accurate? I don’t, and for the very same reason their U-1 is inaccurate – it doesn’t count everyone. This is the “official number” that the media loves to talk about and that most politicians brag about. This one is called the “U-3”, and they say it’s the “total unemployment” number. So if this was the “total unemployment”, why would there be even more numbers above and beyond U-3? Are you being misled?

For instance, there is also a number called the “U-6”. This is also labeled as the “total unemployment number”… but this one includes those who are marginally attached to the labor force. They call these folks the “short-term discouraged workers”. The problem is that these short-term discouraged often turn into long-term discouraged. I’ll discuss this in a second. The U-6 unemployment number is actually at 9.7%. While this number is a little more honest, it still does not paint the entire picture that we need for the point I am going to convey.

Let’s get real for a minute. If you really wanted to see some truth, you could include the long-term discouraged workers and those who have given up looking for work altogether. Unfortunately, and according to the government, these people evidently don’t count… at all. In fact, the government defined them out of official existence in 1994 because they made the unemployment number look really bad.

For some perspective, let’s look back. When people think about “bad unemployment” numbers, they think about the Great Depression. What we should probably do is count unemployment the way they did back then. After all, you want to compare apples to apples, right? If you really wanted to know just how bad things are getting, you would want to be able to compare the situation to that particular event. However, this is actually where it gets kind of scary.

Did you know that at the height of the Great Depression, unemployment was roughly 25%? That is a big scary number. So what if I told you that if you tracked unemployment with the same methodology used back in the day, that the unemployment number for the month of April 2016 was actually 22.9%? It’s true. We are already near Great Depression levels – and things are getting worse; not better. You can actually glimpse some of this truth if you examine the Labor Force Participation Rate for April.

The question I am often asked when I talk about this is “where are the soup lines then?” Good question. The answer is that it’s at their mailbox. They didn’t have entitlements and labor programs back then. They didn’t have unemployment, social security, etc. Today, the horrible unemployment reality is masked by the fact that people get to walk out to their mailbox for their bread and soup instead of lining up on a corner somewhere.

Now what is REALLY scary is when you factor in projection. Retail is a pretty strong economic indicator. In fact, it activity reflects the current state of the economy. The Wall Street Journal reported in April that “retail sales had yet to post an increase in 2016 amid slow wage gains and troubles overseas”. We are seeing other problems as well. We are seeing wave after wave of closures, losses, and panicked moves by retailers to stay afloat.

Don’t believe me? Consider Wal-Mart who for the first time saw its revenues shrink from the year before or how J.C. Penney took emergency measures this last week to protect its bottom line. Two simple examples of many. We could also factor in manufacturing closures and reductions or the pressure in regard to wages, which has forced the hand of business to finally embrace technologies such as self-serve kiosks and robots.

Where do you think this is all going? There was a quote I heard once that said “Everything in life is temporary. So if things are going good, enjoy it because it won’t last forever.” Perhaps Murphy’s Law defines this best. I just think our “boom cycle” is coming to an end.

In fact, if my math is correct, I would say that the chances are pretty good that you are going to hear about a recession in the next month or so. This will more than likely have a domino effect. There are several reasons why I believe this but none of which I’m sure anyone cares to hear – unless economics is your thing (but if it is, you probably already know).

Of course the bills for the average worker will not stop coming in just because they got their hours cut or because they were let go; so what little money these unemployed folks do have will probably not be spent at the local retailer. Those dollars are going to go to bills or will get saved until another bill comes due. After all, it’s not wise to spend your money on things you shouldn’t when you don’t have a job or when money is tight. Of course, this kind of responsible behavior doesn’t stimulate the economy.

This is not just an issue for the unemployed though. Factor in things like stagnant wages for the rest of the population (same amount per check), inflation (rising prices), a devalued dollar (less value in the money), record taxation (less in the pockets of those who can spend), and so on; and you have yourself one heck of a problem in regard to the economy as a whole. THEN factor in the droves of people who have lost their pensions, need medical care and are retiring (unfunded liabilities) and you have yourself a ticking time-bomb. Meanwhile, businesses are bombarded by the government, which reduces their ability to hire or innovate; at the same time, the government is allowing imports at such a rate that it actually becomes more advantageous for the consumer to buy foreign (which further hurts domestic business and only exacerbates the original issue). Basic logic, cause and effect, and Occam’s Razor.

Yes, I could go on and yes it gets even more complicated from here. The point is that our economy is in big trouble due to horrible and long-standing economic policy and practices – and perhaps some complacency by the masses. As a result, the hand of innovation is being forced once again. The sad part is that most people are being told that there is “nothing to see here” and to “move along”. I’m telling you to look. We all need to look. I have spent years showing others the information and for a very specific reason.

Leaders need to be innovative thinkers. Our world is changing before our eyes. We all need to be ahead of the curve. We all need to stop thinking in old world ways because few of us will be immune. We have our clues. According to a recent study by the US Department of Labor, NO LESS than 65 percent of current US primary school students will end up in a job that has yet to be invented. Think about what this means. Think about how soon that really is. Now consider what I have told you and what we are already seeing. Understand that a great portion of the jobs we are familiar with today will either be gone or replaced by the robots and self-serve kiosks we just spoke of in a few very short years.

There was another part to that quote I referenced earlier. The entire quote actually states “Everything in life is temporary. So if things are going good, enjoy it because it won’t last forever.  And if things are going bad, don’t worry. It can’t last forever either.” This is accurate.

The point is that I believe that we should all brace ourselves for rapid economic change. Things have been good, but things are about to get a little rough. And even though things are about to get rough, it is only going to last a little while. Even though this change will last a little while, understand that it will last long enough that it is going to change some behaviors.

It is my belief that the way in which the world conducts business is about to be completely overhauled – similar in scale to that of the industrial revolution, the railroad, or even communications. The near future will be amazing but the transition during the next decade will be a turbulent one if history be our guide. Those who are forward thinking will thrive. Those who can see the wave will be able to navigate it. The rest, the people who ignored it, will become victims to it. Do not allow yourself to get stuck in “Normalcy Bias“.

Many experts are warning of economic strife in the very near future. I believe they are correct. Simple math and basic logic leave me little doubt. The signs are all around us and have been for a while. Now all you have to do examine and plan accordingly.

Want to learn more? Check out RELOADED: An American Warning.


iPatriot Contributers


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