The Global Economy Was Dying Before COVID-19
We all know how bad things are due to COVID-19. The global economy was shut down and supply chains completely interrupted.
While many jumped upon this idea, the reality is that things were awful before COVID-19. Hence, to blame the economic struggles on COVID are misguided. We know that severely affected things. However, it was just piling on top of an already declining situation.
Until people realize the structural problems that exist, most will simply be ignoring the reality of what is taking place.
Recovery Not Expansion
We hear a lot about how the economy is on fire. Compared to the numbers a year ago, things look remarkably better. Of course, the challenge is most of them are YoY (year over year) numbers. In other words, it is a comparison.
The numbers since the economic drop last year have improved. However, to expect an ongoing expansion is something that does not reflect what was taking place before COVID.
Ergo, we are witnessing an economic recovery as compared to an expansion. We are seeing a bounce back from the lows yet there is no evidence that this is going to be ongoing.
In fact, evidence is that we are more likely to resume the previous trend as opposed to this being a trend reversal. Hence, what is being espoused by politicians, the media, and others is likely to be shown to be false.
Global GDP Growth
There is no way to sugarcoat it: global GDP growth stinks and it has for a long time.
Here is a chart from World Bank showing the growth rates over the last few decades.
Absent the Great Recession, 2019 was the worst year of global growth since 2002. We can also see from the chart the trend since the recovery in 2011, a downward progression throughout the decade. This is not how it was supposed to be.
Hence we know that global growth was slowing for more than a decade and not likely to improve anytime soon.
Bad News On The Horizon
Many do not learn from history. We can see from the above chart that this will likely mirror the Great Recession. Notice how it bottom and bounced up. Then we had two years which reversed the bounced and kicked off the overall downward trend for the decade.
The rebound in 2010 of 4.31 was the high for the decade. Sadly, this was by a wide margin. The next closest print was 2017 of 3.28, more than 25% less the recovery year of 2010.
What does this mean for our present situation?
Quite simply, 2021 is likely going to be the highest growth rate we see for some time. It is not uncommon for high GDP levels to be seen appear after major economic pullbacks. However, a recovery is not an expansion.
Even the Federal Reserve sees things are going into decline.
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The yearly projects for US GDP growth rates are:
- 2021 7.05%
- 2022 3.30%
- 2023 2.25%
In other words, we will see two years of rebound before a growth rate below the 2019 level. Granted these are forecasts and reality could turn out to be different. Of course, we could see these numbers come in worse than expected. We also have a situation where this is the US GDP yet if the largest economy is sub the 2019 global level, it is likely the rest follows suit.
The present mania about the economy and inflation is going to be short-lived. While the Fed says the later is transitory, what they are omitting is that the economic growth we are seeing fits into the same category.
As we see, this is nothing new. It is something that took place for most of the last decade. We are now dealing with an economic environment where the structural issues are causing more money to be locked into the financial system. This does not help the economy. While it will send asset prices higher but that is all.
A year from now, the rhetoric of today will be long gone. Perhaps by that time people will realize we are in a deflationary super cycle as well as tightening economic conditions.
Either way, do not expect economic expansion to take place. The recovery will show a good number this year and then fade.
The global economy was dying before COVID-19.
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Covid came at a real convenient time. "They" have something to blame now rather than admit to blatant mismanagement of an unsustainable and corrupted system.
The system is completely sustainable since it will be a slow bleed just like took place for the last few decades. It will just keep going for years on end. That is what people do not realize.
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The bleeding can be sustained for a LONG time... but anything that keeps bleeding will eventually biff it. I am not holding my breath for any drastic systemic changes moving forward, just little tweaks... little introductions like UBI for example. I am just glad to be on Hive at this point in time.
Here’s a little tidbit. For years I have looked forward to “back to school shopping.”
I loved the 25cent notebooks the 20 cent crayon boxes, pencils, pens.
I went today and was shocked that I was only getting small discounts. I missed my huge discounts.
I guess we can’t afford to flood the marketplaces with goods anymore.
Maybe I’ll try a different store.
For much of a year, the cheap goods for China were not being shipped. So the high cost producers in the US have grabbed market share.
