2020 Economic Predictions: This Series of Unfortunate Events Guarantees the Epocalypse

 2020 Economic Predictions: This Series of Unfortunate Events Guarantees the Epocalypse

By David Haggith June 28, 2020 , 10:00 am

The troubles listed here in my 2020 economic predictions are so severe and
so likely to get even worse that it’s more difficult to imagine they won’t get worse than to believe they will. Just a few of these misfortunes would be enough to plunge us into an abyss of social and financial catastrophes.

Here are my economic predictions for the remainder of 2020

This list of economic predictions is not hard to come up with. It is, however, the fact that it is so easy to predict these things this year that makes this year’s list so important.

I think most readers will agree with the likelihood of most
predictions on this list. The point of the list, then, is to show by the
aggregate of calamities that will wash over us how close to certain is a
deep economic depression. (Most are problems central banks have zero
capacity to resolve.)

This depression is something many people may not perceive until they
widen their field of vision to see the full ocean of likely troubles
that are nearly certain to pound the entire world in wave after wave for
months or even years to come.

(Though I focus on the US, the same economics predictions are likely
to apply all over the world with their own variations of local color.)

Many people are living right now in the delusional hope of a V-shaped recovery from the recent Coronacrisis lockdown. The list below shows why that is the most unlikely possibility imaginable.

During this time of economic crisis, most of the predictions listed
below are current events that are almost certain to continue as the
major trends of 2020 and are likely to even worsen, plunging us into the
chaos of a deep economic collapse, worse than 2008:

– The social unrest of BLM will become even more widespread and intense.

• – Additional social unrest over forced social distancing will reappear around the nation as distancing measures return.
• – Social unrest over corporate bailouts is
  likely to begin as the Federal Reserve and government stack up mega
  bailouts for the rich (or as bailouts already given become known) via
  the insanely rich BlackRock, which has been given a monopoly on
  administering handouts for which only the wealthiest qualify.
• – Tearing down of monuments and other acts of violence will certainly create backlash against BLM from those who value the monuments or just want the history of both sides preserved.
• – So, social unrest will beget more social unrest.
• – All the turmoil of a likely-to-be contested election with
  all the accusations of Russian tampering and other hacking (like what
  just happened to Trump’s Tulsa rally) will cause even more social
  unrest.
• – All those social conflicts will negatively impact some local businesses already hurting badly from the COVID-19 lockdown because
  they will be unable to reopen due to the protests at a time when we
  cannot afford anything that causes further damage to business.
• – Social distancing being ignored entirely by BLM protestors, will increase the spread of COVID-19 as
  will reopening, ending the stock market’s fantasy of a V-shaped
  recovery. (Even if the Coronacrisis is a trumped-up hoax as some say,
  the same scenario will give the hoax all kinds of new (and news) stories
  to grow on.)
• – Travel and hospitality will certainly remain in deep depression as COVID-19 stages resurgences.
• – Lack of travel assures a continued rise in bankruptcies in the oil and gas industry.
• – Shutdowns of major summer events will depress local
  business and government revenue as will shutdowns of sports events and
  concerts.
• – Local governments will be forced to downsize staffing
  quickly and cut back projects of all kinds due to hugely diminished tax
  revenue caused by all the troubles listed here, causing a new wave of
  job losses, not just in government but in companies that contract for
  government projects.
• – Diminished policing will result in a huge crime wave across America. Some
  of that will result from police department defunding; some will be
  required in other ways by liberal governments seeking to placate
  protestors; and a lot will happen because police officers resign and no
  new people want to become police in the present atmosphere. This will be
  as damaging to Black communities as to White and will have a
  suppressive effect on economic activity.

