Have you ever been a passenger in a vehicle where the driver was visibly drunk or impaired? If so, you probably remember the tightness you felt in your stomach watching helplessly, knowing that at any moment things could get really bad and there was nothing you could do about it. A lot of people including myself feel this way lately every day waking up to news reports about this or that event which happened while we were sleeping and what, if anything, we can do to prepare.
"As our national debt surpassed $40 trillion last week and has been accelerating at a rate of $13.4 billion per day (annualized rate of $4.9 trillion) since July 1, the only analogy I can make is the final scene of Thelma & Louise when they purposely drive off a cliff into the Grand Canyon, rather than face the consequences of their actions. But, in my daily existence, the people at the gym, drugstore, and grocery store seem happily oblivious to the extreme danger we currently face as citizens of a dying empire, intent on going out with a bang. We are accelerating towards an economic meltdown, inflationary financial collapse, and possibly global war, and no one seems to care or acknowledge reality."
Lending conditions for small business owners have remained surprisingly stable lately but there are some stealth changes happening beneath the surface; many loans which breezed through to final funding are being scrutinized more carefully as lenders perceive certain business models have higher risk profiles than before. In particular, construction and trucking (transportation in general) NSIC codes are being declined regardless of credit quality making it difficult for many business owner in those industries to secure affordable funding. The increased costs of Diesel fuel which is at record highs and the slowdown in building permits combined with higher mortgage rates is putting pressure on loan availability for companies building homes or transporting goods.
One work-around I have found when lending is restricted is HELOC funding (Home Equity Line of Credit) in situations where the business owners have property with equity that can be cashed out. The advantage there is the business NSIC code doesn't prevent loan approvals and rates have been pretty good. Around 7-8%.
You probably already know know the main stream media doesn't tell the truth about what is really happening. The facts aren't too hard to learn for anyone with a modicum of critical thinking skills though:
"Even though the propaganda outlets: CNBC, CNN, Fox, MSNBC, among others, are compensated gloriously by Big Pharma, Big Banks, the Military Industrial Complex, and Big Corps, to lie, obfuscate and mislead the masses, one only needs the most basic of math skills and understanding to see what is really happening in this country. Is it a sign of a strong vibrant economy when credit card delinquencies are at a 15 year high, student loan delinquencies are at a 6 year high, and auto loan delinquencies are at an all-time high? And this is before the real pain of a recession takes hold. This chart reveals immense pressure on average Americans who don’t have the benefit of insider trading tips from Trump."
The on-again-off-again war with Iran is devastating our economy right now as prices lurch upward despite all the happy talk from the WH and media talking heads. Supposedly, the straight is open and oil is flowing as freely as it did before we started this disastruous war of choice. Sure it is.
Many of my readers are seeing reports that America will use the (stolen) 65 billion barrels of Venezuelan oil in the ground and gas prices will certainly plummet as a result. I'm not so sure:
"The shortage that bites right now is in product — diesel and jet fuel — and extra-heavy Venezuelan crude is not product. It is refinery feedstock. You cannot relieve a middle-distillate shortage with a barrel that still has to be diluted, blended, upgraded, coked, and hydro-processed before it yields a usable gallon of anything."
The media and government treats us all like mushrooms; they keep us in the dark and feed us lots of s**t.
As we ride this runaway train of an economy into the unknown, business owners can still take actions that will insulate them from the worst consequences. Reducing debt, refinancing existing debt to longer term-lower rates and stocking up on critical supplies are all advised whenever possible.
There are way too many variables for anyone to cover all contingencies but common sense, critical thinking and perseverance I believe will be enough to both survive and thrive in the conditions developing now.
Stay tuned until next week....