Fed concerns about US economy are a reminder that economy may never be the same

[Juggy777]

In it’s last meeting held on April 28th Fed officials unanimously agreed that US economy will never be the same if a second wave of covid19 virus attack took place, and they also pledged to do all they can to keep the economy stable during such uncertain times.

Furthermore what worries me is the massive wave of unemployment that the Fed believes will come if things don’t get better soon, and if the unemployment wave strikes US now then in my personal opinion US citizens will witness a repeat of the dark days they saw in 2008.

What do you’ll think of Fed’s concern?, and how many of you’ll believe that we will witness those dark days of 2008 again?.

Sources:

https://www.nytimes.com/2020/05/20/business/coronavirus-economy-stock-market.html#link-26af4971

https://en.wikipedia.org/wiki/Financial_crisis_of_2007–08

https://www.washingtonpost.com/business/economy/a-guide-to-the-financial-crisis--10-years-later/2018/09/10/114b76ba-af10-11e8-a20b-5f4f84429666_story.html

https://www.cnbc.com/2020/05/19/unemployment-today-vs-the-great-depression-how-do-the-eras-compare.html

[davis196]

There's no doubt that the US economy will witness the dark days of 2008.The unemployment rates are at historical peak and the stimulus plan won't help that much.However,many economists think that the crisis will be more of a V-shaped or U-shaped line,rather than a L-shaped long term depression.
The statements that "the economy will never be the same" are just some over-dramatic clickbait.I'm sure that the US economy will recover after several months.
The possibility of a second wave of COVID-19 still remains,but I don't think it will happen.

[plvbob0070]

The US still cannot stabilize the COVID cases, what more if there would be the second wave? Even if they are a developed country, it will be hard to handle if this virus lasts longer. Unemployment and financial support will be the primary problem of most citizens aside from the virus itself. In my country, that's the problem we are facing right now that's why the government had no choice but to let some businesses to run again. It's also a way to save the economy.

But based on what I have seen in some articles, it would be hard to start opening some businesses in the US again because they have way more cases than my country. And that it's hard to make Americans follow some rules like using face masks. This situation will worsen if people won't follow and won't adjust to some changes and if the government won't do what they have to do to handle the virus.

Maybe if they could follow what some countries did to flatten the curve in their country, it won't crash the US economy and they could recover from the losses. About the concern of the Fed, it's best for the government to prevent it from happening again since they know how it affects them before.

[justdimin]

When you break the economy to a level where regular people barely surviving and hardly ever "living" a life, basically just wake up in the morning, work all day, come home watch some netflix and sleep and do that over and over again with maybe few times a month going somewhere with friends, you are forcing the economy to break. You know why oil companies were that big?

As they were getting a ton of requests for oil since it was used in more everyday stuff, nowadays people are more aware and they are basically turning to renewable energy, you know why stock markets are this big? Because there was regular people who could save somewhere and put that into investments. All those big companies are losing profits of their future, only because regular people who were part of it became too poor for it.

[Sanugarid]

The economy of USA is not looking good in the long run especially now that the vaccine will not be available until next year. In addition, USA is the new epicenter of this pandemic which has a total of 1.6 million confirmed cases. Even their economic structure is highly developed, world's largest economy and net wealth they will crumble sustaining their citizens for a long time, now that the population is USA is huge. What's worst is the unemployment rate in the USA, last time I checked around March there was already 30 million unemployed people in the USA, and these workers will have to file their job benefits. Now the question is how would they sustain this all??

[dothebeats]

There's no doubt that the US will have a second wave of the virus since different state officials and governors are already too eager to open up their borders and lift quarantines to do business. This will be a huge economic burden to the US, and the Feds need not blame others but only point fingers at themselves since they allowed this to happen. The real workers of the economy are either too scared to go out or too sick to even think of working. No matter how much financial adjustments are made, the US is bound for a 2008-like economic meltdown due to this pandemic.

[bitbunnny]

All economies in the world are affected with consequences of pandemic and US economy is not exception. To my opinion real situation is about to see and at this moment it's hard to tell how deep the crisis is going to be and for long it will last.
Although US economy was among most successful in the world this is the situation where recovery will not come so fast. Also, to.my opinion US government didn't react on time and I'm not sure how much it can do to safe economy and speed up recovery. It might get worse than it seems now.

