The Economy Roils as Coronavirus Peaks- What Comes Next?
The COVID-19 has devastated the world's economy. Never before has the connected global economic machine been disrupted in ways we have never seen.
The Dow Jones Industrial Average has sunken over 40% year to date in 2020. Bitcoin has dropped similarly, and has been stifled before the Bitcoin rewards halving, an historical catalyst has occured. American unemployment may hit 20% or higher in 2020 according to economic projections. Restaurants, bars, stores, entertainment venues and more have laid off thousands of workers, and there is no definitive end in sight. It appears that we are in entirely new territory, and what comes next is uncertainty. We must be prudent in our actions and remove our exposure to risk assets and debt.
Goldman Sachs has sounded a dire prediction- that the American GDP will decline by a massive 24%, which is far and beyond that which has ever been seen before. The shelter in place orders that has affected over 1/3rd of Americans and have shuttered operations worldwide will shock the economy. The Great Depression that began in 1929 was the result of a sustained unemployment rate of 25%. We are in the beginning stages, and our decline is not sustained yet. We are in the initial crash phase.
As a citizen, we must prepare to be locked down for extended periods of time, we must prepare to for our standard of living to change. Our economy will be strained if layoffs hit the 9-20% level, and if we see GDP contraction for a protracted period of time spurred by social isolation, we must expect major changes. Ensure that you are prepared to hunker down in your location for at least 6-weeks. Focus on paying off debt and building an emergency fund for as long as you can. If you are worried you may be laid off, and are in vulnerable industries including entertainment or hospitality, accelerate these goals.
As an investor, now is the time to hold cash. We are not at the bottom yet, with most asset classes still overvalued. One should never catch a falling knife, and right now the knife is certainly falling fast. Gold has rocketed back above $1,500 after its rapid descent from $1,800. Cash looks good as assets crash almost uniformly. Bitcoin may be a buy around $5,000 and the rewards halving scheduled for May 20th of this year may provide an historic catalyst for the asset that is independent of this crash and downturn. Focus on earning cryptocurrency while on lockdown on dapps and platforms including Hive, Steemit, Cointiply and Publish0x.
Make sure to understand that this is an evolving situation. It is key to remain agile during this time. Social distancing is key to stopping the spread of the virus. Don't jump into anything and don't make any rash decisions. Stability will return, and extreme decisions you make may solidify into negative consequences that last for years. Dip into Bitcoin before the rewards halving occurs, pay off debt and build your emergency fund. Focus on earning cryptocurrency from existing platforms and jump on Hive.io as it has just forked from Steemit and is growing fast.
Originally published in my Publish0x account I own at:
Also published in my Hive.io account I own at anarchy999. Join me on Hive.io
Sources:
Picture from Pixabay.
https://www.vox.com/2020/3/23/21188900/coronavirus-stock-market-recession-depression-trump-jobs-unemployment
https://www-bloomberg-com.cdn.ampproject.org/v/s/www.bloomberg.com/amp/news/articles/2020-03-22/top-economists-see-some-echoes-of-depression-in-u-s-sudden-stop?amp_js_v=a2&_gsa=1&usqp=mq331AQFKAGwASA%3D#aoh=15850017918643&referrer=https%3A%2F%2Fwww.google.com&_tf=From%20%251%24s&share=https%3A%2F%2Fwww.bloomberg.com%2Fnews%2Farticles%2F2020-03-22%2Ftop-economists-see-some-echoes-of-depression-in-u-s-sudden-stop
