Economics 2020
What do you think will happen to the economy in connection with this coronavirus? Will there be many crises or will hunger possibly begin? How will this affect trade, especially trade with China?
economy will go down in the short run and this will be deflationary. debt was going to be a major issue. but it looks like the fed plans to debase the currency and prevent as much things from failing and to offset the deflationary effects by printing inflation. I am sure there will still be failures. but the fed is willing to backstop everythhing.they are literally buying junk bonds now and providing liquidity. it means that asset prices will continue to be propped up.
in addition, once the corona threat has disappeared, and things come back to normal. imo trade will remain lower than it was before. so efficiency will go down as we become more self reliant. less productivity, coupled with money printing and higher spending from the recovery will produce high inflation. so this is the outlook for the us.
for everyone else worldwide, there will be pain. the number 1 consumer in the world is pulling back in a massive way and closing down doors. the reserves you hold are also going to becoming worth less. lastly if you owe the us any money. you will not be able to print your war out. the people who hold our currency will prolly try to sell. but the weaker dollar will only make us more competitive, putting them in a worse position. China will experience a slow down as the us increases their competitiveness.