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<\/a><\/p>\nby Michael Snyder
\nThe Economic Collapse<\/p>\n
Our leaders were able to successfully kick the can down the road for a long time, but now many of our long-term problems are becoming short-term problems, and the economic outlook for the remainder of 2023 is extremely bleak.\u00a0 But none of the economic hardships that we are experiencing at this moment should shock any of us.\u00a0 The truth is that we were warned about all of these things well ahead of time.\u00a0 Many independent voices have been warning us that there would be severe consequences for the exceedingly foolish economic decisions that our leaders were making, and now those severe consequences are starting to play out right in front of our eyes.\u00a0 The following are 5 economic disasters we were warned about in advance that are happening right now\u2026<\/p>\n
#1<\/strong>\u00a0We were warned that a great commercial real estate crisis would be coming, and now it is here.\u00a0 In fact, we just witnessed\u00a0another massive default<\/a>\u2026<\/p>\n With recent stress in the regional banking sector, sentiment in US commercial real estate (CRE) \u2013 and especially the office sector \u2013 has turned negative as investors prepare for potential spillover effects (with\u00a0JPM<\/a>,\u00a0Morgan Stanley<\/a>, and\u00a0Goldman Sachs<\/a>\u00a0all joining the gloom parade), especially as high-profile defaults continue to make headlines as borrowers face higher debt service costs and refinancing becomes much harder ahead of a $400 billion CRE debt maturities this year alone.<\/p>\n The latest headline fueling concerns about a potential CRE crisis involves a fund belonging to CRE giant Brookfield defaulting on a $161.4 million mortgage for twelve office buildings in Washington, DC.<\/p>\n According to\u00a0Bloomberg<\/a>, the loan was transferred to a special servicer working with \u201cthe borrower to execute a pre-negotiation agreement and to determine the path forward.\u201d<\/p><\/blockquote>\n #2<\/strong>\u00a0We were warned that there would be widespread layoffs as economic conditions in the United States deteriorated.\u00a0 Sadly, that is now happening all around us.\u00a0 For example, on Monday accounting firm Ernst & Young announced that they will be laying off\u00a0thousands of highly paid workers<\/a>\u2026<\/p>\n Ernst & Young said Monday that it would eliminate roughly 3,000 jobs from its US workforce as it pivots to address shifts in demand and \u201covercapacity\u201d in sections of its business.<\/p>\n The cuts represent less than 5% of the US firm\u2019s total workforce. EY described the workforce reduction as \u201cpart of the ongoing management of our business\u201d and said it didn\u2019t stem from the firm\u2019s recent failure to implement a global breakup.<\/p><\/blockquote>\n #3<\/strong>\u00a0We were warned that the largest corporate debt bubble in the history of the world would eventually burst, and now corporations are beginning to default on their debts\u00a0at a rate that should deeply alarm all of us<\/a>\u2026<\/p>\n More companies around the world defaulted on their debts in the first three months of this year than in any quarter since late 2020, when businesses were still hamstrung by restrictions to stop the spread of Covid.<\/p>\n In a report Tuesday, credit rating agency Moody\u2019s said 33 of the corporations it rates defaulted on their debts in the first quarter, the highest level since the last quarter of 2020 when 47 companies defaulted. Almost half, or 15 companies, defaulted last month \u2014 the highest monthly count since December 2020.<\/p>\n Defaulting firms included Silicon Valley Bank, which collapsed in March, its holding company SVB Financial Group and Signature Bank.<\/p><\/blockquote>\n #4<\/strong>\u00a0We were warned that we would witness a dramatic surge in bankruptcies in 2023, and that is\u00a0precisely what is happening<\/a>\u2026<\/p>\n Bankruptcy filings across the United States rose for the third straight month in March in all major industries.<\/strong>\u00a0A total of 42,368 new bankruptcies were filed last month, according to data from Epiq Bankruptcy, a provider of U.S. bankruptcy court data, technology, and services.<\/p>\n This is 17 percent up from the 36,068 filings in March 2022 and is the highest number of monthly bankruptcy filings since April 2021.<\/strong><\/p>\n Data from S&P Global Market Intelligence showed 71 corporate bankruptcy petitions in March, a jump from 58 in the previous month. This is the highest monthly total since July 2020 and the fourth straight month of increases.<\/p><\/blockquote>\n #5<\/strong>\u00a0We were warned that the rest of the world would eventually start rejecting the U.S. dollar, and now \u201cde-dollarization\u201d is happening\u00a0at a \u201cstunning\u201d pace<\/a>\u2026<\/p>\n The dollar is losing its reserve status at a faster pace than generally accepted as many analysts have failed to account for last year\u2019s wild exchange rate moves, according to Stephen Jen.<\/p>\n The greenback\u2019s share in global reserves slid last year at 10 times the average speed of the past two decades as a number of countries looked for alternatives after Russia\u2019s invasion of Ukraine triggered sanctions, Jen and his Eurizon SLJ Capital Ltd. colleague Joana Freire wrote in a note. Adjusting for exchange rate movements, the dollar has lost about 11% of its market share since 2016 and double that amount since 2008, they said.<\/p>\n \u201cThe dollar suffered a stunning collapse in 2022 in its market share as a reserve currency, presumably due to its muscular use of sanctions,\u201d Jen and Freire wrote. \u201cExceptional actions taken by the US and its allies against Russia have startled large reserve-holding countries,\u201d most of which are emerging economies from the so-called Global South, they said.<\/p><\/blockquote>\n Unfortunately, we are still only in the very early stages of this economic meltdown.<\/p>\n