The Worst Economic Collapse In History Is Starting Now: Be Prepared

This is a graph of the 2008 financial crisis over the course of 517 days the stock market fell more than 56% millions of people lost their jobs their homes and their life savings it was the

worst

time for the global economy since the Great Depression now this is the 20/20

economic

collapse

so far over the course of just 21 days the market has fallen about 20% the world has seemingly shut down and we could be on the

worst

economic

trajectory in

history

so, how do we get here? What could we expect in the future? Well, let's start with the first part. The first thing you see, as most of you know, is that there is a global disease that worries many people and from my previous videos you may know where I stand.

The important thing is that if you get the disease you will almost certainly be fine, but it is disproportionately bad for older people and those with underlying health problems, like me, so it is good to be cautious on a social level, but it is also not necessary. For you to panic on an individual level initially, when the disease had its first outbreak in China, it caused the Chinese government to shut down its manufacturing sector to help prevent the spread of the virus. Now that wouldn't be a problem if a third of all products were not made in China, you see China is the world's global supply chain, so when China experiences production delays, the entire world economy also experiences delays.

Now I made a whole video about this which you can see on my channel, but I want to go into more detail in this video, but anyway, due to the supply chain slowdown, we have seen many large companies experience a slowdown in their sales. and income and that makes sense because if you don't have your product to sell well. then you can't make sales or make money. Here's an example: The auto industry relies heavily on tools, dyes, and machinery to make its cars, but each of these auto industry needs is experiencing a 1-3 month delay due to the shutdown of the manufacturing sector in China, now This means that car companies will not be able to launch their new annual vehicles on time, so they will lose billions of dollars in sales and also because people are being asked to stay inside, they are missing out on some wages, they are trying to be cautious and working from home as much as possible because of those things, we have seen an 80 percent drop in car sales in countries like China and this effect trickles down, you'll see if the car companies are seeing a drop in sales and revenue then so will their suppliers and if the suppliers see a drop in revenue then the primary industries that work with the suppliers and this effect radiates to all other companies that are connected to the automotive industry.

And what else happens when a company sees a drop in sales or revenue? Well, we tend to see things like layoffs or even bankruptcies, and those things lead to a higher unemployment rate, which would lead to consumers making fewer purchases, which would lead to fewer sales. Businesses do and this cycle continues until the economy hits a low point like the Great Recession or the Great Depression. Now keep in mind this is just the auto industry example I was given, the drop in sales I talked about will apply. to virtually every other industry in the world except the toilet paper industry, because it is actually manufactured in several different countries around the world, but sales have increased for some companies like KP Tissue Paper by almost 50% in recent years. weeks, so there is no toilet. paper shortage for everyone, it's just a bunch of foreigners buying a hundred rolls at a time and the big retailers just can't replenish the shelves fast enough anyway, usually from the moment we start to see a slowdown in the sales of companies around the world until the time when experiencing mass layoffs, loan defaults and bankruptcies can last between two and 24 months.

I want to think about this, the Great Recession began in December 2007, but it took until September 2008 for the worst parts of the recession to begin. will be felt and it was in March 2009 when things were at their worst; It is a period of approximately 15 months for the recession to bottom out, so what I am trying to say here is that even though we have gained experience in the economic recession in the coming weeks, it is almost certain that we will experience some type of consequences. negatives in the next 24 months, so the Great Recession might not be the best comparison for what we are going through today because it was caused by a combination of banks, insurance companies. and investors who created massive failures in the financial system the economic recession most comparable to the one we are seeing today was probably the 2001 recession, except the one we are going through today is on a much larger scale than the one we see in 2001. there was a rapid decline in stock prices after half a decade of bull market, there was also a crisis that slowed down the global economy, which was 9/11, and there was a temporary ban on air travel in many countries around the world, now these They are not exactly the same as what we are seeing today, but it is the most comparable recession in terms of causes and in 2001 what we saw is that the effects of the recession caused an eight-month economic downturn and doubled the unemployment rate to around 6%, but again the point is that what we are seeing today is much more extreme than what we saw then because today we are seeing many more negative economic indicators, for example, today consumer debt is at a higher level than during its session even 2008, meaning that any economic downturn could cause people to miss payments on their debt and, in turn, create massive losses for lenders similar to what happened in 2008 today.

Stock market volatility that is usually a sign that investors are unsure of an imminent economic

collapse

. is actually at exactly the same level as it was right before the 2008 recession, which was extremely high. There are also two giant industries right now in airlines and cruise lines that are actually on the verge of bankruptcy and no one is really talking about this. In fact, I'm almost certain that if people can't travel again in the next few weeks or a couple of months, we'll see at least one major airline go bankrupt or be bailed out; in fact, it could even be all of them. and the strange thing is that this might be one of the only bailouts that I agree with 100% because it is due to an unpredictable change in travel laws and regulations and not industry incompetence, in fact, if you want to know how bad it is.