The ships are moving now. By the end of the year, we will be flooded with cheap products from China again. That will push the margins down.
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I did not love spending more, but I did like being forced to be conscientious. I actually kind of liked seeing the carts filled with essentials instead of goods that probably just end up in the land fill.
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Definitely, all countries to a greater or lesser extent are having economic/financial problems.
There was inflation, low GDP, unemployment, among others, and the pandemic only increased all this.
The US has the projection of recovery, and although it may be a temporary mirage in the world's largest economy, where the economic chaos is real is in all Latin and Central American countries...unfortunately. Not to mention Venezuela with unstoppable inflation, unemployment at a 21 digit rate, production on the floor and a currency devaluation on the horizon. To cry.
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STOPGoo pump please... my aset is droped
Well automation is going to replace the cheap labor. When it does, I don't see how the economy will really generate much more than what we have right now. At least I don't see any solution in the physical world.
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Interesting. I probably would have been one of those to guess it was from Covid as well. I am okay with a recession quite honestly. It gives me the chance to keep investing at a lower cost. I've got most of my other affairs in order, so it shouldn't hurt me too much. Plus I have all of my crypto stuff that will just keep humming along.
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The covid was just the wind that blew away the curtain that exposed the huge holes in the road.
But one thing most people don't see is that the global economy is only going to get worse, declining every day until it no longer exists.
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Aside from the fact that I don't really trust this thing called "The Economy" because it seems to exist in a bubble that doesn't actually include — or relate to — just regular working people trying to get by, I agree that the economy pretty much rots everywhere.
Covid didn't help much; there is no "normal" that we're going to return to because automation forged ahead during the previous 18 months, thereby making it even less likely that people are going to "return to work."
The thing that troubles me about the whole equation is that now we have a machine doing the work of three workers; the machine *doesn't" demand paid vacations, sick leave, insurance or even a salary... and yet the product being created by aforesaid robot continues to rise in price even while the cost do produce it goes down.
I just can't get that equation to work out to anything but a huge meltdown...
=^..^=
I hate to break it to many of you. This version of capitalism you all been using for the last 80 years has been on the way down since then. I't's been imploding. After the 60's our debt was so great most families and wives had to take jobs. Thats what started the entire working woman era of the 80's and if you look carefully to our economy we haven't been able to support families since then
if we lived in such capitalistic prosperity do you believe we'd be on a backwards course like this? I say all this to say this. This false idea of fake data and fake job numbers and fake debt economies reality wise show these aren't booming or recovering economies.
How do you call it a recovery when we go back to the recovery period before the recovery period. lol. You see we get further behind the goal post. So its not recovery or booming market. We're just maybe getting back to where we were before covid hit which was a bad position then. A wise person would brace themselves. We got folks walking around here like they winning still going to get rich lol. Are they nuts? Are they insane they that behind what's going on they can't determine the forest from the trees.
Do we recall what the economy looked like before covid 19 hit? Did someone run the numbers? Do people understand really what are spending and debt ratio was like when trump was telling all those baloney stories about the economy? My goodness people will you wake up.
We are headed whether you want it or not until the most extreme forms of socialism you've ever seen. We have kicked the can down the road far too long now the chickens are coming home to roost. These dreams about lambos and crypto riches many of you not going to get them. the majority of you all not going to have them.
It's not going to be possible there is yet a great corelation between crypto and the standard economy. It is not unbridled from it. So its going to probably tank just like it is my theory. We are wasting our time people and this time we're out of time for real. This time we can't recover.
So we going to see some new system you all probably wont like. this dream of what you'd want it to be is not going to happen. its not goign to be this booming capitalist society anymore and its not because i wish it not to be. It's just inevitable because the systems we put in place never really worked to begin with . .its over. For some of you it has to be not just the barbarians are coming. it has to be the barbarians storming in the gates in your homes because thats the only thing you all ever going to understand. When its upon you and happening just like covid 19.. how many decades had be predicted the arrival of a super flu. How many of you still even now don't even believe it was real. As if in biology we can't have any severe airborne virus. Thats inconceivable to some of you.
Is it possible for us to expect things to get any better with our scope of reality and use of logic and reason? No.. no.. no .. no. Crypto won't save us either not unless these people stay home
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