(The Economic Collapse Blog)—It feels like someone has pulled a plug, because the U.S. economy is suddenly caught in an extremely alarming downward spiral. As I discussed at the end of last week, investors are flocking to gold and silver because they can see that a storm is coming. We have reached a point where most of the country is experiencing significant economic pain, and as a result people are starting to get really careful with how they spend their money. The cost of living crisis has caused most of us to tighten our belts, defaults are absolutely soaring, and food bank lines are getting even longer. If conditions continue to deteriorate like this, what will 2026 look like?
Our economic momentum has been causing us to slide in the wrong direction for years, but now that slide threatens to become an avalanche. The following are 14 signs that the condition of the U.S. economy is worse than you think…
#1 According to a brand new survey that was just released, Americans plan to spend far less during this holiday season than they did last year…
The survey showed that consumers intended to spend an average of $1,595 this holiday season, which is over 10% less than the $1,778 they had planned to spend last year. The lower expected spending holds across all household income groups and most generations, but was particularly acute among younger shoppers.
Gen Z consumers, who were represented in the survey by individuals between the ages of 18 and 28, revealed that they plan to spend 34% less this holiday season compared to 2024. Millennials, respondents between the ages of 29 and 44 in the poll, said they plan to spend 13% less, on average.
#2 As the holiday season approaches, we are starting to get reports of “empty shelves” in some parts of the nation…
Several people echoed Michele’s feelings about availability, describing the situation as “empty shelves, higher prices”. Natalie, who lives in New Hampshire, said she hasn’t seen certain pantry staples “for months”. She said: “The store shelves have become more and more bare … instead of multiple choices there may only be one or two, and name brands are being replaced by store brands.”
#3 Household debt has reached an all-time record high of 18.4 trillion dollars, and debt collectors are becoming a lot more aggressive…
U.S. households now owe a record $18.4 trillion in debt, and federal data shows complaints about aggressive debt collection have surged over the past year.
The Federal Trade Commission logged over 140,000 consumer complaints about debt collection in the second quarter — a 220% jump from the same period a year earlier. Georgia, Texas and Florida recorded the highest rates.
#4 According to a report that was recently posted by Zero Hedge, auto loan delinquencies have been absolutely soaring…
A month after bankruptcies of subprime auto lender Tricolor and auto-parts supplier First Brands, new cracks emerged in U.S. credit markets. This week, Zions and Western Alliance disclosed they were victims of loan fraud tied to funds investing in distressed commercial real estate. The revelations come amid broader credit trouble, and shifting our focus back to autos, there’s new data this morning about credit products tied to the riskiest consumers that have seen a 50% surge in delinquencies.
Bloomberg cites data from the credit-scoring company, VantageScore, which reveals that delinquencies among the low-tier consumers have surged 50% since 2010. Fueling the delinquencies is a perfect storm of record-high car prices, elevated interest rates, longer loan terms, and monthly payments that average nearly as much as rent for some folks.
Since 2019, new vehicle prices have jumped over 25% to $50,000, while average monthly payments reached $767, with 20% of borrowers paying over $1,000 per month. Loan rates now exceed 9%, worsening the affordability crisis.
#5 Are we on the verge of a new banking crisis? Thanks in part to the turmoil that we have been witnessing in the auto industry, some regional bank stocks plummeted last week…
Shares of regional banks and investment bank Jefferies tumbled on Thursday as fears mounted around some bad loans lurking on Wall Street.
Zions Bancorporation dropped more than 13%, while Western Alliance Bancorp fell more than 10%. The SPDR S&P Regional Banking ETF (KRE) lost more than 6%, with all but one member of the popular fund ending Thursday’s session in the red.
The bankruptcies of two auto industry-related companies this year have raised concerns about loose lending practices, especially in the opaque private credit market. That’s left both the banking industry and investors concerned about whether instances of loans gone wrong indicate a burgeoning crisis.
#6 Millions upon millions of Americans are seriously behind on their student loan payments…
Roughly 5.3 million borrowers are in default and another 4.3 million borrowers are in “late-stage delinquency,” or between 181 and 270 days late on their payments, according to a separate analysis last month by the Congressional Research Service based on data from the Education Department. Payments 270 days past due are considered in default.
With so many borrowers already seriously delinquent, “if these borrowers do not start paying soon, defaults will meaningfully rise,” Moody’s Analytics economist Justin Begley told CNBC.
#7 The lines at our food banks are getting even longer. In fact, in some areas people are actually spending multiple hours in line just for a chance to get some food…
By the time the Pilsen Food Pantry opened on a recent morning, Ulysses Moreno had been there for two hours — with a line of people behind him that snaked around the corner.