Airlines are being affected right now. Take WestJet, for example, it's a fairly large airline with 14,000 employees, but they are expected to lay off between 20 and 50 percent of their flight attendants in the coming weeks if air travel doesn't return to normal. In fact, there was an internal memo sent to West Jet Union that said the well-being of our airlines has become dire overnight and there is another industry titan in American Airlines that said it will reduce its international flights by 75 %. There's also Air Canada which gets about 70% of its revenue from international and US flights and those flights are empty or just not running right now and because of this crisis and air travel, there have been spokespersons like Kristoff Hannah Bell, representing Air Transat, who have said that we are currently assessing the impact on our operations and we hope that the government will assist airlines and travel companies in these extraordinary circumstances and as I mentioned earlier, the airline industry is not the only industry who is affected right now, of course, you've probably heard of many other closures.

Just like businesses that involve large gatherings of groups of people, these are businesses like the NBA, NHL, MLB, MLS, concerts, comedy shows, conferences, and more, and while each of these companies is much smaller than some of the larger industries we already have. We talked about all of these industries being affected at the same time and

starting

to add up in ways you don't think about. I mean, for example, have you thought about the economic impact of the NBA shutting down? You might think that the only people who will be hurt are the players, the owners, maybe the announcers, but that is not true because the people who will be most affected are the arena workers who expect to have a stable weekly salary but, Suddenly, they have no source of income.

Now, fortunately, many NBA players and owners have offered to help arena workers by funding them until the NBA returns, but the point here is that each business closure will likely have an economic impact that most of the people are not thinking. and yes, there are even different types of businesses that don't attract large or dense crowds and that continue to close for several weeks in a row. The two best examples are Nike and Apple, who have closed all their stores in hopes of stopping the spread of the virus around the world and although these are large companies that will be able to overcome the closure and at the same time be able to pay all their workers, there are still many businesses that have temporarily closed or are limiting store hours.

They won't be able to pay their hourly workers the expected wage and what about the stores and small businesses that keep their doors open during this time? Well, these first data are quite scary. Take the restaurant business for example, there are apps like resi and open table. that are used to reserve tables in restaurants and are reporting that coverages are down 30 to 65 percent in areas like New York and Washington and this one really hurts me personally because imagine all the local mom-and-pop restaurants and businesses. that they are just able to survive and pay the bills and all of a sudden this disease outbreak happens and they might go out of business because everyone stays home, so all of these points represent the case of an incoming recession and there are a lot of In addition to Other points that are difficult to quantify, such as the loss of productivity of companies by having people work from home, there was a sharp drop in oil prices recently, and there are many other economic indicators that point to a really bad economy in the future, but this does not This does not mean that a horrible recession is surely coming.

There are ways to at least mitigate some of the short-term consequences of a recession. For example, one action that several countries, such as Canada and the United States, have taken is that they have established a loan program in which small business owners can obtain interest-free loans in the hopes of preventing their businesses from closing for the next few years. six to 12 months, another thing is, as mentioned above, using taxpayer money to help bail out major infrastructure companies like Airlines could help prevent big companies from going bankrupt is at one point lending five trillion dollars, yes, that was a trillion with a t, they are lending this money to Wall Street and the big banks.

Now there is a complex reasoning behind this thing called the repo market and that would require an entire video to explain. correctly, but here's a quick summary: U.S. banks have taken out $1.5 trillion in loans to help get through tough economic times when Treasury bonds are less liquid. It's essentially a loan to help stabilize the market now, if the market stabilizes with this. The injection is a good thing so that the banks and the market do not collapse, but if the market does not stabilize with this injection, we will suddenly see a giant collapse on Wall Street, which is what happened in 2008, and if you were not worried about that .

Rather, this method of lending to banks is seen as a last resort to help stabilize a market and prevent a collapse. Now, finally, another thing that is done virtually every time there is an economic slowdown is a reduction in interest rates. This is a very simple way. to make debt cheaper in the hope of promoting spending that will boost the economy and generally what you see is that when times are going to be good, interest rates go up and when times are going to be bad, interest rates Interest dropped now, initially, when I recorded this video.

I talked about how the Fed just cut the emergency rate to one point two five percent, but in the last few minutes they did another reduction in the emergency rate to essentially zero percent, something that was only seen during the deepest parts of the 2008 recession, so when I recorded this I was initially going to say that they didn't want to lower it to 0% because they wanted to have one more bullet in the chamber to potentially help the economywhen things start to get really bad, but now they just used that last bullet unless they want to go to negative interest rates, which I don't know if they do, but wow, I can't believe that happened while I was recording this video and despite these measures.

It could help prevent some companies from going bankrupt or having to make mass layoffs. The only thing that cannot be avoided is the slowdown in the economy that we have already experienced in recent weeks and that will likely continue for the foreseeable future. You see that government action can only take you so far during a recession; At the end of the day, the only real way we can prevent or minimize this recession is to get life back to normal for the average person, but that might not happen for quite some time, so buckle up and get ready because now we expect a difficult situation.

I have a whole playlist of business documentaries like this, so if you like this video, click on that playlist and alsoI know everyone is saying this, subscribe and leave a like button. I've been very very happy and excited with the growth of this channel recently and I'm super happy and very lucky that you all like what I have to say so it means a lot to me and yeah thank you all so anyway make sure you click on that playlist or the next video of mine and hopefully I'll see you guys in a few seconds.