Downturn Coming, Not Recovery

By Greg Hunter’s 

A buddy of mine, who is a business broker, recently told me, “I have never in my life seen more broke people.”  I told that little quote to a car salesman I was talking with over the weekend, and he told me, “Don’t I know it! I am in the car business, and I see it all the time.”  Those are not the words you hear from the front lines of business that say a so called “recovery” is at hand–quite the opposite.    

According to the latest report from, signals are intensifying for a “renewed economic downturn.”  Economist and founder of Shadowstatscom, John Williams, says the actual money in the overall economy is “declining.”  There is no wonder why the amount of money is shrinking; just take a look at the unemployment rate.  According to Williams, it stands at 21.7%, if calculated the way Bureau of Labor Statistics did it prior to 1994.   Last weeks jobs report did not really improve the picture much because nearly 95% of the 431,000 jobs added in May were temporary government census workers.  Below are what a bad job market and a plunging money supply look like on a chart, compliments of    

But, it’s not just Williams sounding the alarm.  Plenty of warning signs that things might be taking a turn for the worst popped up all over the Internet just last week.  For example, this is from economics writer Darryl Robert Schoon, “We are entering a period of deep change. The abrupt re-appearance of systemic risk in May is the wake-up call for the April fools who believed the financial crisis was over, that credit-driven prosperity would return with only more credit, that debt could be rolled forward ad infinitum, and that mankind, thank GOD, was once again in control of its destiny.  There is a great deal of difference between affecting destiny and controlling it.  If you don’t know the difference, don’t worry. You will.”  (Click here for the complete article by Schoon.)  In 2007, Schoon wrote the book, “How To Survive The Crisis And Prosper In The Process.”  His analysis of the current financial meltdown has been spot on.


Then there was this from analyst Gordon T Long, “We are nearing a ‘phase shift’ in what I will refer to as the energy level of the markets. Elliott Wave practitioners would refer to it as a ‘higher degree pivot’. W D Gann practitioners would call it a Gann Cardinal. Economists call it a “Tipping Point”. I call it a ‘Critical Point’ or ‘Chaotic Transient’.   A trader would just call it a market melt-down or melt-up! Few alive have ever witnessed either.”  (Click here for the complete Gordon T Long article.) 

Finally, my last warning sign that things are not turning up is news that bankruptcy filings are up an astounding 9% in May from a year ago.  According to the American Bankruptcy Institute Executive Director, Samuel J. Gerdano, “Consumer filings this year remain on track to top 1.6 million filings.”  (Click here for more on that story.)  The good news is May’s filings are down slightly from April’s record month.

Broke people filing for bankruptcy in near record numbers is not a sign of a turnaround.  The signs from just last week are ominous, to say the least.  America’s debt clock just tripped the $13 trillion mark!  That means America’s debt is more than 90% of Gross Domestic Product.  When that phenomenon occurs in a country, it is almost always a sign a severe economic upheaval is coming.  I hope I am wrong.

  1. thomas

    Greg i’m afraid you right !!!!!!!!!!!!

    • Greg

      Thank you but I’d rather be wrong.

  2. John Bernard

    Every day these kinds of articles are published, yet the network and cable talking heads ignore, downplay, or attribute different analysis to the same numbers. Who is taking the correct course? I realize that panicking the general population is not wise but I wonder if most people are well educated enough to panic. Administration supporters are hoping all these indicators are wrong and must understandably paint a rosy picture.

    One of your forecast articles mentioned martial law. What happens to elections should this scenario evolve?

    • Greg

      Bad news about the economy is bad for advertisers. In my experience, management does not tell reporters what to say they just hire and keep on the people who will spin good news. If there is martial law, elections will be suspended. Let’s hope is does not come to that. Thank you for your comment.

      • MarkM

        Hello Greg and John,

        If Barry declares martial law to keep his job, violent revolution will result. There are enough patriotic Americans who won’t live as a dictator’s subject. Live free or die!

        President Obama: DON’T USE THE MARTIAL LAW TACTIC!

        Martial law won’t work very well.


        • Greg

          I also think Martial Law would be a big problem for everyone. Thank you for weighing in.

  3. silver gold ratio


    I think you are spot on. The large majority of people in this country seem to be sleeping. I often hear the American people referred to as the “Sheeple” being led by main stream media and govt. propaganda.

    I believe a monetary system where debt is money is doomed to fail every time. The tipping point you refer to seems quite near. Thanks for you great contributions.


    • Greg

      Thank you MB for the comment.

