This article was originally published by Michael Snyder at The Economic Collapse Blog. 

Right now, financial institutions all over America are getting really tight with their money.  That means that less credit will be available for consumers and businesses, and that will mean less economic activity in the months ahead.

When economic activity slows down, more businesses fail, more layoffs happen, and more consumers start defaulting on their debts.  Of course, if economic conditions steadily deteriorate it will cause financial institutions to get even more stingy with their money.  It appears that a vicious cycle has now started, and I believe that this will be one of the biggest stories of the next 6 months.

Earlier today, I was quite alarmed to read that the top economist at Citibank is now publicly warning about the possibility of a substantial credit crunch in the months ahead…

Citi’s chief economist Nathan Sheets says the US may be headed for a credit crunch and a recession in the coming months, citing the Federal Reserve’s monetary tightening and ongoing fallout from bank turmoil.

So how soon will it be before things start getting really bad?

According to Sheets, this credit crunch could “unfold in [the] coming months and quarters”…

“We’ve moved from what I’ve called the acute phase of the [bank] stresses, where it’s about bank runs and uncertainties about institutions failing,” the firm’s top global economist said. “[This is] where banks are thinking about their balance sheets and asking themselves: ‘Well, can we continue to extend credit in the same way as we have over the last several years?’”

Sheets added: “And as a result of that process, we believe that there could be a credit crunch in the economy. That’s something that will unfold in [the] coming months and quarters, and could indeed make that recession that we’re expecting somewhat longer than it would be otherwise and somewhat deeper.”

Without a doubt, it is going to take some time for this crisis to fully play out.

But we continue to get more evidence that the credit crunch has already begun.

Zero Hedge just posted an article entitled “We Scrambled, And Spoke With Well Over 100 Banks. Not One Will Provide Financing”, and I was astounded to read that more than 100 banks have refused to finance a developer’s project.

If you go to 100 different banks, you would think that at least one would be willing to take a risk.

But this just shows how much the environment has changed.

And as the environment has shifted, the economic numbers just keep getting worse.  In fact, one CEO is calling the latest economic data “brutally bad”…

The US is on the brink of recession judging from its “brutally bad” economic data, Chris Watling, chief executive of financial advisory firm Longview Economics, said in an interview with CNBC this week.

According to the strategist, one of the factors pointing to a looming recession is the latest reading of the Leading Economic Index for the US, which fell by 1.2% in March, its lowest level since November 2020.

Just a few hours ago, we got more bad news.  The Dallas Fed manufacturing survey dropped more than expected, and it has now fallen for 12 months in a row…

The Dallas Fed Manufacturing survey for April printed considerably below expectations. Analysts expected a rebound from -15.7 to -11.0 but instead the headline index plunged to -23.4 (just shy of post-COVID-lockdown lows).

That is the 12th straight month of ‘contraction’ in the survey.

So far, the numbers being put out by the Biden administration tell us that we are not officially in a recession, but it sure looks like a major economic downturn everywhere that we look.

Walmart is closing stores, Bed Bath & Beyond is completely going out of business, and Disney is laying off thousands of workers…

Disney is laying off several thousand workers across the company this week in the second and largest wave of cuts as part of the media giant’s previously announced plan to slash its workforce by 7,000 employees.

The latest round of job cuts will impact ESPN, Disney’s entertainment division, Disney Parks, and its Experiences and Product division as part of a larger workforce reduction plan announced in February by chief executive Bob Iger in an aim to save $5.5 billion in costs, the company said. The company had suspended its dividend payments during the pandemic, but Iger announced in February that he expects them to return.

Did global central banks anticipate that this was coming?

They have been purchasing precious metals at the fastest pace since the 1950s, and it would only make sense to do that if very troubled times are ahead.

And central banks around the world have also been setting the stage for a historic “restructuring” of the worldwide financial system.

This week, the Federal Reserve announced that the FedNow service will be ready to launch in the month of July…

The Federal Reserve on Wednesday announced a July launch of its FedNow service, which will enable all U.S. banks to offer instant payments 24/7, and will constitute the infrastructure of a central bank digital currency (CBDC) by linking each banking node directly to the Federal Reserve, according to financial experts.

FedNow “will enable all the banks — any bank in the United States, not just the big ones — to offer instantly available funds in real-time payments to their customers”, explained Fed Chair Jerome Powell before the House Financial Services Committee on March 8.

This is a really big deal, because as many experts have pointed out, the FedNow service will lay a foundation for the coming CBDC that the Federal Reserve plans to introduce…

While Federal Reserve Vice Chair Lael Brainard maintained during a House of Representatives Committee on Financial Services hearing in May that a CBDC could take five years to launch due to needed security and design features, she added that FedNow will still serve many of the same functions as a CBDC, according to the financial news outlet.

Financial advisor Joe Brown has warned that FedNow serves as the foundation, or “infrastructure” for a CBDC, bringing the country only a step away from deployment of a central bank digital currency once the FedNow system is fully functioning.

So it looks like they are already preparing one of the “solutions” that they plan to roll out once the coming economic crisis becomes quite severe.

Everything happens for a reason, and those that think they are running the show are always looking ahead.

But this time around, I think that they have bitten off more than they can chew.

Our world is rapidly descending into a state of complete and utter chaos, and our leaders will not be able to prop up their precious system for too much longer.

This story will take some time to fully unfold, but at this point it is getting really hard to deny where things are eventually heading.

Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.

About the Author: My name is Michael and my brand new book entitled “End Times” is now available on Amazon.com.  In addition to the new book I have written six other books that are available on Amazon.com including “7 Year Apocalypse”, “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending copies as gifts to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.  I have also started a brand new Substack newsletter, and I encourage you to subscribe so that you won’t miss any of the latest updates.  I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream, and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial, or health decisions.  I encourage you to follow me on social media on Facebook and Twitter, and anyway that you can share these articles with others is definitely a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to invite Jesus Christ to be your Lord and Savior today.