{"id":34973,"date":"2020-05-12T17:24:47","date_gmt":"2020-05-12T21:24:47","guid":{"rendered":"https:\/\/www.escapeartist.com\/?p=34973"},"modified":"2021-03-03T10:42:02","modified_gmt":"2021-03-03T15:42:02","slug":"the-worst-recession-in-global-history","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/the-worst-recession-in-global-history\/","title":{"rendered":"The Worst Recession in Global History"},"content":{"rendered":"

The Worst Recession in Global History \u2014 <\/strong>How To Protect Your Wealth When the World Comes to a Crash\u00a0<\/strong><\/h3>\n

By now, I think all of us should have come to terms with the fact that we\u2019re standing at the door of one of the biggest economic crises of our time. With the economic shutdowns, unemployment and the financial market crashes from the coronavirus\u2014the latest <\/span>reports from the IMF<\/span><\/a> forecast a global economic shrinkage of 3% in 2020. In these past few days, I\u2019ve sort of realized that the word recession doesn\u2019t really capture the real extent of the economic uncertainty we\u2019re looking at and <\/span>predictions of a possible depression<\/span><\/a> are really starting to concern me.\u00a0<\/span><\/p>\n

As it stands, nearly <\/span>80% of the world\u2019s workforce<\/span><\/a> is currently affected by the coronavirus in some way\u2014either people are working fewer hours or they\u2019ve been laid-off altogether. Global output took one of the <\/span>steepest dives of about 4%<\/span><\/a> within the first quarter of 2020 as Covid-19 spread to economies throughout the world. Stock markets are still bearish despite the efforts of governments around the world to keep their economies stimulated and even the Dow Jones Industrial index shows <\/span>at best 50-50 gain\/loss chances<\/span><\/a>.<\/span><\/p>\n

We need to appreciate how deep the damage from the coronavirus goes. It has changed the very structure of global economics\u2014specifically the supply side, which will ultimately change our demand patterns as well. What I\u2019m trying to imply is that economic theory might as well fail to apply to our economies because <\/span>nothing <\/span><\/i>that explains the economics of pandemics exists\u2014because this is the first time in modern history that a virus has eluded all attempts to cure it. We don\u2019t even know when a vaccine will be prepared and how soon it will become accessible to people, nor do we know if this virus will mutate because so far <\/span>it\u2019s eluded our understanding<\/span><\/a>.\u00a0 I mean, how do you cure something that you don\u2019t even understand?\u00a0<\/span><\/p>\n

The coronavirus outbreak is the single greatest challenge that we will face in our lifetimes\u2014it will change the way we live forever. Many of these impacts will be felt across our economic and financial systems, affecting our wealth and financial well-being and we should be prepared for this fresh onslaught way before it begins.\u00a0<\/span><\/p>\n

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What to Expect in the Future?<\/strong><\/h2>\n

Unfortunately, governments around the world have a singular response to economic calamity\u2014to increase regulatory control over financial and economic bodies. As the US elections come closer, a lot of people are predicting that the US government will raise taxes irrespective of whether the Republicans win or the Democrats. Considering the fact that the US Debt to GDP ratio is <\/span>expected to blow up to 101%<\/span><\/a>, I wouldn\u2019t be surprised if the state responded in that way\u2014it\u2019s just how they work.\u00a0<\/span><\/p>\n

Even now, Joe Biden spoke of introducing a progressive tax system that is projected to <\/span>raise $4 trillion in revenue<\/span><\/a> for the government.\u00a0 The problem is many people right now will prefer this approach to resolving the economic crisis and alleviate the impacts of the coronavirus because they will view it as a \u201csimple redistribution of income\u201d. They will say \u201coh, the rich have more money than us so let\u2019s tax them to make more money for the people\u201d\u2013without realizing the fact that the wealthy are also responsible for <\/span>50% of the entire value of the stock market<\/span><\/a>.<\/span><\/p>\n

None of this will come as a surprise and I think you shouldn\u2019t be surprised either. The only thing left at this moment is to devise a financial strategy that can help you survive this shock and try to come out ahead once it\u2019s over. While this epidemic is unfortunate, there are other opportunities that it presents and if you play your cards right, nothing is to say that you can\u2019t come ahead in the long run.<\/span><\/p>\n