2020 Potential Economic Collapse

[Arwen Thebard]

If the virus wasn't enough to consider, there is a lot of discussion at the moment about the potential for economic collapse in 2020, and happening very much sooner rather than later.

Until a few weeks ago the general consensus was that there would be no serious market downturn until after the Nov elections in the U.S. but this weekend that has changed and expectations are now very different, with many pundits forecasting major impacts within the coming few weeks.

In thirty five years I've never experienced anything like the market volatility we have seen these past few months and the sense of fear among bankers, traders and dealers is palpable. The vulnerability of the global supply chain and JIT system has been clearly exposed and its seizure is now threatening our very way of life.

Most people believe (have been told) that another financial collapse will not be allowed to happen and that after the recession of 2007 sensible precautions and banking restrictions had been put in place to ensure that was the case. Unfortunately that is very far from the truth and we are now in a truly dreadful situation with colossal amounts of debt and global uncertainty combining to make a collapse very likely in the coming weeks or months.

If you have any spare time to think at the moment, you might want to consider what another major economic upheaval might be like, on top of everything we have going on at the moment. I certainly wont be leaving any surplus cash in the banks for a while.

Can you remember the economic downturn of 2007?
How did it effect you?
Are you in a position to do anything differently this time?

Not like we have anything else to deal with is it?

[jansman]

I lost a very good job because of the last crash. It has taken me until now to be back on the money I was on THEN. I suspect many people experienced the same thing.

On the plus side, we now own our property outright, AND I have gotten by on crap money in that time. I have done work that would make a maggot puke so work of some sort is always there.

[Arwen Thebard]

Perhaps I should have put DAYS instead of weeks.

"Market Massacre: Oil Crashes 30%, VIX Explodes As S&P Craters Limit Down"
https://www.zerohedge.com/markets/marke ... es-craters

Hold onto your hats (and cash) folks, its getting very dangerous and no one knows what happens next.

[peejay]

I've been loosely following economic news for the last 18 months or so, there was a lot of talk of crash in 2019 but I think it's inevitable now with the impact of the virus tipping things over the edge...

[ukpreppergrrl]

The markets don't like uncertainty. In this country in particular we've had a lot of uncertainty in the last 3 years. Not "we're all doomed" uncertainty, just that it's been difficult to try to predict in which direction events are going to turn and when they will do it. Certainly this virus will knock the markets for six until it becomes clearer just how much impact it really is going to have on daily life in the longer term. The short term is pretty clear and inevitable now I personally think - the virus is in the wild, it will run its course in the same way that the Spanish Flu (which had a much higher death rate, and was compounded by it coming at the end of WW1) ran its course. Once those who are going to get it have had it, once those who are going to die from it have died, once the workforce returns to work, and life returns to normal, as it did after the Spanish Flu outbreak, then the markets will settle. Until the next uncertainty. Looking at market history it is certainly much more instantly volatile that it was 100 years ago for various reasons, there is much more of a concentration on the short term rather than the long term I think. But always remember a crashing market isn't necessarily a bad thing for everyone. So long as you don't need to liquidise your assets during a collapse. Effectively stocks are on sale! If you think about the markets as a long term thing, buying when there's a sale on is actually a good thing!

[jansman]

One of my customers husband came in today. He is self employed as a specialist electronic engineer. His next shipment of components ( from China) is 26 weeks away! Half a year. He said that basically, his business was over. Fortunately, he told me that he is rather prudent and has the resources to cope.

[Arwen Thebard]

The severity of the current situation should not be underestimated and its impacts will be far reaching. What we have seen today has not been seen since the depression era of 1929> when all sorts of shenanigans occurred in the US, including a 42% devaluation of the dollar and confiscation of gold from private citizens. Today's' debt levels are substantially higher just to add fuel to the fire.

As you say UKPG, time to keep your tinder dry for a while and maybe pick up a few bargains down the line if you can.

[grenfell]

Bank of england has dropped base interest rate from 0.75% to 0.25%.

[Arwen Thebard]

Probably negative interest rates will follow soon then?

Time to get your spare cash out and into precious metals or other safe assets while you still can?

Update;
Watching Carney lie through his teeth on live TV. Watch the markets dive tomorrow.

[diamond lil]

Good post ukpreppergrrl!