Just How Bad Will Job Losses Get?
With over 36 million Americans having lost their jobs as a result of the recent government lockdowns, and with the unemployment rate at nearly 15%, just how much worse will the economic crisis we’re in get? While many people are expecting a quick rebound, that’s hardly going to be the case. Rather than a quick V-shaped rebound, we’ll likely see a long, slow rebound that takes years to get back to normal. And we might not have even seen the worst yet.
If you add in the number of people who are underemployed, plus the number of people who have been temporarily laid off, the real unemployment number could be closer to 25-30%. As states start to open back up again, it’s possible that many of these millions of people will return to their jobs, but there aren’t any guarantees. Many analysts have estimated that up to 25% of all restaurants won’t reopen after this crisis. Even those that do reopen will have a hard time of it, as many patrons will remain wary of eating out.
As restaurant and service sector employment made up a large portion of the jobs created since the 2008 financial crisis, the hit from those restaurants closing will be felt throughout the economy. It’s estimated that over 40% of all those forced into unemployment recently will see their jobs disappear completely. That’s nearly 15 million Americans who are now going to be without work, or about 10% of the overall workforce. Then consider that those 15 million workers are going to have to reduce their consumption, stop paying mortgages, find cheaper places to live, etc., and you can see what kind of effect that will have on the economy.
The economy is on the verge of an unemployment crisis that will rival or exceed that of 2008, and we haven’t even seen the beginning of the crisis yet. The full impact on businesses will likely take many more months before the full effects of the damage are revealed, and the devastation could make 2008 look like a mere blip.
Are you prepared for another major financial crisis? Are you prepared for a “recovery” that could take a decade or more, and still never get back to pre-crisis growth levels? More importantly, are your savings and investments prepared for this? If you answered no to those questions, then you need to take action as soon as possible to prepare.
With the full force of the coming economic crisis yet to hit, it’s crucial that you take steps today to protect your investments. Yes, it may feel nice to see stock markets shooting up again, but short-term spikes caused by vaccine euphoria and the Fed’s jawboning and easy money won’t be long-lived.
A crisis worse than 2008 could see stock markets lose even more than they did in 2008. Imagine the Dow Jones losing more than 20,000 points from its peak, sinking back below 10,000 points. That’s not outside the realm of possibility, and it’s something investors need to prepare for.
Unless you’ve invested part of your retirement savings in gold and precious metals, you’re at risk of losing huge amounts of money once stock markets crash. Bond markets aren’t any safer either, with the massive corporate debt bubble at risk of bursting as well. When the whole house of cards comes crashing down, investors who haven’t invested in gold will find themselves wishing they had.