For the last two months, we have been going through a global health problem and an economic crisis at the same time. many people alive today have never seen anything like this because right now many economies are coming to an halt and what is materializing in our eyes will be bigger than the great depression. This will end up being the most severe economic collapse in the history of the world. The stock market is already crashing at a pace that has not been seen in recent years. This has been so severe to a point where trading had to be halted several times in the last two weeks. The real estate industry is also at the verge of collapsing and this time it the crash will be bigger than what we had back in the 2008 financial meltdown. At the same time millions of Americans are losing their jobs and when all this is factored into the current economic turmoil, we have a perfect economic bomb that is about to blow up in our faces. This is just the beginning of another great depression!
Just like other nations, the United States has been going through a historic health crisis that has impacted the economy in a big way. Right now many businesses have been closing and Americans have been losing their jobs at a rate never seen before. Because of this, the searches for unemployment benefits have skyrocketed because of these massive layoffs across the manufacturing and service sector. In the next few weeks, the number of jobless people is expected to skyrocket. The current economic crisis can easily to culminate to a depression similar to what we had back in 1929. This means that the number of people who will lose their jobs might skyrocket by a whopping 20 percent within a short time. During the 2008 financial crisis, more than 660,000 people lost their jobs and this looks nothing compared to the ugly trend that is developing today.
This economic crisis will soon turn to a depression and this might end up being the most severe economic meltdown in modern history. Right now millions of Americans will lose their jobs and others are having their working hours reduced significantly. This shows how fast things can change considering the fact that just a few months ago we had a robust economy where more than 160 million American were employed at the peak of Trump’s economic boom. Goldman Sachs’ is confirming the ugliness of what is happening to our economy because their analysis is showing that consumer spending is dropping at a historic rate.
Economic data being released is showing a historic contraction in the US economy and survey is showing that every week, the manufacturing sector is producing catastrophic data. The monthly economic activity has plummeted and unemployment claims are increasing every day. This shows how severely the economy has been impacted by this slowdown.
Hotels and restaurants have been severely hit and according to the American Hotel and Lodging Association, the occupancy of various hotels has declined by 90 percent. Hotels in hotspots like New York are now shutting down all their operations. Many states have already banned dining in bars and restaurants although deliveries and takeouts are still available. Recent data shows that across the US, restaurants have seen a 40-90 percent decline in their operations and this will only continue getting worse.
At the same time, airlines have experienced the biggest slowdown in history. In April and May, the United Airlines have announced a 50-70 percent decline in their activities while Delta Airlines have experienced a 70 percent drop in their operations. Many of the workers in these airlines have been laid off. It looks as if the whole global economy is coming to an abrupt halt and literally every industry has been disrupted. Major events have also been canceled and services that involve mass gatherings have been limited. Right now, sports leagues like the NBA, NCAA, MLB and NASCAR have been postponed or canceled. Also thousands of retail stores are closing all over the US and brands like Apple and Microsoft have completely closes their stores all over the US.
This economic slowdown will significantly affect the US GDP and in the first quarter of the year, economists are predicting that we will have up to 14 percent decline in the GDP. This kind of economic decline has not been seen for many years and many economists are predicting that if the current heath problem is not addressed on time, the economy will suffer and potentially plunge us to another depression. Globally, many nations have lowered their GDP growth estimations. The Euro zone has also been affected by this global panic and economists are estimating that the Euro zone will experience an economic downturn in the next two quarters. The decision to shut down air travel and close most of the businesses has become a reality in many nations. The US has already banned all travels from Europe and this has turned out to be the biggest business disruption in many decades. The effect on the global economy is turning out to be exponential because supply chains are being shocked and many emerging markets are closing. At the same time, the US economy has been debt driven and this has further worsened the situation.
The stock market has also been plummeting at an historic rate. Right now we have one of the biggest market crashes in history and the 2020 market crash will forever be mentioned alongside the 1929 and 1987 market crashes. Wealth worth trillions of dollars has been wiped out from the markets and economists are still warning that the worst is coming. in coming weeks, the market will continue tumbling because of this global panic. despite the efforts by the federal reserve to pump trillions of dollars into the market, the stock market is still crashing and right now we have bigger collapse than what we had back in the 2008 financial crisis. For example the Dow has dropped by more than 18 percent last week. This is the worst weekly performance since the 2008 economic meltdown. Overall, the Dow Jones Industrial Average has collapsed by more than 35 percent from the all time highs we had at the beginning of the year. Throughout the US history, we have never seen a similar collapse. This market crash is happening at a ferocity that has never been seen before and right now the gains we have had in the market for the last 3 years have all been wiped out. Based on the historical valuation ratios, the stock market will have to fall further before the prices start rising again.
Right now the whole United States economy is in great trouble in this economic meltdown continues. While the stock market is crashing, the US financial institutions are also in trouble. Last week, some of the clearing firms were unable to meet their capital requirements forcing the exchange to step in and invoke the some of the emergency protocols to help in auctioning the firm’s portfolios. This might be the beginning of trouble in the financial sector just s it was in the 2008 financial crisis when Lehman went bankrupt.
In the midst of this economic meltdown, we have the biggest corporate debt bubble in history and all indicators are pointing out that this debt bubble is about to burst. At the same time, the Federal Reserve has been pumping more cash into the economy and this is just making the US debt bubble bigger. In the middle of this economic meltdown, the oil prices have also fallen to historic lows and this has become a big threat to many American oil companies which are at the verge of collapse right now.
Jobless fillings have been rising exponentially because thousands of people are losing their jobs every day. Many people are now applying for unemployment insurance because companies are suspending their operations and in the process they are laying off thousands of workers. Since most people live pay check to paycheck, it will be impossible for most of them to pay their bills if this crisis continues for months. Americans are about to face the most difficult economic time since the great depression. This shock to the American economy is bigger than what was expected. This crisis will cost the economy trillions of dollars and millions of Americans will suffer in a big way. This economic meltdown is becoming a financial suicide and the question is how the American will survive this.
It is very clear that the United Stated and the world at large is going through unchartered waters both economically and socially. The global supply chains have already been disrupted and the whole economy is at the verge of a total collapse. Through the quantitative easing program, the Federal Reserve is pumping more cash into the economy and this is creating a bigger problem. Right now we have a debt problem which is adding gasoline to this fire of economic meltdown. Printing of more cash by the Federal Reserve will bring more trouble to the economy and this will result to unprecedented levels of inflation s the dollar loses its value. Everyday many Americans are losing their jobs and economists are saying that this will continue for a foreseeable future. We are in the middle of an economic meltdown and this means that we will end up having unemployment levels similar to what we had during the great depression.