Special Report: An Economic Catastrophe Is Coming FAST

Author of How to Prep When You’re Broke and Bloom Where You’re Planted online course

If you’ve been following this website for some time, you probably remember the work we did in 2020, reporting on Covid, lockdowns and other related events. Many readers told me that the research I presented helped them to be far better prepared. I’ve always had a knack for noticing patterns and using them to make educated predictions.

I’ve mentioned several times lately that we’re facing hard economic times, but recent research has caused me to believe it’s going to be even harder than we expected.

I would like to begin this report by specifying that it is non-political in nature. If we wanted to play the blame game, we could point fingers at presidential administrations for the past fifty years. Democrats and Republicans have both made some terrible decisions that have led us to where we are right now.

Current decisions will absolutely make things worse. My hope is that it is short-term pain for long-term gain. Changes had to be made, but we are going to feel the repercussions of it, some of us brutally. This doesn’t mean that I hate Trump or that I’m defending Trump. I’m presenting facts, not feelings

First, we’ll do a brief overview of global economic circumstances to make sure we’re all singing from the same songbook. Then, I’ll provide a list of things to expect over the next few months (or longer) so that we can be ready when they happen. Finally, I’ll be providing an article tomorrow on how to prepare for all this once we have the setting of our looming catastrophe in place.

Before we get into any of that, the absolute best thing you can do is to scour every frugality book you can find to come up with ways to get through this. Check out our Money Mojo Bundle (on sale now) for thousands of pages of creative ways to save money.

The upcoming shortage of goods

Tariff negotiations have been successful with just about everyone.

Everyone except our biggest trading partner, that is. In 2024, we imported $462.62 billion worth of goods from China. The goods include food, electronics, medication, glues, machinery, and plastics. There’s more, but those are some of our more important ones.

China has responded by slowing cargo to a crawl.

Molson Hart, the founder of Viahart, put it in simpler terms.

Around April 10th China to USA trade shut down.

It takes ~30 days for containers to go from China to LA.

45 to Houston by sea, 45 to Chicago by train.

55 to New York by sea.

That means that there are no economic effects of what was done on April 10th until about May 10th.

I was unable to find evidence that cargo ships from China have completely shut down. But Reuters and Politico report that the cargo has been “curbed” In particular, the export of “critical minerals” to the US has been restricted, which will affect clean energy, the oil industry, plastic components, and parts for electric cars. The minerals named include samarium, gadolinium, terbium, dysprosium, lutetium, scandium, and yttrium.

China has also slapped matching tariffs onto goods that the US exports to them, which means that businesses providing those goods will suffer.

A report from the South China Morning Post has a lot of information. The Post claims that shipping containers from China to the US have gone from 40-50 containers per day down to 3-6. Even more alarmingly, they quote an anonymous employee of a shipping company as saying that the company is abandoning goods already on the water and giving them to the shipping company.

The bottom line is that between May 10 and May 25, we will see a dramatic decrease in the goods arriving to our ports from China. There will be some stuff, but not the abundance to which we are accustomed. To get back to the level we were before would take another 1-2 months from the time that an agreement is made, but that seems unlikely.

If you recall, during the COVID-19 pandemic, shipping from China all but ceased for a while. The result was that prices skyrocketed, shelves were near empty, and people panicked.

Michael Snyder writes:

The bottom line is that a lot less stuff is going to be coming to our stores.

In fact, the president of the U.S.-China Business Council is convinced that “starting in a couple of weeks, we are just going to start running out of stuff”…

Some of the products likeliest to go missing from store shelves in the coming months will be lower-cost footwear, apparel, toys and electronics, for which manufacturing is heavily concentrated in China, Gold said. Other perishable items coming from China, like apple juice and fish, have limited shelf lives and were more difficult for retailers to stockpile.

“Like back during Covid where we had shortages of toilet paper, we are going to start seeing that in more and more goods,” said Sean Stein, president of the U.S.-China Business Council. “Starting in a couple of weeks, we are just going to start running out of stuff, and if the administration waits to resolve the problem until we have shortages and hoarding, that is just too late.”

There isn’t much time left to stock up.

Something great could come of this if investors do indeed build and refit factories to bring industry back to the United States. This will result in jobs and goods. But that isn’t going to help us in the short term. We have to be prepared for the pain while still being hopeful for the future.

The trickle-down effect

You might think that a shortage of goods is the worst thing that will come of this, but hang onto your halo, angel.

I believe this will result in some of the worst unemployment we’ve seen since the Great Depression, when approximately 25% of workers were without jobs.

It could start with the transportation industry – if there’s less to ship, then truckers will not have as much work. Retailers could slash staff in response to less merchandise coming in to be priced and put on shelves.

Folks are already slowing down on things like going out to eat. An article on Forbes says that 89% of Americans report eating out less than they did in previous years. We’ve seen a tsunami of restaurant bankruptcies over the past year or so. All these restaurants are forced to lay off their entire staff of employees, leaving another large sector jobless. Jobs that were (though low-paying) once fairly easy to get, like working at a fast food counter or being a checkout person at a retail store, are being replaced by self-service options.

Currently, rates of joblessness are fairly steady, hovering around 4%, but that could change rapidly.

If all these people in all these industries suddenly become unemployed, the competition for other jobs will be far more intense. If you are a professional, you may think this doesn’t affect you, but you’d be wrong. A battle for resources affects everyone. Even successful companies will look at cutting costs during hard times. A volatile stock market can result in billions of dollars in loss at the blink of an eye, so this isn’t just a “poor person problem.”

One interesting statistic in past recessions/depressions is that violent crime has not historically increased much during these difficult times. My concern is that we’ve had an overall trend of increasing violence in the United States. Will this skew the statistics in the year to come? At this point, there’s no way to tell, but it’s something you need to be prepared for.
The U.S. is not officially in a recession as of today, but the risk is significant, with 35–60% odds by year-end according to major forecasts. A projected Q1 2025 GDP contraction, escalating trade wars, and declining confidence are key concerns. If Q2 2025 also shows negative growth, a technical recession could be confirmed by summer.

• J.P. Morgan: 60% chance of recession by end of 2025, driven by tariffs and declining confidence.
• Goldman Sachs: Raised recession odds to 35% (from 20%) in March 2025, citing trade policy shocks.
• Reuters Poll: Median recession probability near 45%, with 2025 GDP growth downgraded to 1.4%.
• CNBC CFO Survey: 60% of CFOs expect a recession in the second half of 2025, though most anticipate it being mild or moderate.
• Prediction Markets: Kalshi reports a 60% chance of recession this year, up from 40% in March.

It’s time to prepare now.

The bottom line is that this isn’t just going to be a couple of bad weeks. We could be looking at a year or more of hardscrabble living. I don’t have a crystal ball, so I cannot tell you if this is definitely happening or how long it will last.

Things could still change if our government and China’s government come to an agreement, but to me that seems unlikely.

A lot of us will feel that our financial problems are completely our own fault, feeling shame and embarrassment about bad decisions. That time you ordered DoorDash instead of cooking what was in your fridge did not cause this.  I’m here to tell you: it’s not just you. It’s many of us. Don’t be gaslit into believing this is all your fault.

Tomorrow, we’ll talk about specific ways to prepare for this, including what to stockpile and how to pay for it.

What do you think?

Do you foresee shortages? Job losses? Difficult financial times ahead? Or do you think these worries are overblown?

Let’s discuss it in the comments section.

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