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Is the US economy on the brink of collapse?
While the media is busy with flashy headlines, an economic "heart attack" is happening quietly right now.
Numbers do not favor anyone,
and what is happening today in the American markets is not just a "correction,"
but the pressure has reached the point of explosion.
We are facing the worst levels of institutional and living crises since the 2008 disaster.
1. The Guillotine of Major Companies
In the last three weeks, 18 major companies have fallen into bankruptcy.
We are talking about billion-dollar companies collapsing at a rate of 6 companies per week.
This pace has only been seen at the peak of the pandemic and the depths of the 2008 crisis.
When "heavy" companies start collapsing like this,
it means liquidity drought has reached the bone.
2. The "Crushed" Consumer and Historic Debt
The real danger is not just in the budgets, but in people's pockets.
Household debts have reached a terrifying number:
$18.8 trillion.
But the catastrophe is not in the size of the debt,
but in the inability to pay it off.
The default rate on credit cards has jumped to 12.7%,
a growth in defaults faster than what we saw in the 2008 crisis!
The Young Generation... the First Victim
The worrying thing is that the group driving (18-39 years) consumption is the most defaulting.
When young people lose the ability to spend due to the accumulation of debts from education, cars, and credit cards,
the main engine of the economy stops running.
Summary:
What does this mean for you?
We are living in the "End of the Cycle" (Late Cycle).
Companies are going bankrupt, consumers are defaulting, and debts are at their historic peak.
This combination is usually followed by a "surgical intervention" from the Federal Reserve through interest rate cuts and liquidity injections to save what can be saved,
but history teaches us that intervention often comes after the actual damage has occurred.
My advice:
Don’t be fooled by the apparent calm.
Signals in "Defaulted Debts" and "Bankruptcy Flows" indicate that the storm has already begun, and the matter now is only a matter of time before we see its reflection on jobs and markets directly.
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