  4. Ray

    Eye opening commentary. The White House and Washington D.C. in General have been spinning this as if we are in a recovery and everything is peaches and cream. Congress keeps on spending and spending like the supply of tax payers money is endless, it’s more than irresponsible, it’s become near criminal at this point. I have been telling friends and family to prepare for hardtimes, stock up on essentials and get out of debt as fast as possible. Our standard of living is about to take a plunge and farming and basic skills will be in big demand. Five Acres and a mule anyone!!

    • Greg

      I’ll take the 5 acres. Thanks for the comment.

  5. xiao chun

    Gd report. . . see
    charts: total debts (including part of Sam’s national debt)
    of worst US states is worse than Greece. . .

    • Greg

      Xiao Chum,
      Good info! Thank you.

  6. cheapy

    What would happen to those percentages is instead of being debt to GDP they were debt to production (Ie GDP – Consumer purchases)???

    With consumer purchases being 70% of GDP, that leaves only 30% being the productive portion, giving a dramatically different percentage.

    13 / (14 x .3) = 310%

    • Greg

      Thank you for the math lesson. Very interesting!

  7. Stephen Clifton

    I am in an industry where I look at credit, income and assets everyday. I can tell you firsthand that I have never seen so many people with so little money. Prices in the store are rising and incomes are falling or going away completely. Some companies that aren’t in financial trouble but using the situation to cut benefits.

    I encourage everybody here to watch the movie “The Road” with Viggo Mortensen. You’ll be running to the store for canned goods.


    • Greg

      Thank you for the info from the front lines!

  8. Thomas Nacey

    I think we have reached the point of;
    “In a time of universal deceit, telling the truth becomes a revolutionary act”. (Thank you George Orwell)
    and thank you Greg.

    • Greg

      Great quote! It has stuck with me all day!

  9. dino

    Im sad to say I THINK YOUR RIGHT!!! Great read, Thx!

    • Greg

      Thanks Dino.

  10. BLT

    Great work lately greg, u know I was pondering lately just why everyone seems to be so blind these days…and it hit me….maybe people like us are the ones meant to survive, if the bildeburgers really do have a plan to eradicate and depopulate the world, then wouldn’t you agree that the sheep are expendable? Only the strong….and intelligent survive? I know it sounds mean but mainstream media conveys the exact same intelligence levels that some of my most ignorant (and favorite) friends do….for the same reason I wouldn’t want these people running a complicated machine, maybe society SHOULD dictate who gets left behind? Just a thot, and thanks for the work

    • Greg

      Thank you. You may be on to something. One thing is for sure, the prepared are going to get along alot better than the unprepared.

  11. major

    God’s retribution to an evil administration…..just long enough to crush them so the real patriots can take back control

  12. Steve

    Dear Greg…Your article is so right and even conservative. Today I bought 9 apples and paid $9 for them USD. To take an example of past 45 years ago. Apples were a .05, and were all over the place, you could get them free if you took a trip to an orchard and picked up off the ground and making a $ was easy if you wanted to do hard work. Jobs were plentiful and we were worried that we may have a generation of lazies. Good ol USA products were favored by the world because they lasted. Remember Craftsman tools made in America. The 4 day work week was considered as well as some with 2 homes, yea a vacation home too. So it all came down to Corporatism, Greed, Gross Waste, Bad Management, and a big dose of Corruption, degradation of Mores. So we all now are poorer and a feeling of loss of Vision a making a better destiney. Crisis will mire us into something that is just patched. Wheres watching the Waltons on TV? Our next generation is lost and is not wanting to work and electronnically checking out of reality. Getting High as an escape. Thanks to those mostly in Government that took out Biblical values and controls. Allowed corruption of the masses by Media’s influence instead of directed Framework that Our Origional Fathers had. Like the new generation, I too feel it won’t be fixed…ever…as it’s too far gone…….

    • Greg

      Thank you Steve for weighing in.

  13. Rob

    What are the implications for monetary instruments? Will we be pushing around wheelbarrows full of money just to buy bread? What is the best hedge against money losing its value? I’ve looked into gold, but can’t seem to justify it because of “paper promises” being broken and it’s not easy to liquidate (unless you have it on hand, at which point you need to build your own Fort Knox to protect it).

    My wife even made a good point that things could get so bad that only food, clothing, and “quid pro quo” will be the “money” of the economy. Gold might just be a heavy paperweight.

    • Greg

      Thank you for the comment.

  14. stuuuuu

    the general public allows perception to become reality, instead of perception, how about about the true FACTS ?? Just a thought

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