July 23, 2020
The Chasm Grows Deeper and Wider
By Steven Longenecker
The great divide between the haves and the have-nots in America has never been wider.
And the usual rickety bridges out of poverty – hard work, education, self-improvement, entrepreneurship – are increasingly no guarantee or even likelihood of success.
Folks across America are losing hope.
And once lost… the fall into despair is a long, long way down.
Opioid overdoses across the nation have surged 42% in May compared with the same period last year. Homelessness is rampant… and is expected to soar in the coming months.
This weekend, we watched from our apartment window as a shameless middle-aged fellow in a polo shirt spread a blanket and cooked heroin over a tea light in full view of the same street the presidential motorcade travels down.
He has little to fear… the police in D.C. are largely hands-off. And when they do make an arrest, they rarely take folks to jail – issuing a citation instead. Of course, that leads to more offenses being committed between the initial citation and the ultimate court date.
No surprise, violent crimes and homicides are spiking in most large American cities. Here in Washington, D.C., more than 100 people have been murdered so far this year – u 20% surge from 2019.
Much of America is getting increasingly left behind. It gets the scraps, if anything at all.
Today, nearly half the U.S. population is out of a job. Others have been forced to take less money for the same number of hours put in.
In fact, for many Americans, the only thing they see more of today is debt.
Student loans for their children keep getting larger… and can never be discharged in bankruptcy. Hospital bills are soaring… funded by payment plans and harassment from collectors. Credit-card debt, mortgage debt, personal debt – they’re all rising.
Already, the five largest lenders in the U.S. – JPMorgan Chase (JPM), Wells Fargo (WFC), Bank of America (BAC), Citigroup (C), and U.S. Bancorp (USB) – say the financial stress caused by the pandemic could cause borrowers to default on a total of $104 billion in debt.
We suspect those numbers are nowhere near high enough.
For many Americans, there is no way out…
Main Street businesses have been banned from operating by government decree. These “temporary” closures have now often turned permanent. Review website Yelp recently announced that 60% of the businesses on its site that were previously marked as temporarily shuttered are now shut down for good. And schools are closing across the nation for the fall semester, weighing most heavily on households where both parents work – especially blue-collar jobs.
At the same time, the government is printing money seemingly without end… money that largely goes to the biggest companies and wealthiest individuals in America.
In 10 days in March, the Fed created and added more money to its balance sheet than it did in the previous 30 years before the financial crisis of 2008 and 2009. It has added trillions since.
Our nation is a financial, cultural, and demographic pressure cooker. And the coronavirus has caused this pressure cooker to explode – sending shrapnel into the pillars of American society.
If you think the virus has upended your life so far… just wait until you see what’s coming next. Things are unlikely to “go back to normal” anytime soon – if ever.
What happens next will determine who gets rich in America… and who gets left behind.
But if you trust the government to take care of you – whether it’s with its health care response, its recovery stimulus, or its free money in the form of paying unemployed Americans more to stay unemployed than take a job – you are in grave danger.
The government doesn’t give a damn if you starve. There is no possible way that a group of Washington, D.C. elites can make the right decisions for you, your family, or the good of society. As Adam Smith explained in The Wealth of Nations more than 200 years ago, there is no such thing as the “public good,” there’s only a myriad of competing interests.
Today, the wealth gap is not the cause of the coming financial chaos. It is a symptom… and one that the coronavirus economy has worsened.
A recent Gallup poll found that 71% of people making more than $180,000 can work from home during the pandemic, compared with just 41% of those making less than $24,000.
The problem is not that a small group of Americans have done well. The real problem is how they’ve done well.
Even though the U.S. economy and stock market has boomed for the better part of 30 years, most Americans are actually worse off than they were decades ago thanks to stagnant wages and inflation. As a result, Americans have taken on more and more debt in an attempt to keep up with their former standards of living.
And today, we’re at a point of societal explosion…
- We’ve already seen riots in the streets of dozens of major cities. Expect to see more.
- We’ve already seen “deaths of despair” – suicide-, drug-, and alcohol-related deaths – soar so much that the average American life expectancy has now actually decreased. That will continue.
- We’ve already seen a complete death of trust in every major American institution – from schools to hospitals to newspapers to the police. That’s unlikely to recover in our lifetimes.
The question that you should be focused on today is simple…
As the government continues to pump trillions into our economy… socialists roll out programs across the country… and the rich continue to get richer… How can you keep yourself from ending up on the wrong side of this widening chasm in America?
The answer is one that we have consistently tried to spread since our inaugural issue of American Consequences magazine: Pay off debt. Save rather than spend. Invest in strong businesses and assets that can survive a crisis.
And one week from today, the founder of one of the preeminent financial research firms in America is sharing a major announcement.
The last time he did this, he called the bottom of the COVID-19 crash to nearly the day. Following that prediction, you could have acted on multiple stock recommendations that went on to climb 50% or more.
And this time, he’s explaining how an asset you may never have considered can grow your initial stake by at least 1,000% in the coming crisis that will be upon us sooner than you might imagine.
He says we are nearing an extremely rare monetary event that will unlock trillions of dollars in wealth for those in the know… But it will likely destroy the wealth of many other Americans.
It’s not fair. There has been no such thing as “fair” in America for decades. But it is happening. Prepare yourself and learn what’s coming by clicking here.
Now here are some of the stories we’re reading…
Enough! It’s Time for the Eagle to Fly (Online Magazine)
Enough! It’s Time for the Eagle to Fly (Downloadable PDF)
Violent crime in U.S. cities surges in summer amid pandemic, protests
“I think it’s just a perfect storm of distress in America,” said Atlanta Mayor Keisha Lance Bottoms earlier this month, after a weekend of bloodshed in her city. Here’s a look at the violent crime statistics in the Georgia city and in other parts of the country – including Chicago, Houston, Los Angeles, New York City, Philadelphia, Portland, and Seattle.
Winning Streak of Big Cities Fades With 2020 Crises
Three major shocks now threaten to upend that urban renaissance: The coronavirus is preying on densely packed places; anger over policing is producing social unrest reminiscent of earlier eras; and strained city and state budgets could prolong their economic pain.
Covid-19 Vaccines With ‘Minor Side Effects’ Could Still Be Pretty Bad
Neither the mainstream media nor the medical press has given much attention to the two vaccines’ potential downsides – in particular, their risk of nasty adverse effects, even if they’re not life-threatening. This sort of puffery doesn’t only help to build a false impression; it may also dry the tinder for the future spread of vaccine fearmongering.
1,000 died of Covid-19 in 1 day. Now the U.S. is on track to hit 1 million new cases in 2 weeks
President Donald Trump said Tuesday the pandemic is likely to “get worse before it gets better,” a prediction that’s been echoed by other experts who have shared a bleak outlook on the next few months in the country.
Here’s what’s behind the ‘perfect storm’ sending silver prices surging
Much of what’s driving silver also is driving gold – aggressive monetary policy financing of fiscal spending, which limits the ability of bond yields to rise. That is sending inflation-adjusted, or real, yields lower, which tends to boost precious metals. In addition, silver is still cheap relative to gold by historical measures.
And let us know what you’re reading at [email protected].
Publisher, American Consequences
With P.J. O’Rourke and the Editorial Staff
July 23, 2020