The US economy has been hit hard in 2020. We have governments to thank for that. They overreacted on the COVID-19 fear-hype panic that media pushed onto everyone. They blame COVID, that COVID caused all of this hardship for Americans. But the government did it.
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The corona crash is a euphemism that covers-up government forcing people out of work and destroying the economy. How much has the economy dropped? If we set 2019 as the 100% to compare against, in just 3 months the economy tanked by 10% of that former level. James Rickards of The Daily Reckoning estimates that economic output won't reach 2019 levels until at the earliest 2023.
How does that work out? Well, the economy might go up 3% each year. At that rate it takes 4 years to get back the missing 10% and back to the 100% of 2019. At the earliest, Rickards suggests maybe there would be a surge in 2021 with 5% growth. This would be the highest in decades, so don't expect it.
In 2022, maybe there would be a 4% growth, which is still the highest in 30 years. That takes things up to 98.3% of the 2019 levels. But there are other problems.
Growth is expected, but it's going to be weak. Rickards says it's worse than a technical recession which is defined as two or more yearly quarters of declining growth along with higher unemployment. The recession was already here in February according to the National Bureau of Economic Research (NBER). We're heading toward depression, or are already there.
A depression can have growth, it's just subnormal, and it lasts a long time. Not enough jobs are available, and the debt doesn't get taken down by coercive taxes. The US is already at record debt in 2020. And it's going to keep going up. It's nearing $30 trillion.
Depressions are characterized by their length, by abnormally large increases in unemployment, falls in the availability of credit (often due to some form of banking or financial crisis), shrinking output as buyers dry up and suppliers cut back on production and investment, more bankruptcies including sovereign debt defaults, significantly reduced amounts of trade and commerce (especially international trade), as well as highly volatile relative currency value fluctuations (often due to currency devaluations).
Unemployment, check. Financial crisis, check. Supply issues, check. Bankruptcies, check. Reduced commerce, check.
If it smells like a depression, it likely is. Let's face it, the growth to get back to where things were in 4 years is possible, but not likely. Maybe 5 years, but probably even longer than that. Buckle in and get ready to feel what a depression is.
We already had an inverted yield.curve last year. There has not been a fundamental shift in Fed policy. Real estate prices are still insanely high. The productive economy is still burdened by taxes and arbitrary regulations. Trump hasn't drained the swamp, and the COVID-19 shutdown was just the straw that broke the camel's back. My 2 cents, anyway.
Yeah, the real estate bubble is pretty big. People think its a safe way to preserve wealth... lol.
Real estate and stocks seem to be the sinkholes for QE money creation. When the bubble bursts, it will look bad, and people will blame "the market," because people are ill-informed economically.
And your problem is...?
for me just the question: will btc crash as well (in Dollar US)?
If the US dollar crashes, BTC goes up in value as I see it, like other currencies, at least in comparison to the US dollar.
maybe even with a black market premium like in many countries
The Corona case showed what the economy of many countries is, not just the USA. There are governments that expect donations from their people and distribute these donations to families in need. Of course, everyone suspects that these donations serve the purpose exactly. ! thanks for sharing.
Donations are nice, governments not destroying lives would be better.
The economy won’t crash for sure. But people will suffer. The rich will get richer & the working class will struggle. It is just a sad situation.
It should crash, because it's unreal in fantasy land, not grounded in reality. They can just keep the fantasy alive though and yeah the rich will get richer.
Dont worry we dont need an economy, we have the fed 😊
Yes, printing machines will save us.