Countries and the economy are getting ready to open pack up and there are 3 potential scenarios of what could happen next.
During this 2020 Corona Virus lockdown we broke a lot of economic records.
- The fastest market drop in history.
- The highest unemployment in history.
- The biggest stimulus package in history.
- The biggest drop in real estate demand in history.
- And the biggest demand for toilet-paper in history!
After a crazy two months it looks like countries are getting ready to open again. But isn’t it dangerous to get back to normal when the virus has not been eradicated yet? What’s going to happen next?
Well there are 3 possible scenarios.
The end of the lockdowns, people stop getting sick with the Corona Virus, the markets open back up, a lot of people will steadily get their jobs back, life returns to normal and the spending returns. If this happens we will probably see the fastest market recovery in history and the stock and crypto market should go up like a rocket. Everything should go back to normal very quickly.
The lockdowns end and the virus stops spreading but people are still scared and don’t spend a lot money. Now, depending on how long it takes for people gain confidence and return to their normal spending habits will determine how long will this recession last. Plus, there are markets that will naturally see slower growth like Real Estate or the Travel Industry.
Some time after the lockdown the virus comes back with a second wave, a new lockdown is required and if this happens the we might see a much worse economic tanking.
This is all really hard to manage all this because on one hand the economy has to open for it to stabilise, but if we do it too late the market could get even worse and most of businesses would go bankrupt. On the other hand if we open up too soon there is a higher chance that the virus will return and then we would have to close everything again and basically go back to square 1, or rather, square -1 because this time it would probably be an even more prolonged lockdown.
In 1918 the Spanish Flue hit the world infecting around 500 million people – about one third of the world population – and it didn’t have just one wave on infections but tree waves. The second wave was by far the worse and it infected 5 times more people than the first wave!
Yes… 5 times!!!
That is why we must be very careful on months to come.
No one knows how this will turn out but whatever happens please be sure you stay safe and don’t think this is over just yet because the worse could be yet to come.