r/economicCollapse

The world economy is in huge turmoil. Jobs are declining, wages are stagnant, AI has wreaked havoc in electronic prices & disrupted many industries, housing and living costs are skyrocketing, neoliberal economic policies are proliferating, and wealth inequality is becoming massive. Corporations now have more wealth than many countries, yet poverty seems to be increasing. Now with Hormuz incident, energy costs are increasing around world.

I suspect governments are lying about unemployment or poverty rates through misleading methodologies and statistics. Yet despite all this, why hasn’t a global recession or a Great Depression like scenario happened yet?

Is it because countries use GDP as the main measure of economic well being, even when it does not reflect actual living conditions? Or is it because the top 10% are inflating stock markets and real estate, creating the illusion of economic strength? What is the real reason?

A new NerdWallet survey says 66 percent of Americans expect a recession within the next year, while 37 percent say they’ll rely on credit cards to cover expenses this month. Even more interesting, reliance on credit was reportedly consistent across income levels, suggesting financial pressure is hitting more than just lower-income households. The company’s new “Financial Resilience Index” scored Americans at 60.4 out of 100, which sounds decent until you dig into the details. Feels like a lot of folks are technically staying afloat, but only because debt has become part of everyday life.

This is 100% speculation, but I have been seeing some CRAZY ads recently that have me convinced the economy is headed into a nose dive. I keep seeing ads advertising selling, not buying clothes on depop and other sites like that, which is on the tamer side. On the more wild side I have noticed a ton of ads about surrogacy and selling your eggs, and how much money you can make, which is crazy imo.

Everyone complains about the rich get richer. That’s true. The most talented, smartest people on Wall Street are there to make more money. It’s a living if you play your cards right. But over the last several decades the group hasn’t benefited. With pension funds, retirement funds, benefits unions of various kinds. Those are the people who had their money managed by the best and brightest. But those funds have disappeared in terms of representation. The few have the most, and the most have the least. If wealth was more equally distributed more people in the bottom, half of a K would have savings and not debt and would therefore be able to participate in the stock market going higher because as it is now market can go up very high, but it’s not taking all Americans with it and that’s just not acceptable. That system won’t work.

A slap in the face with a wet fish

I think the reason the economy isn’t going down the tubes faster is because of the banks are doing. I’ll use auto as an example but I’m sure it applies to real estate and other things as well. So let’s say you have a $15,000 loan on a car in the car is only worth 5000. If the owner defaults on that car, then the bank has to retrieve the car via a repossession sell the car at auction for $5000 and then collect $10,000 from the consumer for the defaulted loan. But the consumer doesn’t have the $10,000 in fact many consumers are carrying $10,000 of extra debt when they try to come in and trade in their car. So the banks have realized that they would have to realize a loss on their financial statements if the consumer who’s defaulting on the car goes into repossession.

So what does the bank do to avoid showing a loss on the $10,000 to consumer doesn’t have? They make a deal with a consumer to allow them to pay a lesser amount and keep them in the column of current as opposed to delinquent on their financials. So the consumer calls up and says I can’t pay my $400 a month payment the bank may say OK can you pay us 200 a month? And the consumer will go for that not realizing or caring that all that extra money on the back end it’s gonna be added to the loan and there will be more interest later, but let’s forget that part. So now the bank has an extend and pretend loan with a defaulting consumer with a loss that they have not realized. The banks have a relatively small number of defaults because of this, maybe 2%. But the bank is creating another problem for itself if the car was worth $5000 at auction when they were supposed to repossess it, it may only be worth 2500 when they actually do repossess it later so they’re deferring a depreciation hit. This is economic stress on the balance sheet of the banks as they float the consumer. But there’s no regulatory body there’s no FDIC saying hey you’re doing this wrong there’s no SEC saying what are you doing? You can’t do that.

The beer is really concerning!?
1/10 on both side of the exports and imports from 10 years ago.

Wine exports down to 1/3 of what they were a year ago.

I was only 9 when the 2007 housing market crashed and I have some memory of it but not much.

I have been on edge about the economy for about a year now and I have been feeling like maybe I’m wrong because no one else seems worried around me up until about a month ago.

It seems likely a major crash is now likely coming and I’m curious what everyone’s takes are. Will this be worse than 2007? What exactly needs to happen for it to be worse than 2007?

I dont know. its like im in a lucid dream. almost realizing I'm about to wake up.