• – Business uncertainty due to the continuing trade wars and to additional COVID-19 border lockdowns, as well as inability of businesses to get parts across borders even for products produced and sold within the nation, will act like gravity on the hope of economic lift. (What a time to be doubling down on trade wars, but here we go already!)
• – We all know the federal debt will keep growing at an exponential rate because of reduced taxes that were supposed to be paid for by a rise to 4%
  or better GDP growth. That’s now a distant dream when the best we will
  see is -10% GDP growth. Compounding the retreat in GDP and the resulting
  drop in tax revenues, we have increased government spending due to
  COVID-19 stimulus efforts. All of that will require the Federal
  Reserve to monetize the debt to the moon and back. At some point that
  will call into question the current US credit rating.
• – So many bonds sliding toward junk because the weak business economy will force all kinds of already risky credit to become riskier and become downgraded.
• – Forced offloading of that debt by institutions that are not allowed to carry junk bonds, will cause huge bond market problems and defaults by
  those who can no longer refinance by issuing new bonds. That will force
  the Fed to continue to soak up ever larger amounts of junkier debt,
  moving further down the junk spectrum, even as it also has to fund the
  federal government’s exploding debt plus the new exploding debts of
  local governments via new “special vehicles.”
• – The stock market, being utterly dependent on the Fed continuing to print money while also utterly dependent on COVID-19 keeping its head down, will go down hard again, likely this summer and probably again in the fourth quarter. I predict it will ultimately fall lower than its nadir in March.
• That will cause more wealth evaporation, leading to more natural economic tightening across the financial and business spectrum.
• – The second wave of COVID-19 will be worse than the first when
  the fall flu season hits or maybe even this summer, given that the
  hottest rise in cases is happening in our hottest states. That makes it
  obvious that climate temperature does nothing to slow the spread.
• – Some major banks and other financial institutions in Europe, such as Deutsche Bank, and in other nations will crash. US institutions will get pulled down by their associations.
• – Many businesses will never reopen even though the economy has been reopened legally. Many others that do re-open
  will close for good before long because partial reopening is not enough
  to sustain them and, in some cases, may even cause them to lose more
  money than if they stayed closed. (Already, as I predicted prior to the
  opening would happen all across America, I see restaurants in my own
  area that did not reopen, and I’ve talked to people in restaurants that
  did reopen who say they are not even able to fill their reduced 50%
  capacity under social distancing rules because they can’t get enough
  customers to return. Restaurants are slim-margin business, so many will
  fail.) And that is even if the Coronacrisis doesn’t have a resurgence.
• – More shopping malls that were already marginal will close forever after reopening because of the number of businesses that do not return or that fail during the partial reopening.
• – That, in turn, will have a knock-on effect for other surrounding businesses that now experience less traffic.
• – Due to the continuing sweep of all the problems listed above, we are in for a deep, longterm jobs depression.
• – That means housing and commercial real-estate will crash again as longterm unemployment and business losses result in mortgage defaults.
• – The resulting deep slowdown in construction will mean even more job losses.
• – That means some US banks will crash (or
  have to be bailed out by the Fed) (though maybe not until 2021) due to
  all the loan problems caused by all of the above, resulting in even more
  job losses.
• – Add to all of these near certainties, the growing possibilities of more international wars that
  we already see rising in risk — North Korea v. South Korea, North Korea
  v. the US, Israel v. Iran, Israel v. the Palestinians over annexation
  of parts of the West Bank, Saudi Arabia v. Yemen, China v. Taiwan, China
  v. Nepal, China v. the US, India v. Pakistan. Many of these conflicts
  seem to have intensified over the past year, and that’s just a short
  list of currently rising or continuing international conflicts.
• – Civil wars within various nations are more likely
  because of the rising economic troubles and social strife listed here
  as well as continued growing strife due to immigration pressures that
  developed under globalization.
• – I won’t predict the US dollar will collapse, BUT … this is the FIRST year in which I’ve ever said that is a reasonable possibility. Until
  now, it lay dimly in the future. Nations are angry over how the dollar
  has been repeatedly weaponized by the US via sanctions. So, I am certain
  the indomitable dollar will finally start to experience struggles of
  its own due to all the problems listed here, which will result in the
  Federal Reserve being less able to manage the financial chaos nationally
  and internationally, and due to competition from new central bank
  digital currencies this year, maybe, but especially next.
• – Add to all of that the normal economic crises from major exogenous events, such as earthquakes, volcanism, hurricanes, tornadoes, floods, droughts, pestilence, wildfires, and, oh, an asteroid or two. The
  difference this year is that those big catastrophes will be hitting
  badly crippled economies and stressed societies wherever they hit in
  this world. (We cannot know what will hit or whether the
  number of such events will be lighter or heavier than other years
  because these are black-swan events — things we know CAN happen but have
  no knowledge of the specific likelihood of any particular event in a
  particular area in any given year. What we do know is that nations
  struggling under an economic crisis and an emergency health crisis will
  be less able to manage those events when they hit. Organizations like
  FEMA will be stretched way beyond their capacities.)

That’s a long list of finger-in-the-wind economic predictions. I’m not saying all of them will be dominant trends this year, and I can’t say when or in what order each one will happen; but I am certain 80% or more of my 2020 economic predictions will play out as stated above, and that is more than enough to assure the deep economic depression I’ve named “The Epocalyse.”

I invite you to offer your own social or economic predictions for 2020 (whether as additions or subtractions to
the list above) that you see as highly likely to develop (good or bad)
in the comments below so that we benefit from each others’ observations
and insights.

Reprinted with author’s permission from The Great Recession Blog

2020 Economic Predictions: This Series of Unfortunate Events Guarantees the Epocalypse: Additional social unrest over forced social distancing will reappear around the nation as distancing measures return.