3 Things Happening RIGHT NOW That Could Wreak Havoc on the Economy

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Author of Be Ready for Anything and Bloom Where You’re Planted online course

Anyone with a price book will agree that the cost of nearly everything has been steadily going up. Unfortunately, wages are not increasing at the same rate. And to quote Bachman-Turner Overdrive, you ain’t seen nothin’ yet. There are three events happening in the economy right now that could, alone, cause the prices of everything from food to the materials to make replacement parts for your vehicle to skyrocket. But if you combine them all together? We could be facing a perfect storm of economic havoc.

Iran is blocking oil exports from Saudi Arabia

Yesterday, Saudi Arabia announced that they were halting oil exports through a specific lane in the Red Sea due to attacks by “Yemen’s Iran-aligned rebels.” Reuters reported:

Saudi Arabia and arch-foe Iran have been locked in a three-year proxy war in Yemen, which lies on one side of the Bab al-Mandeb strait at the southern mouth of the sea, one of the most important trade routes for oil tankers heading from the Middle East to Europe.

The Houthis, who have previously threatened to block the strait, said on Thursday that they had the naval capability to hit Saudi ports and other Red Sea targets. Iran has threatened to block another strategic shipping route, the Strait of Hormuz.

Saudi Energy Minister Khalid al-Falih said the Houthis attacked two Saudi oil tankers in the Red Sea on Wednesday, one of which sustained minimal damage.

“Saudi Arabia is temporarily halting all oil shipments through Bab al-Mandeb strait immediately until the situation becomes clearer and the maritime transit through Bab al-Mandeb is safe,” he said. (source)

According to the US Energy Information website, the United States imports 904,000 barrels of oil per day from Saudi Arabia.  Prices of fuel would almost certainly go up, which, of course, affects the price of everything that is transported, which is, of course, everything.

Should we suddenly see a shortfall of nearly a million barrels per day, we’d have to get that oil from somewhere else. Most of the other oil we do not produce ourselves comes from Canada, from whom we currently import 120.000-140,000 barrels of oil per day.

Which leads us right to the next financial catastrophe that is looming.

The trade war is getting more heated every day.

As soon as President Trump slapped tariffs on products from China, the EU, and even Canada, he opened the door to our exports also being subject to tariffs. While I think the intentions were good – to bring production back to the United States – the whole thing could turn out to be very, very bad for many Americans. We are going to see the prices of almost everything we buy increasing.

Of course, that’s ALMOST everything, The prices of some things are going to plummet, which may seem good for many of us initially. But for businesses that rely on being able to export their goods, they could face utter devastation.

Take, for example, the farmers. 2.5 BILLION pounds of meat are taking up space in cold storage right now, and the pile just keeps growing as exports slow down due to the trade war.

U.S. consumers’ demand is increasing, but not at levels that are in pace with record production of chickens and hogs. The excess supply is generally exported to Mexico and China—among the biggest foreign buyers of U.S. meat — have both recently slapped tariffs on U.S. hog productsin response to President Trump’s tariffs on steel, aluminum, and other items. Industry officials told the WSJ that U.S. hams, chops and livers have become more expensive in international markets, coupled with a strong dollar weighing on local currencies, which has dramatically reduced demand for U.S. meats.

America’s meat industry production is rapidly filling up the specialized warehouses built to store meat…

…Thanks to President Trump, Canada implemented a 10 percent retaliatory tariff on U.S. beef starting July 01, and China increased its tax on U.S. beef to 37 percent on July 06. Mexico, the largest export market for U.S. pork, in June ordered a 10 percent tariff that soared to 20 percent this month. The USDA indicated that overall exports to Mexico are slightly higher than 2017, however, new weekly export data reported for the week of July 05 came in at their lowest levels in more than a year…

…Scott VanderWal, a farmer from South Dakota, said the uncertainty of a trade war disrupts entire supply chains and will be chaotic to rural America:

“We’ve got a decreasing population in our rural areas already. If we lose any more population in the state in these rural areas, not only does it make the young farmers and ranchers leave, or the retiring or about to retire people…it also takes out the people who supply those farmers and ranchers. The feed store, the fertilizer people, those that supply the things that we need to raise the products that we do. It has a tremendously long tail.”

