Gordon T Long

Gordon T Long

Global Macro Research | Macro-Technical Analysis 

GLOBAL RECESSION

GLOBAL RECESSION
Now In The Cards!

A TWO YEAR $5-$5.5 TRILLION GLOBAL GDP HIT WON’T QUICKLY BE MADE UP ASSURING GLOBAL RECESSION!

The coronavirus pandemic has been widely expected to rob the global economy of more than $5 trillion of growth over the next two years

  • Wall Street banks are preparing based on actions such as loan loss reserve growth and abrupt increase in Federal Reserve’s excess bank reserves that the world is likely to plunges into its deepest peace-time recession since the 1930s.
  • Current beliefs that a global economic rebound to pre-pandemic levels would happen by 2021-end are too optimist. Given the unrelentingly bad news and data on the coronavirus disease 2019 (COVID-19) virus and the economic carnage, there is high likelihood that the near-term outlook will get worse before it gets better,
  • The recovery in global economic output to pre-pandemic levels will highly likely take another two to three years (at best). It is now widely understood that it will take much longer for economies to make up the lost ground after economies reopen in a post-lock-down environment.
    • Morgan Stanley had warned that despite an aggressive policy response, it will be the third quarter of 2021 before GDP in developed markets returns to pre-virus levels.
    • Deutsche Bank signaled the US and European economies alone to be $1 trillion below pre-virus expectations by the end of 2021.
  • A combination of factors will make the post-crisis recovery unusually slow:

    • A tidal wave of bankruptcies among small and large industries will make restarting the manufacturing sector more challenging than in typical recoveries.
    • The damage to the finances of households and businesses will substantially delay any return to old spending levels,
    • The fear of crowds will postpone any return to “normal” in for example the travel and leisure industries. Even massive stimulus will only offset a small part of plunging growth.

A GLOBAL RECESSION IS NOW IN THE CARDS!

The following videos, power-points, graphics, charts and posts support this conclusion. 

What’s Coming Next?

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