Depression in 2020 – 2021 ?

Are we heading towards depression in 2020 or 2021 ? Well simple answer is Yes and No. We may see major recession and that is inevitable now. World cannot go without recession in 2020 Р2021 that is for sure. How severe is the recession that is another topic altogether.

Last week itself US unemployment rate lost 4 year gains and settled at 2017 levels. More than 6 million US citizens filed for Unemployment claims. These numbers would surely hike as this data was last recorded in March 12th 2020. So this week Thursday’s number of claims will be higher for sure. How high are these numbers would give an idea how US economy is handling the pressure of partial lock down. 7 states out of 50 are yet to implement any advisory to close non essential and work from home.

Currently US is number 1 in corona virus cases with more than 333000 cases. Death toll also reaching near 10000. While many states are running out of ventilators and hospital beds. US president may or may not go for partial opening this easter. This could make things even worse and ultimately it will show in numbers.

Currently we are in unofficial recession as many countries yet to report their GDP numbers. However mounting virus cases & already stand still economy may just got worse before going for a recovery. Now for now there is no solid depression signs but recession will be severe and it would be worse than 2008 & 2000.

I am not ruling out depression but we are far from depression. We will need to asses the situation maybe in August – October to take a call if we are going into depression. But we cannot rule out depression yet. For now we can just estimate how world economies are going to hit and how many jobs are going to vanish in this kind of economies.

For gold its always a good time when stock markets are and economies are doing bad. Good close above 1680-90$ might give gold a chance to test 1800$ – 2000$ very soon but a slide recovery in stocks or economies may be very lethal for gold buyers. So stick with levels.

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By marafat