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The 2020 Depression Analysed: It’s already confirmed that a RECESSION is now unavoidable. But will we see a DEPRESSION as bad as the 1929 Great Depression or worse? Some experts certainly believe so.

To make this really easy to grasp, I'll use 5 measurables plus 2 other variables. I'm going to discuss each section in reverse order, giving each a risk score out of 5.

5. Manufacturing:
- In the Great Depression, World trade plummeted 65% between 1929 and 1933.
- In the Great Repression, World trade plunged 12% in goods and 9% in services.
- Right now, this is definitely one area of concern that I have with so many countries borders closed and trade highly restricted. But I do believe it will be short lived and we should see things start to open up again way before the end of the year assuming we don’t see a surge in second wave cases...
* Risk Score 4/5.

Retail Sales:
- In the Great Depression, retail dried up.
- In the Great Recession, there was a massive reduction in some areas, but at the same time there was a massive increase in other areas such as the demand for low-cost shops such as dollar stores and cheap fast food.
- Right now, the stats are not being presented accurately because they are saying that much of the retail has moved online to Amazon. What they are not saying is that actually Amazon is a far more efficient company than most retailers so they have far less staff than the average store as well as the mass use of robots and technology. So it's not a good comparison and it's also not good for employment numbers, but it's great for Jeff... Despite the optimistic forecasts, I personally don't think that people will have any money left over to go back to retail spending for many months to come and for that reason I'm giving retail:
* Risk Score of 5/5.

Household Income:
- In the Great Depression, manufacturing wages were down 34%
- In the Great Recession, income was down just over 4%
- Right now, we haven't seen any impact as yet. But I believe we will see this soon simply because there are now more people competing for less jobs. Throughout history this is always resulted in wages going down due to the supply and demand curve.
* Household Income Risk Score: 4/5.

Unemployment rate:
- In the Great Depression, the unemployment rate was 25%
- In the Great Recession, the unemployment rate was 11%, less than half.
- Right now: the unemployment rate is expected to be 10% this month. We've had 5 million job losses in the last week alone.
In the USA the working age population is just over 200 million people. If forecasts are correct that we've lost over 20 million workers in the last month alone, this equals 10% of the entire workforce just in the last few weeks. And if we don't get the economy back on track by June, I think there’s a real risk of us passing the 25% rate of the Great Depression.
* Unemployment Risk Score 5/5.

GDP: (Which stands for Gross Domestic Product) - this basically means all the products and services as a monetary value added up.
- In the Great Depression, The worst year for GDP was -12.9%
- In the Great Recession, The worst year was -2.5%
- Right now: My prediction was -7% for Q1, which was not far off, we think it’s about 8% now. And my prediction for Q2 is -25%, although people think I’m crazy for saying that it could go that high.
* GDP Risk Score 5/5 for 2020.

Stock Market
- In the Great Depression, the stock market was down 90%
- In the Great Recession, the stock market was down 50%
- Right now, we lost 35% from the markets between 20th Feb - 23rd March 2020, and we’ve so far recovered about 15% of that loss (roughly) as of earlier this week
* Stock Market Risk Score 4/5.

House Prices
- In the Great Depression, house prices dropped by 30%
- In the Great Recession, house prices dropped by 29%
- Right now, We haven't seen any measurable drops yet. But due to the restrictions currently in place we're not really going to know the full implications until the middle of May or early June in my opinion. And even then we’re really looking 6-months out due to mortgage forbearance or deferment policies

Conclusion
So the BIG question is: do I agree with some of these experts who are predicting the next great depression? My answer is NO. At least not right now… But I do think we've got some big problems ahead and my opinion could change tomorrow as new data emerges.

DISCLAIMER
This video is for entertainment purposes ONLY.
I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.