Rapidly increasing meat stockpiles could force prices into a continued downward trend, which could be beneficial for meat-hungry U.S. consumers, along with restaurants and food retailers. While what is good for the consumer is usually bad for businesses, deflationary prices are quickly eroding margins for meat processors. (source)

Weather conditions are dealing another blow to farmers.

Nobody in the Western half of the United States can deny that this summer has been hot, dry, and miserable. The conditions are terrible for farmers and Michael Snyder of the Economic Collapse Blog has made an alarming comparison to the current heat and drought.

Despite all of the other crazy news that is happening all around the world, the top headlines on Drudge on Monday evening were all about the record heatwave that is currently pummeling the Southwest.  Of course it is always hot during the summer, but the strange weather that we have been witnessing in recent months is unlike anything that we have seen since the Dust Bowl days of the 1930s.  At this moment, almost the entire Southwest is in some stage of drought.  Agricultural production has been absolutely devastated, major lakes, rivers and streams are rapidly becoming bone dry, and wild horses are dropping dead because they don’t have any water to drink.  In addition, we are starting to see enormous dust storms strike major cities such as Las Vegas and Phoenix, and the extremely dry conditions have already made this one of the worst years for wildfires in U.S. history.  What we are facing is not “apocalyptic” quite yet, but it will be soon if the rain doesn’t start falling. (source)

If you recall the Dust Bowl era from history class, you may recall that similar weather conditions to the ones we’re seeing now worsened the Great Depression exponentially.

It occurred due to a combination of ill-conceived ideas and drought conditions.

The Homestead Act of 1862, which provided settlers with 160 acres of public land, was followed by the Kinkaid Act of 1904 and the Enlarged Homestead Act of 1909. These acts led to a massive influx of new and inexperienced farmers across the Great Plains…

…A series of wet years during the period created further misunderstanding of the region’s ecology and led to the intensive cultivation of increasingly marginal lands that couldn’t be reached by irrigation.

Rising wheat prices in the 1910s and 1920s and increased demand for wheat from Europe during World War I encouraged farmers to plow up millions of acres of native grassland to plant wheat, corn and other row crops. But as the United States entered the Great Depression, wheat prices plummeted. Farmers tore up even more grassland in an attempt to harvest a bumper crop and break even.

Crops began to fail with the onset of drought in 1931, exposing the bare, over-plowed farmland. Without deep-rooted prairie grasses to hold the soil in place, it began to blow away. Eroding soil led to massive dust storms and economic devastation—especially in the Southern Plains. (source)

The dust storms became so bad that they traveled 2000 miles – as far as New York City and Washington DC. On one particularly notable occasion, the Statue of Liberty could not be seen because of the dust. Another dust storm was so bad that it was called Black Sunday, and on that day an estimated three million tons of topsoil were blown off the Great Plains.

Just last month, it’s important to note that commuters in Arizona faced down a mile-high wall of dust that was so bad that the National Weather Service in Phoenix warned of “near-zero visibilities” and “life-threatening travel.” Drought conditions, wildfires, and extreme heat have put a massive strain on the power grid in the Southwest.

These conditions could be troubling for farmers and ranchers.  California produces a tremendous amount of the food grown in the United States and the Midwest and Southwest are studded with farms and ranches. Again, we could be looking at a massive increase in prices as shortages arise due to weather conditions. This is a shortage that would normally be overcome by importing the foods, but wait – since there’s a trade war, you can expect those imports to have an extra 25% cost slapped on them. Look out, economy.

None of these things alone would be enough to collapse the economy, but together, they’re a perfect storm.

Each of these events could affect a sector of the US economy on their own but they wouldn’t be enough to cause an economic catastrophe. But all together? It’s a perfect storm. A worrisome picture is starting to form. An inverted yield curve in interest rates has accurately been a predictor of an economic recession 7 times since the 1960s, and we are currently flatlined.