[electronicash]

All economies in the world are affected with consequences of pandemic and US economy is not exception. To my opinion real situation is about to see and at this moment it's hard to tell how deep the crisis is going to be and for long it will last.
Although US economy was among most successful in the world this is the situation where recovery will not come so fast. Also, to.my opinion US government didn't react on time and I'm not sure how much it can do to safe economy and speed up recovery. It might get worse than it seems now.

its all over the news that if Trump reacted a week earlier they would have stop the spread of the virus. why do they have the second waves already when the numbers hasn't even drop for a day, why call it the second wave?

they will recover as they always do. i'm sure they can find away to solve their problem. starting a war is always a money making scheme.

[sheenshane]

IMO, no economy will be exempted from this pandemic regardless if it is a first or third world country. All economies globally are suffering right now and definitely it will be different after the pandemic. Unemployment rate increases in all countries but once the pandemic has gone then people will start to work again and will have enough money to spend that will help economy rise again same as in the US though the damage is really severe in their economy, for sure after the pandemic they will be able to cope again.

If in case there will be a second wave of covid19 that will hit the US I'm pretty sure they'll be more prepare and would be able to handle the situation better than the first wave for each of the countries had learned their lesson and know how to respond in this pandemic if that will happen again which I hope not. And for the Fed I doubt that they'll not prepare for any sudden event like the second wave of covid19 rest assured they already do some presumption on this and how they'll respond if in case it will come to reality.

[mu_enrico]

if a second wave of covid19 virus attack took place

It will If there is no vaccine or herd immunity yet, but to say "never be the same" is an exaggeration. In the next decade, the economy will be higher than ever, as always.
Technology will progress, and humans will have a better way of trade. Can I hear Amen?

[gentlemand]

It will If there is no vaccine or herd immunity yet, but to say "never be the same" is an exaggeration. In the next decade, the economy will be higher than ever, as always.
Technology will progress, and humans will have a better way of trade. Can I hear Amen?

Let's wait and see.

Even if it makes a full recovery and starts to boom again in a few years many things will have permanently changed. A lot of companies that have been part of the landscape since forever will have gone.

And even if the virus is no more than a bad memory before the end of this year every economy is going to have a huuuuge bill that otherwise wouldn't have existed. It's going to be trillions of dollars worldwide. How they choose to address that is going to have effect for a long time to come.

[exstasie]

And even if the virus is no more than a bad memory before the end of this year every economy is going to have a huuuuge bill that otherwise wouldn't have existed. It's going to be trillions of dollars worldwide. How they choose to address that is going to have effect for a long time to come.

What do you think, are we going to see countries go the way of Japan, with perpetually ballooning public debt? Or will the tax hike and austerity route be more popular? Tax hikes and austerity would have a crippling effect on recovery.

My sense of American politics is Republicans really want to rein in spending, and they control the Senate. They are holding out hope for a V-shaped recovery, or at worst one that can be sustained mostly by Fed intervention and not fiscal spending.

In my view, a lot comes down to whether there is a bad second wave of the corona virus and subsequent lockdowns. That could lead to a watershed moment where all caution about public spending is thrown to the wind.

[gentlemand]

What do you think, are we going to see countries go the way of Japan, with perpetually ballooning public debt? Or will the tax hike and austerity route be more popular? Tax hikes and austerity would have a crippling effect on recovery.

I'm pretty sure the British government have stated that austerity has been ruled out. We've had ten years of it already and it hasn't really cheered anyone up. There is talk of tax hikes, but more the levelling up of existing inequalities such as self employed people paying less than the employed. No doubt that may change.

Many politicians are urging no more burden on the public so perhaps they're going to concentrate on back room fiddling.

As you say it's the potential of a second wave that's the decider. I could see things moving on adequately enough with this one wallop. If it proves to be only the opening round then there are going to be many more alarming choices to make and a lot of unprecedented territory will be crossed.

[TheGreatPython]

I am not the type of person that likes to believe that negative things will happen, even when they do happen I still find a way to stay positive. We shouldn't be expecting sug crisis to take place, rather we should all be working hard and making sure that things are the way we want them to be. Yes, a lot of things have changed as of recent and lots of people are losing their jobs, but that doesn't mean all hopes are gone.

All these things that are happening are just going to be temporary, but as time goes on things will get better. That's the reason why I always tell people to have side income rather than depending on only one income stream. People who is having multiple means of income streams definitely wouldn't worry much about this. I guess most people here who believe into futures of bitcoins must be holding enough bitcoins to withstand against any hard times .

