by Michael Snyder
"A lot of people may not like what Donald Trump just said about the economy, but it is accurate. As you will see below, he recently warned that we could soon be facing “an economic depression much like 1929”, and without a doubt the stage has been set for a downturn of that magnitude. Right now, we are in the midst of a global bond crisis, the housing market is paralyzed by high mortgage rates, stores and restaurants are closing all over the nation, there have been mass layoffs in the tech industry, demand at food banks is soaring, and we are experiencing a seemingly endless cost of living crisis that stretches back all the way back to the beginning of this decade.
So I very much agree that we are potentially facing a full-blown economic depression. Earlier this month, Trump caused quite a shock when he publicly stated that the U.S. “will have an economic depression much like 1929” if the Democrats win the midterms… Trump made the warning while promoting his pledge to give every adult American $5,000 if Republicans retain control of the House and Senate. “If the Democrats win, you will have an economic depression much like 1929,” Trump said in a video posted to Truth Social on Saturday. He also argued that Republican control would allow the administration to return money to Americans, citing record tariff revenue and economic gains. Trump has estimated the proposed “Trump dividend” would cost about $1 trillion.
Of course Trump is convinced that an economic depression can be avoided if Republicans win the midterms. At the moment, pollsters are telling us that such an outcome is very unlikely. The latest surveys indicate that Democrats are almost certainly going to take the House, and there is a good chance that they will also take the Senate. Needless to say, the pollsters have been wrong before, and they could be wrong again. So we will just have to wait and see what happens.
But without a doubt, our economy is teetering on the brink of disaster. Today, we learned that pending home sales in the U.S. just hit their lowest level in more than 12 years…U.S. pending home sales are down to their lowest level since spring 2014–with the exception of April 2020, when the onset of the pandemic ground the housing market to a halt. Pending home sales declined 4% from a month earlier in September on a seasonally adjusted basis–the biggest monthly drop in more than three years. This is a real-time indicator of what’s happening in the housing market; fewer homes went under contract in September largely because mortgage rates rose steadily, surpassing 7% by the end of the month.
The bond crisis has driven mortgage rates to absurd heights, and this is absolutely crushing the housing market. The areas that are being hit the hardest were once some of the hottest during the boom years… The declines were biggest on the West Coast: Seattle posted the biggest drop (-24.4% year over year), followed by Los Angeles (-16%), San Diego (-15.8%) and Anaheim, CA (-15.5%). Those Southern California metros are among the priciest in the U.S., so rising mortgage rates hit them hard, pricing many on-the-fence buyers out. Seattle is also expensive, and a bumpy local job market is curbing demand.
It appears to be inevitable that home prices will fall substantially. In fact, this has already started to happen in some parts of the country. That may sound like good news, but the last time this happened our economy plunged into “the Great Recession”. What will happen this time around?
Right now, U.S. households are struggling to keep up with their debts at a level that we haven’t seen since 2010… The ability of U.S. families to stay current on their debts worsened over the past three years, hitting levels not seen since the aftermath of the global financial crisis, the Federal Reserve reported Friday.
In the central bank’s Survey of Consumer Finances, researchers found that while wealth disparities narrowed somewhat, the ability to meet debt payments deteriorated significantly. “Families were more likely to be behind on their financial obligations than at any point since the 2010 survey,” stated the survey, a data-rich document the Fed releases every three years to chronicle the nation’s financial health. The country in 2010 was just emerging from what became known as the Great Recession, a period that ran from December 2007 to June 2009.
The reason why so many Americans are struggling to stay afloat financially is because we are in the middle of the longest multi-year cost of living crisis in U.S. history. For years, I pleaded with our politicians to stop borrowing and spending so much money. For years, I pleaded with the Federal Reserve to stop flooding our financial system with fresh cash. But they didn’t listen.
Now the purchasing power of our money has fallen dramatically and the cost of living crisis is strangling the life out of communities from coast to coast. In West Virginia, just trying to survive has become a daily struggle for countless numbers of people…Those forces have hit especially hard in areas that were already struggling economically, like West Virginia’s once-flourishing coal mining communities. The spike in gas costs means a 45-minute drive to the nearest grocery store can set residents back more than $15. And West Virginians who must comply with the new work requirements to receive food benefits are confronting a lack of jobs and training programs. Since last summer, about 24,000 people, including 8,000 children, have lost food stamps, according to the West Virginia Department of Human Services. “It’s like the pandemic on steroids without funds,” Kirkhart said. “I don’t believe the government needs to provide everything, but if you’re going to ask us to, please help.”
Of course it isn’t just our rural areas that are dealing with hard times. Our major cities are teeming with the impoverished, the homeless and the addicted. In some cities, homeless encampments stretch on for block after block, and hordes of drug addicts wander around like zombies and defecate in the streets.
Such an environment is perfect for rats, and it is no surprise that New York, Los Angeles and Philadelphia are the most rodent-infested cities in the United States…A national pest control company has released its annual list of the top 10 most rodent-infested cities in the U.S. — and one Midwest city has now joined the list for the first time. The list is based on rodent control service data from more than 300 Terminix branches nationwide in 2025, ranking cities where residents most frequently used the company’s services. While New York and Los Angeles held onto the top two spots, Philadelphia moved up one spot to No. 3.
If things are this bad now, what will they look like if “an economic depression much like 1929” soon hits us? When I was growing up, our major cities were quite clean and there were no homeless encampments anywhere to be seen. When I was growing up, drug addicts were not publicly urinating in front of children. When I was growing up, millions of Americans were not living in their vehicles.
The middle class has been eroding for decades, and now millions upon millions of U.S. citizens live in third world conditions. This is what long-term economic decline looks like, and now we are being told that “an economic depression much like 1929” could be in our future.
Brace yourself, because we are moving into times that are going to be extremely challenging for all of us."
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