I know that bloggers have been predicting an economic crisis in America for years now, so much so that some readers scoff.

But it has been edging along this whole time The indicators are all there.

It would be difficult to deny that a perfect storm is brewing.

Daisy Luther

Daisy Luther

Daisy Luther is a coffee-swigging, globe-trotting blogger. She is the founder and publisher of three websites.  1) The Organic Prepper, which is about current events, preparedness, self-reliance, and the pursuit of liberty on her website, 2)  The Frugalite, a website with thrifty tips and solutions to help people get a handle on their personal finances without feeling deprived, and 3) PreppersDailyNews.com, an aggregate site where you can find links to all the most important news for those who wish to be prepared. She is widely republished across alternative media and  Daisy is the best-selling author of 5 traditionally published books and runs a small digital publishing company with PDF guides, printables, and courses. You can find her on FacebookPinterest, Gab, MeWe, Parler, Instagram, and Twitter.

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  • Free Trade and close all US military bases overseas and the US minds it’s own business, two problems solved

    • I’d love to hear how an American making appliances can compete with the slave labor in China, Laos, Cambodia, Vietnam, or Mexico making the same product. Free trade isn’t free, it steals not money but entire countries. The only beneficiaries to free trade are the billionaires who own the factories with the lowest paid slaves. No one who supports free trade (open borders in disguise) should ever hold office.

      • The US of A has over taxed over regulated the businesses in this country, that is the real problem here. It is all greed and control.

  • With Trump willing to see and hear only good news about himself, how will these facts get to him? Only a very brave advisor would dare tell him !

    • how do you know THATS PRESIDENT TRUMP is only willing to hear good things I bet hes heard more bad news than you on his way to earn 10.0000000000000000 dollars in his life so how do you know you don’t your just another dumbocrap running their mouth so shut up already were TIRED OF IT AND PEOPLE LIKE YOU GO TO VENISULA

  • Hi Daisy, thanks so much for your diligent work and great info. Re: the current weather and droughts, I do hope you are aware of the government/deep state Weather Modification and Geoengineering programs. I recommend highly the book Chemtrails Exposed by Peter Kirby (easy to find) in which his research documents the genesis and development of these programs. There is, essentially, no natural weather left on the planet now. thanks

    • Omg, when I tell people this they think I’m nuts but its very real. I wish I could find like minded people in my area.

  • A note on Yemen and shutting down sea lanes; Iran gave their version of the Chinese silkworm antiship missiles to Yemen and trained Yemenis how to operate them. Yemen has already used some on the Saudis. The crash of the global market could take place not at the speed of the stock market but at the speed of a missile, in this case about Mach 2.

  • Add to this the massive amount of personal debt this country is in, and it becomes even more frightening. Batten down the hatches.

  • Dear Daisy:

    Thank you for your efforts and describing the current economic prospects. I wrote a missive of a similar nature last Sunday to my near and dear ones.

    I came to a similar conclusion that a trade war and increasing tariffs could hit the US consumer very hard at least in the short term. Being a macro thinker, I differ slightly in the long term in regard to China’s reaction which could be deflationary in nature.

    However, I do appreciate your point of view.
    And enjoin you to keep up the good work.

    Rob M’cCoy
    A Canadian sojourning in S Korea

  • Daisy, you have the ability to make obscure facts make sense & I thank you. I would love to see more products created in this country by Americans for Americans but I don’t believe that can happen quickly. So many factories have been torn down, machinery destroyed or at least not updated, & most importantly, workers not trained to do the jobs. And as a farmer I fear that soon our entire food production will be in the hands of huge corporations who will not have our health in mind. It’s frightening times.

  • Another thing to consider is how the “great depression” spanned in duration. The fatal blow came in1929, but the worst was yet to come, plumbing new depths in ’33 and ’34 and lasting into ww2, at least for the USA. Poor old England suffered from the ’29 crash and ww2 until the late 50s. Speaking of England, Churchill was in NYC when the crash came as a guest of the Rothschilds or Rockefellers or whoever it was of the nwo that invited him, they wanted to impress him by collapsing the western economies right in front of him.