[Febo]

In it’s last meeting held on April 28th Fed officials unanimously agreed that US economy will never be the same if a second wave of covid19 virus attack took place, and they also pledged to do all they can to keep the economy stable during such uncertain times.

Bigger problem I see is that USA might not get a second wave since first wave will never go away. You need to beat the first wave first to be afraid of the second wave. We will see huge GDP drops in most of countries in Q2 and also latter.

[bitgolden]

Honestly, all nations will eventually have so much debt that the crisis will no longer will be crisis according to fact that I just made all of this up. I mean looking at nations there are only few of them who do not make a debt, I do not get the idea of every single nation owing money.

Maybe there should be some sort of system where everyone who owns money to someone eventually pays with others debts to them and we will get it very very low thanks to it. Like let's say Japan owes money to Germany and Germany owes to France, instead of that, Japan will owe to France straight up. Those kinds of systems already in place but unfortunately not used or adopted widely because nations like to be owed money and not care about owing money, it creates a fake power to them.

[Febo]

Honestly, all nations will eventually have so much debt that the crisis will no longer will be crisis according to fact that I just made all of this up. I mean looking at nations there are only few of them who do not make a debt, I do not get the idea of every single nation owing money.

Maybe there should be some sort of system where everyone who owns money to someone eventually pays with others debts to them and we will get it very very low thanks to it. Like let's say Japan owes money to Germany and Germany owes to France, instead of that, Japan will owe to France straight up. Those kinds of systems already in place but unfortunately not used or adopted widely because nations like to be owed money and not care about owing money, it creates a fake power to them.

Yes. When GDP drops 10% that means that debt/GDP automatically increase 10%.  So for country that is healthy today with 60% dept of their GDP, they will automatically have 66% and then added debt that will happen because of lower income (economy lock down) and increased spending (medical and to boost economy). And we will get 80-90% and then second wave hit us.  With second wave most healthy countries will become debt problematic. The ones with 100% debt of their GDP will become pretty much at the dead end.

[drlukacs]

There's no doubt that the US economy will witness the dark days of 2008.The unemployment rates are at historical peak and the stimulus plan won't help that much.However,many economists think that the crisis will be more of a V-shaped or U-shaped line,rather than a L-shaped long term depression.
The statements that "the economy will never be the same" are just some over-dramatic clickbait.I'm sure that the US economy will recover after several months.
The possibility of a second wave of COVID-19 still remains,but I don't think it will happen.

No need for the 2nd wave of COVID - 19 but the US economy is still suffering greatly. they must constantly import medical devices to treat people and the debt will be higher and higher. The reason for the stock market recovery in the US is because people are fomo about the future of the market. the whales will constantly manipulate people's psychology and once the price has reached a high level they will kick down again. I never thought America would recover quickly. they will have 1-2 years in the recession.

[bits4books]

Even if 2008 comes again - the way out of it will be as brilliant as it was in those days. A huge problem of the market is a bubble system of derivatives and other synthetics that already exceeds the money supply a couple of times. I think that if there wiil be a "new 2008" it is more good than bad. It's time to dump this ballast and money out of the air that too adventurous but not very smart guys are trying (and some manage) to get out of the air.

[exstasie]

Even if 2008 comes again - the way out of it will be as brilliant as it was in those days. A huge problem of the market is a bubble system of derivatives and other synthetics that already exceeds the money supply a couple of times. I think that if there wiil be a "new 2008" it is more good than bad. It's time to dump this ballast and money out of the air that too adventurous but not very smart guys are trying (and some manage) to get out of the air.

2008 is nothing. I think that's partly what all this optimism in the market is all about. The market believes 2008 is the worst case scenario, so investors are already scrambling to position themselves for the recovery.

But what if this time is different? What if this is 1929, not 2008? Are you prepared for the economic pain that comes along with a large scale debt deflation collapse? It would affect every corner of the economy. Corporate debt defaults, mortgage (foreclosure) and rent (eviction) defaults, bank failures. This would kill liquidity to small businesses and also tax revenues, social services.

In that scenario, I don't know what the prognosis is for BTC or gold. In the case of deflation/depression, they could perform poorly for some time in a liquidity shock since globally, debtors need USD to service their debts. It may be difficult to hedge, and virtually everybody in all markets may come out losers.