The 2020 recession began in February of
this year and already the US economy has
contracted 5% just in the first quarter.
This recession has been caused by the
uncertainty over the pandemic and the
government ordered shutdowns in order to
slow the spread of covid-19.
This ultimately led to the end of the
largest economic expansion in history of
11 years, but what most people all over the
world not just in the U.S. are concerned
about is how long is it going to last? In
more economic terms, is this recession
turning into a depression.
There are many news outlets already
saying that there is no doubt that there
are many countries in Europe including
the UK that are already in a depression.
With many firms closing for good
due to the catastrophic effect the
social distancing has brought with it, as
uncertainty grows in regards to the
future there is no clear vision of the
nature of the recovery. The United
Nations has predicted that in a
worst-case scenario that the recent
pandemic could slow the world growth
rate to 0.5% in 2020.
Narrowly avoiding a global recession
which could ultimately cost the global
economy two trillion dollars put into
perspective. The year of 2018 saw the
world economic output at almost eighty
six trillion dollars in the U.S. one of
the main factors contributing to the
fallen economy is unemployment in the
month of March alone eight hundred and
eighty-one thousand jobs were lost, then
shortly afterwards there was a loss of
twenty point five million in the month
of April and has reached highs of thirty
eight point six million people filing
for unemployment, this is more than the
total number of people in the workforce
of the UK France and Canada, this put the
unemployment at fourteen point seven
percent and the Federal Reserve Bank of
St. Louis predicted that in the second
quarter of 2020 the rate will increase
to 32%.  Uncertainty over the
pandemics impact caused the 2020 stock
market crash the CBO predicts that the
economic activity will recover in a
third quarter of 2020. If you can recall
the 2008 recession when credit dried up
banks stopped lending houses pricing
collapsed and I was an eight-year-old
boy just wanting to pay as my toys it
took years for the markets to start to
heal and even longer for the banks to
start lending again but it also made him
stronger for their recovery in the 2020
recession of all the thirty three
recessions the US has endured since 1854
only one of them has been a depression,
this was because the Fed raised the Fed
Funds rate to protect the gold standard
by contrast the Fed in 2020 has lowered
the Fed
funds rate to 0%. Congress has pulled
trillions of dollars into the economy in
just a few months and for this reason
alone 2020 recession will not become a
depression. If you liked the video hit
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