    By the way, ex fed chair Bernanke has admitted the fed caused the crash and made it worse by their actions. These things don’t come by chance, they’re scientifically designed, calculated to allow those who have cash after the collapse to buy up entire industries for pennies on the dollar, the fed and its friends did just that. Here’s the link to Bernake admitting fault;
    “Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again. ”

    The fed is so proud of what they’ve done to America they host this on their own website.

    In 2008, the dead cat that is our economy gave up the last of its nine lives and has been on life support since. This life support is in the form of zero interest loans backed up by US taxpayer’s great grandchildren in the form of the bailouts handed to the too big to fail but failed anyway megacorporations. What this amounts to is on this wise;
    Congress took out a loan from the fed, the fed then handed those trillions to the too big to fail failures to loan BACK to us at interest whenever we borrow from their banks, as well as allowing other too big to fails but failed anyways to buy back their own stock for free, meaning they artificially increased the value of their own stock. And our kids will pay for this.

    So, considering that even a dead cat will bounce at least once, the reprieve we are seeing in the stock market is surprising, but will not last. Trump is doing all he can, and has tweeted about his displeasure with the fed raising rates, but the fed does as it pleases since it’s actually a private banking cartel, not a federal agency. Also please keep in mind the fed crates money out of thin air, ink on paper, bits in a database ledger. Money out of nothing, yet we OWE the fed face value of every debt note (look at the dollars in your billfold, they say debt note on them) PLUS interest, labor, materials, etc cost to produce that money out of nothing. On the debt note thingy, if every debt (to the banks/fed) was paid, there’d be no dollars in circulation at all.

    Also please note the US Constitution says only congress has the power to regulate money, not the fed.

    Right now the fed is raising rates and at the same time selling its holdings (ie all the trillions of mortgages and car loans and other debt (and US bonds) it bought with the bailout proceeds) and clearing its balance sheet. What this resolves to is at the same time the fed raises interest rates it’s also removing billions per month from the worldwide supply of US dollars. So there will be fewer dollars at the same time the banks will charge more in interest on loans.

    Why is this a problem?

    let me give a recent example;
    A large Chinese bank typically got its money from the next higher level of bank, one directly under the Chicom national bank, their version of the fed. You see, banks in most countries rely on fractional reserve banking. What this means is say you deposited 10 bucks with the bank and say that ten spot you just deposited is the only money in that bank. The bank can then loan out 90 bucks to someone else, or to you. Do you see what they just did there? They created money out of nothing using your deposit; it used to be they had to keep x amount in the bank and could only create x amount in loan, but now the rules have changed and they might be able to create unlimited debt and not have to keep any literal bills in the bank. Anyway, every bank is merely an extension of the fed and creates money out of nothing just like the fed, by way of debt.

    This is why banks are going to close quickly when a run starts, they simply have loaned out all their deposits and no longer have actual dollar bills on hand to give to anyone demanding their deposits back.

    Anyway back to China.
    The jr Chinese bank says to the sr Chinese bank hay I’m out, can you lend me 12 million overnite? The sr Chinese bank says sure, here’s the paperwork for the loan. The jr Chinese bank then says to the sr Chinese bank umm I can’t take this loan, and the sr Chinese bank says why not? The jr Chinese bank says I can’t pay 12 percent interest on 12 million! The sr Chinese bank then says hmm, well sorry, can’t do anything about that. So the loan isn’t made, the jr Chinese bank only has enough money on hand for a few days or hours and then it fails. This is what fractional reserve banking and fiat currency is designed to do; steal wealth from the people and give it to the owners of the banks.

    This is attributed to Thomas Jefferson;
    I believe that banking institutions are more dangerous to our liberties than standing armies, If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around(these banks) will deprive the people of all property until their children wake up homeless on the continent their fathers conquered.”

  • daisy is some drunk pot smoking board middle age housewife making stuff uf aigen this wont get posted commetts are moniterd

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