ARTIFICIAL ECONOMIC SHUTDOWNS – AN UNPRECEDENTED CATASTROPHE

​ETF Research & Analytics Team

ETF Research & Analytics | A function of the ETF corporate think tank.

In an unprecedented unified global move, synchronistical economic shutdowns have completed their rounds; all countries across the globe have shut down their economies “artificially”. Although no predictive economic model has ever set itself up for assumptions presumptuous of an artificial shutdown, economists are only accustomed to natural economic decay at the local or regional levels and thus producing a set of fiscal and monetary policies to mitigate and rescue such economies.

When the great depression occurred 1929-1933 staining the worst economic downturn in the history of the industrialized world, it was driven mainly by the stock market crash which wiped off the map most equity and liquidity. Let us enlighten you! during the great depression years the global population count had been less than 2 billion people as opposed to almost 8 billion in 2020. We leave the scaling up to your imagination in terms of catastrophic ramifications in store both from an economic perspective as well as social structures possible collapses as they are intertwined.

We have heard much lately through the Whitehouse Secretary of Treasury that recovery and a strong comeback is imminent, projecting economic growth in Q3 and Q4 as well as an economic boom in 2021. The justification of such light argument is the nature of the economic shutdown; “artificial” - according to Steven Mnuchin. Yet, our analysis strongly reveals the weakness of such argument. The official economic outlook is concerning to say the least as it is missing an integral part; an artificial economy shutdown would naturally implicate resetting the playbook “blueprint” of rules and policies and therefore the whole nature of associated components of the economy and thus the outcomes. We are yet to observe any basis or new blueprint for this reset, and we are concerned!

Traditional remedies are for traditional breakdowns and not for artificial economic resets!

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