Goldman Sachs had earlier said that the current health crisis will push the US economy to a recession but on Friday they updated their estimations and now they are predicting that the worse will happen. They have dramatically cut the US forecasts and their expectations are that the US GDP will decline by approximately 24 percent largely due to the fact that most Americans are not working. This GDP fallout will be the nearly 2.5 times bigger than the 1958 decline where the US GDP shrunk by 10 percent.
The Deutsche Bank is also predicting that there will be the most severe economic meltdown since World War 2 and they are expecting the US economy to grow by just 0.6 percent in the first quarter of 2020 before slipping into an approximately 12.9 percent contraction. This exceeds any previous economic forecasts for many decades. At the same JPMorgan is also expecting a big shrinkage in the US economy at a rate never seen in history. Experts are warning that the European economy will also contract by more than 1.8 percent. It is very clear that the global economy is in the verge of a major economic ccollapse if everything is not contained at these early stages.
The whole US economy now is going through a big fallout and the most severe financial collapse in history has already begun biting. We already have a big liquidity crisis and at the same time we have the biggest debt problem in history. The US has created a debt driven economy and it is very clear that this cannot be sustained for long. Actually the current monetary stimulus from the Federal Reserve will not help but instead, the American tax payers will have a bigger debt that will be serviced for decades to come.
The global stock markets have been crashing in the last two months and experts are predicting that the market will end up tanking by about 40 percent. This is will end up being the biggest stock market crash since the great depression. Ahead of us we have a big economic meltdown that will be bigger than what we had back in 2008 and it is clear that our economy is in trouble. This economic crisis is very different from the 2008 global financial crisis. The current economic collapse is as a result of a health crisis which will take months to get rid of. We will end up having a global economic meltdown that will definitely affect everyone in one way or the other.
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