As the US government remains deadlocked on new policy to slow the country’s economic collapse, renters and landlords are edging perilously closer to financial ruin. Across the country, rent payments have dried up in recent months as tenants struggle to afford other basic necessities like food.
While the government stimulus payments have eased the worst of the strain for many, these measures largely expired last week, leaving already vulnerable Americans on their own to tumble into poverty or homelessness, while the country’s economy feels the ripple effects of the coming eviction apocalypse.
The $2 trillion pandemic relief package passed back in March has yet to be followed by any further aid, even as the US continues to struggle to bring the health crisis under control. In the meantime, tenants and landlords alike are waiting in fear for the next rent payment due dates, and there is little confidence on either side that things will run smoothly.
Even before the pandemic wiped out countless jobs–many of them never to return–around 11 million renters in the US spent at least 50 percent of their income on housing. When income streams dried up, these at-risk Americans were forced to dig into their meager savings to afford just the essentials. Unfortunately, many had little or nothing in the way of emergency funds. Federal unemployment benefits, which have served as a crucial lifeline for millions, also disappeared at the end of last month, which means that countless renters are finally out of options.
Already, Americans are facing nearly $22 billion worth of missed rent payments, according to data compiled by global advisory firm Stout, Risius, and Ross. This massive sum would ultimately be missing from the pockets of landlords, many of whom depend on income from their tenants in order to stay afloat themselves.
It’s a catastrophic situation on both sides. Moody’s Analytics Chief Economist Mark Zandi warned that very few renters would be able to pay off the debt that has been building and building after months of missed payments. The spiral could follow tenants “for a lifetime,” he said.
The Fed’s delicate house of cards has been built upon the high ranking status of the US on the global stage, and the fact that the dollar remains the world’s reserve currency.
But the US currency has continued to slide throughout the pandemic, and its crash accelerated in July as the United States grappled with an explosion of new cases and a second economic downturn while other countries began to reopen much more successfully.
Last week, the ICE US Dollar Index (USDX) traded at its lowest since 2018, but many Americans don’t seem to be worried. The index has also experienced serious volatility so far in 2020, leaping 10 points in a 2 week rally in March, then falling steadily to return to earlier year lows.
According to veteran stockbroker and chief executive officer of Euro Pacific Capital Peter Schiff, people will remain blissfully unaware of the danger ahead until the downturn of the dollar becomes a full blown crash. One major indicator will be a Dollar Index that breaks 80, a crash will come sooner rather than later. Schiff warned that we could reach that point by December, especially as the out of control pandemic condenses the timeline of the dollar’s collapse.
The consequences of the second wave have become more and more evident, as any minor recoveries were disrupted, and economic indicators began to turn back in a more negative direction once again.
At this point, extreme financial pain for countless Americans is unavoidable. The domino effect of crisis after crisis is only speeding up in the absence of extended federal protections. It is not long before the crumbling of the economy becomes even more evident in all areas of life–from housing to hyperinflation and beyond.
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