Huge Trouble Is Percolating Just Under The Surface Of The Global Economy 

Did you know that the number of publicly traded companies declaring bankruptcy has reached a five year high?

And did you know that Chinese exports are absolutely collapsing and that Chinese economic growth in 2014 was the weakest in over 20 years?  Even though things may seem to be okay on the surface for the global economy at the moment, that does not mean that big trouble is not percolating just under the surface.  On Wednesday, investors cheered as stocks soared to new highs, but almost all of the economic news coming in from around the planet has been bad.

The credit rating on Greek debt has been slashed again, global economic trade is really slowing down, and many of the exact same financial patterns that we saw just before the crash of 2008 are repeating once again.  All of this reminds me of the months leading up to the implosion of Lehman Brothers.  Most people were feeling really good about things, but huge trouble was brewing just underneath the surface.  Finally, one day we learned that Lehman Brothers had “suddenly” collapsed, and then all hell broke loose.

If the economy is actually “getting better” like we are being told by the establishment media, then why are so many big companies declaring bankruptcy?  According to CNBC, the number of publicly traded companies declaring bankruptcy has hit a five year high…

 

It is interesting to note that the price of oil is being named as one of the primary reasons why this is happening.

In an article entitled “Anyone That Believes That Collapsing Oil Prices Are Good For The Economy Is Crazy“, I warned about this.  If the price of oil does not bounce back in a huge way, we are going to see a lot more companies go bankrupt, a lot more people are going to lose their jobs, and a lot more corporate debt is going to go bad.

And of course this oil crash has not just hurt the United States.  All over the world, economic activity is being curtailed because of what has happened to the price of oil…

 

But it isn’t just oil.  We appear to be moving into a time when things are slowing down all over the place.

In a recent article, Zero Hedge summarized some of the bad economic news that has come in just this week…

 

If we are indeed heading into another economic downturn, that is really bad news, because at the moment we are in far worse shape than we were just prior to the last recession.

To help illustrate this, I want to share with you a couple of charts.

This first chart comes from the Federal Reserve Bank of St. Louis, and it shows that after you adjust for inflation, median income for the middle class is the lowest that it has been in decades…

 

This next chart shows that median net worth for the middle class is also the lowest that it has been in decades after you adjust for inflation…

 

The middle class is being systematically destroyed.  For much more on this, please seethis recent article that I published.  And now we are on the verge of another major economic slowdown.  That is not what the middle class needs at all.

We are also getting some very disturbing economic news out of China.

In 2014, economic growth in China was the weakest in more than 20 years, and Chinese export numbers are absolutely collapsing…

 

This is a clear sign that global economic activity is slowing down in a big way.

In addition, Chinese home prices are now falling at a faster pace then U.S. home prices fell during the subprime mortgage meltdown…

 

Things continue to get worse in Europe as well.

This week we learned that the credit rating for Greek government debt has been slashed once again…

 

And according to the Financial Times, we could actually be on the verge of witnessing a Greek debt default…

 

So I hope that those that are euphoric about the performance of their stock portfolios are taking their profits while they still can.

Huge trouble is percolating just under the surface of the global economy, and it won’t be too long before the financial markets start feeling the pain.

By Michael T. Snyder, theeconomiccollapseblog.com

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