Wednesday, August 12, 2020
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Deutsche Bank: Coronavirus will cause US GDP to plunge 13%

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According to a report by Yahoo!, Deutsche Bank put out a memo making the call that US GDP is expected to plummet by a whopping 13% in 2020.

The overall shock that is being experienced by the US economy is unprecedented in modern times. To put things in a bit of perspective this is 150% worse than what we experienced in the 2008 meltdown which saw GDP drop by just over 8%.

“The U.S. economy is currently undergoing a truly unprecedented shock that is likely to continue for some time with the spread of the virus set to accelerate further in the coming weeks”

Deutsche Bank

With trade and travel coming to a halt and doom and gloom setting in amid fears of what the coronavirus will do to the healthcare system, it is clear that investors are running for the hills.

One can only speculate that until drastic measures are taken, the blood bath will only continue until such time that someone stops the bleeding.

The last time we have seen anything like this was The Great Depression

If Deutsche Bank is correct, the consequences of a financial meltdown of this magnitude has not been seen since the Great Depression.

Other reports, such as U.S. Treasury Secretary Steven Mnuchin telling Senate Republicans that they could expect a 20% unemployment rate if the bailout package proposed by the administration is not passed quickly, also paint a damning picture.

Add this to the Deutsche Bank memo, and we have a recipe for a pretty ugly sense of what is to come, and it does not instill confidence to Wall Street.

During the Great Depression the US had about 25% unemployment at its peak, and the Great Recession saw about 10%. Steve Mnuchin is predicting a 20% unemployment rate if certain stimulus packages are not introduced immediately.

If we see a 20% unemployment rate, it would be catastrophic for our society and unprecedented in modern times. It is clear that everyone from Wall Street to Main Street is demanding the Trump Administration act quickly to stop this ship from sailing into these uncharted waters.

Adrian Thomas
Adrian is a serial writer and entrepreneur. He is responsible for overall editorial direction and vision of Financial News where he is the Editor-in-chief. When he is not busy wearing the writer/editor/entrepreneur hat, he can be found spending time with his 8 amazing kids. Adrian is involved in multiple ventures including several cryptocurrency related projects which are in various stages of development.

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