“This is a lifeline for me,” said Mr. Moreno, 39. He had lost his construction job a few days earlier, and with three teenagers at home, he wanted to make sure he could stock up. “Our food budget doesn’t stretch as far as it used to.”
#8 Approximately 62 percent of U.S. workers say that the cost of living is rising faster than their paychecks…
Nearly two-thirds of workers (62%) say their income hasn’t kept pace with rising expenses over the past year — the highest share in four years, according to a new Bankrate survey. In 2022, 55% said the same.
#9 Electricity prices have been rising “more than twice as fast as overall inflation”…
The cost of electricity is rising more than twice as fast as overall inflation, turning a basic household necessity into a growing financial burden.
In August, electricity prices jumped 6.2% from a year earlier and are now up more than 30% over the past four years, according to the Consumer Price Index.
That rise has hit families hard and presents a political challenge for the administration.
#10 Close to half of all restaurants anticipate that they will soon be forced to raise prices even higher…
Nearly half of all 712 restaurant decision-makers surveyed (48%) said they plan to increase menu prices if inflation continues to be a factor.
The National Restaurant Association estimates that, to maintain a 5% profit margin, the average restaurant needs to raise prices by 31%, according to data compiled by the D.C.-based industry trade group earlier this year.
#11 We haven’t seen Americans cook meals at home at this rate since the lockdowns of 2020…
More Americans are cooking at home and turning to ingredients that stretch their food budgets, a potential warning sign for the U.S. economy.
American soup and snack maker Campbell’s recently saw the highest level of meals cooked at home since early 2020, CEO Mick Beekhuizen said on an earnings call this week.
#12 Thanks to our trade war with China, U.S. farmers are facing the worst downturn that they have experienced in about 50 years…
Across the Midwest, combines sit idle and bins overflow with unsold grain. Corn prices are down nearly 50% since 2022. Soybeans have dropped 40%. Fertilizer and equipment costs are up double digits. And 8 in 10 farmers now say they believe the U.S. is on the brink of another farm crisis reminiscent of the 1980s. They’ve even given it a name: Farmageddon.
#13 According to Gallup, 60 percent of U.S. workers do not have a “quality job” at this stage…
A majority, 60%, of U.S. workers don’t have a “quality job” that provides basic financial well-being, safety and other factors, according to new Gallup research that covers more than 18,000 workers across industries, occupations and types of employment.
#14 According to a stunning survey that was recently released by PNC Bank, a whopping 67 percent of all workers in the United States are now living paycheck to paycheck.
#15 We continue to see mass layoffs all over the nation. For example, Paramount just announced that it will be eliminating approximately 2,000 jobs…
Paramount Skydance will begin mass layoffs the week of October 27, eliminating around 2,000 U.S. jobs as part of a $2 billion cost-cutting plan under new CEO David Ellison, Variety reported on Saturday.
#16 The gap between the wealthy and the poor just continues to grow. At this point, the top 10 percent “account for nearly half of all spending”…
The top 10 percent of U.S. households now account for nearly half of all spending, Moody’s Analytics recently estimated, the highest share since the late 1980s.
#17 The financial markets have started to shake, and that is really bad news because leverage in the stock market is at an all-time high…
Leverage in the stock market has been spiking since April. In September, margin debt – the amount investors borrowed from their brokers – spiked by another 6.3%, or by $67 billion, from August to a record $1.13 trillion.
#18 57 percent of Americans expect the economy to get even worse over the next year. That figure is 27 percent higher than it was last year…
An annual survey from Deloitte revealed that most U.S. consumers expect the economy to weaken in the year ahead.
According to a survey of roughly 4,000 people published on Wednesday, 57% of respondents expect the economy to soften over the coming 12 months, the highest level ever recorded since Deloitte began tracking the sentiment in 1997. This represents a 27-percentage point jump from the 30% registered during the same time last year, and is even higher than the 54% seen in 2008, during the Great Recession.
It is very rare for Americans to be this pessimistic about the economy.
But the truth is that the vast majority of the population still has no idea just how bad things will eventually get.
Our leaders have been making catastrophically bad decisions for decades, and now the consequences of those catastrophically bad decisions are starting to catch up with us in a major way.
This generation was handed the keys to the greatest economic machine in human history, and we wrecked it.
We have piled up colossal mountains of debt, we have destroyed the value of our currency, and we have absolutely eviscerated the middle class.
Now virtually every pillar of our economic prosperity has started to crumble, and it is just a matter of time before the entire system completely collapses.
Michael’s new book entitled “10 Prophetic Events That Are Coming Next” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.
Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.
